[Federal Register Volume 64, Number 238 (Monday, December 13, 1999)]
[Proposed Rules]
[Pages 69598-69620]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-31670]



[[Page 69597]]

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Part II





Department of Energy





_______________________________________________________________________



Office of Energy Efficiency and Renewable Energy



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10 CFR Part 431



Energy Efficiency Program for Commercial and Industrial Equipment: Test 
Procedures and Efficiency Standards for Commercial Warm Air Furnaces; 
Efficiency Certification, Compliance, and Enforcement Requirements for 
Commercial Heating, Air Conditioning and Water Heating Equipment; 
Proposed Rule

  Federal Register / Vol. 64, No. 238 / Monday, December 13, 1999 / 
Proposed Rules  

[[Page 69598]]


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DEPARTMENT OF ENERGY

Office of Energy Efficiency and Renewable Energy

10 CFR Part 431

[Docket No. EE-RM/TP-99-450]
RIN No. 1904-AA96


Energy Efficiency Program for Commercial and Industrial 
Equipment: Test Procedures and Efficiency Standards for Commercial Warm 
Air Furnaces; Efficiency Certification, Compliance, and Enforcement 
Requirements for Commercial Heating, Air Conditioning and Water Heating 
Equipment

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

ACTION: Proposed Rule and Public Hearing.

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SUMMARY: The Energy Policy and Conservation Act, as amended (EPCA), 
establishes energy efficiency standards and test procedures for certain 
commercial equipment, including commercial warm air furnaces. In 
today's rule the Department of Energy (DOE or the Department) proposes 
regulations to implement the standards and test procedures for these 
furnaces and to address other ancillary matters (e.g., compliance 
certification, prohibited actions, and enforcement procedures) for 
commercial heating, air conditioning and water heating equipment 
generally.

DATES: The Department will accept comments, data, and information 
regarding the proposed rule until February 28, 2000. Please submit ten 
(10) copies. In addition, the Department requests that you provide an 
electronic copy (3\1/2\'' diskette) of the comments in 
WordPerfectTM 8.
    The Department will hold a public hearing on Thursday, January 27, 
2000, in Washington, DC. Please send requests to speak at the hearing 
so that the Department receives them by 4:00 p.m., January 24, 2000. 
Send ten (10) copies of your statements for the public hearing so that 
the Department receives them by 4:00 p.m., January 24, 2000. The 
Department also requests a computer diskette (WordPerfectTM 
8) of each statement.

ADDRESSES: Please address requests to make statements at the public 
hearing and send copies of such statements to Ms. Brenda Edwards-Jones, 
and send written comments to Mr. Cyrus Nasseri, each at the following 
address: U.S. Department of Energy, Office of Energy Efficiency and 
Renewable Energy, EE-41, 1000 Independence Avenue, SW, Washington, DC 
20585-0121. You should identify all such documents both on the envelope 
and on the documents as ``Energy Conservation Program for Commercial 
Equipment: Test Procedures for Commercial Warm Air Furnaces and 
Certification Requirements for Commercial Equipment, Docket No. EE-RM/
TP-99-450.'' The hearing will begin at 9:00 a.m., on Thursday, January 
27, 2000, and will take place in Room 1E-245 at the U.S. Department of 
Energy, Forrestal Building, 1000 Independence Avenue, SW, Washington, 
DC 20585-0121. You can find more information concerning public 
participation in this rulemaking proceeding in section IV, ``Public 
Comment,'' of this notice.
    You can read copies of the transcript of the public hearing and 
public comments received in the Freedom of Information Reading Room 
(Room No. 1E-190) at the U.S. Department of Energy, Forrestal Building, 
1000 Independence Avenue, SW, Washington, DC 20585-0121, between the 
hours of 9:00 a.m. and 4:00 p.m., Monday through Friday, except Federal 
holidays.

FOR FURTHER INFORMATION CONTACT: Cyrus H. Nasseri, U.S. Department of 
Energy, Office of Energy Efficiency and Renewable Energy, Mail Station, 
EE-41, 1000 Independence Avenue, SW, Washington, D.C. 20585, (202) 586-
9138, FAX (202) 586-4617,
    e-mail: Cyrus.N[email protected], or Edward Levy, Esq, U.S. 
Department of Energy, Office of General Counsel, Mail Station, GC-72, 
1000 Independence Avenue, SW, Washington, D.C. 20585, (202) 586-9507, 
e-mail: Edward.L[email protected]

SUPPLEMENTARY INFORMATION:

    The proposed rule refers to certain industry standards established 
by the American National Standards Institute (ANSI), the American 
Society of Heating, Refrigerating and Air-Conditioning Engineers, Inc. 
(ASHRAE), the Illuminating Engineering Society of North America (IES), 
and Underwriters Laboratories (UL). These individual industry standards 
are referenced by the single comprehensive ``ANSI/ASHRAE/IES Standard 
90.1-1989,'' which will be cited by its shorter title ``ASHRAE/IES 
Standard 90.1'' in the rest of this document. The proposed rule would 
incorporate, by reference, the test procedures contained in ASHRAE/IES 
Standard 90.1 for commercial warm air furnaces. Those industry 
standards are: American National Standards Institute (ANSI) Standard 
Z21.47-1993, ``Gas-Fired Central Furnaces'; and Underwriters 
Laboratories (UL) Standard 727-1994, ``Standard for Oil-Fired Central 
Furnaces.'' The proposed rule would also incorporate by reference, (1) 
Sections 8.2, 11.2, and 11.2.1, and accompanying Forms 715 and 721, of 
the Hydronics Institute (HI) Standard ``Testing and Rating Standard for 
Heating Boilers,'' 6th Edition, 1989, which specify a flue loss 
calculation procedure for oil-fired equipment, and (2) Sections 
7.2.2.4, 7.8, 9.2 and 11.3.7 of the ASHRAE Standard 103-1993, ``Method 
of Testing for Annual Fuel Utilization Efficiency of Residential 
Central Furnaces and Boilers,'' which specify a test procedure for 
condensing furnaces.
    You can view copies of these standards at the Department of 
Energy's Freedom of Information Reading Room at the address stated 
above. You can obtain copies of the ASHRAE and HI standards from the 
American Society of Heating, Refrigerating, and Air-Conditioning 
Engineers, Inc., 1971 Tullie Circle, NE, Atlanta, GA 30329, and the 
Hydronics Institute Inc., 35 Russo Place, Berkeley Heights, N.J. 07922, 
respectively. You can obtain copies of the ANSI and UL standards from 
Global Engineering Documents, 15 Inverness Way East, Englewood, CO 
80112, or http://global.ihs.com/. You can obtain electronic versions of 
the ASHRAE standards at ASHRAE's web site, http://www.ashrae.org/book/
bookshop.htm, and of the ANSI standards at ANSI's web site, http://
webstore.ansi.org/ansidocstore/. For more information concerning public 
participation in this rulemaking proceeding, see section IV, ``Public 
Comment,'' of this notice.
    You can obtain the latest information regarding the public hearing 
from the Office of Codes and Standards world wide web site at the 
following address: http://www.eren.doe.gov/buildings/codes__standards/
index.htm.

I. Introduction
    A. Authority
    B. Background.
    1. General.
    2. The Test Procedures for Furnaces.
    C. The Proposed Rule.
II. Discussion
    A. General.
    B. ASHRAE/IES Standard 90.1 Referenced Furnace Test Standards.
    C. Definition of Thermal Efficiency for Furnaces.
    D. Procedures for Measuring Flue Losses of Oil Furnaces and 
Incremental Efficiency of Condensing Furnaces.
    1. Flue Loss Calculation for Oil-Fired Furnaces.
    2. Condensing Furnaces.

[[Page 69599]]

    E. Sampling, Certification and Enforcement for Commercial 
Heating, Air Conditioning and Water Heating Equipment.
    1. Background and Public Comments.
    a. Purpose.
    b. Sampling.
    c. Public Comments and Recommendations.
    2. Proposed Certification and Enforcement Procedures.
    a. Certification Procedures.
    b. Basis for Certification: Methods for Determining Efficiency.
    c. Voluntary Independent Certification Program.
    d. Manufacturers Not Participating in a VICP.
    e. Enforcement.
    3. Accommodation for Manufacturing Tolerances, Measurement 
Uncertainty and Small Sample Sizes.
III. Procedural Requirements
    A. Review Under the National Environmental Policy Act of 1969.
    B. Review Under Executive Order 12866, ``Regulatory Planning and 
Review.''
    C. Review Under the Regulatory Flexibility Act.
    D. Review Under Executive Order 13132.
    E. Review Under Executive Order 12630, ``Governmental Actions 
and Interference with Constitutionally Protected Property Rights.''
    F. Review Under the Paperwork Reduction Act.
    G. Review Under Executive Order 12988, ``Civil Justice Reform.''
    H. Review Under Section 32 of the Federal Energy Administration 
Act of 1974.
    I. Review Under Unfunded Mandates Reform Act of 1995.
    J. Review Under the Plain Language Directives.
    K. Review Under the Treasury and General Government 
Appropriations Act, 1999.
IV. Public Comment
    A. Written Comment Procedures.
    B. Public Hearing.
    1. Procedures for Submitting Requests to Speak.
    2. Conduct of Hearing.
    C. Issues on which Comments are Requested.

I. Introduction

A. Authority

    Part B of Title III of the Energy Policy and Conservation Act 
(EPCA) of 1975, Pub. L. 94-163, as amended, by the National Energy 
Conservation Act of 1978 (NECPA), Pub. L. 95-619, the National 
Appliance Energy Conservation Act of 1987 (NAECA), Pub. L. 100-12, the 
National Appliance Energy Conservation Amendments of 1988 (NAECA 1988), 
Pub. L. 100-357, and the Energy Policy Act (EPACT), Pub. L. 102-486, 
established the Energy Conservation Program for Consumer Products other 
than Automobiles. Part 3 of Title IV of NECPA amended EPCA to add 
``Energy Efficiency of Industrial Equipment,'' which included air 
conditioning equipment, furnances, and other types of equipment.
    EPACT also amended EPCA with respect to industrial equipment. It 
provided definitions, test procedures, labeling provisions, energy 
conservation standards, and authority to require information and 
reports from manufacturers. See 42 U.S.C. 6311-6316. Specifically, for 
example, EPCA now authorizes the Secretarey of Energy to prescribe test 
procedures that are reasonably designed to produce results which 
reflect energy efficiency, energy use and estimated operating costs, 
and that are not unduly burdensome to conduct. 42 U.S.C. 6314. With 
respect to certain industrial equipment for which EPCA prescribes 
energy conservation standards, including commercial war air furnances, 
``the test procedures shall be those generally accepted industry 
testing procedures or rating procedures developed or recognized by the 
American Society of Heating, Refrigerating and Air Conditioning 
Engineers, as referenced in ASHRAE/IES/ Standard 90.1 and in effect on 
June 30, 1992.'' 42 U.S.C. 6314(a)(4)(A). Further, if such an industry 
testing or rating procedure gets amended, DOE must revise its test 
procedure to be consistent with the amendment, unless the Secretary 
determines, based on clear and convincing evidence, that to do so would 
not meet general requirements spelled out in the statute for test 
procedures. 42 U.S.C. 6314(a)(4)(B). Before prescribing any test 
procedures for this equipment, the Secretary must publish them in the 
Federal Register and afford interested persons at least 45 days to 
present data, views and arguments. 42 U.S.C. 6314(b). Effective 360 
days after a test procedure rule applicable to certain covered 
equipment, including commercial warm air furnances, is prescribed, no 
manufacturer, distributor, retailer or private labeler may make any 
representation in writing or in broadcast advertisement respecting the 
energy consumption or cost of energy consumed by such equipment, unless 
it has been tested in accordance with the prescribed procedure and such 
representation fairly discloses the results of the testing. 42 U.S.C. 
6314(d). Finally, EPACT extends certain powers, originally granted to 
the Secretary under NAECA, to require manufacturers of equipment 
covered by this proposed rule to submit information and reports for a 
variety of purposes, including insuring compliance with requirements. 
See 42 U.S.C. 6316(a).

B. Background

1. General
    The Department of Energy (DOE or the Department) has an energy 
conservation program for consumer products, conducted under Part B of 
Title III of EPCA, 42 U.S.C. 6291-6309. Under EPCA, the consumer 
appliance standards program essentially consists of four parts: test 
procedures, Federal energy conservation standards, labeling, and 
certification and enforcement procedures. The Federal Trade Commission 
(FTC) is responsible for labeling, and the Department implements the 
remainder of the program as codified in Title 10 of the Code of Federal 
Regulations, Part 430--Energy Conservation Program for Consumer 
Products.
    Since 10 CFR part 430 covers consumer products, which differ from 
commercial and industrial equipment, the Department is creating a new 
Part 431 in the Code of Federal Regulations (10 CFR part 431), Energy 
Conservation Program for Commercial and Industrial Equipment, to 
implement DOE's program for certain commercial and industrial equipment 
covered under EPCA. These will include commercial heating, air 
conditioning and water heating equipment. This new program will consist 
of: Test procedures, Federal energy conservation standards, labeling, 
and certification and enforcement procedures. EPCA directs the 
Department, rather than the FTC, to administer the statute's efficiency 
labeling provisions for commercial equipment.
    On April 14 and 15, 1998, the Department convened a public workshop 
to solicit views and information from interested parties that would aid 
in the development of rules for commercial heating, air conditioning 
and water heating equipment. The Department requested comment on a 
number of specific issues, including issues related to test procedures, 
and the most cost effective and reliable regimes for sampling, 
certification and enforcement. Statements during the public workshop 
and written comments that were received afterwards helped refine the 
issues involved in this rulemaking and provided useful information 
contributing to their resolution. The Department convened a second 
public workshop on October 18, 1998, to obtain comments on the issues 
as they had been refined, and on approaches presented by the National 
Institute of Standards and Technology (NIST) for resolving them.

[[Page 69600]]

2. The Test Procedures for Furnaces
    During the April 1998 workshop, the Department sought comments on 
the following issues regarding test procedures for commercial warm air 
furnaces:
    (1) EPCA uses thermal efficiency as the descriptor for reporting 
the efficiency value of commercial warm air furnaces. The test standard 
ANSI Standard Z21.47, referenced by ASHRAE/IES Standard 90.1 for gas-
fired furnaces, defines a thermal efficiency whose value is calculated 
by the flue loss method, resulting in a value that is customarily 
called combustion efficiency in the Heating, Ventilation and Air-
Conditioning and Water Heating (HVAC & WH) industry. Also, the test 
standard UL Standard 727 referenced by ASHRAE/IES Standard 90.1 for 
oil-fired furnaces specifies the determination of a flue loss during 
the combustion test under steady state conditions resulting similarly 
in a value for combustion efficiency. Based on the fact that the 
combustion efficiency values are calculated by the referenced test 
standards, should the Department interpret the EPCA efficiency 
descriptor ``thermal efficiency'' to have the same meaning that 
``combustion efficiency'' has in common technical use?
    (2) The referenced test standard for oil-fired furnaces, UL 
Standard 727, does not provide a calculation procedure for the 
determination of flue loss. Should DOE designate the flue loss 
calculation procedure from the Hydronics Institute Testing and Rating 
Standard for Heating Boilers, the referenced test standard for oil-
fired boilers, for calculating flue loss?
    (3) Should DOE provide a procedure specifically for testing 
condensing furnaces?
    Attendees at the April 1998 workshop provided comments and input on 
these issues and the California Energy Commission (CEC) provided 
additional written comments afterwards. These comments helped to 
further clarify the issues. Section II, Discussion, will cover them in 
more detail.
    After the April 1998 workshop, the Department and NIST worked 
towards addressing the identified issues for commercial warm air 
furnaces. A set of recommendations resulted from that work, and NIST 
developed a summary report of the recommendations. The summary report 
formed the basis for discussions during the October 18 workshop, which 
enabled the Department to elicit further views and information from 
interested parties. The summary report included draft rule language for 
commercial warm air furnaces.

C. The Proposed Rule

    In today's proposed rule the Department proposes energy efficiency 
test procedures for commercial warm air furnaces. In formulating these 
test procedures, the Department has considered both oral and written 
comments, and has incorporated recommendations where appropriate. 
Section II below contains the reasons for incorporating or not 
incorporating any significant recommendations. The Department will soon 
issue separate notices of proposed rulemaking regarding test procedures 
for commercial water heaters, boilers and air conditioners.
    Today's proposed rule also contains compliance, certification, 
enforcement and certain other general provisions that would apply to 
all covered commercial heating, air conditioning and water heating 
equipment. The Department intends to promulgate a single set of 
provisions on these subjects for all classes of such equipment, and 
therefore the other notices proposing test procedures for such 
equipment will not address these subjects.

II. Discussion

A. General

    This section discusses the main test procedure issues identified 
for commercial warm air furnaces and certification and enforcement 
issues for all covered commercial heating, air conditioning and water 
heating equipment. The furnace test procedure issues are discussed in 
subsection (B) ``ASHRAE/IES Standard 90.1 Referenced Furnace Test 
Standards,'' subsection (C) ``Definition of Thermal Efficiency for 
Furnaces,'' and subsection (D) ``Procedures for Measuring Flue Losses 
of Oil Furnaces and Incremental Efficiency of Condensing Furnaces.'' 
Subsection (E) addresses the certification and enforcement issues for 
commercial heating, air conditioning and water heating equipment 
generally.

B. ASHRAE/IES Standard 90.1 Referenced Furnace Test Standards

    EPCA requires that the testing procedures for measuring the 
efficiency of commercial warm air furnaces must be those generally 
accepted industry testing procedures or rating procedures that were 
developed or are recognized by the American Society of Heating, 
Refrigerating and Air Conditioning Engineers, Inc., as referenced in 
ASHRAE/IES Standard 90.1 and that were in effect on June 30, 1992. 
Also, if such an industry test procedure or rating procedure for 
commercial warm air furnaces is amended, the Secretary of Energy must 
adopt such revisions unless the Secretary determines that to do so 
would not produce test results which reflect energy efficiency, energy 
use, and estimated operating costs, or that the procedures would be 
unduly burdensome to conduct.
    The version of ASHRAE/IES Standard 90.1 in effect on June 30, 1992 
references two industry test standards: one for gas-fired furnaces, the 
American National Standard Institute (ANSI) Standard Z21.47-1987 (ANSI 
Standard Z21.47); and the other for oil-fired furnaces, Underwriters 
Laboratory (UL) Standard 727-1986 (UL Standard 727). Since 1989, both 
industry test standards have been revised several times. The revised 
ANSI Standard Z21.47-1987 has resulted in ANSI Standard Z21.47-1993, 
and the revised UL Standard 727-1986 in UL Standard 727-1994. Also, 
ASHRAE revised ASHRAE/IES Standard 90.1-1989 itself via several 
addenda: 90.1b, 90.1d, and 90.1e in 1992; 90.1c, 90.1g, and 90.1i in 
1993; and 90.1m in 1995 and 90.1n in 1997. Two of the addenda contained 
revisions related to warm air furnaces: Addendum 90.1b updated the 
referenced furnace test standards to their most up-to-date versions in 
1992, and Addendum 90.1i revised the Table (Table 10.9 in ASHRAE/IES 
Standard 90.1) containing the Standard Rating Conditions and Minimum 
Performance with respect to warm air furnaces. Currently, a major 
revision to ASHRAE/IES Standard 90.1-1989, designated as ASHRAE/IES 
Standard 90.1-1989R, is going through the ASHRAE public review process. 
Once ASHRAE formally completes revisions to ASHRAE/IES Standard 90.1, 
the Department intends to either amend its test procedure as necessary 
to make it consistent with the amended version of ASHRAE/IES 90.1, or 
determine by rule that doing so would not meet certain EPCA 
requirements (for example, it would be unduly burdensome to conduct).
    Regarding the two industry test standards revised after June 30, 
1992, there is no change in the energy performance test section of 
either standard from its prior version. Therefore, the Department 
proposes to incorporate by reference the latest versions of the two 
referenced test procedures. These test standards are ANSI Standard 
Z21.47-1993 for gas-fired central furnaces and UL Standard 727-1994 for 
oil-fired central furnaces.

[[Page 69601]]

C. Definition of Thermal Efficiency for Furnaces

    EPCA specifies the energy standard levels and values for commercial 
warm air furnaces in terms of thermal efficiency. Section 342(a)(4)(A)-
(B), 42 U.S.C. 6313(a)(4)(A)-(B). The test standard ANSI Standard 
Z21.47 (for gas-fired furnaces) specifies that the thermal efficiency 
for a furnace is to be computed by a formula defined as ``100 percent 
minus percent flue loss,'' and UL Standard 727 (for oil-fired furnaces) 
defines a maximum allowable flue loss (which is not to exceed 25 
percent) in its combustion test section. Other than the flue loss 
requirement, UL Standard 727 does not provide for or require the 
calculation of either efficiency or output. However, with the measured 
flue loss, one can calculate an efficiency using the formula as 
specified in ANSI Standard Z21.47. The efficiency as calculated by the 
formula in ANSI Standard Z21.47 (and defined as thermal efficiency in 
ANSI Standard Z21.47) is customarily called the combustion efficiency 
of fossil-fueled equipment. The statute does not provide a definition 
for the term ``thermal efficiency.''
    These points were discussed during the April 1998 workshop. 
Conventionally, the definition for ``thermal efficiency'' is the useful 
output of a device divided by its input, expressed in percent. It is 
related mathematically to the combustion efficiency (also expressed in 
percent) by the equation ``Thermal Efficiency (percent) = Combustion 
Efficiency (percent) - Jacket Loss (percent),'' where the combustion 
efficiency is equal to ``100 percent minus flue loss (percent).'' The 
discussion concerned whether the Department should include a jacket 
loss measurement, in addition to the flue loss, in the test procedure.
    GAMA (Page 158, April 14, 1998 Workshop Transcript) asserted that 
(1) the thermal efficiency in the statute actually referred to the 
classical definition of combustion efficiency, (2) thermal efficiency 
was specified because it was so called in the referenced test 
procedure, and (3) it meant 100 percent minus flue loss (percent). GAMA 
believes that defining the term thermal efficiency to be ``combustion 
efficiency minus jacket loss'' would change both the intent and the 
stringency of the requirements that currently exist in ASHRAE/IES 
Standard 90.1 and in EPCA. GAMA further stated that there is an 
additional requirement in the proposed ASHRAE/IES Standard 90.1-1989R 
limiting the jacket loss of the furnace to less than 0.75% of the input 
rating. GAMA stated that this prescriptive requirement was an outgrowth 
of discussions between the industry and the ASHRAE committee about 
defining a seasonal measure of efficiency for commercial warm air 
furnaces, and the resulting compromise was to continue to specify a 
thermal efficiency term that is 100 percent minus flue losses, to be 
followed by several additional prescriptive requirements that relate to 
off-cycle losses, for example. Consequently, GAMA stated that it would 
be strongly opposed to any suggestion to define the term thermal 
efficiency as [100 percent - flue loss (percent) - jacket losses 
(percent)].
    Rheem (Page 162, April 14, 1998 Workshop Transcript) pointed out 
that the efficiency definition also raises a functional issue. To 
achieve EPCA efficiency values under a traditional definition of 
thermal efficiency (e.g., an 80 percent thermal efficiency as 
determined by reducing the combustion efficiency by the jacket loss) 
could result in flue gas condensation, which causes corrosion and 
premature failures.
    Based on the above discussion, the Department understands that the 
consensus of the attendees was that in the test procedure the term 
``thermal efficiency,'' as specified in the statute for commercial warm 
air furnaces means what is commonly defined as ``combustion 
efficiency'' in other contexts. The Department believes that, 
consistent with adopting industry test standards referenced in ASHRAE/
IES Standard 90.1-1989, the statute's intent is to assign the same 
meaning to the term ``thermal efficiency'' as its definition in the 
corresponding referenced standards. Therefore, the Department believes 
that the term thermal efficiency, when used as the energy standard 
descriptor for commercial warm air furnaces, should be calculated as 
100 percent minus percent flue loss, as was specified in the referenced 
ANSI Standard Z21.47. When the Department proposed this approach during 
the October 1998 workshop, there was no objection from the 
participants. Accordingly, the Department proposes today to explicitly 
define the term thermal efficiency of commercial warm air furnaces as 
equal to 100 minus the percent flue loss. This proposal would avoid any 
possible future confusion regarding the meaning of the term thermal 
efficiency when used in the test procedure for commercial warm air 
furnaces.

D. Procedures for Measuring Flue Losses of Oil Furnaces and Incremental 
Efficiency of Condensing Furnaces

1. Flue Loss Calculation for Oil-Fired Furnaces
    As stated above, the referenced test standard for oil-fired 
furnaces, UL Standard 727, does not provide a calculation procedure for 
the determination of flue loss. However, a value for the percent flue 
loss is needed for determining the efficiency. At the April, 1998 
workshop, the Department suggested the use of the flue loss calculation 
specified in the ASHRAE Standard 90.1 referenced test standard for oil-
fired boilers--the 1989 edition of the Hydronics Institute Testing and 
Rating Standard for Heating Boilers--for calculating the flue loss of 
an oil-fired furnace. Since the type of flue gas data required and the 
formulas/equations used for the flue loss calculation are identical for 
any oil-fired equipment, the calculation procedure as specified in the 
Hydronics Institute test standard for an oil-fired boiler is directly 
applicable to an oil-fired furnace. There were no comments opposing the 
Department's suggestion during the Department's workshops held during 
April and October 1998.
    For the above reasons, the Department is proposing as the 
calculation procedure for percent flue loss for oil-fired furnaces the 
procedure in (1) sections 8.2, 11.2, and 11.2.1 of the 1989 Hydronics 
Institute Testing and Rating Standard for oil-fired boilers, and (2) 
those parts of accompanying Forms 715 and 721 which specify the items 
to be measured and calculated to obtain flue loss, and which are not 
related to steam, water or natural gas.
2. Condensing Furnaces
    Participants raised and discussed the issue of testing a condensing 
furnace (a warm air furnace designed to condense part of the water 
vapor in the flue gases and equipped with a means of collecting and 
draining this condensate) during the Department's April 1998 workshop. 
ASHRAE/IES Standard 90.1 and the two test standards referenced by 
ASHRAE/IES Standard 90.1 do not specifically provide test conditions 
for testing a condensing furnace.
    Attendees at the April 1998 workshop from the furnace industry 
(GAMA, York International, and Lennox) stated that there are very few, 
if any, commercial unitary or rooftop condensing furnaces on the 
market, and it is difficult to provide for the requirements of a 
condensing furnace in a roof-top installation. Therefore, they stated, 
it is not necessary to provide a DOE test

[[Page 69602]]

procedure for testing the condensing feature of a commercial furnace at 
present.
    York (April 14, 1998 Workshop Transcript, Page 220) stated that 
condensate measurement should not be specified for condensing boilers 
and furnaces. York stated that in general, rooftop combustion equipment 
will not operate under condensing conditions, because of the difficulty 
of condensate disposal. York felt that in the future, condensing 
furnaces might become a possibility as the technology evolves. York 
stated that currently, most rooftop units have an efficiency of 80 
percent or less, and they operate at flue temperature above condensing 
range.
    Lennox (April 14, 1998 Workshop Transcript, Page 220) agreed with 
the York comment and emphasized that although condensing units have 
been on the market for a long time, none of them, for all intents and 
purposes, are unitary products sold for commercial applications. Lennox 
stated that this is due to a number of problems, and if these problems 
were to be solved through a technological breakthrough, then a test 
procedure would be appropriate.
    During the October workshop, Natural Resources Canada (October 13, 
1998 Workshop Transcript, Page 285) stated that the condensate 
collected from the condensing furnace should be only what condenses 
within the appliance itself and not beyond the heat exchanger.
    The Department disagrees with the observation from the furnace 
industry workshop attendees that DOE's adoption of a test procedure for 
determining the improvement to the efficiency due to the condensing 
feature of a condensing furnace is unwarranted at the present time. 
Since a condensing furnace is likely to provide a significantly higher 
efficiency, the Department believes that a test procedure should be in 
place in order to have a readily available, accurate method for testing 
these more efficient furnaces in the future, even if no commercial 
condensing furnaces are on the market at the present time. In addition, 
a test procedure is needed for evaluating this design option during any 
future consideration of possible revisions to the efficiency standard.
    Although the ASHRAE/IES Standard 90.1 does not specify a test 
procedure for measuring the energy efficiency of a condensing furnace, 
an industry test procedure--ASHRAE Standard 103-1993--does exist for 
residential condensing furnaces and industry has been using it for over 
a decade. The Department believes that the method of collecting and 
measuring the quantity and the temperature of the flue condensate under 
steady state conditions at the maximum rated input over a 30 minute 
test period, should also be applicable to a commercial condensing 
furnace. Since the Department sees no technical problems in its 
application to commercial warm air furnaces, the Department is 
proposing to adopt the test procedure specified in section 7.2.2.4, 
7.8, 9.2 and 11.3.7 of ASHRAE Standard 103-1993 for determining the 
increment in energy efficiency due to the condensing feature of a 
condensing furnace. In adopting the test procedure, a slight 
modification is applied to the equation in Section 11.3.7.2 of ASHRAE 
103-1993 for steady-state heat loss due to hot condensate flowing down 
the drain. In the aforementioned section, the assumed indoor 
temperature is 70 deg.F, and the average outside temperature is 
specified as 42 deg.F. The modification replaces both of these 
temperatures with the actual temperature of the test area, to be 
consistent with Section 2.2.8 of ANSI Z21.47-1993, during the steady-
state thermal efficiency test.
    The Department agrees with the recommendation from Natural 
Resources Canada that the condensate from the unit be separated from 
the condensate from the flue pipe. The referenced test procedure in 
ASHRAE Standard 103-1993 requires an installation which prevents the 
flue pipe condensate from flowing back into the unit. (See section 
7.2.2.4 of ASHRAE Standard 103-1993).

E. Sampling, Certification and Enforcement for Commercial Heating, Air 
Conditioning and Water Heating Equipment

1. Background and Public Comments
    a. Purpose. The purpose of establishing regulations concerning 
sampling, certification and enforcement is to provide reasonable 
assurance that covered commercial equipment are appropriately tested 
and actually comply with applicable energy conservation standards. In 
today's rule, the Department proposes a set of provisions concerning 
compliance certification and enforcement procedures for certain 
commercial equipment. To help assure compliance with energy 
conservation standards, the rule would require that each manufacturer 
use one of the specified methods for determining the efficiency of each 
basic model of its commercial heating, air conditioning and water 
heating equipment, and certify that the basic models comply with the 
applicable energy conservation standards. In addition, the rule 
specifies enforcement procedures for use in resolving any disputed 
performance claims for such commercial equipment.
    b. Sampling. For consumer products, as described in 10 CFR part 
430, manufacturers must test a sample of each basic model of a covered 
product to establish its efficiency level and its compliance with the 
applicable energy efficiency descriptor value specified in the Act. The 
test procedure for each product incorporates a sampling plan designed 
to give a reasonable assurance that the true mean performance of the 
equipment being manufactured and sold meets or exceeds the applicable 
value, and is accurately determined. The mean performance is a critical 
performance characteristic of a covered product because it determines 
the overall energy usage of a covered product population, and thus the 
impact of the product on national energy consumption. Individual units 
produced from a single design may vary in energy efficiency, however, 
for a number of valid reasons, including variability in manufacturing. 
The Department must balance the risk to the public of purchasing a non-
complying unit with the burden on the manufacturer in conducting 
performance testing to assure compliance, to provide adequate 
protection for the public without imposing an excessive testing burden 
on the manufacturers. Given that performance testing of every unit of a 
covered product would be prohibitively expensive and time-consuming, 
the manufacturer must estimate the average performance of the basic 
model using a sample drawn from the population. The method for 
estimating equipment performance from a small sample of a large 
population is called a sampling plan.
    c. Public Comments and Recommendations. At the April 1998 workshop, 
the Department presented for discussion compliance certification and 
enforcement sampling procedures for commercial equipment that were 
similar to those established in the past for consumer products. These 
require manufacturers to certify compliance based on testing under 
strictly prescribed statistical sampling schemes designed to assure, 
with reasonable probability, that the average efficiency of each 
product sold meets the applicable standard. Enforcement involves a 
similar, but not identical statistical sampling arrangement. The 
advantage of this approach is that manufacturers can provide adequate 
assurance of compliance without having to test every single unit they 
produce.

[[Page 69603]]

    When presented with the concept of applying a prescribed 
statistical sampling method to certifying commercial equipment, the 
participants at the April 1998 workshop made the following general 
observations:
    i. A workable uniform sampling method covering the wide variety of 
commercial equipment would be difficult, if not impossible, to 
formulate. This is due to the large number of design variations and 
small numbers of identical units for some equipment.
    ii. The California Energy Commission (CEC) and several voluntary 
industry associations already have effective efficiency certification 
programs in place that leave the sample design to the manufacturer.
    iii. With adequate independent verification and penalties for 
improper certification by a verification program, prescribing the 
sampling schemes is unnecessary, since the manufacturers would have an 
incentive to design them in each case so as to limit the risk of being 
found to be out of compliance.
    With these observations in mind, the Department investigated the 
certification programs of the State of California, the Air Conditioning 
and Refrigeration Institute, the Gas Appliance Manufacturers' 
Association, and the Hydronics Institute. Participation in these 
industry programs, generically referred to as Voluntary Independent 
Certification Programs (VICP's), could help provide assurance of 
accurate performance claims. Manufacturers have been participating in 
VICP's primarily for marketing reasons, since they feel that 
demonstrating the performance of their equipment via an independent 
testing agency adds legitimacy to their performance claims. VICP's are 
typically operated by industry associations, and the costs of the 
programs are covered by fees paid by the participating manufacturers. 
Manufacturers certify the performance metrics of their equipment to the 
VICP, the VICP publishes a directory that lists performance values of 
equipment offered for sale by each manufacturer, and the VICP 
periodically verifies the performance claims. When the VICP determines 
that a model performs below its rated level, generally the manufacturer 
must either re-rate the product or cease manufacturing it and have it 
removed from the directory (i.e., ``obsolete'' the model). A 
manufacturer's failure to meet such conditions typically results in its 
expulsion from the VICP. All of these programs entail some form of the 
following: (1) Certification by a manufacturer to a VICP of the 
efficiency level of each of its covered products; (2) the VICP's 
independent verification or supervision of levels claimed by the 
manufacturer; and (3) penalties imposed by the VICP to discourage 
inaccurate ratings and ensure that certified efficiencies would be 
reliable. On the other hand, some manufacturers do not participate in 
VICP's, and no program exists at present for commercial warm-air 
furnaces, so the Department would need to specify its own certification 
testing and verification arrangement, at least for equipment not 
otherwise covered by a VICP.
    The Department received additional comments during, and subsequent 
to, the second public workshop which was held on October 18, 1998. 
These comments helped refine the proposed compliance certification and 
enforcement procedures to take advantage of current voluntary industry 
certification programs and allow alternate procedures for determining 
compliance.
    At the second workshop, commenters suggested that DOE consider the 
following elements in the proposed rule:
     After DOE initially approves a VICP, in accordance with 
the specified criteria, a VICP should not require re-approval by DOE 
unless there is a change within the program. In case of such a change, 
the program would inform DOE promptly and apply for a re-approval. 
Another suggestion was that DOE approve a VICP for a pre-determined 
length of time (suggested time frame: 12 months to 5 years), during 
which DOE could revoke approval at any time if warranted.
     Participation in a VICP should be a basis for establishing 
both (1) the validity of product efficiency representations, and (2) 
compliance with minimum standards.
     The ``obsoleting'' of a model should not automatically 
follow its ``delisting'' from a VICP product directory, if the basic 
model falls short of the certified efficiency but still meets the 
minimum efficiency standards prescribed by EPCA.
     A VICP should monitor the performance data and provide 
this data to DOE.
     For Non-Participants in VICP's, review of manufacturer 
self-testing by a licensed Professional Engineer to assure compliance 
and the accuracy of efficiency representations by itself is not 
adequate. They should conduct performance testing or verify the testing 
results by using a qualified independent laboratory.
     DOE should approve alternative methods other than testing 
for efficiency determinations, but the Department should guard against 
public disclosure of proprietary methods, which could harm individual 
manufacturers.
     An alternative method for efficiency determination should 
not require DOE approval in the case of VICP participants.
     Certification provisions should afford manufacturers the 
discretion to certify more conservative (i.e., lower) efficiency 
ratings than the mean efficiency values predicted by the manufacturers' 
tests or calculations.
     Enforcement provisions should restrict the definition of 
units available for testing to units which are available for commercial 
distribution within the U.S.
     Enforcement testing should require samples of no more than 
two units initially, followed by up to two more units if the first two 
fail.
     The compliance statement for a basic model should be a 
one-time report to DOE which either the manufacturer/private labeler or 
a VICP acting on their behalf can submit.
    Written comments underscored some of these observations and added 
others. The Air-Conditioning & Refrigeration Institute (ARI) (October 
13, 1998 Workshop, Written Comment #9) requested that the regulations 
allow for the rerating of basic models that, when tested, fall short of 
their certified efficiency but still meet the minimum efficiency 
standards. ARI also requested that re-approval of a VICP should only be 
required when there is a change in the program, or after five years, 
whichever comes first. On the issue of enforcement testing, ARI 
supported starting with two test samples instead of four. They 
questioned the need for a compliance statement being submitted to DOE 
for manufacturers who participate in a VICP, since the VICP will have 
to be approved by DOE, and manufacturers' ratings will be verified 
through the VICP.
    Written comments from the Gas Appliance Manufacturers Association 
(GAMA) (October 13, 1998 Workshop, Written Comment #10) also requested 
that the rerating of a product which meets the energy efficiency 
standard prescribed by EPCA, but tests lower than the rating submitted 
by the manufacturer, be allowed. GAMA also felt that periodic re-
approval of a VICP should not be required, and that enforcement testing 
should entail an initial sample of two units. GAMA also questioned the 
need for a compliance statement for VICP participants.
    Based upon the comments received during and after the public 
workshops, the Department proposes requiring manufacturers to certify 
compliance based on testing, and to either conduct

[[Page 69604]]

the testing under a DOE-prescribed sampling scheme, or participate in a 
VICP approved by the Department. Each option would afford the 
opportunity to utilize alternative efficiency determination methods. In 
this way, the Department proposes to minimize additional testing 
burdens on manufacturers of commercial equipment, while maintaining a 
certification procedure which is fair to all manufacturers, and which 
provides reasonable assurance that the established minimum performance 
standards are being met. The proposed procedures, described in the 
following sections, include a basic certification program, a provision 
for VICP's, and an enforcement testing plan. The Department anticipates 
that this proposal would not require any additional testing beyond what 
manufacturers who are participating in industry certification programs 
conduct already, and it would involve a similar level of testing by 
manufacturers who elect not to participate in VICP's.
2. Proposed Certification and Enforcement Procedures
    a. Certification Procedures. The Department proposes to require 
each manufacturer to certify to the Department the efficiencies of 
commercial equipment it manufactures, either directly or through a 
VICP. This would be accomplished by submitting both a compliance 
statement, a one-time submittal, and a certification statement for each 
basic model of covered equipment. The manufacturer would be required to 
maintain records of all test results and related analysis used in the 
determination of the mean energy performance. Today's rule includes 
possible formats for certifying efficiency to the Department.
    b. Basis for Certification: Methods for Determining Efficiency. 
Underlying each certification to the Department would be the 
manufacturer's determination of a basic model's energy efficiency or 
usage. The proposed rule would require a manufacturer to make such 
determination either by testing the basic model, or by calculating its 
energy efficiency or use through use of an alternative efficiency 
determination method (AEDM). The specific requirements for testing and 
AEDMs would differ, however, depending on whether a manufacturer's 
covered products were included in a VICP approved by the Department.
    An AEDM is an analytical procedure, such as a computer simulation 
or other approach, that can determine the energy efficiency or use of a 
product. The Department proposes to permit the use of AEDMs due to the 
potentially large number of basic model variations, and the burden that 
would result if the Department required that each basic model be tested 
to determine its efficiency. But a manufacturer could use an AEDM to 
establish the energy efficiency or use of covered equipment only if the 
ADEM had been verified and validated with measured data, i.e., using 
test results. Thus, although the Department proposes to permit the use 
of AEDMs, and would not require the testing of every basic model, all 
efficiency determinations would be based on testing.
    The proposed requirements for testing would apply both to tests 
used directly to determine the efficiency of a basic model, and to 
tests used to validate an AEDM. All manufacturers would be required to 
(1) perform testing in accordance with the applicable DOE test 
procedure, (2) test randomly selected units representative of the basic 
model, (3) have their testing and rating results meet industry 
standards for accuracy for the equipment being rated, and (4) test a 
sufficient number of units to produce an accurate estimate of the mean 
efficiency of all units manufactured of the basic model. The proposed 
rule allows VICP participants substantial discretion in this last 
respect, by permitting them to use any valid statistical method to 
determine the number of units to be tested and the mean efficiency. For 
non-participants, the Department is proposing stricter, prescribed 
sampling procedures, since their efficiency ratings will not be subject 
to routine verification testing.
    As to AEDMs, in addition to the general requirements stated above, 
the Department would require any manufacturer employing an AEDM to 
maintain written documentation of its validation of the AEDM. In 
addition, if the equipment being rated is not listed with a VICP 
approved by the Department, validation would require demonstration that 
the results from using the AEDM are consistent with the results of 
actual tests of at least three basic models, and the manufacturer would 
be required to obtain advance approval of the AEDM by the Department. 
The manufacturer would apply for such approval in writing and submit 
all relevant information related to the calculations and calibration 
procedures.
    c. Voluntary Independent Certification Program. Participation in a 
VICP would allow a manufacturer an alternative to (1) following the DOE 
sampling plan, and (2) required DOE approval of an AEDM. A VICP 
participant must still test its products and validate its AEDM, and 
must file a compliance statement and certification report, either 
directly to the Department, or via the VICP on the manufacturers' 
behalf.
    The Department proposes that it would approve VICP's that meet the 
following requirements:
     The VICP publishes in written form the procedures for the 
operation of the certification program, and permits all manufacturers 
of products covered by the program to participate so long as they 
comply with requirements concerning operation of the program.
     To participate in the VICP, a manufacturer would be 
precluded from distributing any basic models of equipment covered by 
the program unless it had reported to the VICP the energy efficiency or 
usage, as applicable, of that basic model, based on measurement of the 
basic model's performance.
     The VICP publishes or otherwise makes available to the 
general public and to the Department, these efficiency ratings.
     The VICP conducts periodic verification testing on listed 
equipment, such that the performance of each basic model is checked and 
compared to its rated efficiency value at least once every five years.
     The VICP testing personnel select units for verification 
testing randomly from manufacturer's stock.
     The VICP conducts its verification testing at an 
independent laboratory, or under the supervision of independent 
personnel, in accordance with the prescribed DOE test procedures.
     The VICP verification testing meets industry standards for 
the accuracy of testing and of rating results for the equipment being 
tested, and the program satisfactorily describes how it meets these 
standards.
     The VICP has an appropriate standard for determining 
whether the efficiency rating a manufacturer claims for a product is 
valid.
     The VICP provides to the manufacturer copies of all 
records of completed verification testing performed on the 
manufacturer's covered equipment.
     The VICP requires that, if a basic model fails 
verification testing conducted by the VICP, the manufacturer of the 
basic model must remove it from production and sale if the verification 
testing results show it is not in compliance with EPCA efficiency 
standards, or correctly re-rate it if it complies with such standards. 
The program must also provide that a participating manufacturer will be 
expelled from the VICP if it does not

[[Page 69605]]

comply with such requirements, and that the VICP will report to the 
Department verification test results that find the performance of a 
basic model not to meet EPCA efficiency standards. (A basic model 
``fails'' verification testing when the VICP has compared the basic 
model's efficiency rating resulting from completion of that testing 
with the efficiency rating claimed by the manufacturer, and has 
determined that the rating claimed by the manufacturer is not valid.)
     The VICP provides for penalties or other incentives to 
encourage manufacturers to report accurate and reliable efficiency 
ratings.
     The VICP provides to the Department on an annual basis, 
summary data that shows the results of verification testing on each 
basic model, including the manufacturer's energy efficiency or use 
rating for the model, the measured energy efficiency or use from the 
verification testing , and either the energy conservation standard for 
the tested basic model or a description of the model sufficient to 
enable the Department to determine the standard that applies to the 
basic model. (See discussion in section 3 below)
    Voluntary Independent Certification Programs which meet the above 
requirements could request the Department's approval by submitting 
documentation substantiating their compliance directly to the 
Department. Approval would remain in force for five years, unless 
material changes occur in the program. In the event of changes, the 
VICP administrator would be required to notify the Department, which 
may at that time rescind the approval. At the end of any such five-year 
period, the VICP could request re-approval.
    The VICP could submit compliance and certification paperwork to the 
Department on the behalf of participating manufacturers.
    d. Manufacturers Not Participating in a VICP. As discussed above, 
the Department proposes requiring manufacturers not participating in 
VICP's to meet more specific criteria for testing and AEDMs. With 
regard to testing, the sampling procedure referred to above would 
require a manufacturer to select a sample of sufficient size to ensure 
that:
     Any represented value of energy efficiency is no greater 
than the lower of the mean of the sample, or the lower 95 percent 
confidence limit of the true mean divided by 0.95; and,
     Any represented value of energy usage is no less than the 
greater of the mean of the sample, or the upper 95 percent confidence 
limit of the true mean divided by 1.05.
    The Department also proposes that manufacturers of commercial 
heating, air conditioning and water heating equipment who do not 
participate in a VICP approved by the Department, must conduct all 
performance testing of covered products at an independent laboratory, 
or under the supervision of independent testing personnel. This 
requirement would provide greater assurance of the accuracy and 
reliability of such testing. It is also warranted by the lack of on-
going verification of the efficiency ratings of non-participants in 
VICPs, and by DOE's proposal that verification testing by VICPs be 
conducted by an independent facility or under independent supervision. 
DOE is uncertain, however, as to whether sufficient numbers of 
independent testing laboratories and personnel exist to enable 
manufacturers to satisfy this requirement, and whether it would 
otherwise impose undue burdens on manufacturers. Therefore, the 
Department encourages interested parties to address these issues in 
particular, including whether the Department should modify or omit this 
requirement in the proposed rule.
    e. Enforcement. The Department proposes that the enforcement 
provisions for commercial heating, air conditioning and water heating 
equipment would be for the most part virtually identical to those in 10 
CFR Part 430, except for the sampling plan for enforcement testing. The 
proposed sampling plan for enforcement testing would require a 
manufacturer to provide to DOE an initial sample size of two units for 
enforcement testing, with a manufacturer's option of testing an 
additional two units, for a maximum sample size of four units. The 
Department could allow an exception to the sample size for very large 
units on a case-by-case basis, such that only a single unit would be 
tested. Manufacturers would be permitted to request such an exception 
from the Department.
    Participation in a VICP would not affect a manufacturer's 
obligations as described in the enforcement regulations.
3. Accommodation for Manufacturing Tolerances, Measurement Uncertainty 
and Small Sample Sizes
    As indicated above, VICP's conduct verification testing to 
determine if a manufacturer's rating of a basic model is accurate. The 
testing frequently consists of tests on a single unit, or at most two 
units, of the model. Following the tenets of probability, the measured 
energy efficiency or use derived from testing any small sample, such as 
one or two units of a basic model, may be higher or lower than the 
average for the basic model population as a whole. These variations may 
be due to manufacturing tolerances and/or measurement uncertainty. As a 
result, VICP's frequently employ a tolerance band by which a basic 
model is deemed not to fail verification testing unless its performance 
measured from the testing is below the manufacturer's rating for the 
model by more than a set percentage, such as 5 percent. The 
justification for this tolerance band is to avoid a false conclusion 
that a basic model has been over-rated, based on test results for a 
small sample.
    The Department has generally required that compliance with the 
energy conservation standards in EPCA be determined by whether the mean 
performance of the entire population of a covered product meets the 
minimum standard applicable to that product. Under this approach, an 
individual unit of a product could have a measured efficiency less than 
the applicable minimum standard, due for example to variations in 
manufacturing and/or to measurement uncertainty, but the product would 
be in compliance as long as the average efficiency of the basic model 
population conforms to the minimum standard. Following once again the 
tenets of probability, this means that if a sufficiently large number 
of units of a basic model were tested, the mean energy efficiency would 
meet the standard. To allow testing of small samples to establish 
compliance, the appliance standard rules in 10 CFR Part 430 incorporate 
specific statistical procedures for rating products for energy 
efficiency and use. In this rulemaking, the Department proposes to 
require use of such strict statistical procedures by manufacturers to 
rate products not covered by a VICP. But it is not proposing them for 
compliance determinations for products covered by VICP's, largely 
because verification testing by a VICP helps insure accurate efficiency 
ratings.
    Although the Department recognizes that some accommodation by a 
VICP is appropriate to allow for reasonable levels of manufacturing 
variation and measurement uncertainty in covered products, it is 
concerned that manufacturers might take advantage of a tolerance band 
on verification testing results by consistently over-rating the energy 
use or efficiencies of basic models. Such a problem might be indicated, 
for example, if verification test results were consistently skewed on 
the side of over-rating of basic models, rather than exhibiting a 
normal distribution whereby the proportion of

[[Page 69606]]

the verification test results that were higher than the rating 
submitted by the manufacturer was approximately equal to the proportion 
that were lower. The Department is concerned both that non-complying 
products might be rated as being in compliance and that complying 
products might be over-rated.
    To address these concerns, today's proposed rule contains 
provisions to enable the Department to monitor the extent, if any, to 
which the energy efficiency or use of products covered by VICP's may be 
over-rated as a result of tolerance bands for verification testing 
results. These provisions would require VICP's to submit to the 
Department annually summary data on verification testing results. 
Specifically, the proposed rule would require VICP's to report the 
following for each verification test or round of verification tests on 
a basic model: (1) The model's energy efficiency or use as measured by 
the testing, (2) the energy efficiency or use rating submitted by the 
manufacturer for that basic model (i.e., the rating that was evaluated 
by the testing), and (3) either the energy conservation standard for 
that basic model or a brief description of the basic model that would 
enable the Department to determine the applicable standard. The data 
would not include manufacturer identification. If it appeared to the 
Department from this information that over-rating was occurring, the 
Department would consider one or more of the following actions:
     Pursue modification of all or part of the VICP's 
provisions for verification testing;
     Revoke the Department's certification of the VICP; or
     Pursue enforcement procedures.

III. Procedural Requirements

A. Review Under the National Environmental Policy Act of 1969

    EPCA prescribes energy efficiency standards and test procedures for 
commercial equipment, and in today's rule, the Department proposes to 
implement these requirements for commercial warm air furnaces and, to 
some extent, commercial heating, air conditioning and water heating 
equipment generally. The Department has reviewed the proposed rule 
under the National Environmental Policy Act of 1969 (NEPA), 42 U.S.C. 
Secs. 4321 et seq., the regulations of the Council on Environmental 
Quality, 40 CFR parts 1500-1508, the Department's regulations for 
compliance with NEPA, 10 CFR Part 1021, and the Secretarial Policy on 
the National Environmental Policy Act (June 1994). Implementation of 
the Proposed rule would not result in environmental impacts. The 
Department has therefore determined that the proposed rule is covered 
under the Categorical Exclusion found at paragraph A6 of appendix A to 
subpart D of the Department's NEPA Regulations, which applies to 
rulemakings that are strictly procedural. Accordingly, neither an 
environmental assessment nor an environmental impact statement is 
required.

B. Review Under Executive Order 12866, ``Regulatory Planning and 
Review''

    Today's rule has been determined not to be a ``significant 
regulatory action,'' as defined in section 3(f) of Executive Order 
12866, ``Regulatory Planning and Review.'' 58 FR 51735 (October 4, 
1993). Accordingly, this action was not subject to review under the 
Executive Order by the Office of Information and Regulatory Affairs.

C. Review Under the Regulatory Flexibility Act

    The Regulatory Flexibility Act of 1980, 5 U.S.C. Sec. 603, requires 
the preparation of an initial regulatory flexibility analysis for every 
rule which, by law, the agency must propose for public comment, unless 
the agency certifies that the rule, if promulgated, will not have a 
significant economic impact on a substantial number of small entities. 
A regulatory flexibility analysis examines the impact of the rule on 
small entities and considers alternative ways of reducing negative 
impacts.
    The Small Business Administration considers an entity to be a small 
business if, together with its affiliates, it employs fewer than a 
threshold number of workers specified in 13 CFR part 121. The estimated 
number of affected small businesses are discussed below.
     The threshold number of employees for SIC classification 
3585, which includes warm-air furnaces, is 750. The Department 
estimates that between 25 and 39 firms manufacture warm-air furnaces, 
and of these the majority have fewer than 750 employees and are 
considered small businesses. The number of these small businesses that 
manufacture commercial warm-air furnaces covered by the EPACT standards 
(with capacities of 225,000 Btu per hour and above) could be smaller.
     The threshold number for SIC classification 3585, which 
includes air conditioners and heat pumps, is also 750. The Department 
estimates that approximately 31 firms manufacture covered commercial 
air conditioners and heat pumps, and of these, 14 are considered small 
businesses.
     The threshold number for SIC classification 3433, which 
includes commercial packaged boilers, and other non-electric heating 
equipment, is 500. The Department estimates that no more than 29 firms 
manufacture commercial packaged boilers, and of these, the majority are 
considered small businesses. The number of small businesses that 
manufacture commercial-sized packaged boilers covered by the EPACT 
standards (with capacities of 300,000 Btu per hour and above) could be 
smaller.
     The threshold number for SIC classification 3589, which 
includes commercial water heaters, along with other service industry 
machinery not elsewhere classified, is also 500. The Department 
estimates that approximately 25 firms manufacture water heaters and 
unfired hot water storage tanks, and of these the majority are 
considered small businesses. The number of small businesses that 
manufacture commercial-sized equipment covered by the EPACT standards 
could be smaller.
    EPCA establishes efficiency standards for commercial heating, air 
conditioning and water heating equipment and requires the Department to 
prescribe test procedures that are accepted by industry and referenced 
in ASHRAE/IES Standard 90.1. For the most part, EPCA specifies the 
standards and test procedures incorporated in today's proposed rule. 
Therefore, any costs of complying with them are imposed by EPCA and not 
the rule. Moreover, today's proposed rule codifies testing procedures 
that are already generally employed by manufacturers, both large and 
small. The proposed rule also prescribes procedures for manufacturers 
to certify compliance with the standards and test procedures legislated 
by EPCA, using powers which were originally granted to the Secretary 
under NAECA, and extended by EPACT to require manufacturers of covered 
commercial equipment to submit information and reports for a variety of 
purposes, including insuring compliance with requirements. These 
certification requirements, as well as proposed enforcement provisions, 
are new for manufacturers of commercial equipment and will affect both 
small and large enterprises.
    The Department has drafted the proposed rule to minimize the burden 
of compliance for manufacturers, and the rule relies heavily on current 
industry practice. Statistical sampling is permitted for testing, so as 
to minimize the testing burden. Manufacturers that participate in 
VICP's are also afforded considerable latitude in designing

[[Page 69607]]

sampling plans to suit their individual circumstances, consistent with 
the requirement for reasonable degrees of reliability. To minimize 
testing burden further, manufacturers are permitted to use analytical 
procedures, such as computer simulation, to determine the efficiencies 
of their products. Manufacturers are also given the option of 
certifying their products to the Department independently or through 
trade associations, which can minimize costs by reporting on large 
numbers of individual products at one time. Finally, the certification 
forms and enforcement procedures are similar to those already required 
for consumer products, and several of the same manufacturers produce 
both consumer products and commercial equipment.
    The cost of establishing compliance will depend on the number of 
basic models a manufacturer produces. The cost of completing the 
compliance certification form should be negligible once testing has 
occurred. Testing cost depends on unit size, but could amount to 
several thousands of dollars per basic model. To the extent that 
manufacturers must already test their products for efficiency to assure 
that they meet the existing statutory efficiency standards, or for any 
other reason, they will not incur new costs in complying with today's 
proposed rule. The Department believes that any significant economic 
impact will fall only on those firms which do not now routinely test 
their products. The Department further believes that testing is a 
widely accepted practice, and that companies that do not test are rare 
and do not represent a substantial number of small entities.
    The Department has limited discretion to apply different 
requirements to small manufacturers. EPCA mandates uniform standards 
and test procedures for commercial equipment. In this regard, it is 
noteworthy that although EPCA contains a ``small manufacturer 
exemption'' for consumer appliances (42 USC 6295 (t)), it includes no 
such exemption for commercial and industrial equipment.
    The Department invites public comment on its conclusion that the 
incremental costs of complying with the proposed rule (not including 
the cost of requirements that are directly imposed by EPCA, such as the 
energy efficiency standards themselves) would not impose a significant 
impact on a substantial number of small businesses.

D. Review Under Executive Order 13132

    Executive Order 13132 (64 FR 43255, August 4, 1999) imposes certain 
requirements on agencies formulating and implementing policies or 
regulations that preempt State law or that have federalism 
implications. Agencies are required to examine the constitutional and 
statutory authority supporting any action that would limit the 
policymaking discretion of the States and carefully assess the 
necessity for such actions. The proposed rule published today would not 
regulate the States. The proposed rule would primarily codify energy 
efficiency standards and test procedures already established in EPCA 
for commercial equipment. DOE has determined that today's rule does not 
have a substantial direct effect on the States, on the relationship 
between the national government and the States, or on the distribution 
of power and responsibilities among the various levels of government. 
No further action is required by Executive Order 13132.

E. Review Under Executive Order 12630, ``Governmental Actions and 
Interference With Constitutionally Protected Property Rights''

    The Department has determined under Executive Order 12630, 
``Governmental Actions and Interference with Constitutionally Protected 
Property Rights,'' 52 FR 8859 (March 18, 1988), that this regulation 
would not result in any takings which might require compensation under 
the Fifth Amendment to the United States Constitution.

F. Review Under the Paperwork Reduction Act

    Today's notice of proposed rulemaking would impose information 
maintenance and reporting requirements on manufacturers of commercial 
heating, air conditioning and water heating equipment. An agency may 
not conduct or sponsor a collection of information unless the 
collection displays a currently valid OMB control number. (See 5 CFR 
1320.5(b)).
    The proposed rule will require manufacturers to maintain records 
concerning their determinations of the energy consumption and 
efficiency of covered commercial equipment. DOE believes that this 
recordkeeping is necessary for implementing and monitoring compliance 
with energy conservation standards and testing provisions mandated by 
EPCA. The proposed rule would also require manufacturers to make a one-
time submission of a compliance statement, and to submit certification 
reports for existing basic models of covered commercial equipment, 
within 12 months after the publication of a final rule in the Federal 
Register. A report covering a basic model need only be submitted once, 
stating that the manufacturer has determined that the basic model meets 
the applicable energy conservation standard. After the initial 
submission, manufacturers will have to submit a certification report 
for each new basic model before the model may be distributed in 
commerce, or to certify compliance with a new or amended standard.
    The proposed collections of information are necessary for 
implementing and monitoring compliance with the efficiency standards 
and testing requirements for commercial equipment mandated by EPCA. In 
developing the proposed information collection requirements, DOE 
considered the views of stakeholders that were received at two public 
workshops held during April and October 1998, in written comments 
solicited in the notice of those meetings, and in subsequent informal 
contacts.
    The following are the DOE estimates of the total annual reporting 
and recordkeeping burden imposed on the affected manufacturing firms 
for compliance with the proposed rule. The Department estimates that 
the number of hours required to comply with the reporting and 
recordkeeping requirements in the proposed rule is approximately 200 to 
300 hours per year per firm.
     For commercial warm-air furnaces, the estimated number of 
covered manufacturing firms is between 25 and 39. The total annual 
reporting and recordkeeping burden from compliance with the proposed 
rule is expected to be from 5,000 to 11,700 hours (25 x 200 to 39 x 300 
hours per year).
     For small and large commercial air conditioners and heat 
pumps, the estimated number of covered manufacturing firms is no more 
than 31. The total annual reporting and recordkeeping burden from 
compliance with the proposed rule is expected to be from 6,200 to 9,300 
hours (31 x 200 to 31 x 300 hours per year).
     For commercial packaged boilers, the estimated number of 
covered manufacturing firms is no more than 29. The total annual 
reporting and recordkeeping burden from compliance with the proposed 
rule is expected to be from 5,800 to 8,700 hours (29 x 200 to 29 x 300 
hours per year).
     For commercial water heaters and unfired hot water storage 
tanks, the estimated number of covered manufacturing firms is no more 
than 25. The total annual reporting and recordkeeping burden from 
compliance

[[Page 69608]]

with the proposed rule is expected to be from 5,000 to 7,500 hours 
(25 x 200 to 25 x 300 hours per year).
    The above estimates include time for reviewing instructions, 
searching existing data sources, gathering and maintaining the data 
needed, and completing the collection of information.
    In developing the burden estimates, DOE considered that each 
manufacturer is required to comply with the statutory energy efficiency 
standards for each type of commercial equipment it is manufacturing on 
the effective date of the Act, and for each model it begins to 
manufacture after that date. The required certification would contain 
the type of information that many manufacturers already submit to 
voluntary programs or develop for the design or marketing of energy 
efficient commercial equipment. Those manufacturers should be able to 
comply with the certification required by the proposed rule without 
much additional burden. And, finally, the Department believes, based on 
manufacturers' statements as to their determinations of product 
performance, that they already maintain the records of efficiency 
determinations that the proposed rule would require them to keep.
    The Department has submitted these proposed information collection 
and recordkeeping requirements to the Office of Management and Budget 
for review and approval under the Paperwork Reduction Act, 44 U.S.C. 
3501, et seq. The OMB previously approved Appendix A to Subpart F of 
Part 430, ``Compliance Statement and Certification Report,'' and 
assigned OMB control number 1910-1400. The proposed rule would revise 
these forms to cover certification of commercial heating, air 
conditioning and water heating equipment; facilitate the use of the 
certification report by third party representatives of covered product 
manufacturers; and in an attachment, specify forms similar to those 
that manufacturers are currently required to submit to DOE by 10 CFR 
Part 430.62(a)(2).
    The Department considers the information collection and 
recordkeeping called for in this proposed rule to be the least 
burdensome possible for meeting the legal requirements of EPCA and 
effectively enforcing the provisions of the law. However, the 
Department encourages public comments concerning the anticipated 
paperwork reporting burden. Send comments regarding recordkeeping or 
reporting burdens, or any other aspect of information collection, to 
the Department in accordance with the instructions in the DATES and 
ADDRESSES sections of this notice, as well as in Section IV below. Send 
a copy of the same comments to the Office of Information and Regulatory 
Affairs, Office of Management and Budget, Washington, DC 20503, marked 
``Attention: Desk Officer for DOE.''

G. Review Under Executive Order 12988, ``Civil Justice Reform''

    With respect to the review of existing regulations and the 
promulgation of new regulations, Section 3(a) of Executive Order 12988, 
``Civil Justice Reform,'' 61 FR 4729 (February 7, 1996), imposes on 
executive agencies the general duty to adhere to the following 
requirements: (1) Eliminate drafting errors and ambiguity; (2) write 
regulations to minimize litigation; and (3) provide a clear legal 
standard for affected conduct rather than a general standard and 
promote simplification and burden reduction. With regard to the review 
required by Section 3(a), Section 3(b) of the Executive Order 
specifically requires that Executive agencies make every reasonable 
effort to ensure that the regulation: (1) Clearly specifies the 
preemptive effect, if any; (2) clearly specifies any effect on existing 
Federal law or regulation; (3) provide a clear legal standard for 
affected conduct while promoting simplification and burden reduction; 
(4) specifies the retroactive effect, if any; (5) adequately defines 
key terms; and (6) addresses other important issues affecting clarity 
and general draftsmanship under any guidelines issued by the Attorney 
General. Section 3(c) of the Executive Order requires agencies to 
review regulations in light of applicable standards Section 3(a) and 
Section 3(b) to determine whether they are met or it is unreasonable to 
meet one or more of them.
    The Department reviewed today's proposed rule under the standards 
of Section 3 of the Executive Order and determined that, to the extent 
permitted by law, it meets the requirements of those standards.

H. Review Under Section 32 of the Federal Energy Administration Act of 
1974

    Under section 301 of the Department of Energy Organization Act 
(Pub. L. 95-91), the Department of Energy must comply with section 32 
of the Federal Energy Administration Act of 1974, as amended by the 
Federal Energy Administration Authorization Act of 1977. 15 U.S.C. 788. 
Section 32 provides in essence that, where a proposed rule contains or 
involves use of commercial standards, the notice of proposed rulemaking 
must inform the public of the use and background of such standards.
    This rule proposed in this notice incorporates a several commercial 
standards which EPCA requires to be used. These include testing 
standards referenced by ASHRAE/IES Standard 90.1-1989 for the 
measurement of steady state thermal efficiency of commercial warm air 
furnaces. Because the Department has very limited discretion to depart 
from the standards referenced in ASHRAE/IES 90.1, Section 32 of the 
FEAA does not apply to them.
    Two commercial standards incorporated in this rule are not 
referenced by ASHRAE/IES Standard 90.1-1989, and are thus their use is 
not required by EPCA. One is ASHRAE Standard 103-1993, `` Method of 
Testing for Annual Fuel Utilization Efficiency of Residential Central 
Furnaces and Boilers.'' The Department proposes to adopt portions of 
this standard to obtain a suitable test procedure for condensing 
furnaces, which are not covered by ASHRAE/IES Standard 90.1-1989. The 
other is the Hydronics Institute (HI) Standard ``Testing and Rating 
Standard for Heating Boilers,'' which specifies a flue loss calculation 
procedure for oil-fired equipment, also not covered by ASHRAE/IES 
Standard 90.1-1989. The Department has evaluated these two standards 
and is unable to conclude whether they fully comply with the 
requirements of section 32(b) of the Federal Energy Administration Act, 
i.e., that they were developed in a manner that which fully provides 
for public participation, comment and review.
    As required by section 32(c) of the Federal Energy Administration 
Act, the Department will consult with the Attorney General and the 
Chairman of the Federal Trade Commission concerning the impact of these 
two standards on competition, prior to prescribing a final rule.

I. Review Under Unfunded Mandates Reform Act of 1995

    Section 202 of the Unfunded Mandates Reform Act of 1995 (``Unfunded 
Mandates Act'') requires that the Department prepare a budgetary impact 
statement before promulgating a rule that includes a Federal mandate 
that may result in expenditure by state, local, and tribal governments, 
in the aggregate, or by the private sector, of $100 million or more in 
any one year. The budgetary impact statement must include: (i) 
Identification of the Federal law under which the rule is promulgated; 
(ii) a qualitative and

[[Page 69609]]

quantitative assessment of anticipated costs and benefits of the 
Federal mandate and an analysis of the extent to which such costs to 
state, local, and tribal governments may be paid with Federal financial 
assistance; (iii) if feasible, estimates of the future compliance costs 
and of any disproportionate budgetary effects the mandate has on 
particular regions, communities, non-Federal units of government, or 
sectors of the economy; (iv) if feasible, estimates of the effect on 
the national economy; and (v) a description of the Department's prior 
consultation with elected representatives of state, local, and tribal 
governments and a summary and evaluation of the comments and concerns 
presented.
    The Department has determined that the action proposed today does 
not include a Federal mandate that may result in estimated costs of 
$100 million or more to state, local or to tribal governments in the 
aggregate or to the private sector. Therefore, the requirements of 
Sections 203 and 204 of the Unfunded Mandates Act do not apply to this 
action.

J. Review Under the Plain Language Directives

    The President's Memorandum on ``Plain Language in Government 
Writing,'' 63 FR 31885 (June 10, 1998) directs each Federal agency to 
write all published rulemaking documents in plain language. The 
Memorandum includes general guidance on what constitutes ``plain 
language.'' Plain language requirements will vary from one document to 
another, depending on the intended audience, but all plain language 
documents should be logically organized and clearly written.
    DOE invites public comments on how to make this proposed rule 
easier to understand. For example:
     Are the requirements in the rule clearly stated?
     Would a different organization better suit your needs?
     Have we organized the material to suit your needs?
     Does the rule contain jargon or unnecessary technical 
language?
     Can we improve the rule's format?

K. Review Under the Treasury and General Government Appropriations Act, 
1999

    Section 654 of the Treasury and General Government Appropriations 
Act, 1999 (Pub. L. No. 105-277) requires federal agencies to issue a 
Family Policymaking Assessment for any proposed rule or policy that may 
affect family well-being. Today's proposal would not have any impact on 
the autonomy or the integrity of the family as an institution. 
Accordingly, DOE has concluded that it is not necessary to prepare a 
Family Policymaking Assessment.

IV. Public Comment

A. Written Comment Procedures

    The Department invites interested persons to participate in the 
proposed rulemaking by submitting data, comments, or information with 
respect to the issues set forth in today's rule to Mr. Cyrus Nasseri, 
at the address indicated at the beginning of the notice. The Department 
will consider all submittals received by the date specified at the 
beginning of this notice in developing the final rule.
    Under the provisions of Title 10 CFR 1004.11, any person submitting 
information which he or she believes to be confidential and exempt by 
law from public disclosure should submit one complete copy of the 
document and ten (10) copies, if possible, from which the information 
believed to be confidential has been deleted. The Department of Energy 
will make its own determination with regard to the confidential status 
of the information and treat it according to its determination.
    Factors of interest to the Department when evaluating requests to 
treat as confidential information that has been submitted include: (1) 
A description of the items; (2) an indication as to whether and why 
such items are customarily treated as confidential within the industry; 
(3) whether the information is generally known by or available from 
other sources; (4) whether the information has previously been made 
available to others without obligation concerning its confidentiality; 
(5) an explanation of the competitive injury to the submitting person 
which would result from public disclosure; (6) an indication as to when 
such information might lose its confidential character due to the 
passage of time; and (7) why disclosure of the information would be 
contrary to the public interest.

B. Public Hearing

1. Procedures for Submitting Requests To Speak
    The beginning of this notice of proposed rulemaking indicates the 
time and place of the public hearing. The Department invites any person 
who has an interest in today's notice of proposed rulemaking, or who is 
a representative of a group or class of persons that has an interest in 
these proposed rules, to request an opportunity to make an oral 
presentation. If you would like to attend the public hearing, please 
notify Ms. Brenda Edwards-Jones at (202) 586-2945. You may also hand 
deliver requests to speak to the address indicated at the beginning of 
the notice between the hours of 8:00 a.m. and 4:00 p.m., Monday through 
Friday, except Federal holidays.
    The person making the request should briefly describe the interest 
concerned and state why he or she, either individually or as a 
representative of a group or class of persons that has such an 
interest, is an appropriate spokesperson, and give a telephone number 
for contact.
    The Department requests each person selected to be heard to submit 
an advance copy of his or her statement prior to the hearing as 
indicated at the beginning of this notice. The Department, at its 
discretion, may permit any person wishing to testify who cannot meet 
this requirement, to testify if that person has made alternative 
arrangements with the Office of Codes and Standards in advance. The 
letter making a request to give an oral presentation must ask for such 
alternative arrangements.
2. Conduct of Hearing
    The Department will designate a Department official to preside at 
the hearing. The hearing will not be a judicial or an evidentiary-type 
hearing, but the Department will conduct it in accordance with 5 U.S.C. 
553 and Section 336 of the Act. The Department of Energy reserves the 
right to select the persons to be heard at the hearing, to schedule the 
respective presentations, and to establish the procedures governing the 
conduct of the hearing.
    The Department will permit each participant to make a prepared 
general statement, limited to five (5) minutes, prior to the discussion 
of specific topics. The general statement should not address these 
specific topics, but may cover any other issues pertinent to this 
rulemaking. The Department will permit other participants to briefly 
comment on any general statements. The Department will then divide the 
hearing into segments, with each segment consisting of one or more 
topics covered by this notice, as follows:

Test Procedures for Commercial Furnaces

     ASHRAE Referenced Test Standards.
     Definition of Thermal Efficiency.
     Test Procedures for the Measurement of Energy Efficiency.
     Other Test Standard Topics.

[[Page 69610]]

Certification and Enforcement Procedures for Commercial Heating, Air 
Conditioning and Water Heating Equipment

     Certification.
     Alternative Methods for Determining Efficiency.
     Voluntary Independent Certification Programs.
     Non-Participating Manufacturers.
     Other Certification and Enforcement Topics.
    The Department will introduce each topic with a brief summary of 
the relevant provisions of the proposed rule, and the significant 
issues involved. The Department will then permit participants in the 
hearing to make a prepared statement limited to five (5) minutes on 
that topic. At the end of all prepared statements on a topic, the 
Department will permit each participant to briefly clarify his or her 
statement and comment on statements made by others. The Department is 
particularly interested in having participants address in their 
statements the specific issues set forth below in Section IV-C, 
``Issues on which Comments are Requested,'' and participants should be 
prepared to answer questions by the Department and other participants 
at the public hearing concerning these issues. Representatives of the 
Department may also ask questions of participants concerning other 
matters relevant to the hearing. The total cumulative amount of time 
allowed for each participant to make prepared statements must be 20 
minutes.
    The official conducting the hearing will accept additional comments 
or questions from those attending, as time permits. The presiding 
official will announce any further procedural rules, or modification of 
the above procedures, needed for the proper conduct of the hearing.
    The Department will arrange for a transcript of the hearing, and 
will retain the entire record of this rulemaking, including the 
transcript, and will make it available for inspection in the 
Department's Freedom of Information Reading Room. Any person may 
purchase a copy of the transcript from the transcribing reporter.

C. Issues on Which Comments Are Requested

    The Department of Energy is interested in receiving comments and/or 
data concerning the feasibility, workability and appropriateness of the 
test procedures and certification and enforcement program proposed in 
today's rulemaking. Also, the Department welcomes discussion on 
improvements or alternatives to the proposed approaches. In particular, 
the Department requests comments on whether it should require 
manufacturers not participating in a VICP to have their equipment 
tested by, or under the supervision of, independent laboratories or 
personnel. And if such a requirement is retained in the final rule, 
should the Department impose specific competency criteria or 
qualification requirements to ensure accurate and reliable testing? 
Such measures might include laboratory accreditation, professional 
engineering registration or other similar demonstration of testing 
competence.

List of Subjects in 10 CFR Part 431

    Administrative practice and procedure, Energy conservation, 
Incorporation by reference.

    Issued in Washington, DC, on November 10, 1999.
Dan W. Reicher,
Assistant Secretary, Energy Efficiency and Renewable Energy.

    For the reasons set forth in the preamble, Title 10, Part 431 of 
the Code of Federal Regulations (CFR) is proposed to be amended as set 
forth below:

PART 431--ENERGY EFFICIENCY PROGRAM FOR CERTAIN COMMERCIAL AND 
INDUSTRIAL EQUIPMENT

    1. The authority citation for part 431 continues to read as 
follows:

    Authority: 42 U.S.C. 6311-6316.

    2. Subparts H and I are added to read as follows:

Subpart H--Definitions for Commercial HVAC & WH Products

Sec.
431.141  Definitions.

Subpart I--Commercial Warm Air Furnaces

431.151  Purpose and scope.

Test Procedures

431.161  Materials incorporated by reference.
Sec. 431.162  Uniform test method for the measurement of energy 
efficiency of commercial warm air furnaces.

Energy Conservation Standards

431.171  Energy conservation standards and their effective dates.

Subpart H--Definitions for Commercial HVAC & WH Products


Sec. 431.141  Definitions.

    For purposes of subparts I through P, words are defined as provided 
for in section 340 of the Act and as follows--
    Act or EPCA means the Energy Policy and Conservation Act, 42 U.S.C. 
6291-6317.
    Alternate efficiency determination method or AEDM means a method of 
calculating the efficiency of a commercial HVAC & WH product, in terms 
of the descriptor used in or under section 342 (a) of the Act to state 
the energy conservation standard for that product.
    Basic model means all units of a commercial HVAC & WH product 
manufactured by one manufacturer which have the same primary energy 
source and which do not have any differing electrical, physical, or 
functional characteristics that affect energy consumption.
    Batch means a collection of production units of a basic model from 
which a test sample is selected.
    Batch size means the number of units in a batch.
    Btu means British thermal unit, which is the quantity of heat 
required to raise the temperature of one pound of water one degree 
Fahrenheit.
    Commercial HVAC & WH product means any article of a type which 
meets the statutory definition of ``covered equipment'' under section 
340(1)(B)--(F) of the Act, and to which an energy conservation standard 
is applicable under section 342(a) of the Act.
    Commercial warm air furnace means a warm air furnace that is a 
commercial HVAC & WH product.
    Covered equipment means industrial equipment of a type specified in 
section 340 of the Act.
    DOE or the Department means the Department of Energy.
    Flue loss means the sum of the sensible heat and latent heat above 
room temperature of the flue gases leaving the appliance.
    Independent laboratory means a laboratory or test facility not 
controlled by, affiliated with, having financial ties with, or under 
common control with the manufacturer or distributor of the covered 
equipment being evaluated.
    Independent testing personnel means an individual, or an employee 
of an organization, not controlled by, affiliated with, having 
financial ties with, or under common control with the manufacturer or 
distributor of the covered equipment being evaluated.
    Manufacturer's model number means the identifier used by a 
manufacturer to uniquely identify the group of identical or essentially 
identical commercial equipment to which a particular unit belongs. The 
manufacturer's model number typically appears on equipment nameplates, 
in equipment catalogs and in other product advertising literature.

[[Page 69611]]

    Natural gas means natural gas as defined by the Federal Power 
Commission.
    Private labeler means an owner of a brand or trade mark on the 
label of a commercial HVAC & WH product which bears a private label. A 
commercial HVAC & WH product bears a private label if:
    (1) Such product (or its container) is labeled with the brand or 
trademark of a person other than a manufacturer of such product,
    (2) The person with whose brand or trademark such product (or 
container) is labeled has authorized or caused such product to be so 
labeled, and
    (3) The brand or trademark of a manufacturer of such product does 
not appear on such label.
    Secretary means the Secretary of the Department of Energy.
    State means a State, the District of Columbia, Puerto Rico, or any 
territory or possession of the United States.
    State regulation means a law or regulation of a State or political 
subdivision thereof.
    Thermal efficiency means the efficiency descriptor for warm air 
furnaces and equals 100 percent minus percent flue loss determined 
using test procedures prescribed under Sec. 431.162.
    Warm air furnace means a self-contained oil-fired or gas-fired 
furnace designed to supply heated air through ducts to spaces that 
require it and includes combination warm air furnace/electric air 
conditioning units but does not include unit heaters and duct furnaces.

Subpart I--Commercial Warm Air Furnaces


Sec. 431.151  Purpose and scope.

    This subpart contains energy conservation requirements for certain 
commercial warm air furnaces, pursuant to Part C of Title III of the 
Energy Policy and Conservation Act, as amended, 42 U.S.C 6311-6316.

Test Procedures


Sec. 431.161  Materials incorporated by reference.

    (a) The Department incorporates by reference the following test 
procedures which are not otherwise set forth in this part 431. The 
Director of the Federal Register has approved the material listed in 
paragraph (b) of this section for incorporation by reference in 
accordance with 5 U.S.C. 552(a) and 1 CFR Part 51. Any subsequent 
amendment to this material by the standard-setting organization will 
not affect the DOE test procedures unless and until DOE amends its test 
procedures. The Department incorporates the material as it exists on 
the date of the approval and a notice of any change in the material 
will be published in the Federal Register.
    (b) List of test procedures incorporated by reference.
    (1) American National Standards Institute (ANSI) Standard Z21.47-
1993, ``Gas-Fired Central Furnaces.''
    (2) Underwriters Laboratories (UL) Standard 727-1994, ``Standard 
for Oil-Fired Central Furnaces.''
    (3) Sections 8.2.2, 11.2, and 11.2.1, and accompanying Forms 715 
and 721, of the Hydronics Institute (HI) Standard ``Testing and Rating 
Standard for Heating Boilers,'' 6th Edition, 1989.
    (4) Sections 7.2.2.4, 7.8, 9.2, and 11.3.7 of the American Society 
of Heating, Refrigerating and Air-Conditioning Engineers, Inc. (ASHRAE) 
Standard 103-1993, `` Method of Testing for Annual Fuel Utilization 
Efficiency of Residential Central Furnaces and Boilers.''
    (c) Availability of references. (1) Inspection of test procedures. 
The test procedures incorporated by reference are available for 
inspection at:
    (i) Office of the Federal Register 800 North Capitol Street, NW, 
Suite 700, Washington, DC 20002.
    (ii) U.S. Department of Energy, Office of Energy Efficiency and 
Renewable Energy, Hearings and Dockets, ``Test Procedures and 
Certification Requirements for Commercial Warm Air Furnaces,'' Docket 
No. EE-RM/TP-99-450, 1000 Independence Avenue, SW, Washington, DC 
20585.
    (2) Obtaining copies of Standards. Anyone can obtain a copy of 
standards incorporated by reference from the following sources:
    (i) Request copies of the ASHRAE Standards from the American 
Society of Heating, Refrigerating, and Air-Conditioning Engineers, 
Inc., 1971 Tullie Circle, NE, Atlanta, GA 30329, or http://
www.ashrae.org/book/bookshop.htm.
    (ii) Request copies of the ANSI Standards from Global Engineering 
Documents, 15 Inverness Way East, Englewood, CO 80112, or http://
global.ihs.com/, or http://webstore.ansi.org/ansidocstore/.
    (iii) Request copies of the UL Standards from Global Engineering 
Documents, 15 Inverness Way East, Englewood, CO 80112, or http://
global.ihs.com/.
    (iv) Request copies of the HI Standards from the Hydronics 
Institute Inc., 35 Russo Place, Berkeley Heights, N.J. 07922.


Sec. 431.162  Uniform test method for the measurement of energy 
efficiency of commercial warm air furnaces.

    (a) This section covers the test procedures you must follow if, 
pursuant to EPCA, you are measuring the steady state thermal efficiency 
of a gas-fired commercial warm air furnace or any oil-fired commercial 
warm air furnace, with capacity of 225,000 Btu/h or more. Where this 
section prescribes use of ANSI standard Z21.47-1993 or UL standard 727-
1994, perform for purposes of this section only the procedures 
pertinent to the measurement of steady-state efficiency.
    (b) Test setup. (1) Test setup for Gas-Fired Commercial Warm Air 
Furnaces. The test setup, including flue requirement, instrumentation, 
test conditions, and measurements for determining the thermal 
efficiency of gas-fired warm air furnaces with rated input of 225,000 
Btu/h or more, is as specified in Sections 1.1 (Scope), 2.1 (General), 
2.2 (Basic Test Arrangements), 2.3 (Test Ducts and Plenums), 2.4 (Test 
Gases), 2.5 (Test Pressures and Burner Adjustments), 2.6 (Static 
Pressure and Air Flow Adjustments), 2.37 (Thermal Efficiency), and 
4.2.1 (Basic Test Arrangements for Direct Vent Control Furnaces) of the 
American National Standards Institute (ANSI) Standard for Gas-Fired 
Central Furnaces, ANSI Standard Z21.47-1993. The thermal efficiency 
test must be conducted only at the normal inlet test pressure, as 
specified in Section 2.5.1 of ANSI Z21.47-1993, and at the maximum 
hourly Btu input rating specified by the manufacturer for the product 
being tested.
    (2) Test setup for Oil-Fired Commercial Warm Air Furnaces. The test 
setup, including flue requirement, instrumentation, test condition, and 
measurement for measuring the thermal efficiency of oil-fired warm air 
furnaces with rated input of 225,000 Btu/h or more, is as specified in 
sections 1 (Scope), 2 (Units of Measurement), 3 (Glossary), 37 
(General), 38 and 39 (Test Installation), 40 (Instrumentation, except 
40.4 and 40.6.2 through 40.6.7 which are not required for the thermal 
efficiency test), 41 (Initial Test Conditions), 42 (Combustion Test--
Burner and Furnace), 43.2 (Operation Tests), 44 (Limit Control Cutout 
Test), 45 (Continuity of Operation Test), and 46 (Air Flow, Downflow or 
Horizontal Furnace Test), of the Underwriters Laboratories Standard for 
Oil-Fired Central Furnaces, UL Standard 727-1994. A fuel oil analysis 
for heating value, hydrogen content, carbon content, pounds per gallon, 
and API gravity must be conducted as specified

[[Page 69612]]

in section 8.2.2 of the 1989 Hydronics Institute Testing and Rating 
Standard for Heating Boilers. The steady-state combustion conditions, 
specified in section 42.1 of UL 727-1994, are attained as evidenced by 
variations in the measured flue gas temperature of not more than 5 
deg.F for three consecutive readings taken 15 minutes apart.
    (c) Additional test measurements. (1) Measurement of Flue CO2 
(Carbon Dioxide) for Oil-Fired Furnaces. In addition to the flue 
temperature measurement as specified in section 40.6.8 of UL Standard 
727, you must locate one or two sampling tubes within six inches 
downstream from the flue temperature probe (as indicated on Figure 40.3 
of UL Standard 727). If you use an open end tube, it must project into 
the flue one-third of the chimney connector diameter. If you use other 
methods of sampling CO2, you must place the sampling tube so 
as to obtain an average sample. There must be no air leak between the 
temperature probe and the sampling tube location. You must collect the 
flue gas sample at the same time the flue gas temperature is recorded. 
The CO2 concentration of the flue gas must be as specified 
by the manufacturer for the product being tested, with a tolerance of 
0.1%. You must determine the flue CO2 with an 
instrument providing a reading with an error no greater than 
0.1%.
    (2) Procedure for the Measurement of Condensate for a Gas-Fired 
Condensing Furnace. The test procedure for the measurement of the 
condensate from the flue gas under steady state operation must be 
conducted as specified in sections 7.2.2.4, 7.8 and 9.2 of the American 
Society of Heating, Refrigerating, and Air-Conditioning Engineers, Inc. 
(ASHRAE) Standard 103-1993 under the maximum rated input conditions. 
You must conduct this condensate measurement for an additional 30 
minutes of steady state operation after the completion of the steady 
state thermal efficiency test specified in paragraph (b) of this 
section.
    (d) Calculations of Thermal Efficiency. (1) Gas-Fired Commercial 
Warm Air Furnaces. You must use the calculation procedure as specified 
in section 2.37, Thermal Efficiency, of ANSI Standard Z21.47-1993.
    (2) Oil-Fired Commercial Warm Air Furnaces. You must calculate the 
percent flue loss and the steady state efficiency by following the 
procedure specified in section 11.2 (Combustion Efficiency Test), and 
Forms 715 and 721, of the 1989 Hydronics Institute (HI) Testing and 
Heating Standard for Heating Boilers. The thermal efficiency must be 
calculated as:
    Thermal Efficiency (percent) = 100 percent--flue loss (percent).
    (e) Procedure for the Calculation of the Additional Heat Gain and 
Heat loss, and Adjustment to the Thermal Efficiency for a Condensing 
Furnace. (1) You must calculate the latent heat gain from the 
condensation of the water vapor in the flue gas, and calculate heat 
loss due to the flue condensate down the drain, as specified in 
sections 11.3.7.1 and 11.3.7.2 of ASHRAE Standard 103-1993, with the 
exception that in the equation for the heat loss due to hot condensate 
flowing down the drain in section 11.3.7.2, the assumed indoor 
temperature of 70  deg.F and the temperature term TOA must 
be replaced by the measured room temperature as specified in section 
2.2.8 of ANSI Z21.47-1993.
    (2) Adjustment to the Thermal Efficiency for Condensing Furnace. 
You must adjust the thermal efficiency as calculated in paragraph 
(d)(1) of this section by adding the latent gain from the condensation 
of the water vapor in the flue gas and subtracting the heat loss (due 
to the flue condensate down the drain) to obtain the thermal efficiency 
of a condensing furnace.

Energy Conservation Standards


Sec. 431.171  Energy conservation standards and their effective dates.

    Each commercial warm air furnace manufactured on or after January 
1, 1994 must meet the following energy efficiency standard levels:
    (a) For a gas-fired commercial warm air furnace with capacity of 
225,000 Btu per hour or more, the thermal efficiency at the maximum 
rated capacity must be not less than 80 percent.
    (b) For an oil-fired commercial warm air furnace with capacity of 
225,000 Btu per hour or more, the thermal efficiency at the maximum 
rated capacity must be not less than 81 percent.
    3. Subparts J, K, L and M are added to read as follows:

Subpart J--Commercial Air Conditioners and Heat Pumps [Reserved]

Subpart K--Commercial Packaged Boilers [Reserved]

Subpart L--Commercial Water Heaters and Unfired Hot Water Storage 
Tanks [Reserved]

Subpart M--Methods of Determining Efficiency of Commercial HVAC & WH 
Products.

Sec.
431.481  Requirements applicable to all manufacturers.
431.482  Additional requirements applicable to VICP participants.
431.483  Additional requirements applicable to non-VICP 
participants.
431.484  Voluntary independent certification programs (VICP).

Subpart M--Methods of Determining Efficiency of Commercial HVAC & 
WH Products.


Sec. 431.481  Requirements applicable to all manufacturers.

    (a) General. A manufacturer of a commercial HVAC & WH product may 
not distribute any basic model of such product in commerce unless the 
manufacturer has determined the efficiency of the basic model either 
from testing of the basic model or from application of an alternative 
efficiency determination method (AEDM) to the basic model, in 
accordance with the requirements of this section. (For purposes of this 
subpart, the ``efficiency'' of a commercial HVAC & WH product means the 
energy efficiency or energy use of that product, expressed in terms of 
the descriptor that is used in or under Section 342(a) of the Act to 
state the energy conservation standard for that product.)
    (b) Testing. If you test a basic model pursuant to this section to 
determine its efficiency or to validate an AEDM, you must:
    (1) Select at random the unit(s) to be tested, which must be 
representative of the basic model,
    (2) Perform the testing in accordance with the applicable DOE test 
procedure,
    (3) Meet industry standards for the accuracy of testing and of 
rating results for the equipment being tested, and
    (4) Meet the requirements of either section 431.482(b) or section 
431.483(a), whichever is applicable.
    (c) Alternative efficiency determination methods.
    (1) Criteria an AEDM must satisfy. You may not apply an AEDM to a 
basic model to determine its efficiency pursuant to this subpart 
unless,

[[Page 69613]]

    (i) The AEDM is derived from a mathematical model that accurately 
represents the energy consumption characteristics of the basic model, 
and
    (ii) The AEDM is based on engineering or statistical analysis, 
computer simulation or modeling , or other analytic evaluation of 
performance data.
    (2) Subsequent verification of an AEDM. If you have used an AEDM 
pursuant to this subpart,
    (i) You must have available for inspection by the Department 
records showing:
    (A) The method or methods used;
    (B) The mathematical model, the engineering or statistical 
analysis, computer simulation or modeling, and other analytic 
evaluation of performance data on which the AEDM is based, and
    (C) Complete test data, product information, and related 
information that you generated or acquired under paragraph (c)(1) of 
this section and Secs. 431.482(c) or 431.483(b)(1), as applicable, and
    (D) The calculations used to determine the average efficiency and 
energy consumption of each basic model to which an AEDM was applied.
    (ii) If requested by the Department, you must:
    (A) Conduct simulations to predict the performance of particular 
basic models of the commercial HVAC & WH product, or
    (B) Provide analyses of previous simulations conducted by you, or
    (C) Conduct sample testing of basic models selected by the 
Department, or
    (D) Conduct a combination of these.


Sec. 431.482  Additional requirements applicable to VICP participants.

    (a) Description of VICP participant. For purposes of this subpart, 
a manufacturer that participates in a Voluntary Independent 
Certification Program (VICP) approved by the Department for a 
commercial HVAC & WH product, as described in Sec. 431.484, and that 
complies with all requirements imposed by that program, is a ``VICP 
participant'' with respect to that product.
    (b) Testing. A VICP participant that tests a basic model pursuant 
to this subpart must use statistically valid and accurate methods to 
arrive at the efficiency rating of such basic model.
    (c) Alternative efficiency determination methods. Before using an 
AEDM to determine the efficiency of a basic model pursuant to this 
subpart, a VICP participant must apply the AEDM to one or more basic 
models that have been tested in accordance with Secs. 431.481(b) and 
431.482(b) of this subpart, and the predicted efficiency calculated for 
each such basic model from application of the AEDM must be within five 
percent of the efficiency determined from testing that basic model. In 
addition, the predicted efficiency(ies) calculated for the tested basic 
model(s) must on average be within one percent of the efficiency(ies) 
determined from testing such basic model(s).


Sec. 431.483  Additional requirements applicable to non-VICP 
participants.

    If you are a manufacturer that is not a VICP participant with 
respect to a particular commercial HVAC & WH product, you must meet the 
following requirements as to that product.
    (a) Testing. You must perform any testing of a basic model pursuant 
to this subpart under the supervision of independent testing personnel, 
or have such testing performed at an independent laboratory. In 
addition, you must test a sufficient number of units of the basic 
model, and the efficiency rating of the basic model must be determined, 
such that,
    (1) Any represented value of energy efficiency is no greater than 
the lower of the mean of the sample, or the lower 95 percent confidence 
limit of the true mean divided by 0.95, and,
    (2) Any represented value of energy usage is no less than the 
greater of the mean of the sample, or the upper 95 percent confidence 
limit of the true mean divided by 1.05.
    (b) Alternative efficiency determination methods. Before using an 
AEDM to determine the efficiency of a basic model pursuant to this 
subpart, you must first,
    (1) Apply the AEDM to three or more basic models that have been 
tested in accordance with Secs. 431.481(b) and 431.483(a) of this 
subpart. The predicted efficiency calculated for each such basic model 
from application of the AEDM must be within five percent of the 
efficiency determined from testing that basic model, and the predicted 
efficiencies calculated for the tested basic models must on average be 
within one percent of the efficiencies determined from testing such 
basic models; and
    (2) Obtain from the Department approval of the AEDM. The Department 
will provide such approval after receiving from you documentation which 
establishes that the AEDM satisfies the requirements of 
Secs. 431.481(c)(1) and 431.483(b)(1) of this subpart.


Sec. 431.484  Voluntary independent certification programs (VICP).

    (a) The Department will approve a voluntary independent 
certification program (VICP) for a commercial HVAC & WH product if the 
VICP meets all of the following criteria:
    (1) The program publishes its operating procedures in written form, 
and permits participation by all manufacturers of products covered by 
the program so long as they comply with the VICP's requirements 
concerning operation of the program.
    (2) The program requires each participant to report to the program 
the efficiency of each basic model that the participant manufactures 
and that is covered by the program. The participant must determine such 
efficiency based on measurement of the basic model's performance.
    (3) The program publishes the efficiency ratings received from each 
participant, or otherwise makes the ratings readily available to the 
general public and to the Department.
    (4) The program conducts periodic verification testing on listed 
equipment, by testing the efficiency of each basic model at least once 
every five years and comparing its rated efficiency to the test 
results.
    (5) An independent laboratory conducts the tests, or independent 
laboratory personnel supervise the tests.
    (6) For verification testing, the testing personnel select units 
randomly from the manufacturer's stock.
    (7) The program uses efficiency testing in accordance with 
applicable DOE test procedures.
    (8) The program's verification testing meets industry standards for 
the accuracy of testing and of rating results for the equipment being 
tested, and the program satisfactorily describes how it meets these 
standards.
    (9) The program has an appropriate standard for determining whether 
the efficiency rating a manufacturer claims for a product is valid.
    (10) The program requires that, if a basic model fails verification 
testing conducted by the VICP, the manufacturer of the basic model must 
remove it from production and sale if the verification testing results 
show it is not in compliance with EPCA efficiency standards, or 
correctly re-rate it if it complies with such standards. The program 
must also provide that a participating manufacturer will be expelled 
from the VICP if it does not comply with such requirements, and that 
the VICP will report to the Department verification test results that 
find the performance of a basic model not to meet EPCA efficiency 
standards.

[[Page 69614]]

(A basic model ``fails'' verification testing when the VICP has 
compared the basic model's efficiency rating resulting from completion 
of that testing with the efficiency rating claimed by the manufacturer, 
and has determined that the rating claimed by the manufacturer is not 
valid.)
    (11) The program provides for penalties or other incentives to 
encourage manufacturers to report accurate and reliable efficiency 
ratings.
    (12) The program provides to the manufacturer copies of all records 
of completed verification testing performed on the manufacturer's 
equipment covered by the program.
    (13) The VICP provides to the Department annually data on the 
results of its verification testing during the previous 12 months, 
including the following for each basic model on which the VICP has 
performed verification testing:
    (i) The measured efficiency from the verification testing,
    (ii) The manufacturer's efficiency rating, and
    (iii) Either the applicable energy conservation standard or a 
description of the model sufficient to enable the Department to 
determine such standard.
    (b) An organization seeking the Department's approval of its 
voluntary independent certification program must submit to the 
Department written information which demonstrates that the program 
meets the requirements of paragraph (a) of this section. Approval will 
remain in force for five years, unless material changes occur in the 
program. In the event of changes, the VICP must promptly notify the 
Department, which may then rescind or continue the approval. The 
Department may at any time rescind its approval of a VICP upon 
determining that the program does not meet the requirements of 
paragraph (a) of this section.
    4. Subparts N, O, and P are added to read as follows:

Subpart N--Labeling (Reserved)

Subpart O--Certification and Enforcement Provisions Applicable to 
Commercial HVAC & WH Products

Sec.
431.501  Purpose and scope.
431.502  Prohibited acts.
431.503  Compliance certification; general requirements.
431.504  Compliance certification; compliance statement.
431.505  Compliance certification; certification report.
431.506  Enforcement.
431.507  Enforcement; compliance determination procedure.
431.508  Cessation of distribution of a basic model.
431.509  Remedies.
431.510  Hearings and appeals.

Subpart P--General Provisions for Commercial HVAC & WH Products.

431.601  Petitions for waiver, and applications for interim waiver, 
of test procedure.
431.602  Preemption of state regulations for commercial HVAC & WH 
products.
431.603  Maintenance of records.
431.604  Imported equipment.
431.605  Exported equipment.
431.606  Subpoena.
431.607  Confidentiality.

Subpart O--Certification and Enforcement Provisions Applicable to 
Commercial HVAC & WH Products


Sec. 431.501  Purpose and scope.

    This subpart sets out how manufacturers and private labelers can 
certify that their commercial HVAC & WH products comply with the 
applicable energy efficiency standards, and how the Department will 
enforce the provisions of the Act and 10 CFR Part 431 applicable to 
such products.


Sec. 431.502  Prohibited acts.

    (a) Each of the following is a prohibited act under sections 332 
and 345 of the Act:
    (1) Failure to permit access to, or copying of records required to 
be supplied under the Act and this part or failure to make reports or 
provide other information required to be supplied under the Act and 
this part;
    (2) Failure of a manufacturer to supply at his expense a reasonable 
number of units of a covered commercial equipment to a test laboratory 
designated by the Secretary;
    (3) Failure of a manufacturer to permit a representative designated 
by the Secretary to observe any testing required by the Act and this 
part, and to inspect the results of such testing; and
    (4) Distribution in commerce by a manufacturer or private labeler 
of any new covered equipment which is not in compliance with an 
applicable energy efficiency standard prescribed under the Act and this 
part.
    (b) In accordance with sections 333 and 345 of the Act, any person 
who knowingly violates any provision of paragraph (a) of this section 
may be subject to assessment of a civil penalty of no more than $110 
for each violation. Each violation of paragraph (a)(4) of this section 
will constitute a separate violation with respect to each unit of 
covered equipment, and each day of noncompliance with paragraphs (a)(1) 
through (3) of this section will constitute a separate violation.
    (c) For purposes of this section,
    (1) The term ``new covered equipment'' means covered equipment the 
title of which has not passed to a purchaser who buys such equipment 
for purposes other than
    (i) Reselling such equipment, or
    (ii) Leasing such equipment for a period in excess of one year; and
    (2) The term ``knowingly'' means
    (i) Having actual knowledge, or
    (ii) Presumed to have knowledge deemed to be possessed by a 
reasonable person who acts in the circumstances, including knowledge 
obtainable upon the exercise of due care.


Sec. 431.503  Compliance certification; general requirements.

    (a) General. Beginning twelve months after the publication of the 
applicable test procedures, if you are a manufacturer or private 
labeler, you may not distribute in commerce any basic model of a 
commercial HVAC & WH product subject to an energy conservation standard 
under section 342(a) of the Act unless you have certified that the 
basic model complies with the requirements of the applicable standards, 
as follows:
    (1) Submit to the Department a compliance statement, as described 
in Sec. 431.504, and
    (2) Submit to the Department, or have an authorized third party 
(such as a trade association or VICP) submit to the Department, a 
certification report as described in Sec. 431.505.
    (b) New models. (1) Prior to or concurrent with distributing in 
commerce any new model of a commercial HVAC & WH product, you must 
submit all information required under paragraph (a)(2) of this section 
for that model .
    (2) Any change to an existing basic model which affects energy 
consumption will constitute the addition of a new basic model. If such 
a change neither alters compliance with the applicable energy 
conservation standard for the new basic model, nor will be a basis for 
giving the new basic model an efficiency rating that differs from the 
rating of the existing basic model, then you need not measure the 
efficiency of the new basic model. However, you must submit all 
information required by Sec. 431.503(a)(2) for the new basic model.
    (c) Discontinued models. (1) A model is discontinued when its 
production has ceased and it is no longer being distributed.
    (2) You (or an authorized representative) must report such models 
to the Department at the address and in the manner described in 
paragraph (e) of this section. In such a report, for each

[[Page 69615]]

model, you must list: equipment type, the manufacturer's name, the 
private labeler name(s), if applicable, and the manufacturer's model 
number(s).
    (d) Amendment of information. If information in a compliance 
statement or certification report previously submitted to the 
Department under this section is found to be incorrect, you (or an 
authorized representative) must submit the corrected information to the 
Department at the address and in the manner described in paragraph (e) 
of this section.
    (e) Correspondence with the Department. Send any correspondence by 
certified mail to: Department of Energy, Office of Energy Efficiency 
and Renewable Energy, Office of Codes and Standards, 1000 Independence 
Avenue, SW, Washington, DC 20585-0121.
    (f) Notices designating a change of third party representative must 
be sent to the Department at the address and in the manner described in 
paragraph (e) of this section.


Sec. 431.504  Compliance certification; compliance statement.

    (a) You must send your compliance statement to the Department in 
the manner described in Sec. 431.503 (e) signed by a corporate officer, 
and in the format set forth in the paragraph (b) of this section.
    (b) Statement contents. Your compliance statement must certify 
that:
    (1) Each basic model you manufacture of the commercial HVAC & WH 
product covered by the compliance statement complies with the 
applicable energy conservation standards;
    (2) All representations as to efficiency in your compliance 
certification and certification report(s) are based on testing and/or 
use of an AEDM in accordance with 10 CFR part 431;
    (3) All information reported in your compliance statement and 
certification report(s) is true, accurate and complete; and
    (4) You are aware of the penalties associated with violations of 
the Act and the regulations thereunder, and of 18 U.S.C. 1001 which 
prohibits knowingly making false statements to the Federal Government.
    (c) Statement format. You must use the following format for your 
compliance statement:

Statement of Compliance With Energy Conservation Standards for 
Commercial HVAC & WH Products

Product:---------------------------------------------------------------

Manufacturer's Name and Address:
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------

[Company name] submits this compliance statement under 10 CFR Part 
431 (Energy Conservation Program for Commercial Equipment) and Part 
C of the Energy Policy and Conservation Act (Pub. L. 94-163), and 
amendments thereto. I am signing this on behalf of and as a 
responsible official of the above named company. All basic models of 
[the commercial HVAC & WH product covered by this statement] that 
the company manufactures comply with the applicable energy 
conservation standards. We have complied with the applicable testing 
requirements (prescribed in 10 CFR Part 431) in making this 
determination, and in determining the energy efficiency or energy 
use that is set forth in the certification report for each of these 
basic models. All information in that report and in this statement 
is true, accurate, and complete. The company is aware of the 
penalties associated with violations of the Act and the regulations 
thereunder, and is also aware of the provisions contained in 18 
U.S.C. 1001, which prohibits knowingly making false statement to the 
Federal Government.

Signature of Company Official:
----------------------------------------------------------------------
Name:------------------------------------------------------------------
Title:-----------------------------------------------------------------
Firm or Organization:--------------------------------------------------
Date:------------------------------------------------------------------

Name of Person to Contact for Further Information:

Name:------------------------------------------------------------------
Address:---------------------------------------------------------------
Telephone Number:------------------------------------------------------
Facsimile Number:------------------------------------------------------

Third Party Representative:

    If a third party organization, under the provisions of 10 CFR 
Part 431, prepared any part of this Compliance Certification, or is 
authorized to submit any certification report(s) for the company, 
provide the following information for the company official who 
authorized third party representations:
Name:------------------------------------------------------------------
Title:-----------------------------------------------------------------
Address:---------------------------------------------------------------
Telephone Number:------------------------------------------------------
Facsimile Number:------------------------------------------------------

The third party organization authorized to act as representative:

Third Party Organization:
----------------------------------------------------------------------
Name of Responsible Person at that Organization:
----------------------------------------------------------------------
Address:---------------------------------------------------------------
Telephone Number:------------------------------------------------------
Facsimile Number:------------------------------------------------------


Sec. 431.505  Compliance certification; certification report.

    (a) You, or an authorized third party acting on your behalf, must 
send your certification report(s) to the Department in the manner 
specified in Sec. 431.503(e), signed by an official or your company or 
the third party representative. The Department will also accept a 
computer diskette which contains the certification report.
    (b) Report contents. The certification report must include the 
equipment type, manufacturer's name, private labeler name(s) (if 
applicable), the manufacturer's model number(s), and
    (1) For gas-fired and oil-fired commercial warm air furnaces (with 
a capacity of 225,000 Btu per hour or more), the minimum thermal 
efficiency at the maximum rated capacity.
    (2) For gas-fired and oil-fired commercial packaged boilers, the 
minimum combustion efficiency at the maximum rated capacity;
    (3) For air-cooled three-phase electric central air conditioners 
and central air conditioning heat pumps less than 65,000 Btu per hour 
(cooling capacity), split systems or single package, the seasonal 
energy efficiency ratio and the heating seasonal performance factor;
    (4) For air-cooled central air conditioners and central air 
conditioning heat pumps at or above 65,000 Btu per hour (cooling 
capacity) and less than 135,000 Btu per hour (cooling capacity), the 
energy efficiency ratio (at a temperature rating of 95 deg.F dry bulb 
temperature) and the coefficient of performance in the heating mode (at 
a temperature rating of 47 deg.F dry bulb temperature);
    (5) For water-cooled, evaporatively-cooled and water-source central 
air conditioners and central air conditioning heat pumps of less than 
135,000 Btu per hour (cooling capacity), the energy efficiency ratio 
(at a standard rating of 95 deg.F dry bulb temperature, for 
evaporatively cooled equipment, and 85 deg.F entering water 
temperature, for water-source and water-cooled equipment);
    (6) For water-source heat pumps less than 135,000 Btu per hour 
(cooling capacity), the coefficient of performance in the heating mode 
(at a standard rating of 70 deg.F entering water temperature);
    (7) For air-cooled central air conditioners and central air 
conditioning heat pumps at or above 135,000 Btu per hour (cooling 
capacity) and less than 240,000 Btu per hour (cooling capacity), the 
energy efficiency ratio (at a standard rating of 95 deg.F dry bulb 
temperature) and the coefficient of performance in the heating mode (at 
a high temperature rating of 47 deg.F dry bulb temperature);
    (8) For water- and evaporatively-cooled central air conditioners 
and central air conditioning heat pumps at or above 135,000 Btu per 
hour (cooling capacity) and less than 240,000 Btu per hour (cooling 
capacity), the energy efficiency ratio (according to ARI Standard 340/
360-93);
    (9) For packaged terminal air conditioners, the energy efficiency 
ratio

[[Page 69616]]

(EER) in the cooling mode (at a temperature rating of 95 deg.F dry bulb 
temperature);
    (10) For packaged terminal heat pumps, the energy efficiency ratio 
(EER) in the cooling mode (at a temperature rating of 95 deg.F dry bulb 
temperature), and the coefficient of performance (COP) in the heating 
mode (at a standard rating of 47 deg.F dry bulb temperature);
    (11) For storage water heaters (except those having more than 140 
gallon storage capacity, not having a standing pilot light, and having 
the tank surface area thermally insulated to R-12.5) manufactured on or 
after January 1, 1994, the maximum standby loss, in percent per hour;
    (12) For instantaneous water heaters (except those having more than 
140 gallon storage capacity, not having a standing pilot light, and 
having the tank surface area thermally insulated to R-12.5), the 
minimum thermal efficiency, and for storage volumes of 10 gallons or 
more, the maximum standby loss, in percent per hour; and
    (13) For unfired hot water storage tanks (except those having more 
than 140 gallon storage capacity, and having the tank surface area 
thermally insulated to R-12.5), the maximum heat loss in Btus per hour 
square foot of nominal tank surface area.
    (c) One possible format for a certification report is as follows:

Certification report for commercial equipment: (Insert the Name of 
Equipment)

Dated:-----------------------------------------------------------------
Signature of Company Official or Third Party Representative:
----------------------------------------------------------------------
Equipment Type:--------------------------------------------------------
Manufacturer:----------------------------------------------------------
Private Labeler (if applicable):
----------------------------------------------------------------------
For New or Amended Basic Models:
    (Provide specific equipment information including, for each 
basic model, the manufacturer's model number(s) and the information 
required in Sec. 431.505 (b)).

For Discontinued Basic Models:
    (Provide manufacturer's model number(s)).


Sec. 431.506  Enforcement.

    (a) Test notice. Upon receiving information in writing concerning 
the energy performance of a particular commercial HVAC & WH product 
sold by a manufacturer or private labeler which indicates that the 
product may not be in compliance with the applicable energy performance 
standard, the Secretary may conduct a review of test records. The 
Secretary may then conduct enforcement testing of that equipment by 
means of a test notice addressed to the manufacturer or private labeler 
in accordance with the following requirements:
    (1) The test notice procedure will only be followed after the 
Secretary or his/her designated representative has examined the 
underlying test data (or, where appropriate, data as to use of an 
alternative efficiency determination method) provided by the 
manufacturer, and after the manufacturer has been offered the 
opportunity to meet with the Department to verify compliance with the 
applicable efficiency standard. In addition, where compliance of a 
basic model was certified based on an AEDM, the Department has the 
discretion to pursue the provisions of Sec. 431.481(c)(2)(ii) prior to 
invoking the test notice procedure. A representative designated by the 
Secretary must be permitted to observe any reverification procedures 
undertaken according to this subpart and to inspect the results of such 
reverification.
    (2) The test notice will be signed by the Secretary or his/her 
designee and will be mailed or delivered by the Department to the plant 
manager or other responsible official designated by the manufacturer.
    (3) The test notice will specify the model or basic model to be 
selected for testing, the number of units to be tested, the method for 
selecting these units, the date and time at which testing is to begin, 
the date by which testing is scheduled to be completed and the facility 
at which testing will be conducted. The test notice may also provide 
for situations in which the selected basic model is unavailable for 
testing, and it may include alternative basic models.
    (4) The Secretary may require in the test notice that the 
manufacturer ship at his expense a reasonable number of units of a 
basic model specified in the test notice to a testing laboratory 
designated by the Secretary.
    (5) Within five working days of the time the units are selected, 
the manufacturer must ship the specified units of a basic model to the 
designated testing laboratory.
    (b) Testing Laboratory. Whenever the Department conducts 
enforcement testing at a designated laboratory in accordance with a 
test notice under this section, the resulting test data will constitute 
official test data for that basic model. The Department will use such 
test data to make a determination of compliance or noncompliance.
    (c) Sampling. The Secretary will base the determination of whether 
a manufacturer's basic model complies with the applicable energy 
performance standard on the testing conducted in accordance with the 
procedures set forth in this section and Sec. 431.507, and the 
applicable test procedures specified in this part. Initially, the 
Department will test two units, except as follows:
    (1) If only one unit of a basic model is available for testing, the 
Department will test that unit, and will base the compliance 
determination on the results for that unit in a manner otherwise in 
accordance with this section. Available units are those which are 
available for commercial distribution within the United States.
    (2) If a basic model is very large or has unusual testing 
requirements, the Department may decide to base the determination of 
compliance on the testing of one unit, if the manufacturer so requests 
and provides sufficient justification for the request.
    (d) Test unit selection. A DOE inspector will select a batch from 
all available units, and a test sample (i.e., the units to be tested) 
from the batch, in accordance with the provisions of this paragraph and 
the conditions specified in the test notice.
    (1) DOE may select the batch by utilizing criteria specified in the 
test notice, e.g., date of manufacture, component-supplier, location of 
manufacturing facility, or other criteria which may differentiate one 
unit from another within a basic model.
    (2) DOE will randomly select individual units to be tested, 
comprising the test sample, from the batch. DOE will achieve random 
selection by sequentially numbering all of the units in a batch and 
then using a table of random numbers to select the units to be tested. 
The manufacturer must keep on hand all units in the batch until such 
time as the inspector determines the basic model to be in compliance or 
noncompliance.
    (e) Test unit preparation. (1) Prior to and during testing, no one 
may prepare, modify, or adjust in any manner a test unit selected in 
accordance with paragraph (d) of this section unless the applicable DOE 
test procedure allows such preparation, modification, or adjustment. 
DOE will conduct one test for each test unit in accordance with the 
applicable test procedures.
    (2) No one may perform any quality control, testing or assembly 
procedures on a test unit, or any parts and subassemblies thereof, that 
is not performed during the production and assembly of all other units 
included in the basic model.
    (3) A test unit is defective if such unit is inoperative or is 
found to be in noncompliance due to failure of the unit to operate 
according to the manufacturer's design and operating instructions. 
Defective units, including those damaged due to shipping or handling, 
must be reported immediately

[[Page 69617]]

to the Department. The Department will authorize testing of an 
additional unit on a case-by-case basis.
    (f) Testing at manufacturer's option. If the Department determines 
a basic model to be in noncompliance with the applicable energy 
performance standard at the conclusion of its initial enforcement 
sampling plan testing, the manufacturer may request that the Department 
conduct additional testing of up to two additional units of the basic 
model at the manufacturer's expense. Testing under this paragraph must 
be in accordance with the applicable test procedure specified in this 
part, the provisions of paragraphs (d) and (e) of this section, and 
Sec. 431.507(d).


Sec. 431.507  Enforcement; compliance determination procedure.

    The Department will determine compliance for commercial HVAC & WH 
equipment as follows:
    (a) Make the computation in paragraph (b) of this section when the 
first sample size (n1) is two units.
    (b) Compute the mean (x1) of the measured energy 
performance of the n1 units in the first sample as follows:
[GRAPHIC] [TIFF OMITTED] TP13DE99.000

where (xi) is the measured energy efficiency or energy 
consumption of unit i.
    (c) From the sample mean performance derived pursuant to paragraph 
(b) of this section, or from the measured performance when compliance 
is determined from testing one unit pursuant to Sec. 431.506(c), 
determine one of the following:
    (1) For an Energy Efficiency Standard, if the aforementioned sample 
mean or measured performance is equal to or greater than 95 percent of 
the applicable energy efficiency standard, the basic model is in 
compliance and testing is at an end.
    (2) For an Energy Consumption Standard, if the aforementioned 
sample mean or measured performance is equal to or less than 105 
percent of the applicable energy consumption standard, the basic model 
is in compliance and testing is at an end.
    (3) Otherwise, the basic model is not in compliance.
    (d) Manufacturer-Option Testing. If the basic model is in non-
compliance pursuant to paragraph (c)(3) of this section, the 
manufacturer may request additional testing, as follows.
    (1) The manufacturer requests the testing of an additional number 
of units, such that the total size of the combined sample tested does 
not exceed 4.
    (2) Compute the mean energy performance of the new combined sample 
using the paragraph (b) of this section.
    (3) From the mean performance of the new combined sample, determine 
one of the following:
    (i) For an Energy Efficiency Standard, if the new combined sample 
mean is equal to or greater than 95 percent of the applicable energy 
efficiency standard, the basic model is in compliance and testing is at 
an end.
    (ii) For an Energy Consumption Standard, if the new combined sample 
mean is equal to or less than 105 percent of the applicable energy 
consumption standard, the basic model is in compliance and testing is 
at an end.
    (iii) Otherwise, the basic model is in not in compliance.


Sec. 431.508  Cessation of distribution of a basic model.

    (a) If you are a manufacturer or private labeler, and DOE 
determines one of your models to be noncompliant, in accordance with 
Sec. 431.506 and 431.507, or you determine that one of your models is 
noncompliant, you must:
    (1) Immediately cease distribution in commerce of all units of the 
basic model in question;
    (2) Give immediate written notification of the determination of 
noncompliance, to all persons to whom you have distributed units of the 
basic model manufactured since the date of the last determination of 
compliance; and
    (3) If a request is made by the Secretary, provide DOE within 30 
days of the request, records, reports and other documentation 
pertaining to the acquisition, ordering, storage, shipment, or sale of 
a basic model determined to be noncompliant.
    (b) The manufacturer may modify the noncompliant basic model in 
such manner as to make it comply with the applicable performance 
standard. You must treat such a modified basic model as a new basic 
model and certify it in accordance with the provisions of this subpart; 
except that in addition to satisfying all requirements of this subpart, 
you must also maintain records that demonstrate that modifications have 
been made to all units of the new basic model prior to its distribution 
in commerce.
    (c) If a manufacturer or private labeler has a basic model not 
properly certified in accordance with the requirements of this subpart, 
the Secretary may seek, among other remedies, injunctive action to 
prohibit distribution in commerce of units of such a basic model.


Sec. 431.509  Remedies.

    If the Secretary determines that a basic model of covered equipment 
does not comply with an applicable energy conservation standard:
    (a) The Secretary will notify the manufacturer, private labeler or 
any other person as required, of this finding and of the Secretary's 
intent to seek a judicial order restraining further distribution in 
commerce of units of such a basic model unless the manufacturer, 
private labeler or any other person as required, delivers to the 
Secretary within 15 calendar days a statement, satisfactory to the 
Secretary, of the steps he will take to insure that the noncompliant 
basic model will no longer be distributed in commerce. The Secretary 
will monitor the implementation of such statement.
    (b) If the manufacturer, private labeler or any other person as 
required, fails to stop distribution of the noncompliant basic model, 
the Secretary may seek to restrain such violation in accordance with 
sections 334 and 345 of the Act.
    (c) The Secretary will determine whether the facts of the case 
warrant the assessment of civil penalties for knowing violations in 
accordance with sections 333 and 345 of the Act.


Sec. 431.510  Hearings and appeals.

    (a) Under sections 333(d) and 345 of the Act, before issuing an 
order assessing a civil penalty against any person, the Secretary must 
provide to such a person a notice of the proposed penalty. Such notice 
must inform the person that such person can choose (in writing within 
30 days after receipt of the notice) to have the procedures of 
paragraph (c) of this section (in lieu of those in paragraph (b) of 
this section) apply with respect to such assessment.
    (b)(1) Unless a person elects, within 30 calendar days after 
receipt of a notice under paragraph (a) of this section, to have 
paragraph (c) apply with respect to the civil penalty under paragraph 
(a), the Secretary will assess the penalty, by order, after providing 
an opportunity for an agency hearing under section 554 of title 5, 
United States Code, and making a determination of violation on the 
record before an administrative law judge appointed under section 3105 
of such title 5. Such assessment order will include the administrative 
law judge's findings and the basis for such assessment.
    (2) Any person against whom the Secretary assesses a penalty under 
this paragraph may, within 60 calendar days after the date of the order 
assessing such penalty, initiate action in the United States Court of 
Appeals for the appropriate judicial circuit for judicial

[[Page 69618]]

review of such order in accordance with chapter 7 of title 5, United 
States Code. The court will have jurisdiction to enter a judgment 
affirming, modifying, or setting aside in whole or in part, the order 
of the Secretary, or the court may remand the proceeding to the 
Secretary for such further action as the court may direct.
    (c)(1) In the case of any civil penalty with respect to which the 
procedures of this paragraph have been elected, the Secretary will 
promptly assess such penalty, by order, after the date of the receipt 
of the notice under paragraph (a) of this section of the proposed 
penalty.
    (2) If the person has not paid the civil penalty within 60 calendar 
days after the assessment has been made under paragraph (c)(1) of this 
section, the Secretary will institute an action in the appropriate 
District Court of the United States for an order affirming the 
assessment of the civil penalty. The court will have authority to 
review de novo the law and the facts involved and jurisdiction to enter 
a judgment enforcing, modifying, and enforcing as so modified, or 
setting aside in whole or in part, such assessment.
    (3) Any election to have this paragraph apply can only be revoked 
with the consent of the Secretary.
    (d) If any person fails to pay an assessment of a civil penalty 
after it has become a final and unappealable order under paragraph (b) 
of this section, or after the appropriate District Court has entered 
final judgment in favor of the Secretary under paragraph (c) of this 
section, the Secretary will institute an action to recover the amount 
of such penalty in any appropriate District Court of the United States. 
In such action, the validity and appropriateness of such final 
assessment order or judgment will not be subject to review.
    (e)(1) In accordance with the provisions of sections 333(d)(5)(A) 
and 345 of the Act and notwithstanding the provisions of title 28, 
United States Code, or section 502(c) of the Department of Energy 
Organization Act, the General Counsel of the Department of Energy (or 
any attorney or attorneys within DOE designated by the Secretary) will 
represent the Secretary, and will supervise, conduct, and argue any 
civil litigation to which paragraph (c) of this section applies 
(including any related collection action under paragraph (d) of this 
section) in a court of the United States or in any other court, except 
the Supreme Court of the United States. However, the Secretary or the 
General Counsel will consult with the Attorney General concerning such 
litigation and the Attorney General will provide, on request, such 
assistance in the conduct of such litigation as may be appropriate.
    (2) In accordance with the provisions of sections 333(d)(5)(B) and 
345 of the Act, and subject to the provisions of section 502(c) of the 
Department of Energy Organization Act, the Secretary will be 
represented by the Attorney General, or the Solicitor General, as 
appropriate, in actions under this section, except to the extent 
provided in paragraph (e)(1) of this section.
    (3) In accordance with the provisions of section 333(d)(5)(C) and 
345 of the Act, section 402(d) of the Department of Energy Organization 
Act will not apply with respect to the function of the Secretary under 
this section.

Subpart P--General Provisions for Commercial HVAC & WH Products


Sec. 431.601  Petitions for waiver, and applications for interim 
waiver, of test procedure.

    (a) General criteria. (1) Any interested person may submit a 
petition to waive for a particular basic model any requirements of 
Sec. 431.162, and of the provisions specifying the test methods for 
other commercial HVAC & WH products, upon the grounds that either the 
basic model contains one or more design characteristics which either 
prevent testing of the basic model according to the prescribed test 
procedures, or the prescribed test procedures may evaluate the basic 
model in a manner so unrepresentative of its true energy consumption 
characteristics as to provide materially inaccurate comparative data.
    (2) If you have submitted a Petition for Waiver as provided in this 
subpart, you may also file an Application for Interim Waiver of the 
applicable test procedure requirements.
    (b) Submission, content, and publication. (1) You must submit your 
Petition for Waiver in triplicate, to the Assistant Secretary for 
Energy Efficiency and Renewable Energy, United States Department of 
Energy. Each Petition for Waiver must:
    (i) Identify the particular basic model(s) for which a waiver is 
requested, the design characteristic(s) constituting the grounds for 
the petition, and the specific requirements sought to be waived, and 
must discuss in detail the need for the requested waiver;
    (ii) Identify manufacturers of all other basic models marketed in 
the United States and known to the petitioner to incorporate similar 
design characteristic(s);
    (iii) Include any alternate test procedures known to the petitioner 
to evaluate the characteristics of the basic model in a manner 
representative of its energy consumption; and
    (iv) Be signed by you or by an authorized representative. In 
accordance with the provisions set forth in 10 CFR 1004.11, any request 
for confidential treatment of any information contained in a Petition 
for Waiver or in supporting documentation must be accompanied by a copy 
of the petition, application or supporting documentation from which the 
information claimed to be confidential has been deleted. DOE will 
publish in the Federal Register the petition and supporting documents 
from which confidential information, as determined by DOE, has been 
deleted in accordance with 10 CFR 1004.11 and will solicit comments, 
data and information with respect to the determination of the petition.
    (2) You must submit any Application for Interim Waiver in 
triplicate, with the required three copies of the Petition for Waiver, 
to the Assistant Secretary for Energy Efficiency and Renewable Energy, 
U.S. Department of Energy. Each Application for Interim Waiver must 
reference the Petition for Waiver by identifying the particular basic 
model(s) for which you seek a waiver and temporary exception. Each 
Application for Interim Waiver must demonstrate likely success of the 
Petition for Waiver and address what economic hardship and/or 
competitive disadvantage is likely to result absent a favorable 
determination on the Application for Interim Waiver. You or an 
authorized representative must sign the Application for Interim Waiver.
    (c) Notification to other manufacturers. (1) After filing a 
Petition for Waiver with DOE, and after DOE has published the Petition 
for Waiver in the Federal Register, you must, within five working days 
of such publication, notify in writing all known manufacturers of 
domestically marketed units of the same product type (as defined in 
section 340(1) of the Act) and must include in the notice a statement 
that DOE has published in the Federal Register on a certain date the 
Petition for Waiver and supporting documents from which confidential 
information, if any, as determined by DOE, has been deleted in 
accordance with 10 CFR 1004.11. In complying with the requirements of 
this paragraph, you must file with DOE a statement certifying the names 
and addresses of each person to whom you have sent a notice of the 
Petition for Waiver.
    (2) If you apply for Interim Waiver, whether filing jointly with or 
subsequent to your Petition for Waiver with DOE, you must concurrently 
notify in writing all known manufacturers of

[[Page 69619]]

domestically marketed units of the same product type (as defined in 
Section 340(1) of the Act), and must include in the notice a copy of 
the Petition for Waiver and a copy of the Application for Interim 
Waiver. In complying with this section, you must in the written 
notification include a statement that the Assistant Secretary for 
Energy Efficiency and Renewable Energy will receive and consider timely 
written comments on the Application for Interim Waiver. Upon filing an 
Application for Interim Waiver, you must in complying with the 
requirements of this paragraph certify to DOE that a copy of these 
documents has been sent to all known manufacturers of domestically 
marked units of the same product type (as listed in section 340(1) of 
the Act). Such certification must include the names and addresses of 
such persons. You must comply with the provisions of paragraph (c)(1) 
of this section with respect to the petition for waiver.
    (d) Comments; responses to comments. (1) Any person submitting 
written comments to DOE with respect to an Application for Interim 
Waiver must also send a copy of the comments to the applicant.
    (2) Any person submitting written comments to DOE with respect to a 
Petition for Waiver must also send a copy of such comments to the 
petitioner. In accordance with paragraph (b)(1) of this section, a 
petitioner may submit a rebuttal statement to the Assistant Secretary 
for Energy Efficiency and Renewable Energy.
    (e) Provisions specific to interim waivers. (1) Disposition of 
application. If administratively feasible, DOE will notify the 
applicant in writing of the disposition of the Application for Interim 
Waiver within 15 business days of receipt of the application. Notice of 
DOE's determination on the Application for Interim Waiver will be 
published in the Federal Register.
    (2) Consequences of filing application. The filing of an 
Application for Interim Waiver will not constitute grounds for 
noncompliance with any requirements of this subpart, until an Interim 
Waiver has been granted.
    (3) Criteria for granting. The Assistant Secretary for Energy 
Efficiency and Renewable Energy will grant an Interim Waiver from test 
procedure requirements if he or she determines that the applicant will 
experience economic hardship if the Application for Interim Waiver is 
denied, if it appears likely that the Petition for Waiver will be 
granted, and/or if the Assistant Secretary determines that it would be 
desirable for public policy reasons to grant immediate relief pending a 
determination on the Petition for Waiver.
    (4) Duration. An interim waiver will terminate 180 days after 
issuance or upon the determination on the Petition for Waiver, 
whichever occurs first. DOE may extend an interim waiver for up to 180 
days or modify its terms based on relevant information contained in the 
record and any comments received subsequent to issuance of the interim 
waiver. DOE will publish in the Federal Register notice of such 
extension and/or any modification of the terms or duration of the 
interim waiver.
    (f) Provisions specific to waivers. (1) Rebuttal by petitioner. 
Following publication of the Petition for Waiver in the Federal 
Register, a petitioner may, within 10 working days of receipt of a copy 
of any comments submitted in accordance with paragraph (b)(1) of this 
section, submit a rebuttal statement to the Assistant Secretary for 
Energy Efficiency and Renewable Energy. A petitioner may rebut more 
than one response in a single rebuttal statement.
    (2) Disposition of petition. DOE will notify the petitioner in 
writing as soon as practicable of the disposition of each Petition for 
Waiver. The Assistant Secretary for Energy Efficiency and Renewable 
Energy will issue a decision on the petition as soon as is practicable 
following receipt and review of the Petition for Waiver and other 
applicable documents, including, but not limited to, comments and 
rebuttal statements.
    (3) Consequence of filing petition. The filing of a Petition for 
Waiver will not constitute grounds for noncompliance with any 
requirements of this subpart, until a waiver or interim waiver has been 
granted.
    (4) Granting: criteria, conditions, and publication. The Assistant 
Secretary for Energy Efficiency and Renewable Energy will grant a 
waiver, if he or she determines that the basic model for which the 
waiver was requested contains a design characteristic which either 
prevents testing of the basic model according to the prescribed test 
procedures, or the prescribed test procedures may evaluate the basic 
model in a manner so unrepresentative of its true energy consumption 
characteristics as to provide materially inaccurate comparative data. 
The Assistant Secretary for Energy Efficiency and Renewable Energy may 
grant a waiver subject to conditions, which may include adherence to 
alternate test procedures. DOE will promptly publish in the Federal 
Register notice of each waiver granted or denied, and any limiting 
conditions of each waiver granted.
    (g) Revision of regulation. Within one year of the granting of any 
waiver, the Department will publish in the Federal Register a notice of 
proposed rulemaking to amend its regulations so as to eliminate any 
need for the continuation of such waiver. As soon thereafter as 
practicable, the Department will publish in the Federal Register a 
final rule. Such waiver will terminate on the effective date of such 
final rule.
    (h) Exhaustion of remedies. In order to exhaust administrative 
remedies, any person aggrieved by an action under this section must 
file an appeal with the DOE's Office of Hearings and Appeals as 
provided in 10 CFR Part 1003, subpart C.


Sec. 431.602  Preemption of state regulations for commercial HVAC & WH 
products.

    Beginning on the effective date of such standard, an energy 
conservation standard set forth in this part for a commercial HVAC & WH 
product supersedes any State or local regulation concerning the energy 
efficiency or energy use of that product, except as provided for in 
section 345(b)(2)(B)-(D) of the Act.


Sec. 431.603  Maintenance of records.

    (a) If you are the manufacturer of any commercial HVAC & WH 
product, you must establish, maintain and retain records of the 
following:
    (1) The test data for all testing conducted pursuant to 10 CFR part 
431, including any testing conducted by a VICP; and
    (2) The development, substantiation, application, and subsequent 
verification of any AEDM.
    (b) You must organize such records and index them so that they are 
readily accessible for review. The records must include the supporting 
test data associated with tests performed on any test units to satisfy 
the requirements of this subpart (except tests performed by the 
Department directly).
    (c) You must retain all such records for a period of two years from 
the date that production of all units of the commercial equipment for 
the basic model has ceased. You must retain records in a form allowing 
ready access to the Department upon request.


Sec. 431.604  Imported equipment.

    (a) Under sections 331 and 345 of the Act, any person importing any 
commercial HVAC & WH product into the United States must comply with 
the provisions of the Act and of this part, and is subject to the 
remedies of this part.
    (b) Any commercial HVAC & WH product offered for importation in

[[Page 69620]]

violation of the Act and of this part will be refused admission into 
the customs territory of the United States under rules issued by the 
Secretary of the Treasury, except that the Secretary of the Treasury 
may, by such rules, authorize the importation of such covered product 
upon such terms and conditions (including the furnishing of a bond) as 
may appear to the Secretary of Treasury appropriate to ensure that such 
covered product will not violate the Act and this part, or will be 
exported or abandoned to the United States.


Sec. 431.605  Exported equipment.

    Under sections 330 and 345 of the Act, this part does not apply to 
any commercial HVAC & WH product if:
    (a) Such product is manufactured, sold, or held for sale for export 
from the United States (or such product was imported for export), 
unless such product is, in fact, distributed in commerce for use in the 
United States, and
    (b) Such product, when distributed in commerce, or any container in 
which it is enclosed when so distributed, bears a stamp or label 
stating that such covered product is intended for export.


Sec. 431.606  Subpoena.

    Under sections 329(a) and 345 of the Act, for purposes of carrying 
out this part, the Secretary or the Secretary's designee, may sign and 
issue subpoenas for the attendance and testimony of witnesses and the 
production of relevant books, records, papers, and other documents, and 
administer the oaths. The Secretary must pay witnesses summoned under 
the provisions of this section the same fees and mileage as paid to 
witnesses in the courts of the United States. In case of contumacy by, 
or refusal to obey a subpoena served upon, any persons subject to this 
Part, the Secretary may seek an order from the District Court of the 
United States for any District in which such person is found or resides 
or transacts business requiring such person to appear and give 
testimony, or to appear and produce documents. Such court can punish 
the failure to obey such order as a contempt thereof.


Sec. 431.607  Confidentiality.

    Under the provisions of 10 CFR 1004.11, any person submitting 
information or data which the person believes to be confidential and 
exempt by law from public disclosure should submit one complete copy, 
and fifteen copies from which the information believed to be 
confidential has been deleted. In accordance with the procedures 
established at 10 CFR 1004.11, the Secretary must make his own 
determination with regard to any claim that information submitted be 
exempt from public disclosure.

[FR Doc. 99-31670 Filed 12-10-99; 8:45 am]
BILLING CODE 6450-01-P