[Federal Register Volume 71, Number 48 (Monday, March 13, 2006)]
[Proposed Rules]
[Pages 12634-12647]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 06-2381]


 ========================================================================
 Proposed Rules
                                                 Federal Register
 ________________________________________________________________________
 
 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
 
 ========================================================================
 

  Federal Register / Vol. 71, No. 48 / Monday, March 13, 2006 / 
Proposed Rules  

[[Page 12634]]



DEPARTMENT OF ENERGY

Office of Energy Efficiency and Renewable Energy

10 CFR Part 431

[Docket Nos. EE-RM/STD-03-100, EE-RM/STD-03-200, and EE-RM/STD-03-300]
RIN Nos. 1904-AB16, 1904-AB17, and 1904-AB44


Energy Efficiency Program for Commercial and Industrial 
Equipment: Efficiency Standards for Commercial Heating, Air-
Conditioning and Water Heating Equipment

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

ACTION: Notice of document availability and request for comments.

-----------------------------------------------------------------------

SUMMARY: The Energy Policy and Conservation Act (EPCA), as amended, 
establishes energy efficiency standards for various commercial 
equipment. The Department of Energy (the Department or DOE) is 
assessing whether to adopt, as uniform national standards, efficiency 
standards contained in amendments to the American Society of Heating, 
Refrigerating and Air-Conditioning Engineers, Inc. (ASHRAE) and 
Illuminating Engineering Society of North America (IESNA) Standard 90.1 
for certain types of commercial equipment. Such commercial equipment 
includes gas-fired instantaneous water heaters, packaged terminal air 
conditioners and heat pumps, commercial packaged boilers, three-phase 
air conditioners and heat pumps <65,000 Btu/h, and single-package 
vertical air conditioners and heat pumps <65,000 Btu/h, collectively 
known as single-package vertical units, covered by EPCA. This notice 
announces the availability of a technical support document (TSD) the 
Department is using in making this assessment. The Department invites 
written comments on the TSD and on DOE's preliminary conclusions, which 
are set forth in this notice.

DATES: The Department will accept written comments, data, and 
information in response to this notice, but no later than April 27, 
2006. See section III, ``Public Participation,'' of this notice for 
details.

ADDRESSES: Please submit comments, identified by docket numbers EE-RM/
STD-03-100, EE-RM/STD-03-200, and EE-RM/STD-03-300 and/or RIN numbers 
1904-AB16, 1904-AB17, and 1904-AB44, by any of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     E-mail: [email protected]. Include EE-RM/STD-
03-100, EE-RM/STD-03-200, and EE-RM/STD-03-300 and/or RIN 1904-AB16, 
1904-AB17, and 1904-AB44 in the subject line of the message.
     Mail: Ms. Brenda Edwards-Jones, U.S. Department of Energy, 
Building Technologies Program, Mailstop EE-2J, ASHRAE Commercial Five-
Products Standards, 1000 Independence Avenue, SW., Washington, DC 
20585-0121. Telephone: (202) 586-2945. Please submit one signed 
original paper copy.
     Hand Delivery/Courier: Ms. Brenda Edwards-Jones, U.S. 
Department of Energy, Building Technologies Program, Room 1J-018, 1000 
Independence Avenue, SW., Washington, DC 20585.
    Instructions: All submissions received must include the agency name 
and docket number or Regulatory Information Number (RIN) for this 
proceeding. For detailed instructions on submitting comments and 
additional information on the proceeding, see section III of this 
document (Public Participation).
    Docket: For access to the docket to read background documents and 
the TSD, or comments received, go to the U.S. Department of Energy, 
Forrestal Building, Room 1J-018 (Resource Room of the Building 
Technologies Program), 1000 Independence Avenue, SW., Washington, DC, 
(202) 586-9127, between 9 a.m. and 4 p.m., Monday through Friday, 
except Federal holidays. Please call Ms. Brenda Edwards-Jones at the 
above telephone number for additional information regarding visiting 
the Resource Room. Please note: The Department's Freedom of Information 
Reading Room (formerly Room 1E-190 at the Forrestal Building) is no 
longer housing rulemaking materials. The docket will also be posted to 
the Federal Docket Management System through the Federal eRulemaking 
Portal (http://www.regulations.gov) after the comment period closes.
    You can also obtain the report of DOE's screening analysis 
(discussed below) and the TSD electronically from DOE's Building 
Technologies Program's Web site at the following URL address: http://www.eere.energy.gov/buildings/appliance_standards/.
    This notice refers to industry standards established by ASHRAE and 
IESNA in ASHRAE/IESNA Standard 90.1, Energy Standard for Buildings 
Except Low-Rise Residential Buildings (Standard 90.1). The revisions of 
Standard 90.1 are referred to by year of publication. For example, the 
1999 revision is referred to below as Standard 90.1-1999. This standard 
is available at the Resource Room of the Building Technologies Program 
at the address stated above. Copies are also available by mail from the 
American Society of Heating, Refrigerating, and Air-Conditioning 
Engineers, Inc., 1971 Tullie Circle, NE., Atlanta, GA 30329, or 
electronically from ASHRAE's Web site, http://www.ashrae.org/book/bookshop.htm.

FOR FURTHER INFORMATION CONTACT: Maureen Murphy, Project Manager, U.S. 
Department of Energy, Office of Energy Efficiency and Renewable Energy, 
Building Technologies Program, EE-2J, 1000 Independence Avenue, SW., 
Washington, DC 20585-0121, (202) 586-9127, or e-mail: 
[email protected].
    Francine Pinto, Esq., U.S. Department of Energy, Office of General 
Counsel, GC-72, 1000 Independence Avenue, SW., Washington, DC 20585-
0103, (202) 586-9507, or electronic mail: [email protected].

SUPPLEMENTARY INFORMATION: 

I. Introduction
    A. Authority
    B. Background
    1. ASHRAE Amendment of Standard 90.1 and DOE Response
    2. Subsequent Action by the Department
    3. The Energy Policy Act of 2005
II. Discussion
    A. Packaged Terminal Air Conditioners and Packaged Terminal Heat 
Pumps

[[Page 12635]]

    B. Small Commercial Packaged Boilers
    C. Large Commercial Packaged Boilers and Tankless, Gas-Fired 
Instantaneous Water Heaters
    D. Three-Phase Air Conditioners and Heat Pumps <65,000 Btu/h
    E. Single-Package Vertical Air Conditioners and Single-Package 
Vertical Heat Pumps <65,000 Btu/h
    1. Background
    2. Analysis of Proposed Efficiency Levels
    3. Standard 90.1-2004 Addendum b
    4. Potential Energy Savings and Conclusions
III. Public Participation
    A. Submission of Comments
    B. Issues on Which DOE Seeks Comment
IV. Approval by the Secretary

I. Introduction

A. Authority

    Part C of Title III of the Energy Policy and Conservation Act 
(EPCA) addresses the energy efficiency of certain types of commercial 
and industrial equipment, such as electric motors, air conditioners, 
and furnaces. (42 U.S.C. 6311-6317) It contains, for example, 
definitions, test procedures, labeling provisions, and energy 
conservation standards, including specific mandatory energy 
conservation standards for certain tankless, gas-fired instantaneous 
water heaters (IWHs), packaged terminal air conditioners (PTACs) and 
packaged terminal heat pumps (PTHPs), commercial packaged boilers, and 
commercial package air-conditioning and heating equipment (including 
three-phase air conditioners (ACs) and heat pumps (HPs) <65,000 Btu/h 
and single-package vertical air conditioners (SPVACs) and single-
package vertical heat pumps (SPVHPs) <65,000 Btu/h). (42 U.S.C. 
6313(a)(1)-(5))
    The energy conservation standards set in EPCA for commercial and 
industrial equipment generally correspond to the levels in Standard 
90.1, as in effect on October 24, 1992 (Standard 90.1-1989). The 
statute provides that if Standard 90.1 is amended after that date for 
any of this equipment (and for certain other equipment), the Secretary 
of Energy must establish an amended uniform national standard at the 
new minimum level for each effective date specified in Standard 90.1, 
unless the Secretary determines, through a rulemaking supported by 
clear and convincing evidence, that a more stringent standard is 
technologically feasible and economically justified and would result in 
significant additional energy conservation. (42 U.S.C. 6313(a)(6)(A))
    In any such rulemaking, the rule must contain the amended standard, 
and the Secretary must determine whether the economic benefits of the 
standard exceed its burdens, considering factors specified by the 
statute and other factors the Secretary considers relevant. (42 U.S.C. 
6313(a)(6)(B)(i)) The Secretary may not prescribe an amended standard 
if the Secretary finds (and publishes the finding) that interested 
persons have established by a preponderance of evidence that the 
amended standard is likely to result in unavailability in the United 
States of products with performance characteristics (including 
reliability), features, sizes, capacities, and volumes that are 
substantially the same as those generally available in the United 
States at the time of the Secretary's finding. (42 U.S.C. 
6313(a)(6)(B)(ii)) Also, the Secretary may not prescribe any amended 
standard which increases maximum allowable energy use, or decreases the 
minimum required energy efficiency, of a covered product. (42 U.S.C. 
6313(a)(6)(B)(ii))
    Finally, Federal energy efficiency requirements for commercial 
equipment generally preempt State laws or regulations concerning energy 
conservation testing, labeling, and standards. (42 U.S.C. 6316 (a)-(b)) 
The Department can, however, grant waivers of preemption for particular 
State laws or regulations, in accordance with the procedures and other 
provisions of section 327(d) of the Act. (42 U.S.C. 6297(d) and 
6316(b)(2)(D))

B. Background

1. ASHRAE Amendment of Standard 90.1 and DOE Response
    On October 29, 1999, ASHRAE's Board of Directors gave final 
approval to Standard 90.1-1999, which addressed efficiency levels for 
34 categories of commercial heating, ventilating and air-conditioning 
(HVAC) and water heating equipment covered by EPCA. The new Standard 
90.1 (Standard 90.1-1999) revised the efficiency levels of the existing 
Standard 90.1-1989 for certain equipment. For the remaining equipment, 
ASHRAE left the preexisting levels in place, after considering revision 
of the levels for some equipment and deferring consideration of others.
    Following the publication of Standard 90.1-1999, the Department 
performed a screening analysis that covered 24 of the categories of 
equipment to help decide what action it would take with respect to the 
new efficiency levels. The Department did not specifically analyze the 
other 10 categories of equipment because there was insufficient data 
describing baseline energy consumption, a small market for these 
products, a lack of product shipment data, or an absence of a suitable 
methodology to distinguish its heating function. For each of these 
types of equipment that was included in the screening analysis, the 
Department examined a range of efficiency levels that included the 
levels specified in EPCA and Standard 90.1-1999, as well as the levels 
associated with the lowest life-cycle cost (LCC). For each potential 
efficiency level above the EPCA standard, the Department estimated the 
incremental national energy and carbon emission savings and the net 
nationwide direct economic benefit (national net present value (NPV)) 
resulting for the period 2004 to 2030 from setting a standard at that 
level. The baselines for the comparison were the corresponding levels 
specified in Standard 90.1-1999 and EPCA.
    Following completion of the screening analysis, the Department 
published a notice that described the screening analysis and announced 
its public availability. For each equipment category for which ASHRAE 
adopted or considered a revised standard level, the notice stated 
whether the Department was inclined to immediately adopt the standard 
level in Standard 90.1-1999, or to undertake a more thorough analysis 
to determine if a more stringent level was warranted. For the equipment 
categories that ASHRAE did not address in revising Standard 90.1--
namely, three-phase air conditioners and heat pumps with capacities 
under 65,000 Btu per hour--DOE stated that it had tentatively decided 
to take no action until ASHRAE had amended Standard 90.1's efficiency 
levels for these types of equipment. Finally, the notice published on 
May 15, 2000, announced a public meeting and invited written comment on 
the screening analysis and DOE's planned actions. 65 FR 30929 (May 15, 
2000).
    Following the public meeting on July 11, 2000, the Department 
adopted the efficiency levels in Standard 90.1-1999 as Federal 
standards to replace existing EPCA levels for 18 equipment categories 
of commercial air conditioners, heat pumps, furnaces, water heaters, 
and hot water storage tanks. For electric water heaters, DOE rejected 
the Standard 90.1-1999 level, leaving the EPCA level in place. 66 FR 
3335, 3336-37, 3349-52 (January 12, 2001) (the ``January 2001 final 
rule'').
    For 11 of the 24 other categories of commercial equipment analyzed 
in the screening analysis, the Department stated it would evaluate 
whether to adopt more stringent standards than those contained in 
Standard 90.1-1999. 66 FR 3336-38, 3349-52. The Department selected 
these categories of equipment for further evaluation

[[Page 12636]]

because the screening analysis indicated at least a reasonable 
possibility of finding that more stringent standards ``would be 
technologically feasible and economically justified and would result in 
significant additional conservation of energy.'' 66 FR 3349. These are 
the criteria EPCA prescribes for the adoption of standards more 
stringent than those in Standard 90.1. (42 U.S.C. 6313(a)(6)(A)) The 
Department stated that it could discontinue its evaluation of any of 
these types of equipment, however, and adopt the Standard 90.1-1999 
efficiency level, whenever it concluded that these criteria are not 
likely to be satisfied. 66 FR 3348. However, DOE had previously 
indicated that it would take such action only after seeking public 
comment. 65 FR 30932. For the four categories of three-phase air-
conditioning equipment that ASHRAE had not addressed in Standard 90.1-
1999, the Department encouraged ASHRAE to amend its efficiency levels 
for this equipment in conjunction with the then-pending DOE standards 
rulemaking for similar, single-phase residential products, and stated 
that DOE would act once ASHRAE had adopted such amendments. The 
standard levels prescribed in EPCA and Standard 90.1-1999 for these 15 
equipment categories appear in Tables I.1 and I.2. In addition, the 
Energy Policy Act of 2005 (EPACT 2005) included energy efficiency 
standards for some of this commercial equipment, and those new 
standards also appear in the tables.

                   Table I.1.--Standard Efficiency Levels for Air Conditioners and Heat Pumps
----------------------------------------------------------------------------------------------------------------
                                                                       Standard efficiency level\*\
        Type of product                 Capacity/       --------------------------------------------------------
                                     characteristics            EPCA         ASHRAE 90.1-1999      EPACT 2005
----------------------------------------------------------------------------------------------------------------
Small Commercial Package Air-    <65 kBtu/h Air-Cooled,  SEER: 10.0, HSPF:  SEER: 10.0, HSPF:  None.
 Conditioning and Heating         3 Phase, Central        6.8.               6.8.
 Equipment.                       Split-System AC, HP.
                                 <65 kBtu/h Air-Cooled,  SEER: 9.7, HSPF:   SEER: 9.7, HSPF:   None.
                                  3 Phase, Central        6.6.               6.6.
                                  Single-Package AC, HP.
                                 >=65 kBtu/h and <135    EER: 8.9\**\.....  EER: 10.3\**\....  EER:
                                  kBtu/h Air-Cooled,                                            11.2\**\[dagger]
                                  Central AC.                                                   [dagger].
                                 >=65 kBtu/h and <135    EER: 8.9\**\,      EER: 10.3\**\,     EER: 11.0\**\,
                                  kBtu/h Air-Cooled,      COP: 3.0[dagger].  COP: 3.2[dagger].  COP:
                                  Central HP.                                                   3.3[dagger].
Large Commercial Package Air-    >=135 kBtu/h and <240   EER: 8.5\**\.....  EER: 9.7\**\.....  EER:
 Conditioning and Heating         kBtu/h Air-Cooled,                                            11.0\**\[dagger]
 Equipment.                       Central AC.                                                   [dagger].
                                 >=135 kBtu/h and <240   EER: 8.5\**\,      EER: 9.3\**\,      EER: 10.6\**\,
                                  kBtu/h Air-Cooled,      COP: 2.9[dagger].  COP: 3.1[dagger].  COP:
                                  Central HP.                                                   3.2[dagger].
Packaged Terminal Air            Air-Cooled............  EER, COP COP vary  EER, COP vary by   None.
 Conditioners and Heat Pumps.                             by capacity        capacity
                                                          according to       according to
                                                          formulas for       formulas for
                                                          each.              each (different
                                                                             formulas for new
                                                                             construction and
                                                                             replacement
                                                                             products).
----------------------------------------------------------------------------------------------------------------
\*\ Heating efficiency levels do not apply to cooling-only air conditioners.
\**\ At 95 [deg]F dry-bulb temperature.
[dagger] At 47 [deg]F dry-bulb temperature.
[dagger][dagger] This EER level applies to equipment that has electric resistance heat or no heating. For units
  with all other heating-system types that are integrated into the unitary equipment, deduct 0.2 EER.


                      Table I.2.--Standard Efficiency Levels for Boilers and Water Heaters
----------------------------------------------------------------------------------------------------------------
                                                                        Standard efficiency level
       Type of equipment                Capacity        --------------------------------------------------------
                                                                EPCA         ASHRAE 90.1-1999      EPACT 2005
----------------------------------------------------------------------------------------------------------------
Packaged Boilers...............  >300 kBtu/h...........  Combustion         Thermal            None.
                                 <= 2,500 kBtu/h.......   Efficiency\*\:     Efficiency\*\:
                                                          80% Gas, 83% Oil.  75% Gas, 78% Oil.
                                 >2,500 kBtu/h.........  Combustion         Combustion         None.
                                                          Efficiency\*\:     Efficiency\*\:
                                                          80% Gas, 83% Oil.  80% Gas, 83% Oil.
Tankless, Gas-Fired              V<10 gal..............  Thermal            Thermal            None.
 Instantaneous Water Heaters.                             Efficiency: 80%.   Efficiency: 80%.
----------------------------------------------------------------------------------------------------------------
\*\ At maximum rated capacity.

    EPACT 2005 prescribed more stringent standards than those contained 
in Standard 90.1-1999 for commercial package air-conditioning and 
heating equipment between 65,000 and 240,000 Btu per hour covered in 
Table I.1.\1\ The Department has not initiated individual rulemakings 
for the remaining equipment covered in Tables I.1 and I.2,

[[Page 12637]]

which is the subject of this notice and which the screening analysis 
categorized as follows:
---------------------------------------------------------------------------

    \1\ SPVACs and SPVHPs, collectively referred to as SPVUs, are 
types of small and large commercial package air-conditioning and 
heating equipment. ASHRAE did not recognize and evaluate them as 
separate equipment categories in Standard 90.1-1999, nor did EPCA 
recognize them as separate equipment categories.
---------------------------------------------------------------------------

     Three-Phase Split-System, Air-Cooled Air Conditioners 
<65,000 Btu/h
     Three-Phase Single-Package, Air-Cooled Air Conditioners 
<65,000 Btu/h
     Three-Phase Split-System, Air-Cooled Heat Pumps <65,000 
Btu/h
     Three-Phase Single-Package, Air-Cooled Heat Pumps <65,000 
Btu/h
     Packaged Terminal Air Conditioners
     Packaged Terminal Heat Pumps
     Small, Gas-fired Boilers 0.3-2.5 Million Btu/h (MMBtu/h)
     Small, Oil-fired Boilers 0.3-2.5 MMBtu/h
     Large, Gas-fired Boilers >=2.5 MMBtu/h
     Large, Oil-fired Boilers >=2.5 MMBtu/h
     Tankless, Gas-Fired Instantaneous Water Heaters
     Single-Package Vertical Air Conditioners \2\
     Single-Package Vertical Heat Pumps \3\
---------------------------------------------------------------------------

    \2\ Because of the circumstances described in footnote 1, DOE 
did not address SPVACs in the screening analysis it originally 
conducted.
    \3\ Because of the circumstances described in footnote 1, DOE 
did not address SPVACs in the screening analysis it originally 
conducted.
---------------------------------------------------------------------------

    The screening analysis results for these equipment categories are 
shown in Table I.3, except for the oil-fired packaged boilers and 
SPVUs, which DOE did not study in the screening analysis. For each 
equipment category, Table I.3 shows the efficiency level corresponding 
to the lowest average LCC and highest NPV, taking into account both the 
costs of efficiency improvements and the savings from reduced energy 
consumption. Each efficiency level is above the level specified in 
Standard 90.1-1999. Table I.3 also shows the following potential 
benefits, which the screening analysis estimates for the period from 
2004 to 2030, from setting a standard at the higher level:
     The estimated nationwide energy savings, expressed in 
trillions of British thermal units (Tbtu);
     The estimated net nationwide direct economic benefit, 
represented by the NPV; and
     The estimated reductions in atmospheric carbon emissions, 
in millions of tons.

    Table I.3.--Energy Savings, Net Present Value and Carbon Emission Reductions From 2004 to 2030 at Energy
                            Efficiency Levels Corresponding to Lowest Life-Cycle Cost
                                          [Source: screening analysis]
----------------------------------------------------------------------------------------------------------------
                                                                       Relative to ASHRAE standard 90.1-1999
                                                                 -----------------------------------------------
                                                                                                     National
          Equipment category               Efficiency level at       National     National total      carbon
                                         minimum life-cylce cost  energy savings  NPV  (millions     emission
                                                                      (TBtu)       of 1998 $'s)     reductions
                                                                                                  (million tons)
----------------------------------------------------------------------------------------------------------------
3-Phase, Single-Package Air-Source Air  12.0 SEER...............          1412.7           897.7              21
 Conditioners, <65 kBtu/h.
3-Phase, Split-System Air-Source Air    11.0 SEER...............           278.6           109.1               4
 Conditioners, <65 kBtu/h.
3-Phase, Single-Package Air-Source      12.0 SEER...............           183.6            91.3               3
 Heat Pumps, <65 kBtu/h.
3-Phase, Split-System Air-Source Heat   12.0 SEER...............            66.4            47.0               1
 Pumps, <65 kBtu/h.
Packaged Terminal Air Conditioners\**\  10.5 EER................           311.7           274.7               5
Packaged Terminal Heat Pumps\**\......  9.9 EER.................           249.0           241.9               4
Small, Gas-fired Commercial Packaged    78.7%...................           200.0           146.0               3
 Boilers, <=2.5 MMBtu/h.
Large, Gas-fired Commercial Packaged    85.3%\*\................            79.0            86.6               1
 Boilers, >=2.5 MMBtu/h.
Tankless, Gas-Fired Instantaneous       81.5%...................           102.0            45.3              2
 Water Heaters.
----------------------------------------------------------------------------------------------------------------
\*\ Efficiency shown is shipment-weighted averaged value of Large, Steam Commercial Packaged Boilers (76-81
  percent), and Large, Hot Water Commercial Packaged Boilers (78-88 percent).
\**\ PTAC/PTHP minimum LCC EER values are based on capacity-weighted shipments.

2. Subsequent Action by the Department
    The Department has further reviewed the energy savings potential 
and the efficiency levels in Standard 90.1-1999 for four out of the 
five types of equipment, as set forth in the TSD. Table I.4 summarizes 
the Department's actions for each product in today's notice.

             Table I.4.--Summary of DOE's Actions by Product
------------------------------------------------------------------------
                Product                            DOE's action
------------------------------------------------------------------------
PTACs and PTHPs........................  Seek a more stringent standard.
Small, Commercial Packaged Boilers.....  Reject Standard 90.1-1999
                                          efficiency levels.
Tankless, Gas-Fired IWHs...............  The Department does not have
                                          authority to pursue a standard
                                          level higher than those
                                          specified in Standard 90.1-
                                          1999.
Large, Commercial Packaged Boilers.....  The Department does not have
                                          authority to pursue a standard
                                          level higher than those
                                          specified in Standard 90.1-
                                          1999.
Three-phase ACs and HPs <65,000 Btu/h..  Inclined to adopt Addendum f to
                                          Standard 90.1-2004 once ASHRAE
                                          formally adopts this addendum.

[[Page 12638]]

 
SPVUs <65,000 Btu/h....................  Seeking stakeholder comment on
                                          the potential energy savings
                                          analysis and the
                                          appropriateness of the levels
                                          contained in Addendum b to
                                          Standard 90.1-2004.
------------------------------------------------------------------------

    Based on the review, the Department is now inclined to reject the 
Standard 90.1-1999 levels and leave the EPCA levels in place for small, 
commercial packaged boilers due to backsliding as further discussed in 
Section II.B. The Department has also reconsidered its authority to 
take action to pursue standard levels higher than those specified in 
Standard 90.1-1999 for tankless, gas-fired IWHs and large, commercial 
packaged boilers, and has determined that the Department lacks such 
authority as discussed in Section II.C. The Department is also inclined 
to seek a more stringent standard level than that in Standard 90.1-1999 
for PTACs and PTHPs. The Department is also inclined to adopt the 
levels in Addendum f of Standard 90.1-2004 for three-phase ACs and HPs 
<65,000 Btu/h if ASHRAE formally adopts this addendum as an amendment 
to Standard 90.1. Finally, the Department is deferring a final decision 
on SPVUs <65,000 Btu/h until ASHRAE takes final action on Addendum b to 
Standard 90.1-2004. At this time, the Department is seeking stakeholder 
comments on the potential energy savings analysis and the 
appropriateness of the standard levels incorporated in Addendum b to 
Standard 90.1-2004. After considering comments submitted in response to 
this notice, the Department expects to issue a final rule detailing the 
Department's final actions for these products.
3. The Energy Policy Act of 2005
    On August 8, 2005, EPACT 2005 (Pub. L. 109-58) was signed into law 
by the President. Section 136(b) of EPACT 2005 amended section 342(a) 
of EPCA (42 U.S.C. 6313(a)) by inserting energy conservation standards 
for small (>=65,000 Btu/h to <135,000 Btu/h), large (>=135,000 Btu/h to 
<240,000 Btu/h), and very large (>=240,00 Btu/h to <760,000 Btu/h) 
commercial package air conditioners and heat pumps. The standards for 
small, large and very large commercial package air conditioners and 
heat pumps in Section 136(b) of EPACT 2005, which amended section 342 
of EPCA (42 U.S.C. 6313), implicitly cover SPVUs. However, since the 
energy conservation standards contained in EPACT 2005 cover SPVUs 
>=65,000 Btu/h to <760,000 Btu/h, this notice addresses SPVUs that are 
<65,000 Btu/h only.

II. Discussion

A Packaged Terminal Air Conditioners and Packaged Terminal Heat Pumps

    Section 342(a)(3) of EPCA (42 U.S.C. 6313(a)(3)), and Standard 
90.1-1999 set forth energy efficiency standards for PTACs and PTHPs 
(collectively referred to as PTAC/HPs). The standards vary based on the 
capacity of the equipment, as set forth in Table II.1.

      Table II.1.--Comparison of Energy Efficiency Standards for PTACs and PTHPs-EPCA and ASHRAE 90.1-1999
----------------------------------------------------------------------------------------------------------------
                                                                   Efficiency levels
                                      --------------------------------------------------------------------------
               Category                                                         ASHRAE 90.1-1999
                                                 EPCA          -------------------------------------------------
                                                                    New construction           Replacement*
----------------------------------------------------------------------------------------------------------------
Packaged Terminal AC, Cooling Mode...  10.0-(0.16 x EER) Cap/   12.5-(0.213 x Cap/1000)  10.9-(0.213 x Cap/1000)
                                        1000) EER**.             EER**.                   EER**.
Packaged Terminal HP, Cooling Mode...  10.0-(0.16 x Cap/1000)   12.3-(0.213 x Cap/1000)  10.8-(0.213 x Cap/1000)
                                        EER**.                   EER**.                   EER**.
Packaged Terminal HP, Heating Mode...  1.3 + (0.16 x EER)       3.2-(0.026 x Cap/1000)   2.9-(0.026 x Cap/1000)
                                        COP[dagger].             COP**[dagger][dagger].   COP**[dagger][dagger].
----------------------------------------------------------------------------------------------------------------
* Replacement efficiencies apply only to units (1) factory labeled as follows: ``Manufactured for replacement
  applications only; Not to be installed in new construction projects''; and (2) with existing sleeves less than
  16 inches high and less than 42 inches wide.
** Cap means the rated cooling capacity of the equipment in Btu/h. If the unit's capacity is less than 7,000 Btu/
  h, use 7,000 Btu/h in the calculation. If the unit's capacity is greater than 15,000 Btu/h, use 15,000 Btu/h
  in the calculation.
[dagger] EER is the minimum cooling EER.
[dagger][dagger] COP is minimum heating COP.

    [dagger]As shown in Table II.1, EPCA prescribes a single formula 
for computing the minimum cooling efficiency of all PTAC/HPs, and a 
single formula for computing the minimum heating efficiency of all 
PTHPs. By contrast, the minimum efficiency levels in Standard 90.1-1999 
consist of two sets of formulas. One set is for PTAC/HPs that have 
sleeves less than 16 inches high and less than 42 inches wide and a 
specified label indicating they are for replacement use, which Standard 
90.1-1999 classifies as ``replacement'' units. The other set is for all 
other PTAC/HPs, which Standard 90.1-1999 classifies as ``new 
construction'' units. The formulas result in minimum efficiency levels 
slightly higher than EPCA levels for ``replacement'' units, and 
substantially higher for ``new construction'' units. Standard 90.1-1999 
also differs from EPCA in that it has slightly different formulas for 
the cooling modes of PTACs and PTHPs, whereas EPCA prescribes a single 
formula for both.
    The screening analysis estimated the potential energy savings from 
higher standards for PTAC/HPs operating in the cooling mode. The 
Department subsequently used these energy savings values in developing 
the summary chart of potential energy savings in the January 2001 final 
rule. 66 FR 3343. The potential energy savings from DOE adoption of a 
PTAC/HP standard at the maximum NPV levels, over and above

[[Page 12639]]

savings that would be achieved by the Standard 90.1-1999 levels, 
totaled 0.561 quads. 66 FR 3343. These values represent the potential 
savings for all packaged terminal equipment by moving from the ASHRAE 
``replacement'' efficiency level to the maximum NPV efficiency level. 
The Department now believes that these savings are overstated because 
they implicitly assume that DOE would adopt only a single, minimum 
standard equal to the ASHRAE ``replacement'' levels for all PTAC/HPs. 
Since the Department used the ASHRAE ``replacement'' efficiency levels 
(the lowest minimum levels ASHRAE specified in Standard 90.1-1999 for 
PTAC/HPs) and not the efficiency levels actually prescribed in Standard 
90.1-1999 by product class (i.e., the replacement levels and the much 
higher new construction levels), these potential energy savings are not 
entirely representative of those that would result from adoption of a 
higher standard. In other words, the Department believes that adjusting 
the base case would more accurately reflect the potential energy 
savings of adopting higher standards than those contained in Standard 
90.1-1999.
    In the TSD, the Department improved its energy savings estimate for 
PTAC/HPs by using both product class efficiency levels contained in 
Standard 90.1. The Department used these levels as a departure point 
for its revised calculations, along with an estimate of shipments as 
shown in Chapter 2, Section 2, of the TSD. Consequently, DOE assumed 85 
percent of the packaged terminal equipment sold annually would be at 
the ``new construction'' levels and 15 percent would be at the 
``replacement'' levels. Using this assumption, the Department estimated 
the revised potential cooling-mode energy savings would be 0.103 quads 
if DOE adopted a standard above Standard 90.1-1999, which is much lower 
than the estimate of 0.561 in the screening analysis as shown in 
Section 2.2 of the TSD. The difference in potential energy savings 
between the revised analysis and the screening analysis can be 
attributed to using different shipment assumptions, only analyzing the 
space cooling load for the lodging building category, changing the 
analysis period to 2008-2030, and calculating the savings based on 
market weighted shipments as further explained in Section 2.2 of the 
TSD. The Department also estimated, in its revised calculations, the 
potential heating-mode energy savings of 0.037 quads that would result 
from a standard above the levels in Standard 90.1-1999 as shown in 
Chapter 2 of the TSD. The Department did not account for the potential 
heating energy savings in the Screening Analysis. Furthermore, the new 
calculations indicate that the total potential energy savings (both 
heating mode and cooling mode) resulting from adopting the Standard 
90.1-1999 efficiency levels for the two product classes (replacement 
and new construction), when compared to the current EPCA efficiency 
levels, would be 0.499 quads. (In effect, much of the energy savings 
that the screening analysis attributed to moving from the Standard 
90.1-1999 levels to the maximum NPV levels, is now attributed in DOE's 
revised estimate of moving from the EPCA to the Standard 90.1-1999 
levels. This occurs because the revised estimate uses as the Standard 
90.1-1999 levels, the dual levels in Standard 90.1-1999, whereas the 
screening analysis used as the Standard 90.1-1999 levels only the 
relatively low ``replacement'' levels.)
    Since the market has changed, in the absence of Federal standards, 
to efficiency levels at or above the levels in Standard 90.1-1999 for 
PTACs and PTHPs, the Department is inclined to seek a more stringent 
standard level for these products. An examination of the January 2003 
Air-Conditioning and Refrigeration Institute (ARI) Directory for PTAC/
HPs reveals that 52 percent of the listed PTACs are at, or above, the 
Standard 90.1-1999 efficiency level for new construction equipment, and 
98 percent of the listed PTACs are at or above the Standard 90.1-1999 
efficiency level for replacement equipment. Furthermore, 72 percent of 
the listed PTHPs are at or above the Standard 90.1-1999 efficiency 
level for new construction equipment and 99 percent of the listed PTHPs 
are at or above the Standard 90.1-1999 efficiency level for replacement 
equipment. Even though the potential energy savings in the revised 
analysis has been reduced, the Department believes there is a 
possibility of clear and convincing evidence, which would warrant 
further evaluation of more stringent standard levels for PTACs and 
PTHPs. Therefore, the Department is inclined to seek a more stringent 
standard level than Standard 90.1-1999 for PTACs and PTHPs through the 
rulemaking process.

B. Small Commercial Packaged Boilers

    EPCA prescribes a minimum combustion efficiency of 80 percent for 
gas-fired commercial packaged boilers and 83 percent for oil-fired 
commercial packaged boilers, regardless of capacity, as detailed in 
Table I.2 in section I.B.1 of this document. Standard 90.1-1999 
prescribes for small boilers (<=2.5 million Btu/hr) thermal efficiency 
levels of 75 percent for gas-fired equipment and 78 percent for oil-
fired equipment. In January 2001, when it adopted as Federal standards 
certain of the efficiency levels in Standard 90.1-1999, the Department 
stated that it would evaluate whether standard levels higher than those 
in Standard 90.1-1999 are justified for small commercial packaged 
boilers. 66 FR at 3336-38, 3349-52. The Department has tentatively 
concluded that the Standard 90.1-1999 efficiency levels for small 
commercial packaged boilers are lower than EPCA's existing standards 
for this equipment. Therefore, the Department is inclined to reject the 
Standard 90.1-1999 levels for small commercial packaged boilers and 
leave in place the existing EPCA standards.
    The ``combustion efficiency'' descriptor used in EPCA for the 
efficiency levels for small commercial boilers differs from the 
``thermal efficiency'' descriptor used in Standard 90.1-1999. In 
general, the energy efficiency of a product is a function of the 
relationship between the product's output of services and its energy 
input. A boiler's output is measured in large part by the energy 
content of its output (steam or hot water). Consequently, its 
efficiency is often viewed as the ratio between its energy output and 
energy input, with the energy output being calculated as the energy 
input minus the energy lost in producing the output. A boiler's energy 
losses consist of energy that escapes through its flue (commonly 
referred to as flue losses), and of energy that escapes into the area 
surrounding the boiler (commonly referred to as jacket losses). The 
``combustion efficiency'' descriptor in EPCA takes into account only 
flue losses, and typically is defined as ``100 percent minus percent 
flue loss.'' The ``thermal efficiency'' descriptor in Standard 90.1-
1999 takes into account jacket losses as well as flue losses, and can 
be considered as combustion efficiency minus jacket loss. Since all 
boilers will have at least some jacket losses (even if small) and 
because thermal efficiency takes these losses into account, the thermal 
efficiency for a particular boiler will always be lower than its 
combustion efficiency.
    It is understood within the industry that there is not a direct 
mathematical correlation between these two measures of efficiency. The 
factors that contribute to jacket loss (e.g., the boiler's design and 
materials) have little or no direct bearing on combustion efficiency. 
This lack of correlation between combustion efficiency and thermal 
efficiency

[[Page 12640]]

presents some difficulties here. EPCA provides that the Department may 
not prescribe any amended standard that ``increases the maximum 
allowable energy use, or decreases the minimum required energy 
efficiency'' of a product covered under Section 342(a) of the statute, 
such as packaged boilers. (42 U.S.C. 6313(a)(6)(B)(ii)). Therefore, in 
evaluating whether to adopt Standard 90.1-1999's thermal efficiency 
levels of 75 and 78 percent for small gas and oil boilers, 
respectively, the Department needed to determine whether they decrease 
the 80 and 83 percent combustion efficiencies required by EPCA for 
these products. If the percentages for the minimum thermal efficiency 
levels specified by Standard 90.1-1999 were numerically at, or above, 
the percentages in EPCA for the corresponding combustion efficiency 
levels, then clearly the Standard 90.1-1999 levels would not be lower 
than the EPCA levels. If Standard 90.1-1999's thermal efficiency levels 
for small commercial boilers were only slightly lower numerically than 
EPCA's combustion efficiency standards for such equipment, the Standard 
90-1-1999 levels probably would also not represent a reduction in 
minimum efficiency levels. However, because the Standard 90.1-1999 
thermal efficiency levels are five percentage points below EPCA's 
combustion efficiency levels, DOE must address whether the Department's 
adoption of the Standard 90.1-1999 levels would represent a reduction 
of existing standards.
    To address this issue, the Department reviewed the Institute of 
Boiler and Radiation Manufacturers (I=B=R) ratings directories for 
2005. The I=B=R directory provides efficiency ratings for a majority of 
the commercial packaged boilers manufactured in the United States. For 
approximately 62.6 percent of the boilers it listed in 2005, the 
directory provided both the thermal efficiency and combustion 
efficiency levels. For a small portion of these boilers (3.2 percent), 
the ratings appear to be erroneous because the directory lists a 
thermal efficiency rating that is equal to or greater than its 
combustion efficiency rating, which is physically impossible.\4\ As 
explained above, thermal efficiency includes the effects of jacket 
losses whereas combustion efficiency does not. Excluding these boilers, 
the Department reviewed the thermal and combustion efficiency ratings 
for the remaining 59.4 percent of the boilers where both ratings are 
listed in the 2005 I=B=R directory. Among this equipment, small, gas-
fired boilers and small, oil-fired boilers had an average thermal 
efficiency approximately 2.6 percent lower than their combustion 
efficiency. For small, gas-fired boilers with combustion efficiencies 
between 80 and 81 percent, the 2005 directory showed an average thermal 
efficiency of approximately 76.7 percent. For small, oil-fired boilers 
with a combustion efficiency between 83 and 84 percent, the 2005 
directory showed an average thermal efficiency of approximately 81 
percent. The Department believes it is reasonable to assume that these 
relationships between combustion and thermal efficiency exist for small 
boilers that have combustion efficiencies that minimally comply with 
EPCA (80 percent and 83 percent for small gas and oil boilers, 
respectively). Therefore, minimally complying, small, gas-fired boilers 
would have an average thermal efficiency of about 76.8 percent, and 
minimally complying, small, oil-fired boilers would have an average 
thermal efficiency of about 82.1 percent. Standard 90.1-1999's thermal 
efficiencies of 75 percent for small, gas-fired boilers and 78 percent 
for small, oil-fired boilers are approximately 1.8 percent and 3.1 
percent lower, respectively, than the average thermal efficiencies of 
boilers that minimally comply with the EPCA energy efficiency 
standards.
---------------------------------------------------------------------------

    \4\ These anomalous ratings are likely due to Hydronics 
Institutes's (HI) de-rating procedures, manufacturers' interpolation 
of results, varying test chambers and instrument calibration among 
manufacturers, or submittal of erroneous ratings. For more details, 
please see Chapter 3 of the TSD.
---------------------------------------------------------------------------

    This analysis does not establish directly that the small boiler 
efficiency levels in Standard 90.1-1999 are lower than those in EPCA. 
EPCA's combustion efficiency standards for this equipment set maximum 
amounts of flue losses, but do not regulate jacket losses. As stated 
earlier, thermal efficiency is a function of both flue losses (i.e., 
combustion efficiency) and jacket losses. Since these two losses can be 
independent of one another, in theory, a small boiler could meet or 
exceed EPCA's applicable combustion efficiency standard, but have 
sufficiently large jacket losses that cause the thermal efficiency to 
be lower than the 75 percent (for small, gas-fired boilers) or 78 
percent (for small oil-fired boilers) specified in Standard 90.1-1999. 
Thus, DOE's adoption of Standard 90.1-1999 thermal efficiency levels 
would not directly decrease the minimum combustion efficiencies 
required in EPCA for small boilers. However, the Department believes 
the adoption of the Standard 90.1-1999 thermal efficiency levels for 
small boilers would have the effect of lowering minimum combustion 
efficiency levels required by EPCA by allowing increased energy 
consumption.
    At present, the thermal efficiency of a small commercial boiler is 
a function of (1) the manufacturer's compliance with the applicable 
EPCA combustion efficiency standard and (2) decisions it makes 
independent of EPCA concerning the boiler's design, materials, and 
other features that affect jacket losses. For the small boilers for 
which the I=B=R directory lists both thermal and combustion 
efficiencies, these decisions by manufacturers have resulted in 
production of (1) no gas-fired boiler with a thermal efficiency below 
75.4 percent, (2) gas boilers with a combustion efficiency between 80 
and 81 percent that have thermal efficiencies averaging approximately 
76.7 percent, (3) no oil-fired boiler with a thermal efficiency below 
75.6, and (4) oil boilers with a combustion efficiency between 83 and 
84 percent that have thermal efficiencies averaging approximately 81 
percent. Although EPCA does not regulate jacket losses, for both small, 
gas- and oil-fired commercial packaged boilers with relatively low 
combustion efficiencies, manufacturers have restricted jacket losses to 
levels that have kept thermal efficiencies within an average of 2.6 
percentage points below their combustion efficiencies. The Department 
does not believe its adoption of Standard 90.1-1999's thermal 
efficiency levels for small commercial boilers would result in 
manufacturers' increasing the amount of jacket losses for this 
equipment. No reason is readily apparent as to why manufacturers would 
alter their current practices, and make equipment that has greater 
jacket losses, even if mandatory thermal efficiency levels were set 
below the levels that equipment currently achieves. However, setting 
thermal efficiency standards at levels lower than the thermal 
efficiencies of existing equipment could result in equipment with lower 
combustion efficiencies. This allows for the possibility of equipment 
having lower efficiencies than permitted by EPCA, meaning that the 
current minimum (required) efficiency would be decreased.
    For these reasons, it appears to the Department that EPCA precludes 
it from prescribing as amended Federal standards the Standard 90.1-
1999's thermal efficiency levels (one for gas-fired and the other for 
oil-fired equipment) for small commercial packaged boilers, because 
each would decrease the minimum required efficiency of this equipment. 
(42 U.S.C. 6313(a)(6)(B)(ii))

[[Page 12641]]

    For small commercial gas-fired boilers, the screening analysis 
estimated that, in comparison with Standard 90.1-1999's minimum thermal 
efficiency level of 75 percent, 0.2 quads of energy would be saved by 
requiring a thermal efficiency of at least 78.7 percent, the standard 
level that corresponds to the lowest average life-cycle cost and 
highest NPV for this equipment as shown in Chapter 3 of the TSD. The 
estimate of 0.2 quads of energy savings assumes that the thermal 
efficiency of all small, gas-fired boilers shipped would increase from 
the Standard 90.1-1999 minimum of 75 percent to 78.7 percent. The 
Department's review of the I=B=R directories for 2005, however, 
indicates that a number of small, gas-fired commercial boilers with 
thermal efficiencies above 75 percent are already on the market. For 
example, among small, gas-fired boilers for which the directory 
included both thermal and combustion efficiency ratings, the lowest 
thermal efficiency is 75.4 percent, and the average thermal efficiency 
is 79.7 percent. Thus, since many small, gas-fired boilers are being 
sold with thermal efficiencies greater than 75 percent, less than 0.2 
quads of energy would be saved if DOE adopted a standard of 78.7 
percent thermal efficiency instead of 75 percent. The Department cannot 
estimate precisely how much energy a new standard would save, since it 
does not know the quantities of boilers being sold at particular 
efficiency levels. Clearly, however, the savings would be less than the 
potential savings shown in the screening analysis.
    For small, oil-fired commercial boilers, the screening analysis did 
not evaluate potential energy savings from a Federal standard in excess 
of Standard 90.1-1999's minimum thermal efficiency level of 78 percent. 
As explained in Chapter 3 of the TSD, certain equipment (e.g., oil-
fired commercial boilers) was not specifically analyzed because there 
was insufficient data describing baseline energy consumption, a small 
market for these products, a lack of product shipment data, or an 
absence of a suitable methodology to distinguish its heating function. 
However, the Department's review of the I=B=R directory for 2005 
indicates that a number of small, oil-fired commercial boilers already 
on the market have thermal efficiencies above 78 percent. For small, 
oil-fired commercial boilers, for which the directory included both 
thermal and combustion efficiency ratings, the lowest thermal 
efficiency in 2005 is 75.6 percent and the average thermal efficiency 
is 82.3 percent. For models with a combustion efficiency between 83 and 
84 percent, which slightly exceeds the EPCA standard, the average 
thermal efficiency in 2005 was 81.0 percent. The screening analysis did 
not evaluate small, oil-fired commercial boilers, but the Department 
understands that their market share is much smaller than the market 
share for the small, gas-fired commercial boilers. Consequently, the 
Department believes that the potential energy savings from a standard 
higher than that specified in EPCA and Standard 90.1-1999 is much 
smaller for small, oil-fired commercial boilers than the potential 0.2 
quads of energy savings for the small, gas-fired commercial boilers.
    Nonetheless, the Department believes the thermal efficiency metric 
provides a sound method for measuring the efficiency of commercial 
boilers because it is more inclusive and better reflects the total 
energy losses in the equipment than the combustion efficiency metric 
prescribed by EPCA, and is more consistent with the Act's definition of 
``energy efficiency'' for commercial equipment.\5\ If ASHRAE were to 
adopt for small boilers new thermal efficiency levels that maintain or 
increase EPCA's existing standard levels, the Department would give 
them careful consideration, and would be favorably inclined toward 
adopting levels, such as those indicated in the screening analysis, 
that would represent the lowest LCC and highest NPV for this equipment. 
See Chapter 3 of the TSD. However, the Department cannot adopt any 
amended thermal efficiency standard for commercial packaged boilers 
that would entail lowering the minimum required efficiency level for 
this equipment. The Department is inclined to leave in place the 
existing EPCA standards for the small commercial packaged boilers.
---------------------------------------------------------------------------

    \5\ For commercial equipment, `` `energy efficiency' means the 
ratio of the useful output of services from an article of industrial 
equipment to the energy use by such article, determined in 
accordance with test procedures under section 6314 of this title.'' 
(42 U.S.C. 6311(3))
---------------------------------------------------------------------------

C. Large Commercial Packaged Boilers and Tankless, Gas-Fired 
Instantaneous Water Heaters

    EPCA specifies minimum energy efficiency levels for certain 
categories of commercial equipment including tankless, gas-fired 
instantaneous water heaters (IWHs) and large commercial packaged 
boilers. (42 U.S.C. 6313(a)(1)-(5)) These types of equipment are also 
covered by ASHRAE/IES Standard 90.1, and the efficiency requirements in 
EPCA correspond with the Standard 90.1 levels in effect on October 24, 
1992.
    EPCA provides that, ``If ASHRAE/IES Standard 90.1, as in effect on 
October 24, 1992, is amended with respect to any * * * packaged 
boilers, storage water heaters, instantaneous water heaters, or unfired 
hot water storage tanks, the Secretary shall establish an amended 
uniform national standard for that product at the minimum level for 
each effective date specified in the amended ASHRAE/IES Standard 90.1, 
unless the Secretary determines, by rule published in the Federal 
Register and supported by clear and convincing evidence, that adoption 
of a uniform national standard more stringent than such amended ASHRAE/
IES Standard 90.1 for such product would result in significant 
additional conservation of energy and is technologically feasible and 
economically justified.'' (42 U.S.C. 6313(a)(6)(A))
    ASHRAE revised Standard 90.1 on October 29, 1999. It changed 
Standard 90.1's minimum efficiency levels for some products but not for 
others. Of the equipment for which if left levels at their preexisting 
values, ASHRAE evaluated whether to increase some of the levels, while 
deferring consideration of other levels. For tankless IWHs and large, 
commercial packaged boilers, ASHRAE left the pre-existing levels in 
place after considering whether to change them. Thus, Standard 90.1-
1999 values for this equipment are the same as the EPCA standards.
    In response to ASHRAE's actions, the Department issued a notice of 
preliminary screening analysis on March 1, 2000. 65 FR 10984. In this 
document the Department stated that it expected to pursue, one of four 
courses of action for each commercial equipment category covered by 
Standard 90.1-1999:
    1. Adopt the Standard 90.1-1999 efficiency level as a uniform 
national standard;
    2. Reject the Standard 90.1-1999 efficiency level if it increases 
maximum allowable energy use or decreases minimum required efficiency;
    3. Propose consideration of an addendum to Standard 90.1-1999 if 
ASHRAE did not consider a more efficient level, and a more efficient 
level appears warranted; or
    4. Propose consideration of an addendum to Standard 90.1-1999 and 
undertake a more thorough evaluation to determine whether a rulemaking 
is justified, if ASHRAE considered amending or amended the standard, 
and a more efficient level appears warranted than is contained in 
ASHRAE/IES Standard 90.1-1999.
    On May 15, 2000, the Department issued a notice of document 
availability

[[Page 12642]]

and public workshop announcing the preliminary conclusions of the 
screening analysis. 65 FR 30934. The Department announced in this 
notice its inclination to propose that ASHRAE consider an addendum to 
Standard 90.1-1999, based on the screening analysis, and to undertake a 
more thorough evaluation to determine whether a rulemaking was 
justified under the terms of EPCA. On January 12, 2001, the Department 
published a final rule adopting Standard 90.1-1999 standard levels for 
certain commercial equipment, and stated it was considering whether 
more stringent standards are justified for other equipment, including 
IWHs and large commercial packaged boilers. 66 FR 3336.
    In these three notices, the Department indicated its belief that it 
had the authority to consider more stringent standard levels for 
tankless IWHs and large, commercial packaged boilers because ASHRAE had 
considered adopting more stringent levels for these types of equipment, 
even though ASHRAE had not changed the Standard 90.1 levels for such 
equipment. The Department did not receive any comments in response to 
either the May 15, 2000, notice or the January 12, 2001, final rule 
concerning its view that it had this authority. However, in preparing 
today's notice, DOE reexamined its authority under EPCA to amend 
standards for tankless IWHs and large commercial boilers and has 
concluded its earlier view was in error. As quoted at greater length 
above, EPCA states that, if an efficiency level in Standard 90.1 ``is 
amended,'' then DOE may (under certain circumstances) adopt a standard 
more stringent than the ``amended'' level in Standard 90.1. The 
Department now believes that this language authorizes it to adopt a 
more stringent standard than the level(s) in Standard 90.1 only in 
response to a change in such level(s) by ASHRAE. Thus, DOE believes 
ASHRAE must change the Standard 90.1 efficiency level(s) for a type of 
equipment to trigger DOE authority to pursue a rulemaking to consider 
more stringent standards for that equipment. Since ASHRAE did not 
change the existing efficiency levels in Standard 90.1 for tankless, 
gas-fired IWHs and large commercial packaged boilers when it adopted 
Standard 90.1-1999, the adoption of Standard 90.1-1999 appears not to 
authorize DOE to pursue higher standards for these types of equipment. 
The Department now believes that ASHRAE must, instead, take further 
action and adopt new standard levels for such equipment in order for 
DOE to consider more stringent levels for these products. In 
consideration of the above, if ASHRAE considers an addendum to Standard 
90.1 for these products, DOE will encourage it to consider the details 
of the screening analysis.

D. Three-Phase Air Conditioners and Heat Pumps <65,000 Btu/h

    Energy-efficiency levels for single-package three-phase ACs and HPs 
<65,000 Btu/h are set forth in EPCA at a seasonal energy efficiency 
ratio (SEER) level of 9.7 for cooling (42 U.S.C. 6313(a)(1)(B)) and a 
heating seasonal performance factor (HSPF) level of 6.6 for heating (42 
U.S.C. 6313(a)(1)(E)) (see Table II.2). Energy-efficiency levels for 
split-system three-phase HPs <65,000 Btu/h are 10.0 SEER for cooling 
(42 U.S.C. 6313(a)(1)(A)) and 6.8 HSPF for heating (42 U.S.C. 
6313(a)(1)(D)). These efficiency levels are the same as those in 
Standard 90.1-1989. During the development of Standard 90.1-1999, 
ASHRAE explicitly chose not to revise standards for air-cooled three-
phase ACs and HPs <65,000 Btu/h. This decision was based on the close 
relationship the design of this equipment has to residential, single-
phase air-cooled ACs and HPs <65,000 Btu/h, whose efficiency is 
regulated under section 325 of EPCA (42 U.S.C. 6295), and which at that 
time were the subject of a pending DOE rulemaking for the development 
of new efficiency standards.\6\ Subsequently, in the January 12, 2001, 
final rule (66 FR 3336), DOE indicated that it would take no action on 
three-phase ACs and HPs since ASHRAE took no action. As a result, the 
EPCA energy-efficiency levels for this equipment remained unchanged.
---------------------------------------------------------------------------

    \6\ Addendum i to American National Standards Institute (ANSI)/
ASHRAE/IESNA Standard 90.1-2001, Pg.2.
---------------------------------------------------------------------------

    On January 22, 2001, the Department published a final rule setting 
a 13 SEER and 7.7 HSPF standard for residential central air 
conditioners and heat pumps, both single-package and split-system (the 
``13 SEER rule''). 66 FR 71799. ARI requested judicial review of this 
rule by the U.S. Court of Appeals for the 4th Circuit. Subsequently, on 
May 23, 2002, DOE withdrew the 13 SEER rule, and set the efficiency 
standards for residential, single-phase air-cooled air conditioners and 
heat pumps at a SEER rating of 12.0 and an HSPF rating of 7.4 (the ``12 
SEER rule''). 67 FR 36368. In June of 2002, ARI proposed to ASHRAE an 
addendum to Standard 90.1, Addendum i to Standard 90.1-2001, which 
contained minimum efficiency levels of 12 SEER/7.4 HSPF for the three-
phase commercial air-conditioning equipment <65,000 Btu/h, and an 
effective date in 2006. ASHRAE adopted Addendum i on July 3, 2003, to 
align the efficiency standards for this equipment with DOE's standards 
for residential central air conditioners and heat pumps <65,000 Btu/h. 
ANSI approved Addendum i on August 6, 2003.
    In the meantime, the Natural Resources Defense Council had 
requested judicial review of the 12 SEER rule in the U.S. Court of 
Appeals for the 2nd Circuit. Natural Resources Defense Council, et al. 
v. Abraham, 355 F.3d 179 (2nd Cir. 2004). On January 13, 2004, the 
court ruled that DOE, in adopting the 12 SEER rule, had failed to 
effect a valid amendment of the original standard (13 SEER) effective 
date, and was prohibited from amending these standards downward. 355 
F.3d 179. Shortly after this ruling, ARI withdrew its appeal of the 13 
SEER rule. On August 17, 2004, DOE published a technical amendment in 
the Federal Register to re-publish the 13 SEER standard for residential 
central air conditioners and heat pumps. 69 FR 50997.
    Nevertheless, even though the 13 SEER standard now clearly applies 
to residential ACs and HPs <65,000 Btu/h, for three-phase equipment of 
this type the 12 SEER efficiency level in Addendum i to Standard 90.1-
2001 requires action. EPCA states that DOE must adopt as a Federal 
standard any efficiency level specified in an amendment to Standard 
90.1 unless it shows through clear and convincing evidence that a more 
stringent standard, that is technologically feasible and economically 
justified, would produce significant additional energy savings. (42 
U.S.C. 6313(a)(6)(A)) EPCA also bars DOE from adopting any standard 
that would increase the maximum allowable energy use or decrease the 
minimum required efficiency for a product. (42 U.S.C. 
6313(a)(6)(B)(ii)) Therefore, at this point, EPCA requires that DOE 
either adopt the efficiency levels in Addendum i to Standard 90.1-2001, 
to increase the minimum energy efficiency level for three-phase air-
conditioning units from the 10 SEER level established by EPCA to a 12 
SEER level, or pursue a rulemaking to explore adoption of a higher-
energy efficiency level.
    ASHRAE is now considering, however, adoption of the 13 SEER level 
for this equipment. Specifically, under its process for continuous 
maintenance of Standard 90.1, ASHRAE has completed public review of a 
proposed addendum to Standard 90.1 (Addendum f to Standard 90.1-2004) 
that would incorporate 13 SEER and 7.7 HSPF

[[Page 12643]]

levels for three-phase ACs and HPs <65,000 Btu/h. Under ASHRAE's 
process, if the ASHRAE Standards Committee and ASHRAE Board approve 
this addendum during the 2006 ASHRAE winter meeting, it would then go 
to ANSI for approval, and its official adoption and publication would 
likely occur in the spring of 2006. Table II.2 summarizes the minimum 
energy-efficiency standards for three-phase air-conditioning units and 
heat pumps <65,000 Btu/h as specified by EPCA, Standard 90.1-1999, 
Addendum i to Standard 90.1-2001, and Addendum f to Standard 90.1-2004.

                                     Table II.2.--Comparison of Energy Efficiency Levels for Three-Phase ACs and HPs
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                     Efficiency levels (SEER and HSPF)
                                                 -------------------------------------------------------------------------------------------------------
                                                            EPCA               Standard 90.1-1999      Addendum i to standard    Addendum f to standard
                    Category                     ----------------------------------------------------         90.1-2001                 90.1-2004
                                                                                                     ---------------------------------------------------
                                                    Cooling      Heating      Cooling      Heating      Cooling      Heating      Cooling      Heating
                                                     (SEER)       (HSPF)       (SEER)       (HSPF)       (SEER)       (HSPF)       (SEER)       (HSPF)
--------------------------------------------------------------------------------------------------------------------------------------------------------
3-Phase Single-Package AC.......................          9.7           NA          9.7           NA         12.0           NA         13.0           NA
3-Phase Single-Package HP.......................          9.7          6.6          9.7          6.6         12.0          7.4         13.0          7.7
3-Phase Split-System AC.........................         10.0           NA         10.0           NA         12.0           NA         13.0           NA
3-Phase Split-System HP.........................         10.0          6.8         10.0          6.8         12.0          7.4         13.0          7.7
--------------------------------------------------------------------------------------------------------------------------------------------------------

    At this time the Department has decided to postpone action on 
ASHRAE's Addendum i to Standard 90.1-2001 because the Addendum f to 
Standard 90.1-2004 is currently pending before ASHRAE and its adoption 
by ASHRAE would supercede Addendum i. The Department intends to take 
action once ASHRAE has completed consideration of Addendum f. If ASHRAE 
approves this addendum, DOE anticipates that it will adopt as Federal 
standards the efficiency levels in the addendum (13 SEER/7.7 HSPF). The 
Department is following this approach largely to achieve the original 
intent of ASHRAE and DOE to align the energy-efficiency standards for 
the three-phase equipment with the standards for residential, single-
phase, air-cooled ACs and HPs that currently have to meet a 13 SEER/7.7 
HSPF federal energy efficiency standard as of January 23, 2006. In 
addition, the screening analysis estimated that 12 SEER was the 
efficiency level for three-phase ACs and HPs <65,000 Btu/h where the 
lowest LCC occurs. 65 FR 30929. Therefore, the Department considers it 
unlikely that clear and convincing evidence exists, as required by 
EPCA, 42 U.S.C. 6313(a)(6)(A), that a standard higher than the 13 SEER 
level in Addendum f would save significant additional amounts of 
energy, and also be economically justified and technologically 
feasible.

E. Single-Package Vertical Air Conditioners and Single-Package Vertical 
Heat Pumps <65,000 Btu/h

1. Background
    In 2002, ASHRAE approved Addendum d to Standard 90.1-2001. Addendum 
d originated as an ARI continuous-maintenance proposal to ASHRAE, and 
was intended to establish SPVACs and SPVHPs as new categories of 
commercial HVAC equipment. It specified ARI Standard 390-2001 as the 
test procedure for SPVU products and provided minimum efficiency levels 
specifically for this equipment.\7\ Prior to ASHRAE's approval of 
Addendum d, DOE had indicated that SPVUs were covered by EPCA as 
commercial equipment. 65 FR 59589, 59610 (October 5, 2000). Therefore, 
under EPCA, publication of Addendum d triggered a review by DOE to 
determine if it should adopt as Federal requirements the addendum's 
amendments to Standard 90.1. (42 U.S.C. 6313(a)(6))
---------------------------------------------------------------------------

    \7\ Air-Conditioning and Refrigeration Institute, Performance 
Rating of Single-Package Vertical Air-Conditioners and Heat Pumps--
Standard 390, 2001.
---------------------------------------------------------------------------

    The Department examined Addendum d and determined that it could not 
adopt as Federal requirements the standards and test procedures in the 
addendum for the following reasons: (1) Taking into account the 
``Exclusions'' in the Scope section of ARI Standard 390-2001, the 
Addendum appears to prescribe requirements for few if any of the 
products covered by EPCA. Neither Addendum d nor any other provision of 
Standard 90.1 defines or describes SPVUs; (2) Assuming Addendum d did 
prescribe standards and test procedures for SPVUs covered by EPCA, the 
addendum did not clearly delineate SPVUs according to the statutory 
scheme set forth in EPCA, and disregarded EPCA's definitions and 
classifications for commercial air-conditioning equipment; and (3) To 
the extent it addressed equipment covered by EPCA, the addendum 
appeared to contain efficiency levels for some categories of equipment 
that are lower than the minimum efficiency standards currently required 
under EPCA (DOE, No. 7 at pp. 1-7).
    In response to DOE's objections, ARI revised ARI Standard 390 and 
prepared and submitted to ASHRAE a new continuous-maintenance proposal 
to correct the deficiencies DOE had identified in Addendum d. ARI 
developed these documents in consultation with DOE. ASHRAE accepted the 
continuous-maintenance proposal, and largely incorporated its contents 
into proposed Addendum b to Standard 90.1-2004.\8\ At this point, 
ASHRAE has completed its public review process of Addendum b and is in 
the final stages of considering whether to approve the addendum. The 
Department's understanding, based on discussions with ASHRAE staff, is 
that ASHRAE could approve Addendum b as an amendment to Standard 90.1 
as early as the end of 2005.
---------------------------------------------------------------------------

    \8\ Public Review Draft of Proposed Addendum b to Standard 90.1-
2004, Energy Standard for Buildings Except Low-Rise Residential 
Buildings, Nov. 2004.
---------------------------------------------------------------------------

    In Addendum b, ARI redefined both SPVACs and SPVHPs as encased air-
cooled small or large commercial package air-conditioning and heating 
equipment. Additionally, it created SPVU categories corresponding to 
the equipment categories in EPCA. As a result of revisions made to ARI 
Standard 390, any standards and test procedures ASHRAE prescribed for 
SPVU equipment would apply to equipment covered by EPCA, and not 
overlap with EPCA definitions of PTACs and PTHPs. To correct the 
efficiency level, ARI proposed a revised set of standards for

[[Page 12644]]

three categories of equipment size: <65,000 Btu/h, >=65,000 but 
<135,000 Btu/h, and >=135,000 but <240,000 Btu/h. These revised 
standards utilized energy efficiency ratio (EER) and coefficient of 
performance (COP) descriptors to provide SPVU efficiency levels in a 
manner consistent with other commercial equipment, eliminating the use 
of the common residential central ACs and HPs descriptors of SEER and 
HSPF for SPVUs.
    The Department responded favorably to a majority of ARI's 
revisions, but continued to voice concern regarding the test procedures 
and minimum efficiency standards proposed for SPVUs <65,000 Btu/h (DOE, 
No. 11 at pp. 1-6). The SEER/HSPF metrics include additional 
performance factors such as the changes in performance associated with 
changes in various ambient conditions and cycling losses. Consequently, 
the SEER/HSPF metrics require more complicated test procedures than the 
EER/COP metrics and could potentially allow equipment rated with only 
the EER/COP metrics to be less efficient. Despite these differences, 
DOE agreed that ARI's EER standards provided roughly the same level of 
efficiency as the SEER standards for existing equipment (DOE, No. 11 at 
pp. 1-6). The Department's main concern revolved around ARI's COP level 
for three-phase SPVUs below 65,000 Btu/h. The Department recognized 
that one of the factors absent from the COP metric was an assessment of 
the energy used to provide electric resistance backup heat. Electric 
resistance backup heat is needed to meet the heating load at low 
temperatures and provides space heating during periods when the heat 
pump acts to defrost the outdoor coil. This would potentially allow a 
SPVHP subject to the ARI COP standard to have a lower overall 
efficiency (net space heating output over electrical input) than is 
currently required.
    The Department provided a single comment to ASHRAE during the 
public review on Addendum b to Standard 90.1-2004, indicating that, 
while Addendum b addressed many of the issues the Department had 
identified, the Department continued to have concerns regarding the 
change in descriptors from SEER to EER and HSPF to COP (DOE, No. 16 at 
pp. 1-2).
    Even though Addendum b contained recommended efficiency levels for 
SPVUs <65,000 Btu/h, EPACT 2005 supercedes Addendum b requirements for 
these products. The signing of EPACT 2005 by the President divided 
SPVUs into two categories: those products with capacities <65,000 Btu/h 
and those products with capacities >=65,000 Btu/h but <760,000 Btu/h. 
The Department will continue its evaluation of products with capacities 
<65,000 Btu/h, which are the subject of this notice. However, the SPVUs 
with capacities >=65,000 Btu/h but <760,000 Btu/h are covered under the 
standards specified by EPACT 2005 and are not included in today's 
notice.
2. Analysis of Proposed Efficiency Levels
    Table II.3 shows the existing and proposed efficiency levels for 
SPVAC and SPVHP equipment. The statute requires that the Secretary may 
not prescribe any amended standard which increases maximum allowable 
energy use, or decreases the minimum required energy efficiency, of a 
covered product. (42 U.S.C. 6313(a)(6)(B)(ii)) The Department has 
therefore reviewed the ARI data for SPVAC and SPVHP with cooling 
capacity <65,000 Btu/h and believes that the EER levels provided in 
Addendum b are equivalent to or higher than the current SEER 
efficiencies in EPCA (ARI, No. 9 at pp. 1-4 and 10-26).

Table II.3.--Existing and Proposed Efficiency Standard Levels for SPVAC and SPVHP With Cooling Capacity <65 kBtu/
                                                        h
----------------------------------------------------------------------------------------------------------------
                                                                 Addendum d to standard   Addendum b to standard
               Category                          EPCA                  90.1-2001                90.1-2004
----------------------------------------------------------------------------------------------------------------
SPVAC (Cooling):
    Single Phase.....................  None...................  None...................  9.0 EER.
    Three Phase......................  9.7 SEER...............  8.9 EER................  9.0 EER.
SPVHP (Cooling):
    Single Phase.....................  None...................  None...................  9.0 EER.
    Three Phase......................  9.7 SEER...............  8.9 EER................  9.0 EER.
SPVHP (Heating):
    Single Phase.....................  None...................  None...................  3.0 COP.
    Three Phase......................  6.6 HSPF...............  2.7 COP................  3.0 COP.
----------------------------------------------------------------------------------------------------------------

    The Department examined existing efficiency data for SPVAC 
equipment with cooling capacity <65,000 Btu/hr where the SEER rating 
was used (ARI, No. 9 at pp. 1-4, 24, and 25). It identified only one 
minimally compliant (9.7 SEER) product. However, DOE examined 11 near-
minimally compliant models at the next highest efficiency level, 10 
SEER. From this analysis, the Department determined the average EER 
rating was 0.8 points below the SEER ratings for this near-minimally 
compliant equipment. Thus, DOE believes that an EER rating of 8.9, 0.8 
points below the minimum SEER rating of 9.7 that EPCA currently 
requires for three-phase SPVUs with cooling capacity <65,000 Btu/h, is 
equivalent to that minimum rating.
    As discussed in Chapter 5 of the TSD, the Department also carried 
out a separate analysis of the ratio between EER and SEER minimally 
compliant equipment, and the results were similar. Both the 
differential analysis and the ratio analysis reinforce the conclusion 
that a 9.7 SEER efficiency level is equivalent to an 8.9 EER level for 
SPVACs with cooling capacity <65,000 Btu/h. The Department believes, 
therefore, that the proposed 9.0 EER level in Addendum b exceeds the 
existing EPCA levels.
    DOE identified no minimally compliant (9.7 SEER) SPVHP equipment 
with a cooling capacity <65,000 Btu/h. However, DOE identified 14 near-
minimally compliant models at 10.0 SEER. The average EER for this 
equipment was 9.1, 0.9 points below the SEER ratings for the equipment 
as detailed in Chapter 5 of the TSD. Thus, an EER rating of 8.8, 0.9 
below the EPCA minimum of 9.7 SEER for this equipment, appears to be 
equivalent to that minimum rating. The proposed level of 9.0 EER in 
ASHRAE's Addendum b is clearly above this.
    The Department's analysis of HSPF data for SPVHP equipment with 
cooling capacity <65,000 Btu/h indicated that there were 26 products on 
the market with a minimally compliant HSPF of 6.6 as shown in Chapter 5 
of the TSD. The

[[Page 12645]]

minimum COP for these products was 2.7 and the average COP was 2.9. The 
Department believes that there is a remaining issue concerning the COP 
metric, but also believes that there are reasons to suggest this issue 
may be outweighed by the adoption of the 3.0 COP efficiency level 
proposed in Addendum b, as detailed below and in Chapter 5 of the TSD.
3. Standard 90.1-2004 Addendum b
    For SPVHP efficiencies, Addendum b still does not address DOE's 
remaining concern about the inability of the COP metric to account for 
backup electric heating and the energy used during the defrost cycle. 
The single, high-temperature COP rating at 47 [deg]F is less 
comprehensive than the HSPF metric. COP does not provide an indication 
of the efficiency of operation at low temperatures (e.g., like the 17 
[deg]F COP that is used in the HSPF test procedure) and does not 
include electric resistance energy use. Electric resistance heating 
energy is used to augment the heat pump output during periods when the 
space heating load exceeds the ability of the heat pump compressor to 
provide heat during reverse-cycle operation. Electric resistance 
heating energy is also used to provide continued space heating to the 
building when the heat pump is in its defrost mode.
    The HSPF test procedure provides a standard methodology for 
estimating the energy consumption for electric resistance heat. In 
practice, the electric resistance heat can use a significant portion of 
the total energy consumption of a heat pump. However, the amount of 
energy used by electric resistance heat is a function of the heating 
space load, the installed capacity of the heat pump, and the relative 
heating capacity at different outside air conditions. The heating space 
load and equipment sizing are effectively defined for the HSPF test 
conditions, making the electric backup estimate a function of the 
capacity at low temperature relative to nominal capacity. Changes in 
this ratio are reflected in the HSPF test procedure and rating, but not 
in the COP rating.
    Another concern is that the estimated backup heat calculated and 
included in the HSPF metric was developed assuming a typical 
residential heat pump application. However, commercial building 
operations are often substantially different from residential building 
operations. A common application of an SPVHP is in a modular school 
classroom (similar to a manufactured home in construction, but with a 
different occupancy and use). In that application, the heat pump is 
typically scheduled to be off during the building's unoccupied hours or 
is left in a setback mode of operation similar to that in a residential 
home during early morning hours. During the daytime, occupied period of 
the modular school classroom, the space is actively ventilated 
(increasing the heating load) and subject to increased internal gains 
(decreasing the heating load) as compared to the space in a residence. 
Since the heating load profiles used in the HSPF calculations are more 
representative of residential applications, these heating load profiles 
are not reflective of typical SPVHP applications.
    Furthermore, the accuracy of the HSPF metric in measuring the 
energy consumption of equipment in commercial applications is a concern 
because the method used in sizing the SPVHP for commercial applications 
is significantly different than the method for residential 
applications. The amount of backup electric resistance heat provided to 
the conditioned space is a function of the reverse-cycle heating 
capacity of the heat pump (relative to the space load) at different 
operating temperatures. The reverse-cycle heating capacity of a heat 
pump is strongly correlated with the cooling capacity of the heat pump. 
However, in a commercial application, the internal thermal loads and 
ventilation loads during the day make sizing a heat pump for cooling a 
given area of floor space significantly different compared to a 
residential application. Furthermore, the ratio of cooling capacity to 
heating capacity from a properly sized unit in a commercial application 
can be quite different than that in a residential application.
    While the Department mentions these issues as concerns, there are 
also reasons to believe that they may be outweighed by the adoption of 
the 3.0 COP being proposed by ARI for SPVHP equipment <65,000 Btu/h. 
With regard to the operation of defrost mode, there is no evidence to 
suggest that, in comparison with the operation of existing baseline 
equipment, the energy consumed by equipment that complies with ARI's 
proposal during defrost operation would be substantially greater. 
Manufacturers have designed and adopted standard defrost strategies, 
and there is no evidence that they would adopt less efficient defrost 
strategies in the future under ARI's proposal. Therefore, the 
Department does not believe there will be an increase in energy 
consumption from the impact of these strategies not being accounted for 
in the COP test procedure. See Chapter 5 of the TSD for more details. 
Therefore, the Department believes the 3.0 COP being proposed by ARI 
for SPVHP equipment <65,000 Btu/h does not constitute a lowering of the 
standard nor does it allow an increase in energy consumption.
    With regard to backup electric resistance heating in current 
equipment, the control of backup resistance heat is primarily a 
function of the thermostat control design for the conditioned space. 
Sometimes the amount of backup electric heat is not controlled by the 
heat pump itself, but by the wiring of the thermostat. In practical 
application, it is possible to wire a thermostat to the heat pump 
controller on most heat pumps such that the ``backup'' heat operates as 
a primary heat source or in parallel with the reverse-cycle heating at 
all times. While the previous scenario is possible, in most, typical 
applications, a two-stage heating thermostat is used, where the second 
stage, controlling the electric resistance heating, does not engage if 
the heat pump capacity is sufficient to meet the space load. The HSPF 
metric, as measured using the DOE test procedure does not measure 
backup heat, but estimates it based on a theoretically calculated 
residential space heating load and assumes that such heating only 
augments the reverse-cycle heating. In light of the reasons above, the 
Department believes that COP is a more appropriate metric for SPVHPs.
    The Department notes that the final definitions for SPVHP in 
Addendum b of Standard 90.1-2004 did not precisely match the referenced 
test procedure (ARI Standard 390-2003) included in that addendum.\9\ 
The definitions section of Addendum b defined a SPVHP as ``a single-
package vertical air conditioner capable of using the refrigeration 
system in a reverse cycle or heat pump mode to provide heat.'' Section 
3 of ARI Standard 390-2003 defined a SPVHP as a ``SPVAC that utilizes 
reverse cycle refrigeration as its primary heat source, with secondary 
supplemental heating by means of electrical resistance, steam, hot 
water or gas.'' While the Addendum b definition does not make it clear 
that reverse-cycle refrigeration is the primary heat source, DOE 
believes this is necessary in order to maintain the efficiency of these 
products. However, as the referenced test procedure requires a SPVHP to 
use reverse-cycle refrigeration as the primary heat source (and as 
section 6.4.3.4 of Standard 90.1-2004 effectively provides for this by 
not allowing the use of supplemental

[[Page 12646]]

electric resistance heaters for these products when the heat pump alone 
can meet the load), DOE considers the definition in the ARI Standard 
390 test procedure as the operative definition for this rulemaking.
---------------------------------------------------------------------------

    \9\ Air-Conditioning and Refrigeration Institute, Performance 
Rating of Single-Package Vertical Air-Conditioners and Heat Pumps--
Standard 390, 2003.
---------------------------------------------------------------------------

    The Department also notes that current model building codes used in 
the United States (Standard 90.1-1999 and later versions as well as the 
International Energy Conservation Code), contain language that requires 
heat pumps to have controls that prevent the use of supplementary 
resistance heating (except during defrost cycles). Standard 90.1-1999 
allows an exception to this requirement for equipment where the rating 
includes resistance heat in the product's overall efficiency rating 
(such as HSPF). The Department does not see evidence of a market for 
commercial heat pump equipment designed to utilize electric resistance 
heat in parallel with reverse-cycle heating.
4. Potential Energy Savings and Conclusions
    Even though SPVUs were not part of the original screening analysis, 
the Department examined the potential energy savings for efficiency 
levels higher than those in Addendum b to Standard 90.1-4 for SPVU 
equipment. The Department developed an estimate of the unit energy 
savings for SPVUs based on the analysis of energy consumption performed 
for the commercial unitary air-conditioning equipment. The Department 
approximated the load patterns by assuming SPVUs are used solely in 
education building applications (e.g., mobile classrooms) and the 
relative operating hours of a fan and condenser in an SPVU are similar 
to a commercial unitary air conditioner used for the same application. 
However, the Department also recognizes that the fan in an SPVU is 
smaller than the typical fan in a rooftop unit on a horsepower-per-ton-
cooling-capacity basis. To account for these differences, the 
Department approximated the fan power consumption for a baseline SPVU 
by assuming a one-third horsepower blower and a 65 percent motor 
efficiency, which in turn corresponds to a power draw of 0.38 kW. After 
accounting for the change in fan energy consumption, DOE estimated the 
resulting total cooling and fan energy consumption for SPVUs used in 
mobile classroom buildings in terms of annual kWh/ton at each EER level 
analyzed.
    The Department based the calculation of national energy consumption 
for a standard level on the annual energy consumption for all the 
products shipped for each year being studied. The number of shipments 
was based on data collected by the Department in 2005 from ARI. The 
resulting cooling and fan energy consumption estimates for all SPVACs 
and SPVHPs for the study period from 2010 to 2037 are displayed in 
Chapter 5 of the TSD. Chapter 5 of the TSD also provides details of the 
potential energy savings estimates. The Department estimates the 
potential energy savings in going from a minimum standard of 9.0 EER to 
a 10.9 EER standard to be 0.161 quads for cooling and fan energy 
consumption. The Department did not make a separate, detailed 
calculation for the potential energy savings from improving heating COP 
for SPVHP products. The Department expects the additional potential 
energy savings for heat pumps would be unlikely to increase the energy 
savings estimate shown above by more than 20 percent, due to the 
relatively small market volume for SPVHP equipment (31 percent of total 
shipments of SPVUs) and smaller potential improvement in heating COP 
compared with cooling EER.
    As stated previously, the Department recognizes there is work being 
done by ASHRAE to finalize Addendum b to Standard 90.1-2004. The 
Department has determined that it is not able to take action on 
Addendum b to Standard 90.1-2004 for SPVAC and SPVHP equipment <65,000 
Btu/h and has deferred a decision at this time. However, the Department 
invites stakeholder comments on the potential energy savings estimates 
for SPVU products <65,000 Btu/h. In addition, the Department also 
invites comments on the appropriateness of the efficiency levels for 
SPVUs <65,000 Btu/h contained in Addendum b of Standard 90.1-2004 for 
adoption by the Department as federal standards.

III. Public Participation

A. Submission of Comments

    The Department will accept comments, data, and information 
regarding this notice no later than the date provided at the beginning 
of the notice. Please submit comments, data, and information 
electronically. Send them to the following e-mail address: 
[email protected]. Submit electronic comments in 
WordPerfect, Microsoft Word, PDF, or text (ASCII) file format and avoid 
the use of special characters or any form of encryption. Comments in 
electronic format should be identified by the docket numbers EE-RM/STD-
03-100, EE-RM/STD-03-200, and EE-RM/STD-03-300, and/or RIN numbers 
1904-AB16, 1904-AB17, and 1904-AB44 and wherever possible carry the 
electronic signature of the author. Absent an electronic signature, 
comments submitted electronically must be followed and authenticated by 
submitting the signed original paper document. No telefacsimiles 
(faxes) will be accepted.
    According to 10 CFR 1004.11, any person submitting information that 
he or she believes to be confidential and exempt by law from public 
disclosure should submit two copies: One copy of the document including 
all the information believed to be confidential, and one copy of the 
document with the information believed to be confidential deleted. The 
Department of Energy will make its own determination about the 
confidential status of the information and treat it according to its 
determination.
    Factors of interest to the Department when evaluating requests to 
treat submitted information as confidential include: (1) A description 
of the items; (2) 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) 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. Issues on Which DOE Seeks Comment

    The Department is interested in receiving comments on all aspects 
of this notice. The Department especially invites comments and views of 
interested parties concerning (1) the analysis contained in the TSD 
announced in this notice and (2) any information or evidence as to the 
suitability for adoption as Federal standards the pending amendments to 
Standard 90.1 as discussed above for SPVUs <65,000 Btu/h and three-
phase Acs and HPs <65,000 Btu/h. For example, comments might include 
additional evidence, not discussed in the TSD or above, bearing on 
whether uniform national standards more stringent than the ones in the 
Standard 90.1 amendments for this equipment would be technologically 
feasible and economically justified, would result in significant energy 
conservation, or would be likely to result in the unavailability of 
products with

[[Page 12647]]

characteristics substantially the same as those generally available in 
the United States now. The Department also seeks comments on its 
initial conclusions for small commercial packaged boilers and PTACs and 
PTHPs. Finally, the Department seeks specific comments on the potential 
energy savings analysis presented for SPVUs<65,000 Btu/h. After the 
period for written comments, the Department will consider the views 
submitted.

IV. Approval by the Secretary

    The Secretary of Energy has approved publication of this notice.

    Issued in Washington, DC, on March 7, 2006.
Douglas L. Faulkner,
Acting Assistant Secretary, Energy Efficiency and Renewable Energy.
[FR Doc. 06-2381 Filed 3-10-06; 8:45 am]
BILLING CODE 6450-01-P