[Federal Register Volume 75, Number 64 (Monday, April 5, 2010)]
[Proposed Rules]
[Pages 17080-17083]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-7608]


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DEPARTMENT OF ENERGY

10 CFR Part 431

[Docket No. EERE-2008-BT-STD-0012]
RIN 1904-AB86


Energy Conservation Standards for Walk-in Coolers and Walk-in 
Freezers: Public Meeting and Availability of the Preliminary Technical 
Support Document

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

ACTION: Notice of public meeting and availability of preliminary 
technical support document.

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SUMMARY: The U.S. Department of Energy (DOE) will hold a public meeting 
to discuss and receive comments on: The equipment classes that DOE 
plans to analyze for establishing energy conservation standards for 
walk-in coolers and walk-in freezers; the analytical framework, models, 
and tools that DOE is using to evaluate standards for this equipment; 
the results of preliminary analyses performed by DOE for this 
equipment; and the potential energy conservation standard levels 
derived from these analyses that DOE could consider for this equipment. 
In addition, DOE encourages written comments on these subjects. To 
inform interested parties and facilitate this process, DOE has prepared 
an agenda, a preliminary technical support document (preliminary TSD), 
and briefing materials, which are available at: http://www1.eere.energy.gov/buildings/appliance_standards/commercial/wicf.html.

DATES: DOE will hold a public meeting on Friday, May 14, 2010, from 9 
a.m. to 5 p.m. in Washington, DC. Any person requesting to speak at the 
public meeting should submit such request, along with an electronic 
copy of the statement to be given at the public meeting, before 4 p.m., 
Friday, April 30, 2010. Written comments are welcome, especially 
following the public meeting, and should be submitted by May 20, 2010.

ADDRESSES: The public meeting will be held at the U.S. Department of 
Energy, Forrestal Building, Room 8E-089, 1000 Independence Avenue, SW., 
Washington, DC 20585-0121. Please note that foreign nationals 
participating in the public meeting are subject to advance security 
screening procedures. If a foreign national wishes to participate in 
the public meeting, please inform DOE of this fact as soon as possible 
by contacting Ms. Brenda Edwards at (202) 586-2945 so that the 
necessary procedures can be completed. Interested persons may submit 
comments, identified by docket number EERE-2008-BT-STD-0012, by any of 
the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov 
Follow the instructions for submitting comments.
     E-mail: [email protected]; Include EERE-2008-BT-
STD-0012 in the subject line of the message.
     Postal Mail: Ms. Brenda Edwards, U.S. Department of 
Energy, Building Technologies Program, Mailstop EE-2J, Public Meeting 
for Walk-in Coolers and Walk-in Freezers, EERE-2008-BT-STD-0012, 1000 
Independence Avenue, SW., Washington, DC 20585-0121. Telephone (202) 
586-2945. Please submit one signed paper original.
     Hand Delivery/Courier: Ms. Brenda Edwards, U.S. Department 
of Energy, Building Technologies Program, Sixth Floor, 950 L'Enfant 
Plaza, SW., Washington, DC 20024. Telephone (202) 586-2945. Please 
submit one signed paper original.
    Instructions: All submissions received must include the agency name 
and docket number.
    Docket: For access to the docket to read background documents or a 
copy of the transcript of the public meeting or comments received, go 
to the U.S. Department of Energy, Sixth Floor, 950 L'Enfant Plaza, SW., 
Washington, DC 20024, (202) 586-2945, between 9 a.m. and 4 p.m., Monday 
through Friday,

[[Page 17081]]

except Federal holidays. Please call Ms. Brenda Edwards at (202) 586-
2945 for additional information regarding visiting the Resource Room.

FOR FURTHER INFORMATION CONTACT: Direct requests for additional 
information to Mr. Charles Llenza, U.S. Department of Energy, Office of 
Energy Efficiency and Renewable Energy, Building Technologies, EE-2J, 
1000 Independence Avenue, SW., Washington, DC 20585-0121, (202) 586-
2192. E-mail: [email protected]. In the Office of General 
Counsel, contact Mr. Michael Kido, U.S. Department of Energy, Office of 
General Counsel, GC-71, 1000 Independence Avenue, SW., Washington, DC 
20585, (202) 586-8145. E-mail: [email protected].

SUPPLEMENTARY INFORMATION:

A. Statutory Authority

    Title III of the Energy Policy and Conservation Act of 1975, as 
amended, (EPCA or the Act) sets forth a variety of provisions designed 
to improve energy efficiency. Part B of Title III (42 U.S.C. 6291-6309) 
provides for the Energy Conservation Program for Consumer Products 
Other Than Automobiles. The National Energy Conservation Policy Act 
(NECPA), Public Law 95-619, amended EPCA to add Part C of Title III, 
which established an energy conservation program for certain industrial 
equipment. (42 U.S.C. 6311-6317) (For purposes of codification in Title 
42 of the U.S. Code, these parts were subsequently redesignated as 
Parts A and A-1, respectively, for editorial reasons.) Section 312 of 
the Energy Independence and Security Act of 2007 (EISA 2007) further 
amended EPCA by adding certain equipment to this energy conservation 
program, including walk-in coolers and walk-in freezers (collectively 
``walk-in equipment'' or ``walk-ins''), which are the subject of this 
rulemaking. (42 U.S.C. 6311(1), (20), 6313(f) and 6314(a)(9))
    DOE is required to design each standard for this equipment to: (1) 
Achieve the maximum improvement in energy efficiency that is 
technologically feasible and economically justified, and (2) result in 
significant conservation of energy. (42 U.S.C. 6295(o)(2)(A) and 
(o)(3), 42 U.S.C. 6313(f)(4)(A); see 42 U.S.C. 6295(o)(2)(A) and 
(o)(3)(B)) To determine whether a proposed standard is economically 
justified, DOE will, after receiving comments on the proposed standard, 
determine whether the benefits of the standard exceed its burdens to 
the greatest extent practicable, considering the following seven 
factors:
    1. The economic impact of the standard on manufacturers and 
consumers of equipment subject to the standard;
    2. The savings in operating costs throughout the estimated average 
life of the covered equipment in the type (or class) compared to any 
increase in the price, initial charges, or maintenance expenses for the 
covered equipment which 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 covered 
equipment 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] considers relevant.
    (See 42 U.S.C. 6295(o)(2)(B)(i); 6313(f)) For walk-ins, DOE is 
applying those factors in a manner consistent with its other energy 
conservation standards rulemakings to ascertain the maximum improvement 
in energy efficiency that is technologically feasible and economically 
justified for this equipment.
    Prior to proposing a standard, DOE typically seeks public input on 
the analytical framework, models, and tools that DOE will use to 
evaluate standards for the product at issue; the results of preliminary 
analyses DOE performed for the product; and potential energy 
conservation standard levels derived from these analyses that DOE could 
consider. DOE is publishing this document to announce the availability 
of the preliminary technical support document (TSD), which details the 
preliminary analyses, discusses the comments on the framework document, 
and summarizes the preliminary results of DOE's analyses. In addition, 
DOE is announcing a public meeting to solicit feedback from interested 
parties on its analytical framework, models, and preliminary results.

B. History of Standards Rulemaking for Walk-In Coolers and Walk-In 
Freezers

1. Background

    EPCA requires the Secretary to publish performance-based standards 
for walk-ins no later than January 1, 2012. The standards must apply to 
products manufactured beginning 3 years after the date the final rule 
is published unless DOE determines, by rule, that such period is 
inadequate. If DOE makes such a determination, DOE may establish a 
period of up to 5 years for the standards to become applicable. (42 
U.S.C. 6313(f)(4)) To address this requirement, DOE is developing 
standards for walk-in coolers and walk-in freezers that achieve the 
maximum improvement in energy that is technologically feasible and 
economically justified.
    In addition to requiring the promulgation of performance standards 
for walk-ins, EPCA also contains prescriptive standards (i.e., design 
requirements) for walk-in coolers and walk-in freezers manufactured on 
or after January 1, 2009. (42 U.S.C. 6313(f)(1)-(3)) These prescriptive 
standards require that walk-ins have specific components or design 
characteristics, each of which is intended to reduce the energy use of 
the equipment. DOE is not proposing to amend these requirements, but 
rather to develop new standards that further improve the energy 
efficiency of the equipment by regulating its overall energy use (i.e., 
performance). Manufacturers would be permitted to meet the new 
standards with a variety of components or designs that satisfy the 
prescriptive standards mandated by EPCA. Accordingly, this rulemaking 
would not modify any of EPCA's prescriptive standards for walk-in 
equipment.
    Further, EPCA directs the Secretary to establish a test procedure 
to measure the energy use of walk-in coolers and walk-in freezers. (42 
U.S.C. 6314(a)(9)(B)(i)) DOE is conducting a separate rulemaking to 
develop this test procedure and published a notice of proposed 
rulemaking (NOPR) for the test procedure on January 4, 2010. In the 
test procedure NOPR, DOE proposed to consider the two components that 
comprise a walk-in--the insulated envelope and the refrigeration 
system--as two separate pieces of equipment, and proposed separate test 
procedures for each of these components. DOE considered this approach 
because it received comments from interested parties stating that the 
two components are often produced by different manufacturers and may be 
assembled by a third party, and for other reasons as well. 75 FR 186 
(January 4, 2010)
    DOE anticipated that it would take a similar approach to 
performance standards for walk-ins; that is, it would create separate 
standards for the envelope and the refrigeration system. Thus, the 
preliminary analyses reflect this approach. DOE explains the

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approach further and addresses its implications in the preliminary TSD.

2. Current Rulemaking Process

    To initiate this rulemaking, DOE prepared a framework document, 
``Rulemaking Framework for Walk-in Coolers and Walk-in Freezers,'' that 
describes the procedural and analytical approaches DOE anticipated 
using to evaluate the establishment of energy conservation standards 
for walk-ins. DOE published a notice that announced both the 
availability of the framework document and a public meeting to discuss 
the proposed analytical framework for the rulemaking, and that invited 
written comments on the conduct of the rulemaking. 74 FR 411 (January 
6, 2009). The framework document is available at: http://www1.eere.energy.gov/buildings/appliance_standards/commercial/wicf_framework_document.html. DOE held the public meeting on February 4, 
2009, at which it described the various rulemaking analyses DOE would 
conduct, such as the engineering analysis, the life-cycle cost (LCC) 
and payback period (PBP) analyses, and the national impact analysis 
(NIA); the methods for conducting them; and the relationship among the 
various analyses. Manufacturers, trade associations, and environmental 
advocates attended the meeting. The participants discussed the 
following major issues: Creation of separate standards for the 
insulated envelope and the refrigeration system of a walk-in; 
compliance, enforcement, and labeling provisions; test procedures; 
distribution channels; discount rates; monetization of emission 
reductions; and interpretation and enforcement of the EPCA's 
prescriptive requirements for walk-in equipment.
    DOE developed two spreadsheets for analyzing the economic impacts 
of standard levels--one that calculates LCC and PBP, and one that 
calculates national impacts. (For the NOPR, DOE will also develop a 
spreadsheet that will evaluate the financial impacts on walk-in 
manufacturers that may result from a standard level.) DOE prepared an 
LCC and PBP spreadsheet that calculates results for each of the 
representative units analyzed. This spreadsheet includes equipment 
efficiency data that allows users to determine LCC savings and PBPs 
based on average values, and can be combined with Crystal Ball (a 
commercially available software program) to generate a Monte Carlo 
simulation, incorporating uncertainty and variability considerations. 
The second economic spreadsheet calculates the impacts of candidate 
standard levels on shipments and the national energy savings (NES) and 
net present value (NPV) at various standard levels. There is one 
national impact analysis spreadsheet for all walk-in coolers and walk-
in freezers. DOE has posted both economic spreadsheets on its website 
for review and comment by interested parties.
    Comments received since publication of the framework document have 
helped DOE identify and resolve issues involved in the preliminary 
analyses. Chapter 2 of the preliminary TSD, available at the Web link 
provided in the SUMMARY section of this notice, summarizes and 
addresses the comments received in response to the framework document.

C. Summary of the Analyses Performed by DOE

    For the walk-in equipment currently under consideration, DOE 
conducted in-depth technical analyses in the following areas: (1) 
Engineering, (2) energy-use characterization, (3) markups to determine 
equipment price, (4) life-cycle cost and payback period, and (5) 
national impacts. These analyses resulted in a preliminary TSD that 
presents the methodology and results of each of these analyses. The 
preliminary TSD is available at the Web address given in the SUMMARY 
section of this notice. The analyses are described in more detail 
below.
    DOE also conducted, and has included in the preliminary TSD, 
several other analyses that either support the five major analyses or 
are preliminary analyses that will be expanded in preparing the NOPR. 
These analyses include the market and technology assessment, the 
screening analysis, which contributes to the engineering analysis, and 
the shipments analysis, which contributes to the NIA. In addition to 
these analyses, DOE has begun some preliminary work on the manufacturer 
impact analysis and identified the methods to be used for the LCC 
subgroup analysis, the environmental assessment, the employment 
analysis, the regulatory impact analysis, and the utility impact 
analysis. DOE will expand on these analyses in the NOPR.

1. Engineering Analysis

    The engineering analysis establishes the relationship between the 
manufacturer selling price and equipment efficiency DOE is evaluating 
for energy conservation standards. This relationship serves as the 
basis for cost-benefit calculations for individual consumers, 
manufacturers, and the nation. The engineering analysis identifies 
representative baseline equipment, which is the starting point for 
analyzing technologies that provide energy efficiency improvements. 
Baseline equipment refers to a model or models having features and 
technologies typically found in the minimum efficiency equipment 
currently offered for sale. The baseline model in each equipment class 
represents the characteristics of certain walk-in equipment. After 
identifying the baseline models, DOE estimated manufacturer selling 
prices by using a consistent methodology and pricing scheme including 
material and labor costs, cost of shipping and manufacturer's markups. 
In this way, DOE developed these so-called ``manufacturer selling 
prices'' for the baseline and more efficient designs. Later, in its 
Markups To Determine Installed Price analysis, DOE converts these 
manufacturer selling prices into installed prices. In the preliminary 
TSD, section 2.4 of chapter 2 and chapter 5 each provide detail on the 
engineering analysis and the derivation of the manufacturer selling 
prices.

2. Markups To Determine Installed Price

    DOE derives the installed prices for equipment based on 
manufacturer markups, retailer markups, distributor markups, contractor 
markups, builder markups, and sales taxes. In deriving these markups, 
DOE has determined the distribution channels for equipment sales, the 
markup associated with each party in the distribution channels, and the 
existence and magnitude of differences between markups for baseline 
equipment (baseline markups) and for more-efficient equipment 
(incremental markups). DOE calculates both overall baseline and overall 
incremental markups based on the equipment markups at each step in the 
distribution channel. The overall incremental markup relates the change 
in the manufacturer sales price of higher efficiency models (the 
incremental cost increase) to the change in the retailer or distributor 
sales price. In the preliminary TSD, section 2.5 of chapter 2 and 
chapter 6 each provide detail on the estimation of markups.

3. Energy Use Characterization

    The energy use characterization provides estimates of annual energy 
consumption for walk-in equipment, which DOE uses in the LCC and PBP 
analyses and the NIA. DOE developed energy consumption estimates for 
all of the equipment classes analyzed in the engineering analysis, as 
the basis for its energy use estimates. In the preliminary TSD, section 
2.6 of chapter 2 and

[[Page 17083]]

chapter 7 each provide detail on the energy use characterization.

4. Life-Cycle Cost and Payback Period Analyses

    The LCC and PBP analyses determine the economic impact of potential 
standards on individual consumers. The LCC is the total consumer 
expense for equipment over the life of the equipment. The LCC analysis 
compares the LCCs of equipment designed to meet possible energy 
conservation standards with the LCCs of the equipment likely to be 
installed in the absence of standards. DOE determines LCCs by 
considering (1) Total installed cost to the purchaser (which consists 
of manufacturer selling price, sales taxes, distribution chain markups, 
and installation cost); (2) the operating expenses of the equipment 
(energy use and maintenance); (3) equipment lifetime; and (4) a 
discount rate that reflects the real consumer cost of capital and puts 
the LCC in present-value terms. The PBP represents the number of years 
needed to recover the increase in purchase price (including 
installation cost) of more efficient equipment through savings in the 
operating cost of the equipment. It is the change in total installed 
cost due to increased efficiency divided by the change in annual 
operating cost from increased efficiency. In the preliminary TSD, 
section 2.7 of chapter 2 and chapter 8 each provide detail on the LCC 
and PBP analyses.

5. National Impact Analysis

    The NIA estimates the NES and the NPV of total consumer costs and 
savings expected to result from new standards at specific efficiency 
levels (referred to as candidate standard levels). DOE calculated NES 
and NPV for each candidate standard level for walk-in equipment as the 
difference between a base-case forecast (without new standards) and the 
standards case forecast (with standards). DOE determined national 
annual energy consumption by multiplying the number of units in use (by 
vintage) by the average unit energy consumption (also by vintage). 
Cumulative energy savings are the sum of the annual NES determined from 
2015-2045. The national NPV is the sum over time of the discounted net 
savings each year, which consists of the difference between total 
operating cost savings and increases in total installed costs. Critical 
inputs to this analysis include shipments projections, retirement rates 
(based on estimated equipment lifetimes), and estimates of changes in 
shipments and retirement rates in response to changes in equipment 
costs due to standards. In the preliminary TSD, section 2.8 of chapter 
2 and chapter 10 each provide detail on the NIA.
    DOE consulted with interested parties as part of its process for 
conducting all of the analyses and invites further input from the 
public on these topics. The preliminary analytical results are subject 
to revision following further review and input from the public. A 
complete and revised TSD will be made available upon issuance of a 
NOPR. The final rule will contain the final analysis results and be 
accompanied by a final rule TSD.
    DOE encourages those who wish to participate in the public meeting 
to obtain the preliminary TSD from DOE's website and to be prepared to 
discuss its contents. A copy of the preliminary TSD is available at the 
Web address given in the SUMMARY section of this notice. However, 
public meeting participants need not limit their comments to the topics 
identified in the preliminary TSD. DOE is also interested in receiving 
views concerning other relevant issues that participants believe would 
affect energy conservation standards for this equipment or that DOE 
should address in the NOPR.
    Furthermore, DOE welcomes all interested parties, regardless of 
whether they participate in the public meeting, to submit in writing by 
May 20, 2010, comments and information on matters addressed in the 
preliminary TSD and on other matters relevant to consideration of 
standards for walk-in equipment.
    The public meeting will be conducted in an informal, conference 
style. A court reporter will be present to record the minutes of the 
meeting. There shall be no discussion of proprietary information, costs 
or prices, market shares, or other commercial matters regulated by 
United States antitrust laws.
    After the public meeting and the expiration of the period for 
submitting written statements, DOE will consider all comments and 
additional information that is obtained from interested parties or 
through further analyses, and it will prepare a NOPR. The NOPR will 
include proposed energy conservation standards for the equipment 
covered by the rulemaking, and members of the public will be given an 
opportunity to submit written and oral comments on the proposed 
standards.

    Issued in Washington, DC, on March 29, 2010.
Cathy Zoi,
Assistant Secretary, Energy Efficiency and Renewable Energy.
[FR Doc. 2010-7608 Filed 4-2-10; 8:45 am]
BILLING CODE 6450-01-P