[Federal Register Volume 74, Number 6 (Friday, January 9, 2009)]
[Rules and Regulations]
[Pages 1092-1142]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-31449]



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Part III





Department of Energy





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10 CFR Part 431



 Energy Conservation Program for Commercial and Industrial Equipment; 
Final Rule

  Federal Register / Vol. 74, No. 6 / Friday, January 9, 2009 / Rules 
and Regulations  

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DEPARTMENT OF ENERGY

10 CFR Part 431

[Docket Number EERE-2006-BT-STD-0126]
RIN 1904-AB59


Energy Conservation Program for Commercial and Industrial 
Equipment: Energy Conservation Standards for Commercial Ice-Cream 
Freezers; Self-Contained Commercial Refrigerators, Commercial Freezers, 
and Commercial Refrigerator-Freezers Without Doors; and Remote 
Condensing Commercial Refrigerators, Commercial Freezers, and 
Commercial Refrigerator-Freezers

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

ACTION: Final rule.

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SUMMARY: The Department of Energy (DOE) is adopting new energy 
conservation standards for commercial ice-cream freezers; self-
contained commercial refrigerators, commercial freezers, and commercial 
refrigerator-freezers without doors; and remote condensing commercial 
refrigerators, commercial freezers, and commercial refrigerator-
freezers. DOE has determined that energy conservation standards for 
these types of equipment would result in significant conservation of 
energy, and are technologically feasible and economically justified.

DATES: The effective date of this rule is March 10, 2009. The standards 
established in today's final rule will be applicable starting January 
1, 2012. Incorporation by reference of the material listed is approved 
by the Director of the Federal Register on March 10, 2009.

ADDRESSES: For access to the docket to read background documents, the 
technical support document, transcripts of the public meetings in this 
proceeding, or comments received, visit the U.S. Department of Energy, 
Resource Room of the Building Technologies Program, 950 L'Enfant Plaza, 
SW., 6th Floor, Washington, DC 20024, (202) 586-2945, between 9 a.m. 
and 4 p.m., Monday through Friday, except Federal holidays. Please call 
Brenda Edwards at the above telephone number for additional information 
regarding visiting the Resource Room. (Note: DOE's Freedom of 
Information Reading Room no longer houses rulemaking materials.) You 
may also obtain copies of certain previous rulemaking documents in this 
proceeding (i.e., framework document, advance notice of proposed 
rulemaking, notice of proposed rulemaking), draft analyses, public 
meeting materials, and related test procedure documents from the Office 
of Energy Efficiency and Renewable Energy's Web site at http://www.eere.energy.gov/buildings/appliance_standards/commercial/refrigeration_equipment.html.

FOR FURTHER INFORMATION CONTACT:
    Charles Llenza, U.S. Department of Energy, Energy Efficiency and 
Renewable Energy, Building Technologies Program, EE-2J, 1000 
Independence Avenue, SW., Washington, DC 20585-0121, (202) 586-2192, 
[email protected].
    Francine Pinto, Esq., U.S. Department of Energy, Office of General 
Counsel, GC-72, 1000 Independence Avenue, SW., Washington, DC 20585-
0121, (202) 586-9507, [email protected].

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Summary of the Final Rule and Its Benefits
    A. The Standard Levels
    B. Benefits to Customers of Commercial Refrigeration Equipment
    C. Impact on Manufacturers
    D. National Benefits
II. Introduction
    A. Authority
    B. Background
    1. History of Standards Rulemaking for Commercial Refrigeration 
Equipment
III. General Discussion
    A. Test Procedures
    B. Technological Feasibility
    1. General
    2. Maximum Technologically Feasible Levels
    C. Energy Savings
    D. Economic Justification
    1. Specific Criteria
    a. Economic Impact on Commercial Customers and Manufacturers
    b. Life-Cycle Costs
    c. Energy Savings
    d. Lessening of Utility or Performance of Equipment
    e. Impact of Any Lessening of Competition
    f. Need of the Nation To Conserve Energy
    g. Other Factors
    2. Rebuttable Presumption
IV. Methodology and Discussion of Comments on Methodology
    A. Market and Technology Assessment
    1. Definitions Related to Commercial Refrigeration Equipment
    a. Air-Curtain Angle Definition
    b. Door Angle Definition
    c. Ice-Cream Freezer Definition
    d. Equipment Configuration Definitions
    e. Hybrid and Wedge Case Definitions
    2. Equipment Classes
    B. Engineering Analysis
    1. Approach
    2. Analytical Models
    a. Cost Model
    b. Energy Consumption Model
    3. Equipment Classes Analyzed
    4. Wedge Cases
    5. Ice-Cream Freezers--Temperature Range
    6. Special Application Temperature Cases
    7. Coverage of Remote Condensing Units
    8. Regulating Secondary Cooling Applications
    C. Markups to Determine Equipment Price
    D. Energy Use Characterization
    E. Life-Cycle Cost and Payback Period Analyses
    F. Shipments Analysis
    G. National Impact Analysis
    H. Life-Cycle Cost Sub-Group Analysis
    I. Manufacturer Impact Analysis
    J. Utility Impact Analysis
    K. Employment Impact Analysis
    L. Environmental Assessment
V. Discussion of Other Comments
    A. Information and Assumptions Used in Analyses
    1. Market and Technology Assessment
    a. Data Sources
    b. Beverage Merchandisers
    2. Engineering Analysis
    a. Design Options
    b. Baseline Models
    c. Consideration of Alternative Refrigerants
    d. Consideration of NSF 7 Type II Equipment
    e. Product Class Extension Factors
    f. TSL Energy Limits
    g. Compressor Selection Oversize Factor
    h. Offset Factors for Self-Contained Equipment
    i. Self-Contained Condensing Coils
    3. Manufacturer Impact Analysis
VI. Analytical Results and Conclusions
    A. Trial Standard Levels
    1. Miscellaneous Equipment
    B. Significance of Energy Savings
    C. Economic Justification
    1. Economic Impact on Commercial Customers
    a. Life-Cycle Costs and Payback Period
    b. Commercial Customer Sub-Group Analysis
    2. Economic Impact on Manufacturers
    a. Industry Cash-Flow Analysis Results
    b. Cumulative Regulatory Burden
    c. Impacts on Employment
    d. Impacts on Manufacturing Capacity
    e. Impacts on Manufacturers That Are Small Businesses
    3. National Net Present Value and Net National Employment
    4. Impact on Utility or Performance of Equipment
    5. Impact of Any Lessening of Competition
    6. Need of the Nation To Conserve Energy
    7. Other Factors
    D. Conclusion
VII. Procedural Issues and Regulatory Review
    A. Review Under Executive Order 12866
    B. Review Under the Regulatory Flexibility Act
    C. Review Under the Paperwork Reduction Act
    D. Review Under the National Environmental Policy Act
    E. Review Under Executive Order 13132
    F. Review Under Executive Order 12988
    G. Review Under the Unfunded Mandates Reform Act of 1995
    H. Review Under the Treasury and General Government 
Appropriations Act, 1999
    I. Review Under Executive Order 12630
    J. Review Under the Treasury and General Government 
Appropriations Act, 2001

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    K. Review Under Executive Order 13211
    L. Review Under the Information Quality Bulletin for Peer Review
    M. Congressional Notification
VIII. Approval of the Office of the Secretary

I. Summary of the Final Rule and Its Benefits

A. The Standard Levels

    The Energy Policy and Conservation Act, as amended (42 U.S.C. 6291 
et seq.; EPCA), directs the Department of Energy (DOE) to establish 
mandatory energy conservation standards for commercial ice-cream 
freezers; self-contained commercial refrigerators, commercial freezers, 
and commercial refrigerator-freezers without doors; and remote 
condensing commercial refrigerators, commercial freezers, and 
commercial refrigerator-freezers. (42 U.S.C. 6313(c)(4)(A)) These types 
of equipment are referred to collectively hereafter as ``commercial 
refrigeration equipment.'' Any such standard must be designed to 
``achieve the maximum improvement in energy efficiency * * * which the 
Secretary determines is technologically feasible and economically 
justified.'' (42 U.S.C. 6295(o)(2)(A) and 6316(e)(1)) Furthermore, the 
new standard must ``result in significant conservation of energy.'' (42 
U.S.C. 6295(o)(3)(B) and 6316(e)(1)) The standards in today's final 
rule, which apply to all commercial refrigeration equipment, satisfy 
these requirements.\1\
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    \1\ Currently, no mandatory Federal energy conservation 
standards exist for the commercial refrigeration equipment covered 
by this rulemaking.
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    Table I-1 shows the standard levels DOE is adopting today. These 
standards will apply to all commercial refrigeration equipment 
manufactured for sale in the United States, or imported to the United 
States, on or after January 1, 2012.

                                            Table I-1--Standard Levels for Commercial Refrigeration Equipment
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          Equipment class \2\                Standard level * ** (kWh/day) ***           Equipment class             Standard level * ** (kWh/day)
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VOP.RC.M..............................  0.82 x TDA + 4.07                           VCT.RC.I................  0.66 x TDA + 3.05
SVO.RC.M..............................  0.83 x TDA + 3.18                           HCT.RC.M................  0.16 x TDA + 0.13
HZO.RC.M..............................  0.35 x TDA + 2.88                           HCT.RC.L................  0.34 x TDA + 0.26
VOP.RC.L..............................  2.27 x TDA + 6.85                           HCT.RC.I................  0.4 x TDA + 0.31
HZO.RC.L..............................  0.57 x TDA + 6.88                           VCS.RC.M................  0.11 x V + 0.26
VCT.RC.M..............................  0.22 x TDA + 1.95                           VCS.RC.L................  0.23 x V + 0.54
VCT.RC.L..............................  0.56 x TDA + 2.61                           VCS.RC.I................  0.27 x V + 0.63
SOC.RC.M..............................  0.51 x TDA + 0.11                           HCS.RC.M................  0.11 x V + 0.26
VOP.SC.M..............................  1.74 x TDA + 4.71                           HCS.RC.L................  0.23 x V + 0.54
SVO.SC.M..............................  1.73 x TDA + 4.59                           HCS.RC.I................  0.27 x V + 0.63
HZO.SC.M..............................  0.77 x TDA + 5.55                           SOC.RC.L................  1.08 x TDA + 0.22
HZO.SC.L..............................  1.92 x TDA + 7.08                           SOC.RC.I................  1.26 x TDA + 0.26
VCT.SC.I..............................  0.67 x TDA + 3.29                           VOP.SC.L................  4.37 x TDA + 11.82
VCS.SC.I..............................  0.38 x V + 0.88                             VOP.SC.I................  5.55 x TDA + 15.02
HCT.SC.I..............................  0.56 x TDA + 0.43                           SVO.SC.L................  4.34 x TDA + 11.51
SVO.RC.L..............................  2.27 x TDA + 6.85                           SVO.SC.I................  5.52 x TDA + 14.63
VOP.RC.I..............................  2.89 x TDA + 8.7                            HZO.SC.I................  2.44 x TDA + 9.
SVO.RC.I..............................  2.89 x TDA + 8.7                            SOC.SC.I................  1.76 x TDA + 0.36
HZO.RC.I..............................  0.72 x TDA + 8.74                           HCS.SC.I................  0.38 x V + 0.88
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* TDA is the total display area of the case, as measured in the Air-Conditioning and Refrigeration Institute (ARI) Standard 1200-2006, Appendix D.
** V is the volume of the case, as measured in ARI Standard 1200-2006, Appendix C.
*** Kilowatt hours per day.
\2\ For this rulemaking, equipment class designations consist of a combination (in sequential order separated by periods) of: (1) An equipment family
  code (VOP=vertical open, SVO=semivertical open, HZO=horizontal open, VCT=vertical transparent doors, VCS=vertical solid doors, HCT=horizontal
  transparent doors, HCS=horizontal solid doors, or SOC=service over counter); (2) an operating mode code (RC=remote condensing or SC=self contained);
  and (3) a rating temperature code (M=medium temperature (38 [deg]F), L=low temperature (0 [deg]F), or I=ice-cream temperature (-15 [deg]F)). For
  example, ``VOP.RC.M'' refers to the ``vertical open, remote condensing, medium temperature'' equipment class. See discussion in section V.A.2 and
  chapter 3 of the TSD, market and technology assessment, for a more detailed explanation of the equipment class terminology. See Table IV-2 for a list
  of the equipment classes by category.

B. Benefits to Customers of Commercial Refrigeration Equipment

    Table I-2 indicates the impacts on commercial customers of today's 
standards.

                        Table I-2--Implications of New Standards for Commercial Consumers
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                                                                              Total
                                                                 Total      installed    Life-cycle    Payback
          Equipment class              Energy conservation     installed       cost         cost        period
                                             standard           cost ($)     increase   savings ($)    (years)
                                                                               ($)
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VOP.RC.M...........................  0.82 x TDA + 4.07......        8,065          536        1,788          2.0
VOP.RC.L...........................  2.27 x TDA + 6.85......       11,222        1,947        3,938          2.8
VOP.SC.M...........................  1.74 x TDA + 4.71......        4,381          633        1,549          2.4

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VCT.RC.M...........................  0.22 x TDA + 1.95......       11,654        2,134        2,339          3.9
VCT.RC.L...........................  0.56 x TDA + 2.61......       12,584        2,513        5,419          2.6
VCT.SC.I...........................  0.67 x TDA + 3.29......        6,602        1,385        5,217          1.7
VCS.SC.I...........................  0.38 x V + 0.88........        4,227          326        1,757          1.3
SVO.RC.M...........................  0.83 x TDA + 3.18......        7,470          435        1,274          1.9
SVO.SC.M...........................  1.73 x TDA + 4.59......        3,719          439        1,136          2.3
SOC.RC.M...........................  0.51 x TDA + 0.11......       12,740          240          945          1.7
HZO.RC.M...........................  0.35 x TDA + 2.88......        8,133          248        1,040          1.6
HZO.RC.L...........................  0.57 x TDA + 6.88......        8,194          270        1,102          1.6
HZO.SC.M...........................  0.77 x TDA + 5.55......        3,398          313          826          2.3
HZO.SC.L...........................  1.92 x TDA + 7.08......        3,836          460        1,761          1.7
HCT.SC.I...........................  0.56 x TDA + 0.43......        2,478          238          785          1.9
----------------------------------------------------------------------------------------------------------------

    The economic impacts on commercial consumers (i.e., the average 
life-cycle cost (LCC) savings) are positive for all equipment classes. 
For example, currently available remote condensing vertical open 
equipment operating at medium temperatures, semivertical equipment with 
those same characteristics, and vertical closed equipment with 
transparent doors and operating at low temperatures--three of the most 
common types of commercial refrigeration equipment--typically have 
installed prices of $8,065, $7,470 and $12,584, and annual energy costs 
of $1,879, $1,413, and $2,249, respectively. To meet the new standards, 
DOE estimates that the installed prices of such equipment will be 
$8,601, $7,905, and $15,097, respectively, an increase of $536, $435, 
and $2,513. This price increase will be offset by annual energy savings 
of about $331, $234, and $977.

C. Impact on Manufacturers

    Using a real corporate discount rate of 11.5 percent, DOE estimates 
the industry net present value (INPV) of the commercial refrigeration 
equipment industry to be $540 million in 2007$. DOE expects the impact 
of today's standards on the industry net present value (INPV) of 
manufacturers of commercial refrigeration equipment to be a loss of 
7.29 to 27.35 percent (-$39 million to -$148 million). Based on DOE's 
interviews with manufacturers of commercial refrigeration equipment, 
DOE expects minimal plant closings or loss of employment as a result of 
the standards.

D. National Benefits

    DOE estimates the standards will save approximately 1.035 quads 
(quadrillion (10\15\) British thermal units (Btu)) of energy over 30 
years (2012-2042). This is equivalent to all the energy consumed by 
more than 5 million American households in a single year.
    By 2042, DOE expects the energy savings from the standards to 
eliminate the need for approximately 0.7 new 1,000-megawatt (MW) power 
plants. These energy savings will result in cumulative greenhouse gas 
emission reductions of approximately 52.6 million tons (Mt) of carbon 
dioxide (CO2), or an amount equal to that produced by 
approximately 332,500 cars every year. Additionally, the standards will 
help alleviate air pollution by resulting in between approximately 3.64 
and 89.97 kilotons (kt) of cumulative nitrogen oxide (NOX) 
emission reductions and between approximately 0 and 1.38 tons of 
cumulative mercury emission reductions from 2012 through 2042. The 
estimated net present values of these emissions reductions are between 
$0 and $469 million for CO2, between $394,000 and $9.7 
million for NOX, and between $0 and $284,000 for mercury at 
a 7-percent discount rate in 2007$, discounted to 2008. At a 3-percent 
discount rate, the estimated net present values of these emissions 
reductions are between $0 and $955 million for CO2, between 
$0.8 million and $20.5 million for NOX, and between $0 and 
$560,000 for mercury.
    The national NPV of the standards is $1.414 billion using a 7-
percent discount rate and $3.930 billion using a 3-percent discount 
rate, cumulative from 2012 to 2062 in 2007$. This is the estimated 
total value of future savings minus the estimated increased equipment 
costs, discounted to 2008.
    The benefits and costs of today's final rule can also be expressed 
in terms of annualized [2007$] values between 2012 and 2042. Using a 7-
percent discount rate for the annualized cost analysis, the cost of the 
standards established in today's final rule is $95 million per year in 
increased equipment and installation costs, while the annualized 
benefits are $229 million per year in reduced equipment operating 
costs. Using a 3-percent discount rate, the cost of the standards 
established in today's final rule is $81 million per year, while the 
benefits of today's standards are $253 million per year.

II. Introduction

A. Authority

    Title III of EPCA sets forth a variety of provisions designed to 
improve energy efficiency. Part A of Title III (42 U.S.C. 6291-6309) 
provides for the Energy Conservation Program for Consumer Products 
Other than Automobiles. Part A-1 of Title III (42 U.S.C. 6311-6317) 
establishes a similar program for ``Certain Industrial Equipment,'' 
including commercial refrigeration equipment, the subject of this 
rulemaking.\3\ DOE publishes today's final rule pursuant to Part A-1 of 
Title III, which provides for test procedures, labeling, and energy 
conservation standards for commercial refrigeration equipment and 
certain other equipment; and authorizes DOE to require information and 
reports from manufacturers. The test procedure for commercial 
refrigeration equipment appears in Title 10 Code of Federal Regulations 
(CFR) part 431.64.
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    \3\ This part was originally titled Part C. However, it was 
redesignated Part A-1 after Part B of Title III of EPCA was repealed 
by Public Law 109-58.
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    EPCA provides criteria for prescribing new or amended standards for 
commercial refrigeration equipment. As indicated above, any new or 
amended standard for this equipment must be designed to achieve the 
maximum improvement in energy efficiency that is technologically 
feasible and

[[Page 1095]]

economically justified. (42 U.S.C. 6295(o)(2)(A) and 6316(e)(1)) 
Additionally, EPCA provides specific prohibitions on prescribing such 
standards. DOE may not prescribe an amended or new standard for any 
equipment for which DOE has not established a test procedure. (42 
U.S.C. 6295(o)(3)(A) and 6316(e)(1)) Further, DOE may not prescribe an 
amended or new standard if DOE determines by rule that such standard 
would not result in ``significant conservation of energy'' or ``is not 
technologically feasible or economically justified.'' (42 U.S.C. 
6295(o)(3)(B) and 6316(e)(1))
    EPCA also provides that in deciding whether such a standard is 
economically justified for equipment such as commercial refrigeration 
equipment, DOE must, after receiving comments on the proposed standard, 
determine whether the benefits of the standard exceed its burdens by 
considering, to the greatest extent practicable, the following seven 
factors:
    1. The economic impact of the standard on manufacturers and 
consumers of the products subject to the standard;
    2. The savings in operating costs throughout the estimated average 
life of products in the type (or class) compared to any increase in the 
price, initial charges, or maintenance expenses for the covered 
products that are likely to result from the imposition of the standard;
    3. The total projected amount of energy savings likely to result 
directly from the imposition of the standard;
    4. Any lessening of the utility or the performance of the products 
likely to result from the imposition of the standard;
    5. The impact of any lessening of competition, as determined in 
writing by the Attorney General, that is likely to result from the 
imposition of the standard;
    6. The need for national energy conservation; and
    7. Other factors the Secretary of Energy (Secretary) considers 
relevant. (42 U.S.C. 6295(o)(2)(B)(i)-(ii) and 6316(e)(1))
    In addition, EPCA, as amended (42 U.S.C. 6295(o)(2)(B)(iii) and 
6316(e)(1)), establishes a rebuttable presumption that a standard for 
commercial refrigeration equipment is economically justified if the 
Secretary finds that ``the additional cost to the consumer of 
purchasing a product complying with an energy conservation standard 
level will be less than three times the value of the energy (and as 
applicable, water) savings during the first year that the consumer will 
receive as a result of the standard,'' as calculated under the test 
procedure in place for that standard.
    EPCA further provides that the Secretary may not prescribe an 
amended or new standard if interested persons have established by a 
preponderance of the evidence that the standard is ``likely to result 
in the unavailability in the United States in any covered product type 
(or class) of 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. 6295(o)(4) and 6316(e)(1))
    Section 325(q)(1) of EPCA is applicable to promulgating standards 
for most types or classes of equipment, including commercial 
refrigeration equipment, that have two or more subcategories. (42 
U.S.C. 6295(q)(1) and 42 U.S.C. 6316(e)(1)) Under this provision, DOE 
must specify a different standard level than that which applies 
generally to such type or class of equipment for any group of products 
``which have the same function or intended use, if * * * products 
within such group--(A) consume a different kind of energy from that 
consumed by other covered products within such type (or class); or (B) 
have a capacity or other performance-related feature which other 
products within such type (or class) do not have and such feature 
justifies a higher or lower standard'' than applies or will apply to 
the other products. (42 U.S.C. 6295(q)(1)(A) and (B)) In determining 
whether a performance-related feature justifies such a different 
standard for a group of products, DOE must consider ``such factors as 
the utility to the consumer of such a feature'' and other factors DOE 
deems appropriate. (42 U.S.C. 6295(q)(1)) Any rule prescribing such a 
standard must include an explanation of the basis on which DOE 
established such a higher or lower level. (See 42 U.S.C. 6295(q)(2))
    Federal energy conservation standards for commercial equipment 
generally supersede State laws or regulations concerning energy 
conservation testing, labeling, and standards. (42 U.S.C. 6297(a)-(c); 
42 U.S.C. 6316(e)(2)-(3)) DOE 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); 42 U.S.C. 6316(e)(2)-(3))

B. Background

1. History of Standards Rulemaking for Commercial Refrigeration 
Equipment
    As discussed in the notice of proposed rulemaking, 73 FR 50072, 
50076 (August 25, 2008) (the August 2008 NOPR), the EPACT 2005 
amendments to EPCA require that DOE issue energy conservation standards 
for the equipment covered by this rulemaking. (42 U.S.C. 6313(c)(4)(A)) 
The amendments also include definitions for terms relevant to this 
equipment (42 U.S.C. 6311(9)). These definitions provide that 
commercial refrigeration equipment is connected to either a self-
contained condensing unit or to a remote condensing unit (42 U.S.C. 
6311(9)(A)(vii)), the two condenser configurations of equipment covered 
by this rulemaking, and include definitions of a remote condensing unit 
and self-contained condensing unit (42 U.S.C. 6311(9)(E)-(F)).
    DOE commenced this rulemaking on April 25, 2006, by publishing a 
notice of a public meeting and of the availability of its framework 
document for the rulemaking. 71 FR 23876. The framework document 
described the approaches DOE anticipated using and issues to be 
resolved in the rulemaking. DOE held a public meeting on May 16, 2006, 
to present the contents of the framework document, describe the 
analyses DOE planned to conduct during the rulemaking, obtain public 
comment on these subjects, and facilitate the public's involvement in 
the rulemaking. DOE also allowed the submission of written statements, 
after the public meeting, in response to the framework document.
    On July 26, 2007, DOE published an advance notice of proposed 
rulemaking (ANOPR) in this proceeding. 72 FR 41161 (the July 2007 
ANOPR). In the July 2007 ANOPR, DOE sought comment on its proposed 
equipment classes for the rulemaking, and on the analytical framework, 
models, and tools that DOE used to analyze the impacts of energy 
conservation standards for commercial refrigeration equipment. In 
conjunction with the July 2007 ANOPR, DOE published on its Web site the 
complete ANOPR TSD, which included the results of DOE's various 
preliminary analyses in this rulemaking. In the July 2007 ANOPR, DOE 
requested oral and written comments on these results and on a range of 
other issues. DOE held a public meeting in Washington, DC, on August 
23, 2007, to present the methodology and results of the ANOPR analyses 
and to receive oral comments from those who attended. The oral and 
written comments DOE received focused on DOE's assumptions, approach, 
and equipment class breakdown, and were addressed in detail in the 
August 2008 NOPR.
    In the August 2008 NOPR, DOE proposed new energy conservation

[[Page 1096]]

standards for commercial refrigeration equipment. 73 FR 50072. In 
conjunction with the August 2008 NOPR, DOE also published on its Web 
site the complete technical support document (TSD) for the proposed 
rule, which incorporated the final analyses DOE conducted and technical 
documentation for each analysis. The TSD included the engineering 
analysis spreadsheets, the LCC spreadsheet, and the national impact 
analysis spreadsheet. The standards DOE proposed for commercial 
refrigeration equipment are shown in Table II-1.

                                 Table II-1--August 2008 Proposed Standard Levels for Commercial Refrigeration Equipment
--------------------------------------------------------------------------------------------------------------------------------------------------------
            Equipment class                    Standard level* ** (kWh/day)              Equipment class             Standard level* ** (kWh/day)
--------------------------------------------------------------------------------------------------------------------------------------------------------
VOP.RC.M..............................  0.82 x TDA + 4.07                           VCT.RC.I................  0.71 x TDA + 3.05
SVO.RC.M..............................  0.83 x TDA + 3.18                           HCT.RC.M................  0.16 x TDA + 0.13
HZO.RC.M..............................  0.35 x TDA + 2.88                           HCT.RC.L................  0.34 x TDA + 0.26
VOP.RC.L..............................  2.28 x TDA + 6.85                           HCT.RC.I................  0.4 x TDA + 0.31
HZO.RC.L..............................  0.57 x TDA + 6.88                           VCS.RC.M................  0.11 x V + 0.26
VCT.RC.M..............................  0.25 x TDA + 1.95                           VCS.RC.L................  0.23 x V + 0.54
VCT.RC.L..............................  0.6 x TDA + 2.61                            VCS.RC.I................  0.27 x V + 0.63
SOC.RC.M..............................  0.51 x TDA + 0.11                           HCS.RC.M................  0.11 x V + 0.26
VOP.SC.M..............................  1.74 x TDA + 4.71                           HCS.RC.L................  0.23 x V + 0.54
SVO.SC.M..............................  1.73 x TDA + 4.59                           HCS.RC.I................  0.27 x V + 0.63
HZO.SC.M..............................  0.77 x TDA + 5.55                           SOC.RC.L................  1.08 x TDA + 0.22
HZO.SC.L..............................  1.92 x TDA + 7.08                           SOC.RC.I................  1.26 x TDA + 0.26
VCT.SC.I..............................  0.73 x TDA + 3.29                           VOP.SC.L................  4.37 x TDA + 11.82
VCS.SC.I..............................  0.38 x V + 0.88                             VOP.SC.I................  5.55 x TDA + 15.02
HCT.SC.I..............................  0.56 x TDA + 0.43                           SVO.SC.L................  4.34 x TDA + 11.51
SVO.RC.L..............................  2.28 x TDA + 6.85                           SVO.SC.I................  5.52 x TDA + 14.63
VOP.RC.I..............................  2.9 x TDA + 8.7                             HZO.SC.I................  2.44 x TDA + 9
SVO.RC.I..............................  2.9 x TDA + 8.7                             SOC.SC.I................  1.76 x TDA + 0.36
HZO.RC.I..............................  0.72 x TDA + 8.74                           HCS.SC.I................  0.38 x V + 0.88
--------------------------------------------------------------------------------------------------------------------------------------------------------
* TDA is the total display area of the case, as measured in the ARI Standard 1200-2006, Appendix D.
** V is the volume of the case, as measured in ARI Standard 1200-2006, Appendix C.

    In the August 2008 NOPR, DOE identified seven issues on which is 
was particularly interested in receiving comments and views of 
interested parties: Light-emitting diode (LED) price projections, base 
case efficiency trends, operating temperature ranges, offset factors 
for smaller equipment, extension of standards developed for the 15 
primary classes to the remaining 23 secondary classes, standards for 
hybrid cases and wedges, and standard levels. 73 FR 50134. After the 
publication of the August 2008 NOPR, DOE received written comments on 
these and other issues. DOE also held a public meeting in Washington, 
DC, on September 23, 2008, to hear oral comments on and solicit 
information relevant to the proposed rule. The August 2008 NOPR 
included additional background information on the history of this 
rulemaking. 73 FR 50076-77.

III. General Discussion

A. Test Procedures

    On December 8, 2006, DOE published a final rule (the December 2006 
final rule) in which it adopted American National Standards Institute 
(ANSI)/Air-Conditioning and Refrigeration Institute (ARI) Standard 
1200-2006, ``Performance Rating of Commercial Refrigerated Display 
Merchandisers and Storage Cabinets,'' as the DOE test procedure for 
this equipment.\4\ 71 FR 71340, 71369-70; 10 CFR 431.63-431.64. ARI 
Standard 1200-2006 contains rating temperature specifications of 38 
[deg]F (2 [deg]F) for commercial refrigerators and 
refrigerator compartments, 0 [deg]F (2 [deg]F) for 
commercial freezers and freezer compartments, and -5 [deg]F (2 [deg]F) for commercial ice-cream freezers. The standard also 
requires performance tests to be conducted according to the ANSI/
American Society of Heating, Refrigerating, and Air-Conditioning 
Engineers (ASHRAE) Standard 72-2005, ``Method of Testing Commercial 
Refrigerators and Freezers.'' In the test procedure final rule, DOE 
also adopted a -15 [deg]F (2 [deg]F) rating temperature for 
commercial ice-cream freezers. 71 FR 71370. In addition, DOE adopted 
ANSI/Association of Home Appliance Manufacturers (AHAM) Standard HRF-1-
2004, ``Energy, Performance and Capacity of Household Refrigerators, 
Refrigerator-Freezers and Freezers,'' for determining compartment 
volumes for this equipment. 71 FR 71369-70.
---------------------------------------------------------------------------

    \4\ The Air-Conditioning and Refrigeration Institute (ARI) and 
the Gas Appliance Manufacturers Association (GAMA) announced on 
December 17, 2007, that their members voted to approve the merger of 
two trade associations to represent the interests of cooling, 
heating, and commercial refrigeration equipment manufacturers. The 
merged association became AHRI on January 1, 2008.
---------------------------------------------------------------------------

B. Technological Feasibility

1. General
    As stated above, any standards that DOE establishes for commercial 
refrigeration equipment must be technologically feasible. (42 U.S.C. 
6295(o)(2)(A) and (o)(3)(B); 42 U.S.C. 6316(e)(1)) DOE considers a 
design option to be technologically feasible if it is in use by the 
respective industry or if research has progressed to the development of 
a working prototype. ``Technologies incorporated in commercial products 
or in working prototypes will be considered technologically feasible.'' 
10 CFR part 430, subpart C, appendix A, section 4(a)(4)(i).
    This final rule considers the same design options as those 
evaluated in the August 2008 NOPR. (See chapter 4 of the final rule TSD 
accompanying this notice.) All the evaluated technologies have been 
used (or are being used) in commercially available products or working 
prototypes. Therefore, DOE has determined that all of the efficiency 
levels evaluated in this notice are technologically feasible.
2. Maximum Technologically Feasible Levels
    As required by EPCA (42 U.S.C. 6295(p)(2) and 42 U.S.C. 6316(e)(1)) 
in developing the August 2008 NOPR, DOE identified the energy use 
levels that

[[Page 1097]]

would achieve the maximum reductions in energy use that are 
technologically feasible (max-tech levels) for commercial refrigeration 
equipment. 73 FR at 50077-78. (See NOPR TSD chapter 5.) DOE received 
comments indicating that LED efficacy had improved since the August 
2008 NOPR. DOE also received comments regarding the LED lighting 
configurations assumed in the engineering analysis for various 
equipment types. This caused the max-tech levels proposed in the August 
2008 NOPR to change for equipment classes with lighting. In general, 
the max-tech levels for open equipment classes decreased and the max-
tech levels for closed cases increased from the max-tech levels 
proposed in the August 2008 NOPR. For today's final rule, the max-tech 
levels for all classes are the levels provided in Table III-1.

                                                       Table III-1--``Max-Tech'' Energy Use Levels
--------------------------------------------------------------------------------------------------------------------------------------------------------
            Equipment class                    ``Max-tech'' level (kWh/day)              Equipment class             ``Max-tech'' level (kWh/day)
--------------------------------------------------------------------------------------------------------------------------------------------------------
VOP.RC.M..............................  0.74 x TDA + 4.07                           VCT.RC.I................  0.66 x TDA + 3.05
SVO.RC.M..............................  0.76 x TDA + 3.18                           HCT.RC.M................  0.16 x TDA + 0.13
HZO.RC.M..............................  0.35 x TDA + 2.88                           HCT.RC.L................  0.34 x TDA + 0.26
VOP.RC.L..............................  2.27 x TDA + 6.85                           HCT.RC.I................  0.4 x TDA + 0.31
HZO.RC.L..............................  0.57 x TDA + 6.88                           VCS.RC.M................  0.11 x V + 0.26
VCT.RC.M..............................  0.22 x TDA + 1.95                           VCS.RC.L................  0.23 x V + 0.54
VCT.RC.L..............................  0.56 x TDA + 2.61                           VCS.RC.I................  0.27 x V + 0.63
SOC.RC.M..............................  0.4 x TDA + 0.11                            HCS.RC.M................  0.11 x V + 0.26
VOP.SC.M..............................  1.65 x TDA + 4.71                           HCS.RC.L................  0.23 x V + 0.54
SVO.SC.M..............................  1.65 x TDA + 4.59                           HCS.RC.I................  0.27 x V + 0.63
HZO.SC.M..............................  0.77 x TDA + 5.55                           SOC.RC.L................  0.84 x TDA + 0.22
HZO.SC.L..............................  1.92 x TDA + 7.08                           SOC.RC.I................  0.99 x TDA + 0.26
VCT.SC.I..............................  0.67 x TDA + 3.29                           VOP.SC.L................  4.14 x TDA + 11.82
VCS.SC.I..............................  0.38 x V + 0.88                             VOP.SC.I................  5.26 x TDA + 15.02
HCT.SC.I..............................  0.56 x TDA + 0.43                           SVO.SC.L................  4.15 x TDA + 11.51
SVO.RC.L..............................  2.27 x TDA + 6.85                           SVO.SC.I................  5.27 x TDA + 14.63
VOP.RC.I..............................  2.89 x TDA + 8.7                            HZO.SC.I................  2.44 x TDA + 9.
SVO.RC.I..............................  2.89 x TDA + 8.7                            SOC.SC.I................  1.38 x TDA + 0.36
HZO.RC.I..............................  0.72 x TDA + 8.74                           HCS.SC.I................  0.38 x V + 0.88
--------------------------------------------------------------------------------------------------------------------------------------------------------

C. Energy Savings

    DOE forecasted energy savings in its national energy savings (NES) 
analysis, through the use of an NES spreadsheet tool, as discussed in 
the August 2008 NOPR. 73 FR at 50078, 50101-04, 50121.
    One of the criteria that governs DOE's adoption of standards for 
commercial refrigeration equipment is that the standard must result in 
``significant conservation of energy.'' (42 U.S.C. 6295(o)(3)(B) and 42 
U.S.C. 6316(e)(1)) While EPCA does not define the term ``significant,'' 
a U.S. Court of Appeals, in Natural Resources Defense Council v. 
Herrington, 768 F.2d 1355, 1373 (DC Cir. 1985), indicated that Congress 
intended ``significant'' energy savings in this context to be savings 
that were not ``genuinely trivial.'' DOE's estimates of the energy 
savings for energy conservation standards at each of the trial standard 
levels (TSLs) in today's rule indicate that the energy savings each 
would achieve are nontrivial. Therefore, DOE considers these savings 
``significant'' within the meaning of section 325 of EPCA.

D. Economic Justification

1. Specific Criteria
    As noted earlier, EPCA provides seven factors to evaluate in 
determining whether an energy conservation standard for commercial 
refrigeration equipment is economically justified. (42 U.S.C. 
6295(o)(2)(B)(i) and 42 U.S.C. 6316(e)(1)) The following sections 
discuss how DOE has addressed each of those seven factors in this 
rulemaking.
a. Economic Impact on Commercial Customers and Manufacturers
    DOE considered the economic impact of the new commercial 
refrigeration equipment standards on commercial customers and 
manufacturers. For customers, DOE measured the economic impact as the 
change in installed cost and life-cycle operating costs, i.e., the LCC. 
(See sections IV.E and VI.C.1.a, and chapter 8 of the TSD accompanying 
this notice.) DOE investigated the impacts on manufacturers through the 
manufacturer impact analysis (MIA). (See sections IV.I and VI.C.2, and 
chapter 13 of the TSD accompanying this notice.) The economic impact on 
commercial customers and manufacturers is discussed in detail in the 
August 2008 NOPR. 73 FR at 50078-79, 50095-50100, 50104-07, 50013-16, 
50117-21, 50130-31.
b. Life-Cycle Costs
    DOE considered life-cycle costs of commercial refrigeration 
equipment, as discussed in the August 2008 NOPR. 73 FR at 50078-79, 
50095-50100, 50104, 50013-16, 50117-18. DOE calculated the sum of the 
purchase price and the operating expense--discounted over the lifetime 
of the equipment--to estimate the range in LCC benefits that commercial 
consumers would expect to achieve due to the standards.
c. Energy Savings
    Although significant conservation of energy is a separate statutory 
requirement for imposing an energy conservation standard, EPCA also 
requires DOE, in determining the economic justification of a proposed 
standard, to consider the total projected energy savings that are 
expected to result directly from the standard. (42 U.S.C. 
6295(o)(2)(B)(i)(III) and 42 U.S.C. 6316(e)(1)) As in the August 2008 
NOPR, 73 FR at 50078, 50101-04, 50121, for today's final rule DOE used 
the NES spreadsheet results in its consideration of total projected 
savings that are directly attributable to the standard levels DOE 
considered.
d. Lessening of Utility or Performance of Equipment
    In selecting today's standard levels, DOE sought to avoid new 
standards for commercial refrigeration equipment that would lessen the 
utility or performance of that equipment. (42 U.S.C. 
6295(o)(2)(B)(i)(IV) and 42 U.S.C. 6316(e)(1)) 73 FR at 50079, 50088-
89, 50123.

[[Page 1098]]

e. Impact of Any Lessening of Competition
    DOE considers any lessening of competition that is likely to result 
from standards. Accordingly, as discussed in the August 2008 NOPR, 73 
FR at 50079, 50123, DOE requested that the Attorney General transmit to 
the Secretary a written determination of the impact, if any, of any 
lessening of competition likely to result from the proposed standards, 
together with an analysis of the nature and extent of such impact. (42 
U.S.C. 6295(o)(2)(B)(i)(V) and (B)(ii) and 42 U.S.C. 6316(e)(1))
    To assist the Attorney General in making such a determination, DOE 
provided the Department of Justice (DOJ) with copies of the August 2008 
proposed rule and the TSD for review. (DOJ, No. 37 at pp. 1-2) The 
Attorney General's response is discussed in section VI.C.5 below, and 
is reprinted at the end of this rule.\5\
---------------------------------------------------------------------------

    \5\ A notation in the form ``DOJ, No. 37 at pp. 1-2'' identifies 
a written comment that DOE has received and has included in the 
docket of this rulemaking. This particular notation refers to (1) a 
comment submitted by the Department of Justice (DOJ), (2) in 
document number 37 in the docket of this rulemaking, and (3) 
appearing on pages 1 and 2 of document number 37.
---------------------------------------------------------------------------

f. Need of the Nation To Conserve Energy
    In considering standards for commercial refrigeration equipment, 
the Secretary must consider the need of the Nation to conserve energy. 
(42 U.S.C. 6295(o)(2)(B)(i)(VI) and 42 U.S.C. 6316(e)(1)) The Secretary 
recognizes that energy conservation benefits the Nation in several 
important ways. The non-monetary benefits of the standards are likely 
to be reflected in improvements to the security and reliability of the 
Nation's energy system. Today's standards also will likely result in 
environmental benefits. As discussed in the proposed rule, DOE has 
considered these factors in adopting today's standards. 73 FR 50074, 
50079, 50108, 50123-26, 50132.
g. Other Factors
    EPCA directs the Secretary of Energy, in determining whether a 
standard is economically justified, to consider any other factors that 
the Secretary deems to be relevant. (42 U.S.C. 6295(o)(2)(B)(i)(VII) 
and 42 U.S.C. 6316(e)(1)) In adopting today's standard, DOE considered 
the LCC impacts on the commercial refrigeration equipment of 
independent, small grocery/convenience store businesses. Compared to 
the impact of standards on the overall market for commercial 
refrigeration equipment, the impact of standards on these businesses 
might be disproportionate because these businesses experience both 
higher discount rates and lack of access to national account equipment 
purchases. 73 FR 50079, 50104, 50117-18.
2. Rebuttable Presumption
    Section 325(o)(2)(B)(iii) of EPCA states that there is a rebuttable 
presumption that an energy conservation standard is economically 
justified if the additional cost to the consumer of a product that 
meets the standard level is less than three times the value of the 
first-year energy (and as applicable water) savings resulting from the 
standard, as calculated under the applicable DOE test procedure. (42 
U.S.C. 6295(o)(2)(B)(iii) and 42 U.S.C. 6316(e)(1)) DOE's LCC and 
payback period (PBP) analyses generate values that calculate the 
payback period for consumers of potential energy conservation 
standards, which includes, but is not limited to, the three-year 
payback period contemplated under the rebuttable presumption test 
discussed above. However, DOE routinely conducts a full economic 
analysis that considers the full range of impacts, including those to 
the consumer, manufacturer, Nation, and environment, as required under 
42 U.S.C. 6295(o)(2)(B)(i) and 42 U.S.C. 6316(e)(1). The results of 
this analysis serve as the basis for DOE to definitively evaluate the 
economic justification for a potential standard level (thereby 
supporting or rebutting the results of any preliminary determination of 
economic justification).

IV. Methodology and Discussion of Comments on Methodology

    DOE used several analytical tools that it developed previously and 
adapted for use in this rulemaking. One is a spreadsheet that 
calculates LCC and PBP. Another tool calculates national energy savings 
and national NPV. DOE also used the Government Regulatory Impact Model 
(GRIM), along with other methods, in its MIA. Finally, DOE developed an 
approach using the National Energy Modeling System (NEMS) to estimate 
impacts of energy efficiency standards for commercial refrigeration 
equipment on electric utilities and the environment. The TSD appendices 
discuss each of these analytical tools in detail. 73 FR 50079-108.
    As a basis for this final rule, DOE has continued to use the 
spreadsheets and approaches explained in the August 2008 NOPR. DOE used 
the same general methodology as applied in the August 2008 NOPR, but 
revised some of the assumptions and inputs for the final rule in 
response to stakeholder comments. The following paragraphs discuss 
these revisions.

A. Market and Technology Assessment

    When beginning an energy conservation standards rulemaking, DOE 
develops information that provides an overall picture of the market for 
the equipment concerned, including the purpose of the equipment, the 
industry structure, and market characteristics. This activity includes 
both quantitative and qualitative assessments based primarily on 
publicly available information. DOE presented various subjects in the 
market and technology assessment for this rulemaking. (See the August 
2008 NOPR and chapter 3 of the NOPR TSD.) These include equipment 
definitions, equipment classes, manufacturers, quantities and types of 
equipment sold and offered for sale, retail market trends, and 
regulatory and nonregulatory programs.
1. Definitions Related to Commercial Refrigeration Equipment
a. Air-Curtain Angle Definition
    For equipment without doors, an air curtain divides the 
refrigerated compartment from the ambient space. DOE proposed the 
following definition of air-curtain angle in the August 2008 NOPR that 
is consistent with the industry-approved standards: ``Air-curtain angle 
means: (1) For equipment without doors and without a discharge air 
grille or discharge air honeycomb, the angle between a vertical line 
extended down from the highest point on the manufacturer's recommended 
load limit line and the load limit line itself, when the equipment is 
viewed in cross-section; and (2) For all other equipment without doors, 
the angle formed between a vertical line and the straight line drawn by 
connecting the point at the inside edge of the discharge air opening 
with the point at the inside edge of the return air opening, when the 
equipment is viewed in cross-section.'' 73 FR 50080; 50135. DOE did not 
receive any additional comments on the definition of air-curtain angle 
in response to the August 2008 NOPR; thus, DOE is adopting these 
definitions as proposed.
b. Door Angle Definition
    The door orientation affects the energy consumption of equipment 
with doors. This equipment can be broadly categorized by the angle of 
the door. In the August 2008 NOPR, DOE proposed the following 
definition of door angle: ``(1) For equipment with flat doors, the 
angle between a vertical line and the

[[Page 1099]]

line formed by the plane of the door, when the equipment is viewed in 
cross-section; and (2) For equipment with curved doors, the angle 
formed between a vertical line and the straight line drawn by 
connecting the top and bottom points where the display area glass joins 
the cabinet, when the equipment is viewed in cross-section.'' 73 FR 
50080; 50135. DOE did not receive any additional comments on the 
definition of door angle in response to the August 2008 NOPR; thus, DOE 
is adopting the definition as proposed.
c. Ice-Cream Freezer Definition
    During the NOPR public meeting, interested parties expressed 
concern about the definition of an ``ice-cream freezer'' as used in 
this rulemaking. Hussman stated that using the term ``ice cream'' to 
refer to a temperature range might be confusing because ice cream is 
also a product. (Hussman, Public Meeting Transcript, No. 27 at p. 15) 
\6\ Southern Store Fixtures expressed a similar concern, adding that 
other types of frozen items, such as frozen juice, may be displayed in 
ice-cream type cases. (Southern Store Fixtures, Public Meeting 
Transcript, No. 27 at p. 18)
---------------------------------------------------------------------------

    \6\ A notation in the form ``Hussman, Public Meeting Transcript, 
No. 27 at p. 15'' identifies an oral comment that DOE received 
during the September 23, 2008, NOPR public meeting. This comment was 
recorded in the public meeting transcript in the docket for this 
rulemaking (Docket No. EE-2006-STD-0126), maintained in the Resource 
Room of the Building Technologies Program. This particular notation 
refers to a comment (1) made during the public meeting by Hussman; 
(2) recorded in document number 27, which is the public meeting 
transcript filed in the docket of this rulemaking; and (3) appearing 
on page 15 of document number 27.
---------------------------------------------------------------------------

    As described in the July 2007 ANOPR, the EPCA provision that 
required this rulemaking identifies specifically the categories ``ice-
cream freezers,'' ``self-contained commercial refrigerators, freezers, 
and refrigerator-freezers without doors,'' and ``remote condensing 
commercial refrigerators, freezers, and refrigerator-freezers.'' (42 
U.S.C. 6313(c)(4)(A), added by EPACT 2005, section 136(c)) Because the 
term ``ice-cream freezers'' was specified in EPCA, the term ``ice 
cream'' is appropriate to describe that specific equipment category in 
this rulemaking, and DOE is therefore maintaining the use of that term 
in the rulemaking. Also, see section IV.A.2 of this final rule.
d. Equipment Configuration Definitions
    The configuration of commercial refrigeration equipment affects its 
energy consumption and the equipment classes into which this equipment 
is divided. In the August 2008 NOPR, DOE proposed five definitions of 
equipment configurations, shown in Table IV-1. 73 FR 50081; 50135.

                                 Table IV-1--Equipment Configuration Definitions
----------------------------------------------------------------------------------------------------------------
                      Equipment family                                            Description
----------------------------------------------------------------------------------------------------------------
Vertical Open (VOP).........................................  Equipment without doors and an air-curtain angle
                                                               >=0 degrees and <10 degrees from the vertical.
Semivertical Open (SVO).....................................  Equipment without doors and an air-curtain angle
                                                               >=10 degrees and <80 degrees from the vertical.
Horizontal Open (HZO).......................................  Equipment without doors and an air-curtain angle
                                                               >=80 degrees from the vertical.
Vertical Closed (VC)........................................  Equipment with hinged or sliding doors and a door
                                                               angle <45 degrees.
Horizontal Closed (HC)......................................  Equipment with hinged or sliding doors and a door
                                                               angle >=45 degrees.
----------------------------------------------------------------------------------------------------------------

    DOE did not receive any additional comments on the definitions of 
the five configurations; thus, DOE is adopting these definitions as 
proposed.
e. Hybrid and Wedge Case Definitions
    As stated in the August 2008 NOPR, certain types of equipment meet 
the definition of ``commercial refrigeration equipment'' (Section 
136(a)(3) of EPACT 2005), but do not fall directly into any of the 38 
equipment classes defined in the market and technology assessment. 
Among these types are hybrid cases and wedge cases; DOE proposed 
definitions for these in the August 2008 NOPR. Because DOE did not 
receive any additional comments on the definitions of ``commercial 
hybrid refrigerators, freezers, and refrigerator-freezers'' or on the 
definition of ``wedge case,'' DOE is adopting these definitions as 
proposed in section 431.62.
2. Equipment Classes
    Commercial refrigerators, commercial freezers, and commercial 
refrigerator-freezers can be divided into various equipment classes 
categorized largely by physical characteristics that affect energy 
efficiency. Some of these characteristics delineate the categories of 
equipment covered by this rulemaking.\7\ Most affect the merchandise 
that the equipment can be used to display and how the customer can 
access that merchandise. Key physical characteristics that affect 
energy efficiency are the operating temperature, the presence or 
absence of doors (i.e., closed cases or open cases), the type of doors 
used (i.e., transparent or solid), the angle of the door or air-curtain 
(i.e., horizontal, semivertical, or vertical), and the type of 
condensing unit (i.e., remote or self-contained). As discussed in the 
August 2008 NOPR, 73 FR 50080-83, DOE is adopting equipment classes in 
this rulemaking by: (1) Dividing commercial refrigerators, commercial 
freezers, and commercial refrigerator-freezers into equipment families; 
(2) subdividing these families based on condensing unit configurations 
and rating temperature designations; and (3) identifying the resulting 
classes that are within each of the three equipment categories covered 
by this rulemaking. Because DOE did not receive any comments in 
response to the presentation of equipment classes in the August 2008 
NOPR, DOE is adopting the equipment classes as proposed without further 
modification. Table IV-2 presents the equipment classes covered under 
this rulemaking, organized by the three equipment categories.
---------------------------------------------------------------------------

    \7\ ``Commercial refrigerators, commercial freezers, and 
commercial refrigerator-freezers'' is a type of covered commercial 
equipment. For purposes of discussion only in this proceeding, DOE 
uses the term ``categories'' to designate groupings of ``commercial 
refrigeration equipment.'' The categories of equipment are: Self-
contained commercial refrigerators, commercial freezers, and 
commercial refrigerator-freezers without doors; remote condensing 
commercial refrigerators, commercial freezers, and commercial 
refrigerator-freezers; and commercial ice-cream freezers. DOE will 
analyze specific equipment classes that fall within these general 
categories and set appropriate standards.

[[Page 1100]]



                       Table IV-2--Commercial Refrigeration Equipment Classes by Category
----------------------------------------------------------------------------------------------------------------
                                                                                Operating
        Equipment category            Condensing unit      Equipment family    temperature     Equipment class
                                       configuration                             ([deg]F)        designation
----------------------------------------------------------------------------------------------------------------
Remote Condensing Commercial       Remote..............  Vertical Open.......         >=32  VOP.RC.M
 Refrigerators, Commercial                                                             <32  VOP.RC.L
 Freezers, and Commercial
 Refrigerator-Freezers.
                                                         Semivertical Open...         >=32  SVO.RC.M
                                                                                       <32  SVO.RC.L
                                                         Horizontal Open.....         >=32  HZO.RC.M
                                                                                       <32  HZO.RC.L
                                                         Vertical Closed              >=32  VCT.RC.M
                                                          Transparent.                 <32  VCT.RC.L
                                                         Horizontal Closed            >=32  HCT.RC.M
                                                          Transparent.                 <32  HCT.RC.L
                                                         Vertical Closed              >=32  VCS.RC.M
                                                          Solid.                       <32  VCS.RC.L
                                                         Horizontal Closed            >=32  HCS.RC.M
                                                          Solid.                       <32  HCS.RC.L
                                                         Service Over Counter         >=32  SOC.RC.M
                                                                                       <32  SOC.RC.L
Self-Contained Commercial          Self-Contained......  Vertical Open.......         >=32  VOP.SC.M
 Refrigerators, Commercial                                                             <32  VOP.SC.L
 Freezers, and Commercial
 Refrigerator-Freezers without
 Doors.
                                                         Semivertical Open...         >=32  SVO.SC.M
                                                                                       <32  SVO.SC.L
                                                         Horizontal Open.....         >=32  HZO.SC.M
                                                                                       <32  HZO.SC.L
Commercial Ice-Cream Freezers....  Remote..............  Vertical Open.......       * <=-5  VOP.RC.I
                                                         Semivertical Open...  ...........  SVO.RC.I
                                                         Horizontal Open.....  ...........  HZO.RC.I
                                                         Vertical Closed       ...........  VCT.RC.I
                                                          Transparent.
                                                         Horizontal Closed     ...........  HCT.RC.I
                                                          Transparent.
                                                         Vertical Closed       ...........  VCS.RC.I
                                                          Solid.
                                                         Horizontal Closed     ...........  HCS.RC.I
                                                          Solid.
                                                         Service Over Counter  ...........  SOC.RC.I
                                   Self-Contained......  Vertical Open.......  ...........  VOP.SC.I
                                                         Semivertical Open...  ...........  SVO.SC.I
                                                         Horizontal Open.....  ...........  HZO.SC.I
                                                         Vertical Closed       ...........  VCT.SC.I
                                                          Transparent.
                                                         Horizontal Closed     ...........  HCT.SC.I
                                                          Transparent.
                                                         Vertical Closed       ...........  VCS.SC.I
                                                          Solid.
                                                         Horizontal Closed     ...........  HCS.SC.I
                                                          Solid.
                                                         Service Over Counter  ...........  SOC.SC.I
----------------------------------------------------------------------------------------------------------------
* Ice-cream freezer is defined in 10 CFR 431.62 as a commercial freezer designed to operate at or below -5
  [deg]F (-21 [deg]C) and that the manufacturer designs, markets, or intends for the storing, displaying, or
  dispensing of ice cream.

B. Engineering Analysis

    The engineering analysis develops cost-efficiency relationships to 
show the manufacturing costs of achieving increased efficiency. As 
discussed in the August 2008 NOPR, DOE used the design-option approach, 
involving consultation with outside experts, review of publicly 
available cost and performance information, and modeling of equipment 
cost and energy consumption. 73 FR 50083-50093. Chapter 5 of the NOPR 
TSD contained detailed discussion of the engineering analysis 
methodology. In response to the August 2008 NOPR, DOE received a number 
of comments on the engineering analysis methodology. These comments, 
and DOE's response, are detailed in the following paragraphs.
1. Approach
    For the NOPR, DOE adopted a design-options approach for the 
engineering analysis. The methodology DOE used to perform the design-
option analysis is described in detail in chapter 5 of the TSD. DOE 
used industry-supplied data, which were developed using an efficiency-
level approach, to validate DOE data. DOE received no further comments 
on the design-options approach and, as a result, made no changes to 
this methodology for the final rule.
2. Analytical Models
a. Cost Model
    In the engineering analysis, DOE establishes the relationship 
between manufacturer production cost and energy consumption for the 
commercial refrigeration equipment covered in this rulemaking. In 
determining this relationship, DOE estimated the incremental 
manufacturer production costs associated with technological changes 
that reduce the energy consumption of the baseline models (i.e., design 
options).
    During the NOPR public meeting, the American Council for an Energy-
Efficient Economy (ACEEE) stated that DOE's method of estimating 
manufacturer production costs based on a snapshot analysis of available 
engineering options is flawed, because historical data for other 
building technologies show that incremental costs of complying with 
standards have been much lower than DOE estimated. ACEEE attributed 
this to manufacturers

[[Page 1101]]

redesigning their processes to meet new energy conservation standards. 
(ACEEE, Public Meeting Transcript, No. 27 at p. 28) AHRI disagreed with 
ACEEE and cited the residential central air-conditioner rulemaking as 
an example of where the actual cost of equipment was much higher than 
DOE estimated. (AHRI, Public Meeting Transcript, No. 27 at p. 29) 
However, ACEEE responded that this was because commodity prices 
increased dramatically for that equipment and that once this was 
accounted for, the observed price increase in baseline residential air-
conditioner units was 2 percent lower than DOE's estimate. (ACEEE, 
Public Meeting Transcript, No. 27 at p. 30) Appliance Standards 
Awareness Project (ASAP) added that a retrospective analysis would be 
useful for helping DOE evaluate its model for predicting costs. (ASAP, 
Public Meeting Transcript, No. 27 at p. 31) ACEEE also commented that 
DOE's model for assessing the cost and value of energy conservation 
standards is flawed, because the model fails to account for 
manufacturer learning curves. Over time, the price of most equipment 
drops as more units are produced, regardless of the efficiency 
standards placed on them. Therefore, DOE's assumption that greater 
efficiency standards will cause equipment prices to increase is not 
valid. (ACEEE, No. 31 at p. 1) A comment submitted by representatives 
of ACEEE, Appliance Standards Awareness Project, Alliance to Save 
Energy, California Energy Commission, Natural Resources Defense 
Council, Northeast Energy Efficiency Partnerships, Northwest Power and 
Conservation Council, Pacific Gas and Electric Company, Sempra Energy 
Utilities, and Southern California Edison (hereafter referred to as the 
Joint Comment) agreed with ACEEE that DOE's engineering analysis 
methodology should take manufacturer learning curves into account. 
(Joint Comment, No. 34 at p. 6)
    The cost-efficiency curves that DOE presented in the NOPR TSD 
showed incremental costs of implementing design option changes above 
the baseline. The cost-efficiency curves are not intended to capture 
future economies of scale, or other related cost reductions that may or 
may not result from increased cumulative production over time. DOE 
acknowledges that manufacturing efficiency evolves over time, but notes 
that earlier trends do not necessarily reflect future trends. DOE has 
insufficient data to project final minimized unit costs of newer 
technologies. DOE believes that thorough and rigorous manufacturing 
cost analysis based on actual equipment at all efficiency levels 
represents the most effective and appropriate way to estimate current 
and near-term incremental manufacturing costs. Therefore, DOE has used 
available information on existing design options in the cost-efficiency 
analysis.
i. LED Price Projections
    DOE estimates the economic impacts of the proposed standards based 
on current costs of technologically feasible energy saving design 
options used in commercial refrigeration equipment. One such 
technology, which has been a focal point in this rulemaking, is solid-
state lighting (i.e., LEDs). For the ANOPR, DOE based LED lighting 
costs on a retrofit case study, but revised its assumptions for the 
NOPR after gathering information from LED chip and fixture 
manufacturers. These changes caused the original equipment manufacturer 
(OEM) cost (i.e., the cost to commercial refrigeration equipment 
manufacturers) of LED fixtures to increase for both open refrigeration 
cases and refrigeration cases with transparent doors. Based on these 
revised costs, DOE tentatively rejected TSL 5 (i.e., the efficiency 
level where LEDs were first implemented for most equipment classes) 
because it was not economically feasible.
    However, DOE conducted a sensitivity analysis for the NOPR to gauge 
the effect of expected LED price reductions. That analysis estimated 
NPV and LCC values for equipment classes if projected LED prices were 
used in DOE's analysis. DOE's Multi-Year Program Plan was used to 
estimate the reduction in LED chip price by 2012.\8\ The sensitivity 
analysis used an estimated reduction in LED chip price of 80 percent by 
2012, which represented a 50-percent reduction in overall LED system 
cost, assuming the costs of the power supply and LED fixtures did not 
change significantly from the values used in the engineering analysis. 
DOE recognized that if these projected reductions were to be realized 
or exceeded, the economic impacts of this standard could change 
significantly, possibly making higher TSLs economically justified. 
Therefore, in the NOPR, DOE requested comment on all aspects of the LED 
issue, specifically soliciting any information or data that could 
increase confidence in the price projections.
---------------------------------------------------------------------------

    \8\ U.S. Department of Energy, Solid-State Lighting Research and 
Development, Multi-Year Program Plan FY'09-FY'14. This document was 
prepared under the direction of a Technical Committee from the Next 
Generation Lighting Initiative Alliance (NGLIA). Information about 
NGLIA and its members is available at http://www.nglia.org.
---------------------------------------------------------------------------

    DOE received several comments. ASAP, Natural Resources Defense 
Council (NRDC), Earthjustice, and the Joint Comment all expressed 
support for the use of DOE LED price projections. They stated that the 
projections are sufficiently justified and would be a more adequate 
basis for the standard than the assumption that LED prices will remain 
constant at 2007 levels. (ASAP, No. 27 at p. 100; NRDC, Public Meeting 
Transcript, No. 27 at p. 105; Earthjustice, Public Meeting Transcript, 
No. 27 at p. 106; Joint Comment, No. 34 at p. 2) Pacific Gas and 
Electric Company, Southern California Edison, and Sempra Energy 
Utilities (Southern California Gas and San Diego Gas and Electric 
Company) (hereafter the California Utilities Joint Comment) suggested 
that the DOE projections might be too conservative. (California 
Utilities Joint Comment, No. 41 at p. 3) ACEEE agreed, attributing this 
underestimation to the exclusion of scale-dependent factors. ACEEE 
stated that as LED production scales up, there will be greater price 
reductions and increased quality in terms of reproducibility. (ACEEE, 
No. 31 at p. 7 and Public Meeting Transcript, No. 27 at p. 111) As 
evidence of the validity of DOE LED cost projections, the California 
Utilities Joint Comment stated that LED prices have already dropped 
rapidly, rendering DOE analyses based on 2007 prices obsolete. It 
suggested that the price of LED lighting for use in refrigeration has 
already fallen by roughly 10 percent since 2007. (California Utilities 
Joint Comment, No. 41 at p. 13) The California Utilities Joint Comment 
also stated that LED prices will continue to drop after 2012, a fact 
that should be considered in the NPV analyses. (California Utilities 
Joint Comment, No. 41 at p. 8)
    For today's final rule, DOE updated the LED costs to represent the 
current cost of LEDs. DOE did not receive any data providing a greater 
level of confidence that LED price reductions would occur. However, LED 
costs have decreased and the costs used in the NOPR engineering 
analysis no longer represent the current cost of LEDs. While 
considerable information is available that suggests LED prices are 
likely to decline by at least as much as DOE's sensitivity analysis 
assumed, DOE is not using this information as the basis of its analysis 
due to a lack of certainty about the timing and success of LED research 
and product development. See section V.A.2. a for more detail on the 
updated LED lighting assumptions.

[[Page 1102]]

ii. Material Price Projections
    As discussed in the August 2008 NOPR, DOE performed a sensitivity 
analysis to explore the effects of future LED fixture prices on 
commercial refrigeration equipment prices in the engineering analysis. 
During the NOPR public meeting, AHRI commented that if DOE were to 
include LED price projections in the technical analyses, equivalent 
actions should be taken for other materials that also have shown recent 
price variability (i.e., refrigerants). (AHRI, Public Meeting 
Transcript, No. 27 at p. 102) AHRI believes commodity prices are likely 
to change significantly, which would affect equipment costs and change 
efficiency trends. AHRI cited the potential change in costs of 
hydrofluorocarbon refrigerants (HFCs) if pending legislation capping 
those refrigerants is passed. (AHRI, No. 33 at p. 3) True Manufacturing 
Company (True) added that the industry is already using cheaper, less 
efficient substitute materials to produce heat transfer devices in 
response to rising copper prices. (True, Public Meeting Transcript, No. 
27 at p. 104)
    As stated above, DOE did not use LED price projections in the final 
rule due to a lack of certainty about the timing and extent to which 
the projections would be realized. Similarly, DOE also did not include 
material price projections in the final rule analysis.
b. Energy Consumption Model
    The energy consumption model estimates the daily energy consumption 
of commercial refrigeration equipment at various performance levels 
using a design-options approach. The model is specific to the 
categories of equipment covered under this rulemaking, but is 
sufficiently generalized to model the energy consumption of all covered 
equipment classes. For a given equipment class, the model estimates the 
daily energy consumption for the baseline and the energy consumption of 
several levels of performance above the baseline. The model is used to 
calculate each performance level separately. For the NOPR, DOE updated 
its radiation load calculations by revising its assumptions for the 
view factor and changed its calculation method for infiltration load by 
replacing defrost melt-water with infiltrated air. 73 FR 50086. No 
comments were received in response to these changes. Therefore, DOE 
maintained these revised calculation methodologies for the final rule.
3. Equipment Classes Analyzed
    For the final rule, DOE did not make any changes to the equipment 
classes directly analyzed in the NOPR engineering analysis. Table IV-3 
shows the 15 equipment classes DOE directly analyzed.

   Table IV--3 Equipment Classes Directly Analyzed in the Engineering
                                Analysis
------------------------------------------------------------------------
      Equipment class                       Description
-----------------------------------------------------------------------
VOP.RC.M...................  Vertical Refrigerator without Doors with
                              a Remote Condensing Unit, Medium
                              Temperature.
VOP.RC.L...................  Vertical Freezer without Doors with a
                              Remote Condensing Unit, Low Temperature.
SVO.RC.M...................  Semivertical Refrigerator without Doors
                              with a Remote Condensing Unit, Medium
                              Temperature.
HZO.RC.M...................  Horizontal Refrigerator without Doors
                              with a Remote Condensing Unit, Medium
                              Temperature.
HZO.RC.L...................  Horizontal Freezer without Doors with a
                              Remote Condensing Unit, Low Temperature.
VCT.RC.M...................  Vertical Refrigerator with Transparent
                              Doors with a Remote Condensing Unit,
                              Medium Temperature.
VCT.RC.L...................  Vertical Freezer with Transparent Doors
                              with a Remote Condensing Unit, Low
                              Temperature.
SOC.RC.M...................  Service Over Counter Refrigerator with a
                              Remote Condensing Unit, Medium
                              Temperature.
VOP.SC.M...................  Vertical Refrigerator without Doors with
                              a Self-Contained Condensing Unit, Medium
                              Temperature.
SVO.SC.M...................  Semivertical Refrigerator without Doors
                              with a Self-Contained Condensing Unit,
                              Medium Temperature.
HZO.SC.M...................  Horizontal Refrigerator without Doors
                              with a Self-Contained Condensing Unit,
                              Medium Temperature.
HZO.SC.L...................  Horizontal Freezer without Doors with a
                              Self-Contained Condensing Unit, Low
                              Temperature.
VCT.SC.I...................  Vertical Ice-Cream Freezer with
                              Transparent Doors with a Self-Contained
                              Condensing Unit, Ice-Cream Temperature.
VCS.SC.I...................  Vertical Ice-Cream Freezer with Solid
                              Doors with a Self-Contained Condensing
                              Unit, Ice-Cream Temperature.
HCT.SC.I...................  Horizontal Ice-Cream Freezer with
                              Transparent Doors with a Self-Contained
                              Condensing Unit, Ice-Cream Temperature.
------------------------------------------------------------------------

4. Wedge Cases
    In the August 2008 NOPR, DOE considered remote condensing and self-
contained wedge cases as covered equipment.\9\ DOE proposed that the 
calculated daily energy consumption (CDEC) or total daily energy 
consumption (TDEC) be measured according to the ANSI/ASHRAE Standard 
72-2005 test procedure.\10\ DOE also proposed that the maximum daily 
energy consumption (MDEC) for each model shall be the amount derived by 
incorporating into the standards equation for the appropriate equipment 
class a value for the TDA that is the product of: (1) The vertical 
height of the air curtain or glass (in a transparent door), and (2) the 
largest overall width of the case when viewed from the front. 73 FR 
50113. In the NOPR, DOE sought comment regarding appropriate standard 
levels for wedge cases, but did not receive any comments on this 
specific proposal.
---------------------------------------------------------------------------

    \9\ If a wedge case does not include a refrigeration component 
and simply serves as a miter transition piece between two other 
cases, then it does not meet the definition of commercial 
refrigeration equipment, and is not covered under this rulemaking.
    \10\ In the August 2008 NOPR, the test procedure cited was ANSI/
ASHRAE Standard 72-2005. However, the test procedure DOE adopted 
into section 431.64 of 10 CFR Part 431 is ARI Standard 1200-2006, 
which specifically references ANSI/ASHRAE Standard 72-2005 as the 
method of testing commercial refrigeration equipment. 71 FR 71356 
DOE notes that ARI Standard 1200-2006 would give identical test 
results for the measurement of energy consumption as ANSI/ASHRAE 
Standard 72-2005. Therefore, for today's final rule, DOE is 
referencing ARI Standard 1200-2006 for the measurement of CDEC and 
TDEC of wedge cases.
---------------------------------------------------------------------------

    Hussman, Hill Phoenix, and AHRI commented that wedge cases should 
be excluded from this rulemaking because they are niche products that 
do not represent a significant part of the commercial refrigeration 
industry. (Hussman, No. 42 at p. 2; Hill Phoenix, No. 32 at p. 6; AHRI, 
No. 33 at p. 5) Hill Phoenix further states that most supermarkets and 
grocery stores do not use wedge cases at all, and those that do will 
only use a few within a store because they are much more expensive per 
linear foot than a standard case. (Hill Phoenix, Public Meeting 
Transcript, No. 27 at p. 18) Hussman further states that wedge cases 
use less than 0.5 percent of the total energy consumed by the 
supermarket industry and represent only 1.5 percent of the cases 
shipped. (Hussman, No. 42 at p. 2) DOE acknowledges that wedge cases 
are niche equipment and do not represent a significant market share in 
the commercial refrigeration equipment

[[Page 1103]]

industry. However, market share is not a basis for rejecting an 
equipment category from consideration in the rulemaking. Therefore, DOE 
concludes that wedge cases are covered in this rulemaking.
    Hill Phoenix and AHRI also commented that wedge cases should be 
excluded from this rulemaking because there are no test procedures in 
place to test wedges since ARI Standard 1200-2006 excludes wedges from 
its scope of coverage. (Hill Phoenix, No. 32 at p. 2; AHRI, No. 33 at 
p. 5) As stated in the July 2007 ANOPR, EPCA directs DOE to set 
standards for commercial refrigeration equipment (i.e., the three 
categories of equipment identified above). Any equipment that meets the 
EPCA definition of a ``commercial refrigerator, freezer, or 
refrigerator-freezer'' and falls under one of these three categories 
will be covered by this rulemaking. In the December 2006 final rule, 
DOE incorporated by reference certain sections of ARI Standard 1200-
2006 as the test procedure for commercial refrigeration equipment, but 
did not reference section 2.2, which provides exclusions for certain 
equipment such as wedge cases.\11\ The equipment excluded in this 
section of ARI Standard 1200-2006 will only be excluded from this 
rulemaking if they do not meet the EPACT 2005 definition of a 
``commercial refrigerator, freezer, or refrigerator-freezer.'' \12\ 72 
FR 41169 DOE believes that the EPACT 2005 definition of a ``commercial 
refrigerator, freezer, or refrigerator-freezer'' is sufficiently broad 
that it includes wedge cases. Therefore, DOE has concluded that wedge 
cases are properly covered in this rulemaking.
---------------------------------------------------------------------------

    \11\ ARI Standard 1200-2006 refers to wedge cases as ``miter 
transition display merchandisers used as a corner section between 
two refrigerated display merchandisers.''
    \12\ ``(9)(A) The term `commercial refrigerator, freezer, and 
refrigerator-freezer' means refrigeration equipment that--
    (i) Is not a consumer product (as defined in section 321of EPCA 
[42 U.S.C. 6291(1)]);
    (ii) Is not designed and marketed exclusively for medical, 
scientific, or research purposes;
    (iii) Operates at a chilled, frozen, combination chilled and 
frozen, or variable temperature;
    (iv) Displays or stores merchandise and other perishable 
materials horizontally, semivertically, or vertically;
    (v) Has transparent or solid doors, sliding or hinged doors, a 
combination of hinged, sliding, transparent, or solid doors, or no 
doors;
    (vi) Is designed for pull-down temperature applications or 
holding temperature applications; and
    (vii) Is connected to a self-contained condensing unit or to a 
remote condensing unit.'' (42 U.S.C. 6311(9)(A))
---------------------------------------------------------------------------

    Hussman, Hill Phoenix, and AHRI also commented that wedge cases 
should be excluded from this rulemaking because they do not function 
effectively and cannot be tested as a stand-alone merchandiser since 
they require straight cases of the same model on either side. This 
configuration makes accurate performance testing of wedges nearly 
impossible and no specific testing guidelines for wedges exist within 
ANSI/ASHRAE Standard 72-2005 or ANSI/ARI Standard 1200-6006. (Hussman, 
No. 42 at p. 2; Hill Phoenix, No. 32 at p. 6; AHRI, No. 33 at p. 5) DOE 
acknowledges that there is no specific guidance in the ANSI/ASHRAE 
Standard 72-2005 or ARI Standard 1200-2006 test procedures that 
addresses the proper operation of wedge cases. However, DOE believes 
that wedge cases are not significantly different from normal display 
cases used in between other display cases (i.e., cases within a display 
case line-up) in terms of operation and the ability to be tested. A 
wedge case and a normal case within a display case line-up both have 
display cases adjacent to them in normal operation and do not have end 
panels installed on their sides. DOE expects that wedge cases and cases 
within a display case line-up should be tested in the same manner under 
the test procedure.
    Hussman and Hill Phoenix also commented that wedge cases should be 
excluded from this rulemaking because the TDA for inside wedges 
approaches zero. Therefore, standards for such cases are not meaningful 
because the TDA in the standards equation is zero. (Hussman, Public 
Meeting Transcript, No. 27 at p. 16; Hill Phoenix, Public Meeting 
Transcript, No. 27 at p. 19) As stated above, DOE proposed language in 
the August 2008 NOPR to specifically address the TDA issue of wedge 
cases. DOE proposed that for remote condensing and self-contained wedge 
cases, the CDEC or TDEC shall be measured according to the ANSI/ASHRAE 
Standard 72-2005 Test Procedure. DOE also proposed that the MDEC for 
each model shall be the amount derived by incorporating into the 
standards equation for the appropriate equipment class a value for the 
TDA that is the product of: (1) The vertical height of the air curtain 
or glass (in a transparent door), and (2) the largest overall width of 
the case, when viewed from the front.10 73 FR 50113. (See 
section VI.A.1.) This procedure is conservative because it allows for 
the widest horizontal dimension of the display case to be used in 
determining TDA. That is, using this procedure, the standards for a 
wedge case would be less stringent than a normal display case, in the 
same equipment class, of equal refrigerated volume.
    If a manufacturer finds that meeting the standard for wedge cases 
would cause hardship, inequity, or unfair distribution of burdens, the 
manufacturer may petition OHA for exception relief or exemption from 
the standard pursuant to OHA's authority under section 504 of the DOE 
Organization Act (42 U.S.C. 7194), as implemented at subpart B of 10 
CFR part 1003. OHA has the authority to grant such relief on a case-by-
case basis if it determines that a manufacturer has demonstrated that 
meeting the standard would cause hardship, inequity, or unfair 
distribution of burdens.
5. Ice-Cream Freezers--Temperature Range
    In the test procedure final rule for commercial refrigeration 
equipment, DOE established the definition of ice-cream freezer as ``a 
commercial freezer that is designed to operate at or below -5 [deg]F (-
21 [deg]C) and that the manufacturer designs, markets, or intends for 
the storing, displaying, or dispensing of ice cream.'' 71 FR 71369-70. 
DOE incorporated the test procedure into its regulations in 10 CFR 
431.62. Under this definition, unless equipment is designed, marketed, 
or intended specifically for the storage, display or dispensing of ice 
cream, it would not be considered an ice-cream freezer. For example, 
multi-purpose commercial freezers manufactured for storing and 
displaying frozen foods in addition to ice cream and designed to 
operate at or below -5 [deg]F (-21 [deg]C) would not meet this 
definition. Thus, DOE would not treat them as commercial ice-cream 
freezers in this rulemaking. However, any commercial freezer that is 
specifically manufactured for storing, displaying, or dispensing ice 
cream and is designed for normal operation at or below -5 [deg]F would 
meet the definition. Other equipment that meet the definition include 
freezers designed to operate considerably below -5 [deg]F and are 
specifically designed for ice cream storage (e.g., ``hardening'' 
cabinets), as well as ice-cream dipping cabinets designed to operate 
below -5 [deg]F. For the NOPR, DOE expanded the definition used to 
categorize a unit's rating temperature by including a specific 
operating temperature range for medium-temperature, low-temperature, 
and ice-cream temperature applications.
    Hill Phoenix and AHRI commented on the proposed temperature ranges 
for low-temperature and ice-cream temperature freezers. Hill Phoenix, 
in agreement with AHRI, stated that the operating range for low-
temperature

[[Page 1104]]

cases should be changed to less than 32 [deg]F and greater than -15 
[deg]F, and the operating range for ice-cream temperature cases be 
changed to less than or equal to -15 [deg]F. Hill Phoenix and AHRI 
stated that freezers that operate below -15 [deg]F are constructed 
differently than cases that operate in the -5 [deg]F to -10 [deg]F 
range. Hill Phoenix stated that DOE's current temperature range 
designations would require freezers that operate in the -5 [deg]F to -
10 [deg]F range to be rated at -15 [deg]F. (Hill Phoenix, No. 32 at p. 
4; AHRI, No. 33 at p. 4)
    As previously stated, ice-cream freezers are defined by the test 
procedure, which states that an ice-cream freezer is ``a commercial 
freezer that is designed to operate at or below -5 [deg]F (-21 [deg]C) 
and that the manufacturer designs, markets, or intends for the storing, 
displaying, or dispensing of ice cream.'' 71 FR 71369; 10 CFR 431.62. 
Based on the comments from AHRI and Hill Phoenix discussed above, DOE 
is modifying the operating temperature ranges used to define each type 
of equipment from the temperature ranges that were used in the NOPR. 
For today's final rule, DOE is organizing equipment classes based on 
the three operating temperature ranges shown in Table IV-4. For today's 
final rule, DOE will continue to classify equipment as medium 
temperature (refrigerators), low temperature (freezers), or ice-cream 
temperature (ice-cream freezers). Furthermore, DOE maintains the 
required rating temperatures as specified in the test procedure final 
rule: 38 [deg]F (2 [deg]F) for commercial refrigerators and 
refrigerator compartments, 0 [deg]F (2 [deg]F) for 
commercial freezers and freezer compartments, and -15 [deg]F (2 [deg]F) for commercial ice-cream freezers. 71 FR 71370.

                                   Table IV-4--Rating Temperature Designations
----------------------------------------------------------------------------------------------------------------
    Operating temperature       Rating temperature
           ([deg]F)                  ([deg]F)                                Description
----------------------------------------------------------------------------------------------------------------
>=32 (M).....................                   38  Medium temperature (refrigerators).
<32 (L)......................                    0  Low temperature (freezers).
<=-5 (I) *...................                  -15  Ice-cream temperature (ice-cream freezers).
----------------------------------------------------------------------------------------------------------------
* Ice-cream freezer is defined in 10 CFR 431.62 as a commercial freezer that is designed to operate at or below
  5 [deg]F (-21 [deg]C) and that the manufacturer designs, markets, or intends for the storing, displaying, or
  dispensing of ice cream.

6. Special Application Temperature Cases
    After the NOPR public meeting, DOE received comments on including 
``application temperatures'' for commercial refrigeration equipment. 
These are rating temperatures other than the standard rating 
temperatures. Hill Phoenix stated that some refrigerated cases are 
designed for and operate at medium temperature and hold foods with 
temperature requirements that tend to range from 10 [deg]F to 20 
[deg]F. These cases are not designed to operate at the rating 
temperature of 0 [deg]F. Hill Phoenix also stated that the cases would 
have to be redesigned to operate at the rating temperature, which would 
cause them to consume more energy. Therefore, Hill Phoenix recommended 
that this type of product be tested using the application temperature 
at which the product is designed to perform, but be required to meet 
the low-temperature standard. (Hill Phoenix, No. 32 at p. 4) AHRI 
concurred with Hill Phoenix, recommending that any case designed 
specifically to hold products at temperatures higher than the rating 
temperature specified for that class be tested at its application 
temperature and must meet the energy standards of that class. (AHRI, 
No. 33 at p. 5) However, the Joint Comment cautioned that rating 
specialty cases at application temperatures could create loopholes 
allowing equipment to be tested at an application temperature different 
from the temperature at which the equipment is designed to operate in 
the field. (Joint Comment, No. 34 at p. 4)
    In the test procedure final rule for commercial refrigeration 
equipment, DOE adopted ARI Standard 1200-2006 as the DOE test procedure 
for commercial refrigeration equipment. 71 FR 71340, 71369-70; 10 CFR 
431.63-431.64. ANSI/ARI Standard 1200-2006 contains rating temperature 
specifications of 38 [deg]F (2 [deg]F) for commercial 
refrigerators and refrigerator compartments, and 0 [deg]F (2 [deg]F) for commercial freezers and freezer compartments. In 
the test procedure final rule, DOE also adopted a -15 [deg]F (2 [deg]F) rating temperature for commercial ice-cream freezers. 
71 FR 71370.
    Requiring manufacturers to test special application cases at one of 
the three specified standard rating temperatures (38 [deg]F, 0 [deg]F, 
and - 15 [deg]F) instead of at their corresponding application 
temperature could result in higher energy consumption for these cases 
if they have to be redesigned for testing at the standard rating 
temperature. However, DOE agrees with the Joint Comment that allowing 
such special application cases to be tested at an application 
temperature that is different from the temperature at which the 
equipment is designed to operate in the field could create loopholes. 
Therefore, DOE is maintaining the requirement that all equipment must 
be tested at one of the three specified standard rating temperatures 
adopted by DOE in the test procedure final rule. In the example from 
Hill Phoenix, the equipment is classified as a medium-temperature unit, 
but the equipment is designed to operate below 32 [deg]F and above -5 
[deg]F, thus categorizing it as a low-temperature unit under today's 
final rule. Because it is a low-temperature unit, it is required to be 
tested at 0 [deg]F (2 [deg]F).
    Any manufacturer that is unable to test such equipment at its 
designated rating temperature must request a test procedure waiver from 
DOE under the provisions described in 10 CFR 431.401. If the 
manufacturer believes that meeting the standard would cause hardship, 
inequity, or unfair distribution of burdens, it may petition OHA for 
exception relief from the energy conservation standard pursuant to 
OHA's authority under section 504 of the DOE Organization Act (42 
U.S.C. 7194), as implemented at subpart B of 10 CFR part 1003. However, 
the majority of equipment covered by this rulemaking can be tested 
using the three specified rating temperatures provided in the test 
procedure.
7. Coverage of Remote Condensing Units
    In the framework document, ANOPR, and NOPR, DOE considered energy 
conservation standards that covered only the refrigerated cases of 
remote condensing commercial refrigeration equipment, and not the 
remote condensing unit. DOE cited language in EPACT 2005's definitions 
for ``self

[[Page 1105]]

contained condensing unit'' and ``remote condensing unit'' as a 
justification for this approach. DOE believes that, by definition, the 
remote condensing units that support remote condensing refrigeration 
equipment are not considered an ``integral part'' of the refrigeration 
equipment. (EPACT 2005, Section 136(a)(3)) As a result, DOE stated in 
the August 2008 NOPR that remote condensing units would not be 
considered in this rulemaking.
    For the NOPR, the Joint Comment stated that the scope of this 
rulemaking should not be limited to the refrigerated cabinets or 
display cases of remote condensing systems. According to the Joint 
Comment, regulating the remote condensing units supporting these 
cabinets has a significant potential to save energy because these units 
account for 90 percent of the total capacity of commercial 
refrigeration equipment subject to this rulemaking. (Joint Comment, No. 
34 at p. 7)
    As stated in the framework document and the July 2007 ANOPR, DOE 
does not believe that the remote condensing units of remote condensing 
refrigeration equipment systems are considered part of the equipment to 
which they are connected. EPCA defines a ``self-contained condensing 
unit,'' in part, as an ``assembly of refrigerating components that is 
an integral part of the refrigerated equipment * * *'' (42 U.S.C. 
6311(9)(F), added by EPACT 2005, section 136(a)(3)). EPCA also defines 
a ``remote condensing unit,'' in part, as an ``assembly of 
refrigerating components that is remotely located from the refrigerated 
equipment * * *'' (42 U.S.C. 6311(9)(E), added by EPACT 2005, section 
136(a)(3)) The EPCA definition of remote condensing unit implies that 
the remote condensing unit is not part of the refrigeration equipment 
because it refers to the unit and the refrigeration equipment as 
separate entities. A remote condensing unit functions as a supplement 
to remote condensing refrigeration equipment, but is not an ``integral 
part.'' Therefore, energy conservation standards for remote condensing 
commercial refrigerators, commercial freezers, and commercial 
refrigerator-freezers apply only to the refrigerated equipment (i.e., 
storage cabinets and display cases), but not to the remote condensing 
units. For the final rule, DOE maintains that the energy conservation 
standards set for remote condensing commercial refrigeration equipment 
only apply to display cases, not to the remote condensing units.
    However, DOE has the authority to classify industrial or commercial 
equipment as covered under EPCA section 341(a) and (b), if 
classification is ``necessary'' to improve the efficiency of industrial 
equipment (which includes commercial refrigeration equipment) in order 
to conserve energy. (42 U.S.C. 6312(a) and (b)) If DOE were to add 
remote condensing units as covered equipment, DOE would undertake a 
separate rulemaking process to consider standards for these products in 
accordance with EPCA section 341(a) and (b).
8. Regulating Secondary Cooling Applications
    In the framework document, DOE decided to exclude equipment 
designed for secondary coolant applications. DOE's interpretation of 
the EPACT 2005 definitions of ``commercial refrigerator, freezer, and 
refrigerator-freezer'' was consistent with the ARI Standard 1200-2006, 
which explicitly excludes secondary coolant applications. Following the 
framework document, many interested parties, including ARI, Southern 
Company, and EEI, agreed with the exclusion of secondary coolant 
applications in this rule because of their insignificant presence in 
the market and the complexity of modifying the test procedure to 
accommodate them. ACEEE, on the other hand, commented that DOE should 
have a broad scope of coverage and should, in general, cover as much as 
possible in the rulemaking. 72 FR 41171.
    After considering the framework comments, DOE decided to continue 
to exclude secondary coolant applications from this rulemaking in the 
July 2007 ANOPR. Following the ANOPR, commercial refrigeration 
manufacturers expressed concerns that the exclusion of secondary 
coolant systems could provide a loophole if customers purchased these 
lower efficiency systems instead of regulated direct expansion 
equipment. 73 FR 50106. For the NOPR, the Joint Comment restated that 
DOE should consider secondary coolant applications in its analysis. 
(Joint Comment, No. 34 at p. 8)
    Section 340(9)(A)(vii) of EPCA (42 U.S.C. 6311(9)(A)(vii), added by 
EPACT 2005, section 136(a)(3)) states that the terms commercial 
refrigerator, freezer, and refrigerator-freezer refer to equipment that 
is connected to a self-contained condensing unit or to a remote 
condensing unit. DOE maintains that this language excludes secondary 
coolant applications from coverage in this rulemaking because such 
applications are not directly connected to self-contained or remote 
condensing units. 72 FR 41171. For this reason, DOE is excluding 
secondary coolant applications from this rule.

C. Markups To Determine Equipment Price

    In the August 2008 NOPR, DOE explained how it developed the 
distribution channel markups it used. 73 FR 50093-95. DOE did not 
receive comments on these markups. However, DOE updated the 
distribution channel markups by including 2008 sales tax data, and 
updated the markups for commercial refrigeration equipment wholesalers 
using 2008 financial data. DOE used these markups, along with sales 
taxes, installation costs, and manufacturer selling prices (MSPs) 
developed in the engineering analysis, to arrive at the final installed 
equipment prices for baseline and higher efficiency commercial 
refrigeration equipment. As explained in the August 2008 NOPR, 73 FR 
50093-95, DOE defined three distribution channels for commercial 
refrigeration equipment to describe how the equipment passes from the 
manufacturer to the customer. DOE developed market shares by 
distribution channel for remote condensing and self-contained 
equipment. DOE retained the same distribution channel market shares 
described in the August 2008 NOPR.
    The new overall baseline and incremental markups for sales to 
supermarkets within each distribution channel are shown in Table IV-5, 
Table IV-6, Table IV-7, and Table IV-8. Chapter 6 of the TSD provides 
additional details on markups.

    Table IV-5--Baseline Markups by Distribution Channel Including Sales Tax for Self-Contained Equipment in
                                                  Supermarkets
----------------------------------------------------------------------------------------------------------------
                                                               Mechanical
                                                               contractor     National account
                                             Wholesaler         (includes      (manufacturer-        Overall
                                                               wholesaler)         direct)
----------------------------------------------------------------------------------------------------------------
Distributor(s) Markup...................             1.370             2.082             1.185             1.564
Sales Tax...............................             1.069             1.069             1.069             1.069

[[Page 1106]]

 
Overall Markup..........................             1.465             2.226             1.267             1.672
----------------------------------------------------------------------------------------------------------------


   Table IV-6--Baseline Markups by Distribution Channel Including Sales Tax for Remote Condensing Equipment in
                                                  Supermarkets
----------------------------------------------------------------------------------------------------------------
                                                               Mechanical
                                                               contractor     National account
                                             Wholesaler         (includes      (manufacturer-        Overall
                                                               wholesaler)         direct)
----------------------------------------------------------------------------------------------------------------
Distributor(s) Markup...................             1.370             2.082             1.185             1.347
Sales Tax...............................             1.069             1.069             1.069             1.069
Overall Markup..........................             1.465             2.226             1.267             1.440
----------------------------------------------------------------------------------------------------------------


   Table IV-7--Incremental Markups by Distribution Channel Including Sales Tax for Self-Contained Equipment in
                                                  Supermarkets
----------------------------------------------------------------------------------------------------------------
                                                               Mechanical
                                                               contractor     National account
                                             Wholesaler         (includes      (manufacturer-        Overall
                                                               wholesaler)         direct)
----------------------------------------------------------------------------------------------------------------
Distributor(s) Markup...................             1.114             1.370             1.057             1.186
Sales Tax...............................             1.069             1.069             1.069             1.069
Overall Markup..........................             1.191             1.465             1.130             1.268
----------------------------------------------------------------------------------------------------------------


 Table IV-8--Incremental Markups by Distribution Channel Including Sales Tax for Remote Condensing Equipment in
                                                  Supermarkets
----------------------------------------------------------------------------------------------------------------
                                                               Mechanical
                                                               contractor     National account
                                             Wholesaler         (includes      (manufacturer-        Overall
                                                               wholesaler)         direct)
----------------------------------------------------------------------------------------------------------------
Distributor(s) Markup...................             1.114             1.370             1.057             1.112
Sales Tax...............................             1.069             1.069             1.069             1.069
Overall Markup..........................             1.191             1.465             1.130             1.189
----------------------------------------------------------------------------------------------------------------

D. Energy Use Characterization

    The energy use characterization estimates the annual energy 
consumption of commercial refrigeration equipment systems (including 
remote condensing units). This estimate is used in the subsequent LCC 
and PBP analyses (chapter 8 of the TSD) and NIA (chapter 11 of the 
TSD). For the August 2008 NOPR, DOE estimated the energy consumption of 
the 15 equipment classes analyzed in the engineering analysis (chapter 
5 of the NOPR TSD) using the relevant test procedure. DOE then 
validated these energy consumption estimates with annual whole-building 
simulation modeling of selected equipment classes and efficiency 
levels. 73 FR 50095. For the final rule analyses, DOE used the same 
methodology to estimate the annual energy consumption of commercial 
refrigeration systems presented in the August 2008 NOPR. See chapter 7 
of the TSD for additional detail on the energy use characterization.
    DOE assumed for the energy analysis 24-hour operation of case 
lighting based on input received during the ANOPR. The California 
Utilities Joint Comment stated that while many grocers in California 
may shut down case lighting for 8 hours per day, national trends may be 
closer to 24-hour operation. (California Utilities Joint Comment, No. 
41 at p. 12) The California Utilities Joint Comment also indicated that 
LED lighting may be more likely to be controlled on and off during the 
operational day or dimmed based on motion sensors, and that this can be 
done without the risk of moisture or startup problems common to 
fluorescent fixtures. They further speculated that retailers would take 
advantage of these LED characteristics through different operational 
scenarios. (California Utilities Joint Comment, No. 41 at p. 12) 
However, they provided no data to indicate the likelihood of a 
different LED usage profile, and did not provide costs to implement 
automatic or manual control to support this comment. While the 
potential for additional lighting controls exists and LEDs may offer 
additional controllability, the actual likelihood and costs of 
implementation are unknown. As a result, DOE did not change its default 
assumption of 24-hour operation based on these comments. Additional 
detail on the energy use characterization can be found in chapter 7 of 
the TSD.

E. Life-Cycle Cost and Payback Period Analyses

    In response to the requirements of section 325(o)(2)(B)(i) of EPCA, 
DOE conducted LCC and PBP analyses to evaluate the economic impacts of 
possible new commercial refrigeration equipment standards on individual 
customers. DOE used the same spreadsheet models to evaluate the LCC

[[Page 1107]]

and PBP as it used for the NOPR; however, DOE updated certain specific 
inputs to the models. Details of the spreadsheet model and of all the 
inputs to the LCC and PBP analyses are in TSD chapter 8. DOE conducted 
the LCC and PBP analyses using a spreadsheet model developed in 
Microsoft Excel for Windows 2003.
    The LCC is the total cost for a unit of commercial refrigeration 
equipment over the life of the equipment, including purchase and 
installation expense and operating costs (energy expenditures and 
maintenance). To compute the LCC, DOE summed the installed price of the 
equipment and its lifetime operating costs discounted to the time of 
purchase. The PBP is the change in purchase expense due to a given 
energy conservation standard divided by the change in first-year 
operating cost that results from the standard. DOE expresses PBP in 
years. DOE measures the changes in LCC and in PBP associated with a 
given energy use standard level relative to a base case equipment 
energy use. The base case forecast reflects the market in the absence 
of mandatory energy conservation standards.
    The data inputs to the PBP calculation are the purchase expense 
(otherwise known as the total installed customer cost or first cost) 
and the annual operating costs for each selected design. The inputs to 
the equipment purchase expense were the equipment price and the 
installation cost, with appropriate markups. The inputs to the 
operating costs were the annual energy consumption, the electricity 
price, and the repair and maintenance costs. The PBP calculation uses 
the same inputs as the LCC analysis but, because it is a simple 
payback, the operating cost is for the year the standard takes effect, 
assumed to be 2012. For each efficiency level analyzed, the LCC 
analysis required input data for the total installed cost of the 
equipment, the operating cost, and the discount rate.
    Table IV-9 summarizes the inputs and key assumptions DOE used to 
calculate the economic impacts of various energy consumption levels on 
customers. Equipment price, installation cost, and baseline and 
standard design selection affect the installed cost of the equipment. 
Annual energy use, electricity costs, electricity price trends, and 
repair and maintenance costs affect the operating cost. The effective 
date of the standard, the discount rate, and the lifetime of equipment 
affect the calculation of the present value of annual operating cost 
savings from a proposed standard. Table IV-9 also shows how DOE 
modified these inputs and key assumptions for the final rule, relative 
to the August 2008 NOPR. The changes in the input data and the 
discussion of the overall approach to the LCC analysis are provided in 
chapter 8 of the TSD.
---------------------------------------------------------------------------

    \13\ RS Means Company, Inc., 2006. Means Costworks 2006: 
Facility Maintenance & Repair Cost Data. Kingston, Massachusetts.

  Table IV-9--Summary of Inputs and Key Assumptions Used in the LCC and
                              PBP Analyses
------------------------------------------------------------------------
                                                      Changes for final
            Input               NOPR description            rule
------------------------------------------------------------------------
Baseline Manufacturer         Price charged by      Data reflect updated
 Selling Price.                manufacturer to       engineering
                               either a wholesaler   analysis.
                               or large customer
                               for baseline
                               equipment.
                               Developed by using
                               industry-supplied
                               efficiency level
                               data and a design
                               option analysis.
Standard-Level Manufacturer   Incremental change    Data reflect updated
 Selling Price Increases.      in manufacturer       engineering
                               selling price for     analysis.
                               equipment at each
                               of the higher
                               efficiency standard
                               levels. Developed
                               by using a
                               combination of
                               energy consumption
                               level and design
                               option analyses.
Markups and Sales Tax.......  Associated with       Markups updated
                               converting the        based on revised
                               manufacturer          data on sales tax
                               selling price to a    and wholesaler
                               customer price        financial data.
                               (chapter 6 of TSD).
                               Developed based on
                               product
                               distribution
                               channels and sales
                               taxes.
Installation Price..........  Cost to the customer  No change.
                               of installing the
                               equipment. This
                               includes labor,
                               overhead, and any
                               miscellaneous
                               materials and
                               parts. The total
                               installed cost
                               equals the customer
                               equipment price
                               plus the
                               installation price.
                               Installation cost
                               data provided by
                               industry comment.
Equipment Energy Consumption  Site energy use       Data reflect updated
                               associated with the   engineering
                               use of commercial     analysis for each
                               refrigeration         efficiency level.
                               equipment, which
                               includes only the
                               use of electricity
                               by the equipment
                               itself. Taken from
                               engineering
                               analysis and
                               validated in energy
                               use
                               characterization.
                               (chapter 7 of the
                               TSD).
Electricity Prices..........  Established average   No change.
                               commercial
                               electricity price
                               ($/kWh) from EIA
                               data for 2007, in
                               2007$. DOE then
                               established scaling
                               factors for
                               commercial
                               refrigeration
                               equipment consumers
                               based on the 2003
                               Commercial Building
                               Energy Consumption
                               Survey.
Electricity Price Trends....  Used the AEO2007      Updated to AEO2008.
                               reference case to
                               forecast future
                               electricity prices
                               and extrapolated
                               prices to 2042.
Maintenance Costs...........  Labor and material    No change in
                               costs associated      methodology;
                               with maintaining      however, LED
                               the commercial        fixture replacement
                               refrigeration         costs reflect
                               equipment (e.g.,      updated engineering
                               cleaning heat         analysis costs by
                               exchanger coils,      equipment class.
                               checking
                               refrigerant charge
                               levels, lamp
                               replacement).
                               Estimated from data
                               in RS Means
                               Facilities
                               Maintenance and
                               Repair Cost
                               Data.\13\ Also
                               considered lighting
                               types and
                               configurations for
                               the refrigeration
                               equipment.

[[Page 1108]]

 
Repair Costs................  Labor and material    No change in
                               costs associated      methodology from
                               with repairing or     NOPR. Repair costs
                               replacing             reflect estimates
                               components that       of individual
                               have failed.          component life and
                               Estimated based on    cost to replace.
                               replacement           Repair costs
                               frequencies and       increase with
                               costs for key         increasing
                               components.           component costs.
Equipment Lifetime..........  Age at which the      No change.
                               commercial
                               refrigeration
                               equipment is
                               retired from
                               service. Used an
                               average lifetime of
                               10 years for large
                               grocery and multi-
                               line retailers and
                               an average lifetime
                               of 15 years for
                               small grocers and
                               convenience stores.
Discount Rate...............  Computed by           Updated based on
                               estimating the cost   data available in
                               of capital for        the 2008 version of
                               companies that        the Damodaran Web
                               purchase              site.
                               refrigeration
                               equipment using
                               business financial
                               data from the
                               Damodaran Online
                               database.
Rebound Effect..............  A rebound effect was  No change.
                               not taken into
                               account in the LCC
                               analysis.
------------------------------------------------------------------------

    The changes in the input data and the discussion of the overall 
approach to the LCC analysis are provided in chapter 8 of the TSD.
    In response to the NOPR, DOE received comments on two key issues 
affecting the LCC analysis: electricity price forecasts and lighting 
maintenance costs. Regarding electricity price forecasts, ACEEE asked 
DOE to confirm whether the Energy Information Administration (EIA) 
electricity price forecasts take into account well-documented 
regulatory-based changes in electricity prices and are not just based 
on responses to fuel cost forecasts. (ACEEE, Public Meeting Transcript, 
No. 27 at p. 82) In response, DOE notes that the EIA electricity price 
forecasts are developed through NEMS modeling and rely on a 
comprehensive series of supply- and demand-based modules integrated to 
capture the market dynamics for various energy sources, including oil, 
coal, and natural gas. These models also capture a wide range of 
consumption purposes, including such events as changes in the price and 
supplies of fossil fuels, developments in electricity markets, likely 
improvements in technology, and the impact of economic growth and 
various other regulatory impacts that affect market electricity prices. 
NEMS is regularly used to provide analyses to Congress and DOE. DOE 
believes that NEMS does attempt to capture many known regulatory 
changes.
    The Joint Comment stated that DOE should use forecasts for 
electricity prices other than the Annual Energy Outlook (AEO), and that 
electricity price mitigation effects of the proposed standard must be 
documented. (Joint Comment, No. 34 at p. 6) This comment addresses both 
the LCC and NIA analyses. While DOE considers AEO2008 reference case 
forecasts in its central case fuel price scenario, DOE reviewed LCC and 
PBP results based on both the AEO2008 high price and low price 
electricity forecasts and discusses the resulting differences in the 
TSD. While the Joint Comment suggests that DOE consider other 
forecasts, it does not point to specific forecast sources or provide 
justification for the selection or weighting of one forecast over the 
other. The AEO2008 high price forecast used in the commercial 
refrigeration equipment analysis provides sufficient insight into 
probable commercial electricity price variation based on existing data 
and current regulatory schemes.
    DOE considered reporting electricity price impacts but found that 
the uncertainty of price projections, together with the fairly small 
impact of the standards relative to total electricity demand, makes 
these price changes highly uncertain. As a result, they should not be 
weighed heavily in the decision about the standard level. Given the 
current complexity of utility regulation in the United States (with 
significant variances among states), it does not seem appropriate to 
attempt to measure impacts on infrastructure costs and prices where 
there is likely to be significant overlap.
    DOE develops estimates for repair and maintenance costs for 
commercial refrigeration equipment in the LCC analysis. In the August 
2008 NOPR, DOE assumed that maintenance costs are constant and do not 
vary with time. AHRI commented that the costs of maintenance do not 
remain constant, as the cost of HFC refrigerants is expected to 
increase by 300 percent to 400 percent over the next decade. (AHRI, No. 
33 at p. 6) DOE recognizes that refrigerant costs may increase. For 
remote condensing equipment, leakage during maintenance occurs 
throughout the entire refrigeration system, including store 
refrigeration piping and remote condensing units, and is expected to be 
approximately the same for all standard levels since little refrigerant 
is stored in the evaporator coils of remote-condensing commercial 
refrigeration equipment. The law also requires that any HFC refrigerant 
removed during maintenance must be captured (recovered), and in 
supermarkets it is often reused within the supermarket chain. 69 FR 
11946. Any loss of refrigerant during maintenance is essentially the 
same at all standard levels analyzed, and therefore does not affect the 
results of DOE's LCC or NPV analysis. In self-contained equipment, the 
refrigeration system is sealed and little leakage is expected to occur 
over the life of the equipment. Consequently, DOE did not revise the 
maintenance costs from the NOPR to account for future changes in 
refrigerant costs.
    DOE also included in the maintenance costs the cost of necessary 
lighting component replacements over the life of the commercial 
refrigeration equipment. DOE received comments on the lighting 
maintenance costs assumption for LED lamp fixtures. The California 
Utilities Joint Comment cited evidence from recent assessments, as well 
as the physical properties of LEDs, suggesting that 50,000 hours is 
likely a conservative estimate. Fixtures may actually be replaced less 
frequently than the 5.7 years assumed in the NOPR analysis. (California 
Utilities Joint Comment, No. 41 at pp. 10-11) The comment noted that 
the LED light output degrades over time and the amount of degradation 
is a function of the junction temperature of the LED. Reducing the 
junction temperature can result in increased time to failure.
    While DOE agrees with this assessment, the brightness of a 
particular LED chip and the corresponding heat rejection and

[[Page 1109]]

junction temperature are largely a function of power supplied by the 
LED driver circuitry. As such, manufacturers of LED fixtures can trade 
off brightness, total fixture cost, and design life for LED fixtures 
designed for commercial refrigeration equipment applications. The LED 
manufacturer equipment specification sheets that DOE examined for the 
final rule provide for a 50,000-hour life for the known commercial 
refrigeration equipment applications. Due to the recent availability of 
LED fixtures for use with commercial refrigeration equipment, there are 
few instances of installed LED light fixtures in this equipment 
exceeding the 50,000-hour specification. Therefore, DOE did not modify 
its LED fixture replacement cycle assumptions beyond the manufacturers' 
estimated life.
    DOE also received comments on using a rebuttable presumption 
payback period to establish the economic justification of an energy 
conservation standard level. Earthjustice commented that DOE does not 
provide any rationale for why it did not use or does not plan to use 
the rebuttable presumption payback period analysis to set the trial 
standard level for these products. Earthjustice stated that Congress 
specifically provided that once the rebuttable presumption payback 
period is satisfied for a trial standard level, no further economic 
justification would be necessary for DOE's selection of that TSL as the 
final standard. (Earthjustice, Public Meeting Transcript, No. 27 at p. 
88) The Joint Comment also stated that DOE should give greater 
consideration to the rebuttable presumption payback period when 
selecting an appropriate standard level, reflecting the intent of 
Congress in 42 U.S.C. section 6295(o)(2)(B)(iii) that the highest 
standard level with a 3-year payback constitutes the presumptive lowest 
standard level that DOE must adopt. (Joint Comment, No. 34 at pp. 3-4)
    DOE does consider both the rebuttable presumption payback criteria, 
as well as a full analysis including all seven relevant statutory 
criteria under 42 U.S.C. 6295(o)(2)(B)(i), when examining potential 
standard levels. DOE believes that the commenters may be 
misinterpreting the statutory provision in question. Earthjustice 
presents one possible reading of an ambiguous provision (i.e., that DOE 
need not look beyond the results of the rebuttable presumption 
inquiry), but DOE believes that such an approach is neither required 
nor appropriate, because it could ask the agency to ignore other 
relevant information that would affect the selection of the most 
stringent standard level that meets all applicable statutory criteria. 
The commenter's interpretation would essentially restrict DOE from 
being able to rebut the findings of the preliminary presumptive 
analysis. However, the statute contains no such restriction, and such 
an approach would hinder DOE's efforts to base its regulations on the 
best available information.
    Similarly, DOE believes that the Joint Comment misreads the statute 
in calling for a level that meets the rebuttable presumption test to 
serve as a minimum level when setting the final energy conservation 
standard. To do so would not only eliminate the ``rebuttable'' aspect 
of the presumption but would also lock in place a level that may not be 
economically justified based on the full complement of statutory 
criteria. DOE is already obligated under EPCA to select the most 
stringent standard level that meets the applicable statutory criteria, 
so there is no need to tie the same requirement to the rebuttable 
presumption.
    DOE also received a comment supporting its selection of commercial 
refrigeration equipment lifetimes. For the NOPR, DOE determined the 
lifetime of commercial refrigeration equipment by consulting industry 
experts, other interested parties, and literature on equipment 
lifetimes. The Joint Comment stated that DOE's assumptions in the NOPR 
regarding product life are reasonable. (Joint Comment, No. 34 at p. 2) 
Therefore, DOE has maintained the NOPR assumptions regarding product 
life for the final rule.

F. Shipments Analysis

    The shipments analysis develops future shipments for each class of 
commercial refrigeration equipment based on current shipments and 
equipment life assumptions, and takes into account the existing stock 
and expected growth of buildings using commercial refrigeration 
equipment. DOE received no comments on the shipments analysis or the 
resulting shipments during the NOPR. Therefore, DOE used the same 
shipments model for the final rule analysis as the NOPR.

G. National Impact Analysis

    The national impact analysis (NIA) assesses future NES and the 
national economic impacts of different efficiency levels. The analysis 
measures economic impacts using the NPV metric (i.e., future amounts 
discounted to the present) of total commercial customer costs, and 
savings expected to result from new standards at specific efficiency 
levels. For the final rule analysis, DOE used the same spreadsheet 
model used in the NOPR to calculate the energy savings and the national 
economic costs and savings from new standards, but with updates to 
specific input data. Unlike the LCC analysis, the NES spreadsheet does 
not use distributions for inputs or outputs. DOE examined sensitivities 
by applying different scenarios. DOE used the NES spreadsheet to 
perform calculations of national energy savings and NPV using the 
annual energy consumption and total installed cost data from the LCC 
analysis and estimates of national shipments for each of the 15 primary 
commercial refrigeration equipment classes. DOE forecasted the energy 
savings from each TSL from 2012 through 2042. DOE forecasted the energy 
cost savings, equipment costs, and NPV of benefits for all primary 
commercial refrigeration equipment classes from 2012 through 2062. The 
forecasts provided annual and cumulative values for all four output 
parameters.
    DOE calculated the NES by subtracting energy use under a standards 
scenario from energy use in a base case (no new standards) scenario. 
Energy use is reduced when a unit of commercial refrigeration equipment 
in the base case efficiency distribution is replaced by a more 
efficient piece of equipment. Energy savings for each equipment class 
are the same national average values as calculated in the LCC and 
payback period spreadsheet. However, these results are normalized on a 
per-unit-length basis by equipment class and applied to the total 
annual estimated shipments in terms of line-up length of all equipment 
with the class. Table IV-10 summarizes key inputs to the NIA analysis 
and the changes DOE made in the analysis for the final rule. Chapter 11 
of the TSD provides additional information about the NIA spreadsheet.

[[Page 1110]]



                  Table IV-10--Summary of National Energy Savings and Net Present Value Inputs
----------------------------------------------------------------------------------------------------------------
             Input data                        Description of NOPR analysis             Changes for final rule
----------------------------------------------------------------------------------------------------------------
Shipments..........................  Annual shipments from shipments model for 15     No change.
                                      equipment classes. Shipments model based on
                                      projected growth in building stock using
                                      commercial refrigeration equipment (new stock)
                                      and annual replacements to stock based on an
                                      equipment life. Equipment lifetime
                                      distribution based on a 10-year average life
                                      in large grocery and multi-line retail, and a
                                      15-year average life in small grocery and
                                      convenience stores (chapter 10, Shipments
                                      Analysis).
Effective Date of Standard.........  2012...........................................  No change.
Base Case Efficiencies.............  Distribution of base case shipments by           No change in methodology
                                      efficiency level.                                to derive base case
                                                                                       shipments by efficiency
                                                                                       level.
Standards Case Efficiencies........  Distribution of shipments by efficiency level    No change in methodology
                                      for each base case and each standards case.      to derive shipments by
                                      Annual market shares by efficiency level         efficiency level in each
                                      remain constant over time for the base case      standards case.
                                      and each standards case.
Annual Energy Consumption per        Annual weighted-average values are a function    No change in methodology.
 Linear Foot.                         of energy consumption level, which are           Energy consumption
                                      established in the engineering analysis          estimates reflect the
                                      (chapter 5 of the TSD). Converted to a per       updated final rule
                                      linear foot basis.                               engineering analysis.
Total Installed Cost per Linear      Annual weighted-average values are a function    No change in methodology.
 Foot.                                of energy consumption level (chapter 8 of the    Installed costs reflect
                                      TSD). Converted to a per linear foot basis.      the updated final rule
                                                                                       LCC.
Repair Cost per Linear Foot........  Annual weighted-average values are constant in   No change in methodology.
                                      real dollar terms for each energy consumption    Repair costs reflect the
                                      level (chapter 8 of the TSD). Converted to a     updated final rule LCC
                                      per linear foot basis.                           values.
Maintenance Cost per Linear Foot...  Annual weighted-average value equals $160 in     No change.
                                      2007$ (chapter 8 of the TSD), plus lighting
                                      maintenance cost. Converted to a per linear
                                      foot basis.
Escalation of Electricity Prices...  EIA AEO2007 forecasts (to 2030) and              EIA AEO2008 forecasts (to
                                      extrapolation for beyond 2030 (chapter 8 of      2030) and extrapolation
                                      the TSD).                                        for beyond 2030 (chapter
                                                                                       8 of the TSD).
Electricity Site-to-Source           Conversion varies yearly and is generated by     Conversion factor varies
 Conversion.                          DOE/EIA's NEMS program (a time series            yearly and is generated
                                      conversion factor; includes electric             by EIA's NEMS model.
                                      generation, transmission, and distribution       Includes the impact of
                                      losses) based on AEO2007.                        electric generation,
                                                                                       transmission, and
                                                                                       distribution losses based
                                                                                       on AEO2008.
Discount Rate......................  3 and 7 percent real...........................  No change.
Present Year.......................  Future costs are discounted to 2008............  No change
Rebound Effect.....................  A rebound effect (due to changes in shipments    No change.
                                      resulting from standards) was not considered
                                      in the NIA.
----------------------------------------------------------------------------------------------------------------

    The modifications DOE made to the NES and NIA analyses for the 
final rule primarily reflect updates to the same data sources used in 
the NOPR, but not changes in methodology. In addition, the underlying 
input data on equipment costs and energy savings by TSL are based on 
the LCC analysis results as revised in the final rule.
    For the final rule, DOE developed marginal site-source conversion 
factors that relate the national electrical energy savings at the point 
of use to the fuel savings at the power plant. These factors use the 
NEMS model and the examination of the corresponding energy savings from 
standards scenarios considered in DOE's utility analysis (chapter 14 of 
the TSD). The conversion factors vary over time, due to projected 
changes in electricity generation sources (i.e., the power plant types 
projected to provide electricity to the country) and power plant 
dispatch scenarios. DOE revised the stream of conversion factors based 
on the final rule utility impacts analysis and using a version of NEMS 
consistent with AEO2008. DOE also updated the electricity price 
forecasts used in the NIA to reflect forecasts found in AEO2008 
compared to AEO2007.
    DOE did not receive information to support revising the shipments 
analysis or the methodology used in the NIA to estimate future 
shipments by efficiency level. DOE requested input on this methodology 
or on additional data to estimate future shipments. True commented that 
because so many different features and options can degrade a product's 
efficiency, True cannot afford to test every permutation's efficiency. 
Traditionally, therefore, True tests the most severe case, which 
includes all the options, and makes sure it can exceed the standard. As 
a result, the units shipped out are often more efficient than the 
testing would indicate. (True, Public Meeting Transcript, No. 27 at p. 
119) DOE acknowledges this comment, but did not receive sufficient 
detail to address this concern in the final rule analysis for 
individual commercial refrigeration equipment classes. Because the 
distribution of efficiencies of all TSLs as well as the baseline would 
be similarly affected by some customers removing specific energy 
consuming options (e.g., shelf lighting) from their purchased products, 
the impact of this particular issue on the potential national energy 
savings of one TSL over another may be insignificant.
    To discount future impacts, DOE used discount rates of both 7 
percent and 3 percent, in accordance with the Office of Management and 
Budget (OMB)'s guidelines (OMB Circular A-4, section E, Regulatory 
Analysis (September 17, 2003)). ASAP commented that DOE leans too 
heavily on the 7-percent discount rate, and that OMB has DOE looking at 
both the 3-percent and 7-percent discount rates. ASAP stated that DOE 
should be giving primacy to the lower discount rate, which is the 
societal discount rate--the time value of the society as a whole. 
(ASAP, Public Meeting Transcript, No. 27 at pp. 20-21 and p. 128) PG&E 
stated that a 3-percent discount rate is used for the California Energy 
Commission workshops on efficiency, and that it supports the 3-

[[Page 1111]]

percent rate for the Federal rulemaking. (PG&E, Public Meeting 
Transcript, No. 27 at p. 131) The Joint Comment stated that DOE 
improperly weighs the 7-percent discount rate more than the 3-percent 
discount rate. The Joint Comment noted that DOE should use the 3-
percent discount rate because it is the required social discount rate 
and because the actual weighted average cost of capital is lower than 7 
percent. (Joint Comment, No. 34 at p. 6)
    DOE reports and uses both 3-percent and 7-percent discount rates in 
its analysis of net present value. OMB's guidance to Federal agencies 
for developing regulatory analysis (OMB Circular A-4, September 17, 
2003) \14\ references OMB Circular A-94 \15\ for the development of 
discount rates for regulatory analysis. OMB Circular A-94 states that, 
as a default position, constant-dollar benefit-cost analyses of 
proposed investments and regulations should report net present value 
and other outcomes determined using a real discount rate of 3 percent. 
The 7-percent rate is an estimate of the average before-tax rate of 
return to private capital in the U.S. economy. It is a broad measure 
that reflects the returns to real estate and small business capital as 
well as corporate capital. It approximates the opportunity cost of 
capital, and it is the appropriate discount rate whenever the main 
effect of a regulation is to displace or alter the use of capital in 
the private sector. OMB A-94 states that regulatory analyses should 
show the sensitivity of the discounted net present value and other 
outcomes to variations in the discount rate. The importance of these 
alternative calculations will depend on the specific economic 
characteristics of the program under analysis. OMB A-4 notes that the 
effects of regulation do not always fall exclusively or primarily on 
the allocation of capital. When regulation primarily and directly 
affects private consumption (e.g., through higher consumer prices for 
goods and services), a lower discount rate is appropriate. The 
alternative most often used is sometimes called the social rate of time 
preference, or the rate at which society discounts future consumption 
flows to their present value. To represent these cases, OMB recommends 
using the rate the average saver uses to discount future consumption as 
the measure of the social rate of time preference, approximating this 
with the real rate of return on long-term Government debt (e.g., the 
yield on Treasury notes minus the annual rate of change in the Consumer 
Price Index), which has averaged about 3 percent on a pre-tax basis for 
the last 30 years. For the commercial refrigeration equipment 
rulemaking in particular, DOE notes that the purchasers of commercial 
refrigeration equipment are indeed commercial businesses and not 
``savers.'' Regarding the comment that the average cost of capital 
calculated for businesses purchasing commercial refrigeration equipment 
was less than 7 percent, DOE notes that the average cost of capital 
calculated for the LCC analysis is the after-tax cost of capital. OMB 
A-4 specifically notes that pre-tax rates of return better measure 
society's gains from investment. This is because corporate capital, in 
particular, pays an additional layer of taxation: The corporate income 
tax. This tax requires corporate capital to earn a higher pre-tax rate 
of return in order to provide investors with similar after-tax rates of 
return compared with non-corporate investments. Based on the guidance 
provided in OMB A-4, DOE considers both 3-percent and 7-percent 
discount rates in the NIA analysis.
---------------------------------------------------------------------------

    \14\ http://www.whitehouse.gov/omb/circulars/a004/a-4.pdf.
    \15\ http://www.whitehouse.gov/omb/circulars/a094/a094.html.
---------------------------------------------------------------------------

    ASAP stated that discount rates should not be applied to quads 
because a discount rate is a financial instrument and a quad is a 
physical quantity. (ASAP, Public Meeting Transcript, No. 27 at p. 22) 
DOE understands ASAP's concern about discounting of physical 
quantities. Unlike economic factors that are discounted into the 
future, physical quantities are not discounted because they do not 
change over time. DOE reports the undiscounted energy savings in Table 
VI-31 of today's final rule.

H. Life-Cycle Cost Sub-Group Analysis

    In analyzing the potential impact of new or amended standards on 
commercial customers, DOE evaluates the impact on identifiable groups 
(i.e., sub-groups) of customers, such as different types of businesses 
that may be disproportionately affected by a National standard level. 
For this rulemaking, DOE identified independent small grocery and 
convenience stores as a commercial refrigeration equipment customer 
sub-group that could be disproportionately affected, and examined the 
impact of proposed standards on this group. DOE determined the impact 
on this commercial refrigeration equipment customer sub-group using the 
LCC spreadsheet model. DOE conducted the LCC and PBP analyses for 
commercial refrigeration equipment customers represented by the 
subgroup. DOE did not receive comments on its identification of this 
class of users as the key sub-group or on the assumptions applied to 
those sub-groups. DOE relied on the same methodology outlined in the 
NOPR for the final rule analysis. The results of DOE's LCC sub-group 
analysis are summarized in section VI.C.2.e and described in detail in 
chapter 12 of the TSD.

I. Manufacturer Impact Analysis

    DOE performed a manufacturer impact analysis (MIA) to estimate the 
financial impact of energy conservation standards on manufacturers of 
commercial refrigeration equipment, and to assess the impact of such 
standards on employment and manufacturing capacity. DOE conducted the 
MIA for commercial refrigeration equipment in three phases. Phase 1, 
Industry Profile, consisted of preparing an industry characterization, 
including data on market share, sales volumes and trends, pricing, 
employment, and financial structure. Phase 2, Industry Cash Flow 
Analysis, focused on the industry as a whole. In this phase, DOE used 
the GRIM to prepare an industry cash-flow analysis. Using publicly 
available information developed in Phase 1, DOE adapted the GRIM's 
generic structure to perform an analysis of commercial refrigeration 
equipment energy conservation standards. In Phase 3, Sub-Group Impact 
Analysis, DOE conducted interviews with manufacturers representing the 
majority of domestic commercial refrigeration equipment sales. This 
group included large and small manufacturers, providing a 
representative cross-section of the industry. During these interviews, 
DOE discussed engineering, manufacturing, procurement, and financial 
topics specific to each company and obtained each manufacturer's view 
of the industry. The interviews provided valuable information DOE used 
to evaluate the impacts of an energy conservation standard on 
manufacturer cash flows, manufacturing capacities, and employment 
levels.
    The GRIM inputs consist of the commercial refrigeration industry's 
cost structure, shipments, and revenues. This includes information from 
many of the analyses described above, such as manufacturing costs and 
selling prices from the engineering analysis and shipments forecasts 
from the NES.
    The GRIM uses the manufacturer production costs in the engineering 
analysis to calculate the MSPs for each equipment class at each TSL. By 
multiplying the production costs by different sets of markups, DOE 
derives the MSPs used to calculate industry

[[Page 1112]]

revenues. Following the NOPR, DOE revised its engineering cost curves 
to derive new manufacturer production costs. DOE used these updated 
production costs in the GRIM for the final rule.
    The GRIM estimates manufacturer revenues based on total-unit-
shipment forecasts and the distribution of these shipments by 
efficiency. Changes in the efficiency mix at each standard level are a 
key driver of manufacturer finances. For the final rule analysis, DOE 
used the total shipments and efficiency distribution found in the final 
rule NES. For additional detail on the manufacturer impact analysis, 
refer to chapter 13 of the TSD.

J. Utility Impact Analysis

    The utility impact analysis estimates the effects of reduced energy 
consumption due to improved equipment efficiency on the utility 
industry. This analysis compares forecast results for a case comparable 
to the AEO2008 reference case and forecast results for policy cases 
incorporating each of the commercial refrigeration equipment TSLs.
    DOE analyzed the effects of proposed standards on electric utility 
industry generation capacity and fuel consumption using a variant of 
EIA's NEMS. EIA uses NEMS to produce its AEO, a widely recognized 
baseline energy forecast for the United States. DOE used a variant 
known as NEMS-BT. The NEMS-BT is run similarly to the AEO2008 NEMS, 
except that commercial refrigeration equipment energy usage is reduced 
by the amount of energy (by fuel type) saved due to the TSLs. DOE 
obtained the inputs of national energy savings from the NES spreadsheet 
model. In response to the August 2008 NOPR, DOE did not receive 
comments directly on the methodology used for the utility impact 
analysis. DOE revised the final rule inputs to use the NEMS-BT 
consistent with the AEO2008 and to use the NES impacts developed in the 
commercial refrigeration equipment final rule analysis.
    In the utility impact analysis, DOE reported the changes in 
installed capacity and generation by fuel type that result for each 
TSL, as well as changes in end-use electricity sales. Chapter 14 of the 
TSD provides details of the utility analysis methods and results.

K. Employment Impact Analysis

    DOE considers direct and indirect employment impacts when 
developing a standard. In this case, direct employment impacts are any 
changes in the number of employees for, commercial refrigeration 
equipment manufacturers, their suppliers, and related service firms. 
Indirect impacts are those changes in employment in the larger economy 
that occur due to the shift in expenditures and capital investment 
caused by the purchase and operation of more efficient commercial 
refrigeration equipment. In this rulemaking, the MIA addresses direct 
impacts (chapter 13 of the TSD), and the employment impact analysis 
addresses indirect impacts (chapter 15 of the TSD).
    Indirect employment impacts from commercial refrigeration equipment 
standards consist of the net jobs created or eliminated in the national 
economy, other than in the manufacturing sector being regulated, as a 
consequence of: (1) Reduced spending by end users on electricity 
(offset to some degree by the increased spending on maintenance and 
repair), (2) reduced spending on new energy supply by the utility 
industry, (3) increased spending on the purchase price of new 
commercial refrigeration equipment, and (4) the effects of those three 
factors throughout the economy. DOE expects the net monetary savings 
from standards to be redirected to other forms of economic activity. 
DOE also expects these shifts in spending and economic activity to 
affect the demand for labor.
    DOE used the same methodology described in the August 2008 NOPR to 
estimate indirect national employment impacts using an input/output 
model of the U.S. economy, called ImSET (Impact of Sector Energy 
Technologies), which was developed by DOE's Building Technologies 
Program. 73 FR 50072, 50107-108. The ImSET model estimates changes in 
employment, industry output, and wage income in the overall U.S. 
economy resulting from changes in expenditures in various economic 
sectors. DOE estimated changes in expenditures using the NES 
spreadsheet. ImSET then estimated the net national indirect employment 
impacts of potential commercial refrigeration equipment efficiency 
standards on employment by sector.
    In response to the August 2008 NOPR, DOE received several comments 
on the employment impact analysis. ASAP commented that the discussion 
of the employment benefits resulting from the net increase in jobs 
follows a pattern of DOE trivializing these benefits in the rulemakings 
by stating that they are so small that they would be imperceptible in 
national labor statistics and might be offset by other unanticipated 
effects on employment. ASAP stated that it is important that DOE keep 
performing the employment analysis given the cumulative impact of 
possible DOE rulemakings over the next 4 years. (ASAP, Public Meeting 
Transcript, No. 27 at p. 161)
    The Joint Comment also stated that TSL 5 would create more jobs 
than TSL 4, and that DOE cannot reject the difference as statistically 
insignificant because it must consider the combined effect of all 
rulemakings. (Joint Comment, No. 34 at p. 5) The Joint Comment further 
stated that DOE should consider indirect job creation as a serious 
factor weighing in favor of stronger standards. (Joint Comment, No. 34 
at p. 5)
    Earthjustice noted that both indirect and direct employment 
benefits are shown to provide positive employment in the respective 
employment and MIA analyses and that DOE should consider this in the 
final rule. (Earthjustice, Public Meeting Transcript, No. 27 at p. 166)
    DOE considers the employment impacts without quantifying the net 
economic value of such impacts. DOE agrees that the indirect employment 
analysis indicates that new energy conservation standards for 
commercial refrigeration equipment could increase the demand for labor 
in the economy and result in additional employment, a net benefit to 
society that DOE considers in establishing standards for commercial 
refrigeration equipment. Chapter 15 of the TSD describes and provides 
results for the employment impact analysis.

L. Environmental Assessment

    DOE has prepared an environmental assessment (EA) pursuant to the 
National Environmental Policy Act and the requirements under 42 U.S.C. 
6295(o)(2)(B)(i)(VI) and 6316(a) to determine the environmental impacts 
of the standards being established in today's final rule. Specifically, 
DOE estimated the reduction in total emissions of CO2 using 
the NEMS-BT computer model. DOE calculated a range of estimates for 
reduction in NOX emissions and mercury (Hg) emissions using 
current power sector emission rates. However, the EA does not include 
the estimated reduction in power sector impacts of sulfur dioxide 
(SO2), because DOE has determined that any such reduction 
resulting from an energy conservation standard would not affect the 
overall level of SO2 emissions in the United States due to 
the presence of national caps on SO2 emissions as addressed 
below (see chapter 16 of the TSD).
    The NEMS-BT is run similarly to the AEO2008 NEMS, except the energy 
use is reduced by the amount of energy

[[Page 1113]]

saved due to the TSLs. DOE obtained the inputs of national energy 
savings from the NIA spreadsheet model. For the EA, the output is the 
forecasted physical emissions. The net benefit of the standard is the 
difference between emissions estimated by NEMS-BT and the AEO2008 
reference case. The NEMS-BT tracks CO2 emissions using a 
detailed module that provides results with a broad coverage of all 
sectors and inclusion of interactive effects.
    The Clean Air Act Amendments of 1990 set an emissions cap on 
SO2 for all power generation. Attaining this target, 
however, is flexible among generators and is enforced through emissions 
allowances and tradable permits. Because SO2 emissions 
allowances have value, generators will almost certainly use them, 
although not necessarily immediately or in the same year with and 
without a standard in place. In other words, with or without a 
standard, total cumulative SO2 emissions will always be at 
or near the ceiling, while there may be some timing differences between 
yearly forecasts. Thus, it is unlikely that there will be an 
SO2 environmental benefit from electricity savings as long 
as there is enforcement of the emissions ceilings.
    Although there may not be an actual reduction in SO2 
emissions from electricity savings, there still may be an economic 
benefit from reduced demand for SO2 emission allowances. 
Electricity savings decrease the generation of SO2 emissions 
from power production, which can decrease the need to purchase or 
generate SO2 emissions allowance credits, and decrease the 
costs of complying with regulatory caps on emissions.
    Like SO2, future emissions of NOX and Hg 
would have been subject to emissions caps under the Clean Air 
Interstate Act (CAIR) and Clean Air Mercury Rule (CAMR). However, as 
discussed in section VI.C.6, a Federal court has vacated these rules. 
The NEMS-BT model used for today's final rule assumed that both 
NOX and Hg emissions would be subject to CAIR and CAMR 
emissions caps. In the case of NOX emissions, CAIR would 
have permanently capped emissions in 28 eastern states and the District 
of Columbia. Because the NEMS-BT modeling assumed NOX 
emissions would be subject to CAIR, DOE established a range of 
NOX reductions based on the use of a NOX low and 
high emissions rates (in kt of NOX emitted per terawatt-
hours (TWh) of electricity generated) derived from the AEO2008. To 
estimate the reduction in NOX emissions, DOE multiplied 
these emission rates by the reduction in electricity generation due to 
the standards considered. However, because the emissions caps specified 
by CAMR would have applied to the entire country, DOE was unable to use 
NEMS-BT model to estimate the physical quantity changes in mercury 
emissions due to energy conservation standards. To estimate mercury 
emission reductions due to standards, DOE used an Hg emission rate (in 
metric tons of Hg per energy produced) based on AEO2008. Because 
virtually all mercury emitted from electricity generation is from coal-
fired power plants, DOE based the emission rate on the metric tons of 
mercury emitted per TWh of coal-generated electricity. To estimate the 
reduction in mercury emissions, DOE multiplied the emission rate by the 
reduction in coal-generated electricity associated with standards 
considered.
    In comments on the August 2008 NOPR, ASAP stated that it was 
important for DOE to consider the economic impact calculations for 
carbon, noting that the economic savings are significant. In addition, 
until the CRE and packaged terminal air conditioner and heat pump (PTAC 
and PTHP) NOPRs, ASAP did not see that economic values for carbon 
emissions savings were factored into the analysis in a way that could 
affect decision making. (ASAP, Public Meeting Transcript, No. 27 at p. 
172) On the other hand, AHRI believes DOE has no statutory obligation 
to monetize CO2 benefits. (AHRI, Public Meeting Transcript, 
No. 27 at p. 173)
    AHRI further commented that if DOE decides to monetize 
CO2 benefits, then it should account for CO2 
emissions that will result from manufacturing more efficient products. 
For example, DOE should consider the CO2 emissions resulting 
from additional copper to be mined and incorporated into the finished 
product. (AHRI, Public Meeting Transcript, No. 27 at p. 173) True also 
commented on types of manufacturing processes that should be considered 
in the emissions analysis. True stated that the most significant impact 
of commercial refrigeration equipment on the environment is from 
welding agents and refrigerants. True further explained with the global 
warming potentials (GWPs) of some of these substances at 1,300, 1,500, 
and 3,800, the impacts are astronomically greater than other impacts 
the industry faces. (True, Public Meeting Transcript, No. 27 at p. 174)
    On the contrary, ASAP emphasized that the congressional deadline of 
December 31, 2008, means that ``paralysis by analysis'' is not an 
option at this point in this rulemaking and that it is incumbent upon 
AHRI to demonstrate that any proposed analysis changes would be 
significant. (ASAP, Public Meeting Transcript, No. 27 at p. 173) ACEEE 
commented that for buildings and the equipment used in them (not 
specific for this class of equipment), the energy use during the 
operating life is roughly 85 percent of the total lifecycle energy. 
Also, the incremental energy change from increased use of a largely 
recycled metals stock is likely have a small impact on this analysis. 
(ACEEE, Public Meeting Transcript, No. 27 at p. 173)
    Several interested parties provided comments on the economic value 
of CO2 used in DOE's monetization of carbon emissions for 
the August 2008 NOPR and the final rule for PTACs and PTHPs (73 FR 
58772, October 7, 2008). ASAP stated that the low range for 
monetization of carbon emission reductions should not be zero. (ASAP, 
Public Meeting Transcript, No. 27 at p. 23) AHRI stated that DOE should 
not speculate on the value of CO2 emissions because it has 
no statutory obligation to do so and that any value DOE used would be 
an estimate. There is no consensus on any single estimate of the value 
of CO2 emissions. Therefore, DOE should not indulge in 
speculation to determine a value when it has no statutory obligation to 
do so. (AHRI, No. 33 at p. 6)
    Earthjustice commented that the upper and lower bounds of the 
values DOE uses for its carbon emissions are arbitrarily low. 
(Earthjustice, No. 38 at pp. 7-14) Specifically, Earthjustice stated 
that by using the value of the social cost of carbon (SCC) estimated in 
Dr. Richard Tol's 2005 meta-analysis, DOE excluded critical damages and 
made optimistic assumptions that bias the damage cost downwards. 
(Earthjustice, No. 38 at p. 8) Earthjustice noted that Tol released an 
update of his 2005 meta-analysis in September 2007, which reports an 
increase in his peer-reviewed mean estimate of SCC from $14 to $20/ton 
CO2 and from $43 to $71/ton carbon.\16\ Earthjustice also 
asserted that the use of Tol's mean as an upper bound is inconsistent 
with sound risk analysis and distributions of climate damage functions, 
leading to systematic undervaluation of damages. (Earthjustice, No. 38 
at p. 9) Lastly, Earthjustice noted that Tol's estimate relies 
primarily on estimates that did not use the currently accepted climate 
change discounting procedure of

[[Page 1114]]

declining discount rate over time, and it fails to recognize the 
distinction between the ways in which scarcity affects the value of 
normal goods and environmental goods. (Earthjustice, No. 38 at p. 11)
---------------------------------------------------------------------------

    \16\ Tol, R.S.J. (2007) The social cost of carbon: trends, 
outliers, and catastrophes. Research Unit Sustainability and Global 
Change, Working Paper FNU-144, Hamburg University and Centre for 
Marine and Atmospheric Science, Hamburg, Germany.
---------------------------------------------------------------------------

    AHRI noted that Congress is now engaged in debating a possible cap 
and trade program for the United States. The size of the allowance cap 
first set by such legislation or by implementing regulations and the 
pace of reduction of the emission allowances will largely determine the 
unit price or value of CO2 emissions reductions. AHRI stated 
that it would be an arbitrary decision on DOE's part to rely on 
valuations identified in the Intergovernmental Panel on Climate Change 
(IPCC) or valuations used in the European Union (EU) cap and trade 
program when the United States has not yet set an emissions cap itself. 
Further, AHRI stated that DOE should not allow evaluation of 
environmental impacts to negate or render moot what has always been, 
and should remain, the core analysis in appliance standards 
rulemakings, i.e., consumer payback and life-cycle cost analyses. 
(AHRI, No. 33 at p. 6) NRDC also stated that the cost of carbon 
emissions will become an issue with California adopting a Climate 
Program and the Regional Greenhouse Gas Initiative in the Northeast. 
(NRDC, Public Meeting Transcript, No. 27 at p. 105)
    Earthjustice's written comment states that DOE's monetization of 
CO2 emissions should reflect the potential U.S. legislation 
that would put a national cap on CO2 emissions. This 
includes examining the effect of the standard in reducing allowance 
prices and the benefit of reduced emissions in the NPV. This is 
Earthjustice's primary suggested consideration for DOE; otherwise, DOE 
should take into account existing regional CO2 caps when 
monetizing CO2. Finally, the most basic consideration DOE 
must make, according to Earthjustice, is to economically account for 
the avoided environmental harm from CO2 emissions. 
(Earthjustice, No. 38 at pp. 2-6)
    The Joint Comment stated that DOE should incorporate the 
monetization of carbon emission reductions in the life-cycle cost 
analysis and the national impact analysis. The Joint Comment further 
stated that DOE's exclusion of carbon monetization in the LCC and NIA 
results in a systematic underestimation of benefits of new energy 
conservation standards. (Joint Comment, No. 34 at p. 6) Earthjustice 
stated that DOE does not account for the economic value of 
CO2 emissions reductions resulting from efficiency standards 
in any meaningful way. Although DOE has begun estimating a range of 
values for carbon emissions, it then ignores these values when choosing 
the new standard level. Earthjustice stated that DOE must address these 
issues by (1) accounting for the value of emissions reductions 
resulting from a standard in the economic analyses, the LCC, and NIA; 
and (2) using reasonable assumptions and sources when determining the 
value of carbon emission reductions because the current sources 
evaluated are inadequate. (Earthjustice, No. 38 at p. 1) Specifically, 
Earthjustice stated that DOE should quantify the effect of a 
CO2 emission cap on energy prices in the LCC analysis. 
(Earthjustice, No. 38 at p. 2)
    DOE has made several additions to its monetization of environmental 
emissions reductions in today's rule, which are discussed in section 
VI.C.6. DOE has chosen to continue to report these benefits separately 
from the net benefits of energy savings. Nothing in EPCA or in the 
National Environmental Policy Act (NEPA) requires that the economic 
value of emissions reduction be incorporated in the net present value 
analysis of energy savings. Unlike energy savings, the economic value 
of emissions reduction is not priced in the marketplace. However, DOE 
will consider both values when weighing the benefits and burdens of 
standards.
    Although this rulemaking does not affect SO2 emissions, 
there are markets for SO2 emissions allowances. The market 
clearing price of SO2 emissions is roughly the marginal cost 
of meeting the regulatory cap, not the marginal value of the cap 
itself. Further, because national SO2 emissions are 
regulated by a cap and trade system, the need to meet these caps is 
already included in the price of energy or energy savings. With a cap 
on SO2, the value of energy savings already includes the 
value of SO2 control for those consumers experiencing energy 
savings. The economic cost savings associated with SO2 
emissions caps is approximately equal to the change in the price of 
traded allowances resulting from energy savings multiplied by the 
number of allowances that would be issued each year. That calculation 
is uncertain because the energy savings for commercial refrigeration 
equipment are so small relative to the entire electricity generation 
market that the resulting emissions savings would have almost no impact 
on price formation in the allowances market. These savings would most 
likely be outweighed by uncertainties in the marginal costs of 
compliance with SO2 emissions caps.
    For those emissions currently not priced (CO2, Hg, and 
NOX), only a range of estimated economic values based on 
environmental damage studies of varying quality and applicability is 
available. DOE is weighing these values separately and is not including 
them in the NPV analysis.

V. Discussion of Other Comments

    Since DOE opened the docket for this rulemaking, it has received 
more than 100 comments from a diverse set of parties, including 
manufacturers and their representatives, trade associations, 
wholesalers and distributors, energy conservation advocates, and 
electric utilities. Section IV of this preamble discusses comments DOE 
received on the analytic methodologies it used. Additional comments DOE 
received in response to the August 2008 NOPR addressed the information 
DOE used in its analyses, results of and inferences drawn from the 
analyses, impacts of standards, the merits of the different TSLs and 
standards options DOE considered, and other issues affecting adoption 
of standards for commercial refrigeration equipment. DOE addresses 
these comments in this section.

A. Information and Assumptions Used in Analyses

1. Market and Technology Assessment
a. Data Sources
    DOE summarized its analysis for energy consumption in chapter 3 of 
the NOPR TSD. Traulsen stated that there are problems with the use of 
energy consumption data reported to government agencies because of 
inaccurate data reporting. Traulsen cited several problems with U.S. 
Environmental Protection Agency's (EPA's) ENERGY STAR database for 
self-contained commercial solid-door food service refrigerators and 
freezers, including equipment listed in the database that does not 
conform to the ENERGY STAR specifications. Traulsen suggested that 
sources such as these not be used in the technical analyses because of 
the errors they contain. (Traulsen, No. 25 at p. 1)
    The ENERGY STAR requirements for commercial solid door 
refrigerators and freezers cover self-contained commercial 
refrigerators, freezers, and refrigerator-freezers that have solid 
doors, which are not covered in this commercial refrigeration equipment 
rulemaking. In terms of equipment classes, there is no overlap between 
the ENERGY STAR program and DOE's rulemaking on commercial 
refrigeration

[[Page 1115]]

equipment, except for commercial ice-cream freezers. EPA's commercial 
ice-cream freezer equipment class does not coincide with DOE's 
commercial ice-cream freezer equipment class because they are defined 
differently and tested at different rating temperatures. In addition, 
DOE understands that Traulsen has a large market in the commercial 
refrigeration industry for self-contained commercial refrigerator and 
freezers with doors. However, these equipment classes are not covered 
in this rulemaking. Also, DOE did not use energy consumption databases 
from other government agencies such as EPA. Rather, DOE conducted its 
own evaluation of energy consumption data for existing equipment from 
major manufacturers and compiled a performance database. The primary 
source of information for the database was equipment data sheets that 
were publicly available on manufacturers' Web sites. From these data 
sheets, equipment information such as total refrigeration load, 
evaporator temperature, lighting power draw, defrost power draw, and 
motor power draw allowed determination of calculated daily energy 
consumption (CDEC) according to the DOE test procedure. See chapter 3 
of the TSD for additional information on market performance data.
b. Beverage Merchandisers
    In response to the NOPR, Coca-Cola submitted a comment questioning 
the market share and shipment data in DOE's analysis. Coca-Cola stated 
that its own purchases contradict DOE's figures. According to Coca-
Cola, vertical closed transparent, self-contained, medium temperature 
(VCT.SC.M) equipment makes up the majority of Coca-Cola's purchases. 
DOE's exclusion of this class accounts for the differences between 
Coca-Cola's purchases and the number of units shipped that DOE reported 
in the engineering analysis. (Coca-Cola, No. 21 at p. 1)
    As explained in the July 2007 ANOPR, VCT.SC.M equipment is 
currently covered by energy conservation standards established in EPCA. 
72 FR 41176. Therefore, self-contained glass-front beverage 
merchandisers (beverage coolers), which are included in the VCT.SC.M 
equipment class, are not covered in this commercial refrigeration 
equipment rulemaking. As a result, all the shipment and market share 
data reported in the engineering analysis are valid for the classes of 
commercial refrigeration equipment covered in this rulemaking.
2. Engineering Analysis
a. Design Options
    In the NOPR, DOE reevaluated the list of design options remaining 
after the ANOPR screening analysis. Based on public comments, DOE made 
the following design option changes in the NOPR and did not receive any 
further comment for the final rule: increasing insulation thickness as 
a design option; revising anti-sweat heater power values for certain 
equipment classes with glass doors; and revising assumptions made to 
estimate changes in cost and efficiency for high-efficiency, single-
speed compressors used in self-contained equipment. 73 FR 50087. 
However, there were certain design options for which DOE did receive 
comments and that warranted changes for the final rule. Specifically, 
LED cost and efficiency assumptions were updated.
    For the NOPR, DOE could only identify LED luminaires on the market 
for use in vertical refrigerated cases with transparent doors (i.e., 
the VCT equipment family). DOE used these LED luminaires as the basis 
for LED lighting for open refrigerated cases, because DOE could not 
identify LED luminaires for use in open refrigerated cases. However, 
when DOE reexamined the current state of LED lighting for the final 
rule, DOE identified LED luminaries on the market for use in open 
refrigerated cases. DOE updated the LED lighting prices for open 
refrigerated cases using these newly identified LED luminaires.
    For the final rule, DOE also updated the LED prices for lighting 
used in the VCT equipment families using the actual reduction in the 
lumen-based price of LED chips reported in DOE's Multi-Year Program 
Plan between 2007 and 2008. DOE's 2007 Multi-Year Program Plan reported 
that the latest available OEM device price for LED chips was $35/
kilolumen.\17\ DOE's 2008 Multi-Year Program Plan reported that the 
latest available OEM device price for LED chips was $25/kilolumen.\18\ 
This equates to a 29-percent reduction in lumen-based LED chip costs 
from 2007-2008. For the final rule, DOE applied this 29-percent 
reduction in lumen-based LED chip costs to the LED lighting for the VCT 
equipment families, representing about a 9-percent reduction in LED 
system costs, assuming the costs of the power supply and LED fixtures 
did not change from the values used in the NOPR engineering analysis. 
For additional detail regarding LED costs, see section IV.B.2.a.
---------------------------------------------------------------------------

    \17\ U.S. Department of Energy, Solid-State Lighting Research 
and Development, Multi-Year Program Plan FY08-FY13.
    \18\ U.S. Department of Energy, Solid-State Lighting Research 
and Development, Multi-Year Program Plan FY09-FY14.
---------------------------------------------------------------------------

    In addition to expected price reductions, DOE received comments on 
the unique performance advantages of LED systems following the NOPR. 
Philips stated that LED systems are virtually maintenance-free. Without 
maintenance costs, LED payback periods amount to roughly half of their 
life expectancy. (Philips, No. 29 at pp. 1-6) Philips also claimed that 
LED efficacy (lm/W) is expected to increase. Increases in efficacy 
effectively reduce the operational costs of the system by allowing for 
less energy consumption while maintaining output. (Philips, No. 29 at 
p. 1)
    As mentioned above, for today's final rule, DOE reexamined the LED 
lighting assumptions that were used in the NOPR. DOE identified more 
efficacious LED lighting options for use in both vertical refrigerated 
cases with transparent doors and open refrigerated cases than the LED 
lighting identified in the NOPR analysis. Based on the new LED lighting 
options, DOE updated case lighting configurations for each equipment 
class specific to LED lighting in the engineering analysis. For more 
detail about the updated LED lighting performance assumptions, see 
chapter 5 and appendix B of the TSD.
    In addition to the life-cycle benefits afforded by LEDs, the 
California Utilities Joint Comment stated that LED systems have a 
higher degree of controllability, which gives the systems dimming, cold 
start, and short cycling capabilities. (California Utilities Joint 
Comment, No. 41 at p. 3) ASAP added that these features allow LED 
systems to be turned off in situations in which fluorescents could not. 
This equates to improved energy efficiency for commercial refrigeration 
equipment that uses LED lighting. (ASAP, Public Meeting Transcript, No. 
27 at p. 106)
    The enhanced controllability of LED lighting can offer multiple 
benefits over fluorescent lighting. Specifically, the ability to reduce 
the operating time of LED lighting can lead to increased energy 
efficiency for commercial refrigeration equipment. Therefore, in the 
July 2007 ANOPR, DOE specifically requested public comment on using 24 
hours as the case lighting operational hours. 72 FR 41187. In the 
August 2008 NOPR, based on public comment, DOE determined that 24 hours 
was an adequate assumption for case lighting operating hours regardless 
of lighting type. 73 FR 50095. In addition, the test procedure DOE 
adopted for commercial refrigeration equipment, ANSI/ARI Standard 1200-
2006, is a steady-state

[[Page 1116]]

test procedure, which is unable to capture significant energy savings 
due to dimming controls or motion sensors. 71 FR 71370.
    Following the NOPR, some manufacturers expressed concerns that 
implementing LED lighting would reduce the quality of their equipment. 
Specifically, they disagreed with the use of general white light LEDs 
to develop a price specifically for LED lighting used in commercial 
refrigeration equipment. True and Southern Store Fixtures stated that 
the grocery store market will be most affected by the use of LED 
lighting because certain food products, such as meat, dairy, deli, and 
produce, have to have a special display color. (True, Public Meeting 
Transcript, No. 27 at p. 111; Southern Store Fixtures, Public Meeting 
Transcript, No. 27 at p. 108) Continental Refrigerator added that in 
low-temperature applications, there is degradation in LED color 
quality, requiring the technology to be developed further. (Continental 
Refrigerator, No. 27 at p. 141) Southern Store Fixtures stated that 
LEDs used in commercial refrigeration equipment are more expensive 
because additional labor is required to test and sort the LEDs to meet 
the industry's color quality requirements. (Southern Store Fixture, 
Public Meeting Transcript, No. 27 at p. 108) Hill Phoenix agreed with 
Southern Store Fixtures and added that repeatability and minimizing the 
LED output variance also factors into this costly sorting process 
(i.e., binning). (Hill Phoenix, Public Meeting Transcript, No. 27 at p. 
109) PG&E estimated that this premium will remain constant independent 
of any future price reductions. (PG&E, Public Meeting Transcript, No. 
27 at p. 110) AHRI and Hill Phoenix suggested that prices for LED 
systems used in commercial refrigeration equipment will not experience 
the same price reductions that the rest of the LED industry will. Both 
interested parties agreed that, because the commercial refrigeration 
market for LEDs is small, there will not be a great demand for high-
quality LEDs, providing little incentive for LED suppliers to offer 
low-price, high-quality LEDs. (AHRI, No. 33 at p. 2 and Hill Phoenix, 
No. 32 at p. 2)
    DOE acknowledges that a premium markup is applied to LED chips used 
in commercial refrigeration applications due to the binning process. 
This highly selective process requires LED chips to be chosen by hand 
to ensure the consistency in color, temperature and light quality 
demanded by commercial refrigeration equipment customers. As LED 
technology advances (e.g., efficacy or price), the binning process for 
quality remains the same, resulting in a constant markup on the price 
of LED chips used for commercial refrigeration equipment. DOE accounted 
for this premium in the pricing used for the NOPR analysis. In the 
update of LED prices between 2007 and 2008 for the final rule, DOE 
maintained the markup associated with the higher level of quality 
needed for LEDs used in commercial refrigeration equipment.
    DOE also received comments on the relative benefits of using LEDs 
in low-temperature cases versus medium-temperature cases and in closed 
cases versus open cases. The California Utilities Joint Comment stated 
that LED luminous output is 10 percent higher at 0 [deg]F than at 25 
[deg]F. (California Utilities Joint Comment, No. 41 at p. 11) Southern 
Store Fixtures stated the heat from the LED fixture could be used to 
control condensate on closed case doors. It suggested using a remote 
power module for open cases. (Southern Store Fixtures, Public Meeting 
Transcript, No. 27 at p. 98) Hill Phoenix also stated that it is still 
a challenge for LED lighting in open cases to provide the quality and 
quantity of light required by the food marketing industry. (Hill 
Phoenix, No. 32 at p. 1)
    As stated above, DOE was able to identify for the final rule LED 
luminaires currently available on the market for both open refrigerated 
cases and vertical refrigerated cases with transparent doors. The 
benefits of using LEDs vary depending on the type of commercial 
refrigerated equipment in which they are used. However, the luminaires 
DOE identified for use in the final rule analysis were specifically 
developed for individual types of commercial refrigeration equipment, 
and the luminaire manufacturers reported that the performance and 
quality of those luminaires were developed to meet the specific light 
output requirements of the commercial refrigeration equipment 
manufacturers that use them. Therefore, although the LED luminous 
output may be about 10 percent higher for low-temperature cases 
compared to medium-temperature cases, the luminaires chosen for the 
analysis were actual products that commercial refrigeration equipment 
manufacturers specified provide appropriate lighting levels. Likewise, 
the power configuration used in the analysis for LED fixtures was also 
based on actual products used in closed and open cases. However, DOE 
did modify the LED lighting configurations assumed in the engineering 
analysis based on comments received and lighting manufacturer 
specification sheets. Most notably, for the final rule, DOE doubled the 
shelf lighting for open cases compared to that assumed for the NOPR. 
This increase in shelf lighting is needed to meet the lighting 
requirements of open cases due to the directional nature of LED 
lighting. See appendix B for more detail regarding the lighting 
configurations assumed in the engineering analysis.
b. Baseline Models
    DOE established baseline specifications for each equipment class 
modeled in the engineering analysis by reviewing available manufacturer 
data, selecting several representative units, and then aggregating the 
physical characteristics of those units. This process created a unit 
representative of commercial refrigeration equipment currently offered 
for sale in each equipment class, with average characteristics for 
physical parameters (e.g., volume, TDA), and minimum performance of 
energy-consuming components (e.g., fans, lighting). In the NOPR 
analysis, DOE made several revisions to the baseline specifications. 
These changes include updates to baseline lighting, TDA calculations, 
and baseline energy consumption. Appendix B of the NOPR TSD explained 
in detail the changes made to the baseline design specifications 
relative to the ANOPR analysis. DOE received no comments specific to 
these changes, and is therefore maintaining them for the final rule.
c. Consideration of Alternative Refrigerants
    The framework document stated that due to the phaseout of 
chlorofluorocarbons (CFCs) and hydrochlorofluorocarbons (HCFCs) in 
refrigeration equipment, the industry would likely use HFC refrigerants 
in their products. Following the framework document, AHRI stated that 
most of the data it provided to DOE was based on the use of HFC 
refrigerants. In the ANOPR TSD and NOPR, DOE assumed that HFC 
refrigerants were already in wide use in the refrigeration industry, 
and therefore used HFC refrigerants as the basis for the technical 
analysis conducted in the rulemaking.
    The Joint Comment in response to the NOPR stated that DOE should 
consider alternative primary refrigerants such as hydrocarbons, 
ammonia, and CO2 in its analysis because of their potential 
energy benefits, and because of the current phase-out of CFCs and HCFCs 
as refrigerants. The Joint Comment pointed out that alternative primary 
refrigerants are widely used in countries other than

[[Page 1117]]

the United States, principally in Europe. (Joint Comment, No. 34 at p. 
8)
    As stated in the ANOPR TSD and NOPR, DOE based its technical 
analysis on the use of HFC refrigerants. A Federal phaseout of CFC 
refrigerants has already occurred, and a Federal phaseout of HCFC 
refrigerants is pending in 2010. Thus, DOE did not consider CFCs and 
HCFCs in its analysis. Likewise, although alternative refrigerants such 
as hydrocarbons, ammonia, and CO2 are used in Europe and 
elsewhere in the world, there is no evidence that they are widely used 
for commercial refrigeration applications in the United States. In 
addition, current state and local building codes would not allow the 
use of many alternative refrigerants (Safety Class A3--most hydrocarbon 
refrigerants) in remote condensing equipment covered by this rulemaking 
due to flammability concerns. These codes would also severely limit the 
use of ammonia due to toxicity concerns. Both could be considered for 
use with secondary loop refrigeration systems, but these are not the 
subject of this rulemaking. Hydrocarbon refrigerants could possibly be 
used for small self-contained commercial refrigeration equipment 
covered in this rulemaking if they contain less than 3 pounds of 
refrigerant and if they have been certified by Underwriters 
Laboratories or another product certification lab. However, DOE 
believes that no such equipment has been certified for the U.S. market, 
and it did not consider these refrigerants as a viable design option in 
the engineering analysis.
    The majority of the U.S. commercial refrigeration industry uses HFC 
refrigerants in commercial refrigeration equipment. Since the analysis 
should be based on the refrigerant most widely used in commercial 
refrigeration equipment, it is unnecessary to consider alternative 
refrigerants. For these reasons, DOE has continued to use HFC 
refrigerants as the basis for its technical analysis. DOE used the HFC 
refrigerant R-404A for all remote condensing equipment and HFC 
refrigerant R-404A or refrigerant R-134A for all self-contained 
equipment.
d. Consideration of NSF 7 Type II Equipment
    On December 8, 2006, DOE published a final rule in which it adopted 
ANSI/ARI Standard 1200-2006 as the DOE test procedure for commercial 
refrigeration equipment. 71 FR at 71340, 71369-70. DOE incorporated the 
test procedure into its regulations in 10 CFR 431.63-431.64. The 
standard also requires performance tests to be conducted according to 
ANSI/ASHRAE Standard 72-2005. Following the NOPR, DOE received comments 
from Southern Store Fixtures and Zero Zone stating that the DOE test 
procedure is insufficient because a subset of the equipment covered in 
this rulemaking is designed for and operates under harsher conditions 
than the 75.2 [deg]F dry-bulb and 64.4 [deg]F wet-bulb ambient 
temperature condition used in the DOE test procedure.
    According to Southern Store Fixtures and Zero Zone, the hotter, 
more humid ambient condition requires additional energy consumption to 
power larger compressors and the anti-condensate capabilities necessary 
in this environment. These conditions make it more difficult to meet 
the standards proposed by this rulemaking. As a result, both Zero Zone 
and Southern Store Fixtures suggested that DOE should account for the 
difference between test procedure ambient conditions and operating 
ambient conditions for this subset of equipment by making a distinction 
similar to the one currently used in the National Sanitation Foundation 
Standard 7 (NSF 7) standard. (Zero Zone Public Meeting Transcript, No. 
27 at p. 17 and Southern Store Fixtures No. 27 at p. 18) Under NSF 7, 
equipment intended for use in more severe environments is designated as 
``Type II'' equipment and is tested at 80 [deg]F dry-bulb and 68 [deg]F 
wet-bulb ambient conditions. NSF ``Type I'' equipment is tested at the 
same ambient conditions as the DOE test procedure, namely the 75.2 
[deg]F dry-bulb and 64.4 [deg]F wet-bulb temperature ambient condition.
    To address this issue, AHRI suggested exempting Type II equipment 
from coverage or instructing manufacturers of Type II equipment to 
apply for waivers. (AHRI, Public Meeting Transcript, No. 27 at p. 50) 
If the waiver approach is pursued, Southern Store Fixtures suggested 
using available NSF Type II testing data to find the relationship among 
food temperature, the metric used in NSF testing, and energy 
consumption, the metric used in the DOE test procedure. This 
relationship would allow at least some Type II equipment to be 
considered fairly under this rule and mitigate a spike in waiver 
applications. (Southern Store Fixtures, Public Meeting Transcript, No. 
27 at p. 54)
    After consideration of these comments, DOE believes that 
instituting a distinction between Type I and Type II commercial 
refrigeration equipment, as defined by NSF 7, is unnecessary in this 
rulemaking. The DOE test procedure, ARI Standard 1200-2006, requires 
that energy consumption testing for all commercial refrigeration 
equipment covered in this rulemaking be conducted according to ANSI/
ASHRAE Standard 72-2005, which prescribes specific ambient conditions. 
There is no requirement to address the ambient conditions specified in 
the NSF 7 standard. The two standards also serve different purposes. 
The ANSI/ASHRAE 72-2005 standard measures energy consumption for a 
specific ambient condition, whereas the NSF 7 standard measures food 
temperature at a specific ambient condition for food safety purposes. 
Although these test procedures have different purposes, including the 
NSF 7 Type II test procedure would have a minimal impact on the energy 
consumption of this equipment because the differences between the ANSI/
ASHRAE 72-2005 and NSF 7 Type II ambient test conditions are marginal. 
NSF 7 Type II equipment is defined as a unit intended for use in an 
environment in which the ambient dry-bulb temperature does not exceed 
80 [deg]F. This is at most 5 [deg]F higher than the 75 [deg]F ambient 
dry bulb temperature used in the DOE test procedure. Therefore, the 
test procedure requires all commercial refrigeration equipment covered 
under this rulemaking to be tested for energy consumption according to 
the ambient conditions specified in ANSI/ASHRAE Standard 72-2005 and 
will not include any distinction between Type I and Type II equipment 
as defined by NSF 7.
e. Product Class Extension Factors
    In the NOPR, DOE developed multipliers to extend standards from the 
15 equipment classes it directly analyzed to the remaining 23 secondary 
equipment classes of commercial refrigeration equipment it did not 
directly analyze. DOE's approach involved a matched-pair analysis, 
which examined the relationship between several related pairs of 
equipment classes. Chapter 5 of the TSD discusses the development of 
the extension multipliers and the set of focused matched-pair analyses.
    Following the NOPR, Southern Store Fixtures questioned the 
extension multiplier for self-contained equipment that was based on the 
analytical results for open remote condensing equipment. Southern Store 
Fixtures believed that the extension multiplier of 2.51 DOE developed 
to correlate remote medium-temperature equipment without doors to self-
contained medium-temperature equipment without doors should be higher 
to adequately account for the more severe conditions in which self 
contained equipment are typically used,

[[Page 1118]]

but did not offer a recommendation for the value. (Southern Store 
Fixtures, Public Meeting Transcript, No. 27 at p. 37)
    The DOE test procedure, ARI Standard 1200-2006, requires that 
energy consumption testing for all commercial refrigeration equipment 
covered in this rulemaking be conducted according to ANSI/ASHRAE 
Standard 72-2005, which prescribes specific ambient conditions. The 
ambient conditions specified by the DOE test procedure are the same 
regardless of the condensing unit configuration (i.e., remote 
condensing or self-contained). In addition, the 2.51 extension 
multiplier was developed based on the relationship between the medium 
temperature VOP, SVO, and HZO equipment classes that DOE directly 
analyzed. Because neither an alternative value nor contradicting 
analysis was offered, for today's final rule, DOE will continue to use 
the 2.51 and other extension multipliers developed in the NOPR.
f. TSL Energy Limits
    After the NOPR, Hussman submitted a comment expressing its concern 
about the technologies required for equipment to meet minimum energy 
consumption levels for TSL 4. In particular, Hussman is reluctant to 
use the no-heat door design option in humid climates, such as Houston, 
Texas. In its experience, no-heat doors in humid climates result in 
more condensation on store floors. According to Hussman, wet floors 
have led to accidents and costly law suits, indirectly linking 
increased energy efficiency with increased safety risks. (Hussman, No. 
42 at p. 1)
    Energy conservation standards for today's final rule set a maximum 
allowable energy conservation level for commercial refrigeration 
equipment. DOE does not limit the technologies manufacturers can use to 
achieve standards. Manufacturers are free to use any combination of 
technologies and design options to achieve a required level of energy 
consumption. Manufacturers also have the ability to design equipment 
for use in specific regions where certain design options may cause 
safety concerns. Certain anti-condensate design options consume no 
energy and could be used to achieve the energy consumption levels TSL 4 
requires. Anti-condensate films can be applied to the inner surface of 
glass doors to prevent condensation and fog formation. By installing 
this film, some portion (and potentially all) of the glass and/or door 
mullion heaters can be removed and still maintain fog-free operation. 
In addition, DOE does not have the authority to set regional standards 
for commercial refrigeration equipment, and therefore cannot customize 
its analysis to exclude the use of design options in a specific climate 
region. Therefore, in developing the energy conservation standards for 
today's final rule, DOE did not make any modifications to accommodate 
concerns related to any particular climate regions.
g. Compressor Selection Oversize Factor
    DOE's energy consumption model selects the most appropriate 
compressor by comparing each compressor's capacity to the total 
refrigeration load in the case multiplied by the compressor oversize 
factor. For the ANOPR analysis, DOE listed capacity at the standard 
rating conditions used in ANSI/ARI Standard 540-2004.\19\ However, the 
standard rating conditions differed from the operating conditions used 
in the model, resulting in different capacity values. Because the 
standard conditions and modeled conditions differed, the model 
typically overestimated the capacity of the selected compressors. To 
compensate, DOE adjusted the compressor oversize factor to an 
unrealistic level (typically level 1) for the ANOPR model to select the 
correct compressor. In the NOPR analysis, DOE revised the capacity 
values used to select self-contained compressors in the energy 
consumption model. For the NOPR, DOE used capacities based on the same 
conditions used to calculate total refrigeration load and revised the 
oversize factor (typically 1.4 in the NOPR model) for all self-
contained equipment classes to maintain the selection of the correct 
compressor size. See chapter 5 of the TSD for more detail.
---------------------------------------------------------------------------

    \19\ 18ANSI/ARI Standard 540-2004: Performance Rating of 
Positive Displacement Refrigerant Compressors and Compressor Units 
lists standard rating conditions for hermetic refrigeration 
compressors. For medium-temperature equipment, compressors are rated 
at 20 [deg]F suction dewpoint, 120 [deg]F discharge dewpoint, 40 
[deg]F return gas, and 0 [deg]F subcooling. For low-temperature 
equipment, compressors are rated at -10 [deg]F suction dewpoint, 120 
[deg]F discharge dewpoint, 40 [deg]F return gas, and 0 [deg]F 
subcooling. For ice-cream-temperature equipment, compressors are 
rated at -25 [deg]F suction dewpoint, 105 [deg]F discharge dewpoint, 
40 [deg]F return gas, and 0 [deg]F subcooling.
---------------------------------------------------------------------------

    Following the NOPR, Structural Concepts commented that the 
compressor selection criteria in the engineering analysis results in 
the selection of unreasonable compressors for the refrigeration load. 
Specifically, Structural Concepts stated that the refrigeration load is 
6,990 Btu/h for the VOP.SC.M equipment class, and the compressor sizing 
value is 9,787 Btu/h. Using the oversize factor value of 1.4, the 
compressor selected in the engineering analysis has a capacity of 
13,219 Btu/h. The selection of an unrealistically large compressor 
unfairly skews the energy efficiency ratio because the larger 
compressor has a higher efficiency rating than the next smallest 
compressor that has a rated capacity closer to the compressor sizing 
value. (Structural Concepts, No. 30 at p. 3)
    The energy consumption model selects a compressor assuming that the 
rated capacity of the compressor must be at or above the compressor 
sizing value. This prevents the selection of a compressor that is 
unable to meet the refrigeration load. The example Structural Concepts 
selected highlights one of the more extreme cases of how this model can 
select a compressor that is larger than necessary. However, Structural 
Concepts did not provide a recommendation that would result in the 
selection of a more appropriate compressor, or a more appropriate 
compressor oversize factor value to use for all the self-contained 
equipment classes. Because manufacturers previously agreed that the 
compressor oversize factor of 1.4 was appropriate to use for all the 
self-contained equipment classes used in the analysis, DOE maintained 
its assumptions from the NOPR.
h. Offset Factors for Self-Contained Equipment
    For the NOPR, DOE developed offset factors to adjust the energy 
consumption calculations to accommodate smaller equipment for the 
equipment classes it directly analyzed. These offset factors account 
for the components of the refrigeration load that remain constant even 
when equipment sizes vary (i.e., the conduction end effects) and 
disproportionately affect smaller cases. In the equation that describes 
the relationship between energy consumption and the corresponding TDA 
or volume metric, the offset factors are intended to approximate these 
constant loads and provide a fixed end point that corresponds to a zero 
TDA or zero volume case. See chapter 5 of the TSD for further details 
on the development of these offset factors for each equipment class. 
Following the NOPR, Structural Concepts requested that DOE increase the 
offset factor for self-contained equipment because DOE's analysis 
selected compressors that were too large and had unrealistically high 
efficiencies. (Structural Concepts, No. 30 at p. 4)
    The compressors suggested by Structural Concepts for DOE's model 
would, in some cases, be undersized for

[[Page 1119]]

the refrigeration load. As mentioned in section V.A.2.g, DOE maintained 
the methodology used to select compressors in the energy consumption 
model. Because DOE did not receive any comments on necessary 
improvements or data on which its analysis can be reevaluated, and 
because the compressor selections used to develop the offset factors 
have not changed, DOE maintained the offset factors developed in the 
NOPR.
i. Self-Contained Condensing Coils
    Following the NOPR, Structural Concepts revealed a discrepancy 
about the running temperature for self-contained equipment using coil 
enhancements. (Structural Concepts, No. 30 at p. 1) Chapter 5, section 
5.6.3.7 of the NOPR TSD stated that self-contained equipment condenser 
coil enhancements would allow the condenser to run at a saturated 
condenser temperature (SCT) 10 [deg]F cooler than a standard coil. 
However, the engineering analysis spreadsheet showed a decrease of 14 
[deg]F for this design option. There was a typographical error in the 
NOPR TSD and the 14 [deg]F decrease in the engineering analysis is 
correct. In chapter 5 of the final rule TSD, DOE updated its figure to 
reflect the correct SCT 14 [deg]F cooler temperature for the coil 
enhancements design option for self-contained equipment.
    Structural Concepts also questioned the validity of using 98 [deg]F 
as the baseline SCT in the engineering analysis. According to 
Structural Concepts, this value is not representative of the current 
``off the shelf'' self-contained condensing units available. It 
believes the baseline SCT value should be closer to 105 [deg]F or 110 
[deg]F. (Structural Concepts, No. 30 at p. 2)
    There are condensing coils available that operate at both higher 
and lower SCT than the standard coil used in its model. This 
discrepancy exists because the standard coil used in DOE's model is not 
an actual condensing coil. DOE reviewed a range of available 
manufacturer data, selected several representative units, and 
aggregated the physical characteristics of the selected units to create 
a representative unit for each equipment class. The 98 [deg]F operating 
SCT is an average characteristic. DOE also conducted a sensitivity 
analysis to evaluate Structural Concept's claim that baseline SCT was 
too low. In this sensitivity analysis in which the SCT was raised to 
105 [deg]F, DOE observed only minor changes in the energy consumption 
of the self-contained units. For these reasons, DOE will continue to 
use 98 [deg]F as the baseline SCT for self-contained equipment 
condensers for today's final rule.
    For the NOPR, DOE used data from teardowns by Southern California 
Edison's Refrigeration and Thermal Test Center (RTTC) to model the 
enhanced condenser coil used in the engineering analysis. Based on this 
information, DOE considered both minimum and maximum technology levels 
for this design option. For each level, DOE specified an overall UA-
value and a coil cost. The UA-value is normalized to the standard coil, 
and the coil cost is normalized to the heat removal capacity of the 
coil. This approach allowed DOE to apply the details of coil design 
across all self-contained equipment classes. In consultation with 
outside experts, DOE determined that applying the same coil 
improvements to different sized coils would result in similar 
performance improvements. See chapter 5 of the TSD for more detail on 
the development of the enhanced condenser coil specifications.
    Following the NOPR, Structural Concepts stated that DOE overstates 
the magnitude of the UA-value increase achievable with an enhanced 
condenser coil. It claimed the enhanced condenser prototype DOE used as 
a model for this design option is too large for use in self-contained 
equipment and, because UA-value primarily depends on surface area, the 
use of a smaller, practical condenser would yield a lower UA-value. As 
a result, it requested that DOE base the UA-value on coils that are 
closer in size to the standard coil. (Structural Concepts, No. 30 at p. 
2)
    The specifications for the enhanced coil used in DOE's analysis are 
based on a model developed specifically for use in a self-contained 
refrigeration system. The details of the coil construction are based on 
data from teardowns by Southern California Edison's Refrigeration and 
Thermal Test Center (RTTC).\20\ Therefore, DOE is confident that it 
modeled an appropriately sized high efficiency condenser coil. In 
addition to increased exterior dimensions, DOE's enhanced condenser 
coil also uses a higher fin pitch, rifled tubing, and different tube 
spacing to achieve a higher UA-value than the standard coil. Structural 
Concepts also did not provide costs for their suggested coil model. 
Because DOE did not receive additional information or data that would 
suggest that the UA-value is not representative of enhanced condenser 
coils, and the data that was provided were incomplete, DOE maintained 
its assumptions from the NOPR for the enhanced condenser coil.
---------------------------------------------------------------------------

    \20\ Refrigeration and Thermal Test Center. Personal 
communication. Southern California Edison. March 29, 2007.
---------------------------------------------------------------------------

3. Manufacturer Impact Analysis
    The Joint Comment stated that DOE gives exclusive consideration to 
the preservation-of-gross-margin (absolute dollars) scenario. According 
to the Joint Comment, relying solely on this scenario only considers 
manufacturers' expectations about the manufacturing impacts at the 
proposed standard. (Joint Comment, No. 7 at p. 2) The Joint Comment 
stated the preservation-of-gross-margin-percentage markup scenario 
provides a more plausible representation of impacts on manufacturers 
due to new energy conservation standards. (Joint Comment, No. 7 at p. 
3)
    DOE developed two markup scenarios: The preservation-of-gross-
margin-percentage and the preservation-of-gross-margin (absolute 
dollars). DOE used these scenarios to bound the potential impacts on 
the industry value as a result of new energy conservation standards and 
presented its findings in the August 2008 NOPR for public comment. 73 
FR 50107. The preservation-of-gross-margin-percentage markup scenario 
is a lower bound estimate on manufacturer impacts because it assumes 
that manufacturers will be able to fully recover all the increases in 
production costs due to energy conservation standards requirements. The 
preservation-of-gross-margin (absolute dollars) markup scenario is an 
upper bound estimate on manufacturer impacts because it assumes that 
manufacturers will be able to only partially recover cost increases (to 
maintain an absolute dollar gross margin) due to energy conservation 
standards. The markup scenarios DOE modeled in the GRIM reflect both 
its interpretation of qualitative information learned during 
manufacturer interviews and the analysis of limited profit margin data 
provided under confidentiality agreements.
    DOE notes the large uncertainty about the actual impacts on the 
industry due to standards. The commercial refrigeration equipment 
industry has never been regulated for energy efficiency and 
manufacturers do not have previous experience on how energy 
conservation standards affect their business. The seven manufacturers 
that DOE interviewed for the NOPR expressed a divergence of views on 
how prices would change after standards. Most manufacturers stated that 
they expect profit levels to decrease due to new energy conservation 
standards based on their recent inability to pass on

[[Page 1120]]

increases in material and component costs to their customers. The 
portion of production costs reflected in selling prices varied 
significantly from manufacturer to manufacturer. In general, companies 
with lower market shares face greater challenges in passing along costs 
and would suffer larger margin impacts due to new energy conservation 
standards. Manufacturers with relatively large market shares have been 
more successful passing through costs and they are more confident of 
maintaining profit levels over the long term. Because of the divergence 
of experience with cost pass-through and the implication for prices and 
profitability after standards, DOE considers the full range of 
potential impacts bounded by the markup scenarios and does not consider 
one scenario to be more likely.
    In response to the NOPR, Earthjustice noted that the direct 
employment benefits are shown to provide positive employment in the MIA 
analysis. Earthjustice stated DOE should consider these benefits in the 
final rule. (Earthjustice, Public Meeting Transcript, No. 27 at p. 166)
    For the MIA, DOE calculated the direct employment impacts on the 
commercial refrigeration industry. DOE calculated total labor 
expenditures for the industry using the production costs from the 
engineering analysis, labor information from U.S. Census Bureau's 2006 
Annual Survey of Manufacturers, and the total industry shipments from 
the NES. DOE translated the total labor expenditures for the industry 
into the total number of domestic jobs using the domestic share of 
commercial refrigeration equipment manufacturing, the labor rate for 
the industry, and the annual hours per worker. DOE calculated its 
estimate of the domestic employment for the base case and each TSL. The 
direct employment results characterized by the MIA represent U.S. 
production and non-production workers that are affected by this 
rulemaking in the commercial refrigeration equipment manufacturing 
industry.
    For the final rule, DOE examined the impacts of energy conservation 
standards on domestic manufacturing employment levels. The direct 
employment impact analysis conducted as part of the MIA estimates the 
number of domestic workers who are affected by this rulemaking in the 
commercial refrigeration equipment manufacturing industry, assuming 
that shipment levels and product availability remain at current levels. 
Because labor costs are assumed to be a fixed percentage of total 
manufacturing production costs, which increase with more efficient 
equipment, the GRIM predicts a gradual increase in employment after 
standards. DOE has considered all employment impacts in weighing the 
benefits and the burdens, including direct (as calculated by the MIA) 
and indirect (as calculated by the employment impact analysis). For 
further details on the direct employment impact analysis, see chapter 
13 of the accompanying TSD.

VI. Analytical Results and Conclusions

A. Trial Standard Levels

    DOE selected between four and eight energy consumption levels for 
each commercial refrigeration equipment class in the LCC analysis. 
Based on the results of the analysis, DOE selected five trial standard 
levels above the baseline level for each equipment class for the NOPR. 
The range of TSLs selected includes the most energy efficient 
combination of design options with a positive NPV at the 7-percent 
discount rate, and the combination of design options with the minimum 
LCC. TSLs also were selected that filled large gaps between the 
baseline and the level with the minimum LCC.
    For the NOPR, DOE developed offset factors to adjust the energy 
efficiency requirements for smaller equipment in each equipment class 
analyzed. These offset factors account for certain components of the 
refrigeration load (such as the conduction end effects) that remain 
constant even when equipment sizes vary. These constant loads affect 
smaller cases disproportionately. The offset factors are intended to 
approximate these constant loads and provide a fixed end point, 
corresponding to a zero TDA or zero volume case, in an equation that 
describes the relationship between energy consumption and the 
corresponding TDA or volume metric. See chapter 5 of the TSD for 
further details on the development of these offset factors for each 
equipment class.
    For the final rule, DOE preserved the general methodology it used 
for the selection of efficiency levels in the NOPR in establishing 
specific efficiency levels for equipment classes. These levels are 
based on the results of the updated LCC analysis and made up the TSLs 
used in the NOPR. Table VI-1 shows the TSL levels DOE selected for 
energy use for the equipment classes analyzed. TSL 5 is the max-tech 
level for each equipment class. TSL 4 is the maximum efficiency level 
with a positive NPV at the 7-percent discount rate, except for 
VOP.RC.M. In this class, the minimal difference in energy efficiency 
between the minimum life-cycle cost level as determined by the LCC 
analysis and the maximum efficiency level with positive NPV prompted 
DOE to select the minimum life-cycle cost level instead of the maximum 
level with positive NPV. TSL 4 is a combination of the efficiency 
levels selected for TSL 3 and TSL 5. For a given equipment class, the 
efficiency levels selected for TSL 4 are either equivalent to those of 
TSL 3 or TSL 5. TSL 3 is the efficiency level that provides the minimum 
life-cycle cost determined by the LCC analysis. TSL 2 and TSL 1 
represent lower efficiency levels that fill in the gap between the 
current baseline and the levels determined to have the minimum LCC.
    Table VI-1 shows the same TSL levels in terms of proposed equations 
that establish an MDEC limit through a linear equation of the form:

MDEC = A x TDA + B (for equipment using TDA as a normalizing metric)

or

MDEC = A x V + B (for equipment using volume as a normalizing metric)

    Coefficients A and B are uniquely derived for each equipment class 
based on the calculated offset factor B (see chapter 5 of the TSD for 
offset factors) and the equation slope A. Equation slope A would be 
used to describe the efficiency requirements for equipment of different 
sizes within the same equipment class. Chapter 9 of the TSD explains 
the methodology DOE used for selecting TSLs and developing the 
coefficients shown in Table VI-2.

[[Page 1121]]



                         Table VI-1--Trial Standard Levels for Analyzed Equipment Expressed in Terms of Daily Energy Consumption
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                               Trial standard levels for equipment analyzed expressed in
                                                                                                        terms of energy consumption  (kWh/day)
         Equipment class           Normalization metric  Normalization    Test metric (kWh/  -----------------------------------------------------------
                                                            value *             day)            Base-
                                                                                                line      TSL 1     TSL 2     TSL 3     TSL 4     TSL 5
--------------------------------------------------------------------------------------------------------------------------------------------------------
VOP.RC.M.........................  TDA [ft\2\] \**\....        53.30    CDEC................     57.90     51.99     50.68     47.69     47.69     43.75
VOP.RC.L.........................  TDA [ft\2\].........        44.66    CDEC................    133.60    118.44    113.28    112.00    108.40    108.40
VOP.SC.M.........................  TDA [ft\2\].........        14.93    TDEC                     39.60     35.95     33.38     30.70     30.70     29.33
                                                                         [dagger][dagger].
VCT.RC.M.........................  TDA [ft\2\].........        65.00    CDEC................     33.18     31.77     30.00     16.36     16.18     16.18
VCT.RC.L.........................  TDA [ft\2\].........        65.00    CDEC................     69.31     65.73     46.90     39.60     39.18     39.18
VCT.SC.I.........................  TDA [ft\2\].........        26.00    TDEC................     45.63     33.35     23.39     21.17     20.81     20.81
VCS.SC.I.........................  V [ft\3\] [dagger]..        48.00    TDEC................     27.13     24.31     21.64     19.07     19.07     19.07
SVO.RC.M.........................  TDA [ft\2\].........        40.00    CDEC................     43.56     39.58     38.59     36.34     36.34     33.61
SVO.SC.M.........................  TDA [ft\2\].........        12.80    TDEC................     33.11     30.66     28.87     26.74     26.74     25.74
SOC.RC.M.........................  TDA [ft\2\].........        51.00    CDEC................     31.70     30.01     27.93     26.24     26.24     20.62
HZO.RC.M.........................  TDA [ft\2\].........        33.00    CDEC................     19.63     17.89     15.73     14.69     14.54     14.54
HZO.RC.L.........................  TDA [ft\2\].........        46.00    CDEC................     38.38     35.30     33.41     32.97     32.97     32.97
HZO.SC.M.........................  TDA [ft\2\].........        12.00    TDEC................     19.23     17.85     16.51     14.93     14.81     14.81
HZO.SC.L.........................  TDA [ft\2\].........        12.00    TDEC................     38.69     36.02     33.52     30.31     30.14     30.14
HCT.SC.I.........................  TDA [ft\2\].........         5.12    TDEC................      7.25      6.37      3.70      3.53      3.32      3.32
--------------------------------------------------------------------------------------------------------------------------------------------------------
* This is the assumed baseline size for each equipment class used in DOE's analyses.
** TDA is total display area of the case.
[dagger] V is gross refrigerated volume of the case.
[dagger][dagger] TDEC is total daily energy consumption of the case.


                                       Table VI-2--Trial Standard Levels Expressed in Terms of Equations and Coefficients for Each Primary Equipment Class
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                            Trial standard levels for primary equipment classes analyzed
        Equipment class         Test metric  (kWh/----------------------------------------------------------------------------------------------------------------------------------------------
                                       day)               Baseline                  TSL 1                   TSL 2                   TSL 3                   TSL 4                  TSL 5
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
VOP.RC.M......................  CDEC.............  1.01 x TDA + 4.07       0.9 x TDA + 4.07        0.87 x TDA + 4.07       0.82 x TDA + 4.07       0.82 x TDA + 4.07       0.74 x TDA + 4.07
VOP.RC.L......................  CDEC.............  2.84 x TDA + 6.85       2.5 x TDA + 6.85        2.38 x TDA + 6.85       2.35 x TDA + 6.85       2.27 x TDA + 6.85       2.27 x TDA + 6.85
VOP.SC.M......................  TDEC.............  2.34 x TDA + 4.71       2.09 xTDA + 4.71        1.92 xTDA + 4.71        1.74 x TDA + 4.71       1.74 x TDA + 4.71       1.65 x TDA + 4.71
VCT.RC.M......................  CDEC.............  0.48 x TDA + 1.95       0.46 x TDA + 1.95       0.43 x TDA + 1.95       0.22 x TDA + 1.95       0.22 x TDA + 1.95       0.22 x TDA + 1.95
VCT.RC.L......................  CDEC.............  1.03 x TDA + 2.61       0.97 x TDA + 2.61       0.68 x TDA + 2.61       0.57 x TDA + 2.61       0.56 x TDA +2.61        0.56 x TDA + 2.61
VCT.SC.I......................  TDEC.............  1.63 x TDA + 3.29       1.16 x TDA + 3.29       0.77 x TDA + 3.29       0.69 x TDA + 3.29       0.67 x TDA + 3.29       0.67 x TDA + 3.29
VCS.SC.I......................  TDEC.............  0.55 x V + 0.88         0.49 x V + 0.88         0.43 x V + 0.88         0.38 x V + 0.88         0.38 x V + 0.88         0.38 x V + 0.88
SVO.RC.M......................  CDEC.............  1.01 x TDA + 3.18       0.91 x TDA + 3.18       0.89 x TDA + 3.18       0.83 x TDA + 3.18       0.83 x TDA + 3.18       0.76 x TDA + 3.18
SVO.SC.M......................  TDEC.............  2.23 x TDA + 4.59       2.04 x TDA + 4.59       1.9 x TDA + 4.59        1.73 x TDA + 4.59       1.73 x TDA + 4.59       1.65 x TDA + 4.59
SOC.RC.M......................  CDEC.............  0.62 x TDA + 0.11       0.59 x TDA + 0.11       0.55 x TDA + 0.11       0.51 x TDA + 0.11       0.51 x TDA + 0.11       0.4 x TDA + 0.11
HZO.RC.M......................  CDEC.............  0.51 x TDA + 2.88       0.45 x TDA + 2.88       0.39 x TDA + 2.88       0.36 x TDA + 2.88       0.35 x TDA + 2.88       0.35 x TDA + 2.88
HZO.RC.L......................  CDEC.............  0.68 x TDA + 6.88       0.62 x TDA + 6.88       0.58 x TDA + 6.88       0.57 x TDA + 6.88       0.57 x TDA + 6.88       0.57 x TDA + 6.88
HZO.SC.M......................  TDEC.............  1.14 x TDA + 5.55       1.03 x TDA + 5.55       0.91 x TDA + 5.55       0.78 x TDA + 5.55       0.77 x TDA + 5.55       0.77 x TDA + 5.55
HZO.SC.L......................  TDEC.............  2.63 x TDA + 7.08       2.41 x TDA + 7.08       2.2 x TDA + 7.08        1.94 x TDA + 7.08       1.92 x TDA + 7.08       1.92 x TDA + 7.08
HCT.SC.I......................  TDEC.............  1.33 x TDA + 0.43       1.16 x TDA + 0.43       0.64 x TDA + 0.43       0.6 x TDA + 0.43        0.56 x TDA + 0.43       0.56 x TDA + 0.43
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

    In addition to the standards for the 15 primary equipment classes 
DOE analyzed, DOE is adopting standards for the remaining 23 secondary 
equipment classes of commercial refrigeration equipment covered in this 
rulemaking that were not directly analyzed in the engineering analysis 
due to low annual shipments (less than 100 units per year). DOE's 
approach involved extension multipliers developed using both the 15 
primary equipment classes analyzed and a set of focused matched-pair 
analyses. In addition, standards for certain primary equipment classes 
could be directly applied to other similar secondary equipment classes. 
Chapter 5 of the TSD discusses the development of the extension 
multipliers and the set of focused matched-pair analyses.
    Using this approach, DOE developed an additional set of TSLs for 
these secondary equipment classes that corresponds to each of the 
equations shown in Table VI-2 at each TSL. Table VI-3 shows this 
additional set of corresponding TSL levels.

                                      Table VI-3--Trial Standard Levels Expressed in Terms of Equations and Coefficients for Each Secondary Equipment Class
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                           Trial standard levels for secondary equipment classes analyzed
        Equipment class         Test metric  (kWh/----------------------------------------------------------------------------------------------------------------------------------------------
                                       day)               Baseline                  TSL 1                   TSL 2                   TSL 3                   TSL 4                  TSL 5
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
SVO.RC.L......................  CDEC.............  2.84 x TDA + 6.85       2.5 x TDA + 6.85        2.38 x TDA + 6.85       2.35 x TDA + 6.85       2.27 x TDA + 6.85       2.27 x TDA + 6.85
VOP.RC.I......................  CDEC.............  3.6 x TDA + 8.7         3.17 x TDA + 8.7        3.03 x TDA + 8.7        2.99 x TDA + 8.7        2.89 x TDA + 8.7        2.89 x TDA + 8.7
SVO.RC.I......................  CDEC.............  3.6 x TDA + 8.7         3.17 x TDA + 8.7        3.03 x TDA + 8.7        2.99 x TDA + 8.7        2.89 x TDA + 8.7        2.89 x TDA + 8.7
HZO.RC.I......................  CDEC.............  0.87 x TDA + 8.74       0.78 x TDA + 8.74       0.73 x TDA + 8.74       0.72 x TDA + 8.74       0.72 x TDA + 8.74       0.72 x TDA + 8.74
VCT.RC.I......................  CDEC.............  1.2 x TDA + 3.05        1.14 x TDA + 3.05       0.8 x TDA + 3.05        0.67 x TDA + 3.05       0.66 x TDA + 3.05       0.66 x TDA + 3.05
HCT.RC.M......................  CDEC.............  0.39 x TDA + 0.13       0.34 x TDA + 0.13       0.19 x TDA + 0.13       0.18 x TDA + 0.13       0.16 x TDA + 0.13       0.16 x TDA + 0.13

[[Page 1122]]

 
HCT.RC.L......................  CDEC.............  0.81 x TDA + 0.26       0.71 x TDA + 0.26       0.39 x TDA + 0.26       0.37 x TDA + 0.26       0.34 x TDA + 0.26       0.34 x TDA + 0.26
HCT.RC.I......................  CDEC.............  0.95 x TDA + 0.31       0.83 x TDA + 0.31       0.46 x TDA + 0.31       0.43 x TDA + 0.31       0.4 x TDA + 0.31        0.4 x TDA + 0.31
VCS.RC.M......................  CDEC.............  0.16 x V + 0.26         0.14 x V + 0.26         0.13 x V + 0.26         0.11 x V + 0.26         0.11 x V + 0.26         0.11 x V + 0.26
VCS.RC.L......................  CDEC.............  0.33 x V + 0.54         0.3 x V + 0.54          0.26 x V + 0.54         0.23 x V + 0.54         0.23 x V + 0.54         0.23 x V + 0.54
VCS.RC.I......................  CDEC.............  0.39 x V + 0.63         0.35 x V + 0.63         0.31 x V + 0.63         0.27 x V + 0.63         0.27 x V + 0.63         0.27 x V + 0.63
HCS.RC.M......................  CDEC.............  0.16 x V + 0.26         0.14 x V + 0.26         0.13 x V + 0.26         0.11 x V + 0.26         0.11 x V + 0.26         0.11 x V + 0.26
HCS.RC.L......................  CDEC.............  0.33 x V + 0.54         0.3 x V + 0.54          0.26 x V + 0.54         0.23 x V + 0.54         0.23 x V + 0.54         0.23 x V + 0.54
HCS.RC.I......................  CDEC.............  0.39 x V + 0.63         0.35 x V + 0.63         0.31 x V + 0.63         0.27 x V + 0.63         0.27 x V + 0.63         0.27 x V + 0.63
SOC.RC.L......................  CDEC.............  1.3 x TDA + 0.22        1.23 x TDA + 0.22       1.15 x TDA + 0.22       1.08 x TDA + 0.22       1.08 x TDA + 0.22       0.84 x TDA + 0.22
SOC.RC.I......................  CDEC.............  1.52 x TDA + 0.26       1.44 x TDA + 0.26       1.34 x TDA + 0.26       1.26 x TDA + 0.26       1.26 x TDA + 0.26       0.99 x TDA + 0.26
VOP.SC.L......................  TDEC.............  5.87 x TDA + 11.82      5.25 x TDA + 11.82      4.82 x TDA + 11.82      4.37 x TDA + 11.82      4.37 x TDA + 11.82      4.14 x TDA + 11.82
VOP.SC.I......................  TDEC.............  7.45 x TDA + 15.02      6.67 x TDA + 15.02      6.13 x TDA + 15.02      5.55 x TDA + 15.02      5.55 x TDA + 15.02      5.26 x TDA + 15.02
SVO.SC.L......................  TDEC.............  5.59 x TDA + 11.51      5.11 x TDA + 11.51      4.76 x TDA + 11.51      4.34 x TDA + 11.51      4.34 x TDA + 11.51      4.15 x TDA + 11.51
SVO.SC.I......................  TDEC.............  7.11 x TDA + 14.63      6.5 x TDA + 14.63       6.05 x TDA + 14.63      5.52 x TDA + 14.63      5.52 x TDA + 14.63      5.27 x TDA + 14.63
HZO.SC.I......................  TDEC.............  3.35 x TDA + 9          3.06 x TDA + 9          2.8 x TDA + 9           2.46 x TDA + 9          2.44 x TDA + 9          2.44 x TDA + 9
SOC.SC.I......................  TDEC.............  2.13 x TDA + 0.36       2.02 x TDA + 0.36       1.88 x TDA + 0.36       1.76 x TDA + 0.36       1.76 x TDA + 0.36       1.38 x TDA + 0.36
HCS.SC.I......................  TDEC.............  0.55 x V + 0.88         0.49 x V + 0.88         0.43 x V + 0.88         0.38 x V + 0.88         0.38 x V + 0.88         0.38 x V + 0.88
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

1. Miscellaneous Equipment
    As stated in the August 2008 NOPR, certain types of equipment meet 
the definition of ``commercial refrigeration equipment'' (Section 
136(a)(3) of EPACT 2005), but do not fall directly into any of the 38 
equipment classes defined in the market and technology assessment. One 
of these types is hybrid cases, in which two or more compartments are 
in different equipment families and are contained in one cabinet. 
Another is refrigerator-freezers, which have two compartments in the 
same equipment family but have different operating temperatures. Hybrid 
refrigerator-freezers, where two or more compartments are in different 
equipment families and have different operating temperatures, may also 
exist. Another is wedge cases, which form miter transitions (a corner 
section between two refrigerated display merchandisers) between 
standard display case lineups. DOE is using language that will allow 
manufacturers to determine appropriate standard levels for these types 
of equipment.
    An example of a pure hybrid case (one with two or more compartments 
in different equipment families and operating at the same temperature) 
is a unit with one open and one closed medium-temperature compartment, 
such as those seen in coffee shops that sell baked goods and beverages. 
These hybrid cases may be either self-contained or remote condensing, 
and may be cooled by one or more condensing units. They may also have 
one evaporator cooling both compartments or one evaporator feeding each 
compartment separately.
    An example of a refrigerator-freezer is a unit with doors where one 
compartment operates at medium temperature and one compartment operates 
at low temperature. Remote condensing commercial refrigerator-freezers 
(with and without doors) and self-contained commercial refrigerator-
freezers without doors may operate in one of two ways. They may operate 
as separate chilled and frozen compartments with evaporators fed by two 
sets of refrigerant lines or two compressors. Alternatively, they may 
operate as separate chilled and frozen compartments fed by one set of 
low-temperature refrigerant lines (with evaporator pressure regulator 
(EPR) valves or similar devices used to raise the evaporator pressure) 
or one compressor.
    An example of a hybrid refrigerator-freezer is a unit with one open 
compartment at medium temperature and one closed compartment at low 
temperature. As with pure hybrid cases, these cases may be either self-
contained or remote condensing, and may be cooled by one or more 
condensing units. In the case of remote condensing equipment, they may 
operate as separate chilled and frozen compartments with evaporators 
fed by two sets of refrigerant lines or two compressors, or they may 
operate as separate chilled and frozen compartments fed by one set of 
low-temperature refrigerant lines (with EPR valves or similar devices 
used to raise the evaporator pressure of one compartment) or one 
compressor.
    In the August 2008 NOPR, DOE proposed using the following language 
for requiring manufacturers to meet standards for hybrid cases, 
refrigerator-freezers, and hybrid refrigerator-freezers:
     For commercial refrigeration equipment with two or more 
compartments (i.e., hybrid refrigerators, hybrid freezers, hybrid 
refrigerator-freezers, and non-hybrid refrigerator freezers), the MDEC 
for each model shall be the sum of the MDEC values for all of its 
compartments. For each compartment, measure the TDA or volume of that 
compartment, and determine the appropriate equipment class based on 
that compartment's equipment family, condensing unit configuration, and 
designed operating temperature. The MDEC limit for each compartment 
shall be the calculated value obtained by entering that compartment's 
TDA or volume into the standard equation for that compartment's 
equipment class. Measure the calculated daily energy consumption (CDEC) 
or total daily energy consumption (TDEC) for the entire case as 
follows:
     [cir] For remote condensing commercial hybrid refrigerators, 
hybrid freezers, hybrid refrigerator-freezers, and non-hybrid 
refrigerator-freezers, where two or more independent condensing units 
each separately cool only one compartment, measure the total 
refrigeration load of each compartment separately according to the 
ANSI/ASHRAE Standard 72-2005 test procedure. Calculate compressor 
energy consumption (CEC) for each compartment using Table 1 in ARI 
Standard 1200-2006 using the saturated evaporator temperature for that 
compartment. The calculated daily energy consumption (CDEC) for the 
entire case shall be the sum of the CEC for each compartment, fan 
energy consumption (FEC), lighting energy consumption (LEC), anti-
condensate energy consumption (AEC), defrost energy consumption (DEC), 
and condensate evaporator pan energy consumption (PEC) (as measured in 
ARI Standard 1200-2006).

[[Page 1123]]

     [cir] For remote condensing commercial hybrid refrigerators, 
hybrid freezers, hybrid refrigerator-freezers, and non-hybrid 
refrigerator-freezers, where two or more compartments are cooled 
collectively by one condensing unit, measure the total refrigeration 
load of the entire case according to the ANSI/ASHRAE Standard 72-2005 
test procedure. Calculate a weighted saturated evaporator temperature 
for the entire case by (i) multiplying the saturated evaporator 
temperature of each compartment by the volume of that compartment (as 
measured in ARI Standard 1200-2006), (ii) summing the resulting values 
for all compartments, and (iii) dividing the resulting total by the 
total volume of all compartments. Calculate the CEC for the entire case 
using Table 1 in ARI Standard 1200-2006, using the total refrigeration 
load and the weighted average saturated evaporator temperature. The 
CDEC for the entire case shall be the sum of the CEC, FEC, LEC, AEC, 
DEC, and PEC.
     [cir] For self-contained commercial hybrid refrigerators, hybrid 
freezers, hybrid refrigerator-freezers, and non-hybrid refrigerator-
freezers, measure the total daily energy consumption (TDEC) for the 
entire case according to the ANSI/ASHRAE Standard 72-2005 test 
procedure.
    In response to the NOPR, Traulsen suggested that DOE address 
commercial refrigerator-freezers by summing the maximum daily energy 
consumption values for all of its individual compartments. (Traulsen, 
No. 25 at p. 2)
    DOE agrees with this suggestion and notes that it is in alignment 
with the proposal in the August 2008 NOPR for commercial refrigeration 
equipment with two or more compartments. Therefore, DOE is adopting the 
language above for hybrid cases, refrigerator-freezers, and hybrid 
refrigerator-freezers in its final rule.
    Additionally, DOE is adopting the following language to address 
wedge cases: For remote condensing and self-contained wedge cases, 
measure the CDEC or TDEC according to the ANSI/ARI 1200-2006 test 
procedure. The MDEC for each model shall be the amount derived by 
incorporating into the standard equation for the appropriate equipment 
class a value for the TDA that is the product of: (1) The vertical 
height of the air curtain (or glass in a transparent door), and (2) the 
largest overall width of the case when viewed from the front.

B. Significance of Energy Savings

    To estimate the energy savings through 2042 due to new standards, 
DOE compared the energy consumption of commercial refrigeration 
equipment under the base case (no standards) to energy consumption of 
this equipment under each TSL that DOE considered. Table VI-4 shows 
DOE's NES estimates, which it based on the AEO2008 reference case, for 
each TSL. Chapter 11 of the TSD describes these estimates in more 
detail. DOE reports both undiscounted and discounted values of energy 
savings. Discounted energy savings represent a policy perspective where 
energy savings farther in the future are less significant than energy 
savings closer to the present. Each TSL considered in this rulemaking 
resulted in significant energy savings, and the amount of savings 
increased with higher energy conservation standards. Energy savings 
ranged from an estimated 0.168 quads to 1.298 quads for TSLs 1 through 
5 (undiscounted).

Table VI-4--Summary of Cumulative National Energy Savings for Commercial Refrigeration Equipment (Energy Savings
                                        for Units Sold From 2012 to 2042)
----------------------------------------------------------------------------------------------------------------
                                                                Primary national energy savings (quads)  (sum of
                                                                             all equipment classes)
                     Trial standard level                     --------------------------------------------------
                                                                 Undiscounted    3% Discounted    7% Discounted
----------------------------------------------------------------------------------------------------------------
1............................................................            0.168            0.088            0.041
2............................................................            0.645            0.339            0.159
3............................................................            1.013            0.532            0.250
4............................................................            1.035            0.544            0.256
5............................................................            1.298            0.683            0.321
----------------------------------------------------------------------------------------------------------------

C. Economic Justification

1. Economic Impact on Commercial Customers
a. Life-Cycle Costs and Payback Period
    Commercial customers will be affected by the standards because they 
will experience higher purchase prices and lower operating costs. 
Generally, these impacts are best captured by changes in life-cycle 
costs and payback period. Therefore, DOE calculated the LCC and PBP for 
the standard levels considered in this rulemaking. DOE's LCC and PBP 
analyses provided five key outputs for each TSL, reported in Table VI-5 
through Table VI-19. The first three outputs are the proportion of 
purchases of commercial refrigeration equipment where the purchase of a 
design that complies with the TSL would create: (1) A net life-cycle 
cost, (2) no impact, or (3) a net life-cycle savings for the consumer. 
The fourth output is the average net life-cycle savings from purchasing 
a complying design. The fifth output is the average PBP for the 
customer purchasing a design that complies with the TSL compared with 
purchasing baseline equipment. The PBP is the number of years it would 
take for the customer to recover the increased costs of higher-
efficiency equipment through energy savings based on the operating cost 
savings from the first year of ownership. The PBP is an economic 
benefit-cost measure that uses benefits and costs without discounting.

                      Table VI-5--Summary LCC and PBP Results for VOP.RC.M Equipment Class
----------------------------------------------------------------------------------------------------------------
                                                                       Trial standard level
                                                ----------------------------------------------------------------
                                                      1            2            3            4            5
----------------------------------------------------------------------------------------------------------------
Equipment with Net LCC Increase (%)............            0            0            0            0           99
Equipment with No Change in LCC (%)............           64           46           29           29            1
Equipment with Net LCC Savings (%).............           36           54           71           71            0
Mean LCC Savings ($) *.........................        1,344        1,308        1,788        1,788      (3,959)

[[Page 1124]]

 
Mean Payback Period (years)....................          0.8          1.3          2.0          2.0        138.1
----------------------------------------------------------------------------------------------------------------
\*\ Numbers in parentheses indicate negative savings.


                      Table VI-6--Summary LCC and PBP Results for VOP.RC.L Equipment Class
----------------------------------------------------------------------------------------------------------------
                                                                       Trial standard level
                                                ----------------------------------------------------------------
                                                      1            2            3            4            5
----------------------------------------------------------------------------------------------------------------
Equipment with Net LCC Increase (%)............            0            0            0            0            0
Equipment with No Change in LCC (%)............           69           52           23            8            8
Equipment with Net LCC Savings (%).............           31           48           77           92           92
Mean LCC Savings ($)...........................        3,501        4,500        4,610        3,938        3,938
Mean Payback Period (years)....................          0.7          1.1          1.2          2.8          2.8
----------------------------------------------------------------------------------------------------------------


                      Table VI-7--Summary LCC and PBP Results for VOP.SC.M Equipment Class
----------------------------------------------------------------------------------------------------------------
                                                                       Trial standard level
                                                ----------------------------------------------------------------
                                                      1            2            3            4            5
----------------------------------------------------------------------------------------------------------------
Equipment with Net LCC Increase (%)............            0            0            0            0           69
Equipment with No Change in LCC (%)............           67           35           21           21            1
Equipment with Net LCC Savings (%).............           33           65           79           79           30
Mean LCC Savings ($)...........................          842        1,209        1,549        1,549        (451)
Mean Payback Period (years)....................          0.8          1.6          2.4          2.4         11.2
----------------------------------------------------------------------------------------------------------------


                      Table VI-8--Summary LCC and PBP Results for VCT.RC.M Equipment Class
----------------------------------------------------------------------------------------------------------------
                                                                       Trial standard level
                                                ----------------------------------------------------------------
                                                      1            2            3            4            5
----------------------------------------------------------------------------------------------------------------
Equipment with Net LCC Increase (%)............            0            0            0            0            0
Equipment with No Change in LCC (%)............           80           60           17            8            8
Equipment with Net LCC Savings (%).............           20           40           83           92           92
Mean LCC Savings ($)...........................          320          657        2,375        2,339        2,339
Mean Payback Period (years)....................          0.8          1.3          3.8          3.9          3.9
----------------------------------------------------------------------------------------------------------------


                      Table VI-9--Summary LCC and PBP Results for VCT.RC.L Equipment Class
----------------------------------------------------------------------------------------------------------------
                                                                       Trial standard level
                                                ----------------------------------------------------------------
                                                      1            2            3            4            5
----------------------------------------------------------------------------------------------------------------
Equipment with Net LCC Increase (%)............            0            0            0            0            0
Equipment with No Change in LCC (%)............           62           43           20           10           10
Equipment with Net LCC Savings (%).............           38           57           80           90           90
Mean LCC Savings ($)...........................          762        4,137        5,450        5,419        5,419
Mean Payback Period (years)....................          1.1          2.4          2.5          2.6          2.6
----------------------------------------------------------------------------------------------------------------


                      Table VI-10--Summary LCC and PBP Results for VCT.SC.I Equipment Class
----------------------------------------------------------------------------------------------------------------
                                                                       Trial standard level
                                                ----------------------------------------------------------------
                                                      1            2            3            4            5
----------------------------------------------------------------------------------------------------------------
Equipment with Net LCC Increase (%)............            0            0            0            0            0
Equipment with No Change in LCC (%)............           55           41           20            9            9
Equipment with Net LCC Savings (%).............           45           59           80           91           91
Mean LCC Savings ($)...........................        2,941        4,893        5,234        5,217        5,217
Mean Payback Period (years)....................          1.0          1.5          1.6          1.7          1.7
----------------------------------------------------------------------------------------------------------------


[[Page 1125]]


                      Table VI-11--Summary LCC and PBP Results for VCS.SC.I Equipment Class
----------------------------------------------------------------------------------------------------------------
                                                                       Trial standard level
                                                ----------------------------------------------------------------
                                                      1            2            3            4            5
----------------------------------------------------------------------------------------------------------------
Equipment with Net LCC Increase (%)............            0            0            0            0            0
Equipment with No Change in LCC (%)............           76           50           11           11           11
Equipment with Net LCC Savings (%).............           24           50           89           89           89
Mean LCC Savings ($)...........................          704        1,321        1,757        1,757        1,757
Mean Payback Period (years)....................          0.4          0.6          1.3          1.3          1.3
----------------------------------------------------------------------------------------------------------------


                      Table VI-12--Summary LCC and PBP Results for SVO.RC.M Equipment Class
----------------------------------------------------------------------------------------------------------------
                                                                       Trial standard level
                                                ----------------------------------------------------------------
                                                      1            2            3            4            5
----------------------------------------------------------------------------------------------------------------
Equipment with Net LCC Increase (%)............            0            0            0            0           99
Equipment with No Change in LCC (%)............           65           47           30           30            1
Equipment with Net LCC Savings (%).............           35           53           70           70            0
Mean LCC Savings ($)...........................          907          896        1,274        1,274      (2,974)
Mean Payback Period (years)....................          0.8          1.3          1.9          1.9        196.8
----------------------------------------------------------------------------------------------------------------


                      Table VI-13--Summary LCC and PBP Results for SVO.SC.M Equipment Class
----------------------------------------------------------------------------------------------------------------
                                                                       Trial standard level
                                                ----------------------------------------------------------------
                                                      1            2            3            4            5
----------------------------------------------------------------------------------------------------------------
Equipment with Net LCC Increase (%)............            0            0            0            0           69
Equipment with No Change in LCC (%)............           68           36           22           22            2
Equipment with Net LCC Savings (%).............           32           64           78           78           29
Mean LCC Savings ($)...........................          583          853        1,136        1,136        (355)
Mean Payback Period (years)....................          0.6          1.4          2.3          2.3         11.5
----------------------------------------------------------------------------------------------------------------


                      Table VI-14--Summary LCC and PBP Results for SOC.RC.M Equipment Class
----------------------------------------------------------------------------------------------------------------
                                                                       Trial standard level
                                                ----------------------------------------------------------------
                                                      1            2            3            4            5
----------------------------------------------------------------------------------------------------------------
Equipment with Net LCC Increase (%)............            0            0            0            0           92
Equipment with No Change in LCC (%)............           82           64           29           29            3
Equipment with Net LCC Savings (%).............           18           36           71           71            5
Mean LCC Savings ($)...........................          405          851          945          945      (1,458)
Mean Payback Period (years)....................          0.5          0.8          1.7          1.7         19.4
----------------------------------------------------------------------------------------------------------------


                      Table VI-15--Summary LCC and PBP Results for HZO.RC.M Equipment Class
----------------------------------------------------------------------------------------------------------------
                                                                       Trial standard level
                                                ----------------------------------------------------------------
                                                      1            2            3            4            5
----------------------------------------------------------------------------------------------------------------
Equipment with Net LCC Increase (%)............            0            0            0            0            0
Equipment with No Change in LCC (%)............           80           60           39           19           19
Equipment with Net LCC Savings (%).............           20           40           61           81           81
Mean LCC Savings ($)...........................          419          887        1,063        1,040        1,040
Mean Payback Period (years)....................          0.5          0.8          1.2          1.6          1.6
----------------------------------------------------------------------------------------------------------------


                      Table VI-16--Summary LCC and PBP Results for HZO.RC.L Equipment Class
----------------------------------------------------------------------------------------------------------------
                                                                       Trial standard level
                                                ----------------------------------------------------------------
                                                      1            2            3            4            5
----------------------------------------------------------------------------------------------------------------
Equipment with Net LCC Increase (%)............            0            0            0            0            0
Equipment with No Change in LCC (%)............           59           39           19           19           19
Equipment with Net LCC Savings (%).............           41           61           81           81           81
Mean LCC Savings ($)...........................          668        1,047        1,102        1,102        1,102
Mean Payback Period (years)....................          1.0          1.4          1.6          1.6          1.6
----------------------------------------------------------------------------------------------------------------


[[Page 1126]]


                      Table VI-17--Summary LCC and PBP Results for HZO.SC.M Equipment Class
----------------------------------------------------------------------------------------------------------------
                                                                       Trial standard level
                                                ----------------------------------------------------------------
                                                      1            2            3            4            5
----------------------------------------------------------------------------------------------------------------
Equipment with Net LCC Increase (%)............            0            0            0            0            0
Equipment with No Change in LCC (%)............           73           45           21           10           10
Equipment with Net LCC Savings (%).............           27           55           79           90           90
Mean LCC Savings ($)...........................          344          615          861          826          826
Mean Payback Period (years)....................          0.4          1.0          1.8          2.3          2.3
----------------------------------------------------------------------------------------------------------------


                      Table VI-18--Summary LCC and PBP Results for HZO.SC.L Equipment Class
----------------------------------------------------------------------------------------------------------------
                                                                       Trial standard level
                                                ----------------------------------------------------------------
                                                      1            2            3            4            5
----------------------------------------------------------------------------------------------------------------
Equipment with Net LCC Increase (%)............            0            0            0            0            0
Equipment with No Change in LCC (%)............           73           46           21           10           10
Equipment with Net LCC Savings (%).............           27           54           79           90           90
Mean LCC Savings ($)...........................          670        1,215        1,784        1,761        1,761
Mean Payback Period (years)....................          0.3          0.8          1.5          1.7          1.7
----------------------------------------------------------------------------------------------------------------


                      Table VI-19--Summary LCC and PBP Results for HCT.SC.I Equipment Class
----------------------------------------------------------------------------------------------------------------
                                                                       Trial standard level
                                                ----------------------------------------------------------------
                                                      1            2            3            4            5
----------------------------------------------------------------------------------------------------------------
Equipment with Net LCC Increase (%)............            0            0            0            0            0
Equipment with No Change in LCC (%)............           65           47           30           14           14
Equipment with Net LCC Savings (%).............           35           53           70           86           86
Mean LCC Savings ($)...........................          211          775          797          785          785
Mean Payback Period (years)....................          0.6          1.4          1.5          1.9          1.9
----------------------------------------------------------------------------------------------------------------

    For five equipment classes (VOP.RC.M, VOP.SC.M, SVO.RC.M, SVO.SC.M, 
and SOC.RC.M), TSL 5 resulted in negative LCC savings compared to the 
purchase of baseline equipment. For all other equipment classes, TSL 5 
showed positive LCC savings. For equipment classes with lighting, 
including LED lighting at TSL 5 had a significant impact on the 
calculated LCC savings. For equipment classes without lighting (i.e., 
VCS.SC.I, HZO.RC.L, HZO.SC.M, HZO.SC.L, and HCT.SC.I), the difference 
in LCC savings between TSL 3 and TSL 5 was small, between $0 and $35 
less at TSL 5 than at TSL 3. For VCT.RC.L, VCT.RC.I, and VCT.SC.I, the 
difference in LCC savings between TSL 3 and TSL 5 was small as well 
(between $17 and $36 less savings at TSL 5 than at TSL 3). VOP.RC.L 
showed a more significant reduction in LCC savings at TSL 5 compared to 
TSL 3 at $672.
b. Commercial Customer Sub-Group Analysis
    Using the LCC spreadsheet model, DOE estimated the impact of the 
TSLs on small businesses, a customer sub-group. DOE estimated the LCC 
and PBP for small food sales businesses defined by the Small Business 
Administration (SBA) by presuming that most small business customers 
could be represented by the analysis performed for small grocery and 
convenience store owners. DOE further assumed that the smaller, 
independent grocery and convenience store chains may not have access to 
national accounts, but would instead purchase equipment primarily 
through distributors and grocery wholesalers. DOE modified the 
distribution channels for remote condensing and self-contained 
equipment to these small businesses as follows:
     For remote condensing equipment, 15 percent of the sales 
were assumed to pass through a manufacturer-to-distributor-to-
contractor-to-customer channel, and 85 percent were assumed to be 
purchased through a manufacturer-to-distributor-to-customer channel.
     For self-contained equipment, 35 percent of sales were 
assumed to pass through a manufacturer-to-distributor-to-contractor-to-
customer channel, and 65 percent were assumed to be purchased through a 
manufacturer-to-distributor-to-customer channel.
    In both cases, the distribution chain markups were calculated with 
these revised shipment weights. Table VI-20 shows the mean LCC savings 
from proposed energy conservation standards for the small business sub-
group, and Table VI-21 shows the mean payback period (in years) for 
this sub-group. More detailed discussion on the LCC sub-group analysis 
and results can be found in chapter 12 of the TSD.

   Table VI-20--Mean Life-Cycle Cost Savings for Commercial Refrigeration Equipment Purchased by LCC Sub-Group
                                            (Small Business) (2007$)*
----------------------------------------------------------------------------------------------------------------
                   Equipment class                       TSL 1       TSL 2       TSL 3       TSL 4       TSL 5
----------------------------------------------------------------------------------------------------------------
VOP.RC.M............................................       1,746       1,764       2,443       2,443     (3,463)
VOP.RC.L............................................       4,534       5,882       6,064       5,549       5,549

[[Page 1127]]

 
VOP.SC.M............................................       1,094       1,624       2,145       2,145         131
VCT.RC.M............................................         416         868       3,484       3,458       3,458
VCT.RC.L............................................       1,001       5,639       7,454       7,447       7,447
VCT.SC.I............................................       3,811       6,451       6,944       6,949       6,949
VCS.SC.I............................................         902       1,703       2,314       2,314       2,314
SVO.RC.M............................................       1,177       1,209       1,738       1,738     (2,637)
SVO.SC.M............................................         752       1,138       1,565       1,565          61
SOC.RC.M............................................         521       1,106       1,290       1,290       (948)
HZO.RC.M............................................         538       1,152       1,397       1,383       1,383
HZO.RC.L............................................         875       1,383       1,466       1,466       1,466
HZO.SC.M............................................         440         803       1,156       1,129       1,129
HZO.SC.L............................................         857       1,574       2,364       2,352       2,352
HCT.SC.I............................................         272       1,022       1,055       1,057       1,057
----------------------------------------------------------------------------------------------------------------
* Numbers in parentheses indicate negative savings.


    Table VI-21--Mean Payback Period for Commercial Refrigeration Equipment Purchased by LCC Sub-Group (Small
                                                Business) (Years)
----------------------------------------------------------------------------------------------------------------
                   Equipment class                       TSL 1       TSL 2       TSL 3       TSL 4       TSL 5
----------------------------------------------------------------------------------------------------------------
VOP.RC.M............................................        0.71        1.19        1.77        1.77       51.97
VOP.RC.L............................................        0.64        0.99        1.10        2.53        2.53
VOP.SC.M............................................        0.70        1.43        2.17        2.17        9.50
VCT.RC.M............................................        0.73        1.14        3.54        3.64        3.64
VCT.RC.L............................................        1.00        2.17        2.32        2.42        2.42
VCT.SC.I............................................        0.90        1.32        1.47        1.57        1.57
VCS.SC.I............................................        0.33        0.53        1.17        1.17        1.17
SVO.RC.M............................................        0.70        1.19        1.73        1.73      106.71
SVO.SC.M............................................        0.55        1.26        2.09        2.09        9.71
SOC.RC.M............................................        0.48        0.75        1.55        1.55       15.62
HZO.RC.M............................................        0.46        0.72        1.13        1.47        1.47
HZO.RC.L............................................        0.93        1.26        1.50        1.50        1.50
HZO.SC.M............................................        0.36        0.92        1.66        2.06        2.06
HZO.SC.L............................................        0.29        0.71        1.35        1.55        1.55
HCT.SC.I............................................        0.58        1.24        1.32        1.74        1.74
----------------------------------------------------------------------------------------------------------------

    For commercial refrigeration equipment, the LCC and PBP impacts for 
small businesses are similar to those of all customers as a whole. 
While the discount rate for small grocery stores is higher than the 
rate for commercial refrigeration equipment customers as a whole and 
equipment prices are higher due to the higher markups, these small 
business customers appear to retain commercial refrigeration equipment 
over longer periods. Also, smaller stores generally tend to pay higher 
electric prices. The average LCC savings for the small business sub-
group is slightly higher than that calculated for the average 
commercial refrigeration equipment customer, and the average PBP is 
slightly shorter than the national average. DOE concluded that the 
small food sales businesses defined by SBA will not experience economic 
impacts significantly different from or more negative than those 
impacts on food sales businesses as a whole.
2. Economic Impact on Manufacturers
    DOE determined the economic impacts of today's standard on 
manufacturers, as described in the proposed rule. 73 FR 50118-21. For 
the final rule, DOE analyzed manufacturer impacts under two distinct 
markup scenarios: (1) The preservation-of-gross-margin-percentage 
markup scenario, and (2) the preservation-of-gross-margin (absolute 
dollars) markup scenario. 73 FR 50107. Under the first scenario, DOE 
applied a single uniform ``gross margin percentage'' markup that 
represents the current markup for manufacturers in the commercial 
refrigeration equipment industry. This markup scenario implies that as 
production costs increase with efficiency, the absolute dollar markup 
will also increase. DOE calculated that the non-production cost 
markup--which consists of selling, general, and administrative (SG&A) 
expenses; research and development (R&D) expenses; interest; and 
profit--is 1.32. This markup is consistent with the one DOE used in its 
engineering and GRIM analyses for the base case.
    The implicit assumption behind the second scenario is that the 
industry can only maintain its gross margin from the baseline (in 
absolute dollars) after the standard. The industry would do so by 
passing its increased production costs on to customers without passing 
on its increased R&D and SG&A expenses so the gross profit per unit is 
the same in absolute dollars. DOE implemented this markup scenario in 
the GRIM by setting the production cost markups at each TSL to yield 
approximately the same gross margin in the standards cases in 2012 as 
they yielded in the base case.
    Together, these two markup scenarios characterize the range of 
possible conditions the commercial refrigeration equipment market will 
experience as a result of new energy conservation standards. See 
chapter 13 of the TSD for additional details of the markup scenarios 
and analysis. DOE also examined both of these scenarios for this final 
rule.

[[Page 1128]]

a. Industry Cash-Flow Analysis Results
    Using two different markup scenarios, 73 FR 50107, 50118-20, DOE 
estimated the impact of new standards for commercial refrigeration 
equipment on the INPV of the commercial refrigeration equipment 
industry. The impact consists of the difference between INPV in the 
base case and INPV in the standards case. INPV is the primary metric 
used in the MIA, and represents one measure of the fair value of the 
industry in today's dollars. DOE calculated the INPV by summing all of 
the net cash flows, discounted at the commercial refrigeration 
equipment industry's cost of capital or discount rate.
    Table VI-22 and Table VI-23 show the changes in INPV that DOE 
estimates would result from the TSLs DOE considered for this final 
rule. The tables also present the equipment conversion expenses and 
capital investments that the industry would incur at each TSL. Product 
conversion expenses include engineering, prototyping, testing, and 
marketing expenses incurred by a manufacturer as it prepares to comply 
with a standard. Capital investments are the one-time outlays for 
tooling and plant changes required for the industry to comply (i.e., 
conversion capital expenditures).

   Table VI-22--Manufacturer Impact Analysis Results, Including INPV Estimates, for Commercial Refrigeration Equipment Under the Preservation of Gross
                                                            Margin Percentage Markup Scenario
                                [Preservation of gross margin percentage markup scenario with a rollup shipment scenario]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                  Trial standard level
                                                     Units            Base case ------------------------------------------------------
                                                                                     1          2          3          4          5
--------------------------------------------------------------------------------------------------------------------------------------
INPV....................................  2007$ millions............        540        540        548        530        501        560
Change in INPV \*\......................  2007$ millions............  .........          0          8       (11)       (39)         20
                                          (%).......................  .........       0.02       1.42       1.95     (7.29)       3.73
New Energy Conservation Standards         2007$ millions............  .........        0.5        2.8       20.6       40.4       51.6
 Equipment Conversion Expenses.
New Energy Conservation Standards         2007$ millions............  .........        0.8        5.0       36.3       71.2       90.8
 Capital Investments.
Total Investment Required...............  2007$ millions............  .........        1.3        7.8       57.0      111.6      142.4
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Values in Table VI-22 may not appear to sum due to rounding.


   Table VI-23--Manufacturer Impact Analysis Results, Including INPV Estimates, for Commercial Refrigeration Equipment Under the Preservation of Gross
                                                        Margin (Absolute Dollars) Markup Scenario
                             [Preservation of gross margin absolute dollars markup scenario with a rollup shipment scenario]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                  Trial standard level
                                                     Units            Base case ------------------------------------------------------
                                                                                     1          2          3          4          5
--------------------------------------------------------------------------------------------------------------------------------------
INPV....................................  2007$ millions............        540        533        502        442        392        200
Change in INPV *........................  2007$ millions............  .........        (7)       (39)       (99)      (148)      (340)
                                          (%).......................  .........     (1.27)     (7.16)    (18.26)    (27.35)    (63.01)
New Energy Conservation Standards         2007$ millions............  .........        0.5        2.8       20.6       40.4       51.6
 Equipment Conversion Expenses.
New Energy Conservation Standards         2007$ millions............  .........        0.8        5.0       36.3       71.2       90.8
 Capital Investments.
Total Investment Required...............  2007$ millions............  .........        1.3        7.8       57.0      111.6      142.4
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Values in Table VI-23 may not appear to sum due to rounding.

    The August 2008 NOPR discusses the estimated impact of new 
commercial refrigeration equipment standards on INPV for each equipment 
class. 73 FR 50118-20. See chapter 13 of the TSD for details.
b. Cumulative Regulatory Burden
    DOE's assesses manufacturer burden through the cumulative impact of 
multiple DOE standards and other regulatory actions that affect 
manufacturers of the same covered equipment and other equipment 
produced by the same manufacturers or their parent companies. 73 FR 
50120. For the August 2008 NOPR, DOE listed the EPA-mandated phaseout 
of HCFCs as refrigerants and blowing agents, and energy conservation 
standards for residential central air conditioners and heat pumps and 
room air conditioners as examples of other Federal regulations that 
could affect manufacturers of commercial refrigeration equipment. 73 FR 
50120.
    Following the August 2008 NOPR, public comments made DOE aware that 
commercial refrigeration equipment manufacturers must test equipment 
using the NSF 7 test procedure in addition to the DOE test procedure. 
As mentioned previously, NSF 7 measures product temperature for food 
safety requirements, while the DOE test procedure measures energy 
consumption for energy conservation standards. Although NSF 7 is not a 
Federal regulation, the commercial refrigeration equipment industry in 
general already tests its equipment using this procedure to meet food 
safety requirements.
    For this final rule, DOE also identified the other DOE regulations 
commercial refrigeration equipment manufacturers are facing for other 
equipment. DOE identified several regulations that go into effect 3 
years before and after the effective date of the new energy 
conservation standards for commercial refrigeration equipment. DOE 
recognizes that each regulation can significantly affect manufacturers' 
financial operations. Multiple regulations affecting the same 
manufacturer can quickly reduce manufacturers' profits and possibly 
cause an exit from the market.

[[Page 1129]]

    DOE requested information about the cumulative regulatory burden 
during manufacturer interviews. Manufacturers indicated that they had 
already begun using other non-HCFC refrigerants and blowing agents. 
Manufacturers did not indicate that the DOE regulations on residential 
central air conditioners and heat pumps or room air conditioners were a 
great concern. DOE sought comment on these and other potential 
regulations affecting manufacturers for the final rule. From its own 
research, DOE learned that manufacturers of commercial refrigeration 
equipment or their parent companies could also be affected by 
rulemakings on PTACs and PTHPs, room air conditioners, residential 
furnaces, and walk-in freezers and coolers. DOE identified the costs of 
additional regulations when these estimates were available from other 
DOE rulemakings. For example, two commercial refrigeration equipment 
manufacturers (or their parent companies) also manufacture PTACs and 
PTHPs. DOE estimated that in the PTAC and PTHP industry, manufacturers 
may incur an estimated total conversion expense of $17.3 million 
(2007$). However, DOE has limited data on the importance of these other 
regulated products for manufacturers of commercial refrigeration 
equipment. Differences in market shares and manufacturing processes of 
other regulated products for each manufacturer could cause varying 
degrees of burdens on these manufacturers. See chapter 13 of the TSD 
for additional information regarding the cumulative regulatory burden 
analysis.
c. Impacts on Employment
    As discussed in the August 2008 NOPR, DOE expects that employment 
by commercial refrigeration equipment manufacturers would increase 
under all of the TSLs considered for today's rule. However, this does 
not take into account any relocation of domestic jobs to countries with 
lower labor costs that might be influenced by the level of investment 
required by new standards. 73 FR 50120-21. Table VI-24 shows the direct 
employment impacts at each TSL. Further support for this conclusion is 
set forth in chapter 13 of the TSD.

              Table VI-24--Commercial Refrigeration Equipment Estimated Employment Impacts in 2012
----------------------------------------------------------------------------------------------------------------
                                                        Base
                Trial standard level                    case      TSL 1     TSL 2     TSL 3     TSL 4     TSL 5
----------------------------------------------------------------------------------------------------------------
Total Number of Domestic Production Employees in         2,199     2,205     2,291     2,371     2,396     2,978
 2012...............................................
Change in Total Number of Domestic Production         ........         6        92       172       197       779
 Employees in 2012 Due to Standards *...............
Total Number of Domestic Non-Production Employees in       681       683       709       734       742       922
 2012 *.............................................
Total Number of Domestic Employees in 2012 *........     2,880     2,888     3,000     3,105     3,137     3,900
----------------------------------------------------------------------------------------------------------------
* Figures do not take into account any relocation of domestic jobs to countries with lower labor costs that
  might be influenced by the level of investment required by new standards.

d. Impacts on Manufacturing Capacity
    According to the majority of commercial refrigeration equipment 
manufacturers, new energy conservation standards will not significantly 
affect manufacturers' production capacity. Any necessary redesign of 
commercial refrigeration equipment will not change the fundamental 
assembly of the equipment. However, manufacturers anticipate some minor 
changes to tooling. Thus, manufacturers will be able to maintain 
manufacturing capacity levels and continue to meet market demand under 
new energy conservation standards.
e. Impacts on Manufacturers That Are Small Businesses
    As discussed in the August 2008 NOPR, DOE expects today's standard 
to have little or no differential impact on small manufacturers of 
commercial refrigeration equipment. 73 FR at 50121, 50130-31. DOE found 
that small manufacturers generally have the same concerns as large 
manufacturers regarding energy conservation standards. DOE also found 
no significant differences in the R&D emphasis or marketing strategies 
between small and large manufacturers. Therefore, DOE believes the GRIM 
analysis, which models each equipment class separately and aggregates 
the results to produce an industry-wide impact, is representative of 
the small manufacturers that would be affected by standards. The 
impacts on small manufacturers are discussed further in section VII.B 
of this preamble (``Review Under the Regulatory Flexibility Act'').
3. National Net Present Value and Net National Employment
    The NPV analysis estimates the cumulative benefits or costs to the 
Nation that would result from particular standard levels. While the NES 
analysis estimates the energy savings from each standard level DOE 
considers, relative to the base case, the NPV analysis estimates the 
national economic impacts of each level relative to the base case. 
Table VI-25 provides an overview of the NPV results for each TSL 
considered for this final rule, using both a 7-percent and a 3-percent 
real discount rate.
    Table VI-25 shows the estimated cumulative NPV for commercial 
refrigeration equipment resulting from the sum of the NPV calculated 
for each of the 15 primary equipment classes analyzed. Table VI-25 
assumes the AEO2008 reference case forecast for electricity prices. At 
a 7-percent discount rate, TSLs 1-4 show positive cumulative NPVs. The 
highest NPV is provided by TSL 3 at $1.45 billion. TSL 4 provided $1.41 
billion, close to that of TSL 3. TSL 5 showed a negative NPV at - $2.59 
billion, the result of negative NPV observed in five equipment classes 
(VOP.RC.M, VOP.SC.M, SVO.RC.M, SVO.SC.M, and SOC.RC.M).
    At a 3-percent discount rate, the picture is similar across the 
equipment classes. TSL 5 showed a negative NPV at - $3.79 billion, 
whereas the highest NPV was provided at TSL 3 (i.e., $3.97 billion). 
TSL 4 provided a near equivalent NPV at $3.93 billion. TSL 5 provided a 
NPV of - $3.79 billion dollars. Five equipment classes (VOP.RC.M, 
VOP.SC.M, SVO.RC.M, SVO.SC.M, and SOC.RC.M) were determined to have 
negative NPVs at a 3-percent discount rate at TSL 5. See TSD chapter 11 
for more detailed NPV results.

[[Page 1130]]



       Table VI-25--Overview of National Net Present Value Results
------------------------------------------------------------------------
                                            NPV (billion 2007$)
      Trial standard level       ---------------------------------------
                                   7% Discount rate    3% Discount rate
------------------------------------------------------------------------
1...............................                0.33                0.83
2...............................                0.98                2.60
3...............................                1.45                3.97
4...............................                1.41                3.93
5...............................              (2.59)              (3.79)
------------------------------------------------------------------------

    DOE also estimated the national employment impacts that would 
result from each TSL. As discussed in the August 2008 NOPR, 73 FR 
50107-08, 50122-23, DOE expects the net monetary savings from standards 
to be redirected to other forms of economic activity. DOE also expects 
these shifts in spending and economic activity to affect the demand for 
labor. As shown in Table VI-26, DOE estimates net indirect employment 
impacts--those changes of employment in the larger economy (other than 
in the manufacturing sector being regulated)--from commercial 
refrigeration equipment energy conservation standards to be positive 
but very small relative to total national employment. These impacts 
might be offset by other, unanticipated effects on employment. For 
details on the employment impact analysis methods and results, see TSD 
chapter 15.

  Table VI-26--Net National Change in Indirect Employment, Thousands of
                              Jobs in 2042
------------------------------------------------------------------------
                                        Net national change in jobs
      Trial standard level       ---------------------------------------
                                    2012      2022      2032      2042
------------------------------------------------------------------------
1...............................         0       202       289       332
2...............................       (6)     1,056     1,482     1,699
3...............................      (15)     1,591     2,238     2,559
4...............................      (18)     1,658     2,337     2,670
5...............................      (40)     1,856     2,645     3,011
Maximum Job Impact..............      (40)     1,856     2,645     3,011
------------------------------------------------------------------------

4. Impact on Utility or Performance of Equipment
    As indicated in section V.B.4 of the August 2008 NOPR, the new 
standards DOE is adopting today will not lessen the utility or 
performance of any commercial refrigeration equipment. 73 FR 50123.
5. Impact of Any Lessening of Competition
    As discussed in the August 2008 NOPR, 73 FR 50079, 50123, and in 
section III.D.1.e of this preamble, DOE considers any lessening of 
competition likely to result from standards. The Attorney General 
determines the impact, if any, of any lessening of competition.
    DOJ concluded that the commercial refrigeration equipment standards 
contained in the proposed rule would not adversely affect competition. 
In reaching this conclusion, DOJ noted that the proposed standards took 
into account comments from commercial refrigeration equipment 
manufacturers, ASHRAE, ACEEE, and electric utilities. DOJ noted further 
that all key components are available for purchase by any manufacturer; 
therefore, no manufacturer has a technological advantage in meeting the 
proposed standards. Finally, DOJ noted that DOE found no significant 
differences between the concerns of large and small manufacturers, and 
DOJ found no evidence that certain manufacturers would be placed at a 
competitive disadvantage to other manufacturers.
6. Need of the Nation To Conserve Energy
    When economically justified, an improvement in the energy 
efficiency of commercial refrigeration equipment is likely to improve 
the security of the Nation by reducing overall energy demand, thus 
reducing the Nation's reliance on foreign sources of energy. Reduced 
demand is also likely to improve the reliability of the electricity 
system, particularly during peak-load periods. As a measure of this 
reduced demand, DOE expects the new standards covered under this 
rulemaking to eliminate the need for the construction of approximately 
121 megawatts to 2,989 megawatts of new power by 2042.
    Enhanced energy efficiency also produces environmental benefits. 
The expected energy savings from new standards for the equipment 
covered by this rulemaking will reduce the emissions of air pollutants 
and greenhouse gases associated with electricity production. Table VI-
27 provides DOE's estimate of cumulative CO2, 
NOX, and Hg emissions reductions that would result from the 
TSLs considered in this rulemaking. The expected energy savings from 
new standards for commercial refrigeration equipment may also reduce 
the cost of maintaining nationwide emissions standards and constraints.

                        Table VI-27--Summary of Emissions Reductions for Commercial Refrigeration Equipment (Cumulative Reductions for Equipment Sold From 2012 to 2042)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                              Trial standard levels [dagger][dagger]
                                 ---------------------------------------------------------------------------------------------------------------------------------------------------------------
                                               TSL 1                           TSL 2                           TSL 3                           TSL 4                           TSL 5
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
CO2 (Mt \*\)....................  8.5...........................  32.8..........................  50.7..........................  52.6..........................  66.0.

[[Page 1131]]

 
NOX (kt \**\)...................  0.59 to 14.58.................  2.27 to 56.04.................  3.51 to 86.77.................  3.64 to 89.97.................  4.56 to 112.84.
Hg (t [dagger]).................  0 to 0.224....................  0 to 0.86.....................  0 to 1.332....................  0 to 1.381....................  0 to 1.732.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
* Mt = million metric tons.
** kt = thousand tons.
[dagger] t = tons.
[dagger][dagger] Negative values indicate emission increases. Detail may not appear to sum to total due to rounding.

    The estimated cumulative CO2, NOX, and Hg 
emissions reductions for the new energy conservation standards range up 
to 66 Mt for CO2, 1.56 to 112.84 kt for NOX, and 
0 to 1.732 t for Hg for commercial refrigeration equipment from 2012 to 
2042. In the EA (chapter 16 of the TSD), DOE reports estimated annual 
changes in CO2, NOX, and Hg emissions 
attributable to each TSL. As discussed in section IV.L of this final 
rule, DOE does not report SO2 emissions reduction from power 
plants because reductions from an energy conservation standard would 
not affect the overall level of SO2 emissions in the United 
States due to emissions caps for SO2.
    The NEMS-BT modeling assumed that NOX would be subject 
to CAIR, issued by the U.S. Environmental Protection Agency on March 
10, 2005.\21\ 70 FR 25162 (May 12, 2005). On July 11, 2008, the U.S. 
Court of Appeals for the District of Columbia Circuit (DC Circuit) 
issued its decision in North Carolina v. Environmental Protection 
Agency,\22\ in which the court vacated the CAIR. 531 F.3d 896 (DC Cir. 
2008). If left in place, CAIR would have permanently capped emissions 
of NOX in 28 eastern States and the District of Columbia. As 
with the SO2 emissions cap, a cap on NOX 
emissions would have meant that energy conservation standards are not 
likely to have a physical effect on NOX emissions in states 
covered by the CAIR caps. While the caps would have meant that physical 
emissions reductions in those States would not have resulted from the 
energy conservation standards that DOE is establishing today, the 
standards might have produced an environmental-related economic impact 
in the form of lower prices for emissions allowance credits, if large 
enough. DOE notes that the estimated total reduction in NOX 
emissions, including projected emissions or corresponding allowance 
credits in States covered by the CAIR cap, was insignificant and too 
small to affect allowance prices for NOX under CAIR.
---------------------------------------------------------------------------

    \21\ On December 23, 2008, the DC Circuit decided to allow CAIR 
to remain in effect until it is replaced by a rule consistent with 
the court's earlier opinion. North Carolina v. EPA, No. 05-1244, 
2008 WL 5335481 (DC Cir. Dec. 23, 2008). Neither the July 11, 2008, 
nor the December 23, 2008, decisions of the DC Circuit change the 
standard-setting conclusions reached in this rule. See http://www.epa.gov/cleanairinterstaterule.
    \22\ Case No. 05-1244, 2008 WL 2698180 at *1 (DC Cir. July 11, 
2008).
---------------------------------------------------------------------------

    Even though the DC Circuit vacated CAIR, DOE notes that the DC 
Circuit left intact EPA's 1998 NOX SIP Call rule, which 
capped seasonal (summer) NOX emissions from electric 
generating units and other sources in 23 jurisdictions, and gave those 
jurisdictions the option to participate in a cap and trade program. 63 
FR 57356, 57359 (Oct. 27, 1998).\23\ The SIP Call rule may provide a 
similar, although less extensive, regional cap and may limit actual 
reduction in NOX emissions from revised standards occurring 
in states participating in the SIP Call rule. However, the possibility 
that the SIP Call rule may have the same effect as CAIR is highly 
uncertain. Therefore, DOE established a range of NOX 
reductions due to the standards being established in today's final 
rule. DOE's low estimate was based on the emission rate of the cleanest 
new natural gas combined-cycle power plant available for electricity 
generated, assuming that energy conservation standards would displace 
the generation of only the cleanest available fossil fuels. DOE used 
the emission rate, specified as 0.0341 t of NOX emitted per 
TWh of electricity generated, associated with an advanced natural gas 
combined-cycle power plant, as specified by NEMS-BT. To estimate the 
reduction in NOX emissions, DOE multiplied this emission 
rate by the reduction in electricity generation due to the new energy 
conservation standards considered. DOE's high estimate of 0.843 t of 
NOX per TWh was based on a nationwide NOX 
emission rate for all electrical generation. Use of such an emission 
rate assumes that future power plants displaced are no cleaner than the 
plants that are being used currently to generate electricity. Under the 
high estimate assumption, energy conservation standards also would have 
little to no effect on the generation mix. Based on AEO2008 for 2006, 
when no regulatory or non-regulatory measures were in effect to limit 
NOX emissions, DOE multiplied this emission rate by the 
reduction in electricity generation due to the standards considered. 
Table VI-27 shows the range in NOX emission changes 
calculated using the low and high estimate scenarios by TSL. 
NOX emission reductions range from 0.59 to 112.84 kt for the 
TSLs considered. These changes in NOX emissions are 
extremely small, ranging from 0.001 to 0.168 percent of the national 
base case emissions forecast by NEMS-BT, depending on the TSL.
---------------------------------------------------------------------------

    \23\ In the NOX SIP Call rule, EPA found that sources 
in the District of Columbia and 22 ``upwind'' states were emitting 
NOX (an ozone precursor) at levels that significantly 
contributed to ``downwind'' states not attaining the ozone NAAQS or 
at levels that interfered with states in attainment maintaining the 
ozone NAAQS. To ensure that downwind states attain or continue to 
attain the ozone NAAQS, EPA established a region-wide cap for 
NOX emissions from certain large combustion sources and 
set a NOX emissions budget for each State. Unlike the cap 
that CAIR would have established, the NOX SIP Call Rule's 
cap only constrains seasonal (summertime) emissions. To comply with 
the NOX SIP Call Rule, states could elect to participate 
in the NOX Budget Trading Program. Under this program, 
each emission source is required to have one allowance for each ton 
of NOX emitted during the ozone season. States have 
flexibility in how they allocate allowances through their State 
Implementation Plans, but states must remain within the EPA-
established budget. Emission sources are allowed to buy, sell, and 
bank NOX allowances as appropriate. On April 16, 2008, 
EPA determined that Georgia is no longer subject to the 
NOX SIP Call rule. 73 FR 21528 (April 22, 2008).
---------------------------------------------------------------------------

    As noted in section IV.L, DOE is able to report an estimate of the 
physical quantity changes in Hg emissions associated with an energy 
conservation standard. Rather than using the NEMS-BT model, DOE 
established a range of Hg rates to estimate the Hg emissions that could 
be reduced through standards. DOE's low estimate assumed that future 
standards would displace electrical generation from natural gas-fired 
power plants, resulting in an effective emission rate of zero. The low-

[[Page 1132]]

end emission rate is zero because natural gas-fired power plants have 
virtually zero Hg emissions associated with their operation.
    DOE's high estimate was based on a nationwide mercury emission rate 
from AEO2008. Because power plant emission rates are a function of 
local regulation, scrubbers, and the mercury content of coal, it is 
extremely difficult to identify a precise high-end emission rate. 
Therefore, DOE believes the most reasonable estimate is based on the 
assumption that all displaced coal generation would have been emitting 
at the average emission rate for coal generation as specified by 
AEO2008. As noted previously, because virtually all mercury emitted 
from electricity generation is from coal-fired power plants, DOE based 
the emission rate on the tons of mercury emitted per TWh of coal-
generated electricity. Based on the emission rate for 2006, DOE derived 
a high-end emission rate of 0.0255 tons per TWh. To estimate the 
reduction in mercury emissions, DOE multiplied the emission rate by the 
reduction in coal-generated electricity due to the standards considered 
in the utility impact analysis. The estimated changes in Hg emissions 
are shown in Table VI-27 for commercial refrigeration equipment from 
2012 to 2042. Hg emission reductions range from 0 to 1.732 tons for the 
TSLs considered. These changes in Hg emissions are extremely small, 
ranging from 0 to 0.003 percent of the national base case emissions 
forecast by NEMS-BT, depending on the TSL.
    The NEMS-BT model used for today's rulemaking could not estimate Hg 
emission reductions due to new energy conservation standards, as it 
assumed that Hg emissions would be subject to EPA's Clean Air Mercury 
Rule \24\ (CAMR). CAMR would have permanently capped emissions of 
mercury for new and existing coal-fired plants in all states by 2010. 
As with SO2 and NOX, DOE assumed that under such 
a system, energy conservation standards would have resulted in no 
physical effect on these emissions, but might have resulted in an 
environmental-related economic benefit in the form of a lower price for 
emissions allowance credits, if large enough. DOE estimated that the 
change in the Hg emissions from energy conservation standards would not 
be large enough to influence allowance prices under CAMR.
---------------------------------------------------------------------------

    \24\ 70 FR 28606 (May 18, 2005).
---------------------------------------------------------------------------

    On February 8, 2008, the DC Circuit issued its decision in New 
Jersey v. Environmental Protection Agency \25\ to vacate CAMR. In light 
of this development and because the NEMS-BT model could not be used to 
directly calculate Hg emission reductions, DOE used the current Hg 
emission rates discussed above to calculate the emissions reductions in 
Table VI-27.
---------------------------------------------------------------------------

    \25\ No. 05-1097, 2008 WL 341338, at * (DC Cir. Feb. 9, 2008).
---------------------------------------------------------------------------

    In the August 2008 NOPR, DOE considered accounting for a monetary 
benefit of CO2 emission reductions associated with this 
rulemaking. To put the potential monetary benefits from reduced 
CO2 emissions into a form that is likely to be most useful 
to decision-makers and interested parties, DOE used the same methods it 
used to calculate the net present value of consumer cost savings. DOE 
converted the estimated year-by-year reductions in CO2 
emissions into monetary values, which were then discounted over the 
life of the affected equipment to the present using both 3-percent and 
7-percent discount rates.
    In the August 2008 NOPR, DOE proposed to use the range $0 to $14 
per ton. These estimates were based on an assumption of no benefit to 
an average benefit value reported by the Intergovernmental Panel on 
Climate Change (IPCC).\26\ DOE derived the IPCC estimate used as the 
upper bound value from an estimate of the mean value of worldwide 
impacts due to climate change, and not just the effects likely to occur 
within the United States. As DOE considers a monetary value for 
CO2 emission reductions, the value should, if possible, be 
restricted to a representation of those costs and benefits likely to be 
experienced in the United States. DOE explained in the August 2008 NOPR 
that it expects such values would be lower than comparable global 
values; however, there currently are no consensus estimates for the 
U.S. benefits likely to result from CO2 emission reductions. 
However, it is appropriate to use U.S. benefit values, where available, 
and not world benefit values, in its analysis.\27\ Because U.S.-
specific estimates are unavailable, and DOE did not receive any 
additional information that would help narrow the proposed range of 
domestic benefits, DOE used the global mean value as an upper bound 
U.S. value for purposes of the sensitivity analysis.
---------------------------------------------------------------------------

    \26\ During the preparation of its most recent review of the 
state of climate science, the IPCC identified various estimates of 
the present value of reducing CO2 emissions by 1 ton over 
the life that these emissions would remain in the atmosphere. The 
estimates reviewed by the IPCC spanned a range of values. Absent a 
consensus on any single estimate of the monetary value of 
CO2 emissions, DOE used the estimates identified by the 
study cited in ``Summary for Policymakers,'' prepared by Working 
Group II of the IPCC's Fourth Assessment Report, to estimate the 
potential monetary value of CO2 reductions likely to 
result from standards finalized in this rulemaking. According to 
IPCC, the mean social cost of carbon (SCC) reported in studies 
published in peer-reviewed journals was $43 per ton of carbon. This 
translates into about $12 per ton of CO2. The literature 
review (Tol 2005) from which this mean was derived did not report 
the year in which these dollars were denominated. However, DOE 
understands this estimate was denominated in 1995$. Updating that 
estimate to 2007$ yields a SCC of $15 per ton of CO2.
    \27\ In contrast, most of the estimated costs and benefits of 
increasing the efficiency of commercial refrigeration equipment 
include only economic values of impacts that would be experienced in 
the United States. DOE generally does not consider impacts on 
manufacturers that occur solely outside of the United States.
---------------------------------------------------------------------------

    DOE received several comments in response to the proposed estimated 
value of CO2 emissions reductions. In a comment submitted by 
Earthjustice on behalf of itself and NRDC, Earthjustice questioned both 
the upper and lower bounds of DOE's range of estimated CO2 
values, which it argued were too low. (Earthjustice, No. 38 at p. 7) 
Earthjustice also stated that it would be inappropriate to limit the 
consideration to the value of CO2 to a domestic value. 
(Earthjustice, No. 38 at p. 13) Earthjustice suggested that DOE 
consider relying on the estimate used in DOE's analysis of the impacts 
of the Lieberman-Warner Climate Security Act of 2007 (S. 2191).\28\ 
(Earthjustice, No. 38 at p. 2) AHRI stated that DOE should not rely on 
the IPCC study or values under the European Union cap and trade 
program, because such a program has not yet been established in the 
United States. (AHRI, No. 33 at p. 6)
---------------------------------------------------------------------------

    \28\ According to Earthjustice's analysis of the Lieberman-
Warner Climate Security Act of 2007, implementation of this 
legislation would lead to a CO2 allowance price of $30 
per ton in 2020, rising to $61 per ton in 2030.
---------------------------------------------------------------------------

    Given the uncertainty surrounding estimates of the social cost of 
carbon, relying on any single estimate may be inadvisable because any 
estimate will depend on many assumptions. Working Group II's 
contribution to the Fourth Assessment Report of the IPCC notes the 
following:
    The large ranges of SCC are due in the large part to differences in 
assumptions regarding climate sensitivity, response lags, the treatment 
of risk and equity, economic and non-economic impacts, the inclusion of 
potentially catastrophic losses, and discount rates.\29\
---------------------------------------------------------------------------

    \29\ Climate Change 2007--Impacts, Adaptation and Vulnerability. 
Contribution of Working Group II to the Fourth Assessment Report of 
the IPCC, 17. Available at http://www.ipcc-wg2.org (last accessed 
Aug. 7, 2008).
---------------------------------------------------------------------------

    Because of this uncertainty, DOE used the SCC value from Tol 
(2005), which was presented in the IPCC's Fourth

[[Page 1133]]

Assessment Report and provided a comprehensive meta-analysis of 
estimates for the value of SCC. Earthjustice commented that this value 
was out of date, because Tol released an update of his 2005 meta-
analysis in September 2007. This update reported an increase in his 
mean estimate of SCC from $43 to $71/ton carbon. Earthjustice stated 
that DOE should not continue to use old data and should update its 
sources. (Earthjustice, No. 38 at p. 9)
    Although the Tol study was updated in 2007, the IPCC has not 
adopted the updated Tol study for its report. As a result, DOE 
continues to rely on the same study used by the IPCC. Moreover, DOE 
notes that the conclusions of Tol (2007) are similar to the conclusions 
of Tol (2005). Tol (2007) continues to indicate that there is no 
consensus regarding the monetary value of reducing CO2 
emissions by 1 ton. The broad range of values in both Tol studies are 
the result of significant differences in the methodologies used in the 
studies Tol summarized. According to Tol, all of the studies have 
shortcomings, largely because the subject is inherently complex and 
uncertain and requires broad multidisciplinary knowledge. Thus, it is 
not certain that the values reported in Tol (2007) are more accurate or 
representative than the values reported in Tol (2005).
    In today's final rule, DOE is relying on the range of values 
proposed in the August 2008 NOPR, which was based on the values 
presented in Tol (2005), as proposed. DOE does note that DOE mistakenly 
assumed that the values presented in Tol (2005) were in 2000 dollars. 
In actuality, the values in Tol (2005) were indicated to be 
approximately 1995 values in 1995 dollars. Had DOE at the NOPR stage 
applied the correct dollar year of the values presented in Tol (2005), 
DOE would have proposed the range of $0 to $15 in the August 2008 NOPR. 
Additionally, DOE has applied an annual growth rate of 2.4 percent to 
the value of SCC, as suggested by the IPCC Working Group II (2007, p. 
822). This growth rate is based on estimated increases in damage from 
future emissions that published studies have reported. As a result, for 
today's final rule, DOE is assigning a range for SCC of $0 to $20 
($2007) per ton of CO2 emissions.
    Earthjustice questioned the use of the mean estimated social cost 
of CO2 as an upper bound of the range. (Earthjustice, No. 38 
at p. 9) However, the upper bound of the range DOE used is based on Tol 
(2005), which reviewed 103 estimates of SCC from 28 published studies. 
Tol concluded that when only peer-reviewed studies published in 
recognized journals are considered, ``climate change impacts may be 
very uncertain but [it] is unlikely that the marginal damage costs of 
carbon dioxide emissions exceed $50 per ton carbon [comparable to a 
2007 value of $20 per ton carbon dioxide when expressed in 2007 U.S. 
dollars with a 2.4 percent growth rate.]''
    Earthjustice also questioned using $0 as the lower bound of DOE's 
estimated range. (Earthjustice, No. 38 at p. 10) In setting a lower 
bound, DOE agrees with the IPCC Working Group II (2007) report that 
``significant warming across the globe and the locations of significant 
observed changes in many systems consistent with warming is very 
unlikely to be due solely to natural variability of temperatures or 
natural variability of the systems'' (p. 9), and thus tentatively 
concludes that a global value of zero for reducing emissions cannot be 
justified. However, it is reasonable to allow for the possibility that 
the U.S. portion of the global cost of CO2 emissions may be 
quite low. In fact, some of the studies examined by Tol (2005) reported 
negative values for the SCC. As stated in the August 2008 NOPR, DOE is 
using U.S. benefit values, and not world benefit values, in its 
analysis. Further, U.S. domestic values will be lower than the global 
values. Additionally, the statutory criteria in EPCA do not require 
consideration of global effects. Therefore, DOE is using a lower bound 
of $0 per ton of CO2 emissions in estimating the potential 
benefits of today's final rule.
    Table VI-28 presents the resulting estimates of the potential range 
of net present value benefits associated with reducing CO2 
emissions.

 Table VI--28 Estimates of Savings From CO2 Emissions Reductions Under Commercial Refrigeration Equipment Trial
                Standard Levels at a Seven-Percent Discount Rate and Three-Percent Discount Rate
----------------------------------------------------------------------------------------------------------------
                                      Estimated
                                      cumulative      Value of estimated CO2          Value of estimated CO2
                TSL                    CO2 (Mt)    emission reductions (million    emission reductions (million
                                       emission     2007$) at 7% discount rate      2007$) at 3% discount rate
                                      reductions
----------------------------------------------------------------------------------------------------------------
1..................................         8.52  $0 to $76.01..................  $0 to $154.73.
2..................................        32.76  $0 to $292.26.................  $0 to $594.94.
3..................................        50.71  $0 to $452.49.................  $0 to $921.1.
4..................................        52.59  $0 to $469.19.................  $0 to $955.1.
5..................................        65.95  $0 to $588.44.................  $0 to $1,197.85.
----------------------------------------------------------------------------------------------------------------

    DOE also investigated the potential monetary impact from today's 
energy conservation standards of reducing SO2, 
NOX, and Hg emissions. As previously stated, DOE's initial 
analysis assumed the presence of nationwide emission caps on 
SO2 and Hg, and caps on NOX emissions in the 28 
states covered by CAIR. In the presence of these caps, DOE concluded 
that no physical reductions in power sector emissions would occur, but 
that the lower generation requirements associated with energy 
conservation standards could put downward pressure on the prices of 
emissions allowances in cap and trade markets. Estimating this effect 
is very difficult because of factors such as credit banking, which can 
change the trajectory of prices. DOE has further concluded that the 
effect from energy conservation standards on SO2 allowance 
prices is likely to be negligible, based on runs of the NEMS-BT model. 
See chapter 16 (Environmental Assessment) of the TSD for further 
details.
    Because the courts have vacated the CAIR rule, projected annual 
NOX allowances from NEMS-BT are no longer relevant. In DOE's 
subsequent analysis, NOX emissions are not controlled by a 
nationwide regulatory system. DOE estimated the national monetized 
benefits of NOX and Hg emissions reductions from today's 
rule based on environmental damage estimates from the literature. 
Available estimates suggest a very wide range of monetary values for 
NOX emissions, ranging from $370 per ton to $3,800 per

[[Page 1134]]

ton of NOX from stationary sources, measured in 2001$,\30\ 
or a range of $432 per ton to $4,441 per ton in 2007$.
---------------------------------------------------------------------------

    \30\ 2006 Report to Congress on the Costs and Benefits of 
Federal Regulations and Unfunded Mandates on State, Local, and 
Tribal Entities. Office of Management and Budget Office of 
Information and Regulatory Affairs, Washington, DC.
---------------------------------------------------------------------------

    DOE has conducted research for today's final rule and determined 
that the basic science linking mercury emissions from power plants to 
impacts on humans is considered highly uncertain. However, DOE 
identified two estimates of the environmental damage of mercury based 
on two estimates of the adverse impact of childhood exposure to methyl 
mercury on IQ for American children, and subsequent loss of lifetime 
economic productivity resulting from these IQ losses. The high-end 
estimate is based on an estimate of the current aggregate cost of the 
loss of IQ in American children that results from exposure to mercury 
of U.S. power plant origin ($1.3 billion per year in year 2000$), which 
works out to $32.6 million per ton emitted per year (2007$).\31\ The 
low-end estimate was $664,000 per ton emitted in 2004$ or $729,000 per 
ton in 2007$, which DOE derived from a published evaluation of mercury 
control using different methods and assumptions from the first study, 
but also based on the present value of the lifetime earnings of 
children exposed.\32\ Table VI-29 and Table VI-30 present the resulting 
estimates of the potential range of present value benefits associated 
with reducing national NOX and Hg emissions.
---------------------------------------------------------------------------

    \31\ Trasande, L., et al., ``Applying Cost Analyses to Drive 
Policy that Protects Children,'' 1076 Ann. N.Y. Acad. Sci. 911 
(2006).
    \32\ Ted Gayer and Robert Hahn, ``Designing Environmental 
Policy: Lessons from the Regulation of Mercury Emissions,'' 
Regulatory Analysis 05-01. AEI-Brookings Joint Center for Regulatory 
Studies, Washington, DC, 2004. A version of this paper was published 
in the Journal of Regulatory Economics in 2006. The estimate was 
derived by back-calculating the annual benefits per ton from the net 
present value of benefits reported in the study.

   Table VI-29--Estimates of Savings From Reducing NOX and Hg Emissions Under Commercial Refrigeration Equipment TSLs at a Seven-Percent Discount Rate
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                    Value of estimated NOX        Estimated cumulative Hg       Value of estimated Hg
               TSL                   Estimated cumulative NOX        emission  reductions       (tons) emission  reductions      emission  reductions
                                     (kt) emission reductions*         (thousand 2007$)                      *                     (thousand 2007$)
--------------------------------------------------------------------------------------------------------------------------------------------------------
1................................  0.59 to 14.58...............  $64 to $1,578...............  0 to 0.224..................  $0 to $46.
2................................  2.27 to 56.04...............  $245 to $6,067..............  0 to 0.86...................  $0 to $177.
3................................  3.51 to 86.77...............  $380 to $9,394..............  0 to 1.332..................  $0 to $274.
4................................  3.64 to 89.97...............  $394 to $9,741..............  0 to 1.381..................  $0 to $284.
5................................  4.56 to 112.84..............  $494 to $12,216.............  0 to 1.732..................  $0 to $356.
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Values in Table VI-29 may not appear to sum to the cumulative values in Table VI-27 due to rounding.


   Table VI-30--Estimates of Savings from Reducing NOX and Hg Emissions Under Commercial Refrigeration Equipment TSLs at a Three-Percent Discount Rate
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                    Value of estimated NOX        Estimated cumulative Hg       Value of estimated Hg
               TSL                   Estimated cumulative NOX        emission  reductions       (tons) emission  reductions      emission  reductions
                                     (kt) emission reductions*         (thousand 2007$)                      *                     (thousand 2007$)
--------------------------------------------------------------------------------------------------------------------------------------------------------
1................................  0.59 to 14.58...............  $135 to $3,329..............  0 to 0.224..................  $0 to 91.
2................................  2.27 to 56.04...............  $518 to $12,799.............  0 to 0.86...................  $0 to $349.
3................................  3.51 to 86.77...............  $802 to 19,815..............  0 to 1.332..................  $0 to $540.
4................................  3.64 to 89.97...............  $831 to $20,547.............  0 to 1.381..................  $0 to $560.
5................................  4.56 to 112.84..............  $1,042 to $25,769...........  0 to 1.732..................  $0 to $702.
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Values in Table VI-30 may not appear to sum to the cumulative values in Table VI-27 due to rounding.

7. Other Factors
    EPCA allows the Secretary of Energy, in determining whether a 
standard is economically justified, to consider any other factors that 
the Secretary deems to be relevant. (42 U.S.C. 6295(o)(2)(B)(i)(VII) 
and 6316(e)(1)) Under this provision, DOE considered LCC impacts on 
identifiable groups of customers, such as customers of different 
business types who may be disproportionately affected by any national 
energy conservation standard level. DOE also considered the reduction 
in generated capacity that could result from the imposition of any 
national energy conservation standard level.

D. Conclusion

    EPCA contains criteria for prescribing new or amended energy 
conservation standards. It provides that any such standard for 
commercial refrigeration equipment must be designed to achieve the 
maximum improvement in energy efficiency that the Secretary determines 
is technologically feasible and economically justified. (42 U.S.C. 
6295(o)(2)(A) and 42 U.S.C. 6316(e)(1)) As stated above, the Secretary 
must determine whether the benefits of the standards exceed its burdens 
considering the seven factors discussed in section II.A. (42 U.S.C. 
6295(o)(2)(B)(i) and 42 U.S.C. 6316(e)(1)) A determination is not made 
based on any one of these factors in isolation. The Secretary must 
weigh each of these seven factors in total. Further, the Secretary may 
not establish a new or amended standard if such standard would not 
result in ``significant conservation of energy.'' (42 U.S.C. 
6295(o)(3)(B) and 42 U.S.C. 6316(e)(1))
    In selecting today's energy conservation standards for commercial 
refrigeration equipment, DOE started by examining the maximum 
technologically feasible levels to determine whether those levels were 
economically justified. Upon finding the maximum technologically 
feasible levels not to be justified, DOE analyzed the next lower TSL. 
DOE followed this procedure until it identified a TSL that is 
economically justified.

[[Page 1135]]

    Table VI-31 summarizes DOE's quantitative analysis results for each 
TSL it considered for this final rule. This table presents the results 
or a range of results for each TSL, and will aid the reader in 
understanding the costs and benefits of each one. The range of values 
for industry impacts represents the results for the different markup 
scenarios that DOE used to estimate manufacturer impacts.

          Table VI-31--Summary of Results Based Upon the AEO2008 Reference Case Energy Price Forecast *
----------------------------------------------------------------------------------------------------------------
                                       TSL 1           TSL 2           TSL 3           TSL 4           TSL 5
----------------------------------------------------------------------------------------------------------------
Primary Energy Saved (quads)....           0.168           0.645           1.013           1.035           1.298
    7% Discount Rate............           0.041           0.159           0.250           0.256           0.321
    3% Discount Rate............           0.088           0.339           0.532           0.544           0.683
Generation Capacity Reduction            (0.121)         (0.465)         (0.720)         (0.747)         (0.936)
 (GW) **........................
NPV (2007$ billion)
    7% Discount Rate............           $0.33           $0.98           $1.45          $1.414         $(2.59)
    3% Discount Rate............           $0.83           $2.60           $3.97          $3.930         $(3.79)
Industry Impacts
    Industry NPV (2007$ million)           0-(7)          8-(39)       (11)-(99)      (39)-(148)        20-(340)
    Industry NPV (% change).....           0-(1)           1-(7)        (2)-(18)        (7)-(27)          4-(63)
Cumulative Emissions Impacts
 [dagger]
    CO2 (Mt)....................            8.52           32.76           50.71           52.59           65.95
    NOX (kt)....................      0.59-14.58      2.27-56.04      3.51-86.77      3.64-89.97     4.56-112.84
    Hg (t)......................         0-0.224          0-0.86         0-1.332         0-1.381         0-1.732
Employment Impacts
    Indirect Employment Impacts              332           1,699           2,559           2,670           3,011
     (2042).....................
    Direct, Domestic Employment                6              92             172             197             779
     Impacts (2012)
     [dagger][dagger]...........
Life-Cycle Cost
    Net Savings (%).............           18-45           36-65           61-89           70-92            0-92
    Net Increase (%)............             0-0             0-0             0-0             0-0            0-99
    No Change (%)...............           55-82           35-64           11-39            8-30            1-19
    Mean LCC Savings (2007$)....        211-3501        615-4893        797-5450        785-5419     (3959)-5419
    Mean PBP (years)............         0.3-1.1         0.6-2.4         1.2-3.8         1.3-3.9       1.3-196.8
----------------------------------------------------------------------------------------------------------------
* Parentheses indicate negative (-) values. For LCCs, a negative value means an increase in LCC by the amount
  indicated.
** Change in installed generation capacity by 2042 based on AEO2008 Reference Case.
[dagger] CO2 emissions impacts include physical reductions at power plants. NOX emissions impacts include
  physical reductions at power plants as well as production of emissions allowance credits where NOX emissions
  are subject to emissions caps.
[dagger][dagger] Change in total number of domestic production employees in 2012 due to standards.

    First, DOE considered TSL 5, the most efficient level for all 
equipment classes. TSL 5 would likely save an estimated 1.298 quads of 
energy through 2042, an amount DOE considers significant. Discounted at 
7 percent, the projected energy savings through 2042 would be 0.321 
quads. For the Nation as a whole, DOE projects that TSL 5 would result 
in a net decrease of $2.59 billion in NPV, using a discount rate of 7 
percent. Five equipment classes (VOP.RC.M, VOP.SC.M, SVO.RC.M, 
SVO.SC.M, and SOC.RC.M) show negative NPV at TSL 5, primarily due the 
use of LED lighting for these cases.\33\ The emissions reductions at 
TSL 5 are 65.95 Mt of CO2 and up to 112.84 kt of 
NOX. DOE also estimates that under TSL 5, total generating 
capacity in 2042 will decrease compared to the base case by 0.936 
gigawatts (GW).
---------------------------------------------------------------------------

    \33\ LED lighting for open cases was updated from the August 
2008 NOPR to reflect LED lighting fixtures currently available for, 
and specific to, open cases. DOE also increased the amount of LED 
lighting assumed for open cases. See section V.A.2.a and appendix B 
of the TSD.
---------------------------------------------------------------------------

    At TSL 5, DOE projects that the average commercial refrigeration 
equipment customer will experience a reduction in LCC compared to the 
baseline for 10 of the 15 equipment classes analyzed, while they will 
experience an increase in LCC for five equipment classes (VOP.RC.M, 
VOP.SC.M, SVO.RC.M, SOC.RC.M). These equipment classes are the five 
that DOE showed had negative NPV. Mean LCC savings for all 15 equipment 
classes vary from -$3,959 to $5,419. At TSL 5, DOE estimates the 
fraction of customers experiencing LCC increases will vary between 0 
and 99 percent depending on equipment class. The mean payback period 
for the average commercial refrigeration equipment customer at TSL 5 
compared to the baseline level is projected to be between 1.3 and 196.8 
years, depending on equipment class.
    At TSL 5, there is the risk of very large negative impacts on the 
industry if manufacturers' profit margins are reduced. The investments 
required to modify all equipment lines at the max-tech levels are 
large. At this level, manufacturers have to make costly changes to 
their production lines. In addition, the incremental cost of adding LED 
lights at TSL 5 are extremely large. Because customers put a much 
higher priority on marketing and displaying their goods than they do on 
energy efficiency, most manufacturers expressed a concern that they 
would be unable to fully recover the additional cost incurred when only 
manufacturing the most efficient equipment possible. If manufacturers 
are not able to fully pass along these large incremental production 
costs, the industry could lose up to 63 percent of the INPV.
    Although TSL 5 is the most efficient level and thus saves the most 
energy of all TSLs, four of the 15 equipment classes show a reduction 
in LCC compared to the baseline. The energy savings at TSL 5 would 
reduce installed generating capacity by 0.94 GW, or roughly 2.5 large, 
400-MW power plants. DOE estimates the associated emissions reductions 
at 66 Mt of CO2. DOE concludes that at TSL 5, the benefits 
of energy savings, generating capacity reductions, and emission 
reductions would be outweighed by the economic burdens on customers as 
indicated by the net decrease in NPV, long payback periods of up to 197 
years, and a drop in INPV of up to 63 percent. Consequently, DOE 
concludes that TSL 5 is not economically justified.
    DOE then considered TSL 4, which provides for all equipment classes 
the maximum efficiency levels that the analysis showed to have positive 
NPV to the Nation. DOE projects that the

[[Page 1136]]

average commercial refrigeration equipment customer will experience a 
reduction in LCC compared to the baseline for all 15 equipment classes 
analyzed, ranging from $785 to $5,419 depending on equipment class. The 
mean payback period for the average commercial refrigeration equipment 
customer at TSL 4 is projected to be between 1.3 and 3.9 years compared 
to the purchase of baseline equipment.
    TSL 4 would likely save an estimated 1.035 quads of energy through 
2042, an amount DOE considers significant. Discounted at 7 percent, the 
projected energy savings through 2042 would be 0.256 quads. For the 
Nation as a whole, DOE projects that TSL 4 would result in a net 
increase of $1.41 billion in NPV, using a discount rate of 7 percent. 
The estimated emissions reductions at TSL 4 are 42.6 Mt of 
CO2 and up to 90 kt of NOX.
    Similar to TSL 5, there is a risk at TSL 4 of large negative 
impacts on the industry if manufacturers' profit margins are reduced. 
The investments required at TSL 4 are also large because, based on the 
construction of the TSL, many equipment classes are at the max-tech 
level. Because a large portion of the equipment classes are at max-
tech, the incremental manufacturing costs are also large. If 
manufacturers are not able to fully pass along these large incremental 
production costs, the industry could lose up to 27 percent of the INPV.
    After carefully considering the analysis and weighing the benefits 
and burdens of TSL 4, DOE concludes that the benefits of TSL 4 (in 
terms of energy savings to the Nation of 1.035 quads through 2042, 
economic benefits of $1.41 billion in NPV using a discount rate of 7 
percent, significant environmental benefits in terms of reduced 
emissions from power plants, and national employment benefits) outweigh 
the burdens in terms of the range of possible reductions in INPV of up 
to 27 percent, and that TSL 4 represents the maximum improvement in 
energy efficiency that is technologically feasible and economically 
justified. Therefore, DOE is adopting the energy conservation standards 
for this equipment at TSL 4.

VII. Procedural Issues and Regulatory Review

A. Review Under Executive Order 12866

    Section 1(b)(1) of Executive Order 12866, ``Regulatory Planning and 
Review,'' 58 FR 51735 (October 4, 1993), requires each agency to 
identify in writing the market failure or other problem that it intends 
to address that warrants agency action such as today's final rule, and 
to assess the significance of that problem in evaluating whether any 
new regulation is warranted.
    In the August 2008 NOPR for this rulemaking, DOE requested feedback 
related to the possible existence of a market failure in the commercial 
refrigeration equipment industry. Because the commercial refrigeration 
equipment industry is part of the food merchandising industry, energy 
efficiency and energy cost savings are not the primary drivers of the 
business. Selling food products to shoppers is the primary driver. It 
is difficult for store personnel to identify cost-effective efficiency 
levels for commercial refrigeration equipment given reasons identified 
in the NOPR, and doing so may incur transaction costs, thus reducing 
cost-effectiveness of the energy efficiency investment. 73 FR 50128. 
DOE sought data on the efficiency levels of existing commercial 
refrigeration equipment by owner, electricity price, and equipment 
class. Following the publication of the August 2008 NOPR and subsequent 
public comment period, DOE did not receive any feedback related to this 
request.
    Because today's regulatory action is a significant regulatory 
action under section 3(f)(1) of Executive Order 12866, section 6(a)(3) 
of the Executive Order requires DOE to prepare and submit for review to 
the Office of Information and Regulatory Affairs (OIRA) in OMB an 
assessment of the costs and benefits of today's rule. Accordingly, DOE 
presented to OIRA for review the draft final rule and other documents 
prepared for this rulemaking, including a regulatory impact analysis 
(RIA). These documents are included in the rulemaking record and are 
available for public review in the Resource Room of DOE's Building 
Technologies Program, 950 L'Enfant Plaza, SW., 6th Floor, Washington, 
DC 20024, (202) 586-9127, between 9 a.m. and 4 p.m., Monday through 
Friday, except Federal holidays.
    The August 2008 NOPR contained a summary of the RIA, which 
evaluated the extent to which major alternatives to standards for 
commercial refrigeration equipment could achieve significant energy 
savings at reasonable cost, as compared to the effectiveness of the 
proposed rule. 73 FR 50128-29. The complete RIA (Regulatory Impact 
Analysis for Proposed Energy Conservation Standards for Commercial 
Refrigeration Equipment) is contained in the TSD prepared for today's 
rule. The RIA consists of: (1) A statement of the problem addressed by 
this regulation and the mandate for government action, (2) a 
description and analysis of the feasible policy alternatives to this 
regulation, (3) a quantitative comparison of the impacts of the 
alternatives, and (4) the national economic impacts of today's 
standards.
    As explained in the August 2008 NOPR, none of the alternatives DOE 
examined would save as much energy or have an NPV as high as the 
proposed standards. That same conclusion applies to the standards in 
today's rule. Also, several of the alternatives would require new 
enabling legislation, because authority to carry out those alternatives 
does not exist. Additional detail on the regulatory alternatives is 
found in the RIA report in the TSD.

B. Review Under the Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires 
preparation of an initial regulatory flexibility analysis (IRFA) for 
any rule that by law must be proposed for public comment, and a final 
regulatory flexibility analysis (FRFA) for any such rule that an agency 
adopts as a final rule, unless the agency certifies that the rule, if 
promulgated, will not have a significant economic impact on a 
substantial number of small entities. A regulatory flexibility analysis 
examines the impact of the rule on small entities and considers 
alternative ways of reducing negative impacts. Also, as required by 
Executive Order 13272, ``Proper Consideration of Small Entities in 
Agency Rulemaking,'' 67 FR 53461 (August 16, 2002), DOE published 
procedures and policies on February 19, 2003, to ensure that the 
potential impacts of its rules on small entities are properly 
considered during the rulemaking process. 68 FR 7990. DOE has made its 
procedures and policies available on the Office of General Counsel's 
Web site: http://www.gc.doe.gov.
    Small businesses, as defined by the Small Business Administration 
(SBA) for the commercial refrigeration equipment manufacturing 
industry, are manufacturing enterprises with 750 employees or fewer. 
DOE used the small business size standards published by SBA to 
determine whether any small entities would be required to comply with 
the rule. 61 FR 3286 and codified at 13 CFR part 121. The size 
standards are listed by North American Industry Classification System 
(NAICS) code and industry description. Commercial refrigeration 
equipment manufacturing is classified under NAICS 333415.
    DOE interviewed two of the nine manufacturers of commercial 
refrigeration equipment it identified as small businesses affected by 
this rulemaking. 73 FR 50130. DOE reviewed

[[Page 1137]]

the proposed rule under the provisions of the Regulatory Flexibility 
Act and the procedures and policies published on February 19, 2003. Id. 
On the basis of this review, DOE determined that it could not certify 
that the proposed standards (TSL 4) would have no significant economic 
impact on a substantial number of small entities. Id. DOE made this 
determination because of the potential impacts of the proposed standard 
levels on commercial refrigeration equipment manufacturers generally, 
including small businesses. Id.
    Because of these potential impacts on small manufacturers, DOE 
prepared an IRFA during the NOPR stage of this rulemaking. DOE provided 
the IRFA in its entirety in the August 2008 NOPR, 73 FR 50130-31, and 
also transmitted a copy to the Chief Counsel for Advocacy of the SBA 
for review. Chapter 13 of the TSD contains more information about the 
impact of this rulemaking on manufacturers.
    The IRFA divided potential impacts on small businesses into two 
broad categories: (1) Impacts associated with commercial refrigeration 
equipment design and manufacturing, and (2) impacts associated with the 
effect on customers' ability to merchandise products by limiting the 
flexibility in choosing design options. The commercial refrigeration 
industry is highly customized, and manufacturers were concerned that 
limiting the choices in design options would commoditize the industry 
and reduce profit margins. However, this concern was echoed by all 
manufacturers, not just small business manufacturers.
    DOE has prepared a FRFA for this rulemaking, which is presented in 
the following discussion. DOE has transmitted a copy of this FRFA to 
the Chief Counsel for Advocacy of the SBA for review. The FRFA below is 
written in accordance with the requirements of the Regulatory 
Flexibility Act.
1. Reasons for the Final Rule
    Part A-1 of Title III of EPCA addresses the energy efficiency of 
certain types of commercial and industrial equipment. (42 U.S.C. 6311-
6317) EPACT 2005, Public Law 109-58, included an amendment to Part A-1 
requiring that DOE prescribe energy conservation standards for the 
commercial refrigeration equipment that is the subject of this 
rulemaking. (EPACT 2005, Section 136(c); 42 U.S.C. 6313(c)(4)(A)) DOE 
publishes today's final rule pursuant to Part A-1. The commercial 
refrigeration equipment test procedures appear at 10 CFR parts 430-431.
2. Objectives of, and Legal Basis for, the Rule
    EPCA requires new and amended standards to be designed to achieve 
the maximum improvement in energy efficiency that is technologically 
feasible and economically justified (see section II.B of this 
preamble). To determine whether economic justification exists, DOE 
reviews comments received and conducts analysis to determine whether 
the economic benefits of the new standard exceed the burdens to the 
greatest extent practicable, taking into consideration seven factors 
set forth in 42 U.S.C. 6295(o)(2)(B) and 6316(e)(1) (see section II.B 
of this preamble). Further information concerning the background of 
this rulemaking is provided in chapter 1 of the TSD.
3. Description and Estimated Number of Small Entities Regulated
    DOE reviewed AHRI's listing of commercial refrigeration equipment 
manufacturer members and surveyed the industry to develop a list of 
every manufacturer. DOE also asked interested parties and AHRI 
representatives within the industry if they were aware of any other 
small business manufacturers. DOE then looked at publicly available 
data and contacted manufacturers, when needed, to determine if they 
meet the SBA's definition of a small business manufacturing facility 
and if their manufacturing facilities are located within the United 
States. Based on this analysis, DOE identified nine small commercial 
refrigeration equipment manufacturers and conducted on-site interviews 
with two of them. See chapter 13 of the TSD for further discussion 
about the methodology DOE used in the manufacturer impact analysis.
4. Description and Estimate of Compliance Requirements
    Potential impacts on manufacturers, including small businesses, 
come from impacts associated with commercial refrigeration equipment 
design and manufacturing. All manufacturers, including small 
businesses, would have to develop designs to comply with higher TSLs. 
Product redesign costs tend to be fixed and do not scale with sales 
volume. Thus, small manufacturers would be at a relative disadvantage 
at higher TSLs because research and development efforts would be on the 
same scale as those for larger companies. Furthermore, the level of 
research and development needed to meet energy conservation standards 
increases with more stringent energy conservation standards. DOE 
expects that small manufacturers will have more difficulty funding the 
required research and development necessary to meet energy conservation 
standards than larger manufacturers. However, as explained in part 6 of 
the IRFA, ``Significant Alternatives to the Proposed Rule,'' DOE 
explicitly considered the impacts on small manufacturers of commercial 
refrigeration equipment in selecting TSL 4, rather than selecting a 
higher standard level. DOE expects that the differential impact on 
small manufacturers of commercial refrigeration equipment would be 
smaller in moving from TSL 3 to TSL 4 than it would be in moving from 
TSL 4 to TSL 5.
5. Significant Issues Raised by Public Comments
    DOE summarized comments from interested parties, including 
commercial refrigeration equipment manufacturers, in sections IV and V 
of this preamble. However, DOE did not receive any comments regarding 
impacts specific to small business manufacturers for the adoption of 
TSL 4 or the alternatives identified in section 6 of the IRFA, 
``Significant Alternatives to the Rule.''
6. Steps DOE Has Taken To Minimize the Economic Impact on Small 
Manufacturers
    In consideration of the benefits and burdens of standards, 
including the burdens posed on small manufacturers, DOE concluded that 
TSL 4 is the highest level that can be justified for commercial 
refrigeration equipment. As explained in part 6 of the IRFA, 
``Significant Alternatives to the Rule,'' DOE explicitly considered the 
impacts on small manufacturers of commercial refrigeration equipment in 
selecting TSL 4. Levels at TSL 5 would place excessive burdens on 
manufacturers, including small manufacturers, of commercial 
refrigeration equipment. Such burdens would include research and 
development costs and also a potential reduction of profit margins by 
limiting the flexibility of customers to choose design options. 
However, the differential impact on small businesses is expected to be 
lower in moving from TSL 3 to TSL 4 than in moving from TSL 4 to TSL 5, 
because research and development efforts are less at lower TSLs. 
Chapter 13 of the TSD contains additional information about the impact 
of this rulemaking on manufacturers.
    Section VI.C.2 discusses how small business impacts entered into 
DOE's selection of today's standards for commercial refrigeration 
equipment.

[[Page 1138]]

DOE made its decision regarding standards by beginning with the highest 
level considered (TSL 5) and successively eliminating TSLs until it 
found a TSL that is both technically feasible and economically 
justified, taking into account other EPCA criteria. As discussed in 
section VI.C.2.e, DOE expects today's standard to have little or no 
differential impact on small manufacturers of commercial refrigeration 
equipment.
    Finally, in the NOPR, DOE requested comment on the impacts on small 
business manufacturers of TSL 4 and any other alternatives to the 
proposed rule. DOE received no comments in reference to any undue 
burden placed on small manufacturers.

C. Review Under the Paperwork Reduction Act

    DOE stated in the August 2008 NOPR that this rulemaking would 
impose no new information and recordkeeping requirements, and that OMB 
clearance is not required under the Paperwork Reduction Act (44 U.S.C. 
3501 et seq.). 73 FR 50131-32. DOE received no comments on this in 
response to the August 2008 NOPR, and, as with the proposed rule, 
today's rule imposes no information and recordkeeping requirements. 
Therefore, DOE has taken no further action in this rulemaking with 
respect to the Paperwork Reduction Act.

D. Review Under the National Environmental Policy Act

    DOE prepared an environmental assessment of the impacts of today's 
standards which it published as chapter 16 within the TSD for the final 
rule. DOE found the environmental effects associated with today's 
various standard levels for commercial refrigeration equipment to be 
insignificant. Therefore, DOE is issuing a Finding of No Significant 
Impact (FONSI) pursuant to the National Environmental Policy Act of 
1969 (NEPA) (42 U.S.C. 4321 et seq.), the regulations of the Council on 
Environmental Quality (40 CFR parts 1500-1508), and DOE's regulations 
for compliance with NEPA (10 CFR part 1021). The FONSI is available in 
the docket for this rulemaking.

E. Review Under Executive Order 13132

    DOE reviewed this rule pursuant to Executive Order 13132, 
``Federalism,'' 64 FR 43255 (August 4, 1999), which imposes certain 
requirements on agencies formulating and implementing policies or 
regulations that preempt State law or that have federalism 
implications. In accordance with DOE's statement of policy describing 
the intergovernmental consultation process it will follow in the 
development of regulations that have federalism implications, 65 FR 
13735 (March 14, 2000), DOE examined the proposed rule and determined 
that the rule would not have a substantial direct effect on the States, 
on the relationship between the National Government and the States, or 
on the distribution of power and responsibilities among the various 
levels of Government. 73 FR 50132. DOE received no comments on this 
issue in response to the August 2008 NOPR, and its conclusions on this 
issue are the same for the final rule as they were for the proposed 
rule. Therefore, DOE is taking no further action in today's final rule 
with respect to Executive Order 13132.

F. Review Under Executive Order 12988

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

G. Review Under the Unfunded Mandates Reform Act of 1995

    As indicated in the August 2008 NOPR, DOE reviewed the proposed 
rule under Title II of the Unfunded Mandates Reform Act of 1995 (Pub. 
L. 104-4) (UMRA), which imposes requirements on Federal agencies when 
their regulatory actions will have certain types of impacts on State, 
local, and Tribal governments and the private sector. 73 FR 50132. DOE 
concluded that although this rule would not contain an 
intergovernmental mandate, it may result in expenditure of $100 million 
or more in one year by the private sector. Id. Therefore, in the August 
2008 NOPR, DOE addressed the UMRA requirements that it prepare a 
statement as to the basis, costs, benefits, and economic impacts of the 
proposed rule, and that it identify and consider regulatory 
alternatives to the proposed rule. Id. DOE received no comments 
concerning the UMRA in response to the August 2008 NOPR, and its 
conclusions on this issue are the same for the final rule as they were 
for the proposed rule. Therefore, DOE is taking no further action in 
today's final rule with respect to the UMRA.

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

    DOE determined that, for this rulemaking, it need not prepare a 
Family Policymaking Assessment under Section 654 of the Treasury and 
General Government Appropriations Act, 1999 (Pub. L. 105-277). Id. DOE 
received no comments concerning Section 654 in response to the August 
2008 NOPR, and, therefore, takes no further action in today's final 
rule with respect to this provision.

I. Review Under Executive Order 12630

    DOE determined under Executive Order 12630, ``Governmental Actions 
and Interference with Constitutionally Protected Property Rights,'' 53 
FR 8859 (March 18, 1988), that today's rule would not result in any 
takings that might require compensation under the Fifth Amendment to 
the U.S. Constitution. 73 FR 50132. DOE received no comments concerning 
Executive Order 12630 in response to the August 2008 NOPR, and, 
therefore, takes no further action in today's final rule with respect 
to this Executive Order.

J. Review Under the Treasury and General Government Appropriations Act, 
2001

    Section 515 of the Treasury and General Government Appropriations 
Act, 2001 (44 U.S.C. 3516 note) provides for agencies to review most 
disseminations of information to the public under guidelines 
established by each agency pursuant to general guidelines issued by 
OMB. OMB's

[[Page 1139]]

guidelines were published at 67 FR 8452 (February 22, 2002), and DOE's 
guidelines were published at 67 FR 62446 (October 7, 2002). DOE has 
reviewed today's final rule under the OMB and DOE guidelines and has 
concluded that it is consistent with applicable policies in those 
guidelines.

K. Review Under Executive Order 13211

    Executive Order 13211, ``Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution, or Use,'' 66 FR 28355 
(May 22, 2001) requires Federal agencies to prepare and submit to OIRA 
a Statement of Energy Effects for any significant energy action. DOE 
determined that the proposed rule was not a ``significant energy 
action'' within the meaning of Executive Order 13211. 73 FR 50133. 
Accordingly, it did not prepare a Statement of Energy Effects on the 
proposed rule. DOE received no comments on this issue in response to 
the August 2008 NOPR. As with the proposed rule, DOE has concluded that 
today's final rule is not a significant energy action within the 
meaning of Executive Order 13211, and has not prepared a Statement of 
Energy Effects on the rule.

L. Review Under the Information Quality Bulletin for Peer Review

    On December 16, 2004, OMB, in consultation with the Office of 
Science and Technology, issued its ``Final Information Quality Bulletin 
for Peer Review (the Bulletin). 70 FR 2664 (January 14, 2005). The 
purpose of the Bulletin is to enhance the quality and credibility of 
the Government's scientific information. The Bulletin establishes that 
certain scientific information shall be peer reviewed by qualified 
specialists before it is disseminated by the Federal Government. As 
indicated in the August 2008 NOPR, this includes influential scientific 
information related to agency regulatory actions, such as the analyses 
in this rulemaking. 73 FR 50133.
    As set forth in the August 2008 NOPR, DOE held formal in-progress 
peer reviews of the types of analyses and processes that DOE has used 
to develop the energy efficiency standards in today's rule, and issued 
a report on these peer reviews. Id.

M. Congressional Notification

    As required by 5 U.S.C. 801, DOE will submit to Congress a report 
regarding the issuance of today's final rule prior to the effective 
date set forth at the outset of this notice. The report will state that 
it has been determined that the rule is a ``major rule'' as defined by 
5 U.S.C. 804(2). DOE also will submit the supporting analyses to the 
Comptroller General in the U.S. Government Accountability Office (GAO) 
and make them available to each House of Congress.

VIII. Approval of the Office of the Secretary

    The Secretary of Energy has approved publication of today's final 
rule.

    Issued in Washington, DC, on December 31, 2008.
John F. Mizroch,
Acting Assistant Secretary, Energy Efficiency and Renewable Energy.

List of Subjects in 10 CFR Part 431

    Administrative practice and procedure, Confidential business 
information, Energy conservation, Incorporation by reference.

0
For the reasons set forth in the preamble, chapter II of title 10, Code 
of Federal Regulations, part 431 is amended as set forth below.

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

0
1. The authority citation for part 431 continues to read as follows:

    Authority: 42 U.S.C. 6291-6317.


0
2. Section 431.62 of subpart C is amended by adding in alphabetical 
order new definitions for ``air-curtain angle,'' ``commercial hybrid 
refrigerator, freezer, and refrigerator-freezer,'' ``door angle,'' 
``horizontal closed,'' ``horizontal open,'' ``semivertical open,'' 
``vertical closed,'' ``vertical open,'' and ``wedge case'' to read as 
follows:


Sec.  431.62  Definitions concerning commercial refrigerators, 
freezers, and refrigerator-freezers.

    Air-curtain angle means:
    (1) For equipment without doors and without a discharge air grille 
or discharge air honeycomb, the angle between a vertical line extended 
down from the highest point on the manufacturer's recommended load 
limit line and the load limit line itself, when the equipment is viewed 
in cross-section; and
    (2) For all other equipment without doors, the angle formed between 
a vertical line and the straight line drawn by connecting the point at 
the inside edge of the discharge air opening with the point at the 
inside edge of the return air opening, when the equipment is viewed in 
cross-section.
* * * * *
    Commercial hybrid refrigerator, freezer, and refrigerator-freezer 
means a commercial refrigerator, freezer, or refrigerator-freezer that 
has two or more chilled and/or frozen compartments that are:
    (1) In two or more different equipment families,
    (2) Contained in one cabinet, and
    (3) Sold as a single unit.
* * * * *
    Door angle means:
    (1) For equipment with flat doors, the angle between a vertical 
line and the line formed by the plane of the door, when the equipment 
is viewed in cross-section; and
    (2) For equipment with curved doors, the angle formed between a 
vertical line and the straight line drawn by connecting the top and 
bottom points where the display area glass joins the cabinet, when the 
equipment is viewed in cross-section.
* * * * *
    Horizontal Closed means equipment with hinged or sliding doors and 
a door angle greater than or equal to 45[deg].
* * * * *
    Horizontal Open means equipment without doors and an air-curtain 
angle greater than or equal to 80[deg] from the vertical.
* * * * *
    Semivertical Open means equipment without doors and an air-curtain 
angle greater than or equal to 10[deg] and less than 80[deg] from the 
vertical.
* * * * *
    Vertical Closed means equipment with hinged or sliding doors and a 
door angle less than 45[deg].
    Vertical Open means equipment without doors and an air-curtain 
angle greater than or equal to 0[deg] and less than 10[deg] from the 
vertical.
    Wedge case means a commercial refrigerator, freezer, or 
refrigerator-freezer that forms the transition between two regularly 
shaped display cases.

0
3. Section 431.63 of subpart C is revised to read as follows:


Sec.  431.63  Materials incorporated by reference.

    (a) General. We incorporate by reference the following standards 
into Subpart C of Part 431. The material listed has been approved for 
incorporation by reference by the Director of the Federal Register in 
accordance with 5 U.S.C. 552(a) and 1 CFR 51. Any subsequent amendment 
to a standard by the standard-setting organization will not affect the 
DOE regulations unless and until amended by DOE. Material is 
incorporated as it exists on the date of the approval and a notice of 
any change in the material will be published in the Federal

[[Page 1140]]

Register. All approved material is available for inspection at the 
National Archives and Records Administration (NARA). For information on 
the availability of this material at NARA, call 202-741-6030 or go to 
http://www.archives.gov/federal_register/code_of_federal_regulations/ibr_locations.html. Also, this material is available for 
inspection at U.S. Department of Energy, Office of Energy Efficiency 
and Renewable Energy, Building Technologies Program, 6th Floor, 950 
L'Enfant Plaza, SW., Washington, DC 20024, 202-586-2945, or go to: 
http://www1.eere.energy.gov/buildings/appliance_standards/. Standards 
can be obtained from the sources listed below.
    (b) ANSI. American National Standards Institute, 25 W. 43rd Street, 
4th Floor, New York, NY 10036, 212-642-4900, or go to http://www.ansi.org:
    (1) ANSI /AHAM HRF-1-2004, Energy, Performance and Capacity of 
Household Refrigerators, Refrigerator-Freezers and Freezers, approved 
July 7, 2004, IBR approved for Sec.  431.64.
    (2) [Reserved]
    (c) ARI. Air-Conditioning and Refrigeration Institute, 4100 N. 
Fairfax Dr., Suite 200, Arlington, VA 22203, or http://www.ari.org/std/standards.html:
    (1) ARI Standard 1200-2006, Performance Rating of Commercial 
Refrigerated Display Merchandisers and Storage Cabinets, 2006, IBR 
approved for Sec. Sec.  431.64 and 431.66.
    (2) [Reserved]

0
4. Section 431.66 of subpart C is amended by adding new paragraphs 
(a)(3) and (d) to read as follows:


Sec.  431.66  Energy conservation standards and their effective dates.

    (a) * * *
    (3) The term ``TDA'' means the total display area (ft2) 
of the case, as defined in the ARI Standard 1200-2006, appendix D 
(incorporated by reference, see Sec.  431.63).
* * * * *
    (d) Each commercial refrigerator, freezer, and refrigerator-freezer 
with a self-contained condensing unit and without doors; commercial 
refrigerator, freezer, and refrigerator-freezer with a remote 
condensing unit; and commercial ice-cream freezer manufactured on or 
after January 1, 2012, shall have a daily energy consumption (in 
kilowatt hours per day) that does not exceed the levels specified:
    (1) For equipment other than hybrid equipment, refrigerator-
freezers or wedge cases:

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                 Rating     Operating
       Equipment category          Condensing unit       Equipment family        temp.        temp.       Equipment class        Maximum daily energy
                                    configuration                               ([deg]F)     ([deg]F)     designation \*\       consumption (kWh/day)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Remote Condensing Commercial     Remote (RC).......  Vertical Open (VOP)....       38 (M)         >=32  VOP.RC.M...........  0.82 x TDA + 4.07
 Refrigerators and Commercial                                                       0 (L)          <32  VOP.RC.L...........  2.27 x TDA + 6.85
 Freezers.
                                                     Semivertical Open (SVO)       38 (M)         >=32  SVO.RC.M...........  0.83 x TDA + 3.18
                                                                                    0 (L)          <32  SVO.RC.L...........  2.27 x TDA + 6.85
                                                     Horizontal Open (HZO)..       38 (M)         >=32  HZO.RC.M...........  0.35 x TDA + 2.88
                                                                                    0 (L)          <32  HZO.RC.L...........  0.57 x TDA + 6.88
                                                     Vertical Closed               38 (M)         >=32  VCT.RC.M...........  0.22 x TDA + 1.95
                                                      Transparent (VCT).            0 (L)          <32  VCT.RC.L...........  0.56 x TDA + 2.61
                                                     Horizontal Closed             38 (M)         >=32  HCT.RC.M...........  0.16 x TDA + 0.13
                                                      Transparent (HCT).            0 (L)          <32  HCT.RC.L...........  0.34 x TDA + 0.26
                                                     Vertical Closed Solid         38 (M)         >=32  VCS.RC.M...........  0.11 x V + 0.26
                                                      (VCS).                        0 (L)          <32  VCS.RC.L...........  0.23 x V + 0.54
                                                     Horizontal Closed Solid       38 (M)         >=32  HCS.RC.M...........  0.11 x V + 0.26
                                                      (HCS).                        0 (L)          <32  HCS.RC.L...........  0.23 x V + 0.54
                                                     Service Over Counter          38 (M)         >=32  SOC.RC.M...........  0.51 x TDA + 0.11
                                                      (SOC).                        0 (L)          <32  SOC.RC.L...........  1.08 x TDA + 0.22
Self-Contained Commercial        Self-Contained      Vertical Open (VOP)....       38 (M)         >=32  VOP.SC.M...........  1.74 x TDA + 4.71
 Refrigerators and Commercial     (SC).                                             0 (L)          <32  VOP.SC.L...........  4.37 x TDA + 11.82
 Freezers without Doors.
                                                     Semivertical Open (SVO)       38 (M)         >=32  SVO.SC.M...........  1.73 x TDA + 4.59
                                                                                    0 (L)          <32  SVO.SC.L...........  4.34 x TDA + 11.51
                                                     Horizontal Open........       38 (M)         >=32  HZO.SC.M...........  0.77 x TDA + 5.55
                                                                                    0 (L)          <32  HZO.SC.L...........  1.92 x TDA + 7.08
Commercial Ice-Cream Freezers..  Remote (RC).......  Vertical Open (VOP)....      -15 (I)    <=-5 \**\  VOP.RC.I...........  2.89 x TDA + 8.7
                                                     Semivertical Open (SVO)  ...........  ...........  SVO.RC.I...........  2.89 x TDA + 8.7
                                                     Horizontal Open (HZO)..  ...........  ...........  HZO.RC.I...........  0.72 x TDA + 8.74
                                                     Vertical Closed          ...........  ...........  VCT.RC.I...........  0.66 x TDA + 3.05
                                                      Transparent (VCT).
                                                     Horizontal Closed        ...........  ...........  HCT.RC.I...........  0.4 x TDA + 0.31
                                                      Transparent (HCT).
                                                     Vertical Closed Solid    ...........  ...........  VCS.RC.I...........  0.27 x V + 0.63
                                                      (VCS).
                                                     Horizontal Closed Solid  ...........  ...........  HCS.RC.I...........  0.27 x V + 0.63
                                                      (HCS).
                                                     Service Over Counter     ...........  ...........  SOC.RC.I...........  1.26 x TDA + 0.26
                                                      (SVO).
                                 Self-Contained      Vertical Open (VOP)....  ...........  ...........  VOP.SC.I...........  5.55 x TDA + 15.02
                                  (SC).
                                                     Semivertical Open (SVO)  ...........  ...........  SVO.SC.I...........  5.52 x TDA + 14.63
                                                     Horizontal Open (HZO)..  ...........  ...........  HZO.SC.I...........  2.44 x TDA + 9
                                                     Vertical Closed          ...........  ...........  VCT.SC.I...........  0.67 x TDA + 3.29
                                                      Transparent (VCT).
                                                     Horizontal Closed        ...........  ...........  HCT.SC.I...........  0.56 x TDA + 0.43
                                                      Transparent (HCT).

[[Page 1141]]

 
                                                     Vertical Closed Solid    ...........  ...........  VCS.SC.I...........  0.38 x V + 0.88
                                                      (VCS).
                                                     Horizontal Closed Solid  ...........  ...........  HCS.SC.I...........  0.38 x V + 0.88
                                                      (HCS).
                                                     Service Over Counter     ...........  ...........  SOC.SC.I...........  1.76 x TDA + 0.36
                                                      (SVO).
--------------------------------------------------------------------------------------------------------------------------------------------------------
\*\ The meaning of the letters in this column is indicated in the three columns to the left.
\**\ Ice-cream freezer is defined in 10 CFR 431.62 as a commercial freezer that is designed to operate at or below -5 [deg]F (-21 [deg]C) and that the
  manufacturer designs, markets, or intends for the storing, displaying, or dispensing of ice cream.

    (2) For commercial refrigeration equipment with two or more 
compartments (i.e., hybrid refrigerators, hybrid freezers, hybrid 
refrigerator-freezers, and non-hybrid refrigerator-freezers), the 
maximum daily energy consumption (MDEC) for each model shall be the sum 
of the MDEC values for all of its compartments. For each compartment, 
measure the TDA or volume of that compartment, and determine the 
appropriate equipment class based on that compartment's equipment 
family, condensing unit configuration, and designed operating 
temperature. The MDEC limit for each compartment shall be the 
calculated value obtained by entering that compartment's TDA or volume 
into the standard equation in paragraph (d)(1) of this section for that 
compartment's equipment class. Measure the calculated daily energy 
consumption (CDEC) or total daily energy consumption (TDEC) for the 
entire case:
    (i) For remote condensing commercial hybrid refrigerators, hybrid 
freezers, hybrid refrigerator-freezers, and non-hybrid refrigerator-
freezers, where two or more independent condensing units each 
separately cool only one compartment, measure the total refrigeration 
load of each compartment separately according to the ARI Standard 1200-
2006 test procedure (incorporated by reference, see Sec.  431.63). 
Calculate compressor energy consumption (CEC) for each compartment 
using Table 1 in ARI Standard 1200-2006 using the saturated evaporator 
temperature for that compartment. The CDEC for the entire case shall be 
the sum of the CEC for each compartment, fan energy consumption (FEC), 
lighting energy consumption (LEC), anti-condensate energy consumption 
(AEC), defrost energy consumption (DEC), and condensate evaporator pan 
energy consumption (PEC) (as measured in ARI Standard 1200-2006).
    (ii) For remote condensing commercial hybrid refrigerators, hybrid 
freezers, hybrid refrigerator-freezers, and non-hybrid refrigerator-
freezers, where two or more compartments are cooled collectively by one 
condensing unit, measure the total refrigeration load of the entire 
case according to the ARI Standard 1200-2006 test procedure 
(incorporated by reference, see Sec.  431.63). Calculate a weighted 
saturated evaporator temperature for the entire case by:
    (A) Multiplying the saturated evaporator temperature of each 
compartment by the volume of that compartment (as measured in ARI 
Standard 1200-2006),
    (B) Summing the resulting values for all compartments, and
    (C) Dividing the resulting total by the total volume of all 
compartments.
    Calculate the CEC for the entire case using Table 1 in ARI Standard 
1200-2006 (incorporated by reference, see Sec.  431.63), using the 
total refrigeration load and the weighted average saturated evaporator 
temperature. The CDEC for the entire case shall be the sum of the CEC, 
FEC, LEC, AEC, DEC, and PEC.
    (iii) For self-contained commercial hybrid refrigerators, hybrid 
freezers, hybrid refrigerator-freezers, and non-hybrid refrigerator-
freezers, measure the TDEC for the entire case according to the ARI 
Standard 1200-2006 test procedure (incorporated by reference, see Sec.  
431.63).
    (3) For remote-condensing and self-contained wedge cases, measure 
the CDEC or TDEC according to the ARI Standard 1200-2006 test procedure 
(incorporated by reference, see Sec.  431.63). The MDEC for each model 
shall be the amount derived by incorporating into the standards 
equation in paragraph (d)(1) of this section for the appropriate 
equipment class a value for the TDA that is the product of:
    (i) The vertical height of the air-curtain (or glass in a 
transparent door) and (ii) The largest overall width of the case, when 
viewed from the front.

Appendix

    [The following letter from the Department of Justice will not 
appear in the Code of Federal Regulations.]
Department of Justice, Antitrust Division, Main Justice Building, 
950 Pennsylvania Avenue, NW., Washington, DC 20530-0001, (202) 514-
2401/(202) 616-2645(f, [email protected], http://www.usdoj.gov.

October 24, 2008.

Warren Belmar, Esq., Deputy General Counsel for Energy Policy, 
Department of Energy, Washington, DC 20585.

    Dear Deputy General Counsel Belmar: I am responding to your 
August 12, 2008 letter seeking the views of the Attorney General 
about the potential impact on competition of the proposed energy 
efficiency standards for commercial refrigeration equipment. The 
Energy Policy and Conservation Act (``EPCA'') authorizes the 
Department of Energy (``DOE'') to establish energy conservation 
standards for a number of appliances where DOE determines that those 
standards would be technologically feasible, economically justified, 
and result in significant energy savings.
    Your request was submitted pursuant to Section 325(o)(2)(B)(i) 
of the Energy Policy and Conservation Act, 42 U.S.C. Sec.  6295 
(``EPCA''), which states that, before the Secretary of Energy may 
prescribe a new or amended energy conservation standard, the 
Secretary shall ask the Attorney General to make a determination of 
``the impact of any lessening of competition * * * that is likely to 
result from the imposition of standard.'' The Attorney General's 
responsibility for responding to requests from other departments 
about the effect of a program on competition has been delegated to 
the Assistant Attorney General for the Antitrust Division in 28 CFR 
Sec.  0.40(g). In conducting its analysis the Antitrust Division 
examines whether a proposed standard may lessen competition, for 
example, by placing certain manufacturers of a product at an 
unjustified competitive disadvantage compared to other 
manufacturers, or by inducing avoidable inefficiencies in production 
or distribution of particular products. In addition to harming 
consumers directly through higher prices, these effects could 
undercut the ultimate goals of the legislation.
    Along with your request, you sent us the draft final rule and a 
number of other documents relating to commercial refrigeration 
equipment, including a hearing transcript and the names of parties 
interviewed by DOE's consultant.
    We have concluded that the proposed standards would not 
adversely affect competition. In reaching this conclusion, we note 
that the proposed standards were

[[Page 1142]]

developed taking into account comments by commercial refrigeration 
equipment manufacturers, the American Society of Heating, 
Refrigerating, and Air-Conditioning Engineers, the American Council 
for an Energy Efficient Economy and electric utilities. We note 
further that all key components are available for purchase by any 
manufacturer; therefore no manufacturer has a technological 
advantage in meeting the proposed standards. Finally, DOE found no 
significant differences between the concerns of large and small 
manufacturers, and we found no evidence that certain manufacturers 
would be placed at a competitive disadvantage to other 
manufacturers.
    In conclusion, the Antitrust Division does not believe the 
proposed final rule would adversely affect competition.


    Yours sincerely,
Deborah A. Garza,
Acting Assistant Attorney General.

[FR Doc. E8-31449 Filed 1-8-09; 8:45 am]
BILLING CODE 6450-01-P