[Federal Register Volume 78, Number 22 (Friday, February 1, 2013)]
[Proposed Rules]
[Pages 7296-7304]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-02164]


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DEPARTMENT OF ENERGY

10 CFR Part 431

[Docket No. EERE-2013-BT-STD-0007]
RIN 1904-AC95


Energy Conservation Program: Energy Conservation Standards for 
Small, Large, and Very Large Commercial Package Air Conditioning and 
Heating Equipment

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

ACTION: Request for information (RFI) and notice of document 
availability.

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SUMMARY: Pursuant to the American Energy Manufacturing Technical 
Corrections Act, the U.S. Department of Energy (DOE) is initiating an 
effort to determine whether to amend the current energy conservation 
standards for certain commercial air-conditioning and heating 
equipment. This notice seeks to solicit information from the public to 
help DOE determine whether national standards more stringent than those 
that are currently in place would result in a significant amount of 
additional energy savings and whether those national standards would be 
technologically feasible and economically justified. Separately, DOE 
also seeks information from the public on the merits of adopting the 
integrated energy efficiency ratio (IEER) as the energy efficiency 
descriptor for small, large, and very large air-cooled commercial air 
conditioners and heat pumps.

DATES: Written comments and information are requested on or before 
March 4, 2013.

ADDRESSES: Interested parties are encouraged to submit comments 
electronically. However, comments may be submitted by any of the 
following methods:
     Federal eRulemaking Portal: www.regulations.gov. Follow 
the instructions for submitting comments.
     Email to the following address: 
[email protected]. Include docket number EERE-2013-BT-
STD-0007 and/or RIN 1904-AC95 in the subject line of the message. All 
comments should clearly identify the name, address, and, if 
appropriate, organization of the commenter.
     Postal Mail: Ms. Brenda Edwards, U.S. Department of 
Energy, Building Technologies Program, Mailstop EE-2J, Request for 
Information for Commercial Air Conditioners and Heat Pumps, Docket No. 
EERE-2013-BT-STD-0007 and/or RIN 1904-AC95, 1000 Independence Avenue 
SW., Washington, DC 20585-0121. 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. Please submit one signed paper 
original.
    Instructions: All submissions received must include the agency name 
and docket number and/or RIN for this rulemaking. No telefacsimilies 
(faxes) will be accepted.
    Docket: The docket is available for review at www.regulations.gov, 
including Federal Register notices, public meeting attendees' lists and 
transcripts, comments, and other supporting documents/materials. All 
documents in the docket are listed in the www.regulations.gov index. 
However, not all documents listed in the index may be publicly 
available, such as information that is exempt from public disclosure.
    A link to the docket Web page can be found at: http://www.regulations.gov/#!docketDetail;D=EERE-2013-BT-STD-0007. This Web 
page contains a link to the docket for this notice on the 
www.regulations.gov Web site. The www.regulations.gov Web page contains 
simple instructions on how to access all documents, including public 
comments, in the docket.
    For information on how to submit a comment, review other public 
comments and the docket, or participate in the public meeting, contact 
Ms. Brenda Edwards at (202) 586-2945 or by email: 
[email protected].

FOR FURTHER INFORMATION CONTACT: Direct requests for additional 
information may be sent to Mr. Joshua Cocciardi, U.S. Department of 
Energy, Office of Energy Efficiency and Renewable Energy, Building 
Technologies Program, EE-2J, 1000 Independence Avenue SW., Washington, 
DC 20585-0121. Telephone: 202-287-1656. Email: 
[email protected].
    Mr. Michael Kido, U.S. Department of Energy, Office of the General 
Counsel, Mailstop GC-71, 1000 Independence Avenue SW., Washington, DC 
20585-0121. Telephone: (202) 586-9507. Email: [email protected].
    For information on how to submit or review public comments, contact 
Ms. Brenda Edwards, U.S. Department of Energy, Office of Energy 
Efficiency and Renewable Energy, Building Technologies Program, 
Mailstop EE-2J, 1000 Independence Avenue SW., Washington, DC 20585-
0121. Telephone: (202) 586-2945. Email: [email protected].

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Introduction
II. Energy Efficiency Descriptors
III. Request for Information and Comments

I. Introduction

A. Authority

    Title III, Part C \1\ of the Energy Policy and Conservation Act of 
1975 (EPCA or the Act), Public Law 94-163 (42 U.S.C. 6311-6317, as 
codified), added by

[[Page 7297]]

Public Law 95-619, Title IV, Sec.  441(a), established the Energy 
Conservation Program for Certain Industrial Equipment, which includes 
provisions covering the commercial heating and air-conditioning 
equipment that is the subject of this notice.\2\ In general, this 
program addresses the energy efficiency of certain types of commercial 
and industrial equipment. Relevant provisions of the Act include 
definitions (42 U.S.C. 6311), energy conservation standards (42 U.S.C. 
6313), test procedures (42 U.S.C. 6314), labelling provisions (42 
U.S.C. 6315), and the authority to require information and reports from 
manufacturers (42 U.S.C. 6316).
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    \1\ For editorial reasons, upon codification in the U.S. Code, 
Part C was re-designated Part A-1.
    \2\ All references to EPCA in this document refer to the statute 
as amended through the American Energy Manufacturing Technical 
Corrections Act of 2012, Public Law 112-210 (Dec. 18, 2012).
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    Section 342(a) of EPCA concerns energy conservation standards for 
small, large, and very large, air-cooled commercial package air 
conditioning and heating equipment (also known generally as unitary air 
conditioning and heating equipment). (42 U.S.C. 6313(a)) This category 
of equipment has a rated capacity between 64,000 Btu/h and 760,000 Btu/
h. The equipment is designed to heat and cool commercial buildings and 
is typically located on the building's rooftop. Section 5(b) of the 
American Energy Manufacturing Technical Corrections Act of 2012 (Pub. 
L. 112-210 (Dec. 18, 2012) (AEMTCA)) amended Section 342(a)(6) of EPCA, 
which concerns the amendment of energy conservation standards for 
certain types of commercial and industrial equipment. At issue here is 
the inclusion of a requirement for DOE to consider amending the 
standards for ``any covered equipment as to which more than 6 years has 
elapsed since the issuance of the most recent final rule establishing 
or amending a standard for the product as of the date of AEMTCA's 
enactment, December 18, 2012. (42 U.S.C. 6313(a)(6)(C)(vi)) DOE must 
issue either a notice of determination that the current standards do 
not need to be amended or a notice of proposed rulemaking containing 
proposed standards by December 31, 2013. See 42 U.S.C. 6313(a)(6)(C)(i) 
and (vi) (as amended by AEMTCA).\3\
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    \3\ Subparagraph (A) and subparagraph (B) refer to 42 U.S.C. 
6313(a)(6).
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    For small, large, and very large air-cooled commercial package air 
conditioners (ACs) and heating pumps (HPs), the last final rule issued 
by DOE was on October 18, 2005, which codified both the amended 
standards for small and large equipment and the new standards for very 
large equipment set by the Energy Policy Act of 2005, Public Law 109-58 
(Aug. 8, 2005) (EPAct 2005). 70 FR 60407. Consistent with the new 
requirements Congress enacted as part of AEMTCA, DOE is required to 
publish either a notice of determination that standards for these 
equipment types do not need to be amended, or a notice of proposed 
rulemaking proposing amended energy conservation standards for these 
equipment types.
    In order to meet the new requirements added by AEMTCA, DOE is 
reviewing the standards that are already in place affecting those 
products listed in 42 U.S.C. 6313(a) for which more than six years have 
elapsed since the issuance of the most recent final rule. Under Section 
6313(a), DOE must either adopt those standards developed by the 
American Society of Heating, Refrigerating, and Air-Conditioning 
Engineers (ASHRAE)--or to adopt levels more stringent than the ASHRAE 
levels if there is clear and convincing evidence in support of doing 
so. AEMTCA added to this procedure a specified deadline within which 
DOE must act with respect to those standards for which more than six 
years have elapsed since the issuance of the relevant final rule. (42 
U.S.C. 6313(a)(6)(A)(i) and (vi)) Today's notice represents the 
initiation of the mandatory review process imposed by AEMTCA and seeks 
input from the public to assist DOE with its determination on whether 
to amend the current standards pertaining to small, large, and very 
large air-cooled commercial package air conditioners and heating 
equipment ranging in cooling capacity from 65,000 Btu/h to 760,000 Btu/
h. In making this determination, DOE must evaluate whether there is 
clear and convincing evidence that more stringent national standards 
than the ones established pursuant to the ASHRAE-process described 
above would result in significant energy savings, be technologically 
feasible and economically justified. By statute, DOE may promulgate or 
amend existing energy conservation standards only if the resulting 
standards would (1) yield a significant savings in energy use and (2) 
be both technologically feasible and economically justified. The 
current Federal standards, for this equipment, are shown in Table 1.

   Table 1--Minimum Cooling and Heating Efficiency Levels for Air-Cooled Commercial Air Conditioners and Heat Pumps, >=65,000 Btu/h and <760,000 Btu/h
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                                                                                                                                            Compliance
           Equipment type                Cooling capacity            Sub-category             Heating type           Efficiency level          date
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Small Commercial Packaged Air-        >=65,000 Btu/h and      AC.......................  No Heating or Electric  EER = 11.2.............        1/1/2010
 Conditioning and Heating Equipment    <135,000 Btu/h.                                    Resistance Heating.
 (Air-Cooled).
                                                                                         All Other Types of      EER = 11.0.............        1/1/2010
                                                                                          Heating.
                                                              HP.......................  No Heating or Electric  EER = 11.0.............        1/1/2010
                                                                                          Resistance Heating.    COP = 3.3..............
                                                                                         All Other Types of      EER = 10.8.............        1/1/2010
                                                                                          Heating.               COP = 3.3..............
Large Commercial Packaged Air-        >=135,000 Btu/h and     AC.......................  No Heating or Electric  EER = 11.0.............        1/1/2010
 Conditioning and Heating Equipment    <240,000 Btu/h.                                    Resistance Heating.
 (Air-Cooled).
                                                                                         All Other Types of      EER = 10.8.............        1/1/2010
                                                                                          Heating.
                                                              HP.......................  No Heating or Electric  EER = 10.6.............        1/1/2010
                                                                                          Resistance Heating.    COP = 3.2..............
                                                                                         All Other Types of      EER = 10.4.............        1/1/2010
                                                                                          Heating.               COP = 3.2..............

[[Page 7298]]

 
Very Large Commercial Packaged Air-   >=240,000 Btu/h and     AC.......................  No Heating or Electric  EER = 10.0.............        1/1/2010
 Conditioning and Heating Equipment    <760,000 Btu/h.                                    Resistance Heating.
 (Air-Cooled).
                                                                                         All Other Types of      EER = 9.8..............        1/1/2010
                                                                                          Heating.
                                                              HP.......................  No Heating or Electric  EER = 9.5..............        1/1/2010
                                                                                          Resistance Heating.    COP = 3.2..............
                                                                                         All Other Types of      EER = 9.3..............        1/1/2010
                                                                                          Heating.               COP = 3.2..............
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A. Background

    On October 29, 1999, ASHRAE and the Illuminating Engineering 
Society of North America (IESNA) adopted Standard 90.1-1999, which 
included amended efficiency levels for commercial air conditioners and 
heat pumps. DOE evaluated these efficiency levels and subsequently 
adopted levels affecting 18 different equipment categories in a 2001 
final rule. 66 FR 3336 (Jan. 12, 2001). However, the final rule's 
notice also indicated that DOE planned to further evaluate commercial 
air-cooled air conditioners and heat pumps with rated capacities 
between 65,000 Btu/h and 240,000 Btu/h because the initial analyses 
indicated that more stringent standards would be technologically 
feasible and economically justified. Id. at 3349. On June 12, 2001, the 
Department published a Framework Document that described analytical 
approaches to evaluate energy conservation standards for these larger 
commercial air conditioners and heat pumps (i.e. capacities between 
65,000 Btu/h and 240,000 Btu/h) and presented this analytical framework 
to stakeholders at a public workshop. On July 29, 2004, DOE issued an 
Advance Notice of Proposed Rulemaking (ANOPR) to solicit public 
comments on its preliminary analyses for this equipment. 69 FR 45461. 
Subsequently, Congress enacted EPAct 2005, which, among other things, 
established amended standards for small and large commercial air-cooled 
air conditioners and heat pumps and new standards for very large air-
cooled air conditioners and heat pumps. As a result, EPAct 2005 
displaced the rulemaking effort that DOE had already begun. DOE 
codified these new statutorily-prescribed standards on October 18, 
2005. 70 FR 60407.

B. Rulemaking Process

    DOE generally follows specific criteria when prescribing amended 
standards for covered equipment. See generally 42 U.S.C. 6313(a)(6)(B)-
(C). An amended standard for covered equipment must be designed to 
achieve the maximum improvement in energy efficiency that is 
technologically feasible and economically justified. Furthermore, DOE 
may not adopt any amended standard that would not result in the 
significant conservation of energy. Moreover, DOE may not prescribe a 
standard for certain equipment, if (1) no test procedure has been 
established for the equipment, or (2) if DOE determines by rule that, 
in cases where a standard has been proposed, the proposed standard is 
not technologically feasible or economically justified. In deciding 
whether a proposed amended standard is economically justified, DOE must 
determine whether the benefits of the standard exceed its burdens. DOE 
must make this determination after receiving comments on the proposed 
standard, and by considering, to the greatest extent practicable, the 
following seven factors:
    1. The economic impact of the standard on manufacturers and 
consumers of the 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 products that are likely to result from the imposition of the 
standard;
    3. The total projected amount of energy savings, or as applicable, 
water 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 and water conservation; and
    7. Other factors the Secretary of Energy (Secretary) considers 
relevant. (See generally 42 U.S.C. 6313(a)(6)(B))
    As part of this decision-making process, there must also be clear 
and convincing evidence that the adoption of a national standard that 
is more stringent than the level set by ASHRAE would result in the 
significant additional conservation of energy and is technologically 
feasible and economically justified. See generally 42 U.S.C. 
6313(a)(6)(A). Accordingly, EPCA requires that there be clear and 
convincing evidence that the adoption of standards more stringent than 
those set by ASHRAE would lead to significant energy savings and that 
achieving those standards would be both technologically feasible and, 
separately, economically justified using the seven criteria listed 
above.
    In assessing the appropriateness of amending the standards that are 
currently in place for small, large, and very large commercial air-
cooled air conditioners and heat pumps, DOE is planning to conduct in-
depth technical analyses in the following areas to meet the statutory 
criteria for prescribing amended standards: (1) Engineering; (2) energy 
use; (3) markups; (4) life-cycle cost and payback period; (5) national 
impacts; (6) manufacturer impacts; (7) emission impacts; (8) utility 
impacts; (9) employment impacts; and (10) regulatory impacts. These 
analyses are the same ones DOE routinely applies when evaluating 
potential standards for a given type of product or equipment. DOE will 
also conduct several other analyses that support those previously 
listed, including the market and technology assessment, the screening 
analysis (which contributes to the engineering analysis), and the 
shipments analysis (which contributes to the national impact analysis). 
As detailed throughout this RFI, DOE is specifically publishing this 
notice as the

[[Page 7299]]

first step in the analysis process and is specifically requesting input 
and data from interested parties to aid in the development of the 
technical analyses.

II. Energy Efficiency Descriptors

    As part of this analysis, DOE is giving very serious consideration 
to the possible replacement of the existing efficiency descriptor 
(i.e., energy efficiency ratio (EER)) with a new energy-efficiency 
descriptor (i.e., integrated energy efficiency ratio (IEER)). Unlike 
the EER metric, which utilizes only the efficiency of equipment 
operating at full load conditions, IEER factors in the equipment's 
efficiency while operating at part-load conditions of 75%, 50%, and 25% 
of capacity as well as during full load. This is accomplished by 
weighting the full- and part-load efficiencies with the average amount 
of time operating at each loading point; IEER provides a more 
representative measure of the energy consumption in actual operation. 
Moreover, IEER incorporates variations of outside temperature from 
design temperatures for part-load operation that further increase the 
accuracy of the metric.
    Since 2007, ASHRAE has been specifying in its Standard 90.1 the use 
of an energy efficiency metric that captures part-load performance. 
ASHRAE first published specifications for part-load energy efficiency 
in their Standard 90.1-2007 based on the integrated part load value 
(IPLV). In Addendum's from the 2008 Supplement to Standard 90.1-2007, 
ASHRAE replaced IPLV for commercial air conditioning and heat pump 
equipment with IEER, effective January 1, 2010. According to ASHRAE, 
that change was made to improve the accuracy when rating part-load 
performance of commercial air conditioning and heating equipment.\4\
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    \4\ ASHRAE. ASHRAE Addenda. 2008 Supplement. http://www.ashrae.org/File%20Library/docLib/Public/20090317_90_1_2007_supplement.pdf.
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    EPCA authorizes DOE to establish ``energy conservation standards'' 
that set either a single performance standard or a single design 
requirement--not both. See 42 U.S.C. 6311(18). As such, DOE can choose 
to implement an energy conservation standard using one or the other. In 
the case of small, large, and very large commercial air-cooled ACs and 
HPs, ASHRAE Standard 90.1 recommends two performance requirements; EER 
and IEER. Because EPCA does not specify a particular metric that DOE 
must use when measuring the efficiency of the equipment at issue in 
this notice, changing that metric from one type (e.g. EER) to another 
(e.g. IEER) is permissible. DOE also notes that in amending standards 
for a given type of product or equipment, DOE must ensure that a 
potential new standard would not result in reduced stringency when 
compared to the current Federal standards. See, e.g. 74 FR 36322 and 42 
U.S.C. 6313(a)(6)(B)(iii)(I).
    As part of its consideration, DOE examined whether part-load 
performance is currently being used and accepted for rating commercial 
air conditioners and heat pumps. On January 2, 2009, the Environmental 
Protection Agency (EPA) issued a draft ENERGY STAR specification for 
Light Commercial Air Conditioners and Heat Pumps products, i.e., small 
and large air-cooled air conditioners and air-source heat pumps, which 
proposed to adopt IEER as part of the minimum energy efficiency 
criteria.\5\ In a January 30, 2009 letter regarding EPA's draft, AHRI 
expressed support for IEER as well as for the ENERGY STAR program to 
adopt IEER. Recently, the Consortium for Energy Efficiency (CEE), an 
organization for energy efficiency advocates, has adopted IEER for its 
Tier 0, 1, and 2 efficiencies for unitary air conditioning and heat 
pump products, i.e., small, large, and very large air-, water-, and 
evaporatively-cooled air conditioners and air- and water-source heat 
pumps.\6\
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    \5\ ENERGY STAR. Re: EPA Proposed Draft Energy Star 
Specification for Light Commercial HVAC Equipment. http://www.energystar.gov/ia/partners/prod_development/revisions/downloads/lhvac/AHRI_Comments_D1.pdf.
    \6\ Consortium for Energy Efficiency. CEE Commercial Unitary AC 
and HP Specification. http://www.cee1.org/files/CEE_CommHVAC_UnitarySpec2012.pdf.
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    IEER has also gained support through efforts such as DOE's 
Commercial Building Energy Alliance (CBEA) technology transfer program, 
which sponsors the High Performance Rooftop Unit Challenge (RTU 
Challenge). This program provides a market mechanism that reduces 
barriers for manufacturers to procure greater than 18-IEER 10-ton 
equipment and encourages the private sector to commit to adopt energy-
efficient equipment. Carrier, Lennox, 7AC Technologies, and Rheem are 
participating in the RTU Challenge, while participant McQuay has 
already produced certified equipment that meets or exceeds 18 IEER. In 
conjunction with manufacturer support, fourteen CBEA-member private 
entities,\7\ such as Target Corp., Macy's, Inc., McDonald's Corp., and 
others, have also signaled their support and indicated their strong 
interest in potentially purchasing high-efficiency rooftop units, a 
sign of their confidence in the RTU Challenge and its ability to use 
IEER to accurately portray the energy use of commercial air-cooler air 
conditioners and heat pumps in the field.
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    \7\ U.S. Department of Energy. Building Technologies Program. 
High Performance Rooftop Unit Challenge Fact Sheet. http://apps1.eere.energy.gov/buildings/publications/pdfs/alliances/techspec_rtus.pdf.
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    Lastly, DOE conducted a market analysis to compare the two metrics 
based on publicly available ratings of equipment currently available in 
the market. DOE is making available for comment a document that 
provides the methodology and results of the investigation of the 
relationship between IEER and EER for commercial air-cooled air 
conditioners and heat pumps with cooling capacities between 65,000 Btu/
hr and 760,000 Btu/hr (i.e., 5 and 63 tons). In addition, it looks at 
the variance of heating efficiency (i.e., coefficient of performance or 
COP) with IEER and EER. The document is available at: http://www1.eere.energy.gov/buildings/appliance_standards/product.aspx/productid/77. Ultimately, if DOE were to decide after considering the 
comments in response to this notice to migrate to the IEER metric, DOE 
would transition the existing Federal energy conservation standards to 
the new metric by identifying the appropriate baseline energy-
efficiency levels to use in the analysis. From that point forward, all 
of the technical and economic analyses would be conducted using the new 
metric, IEER, in the evaluation of potential amended energy 
conservation standards for small, large, and very large air-cooled ACs 
and HPs. Consequently, DOE seeks comments and data regarding its 
consideration of transitioning metrics and the analysis conducted on 
the currently available models.

III. Request for Information and Comments

    In the next section, DOE identifies a variety of issues on which it 
seeks input and data in order to aid its development of the technical 
and economic analyses to determine whether amended energy conservation 
standards may be warranted. In addition, DOE welcomes comments on other 
issues relevant to the conduct of this rulemaking that may not 
specifically be identified in this notice.

A. Test Procedure

    DOE recently reviewed and adopted amended test procedures for 
small,

[[Page 7300]]

large, and very large, air-cooled commercial package air conditioning 
and heating equipment in a final rule published on May 16, 2012. 77 FR 
28928. These test procedures incorporate by reference certain sections 
of the Air-Conditioning, Heating, and Refrigeration Institute's (AHRI) 
2007 Standard for Performance Rating of Commercial and Industrial 
Unitary Air-Conditioning and Heat Pump Equipment (AHRI 340/360-2007) 
along with the addition of a handful of other additional testing 
specifications. AHRI is an industry trade group representing air 
conditioning, heating and refrigeration manufacturers.
    In light of DOE's consideration to switch from EER to IEER, DOE 
conducted a preliminary review of the current Federal test procedures 
for small, large, and very large air-cooled ACs and HPs. As part of its 
final rule issued on May 16, 2012, DOE adopted AHRI Test Standard 340/
360-2007. 77 FR 28928. DOE found that the methods and procedures for 
testing and rating equipment with an IEER already exist within its test 
procedure. However, DOE specifically seeks comment on any test 
procedure issues relating to IEER and the existing Federal procedures 
that DOE should consider as part of this rulemaking.
    (A1) DOE requests comment on the existing DOE test procedure for 
small, large, and very large air-conditioning equipment and its 
suitability for establishing a performance rating based on IEER.

B. Market Assessment

    The market and technology assessment provides information about the 
commercial air conditioner and heat pump industry that will be used 
throughout the rulemaking process. For example, this information will 
be used to determine whether the existing equipment class structure 
requires modification based on the statutory criteria for setting such 
classes and to explore the potential for technological improvements in 
the design and manufacturing of such equipment. The Department uses 
qualitative and quantitative information to assess the past and present 
industry structure and market characteristics. DOE will use existing 
market materials and literature from a variety of sources, including 
industry publications, trade journals, government agencies, and trade 
organizations. Additionally, DOE will consider conducting interviews 
with manufacturers to assess the overall market for commercial air 
conditioners and heat pumps.
    The current equipment classes as established in EPAct 2005 for 
small, large, and very large, air-cooled ACs and HPs divide this 
equipment into twelve equipment classes characterized by rated cooling 
capacity, equipment type (air conditioner versus heat pump), and 
heating type. As a starting point, DOE plans to use the existing 
equipment class structure as shown in Table 1 of 10 CFR 431.97. 
However, DOE will consider additional equipment classes for capacities 
or other performance-related features that inherently effect efficiency 
and justify the establishment of a different energy conservation 
standard. For instance, additional equipment classes may be warranted 
to differentiate between split and packaged type units or to further 
segment the capacities of the equipment covered in this analysis.
    (B1) DOE requests feedback on the current equipment classes and 
seeks information regarding other equipment classes it should consider 
for inclusion in its analysis.

C. Technology Options for Consideration

    DOE uses information about existing and past technology options and 
prototype designs to help identify technologies that manufacturers 
could use to meet and/or exceed energy conservation standards. In 
consultation with interested parties, DOE intends to develop a list of 
technologies to consider in its analysis. Initially, this list will 
include all those technologies considered to be technologically 
feasible and will serve to establish the maximum technologically 
feasible design. DOE is currently considering the specific technologies 
and design options listed below.
     Electro-hydrodynamic enhanced heat transfer.
     Copper rotor motor with improved efficiency.
     Improved refrigerants.
     Evaporator coil area (keeping the number of coil rows the 
same).
     Condenser coil area (keeping the number of coil rows the 
same).
     Coil rows (keeping face area the same).
     Condenser fan diameters.
     Evaporator fan.
     Air leakage paths within the unit.
     Coil row (keeping coil heat transfer the same).
     Microchannel heat exchangers.
     Deep coil heat exchangers.
     Low-pressure-loss filters.
     High efficiency fan motors.
     High efficiency compressors.
     Multiple compressors.
     Thermal expansion valves.
     Electronic expansion valves.
     Air foil centrifugal fans.
     Backward-curved centrifugal fans.
     Synchronous (toothed) belts.
     Direct-drive fans.
     High efficiency propeller condenser.
     High-side solenoid valve or discharge line check-valve to 
minimize pressure equalization.
     Heat-pipes (for high latent loads).
     Sub-coolers.
     Demand-control ventilation strategy.
    (C1) DOE seeks information related to these or other unlisted, 
efficiency improving technologies as to their applicability to the 
current market and how these technologies improve efficiency of small, 
large, and very large commercial air-cooler ACs and HPs as rated by 
AHRI 340/360-2007.
    (C2) Additionally, DOE requests comment on which of the listed 
technologies and/or other technologies not mentioned that may 
preferentially improve the IEER more than the EER for commercial air 
conditioners and heat pumps.

D. Engineering Analysis

    The engineering analysis estimates the cost-efficiency relationship 
of equipment at different levels of increased energy efficiency. This 
relationship serves as the basis for the cost-benefit calculations for 
commercial customers, manufacturers, and the nation. In determining the 
cost-efficiency relationship, DOE will estimate the increase in 
manufacturer cost associated with increasing the efficiency of 
equipment above the baseline to the maximum technologically feasible 
(``max-tech'') efficiency level for each equipment class. The baseline 
model is used as a reference point for each equipment class in the 
engineering analysis and the life-cycle cost and payback-period 
analyses. Typically, DOE would consider equipment that just meets the 
minimum energy conservation standard as baseline equipment. However, 
DOE is considering whether to replace the current cooling performance 
energy efficiency descriptor, EER, with IEER, and a single EER level 
can correspond to a range of IEERs. If DOE decides to transition to a 
new efficiency descriptor, DOE would have to establish a baseline IEER 
for each equipment class, and could consider the minimum, median, 
average, or maximum IEER in the applicable range.
    (D1) DOE requests comment on approaches that it should consider 
when determining a baseline IEER for each equipment class, including

[[Page 7301]]

information regarding the merits and/or deficiencies of such 
approaches.
    (D2) DOE also seeks comment on an appropriate baseline IEER for 
each equipment class and analysis supporting such selected baseline 
efficiency levels.
    (D3) DOE requests information on max-tech efficiency levels 
achievable in the current market in terms of IEER, EER, and COP as 
applicable.
    In order to create the cost-efficiency relationship, DOE 
anticipates that it will structure its engineering analysis using the 
reverse-engineering (or cost-assessment) approach. A reverse-
engineering or cost-assessment approach relies on a teardown analysis 
of representative baseline efficient to highly efficient units that 
employ maximum technologically feasible designs. A teardown analysis 
(or physical teardown) determines the production cost of a piece of 
equipment by disassembling the equipment ``piece-by-piece'' and 
estimating the material and labor cost of each component. A 
supplementary method called a catalog teardown uses published 
manufacturer catalogs and supplementary component data to estimate the 
major physical differences between a piece of equipment that has been 
physically disassembled and another piece of similar equipment. These 
two methods would be used together to help DOE determine the cost 
effectiveness of any standards that it may consider as part of a 
standards rulemaking to amend the levels currently in place.
    (D4) DOE requests feedback on using a reverse engineering approach 
supplemented with catalog teardowns and requests comment on what the 
appropriate representative capacities would be for each equipment 
class.
    In the 2004 ANOPR, the Department proposed to address the energy 
efficiency of commercial air-cooled heat pumps by developing functions 
relating COP to EER. This method was also used by industry to establish 
minimum performance requirements for ASHRAE 90.1-1999. AHRI supplied 
the ASHRAE 90.1-1999 committee with curves relating the COP as a 
function of EER, and the committee then set the minimum COP levels 
based on EER. 69 FR 45460, 45468. Due to the previous acceptance of 
this method, DOE is considering a similar approach for this rulemaking. 
If DOE transitions to use IEER as the energy efficiency descriptor, 
then DOE may establish minimum COP levels based on IEER. DOE has 
conducted a market analysis and evaluated the relationship between IEER 
and COP in a technical support document published to coincide with this 
notice.\8\ DOE recognizes that COP does not integrate part load 
efficiency and that a correlation between COP and IEER may not be 
robust for this reason.
---------------------------------------------------------------------------

    \8\ The document is available at: http://www1.eere.energy.gov/buildings/appliance_standards/product.aspx/productid/77.
---------------------------------------------------------------------------

    (D5) DOE seeks information about potential issues related to using 
IEER as the cooling performance efficiency metric when developing a 
correlation between COP and IEER.

E. Markups Analysis

    To carry out the life-cycle cost (LCC) and payback period (PBP) 
calculations, DOE needs to determine the cost to the commercial 
customer of baseline equipment that satisfies the currently applicable 
standards, and the cost of the more-efficient unit the customer would 
purchase under potential amended standards. By applying a multiplier 
called a ``markup'' to the manufacturer's selling price, DOE is able to 
estimate the commercial customer's price.
    For DOE's 2004 ANOPR, two types of distribution channels were 
defined to describe how the equipment passes from the manufacturer to 
the customer. In the first distribution channel, the manufacturer sells 
the equipment to a wholesaler. The wholesaler sells the equipment to a 
mechanical contractor, who then sells it to a general contractor. In 
the final step to this first channel, the general contractor sells the 
equipment to the customer/end user (and installs it). In the second 
distribution channel, the manufacturer sells the equipment directly to 
the customer through a national account. 69 FR 45460, 45476. For this 
rulemaking, DOE intends to characterize the distribution of equipment 
with the same channels developed for the 2004 ANOPR, with modifications 
to reflect the current status of equipment distribution.
    (E1) DOE seeks input from stakeholders on whether the distribution 
channels described above are still relevant for small and large air-
cooled commercial air conditioners and heat pumps, and whether they are 
also relevant for very large air-cooled equipment.
    Based on information that equipment manufacturers provided, 
commercial customers were estimated to purchase 50 percent of equipment 
through small mechanical contractors, 32.5 percent through large 
mechanical contractors, and the remaining 17.5 percent through national 
accounts. In addition, 30 percent of commercial air-conditioning 
equipment was estimated to be purchased for the new construction market 
while the remaining 70 percent was estimated to serve the replacement 
market. In the case of the replacement market, where equipment is 
purchased through a mechanical contractor, the mechanical contractor 
purchases equipment directly from the wholesaler (i.e., a general 
contractor is not involved). 69 FR 45460, 45476.
    (E2) DOE seeks input on the percent of equipment being distributed 
through the various types of distribution channels, and whether the 
share of equipment through each channel varies based on equipment 
capacity.
    To develop markups for the parties involved in the distribution of 
the equipment, DOE utilized several sources including: (1) The Air-
conditioning & Refrigeration Wholesalers Association's 1998 Wholesaler 
PROFIT Survey Report to develop wholesaler markups, (2) the Air 
Conditioning Contractors of America's (ACCA) financial analysis for the 
heating, ventilation, air-conditioning, and refrigeration (HVACR) 
contracting industry to develop mechanical contractor markups, and (3) 
U.S. Census Bureau economic data for the commercial and institutional 
building construction industry to develop general contractor markups.
    (D3) DOE seeks recent data to establish the markups for the parties 
involved with the distribution of the equipment addressed by today's 
notice.

F. Energy Use Analysis

    The purpose of the energy use analysis is to assess the energy and 
peak demand savings potential of different equipment efficiencies in 
the building types that utilize the equipment. DOE intends to base the 
energy use analysis for the current effort on building simulation data 
compiled for the 2004 ANOPR. The simulation database includes hourly 
profiles for over 1,000 commercial buildings, which were based on 
building characteristics from the 1995 Commercial Building Energy 
Consumption Survey (CBECS) for the subset of buildings using the type 
of equipment covered by the standards. Each building was assigned to a 
specific location and a typical meteorological year hourly weather file 
(referred to as TMY2) was used to represent local weather. The 
simulations capture variability in cooling loads due to factors such as 
building activity, schedule, occupancy, local weather and shell 
characteristics. Because the building simulation data developed for the 
2004 ANOPR are based on the 1995 CBECS, DOE intends to take a number of 
steps to update the building simulation database for this analytical 
effort and with any subsequent

[[Page 7302]]

proposed rulemaking that DOE may issue.
    DOE intends to adjust the 1995 CBECS building weights to match the 
most recent CBECS (2003), and to account for changes to the 
distribution of total floor space by geographic region and building 
type. CBECS 2012 is currently in development but will not be available 
in time for DOE to use as part of its rulemaking effort. In addition, 
the 1995 CBECS sample may not include examples of recent innovations in 
building shell or window technologies that reduce cooling loads. DOE 
intends on reviewing other data sets, for example, the technology 
penetration curves used in the National Energy Modeling System (NEMS) 
commercial demand module,\9\ to determine whether a significant 
fraction of the current building population is not represented by the 
building simulation database used for the 2004 ANOPR.
---------------------------------------------------------------------------

    \9\ The National Energy Modeling System (NEMS) is a computer-
based, energy-economy modeling system of the U.S. designed and 
implemented by the Energy Information Administration (EIA) of the 
U.S. DOE.
---------------------------------------------------------------------------

    The TMY2 weather data set was updated in 2008 to TMY3. For each 
location in the building database, the two weather data sets will be 
compared to determine whether there has been a change to either the 
monthly maximum temperatures or monthly cooling degree days. DOE 
intends to adjust the estimated cooling loads and energy use 
accordingly.
    The range of capacities covered by the current effort that DOE may 
consider is likely to be broader than that considered in the 2004 
ANOPR, and includes much larger capacity units. For the 2004 ANOPR, a 
design day simulation was used to determine the total cooling capacity 
requirement for a building. The simulation assumed this would be met by 
a number of identical units of fixed capacity. The updated analysis 
will consider the possibility that a smaller number of larger capacity 
units may be used. Further, DOE intends to apply the building 
simulation database to very large equipment (i.e., equipment with 
capacities between 240,000 Btu/h and 760,000 Btu/h.)
    DOE requests comment or seeks input from stakeholders on the 
following issues pertaining to the energy use analysis:
    (F1) For different cooling technologies, the relationship between 
efficiency and the instantaneous load level;
    (F2) The current distribution of equipment efficiencies in the 
building population;
    (F3) For a given cooling load shape, how equipment energy use 
scales as a function of capacity, i.e., whether two air-conditioning 
units of a certain capacity use the same total cooling energy as one 
air-conditioning unit of twice the capacity; and
    (F4) Whether the building simulations developed for small and large 
air-conditioning equipment are applicable to very large equipment.

G. Life-Cycle Cost and Payback Period Analysis

    The purpose of the LCC and PBP analysis is to analyze the effects 
of potential amended energy conservation standards on customers of 
commercial air-cooled air-conditioning and heating equipment by 
determining how a potential amended standard would affect their 
operating expenses (usually decreased) and their total installed costs 
(usually increased).
    DOE intends to analyze the potential for variability and 
uncertainty by performing the LCC and PBP calculations on a 
representative sample of individual commercial buildings. DOE plans to 
utilize the sample of buildings developed for the energy use analysis 
and the corresponding simulations results. Within a given building, one 
or more air-conditioning units may serve the building's space-
conditioning needs, depending on the cooling load requirements of the 
building. As a result, the Department intends to express the LCC and 
PBP results as the number of ACs and HPs experiencing economic impacts 
of different magnitudes. DOE plans to model both the uncertainty and 
the variability in the inputs to the LCC and PBP analysis using Monte 
Carlo simulation and probability distributions. As a result, the LCC 
and PBP results will be displayed as distributions of impacts compared 
to the base case conditions.
    (G1) DOE requests comment from stakeholders on the overall method 
that it intends to use when conducting the LCC and PBP analysis.
    Inputs to the LCC and PBP analysis are categorized as: (1) Inputs 
for establishing the purchase expense, otherwise known as the total 
installed cost, and (2) inputs for calculating the operating expense.
    The primary inputs for establishing the total installed cost are 
the baseline customer price, standard-level customer price increases, 
and installation costs. Baseline customer prices and standard-level 
customer price increases will be determined by applying markups to 
manufacturer price estimates. The installation cost is added to the 
customer price to arrive at a total installed cost. For DOE's 2004 
ANOPR, DOE developed installation costs from RS Means Mechanical Cost 
Data. 69 FR 45460, 45480. DOE intends to develop installation costs for 
any potential rulemaking it may conduct for the equipment addressed by 
today's notice using the most recent RS Means data available. For the 
2004 ANOPR, DOE varied installation cost as a function of equipment 
weight. Because weight tends to increase with equipment efficiency, 
installation cost increased with equipment efficiency. 69 FR 45460, 
45481. DOE intends to develop similar relationships for this analysis 
and for any proposed rulemaking that may be issued.
    (G2) DOE seeks input on the approach and data sources it intends to 
use to develop installation costs, specifically, its intention to use 
the most recent RS Means Mechanical Cost Data and to vary installation 
cost based on equipment weight.
    The primary inputs for calculating the operating costs are 
equipment energy consumption and power demand, equipment efficiency, 
electricity prices and forecasts, maintenance and repair costs, 
equipment lifetime, and discount rates. Both equipment lifetime and 
discount rates are used to calculate the present value of future 
operating expenses.
    The equipment energy consumption is the site energy use associated 
with providing space-conditioning to the building. The power demand is 
the maximum power requirement of the equipment (i.e., the peak demand) 
for a specific period of time. DOE intends to utilize updated building 
simulation results from its 2004 ANOPR to establish equipment energy 
use and demand.
    For projecting equipment efficiency, DOE will use the most 
appropriate metric to characterize efficiency, whether it is EER or 
IEER. The building simulations conducted for the 2004 ANOPR assigned 
specific baseline and standard level EERs to the equipment to determine 
its corresponding energy consumption and peak demand. 69 FR 45460, 
45482. If DOE utilizes an IEER as the metric for equipment efficiency, 
the updating of the building simulation results will address how 
equipment efficiency, expressed as IEER, will impact energy use and 
demand.
    Electricity prices are the price per kilowatt-hour paid by each 
customer for electricity. For the 2004 ANOPR, DOE determined 
electricity prices based on tariffs from a representative sample of 
electric utilities. 69 FR 45460, 45481-82. This approach calculates 
energy

[[Page 7303]]

expenses based on actual electricity prices that customers are paying. 
DOE intends to retain the tariff-based approach for its analysis and 
plans to update its electricity prices based on recent or current 
tariffs. Future electricity prices will likely be forecasted using 
trends from the Energy Information Administration's most recent Annual 
Energy Outlook.
    (G3) DOE seeks comment on its tariff-based approach for developing 
electricity prices. DOE seeks input on specific data sources available 
for collecting tariffs.
    Maintenance costs are costs associated with maintaining the 
operation of the equipment. For DOE's 2004 ANOPR, DOE developed 
maintenance costs from RS Means Facilities Maintenance & Repair Cost 
Data. 69 FR 45460, 45485. DOE intends to develop maintenance costs for 
its analysis using the most recent RS Means data available. For the 
2004 ANOPR, DOE estimated that maintenance costs do not vary with 
equipment efficiency. 69 FR 45460, 45485. DOE intends to use the same 
assumption as part of its analysis in determining whether amending the 
current standards is appropriate under the statutory criteria.
    (G4) DOE seeks input on the approach and data sources it intends to 
use to develop maintenance costs, specifically, its intention to use 
the most recent RS Means Facilities Maintenance & Repair Cost Data and 
in assuming that maintenance costs do not vary with equipment 
efficiency.
    Repair costs are associated with repairing or replacing components 
that have failed. For the 2004 ANOPR, DOE estimated that repair costs 
varied as function of customer equipment price. 69 FR 45460, 45485. DOE 
intends to determine whether repair costs continue to vary with 
equipment prices as part of its determination analysis.
    (G5) DOE seeks comment as to whether repair costs vary as a 
function of equipment price. DOE also requests any data or information 
on developing repair costs.
    Equipment lifetime is the age at which the equipment is retired 
from service. For the 2004 ANOPR, DOE based equipment lifetime on a 
retirement function, which was based on the use of a Weibull 
probability distribution, with a resulting median lifetime of 15 years. 
69 FR 45460, 45486. DOE intends to use the same retirement function for 
its analysis.
    (G6) DOE seeks comment on its approach of using a Weibull 
probability distribution to characterize equipment lifetime. DOE also 
requests any data or information that demonstrates whether equipment 
lifetime has a median value of 15 years and whether equipment lifetime 
varies based on equipment class.
    The discount rate is the rate at which future expenditures are 
discounted to establish their present value. For the 2004 ANOPR, DOE 
derived the discount rates by estimating the cost of capital of 
companies that purchase air-cooled air-conditioning equipment. 69 FR 
45460, 45486-87. DOE intends to apply this approach for its analysis 
and to update its data sources for calculating the cost of capital of 
companies that purchase air-cooled air-conditioning equipment.
    DOE measures LCC and PBP impacts of potential standard levels 
relative to a base case that reflects the likely market in the absence 
of amended standards. DOE plans to develop market-share efficiency data 
(i.e., the distribution of equipment shipments by efficiency) for the 
equipment classes DOE is considering, for the year in which compliance 
with any amended standards would be required.
    (G7) DOE requests data on current efficiency market shares (of 
shipments) by equipment class, and also similar historic data. In 
particular, DOE needs efficiency data for very large equipment.
    (G8) DOE also requests information on expected trends in efficiency 
over the next five years.

H. Shipments Analysis

    DOE uses shipment projections by equipment class to calculate the 
national impacts of standards on energy consumption, net present value 
(NPV), and future manufacturer cash flows.
    For the 2004 ANOPR, DOE developed a shipments model for small and 
large air-cooled air-conditioning and heating equipment driven by 
historical shipments data. 69 FR 45492. The accuracy of the shipments 
model is highly dependent on historical shipments data as the data is 
used not only to build up an equipment stock but also to calibrate the 
shipments model.
    (H1) DOE seeks recent historical shipments data for small, large, 
and very large air conditioners and heat pumps. Because very large 
equipment were not considered in the 2004 ANOPR, DOE is especially in 
need of shipments data for this class of equipment.
    The shipments model for the 2004 ANOPR considered three market 
segments: (1) New commercial buildings acquiring equipment, (2) 
existing buildings replacing broken equipment, and (3) existing 
buildings acquiring new equipment for the first time. It considered two 
stock categories: (1) Equipment that has received only normal 
maintenance repairs, and (2) equipment that has had its useful life 
extended through additional repairs. To determine whether a customer 
would choose to repair rather than replace their air-conditioning 
equipment, the shipments model explicitly accounted for the combined 
effects of changes in purchase price, annual operating cost, and the 
value of commercial floor space on the purchase versus repair decision. 
Changes to the purchase price and operating costs due to standards were 
the drivers for shipment estimates for the standards cases relative to 
the base case (the case without standards). Because purchase price had 
more of an effect on shipments than operating costs, standards case 
shipments estimated for the 2004 ANOPR were 0.2-percent to 5-percent 
lower than the base case, depending on the increased price associated 
with the standard level. Extended repairs, i.e., repairing the 
equipment rather than purchasing a new unit, accounted for 80-percent 
of the shipments decrease with the remaining 20-percent due to forgone 
shipments to new construction. DOE intends to utilize the same approach 
to develop the shipments model for this rulemaking
    (H2) DOE requests comment on the approach it intends on using to 
develop the shipments model and shipments forecasts for this 
rulemaking.
    For the 2004 ANOPR, DOE utilized U.S. Census Bureau data to 
establish historical new construction floor space as well as historical 
stock floor space. The Annual Energy Outlook was used to forecast both 
new construction and stock floor space. Together with historical 
equipment saturation data from CBECS, DOE was able to estimate 
shipments to the three market segments identified above. The utility 
function to estimate the repair versus replacement decision was based 
on income per square foot data from the Building Owners and Managers 
Association (BOMA) Commercial Building Survey reports, purchase price 
data estimated from the Bureau of Labor Statistics, and operating cost 
data derived from the LCC and PBP analysis. 69 FR 45493. DOE intends to 
update all of the above data sources for the development of the 
shipments model for its analysis.
    (H3) DOE seeks input on the approach and data sources it intends to 
use in developing the shipments model and shipments forecasts for this 
analysis.

I. National Impact Analysis

    The purpose of the national impact analysis (NIA) is to estimate 
aggregate impacts of potential efficiency standards at the national 
level. Impacts that DOE reports include the national energy savings 
(NES) from potential standards

[[Page 7304]]

and the national NPV of the total customer benefits.
    To develop the NES, DOE calculates annual energy consumption for 
the base case and the standards cases. DOE calculates the annual energy 
consumption using per-unit annual energy use data multiplied by 
projected shipments.
    To develop the national NPV of customer benefits from potential 
standards, DOE calculates annual energy expenditures and annual 
equipment expenditures for the base case and the standards cases. DOE 
calculates annual energy expenditures from annual energy consumption by 
incorporating forecasted energy prices, using shipment projections and 
average energy efficiency projections. DOE calculates annual equipment 
expenditures by multiplying the price per unit times the projected 
shipments. The difference each year between energy bill savings and 
increased equipment expenditures is the net savings or net costs.
    A key component of DOE's estimates of NES and NPV are the equipment 
energy efficiencies forecasted over time for the base case and for each 
of the standards cases. For the 2004 ANOPR, DOE used a combination of 
historical commercial and residential equipment efficiency data to 
forecast efficiencies for the base case. To estimate the impact that 
standards have in the year compliance becomes required, DOE used a 
``roll-up'' scenario which assumes that equipment efficiencies in the 
base case that do not meet the standard level under consideration would 
``roll up'' to meet the new standard level and equipment shipments at 
efficiencies above the standard level under consideration are not 
affected. 69 FR 45460, 45489-90. DOE intends to use the same methods 
for conducting the NIA for this analysis.
    (I1) In addition to historical efficiency data (see section III.H), 
DOE also requests information on expected trends in efficiency over the 
long run.

J. Submission of Comments

    DOE invites all interested parties to submit in writing by March 4, 
2013, comments and information on matters addressed in this notice and 
on other matters relevant to DOE's consideration of a new efficiency 
descriptor and amended energy conservations standard for commercial 
air-cooled air conditioners and heat pumps. After the close of the 
comment period, DOE will begin collecting data, conducting the 
analyses, and reviewing the public comments, as needed. These actions 
will be taken to aid in the development of a NOPR for commercial air-
cooled air conditioners and heat pumps if DOE decides to replace EER 
with IEER and amend the standards for such equipment.
    DOE considers public participation to be a very important part of 
the process for developing test procedures. DOE actively encourages the 
participation and interaction of the public during the comment period 
in each stage of the rulemaking process. Interactions with and between 
members of the public provide a balanced discussion of the issues and 
assist DOE in the rulemaking process. Anyone who wishes to be added to 
the DOE mailing list to receive future notices and information about 
this rulemaking should contact Ms. Brenda Edwards at (202) 586-2945, or 
via email at [email protected].

    Issued in Washington, DC, on January 25, 2013.
Kathleen B. Hogan,
Deputy Assistant Secretary for Energy Efficiency, Energy Efficiency and 
Renewable Energy.
[FR Doc. 2013-02164 Filed 1-31-13; 8:45 am]
BILLING CODE 6450-01-P