[Federal Register Volume 79, Number 60 (Friday, March 28, 2014)]
[Rules and Regulations]
[Pages 17726-17818]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-05082]



[[Page 17725]]

Vol. 79

Friday,

No. 60

March 28, 2014

Part III





Department of Energy





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10 CFR Part 431





 Energy Conservation Program: Energy Conservation Standards for 
Commercial Refrigeration Equipment; Final Rule

  Federal Register / Vol. 79 , No. 60 / Friday, March 28, 2014 / Rules 
and Regulations  

[[Page 17726]]


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DEPARTMENT OF ENERGY

10 CFR Part 431

[Docket Number EERE-2010-BT-STD-0003]
RIN 1904-AC19


Energy Conservation Program: Energy Conservation Standards for 
Commercial Refrigeration Equipment

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

ACTION: Final rule.

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SUMMARY: The Energy Policy and Conservation Act of 1975 (EPCA), as 
amended, prescribes energy conservation standards for various consumer 
products and certain commercial and industrial equipment, including 
commercial refrigeration equipment (CRE). EPCA also requires the U.S. 
Department of Energy (DOE) to determine whether more-stringent 
standards would be technologically feasible and economically justified, 
and would save a significant amount of energy. In this final rule, DOE 
is adopting more-stringent energy conservation standards for some 
classes of commercial refrigeration equipment. It has determined that 
the amended energy conservation standards for these products would 
result in significant conservation of energy, and are technologically 
feasible and economically justified.

DATES: The effective date of this rule is May 27, 2014. Compliance with 
the amended standards established for commercial refrigeration 
equipment in today's final rule is required on March 27, 2017.
    The incorporation by reference of certain publications listed in 
this final rule were approved by the Director of the Office of the 
Federal Register on January 9, 2009 and February 21, 2012.

ADDRESSES: The docket, which includes Federal Register notices, public 
meeting attendee lists and transcripts, comments, and other supporting 
documents/materials, is available for review at www.regulations.gov. 
All documents in the docket are listed in the regulations.gov index. 
However, some documents listed in the index, such as those containing 
information that is exempt from public disclosure, may not be publicly 
available.
    A link to the docket Web page can be found at: http://www.regulations.gov/#!docketDetail;D=EERE-2010-BT=STD-0003. The 
regulations.gov Web page will contain simple instructions on how to 
access all documents, including public comments, in the docket.
    For further information on how to review the docket, contact Ms. 
Brenda Edwards at (202) 586-2945 or by email: 
[email protected].

FOR FURTHER INFORMATION CONTACT:
John Cymbalsky, 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 
287-1692. Email: [email protected].
Ms. Jennifer Tiedeman, U.S. Department of Energy, Office of the General 
Counsel, GC-71, 1000 Independence Avenue SW., Washington, DC 20585-
0121. Telephone: (202) 287-6111. Email: [email protected].

SUPPLEMENTARY INFORMATION: 

Table of Contents

I. Summary of the Final Rule and Its Benefits
    A. Benefits and Costs to Customers
    B. Impact on Manufacturers
    C. National Benefits and Costs
    D. Conclusion
II. Introduction
    A. Authority
    B. Background
    1. Current Standards
    2. History of Standards Rulemaking for Commercial Refrigeration 
Equipment
III. General Discussion
    A. Test Procedures and Normalization Metrics
    1. Test Procedures
    2. Normalization Metrics
    B. Technological Feasibility
    1. General
    2. Maximum Technologically Feasible Levels
    C. Energy Savings
    1. Determination of Savings
    2. Significance of Savings
    D. Economic Justification
    1. Specific Criteria
    a. Economic Impact on Manufacturers and Commercial Customers
    b. Savings in Operating Costs Compared To Increase in Price
    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
    A. General Rulemaking Issues
    1. Trial Standard Levels
    2. Proposed Standard Levels
    3. Rulemaking Timeline
    4. Normalization Metrics
    5. Conformance With Executive Orders and Departmental Policies
    6. Offset Factors
    B. Market and Technology Assessment
    1. Equipment Classes
    a. Equipment Subcategories
    b. Floral Equipment
    2. Technology Assessment
    a. Technologies Applicable to All Equipment
    b. Technologies Relevant Only to Equipment With Doors
    c. Technologies Applicable Only to Equipment Without Doors
    C. Screening Analysis
    D. Engineering Analysis
    1. Representative Equipment for Analysis
    a. Representative Unit Selection
    b. Baseline Models
    2. Design Options
    a. Fluorescent Lamp Ballasts
    b. Condenser Fans
    c. Evaporator Fans
    d. Design Options Impacting Equipment Form Factor
    e. Vacuum Insulated Panels (VIPs)
    f. Variable-Speed Fan Motors
    g. Improved Transparent Door Designs
    h. High-Performance Coil Designs
    i. Higher-Efficiency Fan Blades
    j. ECM Fan Motors
    k. Lighting Occupancy Sensors and Controls
    l. Night Curtains
    3. Refrigerants
    4. Cost Assessment Methodology
    a. Teardown Analysis
    b. Cost Model
    c. Manufacturer Production Cost
    d. Cost-Efficiency Relationship
    e. Manufacturer Markup
    f. Shipping Costs
    g. Manufacturer Interviews
    5. Energy Consumption Model
    a. Release of Engineering Model for Review
    b. Anti-Sweat Heater Power
    c. Coil Performance Modeling
    d. Compressor Performance Modeling
    e. Insulation Modeling
    f. Lighting Performance
    g. Transparent Door Performance
    h. Validation of Engineering Results
    E. Markups Analysis
    F. Life-Cycle Cost and Payback Period Analysis
    1. Equipment Cost
    2. Installation Costs
    3. Maintenance and Repair Costs
    4. Annual Energy Consumption
    5. Energy Prices
    6. Energy Price Projections
    7. Equipment Lifetime
    8. Discount Rates
    9. Compliance Date of Standards
    10. Base-Case Efficiency Distributions
    11. Inputs to Payback Period Analysis
    12. Rebuttable-Presumption Payback Period
    G. Shipments
    1. Impact of Standards on Shipments
    H. National Impact Analysis--National Energy Savings and Net 
Present Value
    1. Forecasted Efficiency in the Base Case and Standards Cases
    2. National Energy Savings
    3. Net Present Value of Customer Benefit
    I. Customer Subgroup Analysis
    J. Manufacturer Impact Analysis
    1. Overview
    2. Government Regulatory Impact Model

[[Page 17727]]

    a. Government Regulatory Impact Model Key Inputs
    b. Government Regulatory Impact Model Scenarios
    3. Discussion of Comments
    a. Volume Purchasing of Components
    b. Refrigerants
    c. Redesign Issues
    d. LED Material Costs
    e. GRIM
    f. Cumulative Regulatory Burden
    g. Certification Costs
    h. Small Manufacturers
    K. Emissions Analysis
    L. Monetizing Carbon Dioxide and Other Emissions Impacts
    1. Social Cost of Carbon
    a. Monetizing Carbon Dioxide Emissions
    b. Social Cost of Carbon Values Used in Past Regulatory Analyses
    c. Current Approach and Key Assumptions
    2. Valuation of Other Emissions Reductions
    M. Utility Impact Analysis
    N. Employment Impact Analysis
V. Analytical Results
    A. Trial Standard Levels
    1. Trial Standard Level Formulation Process and Criteria
    2. Trial Standard Level Equations
    B. Economic Justification and Energy Savings
    1. Economic Impacts on Commercial Customers
    a. Life-Cycle Cost and Payback Period
    b. Customer Subgroup Analysis
    c. Rebuttable Presumption Payback
    2. Economic Impacts on Manufacturers
    a. Industry Cash-Flow Analysis Results
    b. Impacts on Direct Employment
    c. Impacts on Manufacturing Capacity
    d. Impacts on Subgroups of Manufacturers
    e. Cumulative Regulatory Burden
    3. National Impact Analysis
    a. Energy Savings
    b. Net Present Value of Customer Costs and Benefits
    c. Employment Impacts
    4. Impact on Utility or Performance of Equipment
    5. Impact of Any Lessening of Competition
    6. Need of the Nation To Conserve Energy
    7. Summary of National Economic Impact
    8. Other Factors
    C. Conclusions
    1. Benefits and Burdens of Trial Standard Levels Considered for 
Commercial Refrigeration Equipment
    2. Summary of Benefits and Costs (Annualized) of the Standards
VI. Procedural Issues and Regulatory Review
    A. Review Under Executive Orders 12866 and 13563
    B. Review Under the Regulatory Flexibility Act
    1. Description and Estimated Number of Small Entities Regulated
    2. Description and Estimate of Compliance Requirements
    3. Duplication, Overlap, and Conflict with Other Rules and 
Regulations
    4. Significant Alternatives to the Rule
    C. Review Under the Paperwork Reduction Act
    D. Review Under the National Environmental Policy Act of 1969
    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
    K. Review Under Executive Order 13211
    L. Review Under the Information Quality Bulletin for Peer Review
    M. Congressional Notification
VII. Approval of the Office of the Secretary

I. Summary of the Final Rule and Its Benefits

    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. 6291-6309, as 
codified), added by Public Law 95-619, Title IV, section 441(a), 
established the Energy Conservation Program for Certain Industrial 
Equipment.\2\ Pursuant to EPCA, any new or amended energy conservation 
standard that DOE prescribes for certain products, such as commercial 
refrigeration equipment, shall be designed to achieve the maximum 
improvement in energy efficiency that DOE determines is both 
technologically feasible and economically justified. (42 U.S.C. 
6295(o)(2)(A)) Furthermore, the new or amended standard must result in 
significant conservation of energy. (42 U.S.C. 6295(o)(3)(B) and 
6316(e)(1)) In accordance with these and other statutory provisions 
discussed in this document, DOE is adopting amended energy conservation 
standards for commercial refrigeration equipment. The amended 
standards, which consist of maximum daily energy consumption (MDEC) 
values as a function of either refrigerated volume or total display 
area (TDA), are shown in Table I.1. These amended standards apply to 
all equipment listed in Table I.1 and manufactured in, or imported 
into, the United States on or after March 27, 2017.
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    \1\ For editorial reasons, upon codification in the U.S. Code, 
Part C was redesignated 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 (AEMTCA), Public Law 112-210 (Dec. 18, 2012).

                 Table I.1--Energy Conservation Standards for Commercial Refrigeration Equipment
                                  [Compliance required starting March 27, 2017]
----------------------------------------------------------------------------------------------------------------
                                          Standard level**                                   Standard level**
          Equipment class*                    [dagger]              Equipment class*             [dagger]
----------------------------------------------------------------------------------------------------------------
VOP.RC.M............................  0.64 x TDA + 4.07         VOP.RC.I...............  2.79 x TDA + 8.7
VOP.RC.L............................  2.2 x TDA + 6.85          SVO.RC.L...............  2.2 x TDA + 6.85
VOP.SC.M............................  1.69 x TDA + 4.71         SVO.RC.I...............  2.79 x TDA + 8.7
VCT.RC.M............................  0.15 x TDA + 1.95         HZO.RC.I...............  0.7 x TDA + 8.74
VCT.RC.L............................  0.49 x TDA + 2.61         VOP.SC.L...............  4.25 x TDA + 11.82
VCT.SC.M............................  0.1 x V + 0.86            VOP.SC.I...............  5.4 x TDA + 15.02
VCT.SC.L............................  0.29 x V + 2.95           SVO.SC.L...............  4.26 x TDA + 11.51
VCT.SC.I............................  0.62 x TDA + 3.29         SVO.SC.I...............  5.41 x TDA + 14.63
VCS.SC.M............................  0.05 x V + 1.36           HZO.SC.I...............  2.42 x TDA + 9
VCS.SC.L............................  0.22 x V + 1.38           SOC.RC.L...............  0.93 x TDA + 0.22
VCS.SC.I............................  0.34 x V + 0.88           SOC.RC.I...............  1.09 x TDA + 0.26
SVO.RC.M............................  0.66 x TDA + 3.18         SOC.SC.I...............  1.53 x TDA + 0.36
SVO.SC.M............................  1.7 x TDA + 4.59          VCT.RC.I...............  0.58 x TDA + 3.05
SOC.RC.M............................  0.44 x TDA + 0.11         HCT.RC.M...............  0.16 x TDA + 0.13
SOC.SC.M............................  0.52 x TDA + 1            HCT.RC.L...............  0.34 x TDA + 0.26
HZO.RC.M............................  0.35 x TDA + 2.88         HCT.RC.I...............  0.4 x TDA + 0.31
HZO.RC.L............................  0.55 x TDA + 6.88         VCS.RC.M...............  0.1 x V + 0.26
HZO.SC.M............................  0.72 x TDA + 5.55         VCS.RC.L...............  0.21 x V + 0.54
HZO.SC.L............................  1.9 x TDA + 7.08          VCS.RC.I...............  0.25 x V + 0.63
HCT.SC.M............................  0.06 x V + 0.37           HCS.SC.I...............  0.34 x V + 0.88
HCT.SC.L............................  0.08 x V + 1.23           HCS.RC.M...............  0.1 x V + 0.26
HCT.SC.I............................  0.56 x TDA + 0.43         HCS.RC.L...............  0.21 x V + 0.54

[[Page 17728]]

 
HCS.SC.M............................  0.05 x V + 0.91           HCS.RC.I...............  0.25 x V + 0.63
HCS.SC.L............................  0.06 x V + 1.12           SOC.SC.L...............  1.1 x TDA + 2.1
PD.SC.M.............................  0.11 x V + 0.81           .......................  .......................
----------------------------------------------------------------------------------------------------------------
* 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
  closed with transparent doors, VCS = vertical closed with solid doors, HCT = horizontal closed with
  transparent doors, HCS = horizontal closed with solid doors, SOC = service over counter, or PD = pull-down);
  (2) an operating mode code (RC = remote condensing or SC = self-contained); and (3) a rating temperature code
  (M = medium temperature (382 [deg]F), L = low temperature (02 [deg]F), or I = ice-
  cream temperature (-152 [deg]F)). For example, ``VOP.RC.M'' refers to the ``vertical open, remote
  condensing, medium temperature'' equipment class. See discussion in chapter 3 of the final rule technical
  support document (TSD) for a more detailed explanation of the equipment class terminology.
** ``TDA'' is the total display area of the case, as measured in the Air-Conditioning, Heating, and
  Refrigeration Institute (AHRI) Standard 1200-2010, appendix D.
[dagger] ``V'' is the volume of the case, as measured in American National Standards Institute (ANSI)/
  Association of Home Appliance Manufacturers (AHAM) Standard HRF-1-2004.

A. Benefits and Costs to Customers

    Table I.2 presents DOE's evaluation of the economic impacts of 
today's standards on customers of commercial refrigeration equipment, 
as measured by the average life-cycle cost (LCC) savings \3\ and the 
median payback period (PBP).\4\ The average LCC savings are positive 
for all equipment classes for which customers are impacted by the 
amended standards.
---------------------------------------------------------------------------

    \3\ Life-cycle cost of commercial refrigeration equipment is the 
cost to customers of owning and operating the equipment over the 
entire life of the equipment. Life-cycle cost savings are the 
reductions in the life-cycle costs due to amended energy 
conservation standards when compared to the life-cycle costs of the 
equipment in the absence of amended energy conservation standards.
    \4\ Payback period refers to the amount of time (in years) it 
takes customers to recover the increased installed cost of equipment 
associated with new or amended standards through savings in 
operating cost. Further discussion can be found in chapter 8 of the 
final rule TSD.

   Table I.2--Impacts of Today's Standards on Customers of Commercial
                         Refrigeration Equipment
------------------------------------------------------------------------
                                                Average LCC
               Equipment class*                   savings     Median PBP
                                                   2012$        years
------------------------------------------------------------------------
VOP.RC.M......................................          922          5.7
VOP.RC.L......................................           53          6.1
VOP.SC.M......................................  ...........  ...........
VCT.RC.M......................................          542          2.1
VCT.RC.L......................................          526          2.7
VCT.SC.M......................................          226          5.3
VCT.SC.L......................................         5001          1.1
VCT.SC.I......................................           18          7.2
VCS.SC.M......................................          363          1.4
VCS.SC.L......................................          507          2.5
VCS.SC.I......................................          113          5.0
SVO.RC.M......................................          564          6.2
SVO.SC.M......................................  ...........  ...........
SOC.RC.M......................................  ...........  ...........
SOC.SC.M......................................  ...........  ...........
HZO.RC.M......................................  ...........  ...........
HZO.RC.L......................................  ...........  ...........
HZO.SC.M......................................           55          6.9
HZO.SC.L......................................  ...........  ...........
HCT.SC.M......................................          101          5.8
HCT.SC.L......................................          293          2.5
HCT.SC.I......................................  ...........  ...........
HCS.SC.M......................................           15          5.5
HCS.SC.L......................................           64          2.5
PD.SC.M.......................................          165          5.6
------------------------------------------------------------------------
* Values have been shown only for primary equipment classes, which are
  equipment classes that have significant volume of shipments and,
  therefore, were directly analyzed. See chapter 5 of the final rule
  TSD, Engineering Analysis, for a detailed discussion of primary and
  secondary equipment classes.
* For equipment classes VOP.SC.M, SVO.SC.M, SOC. RC.M, SOC. SC.M,
  HZO.RC.M, HZO.RC.L, HZO.SC.L, and HCT.SC.I, no efficiency levels above
  the baseline were found to be economically justifiable. Therefore, the
  standard levels contained in today's document for these equipment
  classes are the same as those set in the 2009 final rule. As a result,
  LCC savings and PBP values for these equipment classes are not
  relevant.
Note: Equipment lifetimes are between 10 and 15 years for all equipment
  classes.

B. Impact on Manufacturers

    The industry net present value (INPV) is the sum of the discounted 
cash flows to the industry from the base year (2013) through the end of 
the analysis period (2046). Using a real discount rate of 10.0 percent, 
DOE estimates that the INPV for manufacturers of commercial 
refrigeration equipment is $2,660.0 million in 2012$.\5\ Under today's 
standards, DOE expects the industry net present value to decrease by 
3.53 percent to 6.60 percent. Total industry conversion costs are 
expected to total $184.0 million. Additionally, based on DOE's 
interviews with the manufacturers of commercial refrigeration 
equipment, DOE does not expect significant loss of domestic employment.
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    \5\ All monetary values in this notice are expressed in 2012 
dollars.
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C. National Benefits and Costs

    DOE's analyses indicate that today's standards would save a 
significant amount of energy. The lifetime savings for commercial 
refrigeration equipment purchased in the 30-year period that begins in 
the year of compliance with amended standards (2017-2046) amount to 
2.89 quadrillion British thermal units (quads). The annualized energy 
savings (0.10 quads) are equivalent to 0.5 percent of total U.S. 
commercial primary energy consumption in 2014.\6\
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    \6\ Based on U.S. Department of Energy, Energy Information 
Administration, Annual Energy Outlook 2013 (AEO 2013) data.
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    The cumulative net present value (NPV) of total consumer costs and 
savings of today's standards for commercial refrigeration equipment 
ranges from $4.93 billion (at a 7-percent discount rate) to $11.74 
billion (at a 3-percent discount rate).\7\ This NPV expresses the 
estimated total value of future operating cost savings minus the 
estimated increased product costs for products purchased in 2016-2047.
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    \7\ All present value results reflect discounted to beginning of 
2014.
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    In addition, today's standards are expected to have significant 
environmental benefits. The energy savings would result in cumulative 
emission reductions of approximately 142 million metric tons (Mt) \8\ 
of carbon dioxide (CO2), 762 thousand tons of methane, 207 
thousand tons of sulfur dioxide (SO2), 94 tons of nitrogen 
oxides

[[Page 17729]]

(NOX) and 0.25 tons of mercury (Hg).\9\ Through 2030, the 
estimated energy savings would result in cumulative emissions 
reductions of 48 Mt of CO2.
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    \8\ A metric ton is equivalent to 1.1 short tons. Results for 
NOX and Hg are presented in short tons.
    \9\ DOE calculated emissions reductions relative to the AEO 2013 
Reference case, which generally represents current legislation and 
environmental regulations for which implementing regulations were 
available as of December 31, 2012.
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    The value of the CO2 reductions is calculated using a 
range of values per metric ton of CO2 (otherwise known as 
the Social Cost of Carbon, or SCC) developed by a recent Federal 
interagency process.\10\ The derivation of the SCC values is discussed 
in section IV.M. Using discount rates appropriate for each set of SCC 
values, DOE estimates that the net present monetary value of the 
CO2 emissions reductions is between $1.0 billion and $14.0 
billion. DOE also estimates that the net present monetary value of the 
NOX emissions reductions is $33 million at a 7-percent 
discount rate, and $104 million at a 3-percent discount rate.\11\
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    \10\ Technical Update of the Social Cost of Carbon for 
Regulatory Impact Analysis Under Executive Order 12866. Interagency 
Working Group on Social Cost of Carbon, United States Government. 
May 2013; revised November 2013. http://www.whitehouse.gov/sites/default/files/omb/assets/inforeg/technical-update-social-cost-of-carbon-for-regulator-impact-analysis.pdf.
    \11\ DOE is investigating the valuation of avoided Hg and 
SO2 emissions.
---------------------------------------------------------------------------

    Table I.3 summarizes the national economic costs and benefits 
expected to result from today's standards for commercial refrigeration 
equipment.

  Table I.3--Summary of National Economic Benefits and Costs of Amended
    Commercial Refrigeration Equipment Energy Conservation Standards*
------------------------------------------------------------------------
                                        Present value     Discount rate
              Category                 Billion  2012$       (percent)
------------------------------------------------------------------------
                                Benefits
------------------------------------------------------------------------
Operating Cost Savings..............              7.70                 7
                                                 16.63                 3
CO2 Reduction Monetized Value ($11.8/             1.01                 5
 t case)**..........................
CO2 Reduction Monetized Value ($39.7/             4.55                 3
 t case)**..........................
CO2 Reduction Monetized Value ($61.2/             7.20               2.5
 t case)**..........................
CO2 Reduction Monetized Value ($117/             14.05                 3
 t case)**..........................
NOX Reduction Monetized Value (at                 0.03                 7
 $2,591/ton )**.....................
                                                  0.10                 3
                                     -----------------------------------
    Total Benefits[dagger]..........             12.28                 7
                                                 21.28                 3
------------------------------------------------------------------------
                                  Costs
------------------------------------------------------------------------
Incremental Installed Costs.........              2.77                 7
                                                  4.89                 3
------------------------------------------------------------------------
                              Net Benefits
------------------------------------------------------------------------
Including CO2 and NOX [dagger]                    9.51                 7
 Reduction Monetized Value..........             16.40                 3
------------------------------------------------------------------------
* This table presents the costs and benefits associated with commercial
  refrigeration equipment shipped in 2017-2046. These results include
  benefits to customers which accrue after 2046 from the equipment
  purchased in 2017-2046. The results account for the incremental
  variable and fixed costs incurred by manufacturers due to the amended
  standard, some of which may be incurred in preparation for this final
  rule.
** The CO2 values represent global monetized values of the SCC, in
  2012$, in 2015 under several scenarios of the updated SCC values. The
  first three cases use the averages of SCC distributions calculated
  using 5%, 3%, and 2.5% discount rates, respectively. The fourth case
  represents the 95th percentile of the SCC distribution calculated
  using a 3% discount rate. The SCC time series used by DOE incorporates
  an escalation factor. The value for NOX is the average of the low and
  high values used in DOE's analysis.
[dagger] Total Benefits for both the 3% and 7% cases are derived using
  the series corresponding to average SCC with 3-percent discount rate.

    The benefits and costs of today's standards, for equipment sold in 
2017-2046, can also be expressed in terms of annualized values. The 
annualized monetary values are the sum of (1) the annualized national 
economic value of the benefits from operating the product (consisting 
primarily of operating cost savings from using less energy, minus 
increases in equipment purchase and installation costs, which is 
another way of representing consumer NPV, plus (2) the annualized 
monetary value of the benefits of emission reductions, including 
CO2 emission reductions.\12\
---------------------------------------------------------------------------

    \12\ DOE used a two-step calculation process to convert the 
time-series of costs and benefits into annualized values. First, DOE 
calculated a present value in 2013, the year used for discounting 
the NPV of total customer costs and savings, for the time-series of 
costs and benefits, using discount rates of three and seven percent 
for all costs and benefits except for the value of CO2 
reductions. For the latter, DOE used a range of discount rates, as 
shown in Table I.3. From the present value, DOE then calculated the 
fixed annual payment over a 30-year period (2017 through 2046) that 
yields the same present value. The fixed annual payment is the 
annualized value. Although DOE calculated annualized values, this 
does not imply that the time-series of cost and benefits from which 
the annualized values were determined is a steady stream of 
payments.
---------------------------------------------------------------------------

    Although adding the value of consumer savings to the values of 
emission reductions provides a valuable perspective, two issues should 
be considered. First, the national operating cost savings are domestic 
U.S. consumer monetary savings that occur as a result of market 
transactions, while the value of CO2 reductions is based on 
a global value. Second, the assessments of operating cost savings and 
CO2 savings are performed with different methods that use 
different time frames for analysis. The national operating cost savings 
is measured for the lifetime of commercial refrigeration equipment 
shipped in 2017-2046. The SCC values, on the other hand, reflect the 
present value of all future climate-related impacts resulting from the 
emission of one metric ton of carbon dioxide in each

[[Page 17730]]

year. These impacts continue well beyond 2100.
    Estimates of annualized benefits and costs of today's standards are 
shown in Table I.4. The results under the primary estimate are as 
follows. Using a 7-percent discount rate for benefits and costs other 
than CO2 reduction, for which DOE used a 3-percent discount 
rate along with the average SCC series that uses a 3-percent discount 
rate, the cost of the amended standards in today's rule is $256 million 
per year in increased equipment costs, while the benefits are $710 
million per year in reduced equipment operating costs, $246 million in 
CO2 reductions, and $3.01 million in reduced NOX 
emissions. In this case, the net benefit amounts to $704 million per 
year. Using a 3-percent discount rate for all benefits and costs and 
the average SCC series, the cost of the standards in today's rule is 
$264 million per year in increased equipment costs, while the benefits 
are $900 million per year in reduced operating costs, $246 million in 
CO2 reductions, and $5.64 million in reduced NOX 
emissions. In this case, the net benefit amounts to $888 million per 
year.

      Table I.4--Annualized Benefits and Costs of Amended Standards for Commercial Refrigeration Equipment*
----------------------------------------------------------------------------------------------------------------
                                                                          million 2012$/year
                                                     -----------------------------------------------------------
                                     Discount rate                         Low net benefits    High net benefits
                                                       Primary estimate*       estimate*           estimate*
----------------------------------------------------------------------------------------------------------------
                                                    Benefits
----------------------------------------------------------------------------------------------------------------
Operating Cost Savings..........  7%................  710...............  688...............  744.
                                  3%................  900...............  865...............  947.
CO2 Reduction at ($11.8/t         5%................  73................  73................  73.
 case)**.
CO2 Reduction at ($39.7/t         3%................  246...............  246...............  246.
 case)**.
CO2 Reduction at ($61.2/t         2.5%..............  361...............  361...............  361.
 case)**.
CO2 Reduction at ($117.0/t        3%................  760...............  760...............  760.
 case)**.
NOX Reduction at ($2,591/ton)**.  7%................  3.01..............  3.01..............  3.01.
                                  3%................  5.64..............  5.64..............  5.64.
    Total Benefits[dagger]......  7% plus CO2 range.  786 to 1,474......  764 to 1,451......  820 to 1,508.
                                  7%................  960...............  937...............  994.
                                  3% plus CO2 range.  978 to 1,666......  943 to 1,631......  1,026 to 1,713.
                                  3%................  1,152.............  1,117.............  1,200.
----------------------------------------------------------------------------------------------------------------
                                                      Costs
----------------------------------------------------------------------------------------------------------------
Incremental Equipment Costs.....  7%................  256...............  250...............  261.
                                  3%................  264...............  258...............  271.
----------------------------------------------------------------------------------------------------------------
                                                  Net Benefits
----------------------------------------------------------------------------------------------------------------
    Total[dagger]...............  7% plus CO2 range.  530 to 1,218......  513 to 1,201......  559 to 1,246.
                                  7%................  704...............  687...............  733.
                                  3% plus CO2 range.  714 to 1,402......  685 to 1,373......  755 to 1,442.
                                  3%................  888...............  859...............  929.
----------------------------------------------------------------------------------------------------------------
* This table presents the annualized costs and benefits associated with commercial refrigeration equipment
  shipped in 2017-2046. These results include benefits to customers which accrue after 2046 from the products
  purchased in 2017-2046. The results account for the incremental variable and fixed costs incurred by
  manufacturers due to the amended standard, some of which may be incurred in preparation for the final rule.
  The primary, low, and high estimates utilize projections of energy prices from the AEO 2013 Reference case,
  Low Estimate, and High Estimate, respectively. In addition, incremental equipment costs reflect a medium
  decline rate for projected product price trends in the Primary Estimate, a low decline rate for projected
  product price trends in the Low Benefits Estimate, and a high decline rate for projected product price trends
  in the High Benefits Estimate. The method used to derive projected price trends are explained in section IV.H.
** The CO2 values represent global monetized values of the SCC, in 2012$, in 2015 under several scenarios of the
  updated SCC values. The first three cases use the averages of SCC distributions calculated using 5%, 3%, and
  2.5% discount rates, respectively. The fourth case represents the 95th percentile of the SCC distribution
  calculated using a 3% discount rate. The SCC time series used by DOE incorporate an escalation factor. The
  value for NOX is the average of the low and high values used in DOE's analysis.
[dagger] Total Benefits for both the 3-percent and 7-percent cases are derived using the series corresponding to
  average SCC with 3-percent discount rate. In the rows labeled ``7% plus CO2 range'' and ``3% plus CO2 range,''
  the operating cost and NOX benefits are calculated using the labeled discount rate, and those values are added
  to the full range of CO2 values.

D. Conclusion

    Based on the analyses culminating in this final rule, DOE found the 
benefits to the nation of the amended standards (energy savings, 
consumer LCC savings, positive NPV of consumer benefit, and emission 
reductions) outweigh the burdens (loss of INPV and LCC increases for 
some users of this equipment). DOE has concluded that the standards in 
today's final rule represent the maximum improvement in energy 
efficiency that is both technologically feasible and economically 
justified, and would result in significant conservation of energy. (42 
U.S.C. 6295(o), 6316(e))

II. Introduction

    The following section briefly discusses the statutory authority 
underlying today's final rule, as well as some of the relevant 
historical background related to the establishment of amended standards 
for commercial refrigeration equipment.

[[Page 17731]]

A. Authority

    Title III, Part C of EPCA, Public Law 94-163 (42 U.S.C. 6311-6317, 
as codified), added by Public Law 95-619, Title IV, section 441(a), 
established the Energy Conservation Program for Certain Industrial 
Equipment, a program covering certain industrial equipment, which 
includes the commercial refrigeration equipment that is the focus of 
this document.13 14 EPCA prescribes energy conservation 
standards for commercial refrigeration equipment (42 U.S.C. 6313(c)(2)-
(4)), and directs DOE to conduct rulemakings to establish new and 
amended standards for commercial refrigeration equipment. (42 U.S.C. 
6313(c)(4)-(6)) (DOE notes that under 42 U.S.C. 6295(m) and 6316(e)(1) 
the agency must periodically review its already established energy 
conservation standards for covered equipment. Under this requirement, 
the next review that DOE would need to conduct must occur no later than 
6 years from the issuance of a final rule establishing or amending a 
standard for covered equipment.)
---------------------------------------------------------------------------

    \13\ For editorial reasons, upon codification in the U.S. Code, 
Part C was re-designated Part A-1.
    \14\ All references to EPCA in this document refer to the 
statute as amended through the American Energy Manufacturing 
Technical Corrections Act (AEMTCA), Public Law 112-210 (Dec. 18, 
2012).
---------------------------------------------------------------------------

    Pursuant to EPCA, DOE's energy conservation program for covered 
equipment generally consists of four parts: (1) Testing; (2) labeling; 
(3) the establishment of Federal energy conservation standards; and (4) 
certification and enforcement procedures. For commercial refrigeration 
equipment, DOE is responsible for the entirety of this program. Subject 
to certain criteria and conditions, DOE is required to develop test 
procedures to measure the energy efficiency, energy use, or estimated 
annual operating cost of each type or class of covered equipment. (42 
U.S.C. 6314) Manufacturers of covered equipment must use the prescribed 
DOE test procedure as the basis for certifying to DOE that their 
equipment complies with the applicable energy conservation standards 
adopted under EPCA and when making representations to the public 
regarding the energy use or efficiency of that equipment. (42 U.S.C. 
6315(b), 6295(s), and 6316(e)(1)) Similarly, DOE must use these test 
procedures to determine whether that equipment complies with standards 
adopted pursuant to EPCA. The DOE test procedure for commercial 
refrigeration equipment currently appears at title 10 of the Code of 
Federal Regulations (CFR) part 431, subpart C.
    DOE must follow specific statutory criteria for prescribing amended 
standards for covered equipment. As indicated above, any amended 
standard for covered equipment must be designed to achieve the maximum 
improvement in energy efficiency that is technologically feasible and 
economically justified. (42 U.S.C. 6295(o)(2)(A) and 6316(e)(1)) 
Furthermore, DOE may not adopt any standard that would not result in 
the significant conservation of energy. (42 U.S.C. 6295(o)(3) and 
6316(e)(1)) DOE also may not prescribe a standard: (1) For certain 
equipment, including commercial refrigeration equipment, if no test 
procedure has been established for the product; or (2) if DOE 
determines by rule that the proposed standard is not technologically 
feasible or economically justified. (42 U.S.C. 6295(o)(3)(A)-(B) and 
6316(e)(1)) In deciding whether a proposed standard is economically 
justified, DOE must determine whether the benefits of the standard 
exceed its burdens. (42 U.S.C. 6295(o)(2)(B)(i) and 6316(e)(1)) 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 equipment that are likely to result from the imposition of the 
standard;
    3. The total projected amount of energy, 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 U.S. Attorney General (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 considers relevant.

(42 U.S.C. 6295(o)(2)(B)(i)(I)-(VII) and 6316(e)(1))

    EPCA, as codified, also contains what is known as an ``anti-
backsliding'' provision, which prevents the Secretary from prescribing 
any amended standard that either increases the maximum allowable energy 
use or decreases the minimum required energy efficiency of covered 
equipment. (42 U.S.C. 6295(o)(1) and 6316(e)(1)) Also, 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 of 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. (42 U.S.C. 6295(o)(4) and 6316(e)(1))
    Further, EPCA, as codified, establishes a rebuttable presumption 
that a standard 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 savings during the first year that the 
consumer will receive as a result of the standard, as calculated under 
the applicable test procedure. (See 42 U.S.C. 6295(o)(2)(B)(iii) and 
6316(e)(1)) Section III.D.2 presents additional discussion about the 
rebuttable presumption payback period.
    Additionally, 42 U.S.C. 6295(q)(1) and 6316(e)(1) specify 
requirements when promulgating a standard for a type or class of 
covered equipment that has two or more subcategories that may justify 
different standard levels. DOE must specify a different standard level 
than that which applies generally to such type or class of equipment 
for any group of covered products that has the same function or 
intended use if DOE determines that products within such group (A) 
consume a different kind of energy from that consumed by other covered 
equipment within such type (or class); or (B) have a capacity or other 
performance-related feature that other equipment within such type (or 
class) do not have and such feature justifies a higher or lower 
standard. (42 U.S.C. 6295(q)(1) and 6316(e)(1)) In determining whether 
a performance-related feature justifies a different standard for a 
group of equipment, DOE must consider such factors as the utility to 
the consumer of the feature and other factors DOE deems appropriate. 
Id. Any rule prescribing such a standard must include an explanation of 
the basis on which such higher or lower level was established. (42 
U.S.C. 6295(q)(2) and 6316(e)(1))
    Federal energy conservation requirements generally supersede State 
laws or regulations concerning energy conservation testing, labeling, 
and

[[Page 17732]]

standards. (42 U.S.C. 6297(a)-(c) and 6316(e))

B. Background

1. Current Standards
    The current energy conservation standards for commercial 
refrigeration equipment were established by two different legislative 
actions and one DOE final rule. EPCA, as amended by the Energy Policy 
Act of 2005 (EPACT 2005), established standards for self-contained 
commercial refrigerators and freezer with solid or transparent doors, 
self-contained commercial refrigerator-freezers with solid doors, and 
self-contained commercial refrigerators designed for pull-down 
applications. (42 U.S.C. 6313(c)(2)-(3)) On January 9, 2009, DOE 
published a final rule (January 2009 final rule) prescribing standards 
for commercial refrigeration equipment. 74 FR at 1092. Specifically, 
this final rule completed the first standards rulemaking for commercial 
refrigeration equipment by establishing standards for equipment types 
specified in 42 U.S.C. 6313(c)(5), and for which EPCA did not prescribe 
standards in 42 U.S.C. 6313(c)(2)-(3). These types consisted of 
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. More recently, the 
American Energy Manufacturing Technical Corrections Act (AEMTCA), 
Public Law 112-210 (December 18, 2012), amended section 342(c) of EPCA 
to establish a new standard for self-contained service over counter 
medium temperature commercial refrigerators (this class is known as 
SOC.SC.M per DOE's equipment class nomenclature). (42 U.S.C. 
6313(c)(4)) As a result, DOE's current energy conservation standards 
for commercial refrigeration equipment include the following: Standards 
established by EPCA for commercial refrigeration equipment manufactured 
on or after January 1, 2010; standards established in the January 2009 
final rule for commercial refrigeration equipment manufactured on or 
after January 1, 2012; and standards established by AEMTCA for SOC.SC.M 
equipment manufactured on or after January 1, 2012.
    Table II.1 and Table II.2 present DOE's current energy conservation 
standards for commercial refrigeration equipment set by EPCA and the 
January 2009 final rule, respectively. The AEMTCA standard for SOC.SC.M 
equipment manufactured on or after January 1, 2012 is prescribed as 0.6 
x TDA + 1.0. (42 U.S.C. 6313(c)(4))

  Table II.1--Commercial Refrigeration Equipment Standards Prescribed by EPCA--Compliance Required Beginning on
                                                 January 1, 2010
----------------------------------------------------------------------------------------------------------------
                  Category                                Maximum daily energy consumption kWh/day*
----------------------------------------------------------------------------------------------------------------
Refrigerators with solid doors.............  0.10 V** + 2.04.
Refrigerators with transparent doors.......  0.12 V + 3.34.
Freezers with solid doors..................  0.40 V + 1.38.
Freezers with transparent doors............  0.75 V + 4.10.
Refrigerators/freezers with solid doors....  the greater of 0.27 AV[dagger]--0.71 or 0.70.
Self-contained refrigerators with            0.126V + 3.51.
 transparent doors designed for pull-down
 temperature applications.
----------------------------------------------------------------------------------------------------------------
* kilowatt-hours per day.
** Where ``V'' means the chilled or frozen compartment volume in cubic feet as defined in the Association of
  Home Appliance Manufacturers Standard HRF-1-1979. 10 CFR 431.66.
[dagger] Where ``AV'' means that adjusted volume in cubic feet measured in accordance with the Association of
  Home Appliance Manufacturers Standard HRF-1-1979. 10 CFR 431.66.


 Table II.2--Commercial Refrigeration Equipment Standards Established in
the January 2009 Final Rule--Compliance Required Beginning on January 1,
                                  2012
------------------------------------------------------------------------
             Equipment class *                Standard level ** kWh/day
------------------------------------------------------------------------
VOP.RC.M..................................  0.82 x TDA + 4.07
SVO.RC.M..................................  0.83 x TDA + 3.18
HZO.RC.M..................................  0.35 x TDA + 2.88
VOP.RC.L..................................  2.27 x TDA + 6.85
HZO.RC.L..................................  0.57 x TDA + 6.88
VCT.RC.M..................................  0.22 x TDA + 1.95
VCT.RC.L..................................  0.56 x TDA + 2.61
SOC.RC.M..................................  0.51 x TDA + 0.11
VOP.SC.M..................................  1.74 x TDA + 4.71
SVO.SC.M..................................  1.73 x TDA + 4.59
HZO.SC.M..................................  0.77 x TDA + 5.55
HZO.SC.L..................................  1.92 x TDA + 7.08
VCT.SC.I..................................  0.67 x TDA + 3.29
VCS.SC.I..................................  0.38 x V + 0.88
HCT.SC.I..................................  0.56 x TDA + 0.43
SVO.RC.L..................................  2.27 x TDA + 6.85
VOP.RC.I..................................  2.89 x TDA + 8.7
SVO.RC.I..................................  2.89 x TDA + 8.7
HZO.RC.I..................................  0.72 x TDA + 8.74
VCT.RC.I..................................  0.66 x TDA + 3.05
HCT.RC.M..................................  0.16 x TDA + 0.13
HCT.RC.L..................................  0.34 x TDA + 0.26
HCT.RC.I..................................  0.4 x TDA + 0.31
VCS.RC.M..................................  0.11 x V + 0.26
VCS.RC.L..................................  0.23 x V + 0.54
VCS.RC.I..................................  0.27 x V + 0.63
HCS.RC.M..................................  0.11 x V + 0.26
HCS.RC.L..................................  0.23 x V + 0.54
HCS.RC.I..................................  0.27 x V + 0.63
SOC.RC.L..................................  1.08 x TDA + 0.22
SOC.RC.I..................................  1.26 x TDA + 0.26
VOP.SC.L..................................  4.37 x TDA + 11.82
VOP.SC.I..................................  5.55 x TDA + 15.02
SVO.SC.L..................................  4.34 x TDA + 11.51
SVO.SC.I..................................  5.52 x TDA + 14.63
HZO.SC.I..................................  2.44 x TDA + 9.
SOC.SC.I..................................  1.76 x TDA + 0.36
HCS.SC.I..................................  0.38 x V + 0.88
------------------------------------------------------------------------
* 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 closed with transparent doors, VCS = vertical closed with
  solid doors, HCT = horizontal closed with transparent doors, HCS =
  horizontal closed with 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.

[[Page 17733]]

 
** TDA is the total display area of the case, as measured in ANSI/Air-
  Conditioning and Refrigeration Institute (ARI) Standard 1200-2006,
  appendix D. V is the volume of the case, as measured in AHAM Standard
  HRF-1-2004.

    In December 2012, AEMTCA amended EPCA by establishing new standards 
for SOC.SC.M equipment with a compliance date of January 1, 2012. (42 
U.S.C. 6313(c)(4)) The SOC.SC.M equipment had previously been 
classified under the category self-contained commercial refrigerators 
with transparent doors, for which standards were established by EPACT 
2005. (42 U.S.C. 6313(c)(2)) The standard established by AEMTCA for 
SOC.SC.M equipment reduces the stringency of the standard applicable to 
this equipment.
    AEMTCA also directs DOE to determine, within three years of 
enactment of the new SOC.SC.M standard, whether this standard should be 
amended. (42 U.S.C. 6313(c)(4)(B)(i)) If DOE determines that the 
standard should be amended, then DOE must issue a final rule 
establishing an amended standard within this same three-year period. 
(42 U.S.C. 6313(c)(4)(B)(ii))

2. History of Standards Rulemaking for Commercial Refrigeration 
Equipment

    EPCA, as amended by EPACT 2005, prescribes energy conservation 
standards for certain self-contained commercial refrigeration equipment 
designed for holding temperatures \15\ (i.e., commercial refrigerators, 
freezers, and refrigerator-freezers with transparent and solid doors 
designed for holding temperature applications) and self-contained 
commercial refrigerators with transparent doors designed for pull-down 
temperature applications.\16\ Compliance with these standards was 
required as of January 1, 2010. (42 U.S.C. 6313(c)(2)-(3)) DOE 
published a technical amendment final rule on October 18, 2005 
codifying these standards into subpart C of part 431 under title 10 of 
the Code of Federal Regulations (CFR). 70 FR at 60407.
---------------------------------------------------------------------------

    \15\ EPCA defines the term ``holding temperature application'' 
as a use of commercial refrigeration equipment other than a pull-
down temperature application, except a blast chiller or freezer. (42 
U.S.C. 6311(9)(B))
    \16\ EPCA defines the term ``pull-down temperature application'' 
as a commercial refrigerator with doors that, when fully loaded with 
12 ounce beverage cans at 90 [deg]F, can cool those beverages to an 
average stable temperature of 38 [deg]F in 12 hours or less. (42 
U.S.C. 6311(9)(D))
---------------------------------------------------------------------------

    In addition, EPCA requires DOE to set standards for additional 
commercial refrigeration equipment that is not covered by 42 U.S.C. 
6313(c)(2)-(3), namely commercial 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)(5)) DOE published a final 
rule establishing these standards on January 9, 2009 (74 FR 1092), and 
manufacturers must comply with these standards starting on January 1, 
2012. (42 U.S.C. 6313(c)(5)(A))
    EPCA requires DOE to conduct a subsequent rulemaking to determine 
whether to amend the standards established under 42 U.S.C. 6313(c), 
which includes both the standards prescribed by EPACT 2005 and those 
prescribed by DOE in the January 2009 final rule. (42 U.S.C. 
6313(c)(6)) If DOE decides as part of this ongoing rulemaking to amend 
the current standards, DOE must publish a final rule establishing any 
such amended standards by January 1, 2013. Id.
    To satisfy this requirement, DOE initiated the current rulemaking 
on April 30, 2010 by publishing on its Web site its ``Rulemaking 
Framework for Commercial Refrigeration Equipment.'' (The Framework 
document is available at: www1.eere.energy.gov/buildings/appliance_standards/commercial/pdfs/cre_framework_04-30-10.pdf.) DOE also 
published a document in the Federal Register announcing the 
availability of the Framework document, as well as a public meeting to 
discuss the document. The document also solicited comment on the 
matters raised in the document. 75 FR 24824 (May 6, 2010). The 
Framework document described the procedural and analytical approaches 
that DOE anticipated using to evaluate energy conservation standards 
for commercial refrigeration equipment, and identified various issues 
to be resolved in the rulemaking.
    DOE held the Framework public meeting on May 18, 2010, at which it: 
(1) Presented the contents of the Framework document; (2) described the 
analyses it planned to conduct during the rulemaking; (3) sought 
comments from interested parties on these subjects; and (4) in general, 
sought to inform interested parties about, and facilitate their 
involvement in, the rulemaking. Major issues discussed at the public 
meeting included: (1) The scope of coverage for the rulemaking; (2) 
potential updates to the test procedure and appropriate test metrics 
(being addressed in a concurrent rulemaking); (3) manufacturer and 
market information, including distribution channels; (4) equipment 
classes, baseline units,\17\ and design options to improve efficiency; 
(5) life-cycle costs to customer, including installation, maintenance, 
and repair costs; and (6) any customer subgroups DOE should consider. 
At the meeting and during the comment period on the Framework document, 
DOE received many comments that helped it identify and resolve issues 
pertaining to commercial refrigeration equipment relevant to this 
rulemaking. These are discussed in subsequent sections of this 
document.
---------------------------------------------------------------------------

    \17\ Baseline units consist of units possessing features and 
levels of efficiency consistent with the least-efficient equipment 
currently available and widely sold on the market.
---------------------------------------------------------------------------

    DOE then gathered additional information and performed preliminary 
analyses to help review energy conservation standards for this 
equipment. This process culminated in DOE's notice of a public meeting 
to discuss and receive comments regarding the tools and methods DOE 
used in performing its preliminary analysis, as well as the analyses 
results. 76 FR 17573 (March 30, 2011) (the March 2011 notice). DOE also 
invited written comments on these subjects and announced the 
availability on its Web site of a preliminary analysis technical 
support document (preliminary analysis TSD). Id. (The preliminary 
analysis TSD is available at: www.regulations.gov/#!documentDetail;D=EERE-2010-BT-STD-0003-0030.)
    The preliminary analysis TSD provided an overview of DOE's review 
of the standards for commercial refrigeration equipment, discussed the 
comments DOE received in response to the Framework document, and 
addressed issues including the scope of coverage of the rulemaking. The 
document also described the analytical framework that DOE used (and 
continues to use) in considering amended standards for commercial 
refrigeration equipment, including a description of the methodology, 
the analytical tools, and the relationships between the various 
analyses that are part of this rulemaking. Additionally, the 
preliminary analysis TSD presented in detail each analysis that DOE had 
performed for this equipment up to that point, including descriptions 
of inputs, sources, methodologies, and results. These analyses were as 
follows:
     A market and technology assessment addressed the scope of 
this rulemaking, identified existing and potential new equipment 
classes for commercial refrigeration equipment, characterized the 
markets for this equipment, and reviewed techniques and approaches for 
improving its efficiency;
     A screening analysis reviewed technology options to 
improve the

[[Page 17734]]

efficiency of commercial refrigeration equipment, and weighed these 
options against DOE's four prescribed screening criteria;
     An engineering analysis estimated the manufacturer selling 
prices (MSPs) associated with more energy efficient commercial 
refrigeration equipment;
     An energy use analysis estimated the annual energy use of 
commercial refrigeration equipment;
     A markups analysis converted estimated MSPs derived from 
the engineering analysis to customer purchase prices;
     A life-cycle cost analysis calculated, for individual 
customers, the discounted savings in operating costs throughout the 
estimated average life of commercial refrigeration equipment, compared 
to any increase in installed costs likely to result directly from the 
imposition of a given standard;
     A payback period analysis estimated the amount of time it 
would take customers to recover the higher purchase price of more 
energy efficient equipment through lower operating costs;
     A shipments analysis estimated shipments of commercial 
refrigeration equipment over the time period examined in the analysis;
     A national impact analysis (NIA) assessed the national 
energy savings (NES), and the national NPV of total customer costs and 
savings, expected to result from specific, potential energy 
conservation standards for commercial refrigeration equipment; and
     A preliminary manufacturer impact analysis (MIA) took the 
initial steps in evaluating the potential effects on manufacturers of 
amended efficiency standards.
    The public meeting announced in the March 2011 notice took place on 
April 19, 2011 (April 2011 preliminary analysis public meeting). At the 
April 2011 preliminary analysis public meeting, DOE presented the 
methodologies and results of the analyses set forth in the preliminary 
analysis TSD. Interested parties provided comments on the following 
issues: (1) Equipment classes; (2) technology options; (3) energy 
modeling; (4) installation, maintenance, and repair costs; (5) markups 
and distributions chains; (6) commercial refrigeration equipment 
shipments; and (7) test procedures.
    On September 11, 2013, DOE published a notice of proposed 
rulemaking (NOPR) in this proceeding (September 2013 NOPR). 78 FR 
55890. In the September 2013 NOPR, DOE addressed, in detail, the 
comments received in earlier stages of rulemaking, and proposed amended 
energy conservation standards for commercial refrigeration equipment. 
In conjunction with the September 2013 NOPR, DOE also published on its 
Web site the complete technical support document (TSD) for the proposed 
rule, which incorporated the analyses DOE conducted and technical 
documentation for each analysis. Also published on DOE's Web site were 
the engineering analysis spreadsheets, the LCC spreadsheet, and the 
national impact analysis standard spreadsheet. These materials are 
available at http://www1.eere.energy.gov/buildings/appliance_standards/rulemaking.aspx/ruleid/27.
    The standards which DOE proposed for commercial refrigeration 
equipment at the NOPR stage of this rulemaking are shown in Table II.3. 
They are provided solely for background informational purposes and 
differ from the amended standards set forth in this final rule.

            Table II.3--Proposed Energy Conservation Standards for Commercial Refrigeration Equipment
                                            [For compliance in 2017]
----------------------------------------------------------------------------------------------------------------
                                          Proposed level **                              Proposed standard level
          Equipment class*                    [dagger]             Equipment class *                **
----------------------------------------------------------------------------------------------------------------
VCT.RC.L............................  0.43 x TDA + 2.03         VOP.RC.I...............  2.68 x TDA + 8.08
VOP.RC.M............................  0.61 x TDA + 3.03         SVO.RC.L...............  2.11 x TDA + 6.36
SVO.RC.M............................  0.63 x TDA + 2.41         SVO.RC.I...............  2.68 x TDA + 8.08
HZO.RC.L............................  0.57 x TDA + 6.88         HZO.RC.I...............  0.72 x TDA + 8.74
HZO.RC.M............................  0.35 x TDA + 2.88         VOP.SC.L...............  3.79 x TDA + 10.26
VCT.RC.M............................  0.08 x TDA + 0.72         VOP.SC.I...............  4.81 x TDA + 13.03
VOP.RC.L............................  2.11 x TDA + 6.36         SVO.SC.L...............  3.77 x TDA + 10.01
SOC.RC.M............................  0.39 x TDA + 0.08         SVO.SC.I...............  4.79 x TDA + 12.72
VOP.SC.M............................  1.51 x TDA + 4.09         HZO.SC.I...............  2.44 x TDA + 9.0
SVO.SC.M............................  1.5 x TDA + 3.99          SOC.RC.L...............  0.83 x TDA + 0.18
HZO.SC.L............................  1.92 x TDA + 7.08         SOC.RC.I...............  0.97 x TDA + 0.21
HZO.SC.M............................  0.75 x TDA + 5.44         SOC.SC.I...............  1.35 x TDA + 0.29
HCT.SC.I............................  0.49 x TDA + 0.37         VCT.RC.I...............  0.51 x TDA + 2.37
VCT.SC.I............................  0.52 x TDA + 2.56         HCT.RC.M...............  0.14 x TDA + 0.11
VCS.SC.I............................  0.35 x V + 0.81           HCT.RC.L...............  0.3 x TDA + 0.23
VCT.SC.M............................  0.04 x V + 1.07           HCT.RC.I...............  0.35 x TDA + 0.27
VCT.SC.L............................  0.22 x V + 1.21           VCS.RC.M...............  0.1 x V + 0.24
VCS.SC.M............................  0.03 x V + 0.53           VCS.RC.L...............  0.21 x V + 0.5
VCS.SC.L............................  0.13 x V + 0.43           VCS.RC.I...............  0.25 x V + 0.58
HCT.SC.M............................  0.02 x V + 0.51           HCS.SC.I...............  0.35 x V + 0.81
HCT.SC.L............................  0.11 x V + 0.6            HCS.RC.M...............  0.1 x V + 0.24
HCS.SC.M............................  0.02 x V + 0.37           HCS.RC.L...............  0.21 x V + 0.5
HCS.SC.L............................  0.12 x V + 0.42           HCS.RC.I...............  0.25 x V + 0.58
PD.SC.M.............................  0.03 x V + 0.83           SOC.SC.L...............  0.67 x TDA + 1.12
SOC.SC.M............................  0.32 x TDA + 0.53
----------------------------------------------------------------------------------------------------------------
* 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
  closed with transparent doors, VCS = vertical closed with solid doors, HCT = horizontal closed with
  transparent doors, HCS = horizontal closed with solid doors, SOC = service over counter, or PD = pull-down);
  (2) an operating mode code (RC = remote condensing or SC = self-contained); and (3) a rating temperature code
  (M = medium temperature (382 [deg]F), L = low temperature (02 [deg]F), or I = ice-
  cream temperature (-152 [deg]F)). For example, ``VOP.RC.M'' refers to the ``vertical open, remote
  condensing, medium temperature'' equipment class. See discussion in chapter 3 of the final rule technical
  support document (TSD) for a more detailed explanation of the equipment class terminology.
** ``TDA'' is the total display area of the case, as measured in the Air-Conditioning, Heating, and
  Refrigeration Institute (AHRI) Standard 1200-2010, appendix D. ``V'' is the volume of the case, as measured in
  American National Standards Institute (ANSI)/Association of Home Appliance Manufacturers (AHAM) Standard HRF-1-
  2004.

    In the September 2013 NOPR, DOE identified seven issues on which it 
was particularly interested in receiving comments and views of 
interested parties: light-emitting diode (LED) price projections, base 
case efficiency trends,

[[Page 17735]]

operating temperature ranges, offset factors for smaller equipment, 
extension of standards developed for the 25 primary classes to the 
remaining 24 secondary classes, standards for hybrid cases and wedges, 
and standard levels. 78 FR 55987 (September 11, 2013) After the 
publication of the September 2013 NOPR, DOE received written comments 
on these and other issues. DOE also held a public meeting in 
Washington, DC, on October 3, 2013, to hear oral comments on and 
solicit information relevant to the proposed rule. These comments are 
addressed in today's document.

III. General Discussion

A. Test Procedures and Normalization Metrics

1. Test Procedures
    On December 8, 2006, DOE published a 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. 71 FR at 
71340, 71369-70. ANSI/ARI Standard 1200-2006 requires performance tests 
to be conducted according to the American Society of Heating, 
Refrigerating, and Air-Conditioning Engineers (ASHRAE) Standard 72-
2005, ``Method of Testing Commercial Refrigerators and Freezers.'' The 
standard also 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. During the 2006 test procedure rulemaking, DOE 
determined that testing at a -15 [deg]F (2 [deg]F) rating 
temperature was more representative of the actual energy consumption of 
commercial freezers specifically designed for ice-cream application. 71 
FR at 71357 (December 8, 2006). Therefore, in the test procedure final 
rule, DOE adopted a -15 [deg]F (2 [deg]F) rating 
temperature for commercial ice-cream freezers, rather than the -5 
[deg]F (2 [deg]F) prescribed in the ANSI/ARI Standard 1200-
2006. 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 at 71369-70 (December 8, 2006).
    On February 21, 2012, DOE published a test procedure final rule 
(2012 test procedure final rule) in which it adopted several amendments 
to the DOE test procedure. This included an amendment to incorporate by 
reference ANSI/Air-Conditioning, Heating, and Refrigeration Institute 
(AHRI) Standard 1200-2010, ``Performance Rating of Commercial 
Refrigerated Display Merchandisers and Storage Cabinets,'' as the DOE 
test procedure for this equipment. 77 FR 10292, 10314 (February 21, 
2012). The 2012 test procedure final rule also included an amendment to 
incorporate by reference the updated ANSI/AHAM Standard HRF-1-2008, 
``Energy, Performance, and Capacity of Household Refrigerators, 
Refrigerator-Freezers, and Freezers,'' for determining compartment 
volumes for this equipment.
    In addition, the 2012 test procedure final rule included several 
amendments designed to address certain energy efficiency features that 
were not accounted for by the previous DOE test procedure, including 
provisions for measuring the impact of night curtains \18\ and lighting 
occupancy sensors and scheduled controls. 77 FR at 10296-98 (February 
21, 2012). In the 2012 test procedure final rule, DOE also adopted 
amendments to allow testing of commercial refrigeration equipment at 
temperatures other than one of the three rating temperatures previously 
specified in the test procedure. Specifically, the 2012 test procedure 
final rule allows testing of commercial refrigeration equipment at its 
lowest application product temperature, for equipment that cannot be 
tested at the prescribed rating temperature. The 2012 test procedure 
final rule also allows manufacturers to test and certify equipment at 
the more-stringent temperatures and ambient conditions required by NSF 
for food safety testing.\19\ 77 FR at 10305 (February 21, 2012).
---------------------------------------------------------------------------

    \18\ Night curtains are devices made of an insulating material, 
typically insulated aluminum fabric, designed to be pulled down over 
the open front of the case to decrease infiltration and heat 
transfer into the case when the merchandizing establishment is 
closed.
    \19\ The NSF was founded in 1944 as the National Sanitation 
Foundation, and is now referred to simply as NSF.
---------------------------------------------------------------------------

    The test procedure amendments established in the 2012 test 
procedure final rule are required to be used in conjunction with the 
amended standards promulgated in this energy conservation standards 
final rule. As such, use of the amended test procedure to show 
compliance with DOE energy conservation standards or make 
representations with respect to energy consumption of commercial 
refrigeration equipment is required on the compliance date of the 
revised energy conservation standards established by today's document. 
77 FR at 10308 (February 21, 2012).
    DOE has initiated a test procedure rulemaking for commercial 
refrigeration equipment to revise and reorganize its test procedure for 
commercial refrigeration equipment in order to clarify certain terms, 
procedures, and compliance dates. A NOPR for this rulemaking was 
published on October 28, 2013. 78 FR 64206 (October 28. 2013). In the 
NOPR, DOE addressed:
     Several inquiries received from interested parties 
regarding the applicability of DOE's test procedure and current Federal 
energy conservation standards;
     The definitions of certain terms pertinent to commercial 
refrigeration equipment;
     The proper configuration and use of certain components and 
features of commercial refrigeration equipment when testing according 
to the DOE test procedure;
     The proper application of certain test procedure 
provisions;
     The compliance date of certain provisions specified in the 
DOE test procedure final rule published on February 21, 2012; and
     A number of test procedure clarifications which arose as a 
result of the negotiated rulemaking process for certification of 
commercial heating, ventilation, air conditioning, refrigeration, and 
water heating equipment.
    DOE also held a public meeting in Washington, DC, on December 5, 
2013, to hear oral comments on and solicit information relevant to the 
proposed rule.
2. Normalization Metrics
    Both the January 2009 final rule and EPACT 2005 contain energy 
conservation standards for respective covered types of commercial 
refrigeration equipment, expressed in the form of equations developed 
as a function of unit size. This use of normalization metrics allows 
for a single standard-level equation developed for an equipment class 
to apply to a broad range of equipment sizes offered within that class 
by manufacturers. In the aforementioned commercial refrigeration 
equipment standards, the two normalization metrics used are 
refrigerated compartment volume, as determined using AHAM HRF-1-2004, 
and TDA, as determined using ANSI/ARI 1200-2006. In particular, the 
EPACT 2005 standards

[[Page 17736]]

utilize volume as the normalization metric for all equipment types, 
with the exception of refrigerator-freezers with solid doors, for which 
the standard specifies adjusted volume. (42 U.S.C. 6313(c)(2)) The 
January 2009 final rule, meanwhile, utilizes TDA as the normalization 
metric for all equipment with display capacity while specifying volume 
as the metric for solid-door (VCS and HCS) equipment. 74 FR at 1093 
(January 9, 2009).
    At the May 2010 Framework public meeting, interested parties raised 
several questions regarding the potential normalization metrics that 
could be used in amended standards. DOE also received stakeholder 
feedback pertaining to this issue following the publication of the 
Framework document. In the preliminary analysis, DOE suggested that it 
would consider retaining the normalization metrics in this rulemaking 
for the respective classes to which they were applied in EPCA (42 
U.S.C. 6313(c)(2)-(3)) and the January 2009 final rule. 74 FR at 1093 
(January 9, 2009). In chapter 2 of the preliminary analysis TSD, DOE 
presented its rationale for the continued use of TDA for equipment with 
display areas addressed in the January 2009 final rule and the 
continued use of volume as the metric for solid-door remote condensing 
equipment and ice-cream freezers, as well as for the equipment covered 
by EPACT 2005 standards. DOE maintained this stance in the NOPR 
document and TSD. DOE did not receive any significant information or 
data while conducting the final rule analyses that would alter this 
position, and thus DOE includes continued use of the existing 
normalization metrics in today's document.

B. Technological Feasibility

1. General
    In each standards rulemaking, DOE conducts a screening analysis, 
which is based on information that the Department has gathered on all 
current technology options and prototype designs that could improve the 
efficiency of the products or equipment that are the subject of the 
rulemaking. As the first step in such analysis, DOE develops a list of 
design options for consideration, in consultation with manufacturers, 
design engineers, and other interested parties. DOE then determines 
which of these options for improving efficiency are technologically 
feasible. DOE considers a design option to be technologically feasible 
if it is used by the relevant industry or if a working prototype has 
been developed. Technologies incorporated in commercially available 
equipment or in working prototypes will be considered technologically 
feasible. 10 CFR part 430, subpart C, appendix A, section 4(a)(4)(i) 
Although DOE considers technologies that are proprietary, it will not 
consider efficiency levels that can only be reached through the use of 
proprietary technologies (i.e., a unique pathway), which could allow a 
single manufacturer to monopolize the market.
    Once DOE has determined that particular design options are 
technologically feasible, it further evaluates each of these design 
options in light of the following additional screening criteria: (1) 
Practicability to manufacture, install, or service; (2) adverse impacts 
on product utility or availability; and (3) adverse impacts on health 
or safety. 10 CFR part 430, subpart C, appendix A, section 4(a)(4)(ii)-
(iv) Chapter 4 of the final rule TSD discusses the results of the 
screening analyses for commercial refrigeration equipment. 
Specifically, it presents the designs DOE considered, those it screened 
out, and those that are the bases for the TSLs considered in this 
rulemaking.
2. Maximum Technologically Feasible Levels
    When DOE adopts (or does not adopt) an amended or new energy 
conservation standard for a type or class of covered equipment such as 
commercial refrigeration equipment, it determines the maximum 
improvement in energy efficiency that is technologically feasible for 
such equipment. (See 42 U.S.C. 6295(p)(1) and 6316(e)(1)) Accordingly, 
DOE determined the maximum technologically feasible (``max-tech'') 
improvements in energy efficiency for commercial refrigeration 
equipment in the engineering analysis using the design parameters that 
passed the screening analysis.
    As indicated previously, whether efficiency levels exist or can be 
achieved in commonly used equipment is not relevant to whether they are 
considered max-tech levels. DOE considers technologies to be 
technologically feasible if they are incorporated in any currently 
available equipment or working prototypes. Hence, a max-tech level 
results from the combination of design options predicted to result in 
the highest efficiency level possible for an equipment class, with such 
design options consisting of technologies already incorporated in 
commercial equipment or working prototypes. DOE notes that it 
reevaluated the efficiency levels, including the max-tech levels, when 
it updated its results for this final rule. See chapter 5 of the TSD 
for the results of the analyses and a list of technologies included in 
max-tech equipment. Table III.1 shows the max-tech levels determined in 
the engineering analysis for commercial refrigeration equipment.

 Table III.1--``Max-Tech'' Levels for Commercial Refrigeration Equipment
                             Primary Classes
------------------------------------------------------------------------
                                                           ``Max-Tech''
                     Equipment class                       level kWh/day
------------------------------------------------------------------------
VCT.RC.L................................................          33.044
VOP.RC.M................................................          35.652
SVO.RC.M................................................          27.702
HZO.RC.L................................................          31.078
HZO.RC.M................................................           14.15
VCT.RC.M................................................          10.988
VOP.RC.L................................................         100.006
SOC.RC.M................................................          21.560
VOP.SC.M................................................          29.714
SVO.SC.M................................................          25.400
HZO.SC.L................................................          29.922
HZO.SC.M................................................          13.748
HCT.SC.I................................................           2.327
VCT.SC.I................................................          18.106
VCS.SC.I................................................          16.042
VCT.SC.M................................................           5.148
VCT.SC.L................................................          16.048
VCS.SC.M................................................           3.028
VCS.SC.L................................................          11.130
HCT.SC.M................................................           0.614
HCT.SC.L................................................           1.315
HCS.SC.M................................................           0.981
HCS.SC.L................................................           0.713
PD.SC.M.................................................           3.405
SOC.SC.M................................................          26.119
------------------------------------------------------------------------

C. Energy Savings

1. Determination of Savings
    For each TSL, DOE projected energy savings from the products that 
are the subjects of this rulemaking purchased during a 30-year period 
that begins in the year of compliance with amended standards (2017-
2046).\20\ The savings are measured over the entire lifetime of 
products purchased in the 30-year period.\21\ DOE used the NIA model to 
estimate the NES for equipment purchased over the period 2017-2046. The 
model forecasts total energy use over the analysis period for each 
representative equipment class at efficiency levels set by each of the 
considered TSLs. DOE then compares

[[Page 17737]]

the energy use at each TSL to the base-case energy use to obtain the 
NES. The NIA model is described in section IV.H of this document and in 
chapter 10 of the final rule TSD.
---------------------------------------------------------------------------

    \20\ DOE also presents a sensitivity analysis that considers 
impacts for products shipped in a 9-year period.
    \21\ In the past, DOE presented energy savings results for only 
the 30-year period that begins in the year of compliance. In the 
calculation of economic impacts, however, DOE considered operating 
cost savings measured over the entire lifetime of products purchased 
during the 30-year period. DOE has chosen to modify its presentation 
of national energy savings to be consistent with the approach used 
for its national economic analysis.
---------------------------------------------------------------------------

    DOE used its NIA spreadsheet model to estimate energy savings from 
amended standards for the equipment that is the subject of this 
rulemaking. The NIA spreadsheet model (described in section IV.H of 
this document) calculates energy savings in site energy, which is the 
energy directly consumed by products at the locations where they are 
used. For electricity, DOE reports national energy savings in terms of 
the savings in the energy that is used to generate and transmit the 
site electricity. To calculate this quantity, DOE derives annual 
conversion factors from the model used to prepare the Energy 
Information Administration's (EIA) Annual Energy Outlook (AEO).
    DOE also has begun to estimate full-fuel-cycle energy savings. 76 
FR 51282 (August 18, 2011), as amended at 77 FR 49701 (August 17, 
2012). The full-fuel-cycle (FFC) metric includes the energy consumed in 
extracting, processing, and transporting primary fuels, and thus 
presents a more complete picture of the impacts of energy efficiency 
standards. DOE's evaluation of FFC savings is driven in part by the 
National Academy of Science's (NAS) report on FFC measurement 
approaches for DOE's Appliance Standards Program.\22\ The NAS report 
discusses that FFC was primarily intended for energy efficiency 
standards rulemakings where multiple fuels may be used by a particular 
product. In the case of this rulemaking pertaining to commercial 
refrigeration equipment, only a single fuel--electricity--is consumed 
by the equipment. DOE's approach is based on the calculation of an FFC 
multiplier for each of the energy types used by covered equipment. 
Although the addition of FFC energy savings in the rulemakings is 
consistent with the recommendations, the methodology for estimating FFC 
does not project how fuel markets would respond to this particular 
standard rulemaking. The FFC methodology simply estimates how much 
additional energy, and in turn how many tons of emissions, may be 
displaced if the estimated fuel were not consumed by the equipment 
covered in this rulemaking. It is also important to note that inclusion 
of FFC savings does not affect DOE's choice of proposed standards. 76 
FR 51282 (August 18, 2011), as amended at 77 FR 49701 (August 17, 
2012). The FFC metric includes the energy consumed in extracting, 
processing, and transporting primary fuels (i.e., coal, natural gas, 
petroleum fuels), and thus presents a more complete picture of the 
impacts of energy efficiency standards. For more information on FFC 
energy savings, see section IV.H.2.
---------------------------------------------------------------------------

    \22\ ``Review of Site (Point-of-Use) and Full-Fuel-Cycle 
Measurement Approaches to DOE/EERE Building Appliance Energy- 
Efficiency Standards,'' (Academy report) was completed in May 2009 
and included five recommendations. A copy of the study can be 
downloaded at: http://www.nap.edu/catalog.php?record_id=12670.
---------------------------------------------------------------------------

2. Significance of Savings
    EPCA prohibits DOE from adopting a standard that would not result 
in significant additional energy savings. (42 U.S.C. 6295(o)(3)(B),(v) 
and 6316(e)(1)) While the term ``significant'' is not defined in EPCA, 
the U.S. Court of Appeals for the District of Columbia in Natural 
Resources Defense Council v. Herrington, 768 F.2d 1355, 1373 (D.C. Cir. 
1985), indicated that Congress intended significant energy savings to 
be savings that were not ``genuinely trivial.''

D. Economic Justification

1. Specific Criteria
    As discussed in section III.D.1, EPCA provides seven factors to be 
evaluated in determining whether a potential energy conservation 
standard is economically justified. (42 U.S.C. 6295(o)(2)(B)(i) and 
6316(e)(1)) The following sections generally discuss how DOE is 
addressing each of those seven factors in this rulemaking. For further 
details and the results of DOE's analyses pertaining to economic 
justification, see sections III.C and V of today's document.
a. Economic Impact on Manufacturers and Commercial Customers
    In determining the impacts of a potential new or amended energy 
conservation standard on manufacturers, DOE first determines its 
quantitative impacts using an annual cash flow approach. This includes 
both a short-term assessment (based on the cost and capital 
requirements associated with new or amended standards during the period 
between the announcement of a regulation and the compliance date of the 
regulation) and a long-term assessment (based on the costs and marginal 
impacts over the 30-year analysis period). The impacts analyzed include 
INPV (which values the industry based on expected future cash flows), 
cash flows by year, changes in revenue and income, and other measures 
of impact, as appropriate. Second, DOE analyzes and reports the 
potential impacts on different types of manufacturers, paying 
particular attention to impacts on small manufacturers. Third, DOE 
considers the impact of new or amended standards on domestic 
manufacturer employment and manufacturing capacity, as well as the 
potential for new or amended standards to result in plant closures and 
loss of capital investment. Finally, DOE takes into account cumulative 
impacts of other DOE regulations and non-DOE regulatory requirements on 
manufacturers.
    For individual customers, measures of economic impact include the 
changes in LCC and the PBP associated with new or amended standards. 
These measures are discussed further in the following section. For 
consumers in the aggregate, DOE also calculates the national net 
present value of the economic impacts applicable to a particular 
rulemaking. DOE also evaluates the LCC impacts of potential standards 
on identifiable subgroups of consumers that may be affected 
disproportionately by a national standard.
b. Savings in Operating Costs Compared To Increase in Price
    EPCA requires DOE to consider the savings in operating costs 
throughout the estimated average life of the covered product compared 
to any increase in the price of the covered product that are likely to 
result from the imposition of the standard. (42 U.S.C. 
6295(o)(2)(B)(i)(II) and 6316(e)(1)) DOE conducts this comparison in 
its LCC and PBP analysis.
    The LCC is the sum of the purchase price of equipment (including 
the cost of its installation) and the operating costs (including energy 
and maintenance and repair costs) discounted over the lifetime of the 
equipment. To account for uncertainty and variability in specific 
inputs, such as product lifetime and discount rate, DOE uses a 
distribution of values, with probabilities attached to each value. For 
its analysis, DOE assumes that consumers will purchase the covered 
products in the first year of compliance with amended standards.
    The LCC savings and the PBP for the considered efficiency levels 
are calculated relative to a base-case scenario, which reflects likely 
trends in the absence of new or amended standards. DOE identifies the 
percentage of consumers estimated to receive LCC savings or experience 
an LCC increase, in addition to the average LCC savings associated with 
a particular standard level.

[[Page 17738]]

c. Energy Savings
    While significant conservation of energy is a statutory requirement 
for imposing an energy conservation standard, EPCA also requires DOE, 
in determining the economic justification of a 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 6316(e)(1)) DOE 
uses NIA spreadsheet results in its consideration of total projected 
savings. For the results of DOE's analyses related to the potential 
energy savings, see section I.A.3 of this document and chapter 10 of 
the final rule TSD.
d. Lessening of Utility or Performance of Equipment
    In establishing classes of equipment, and in evaluating design 
options and the impact of potential standard levels, DOE seeks to 
develop standards that would not lessen the utility or performance of 
the equipment under consideration. DOE has determined that none of the 
TSLs presented in today's final rule would reduce the utility or 
performance of the equipment considered in the rulemaking. (42 U.S.C. 
6295(o)(2)(B)(i)(IV) and 6316(e)(1)) During the screening analysis, DOE 
eliminated from consideration any technology that would adversely 
impact customer utility. For the results of DOE's analyses related to 
the potential impact of amended standards on equipment utility and 
performance, see section IV.C of this document and chapter 4 of the 
final rule TSD.
e. Impact of Any Lessening of Competition
    EPCA requires DOE to consider any lessening of competition that is 
likely to result from setting new or amended standards for covered 
equipment. Consistent with its obligations under EPCA, DOE sought the 
views of the United States Department of Justice (DOJ). DOE asked DOJ 
to provide a written determination of the impact, if any, of any 
lessening of competition likely to result from the amended 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).
    To assist DOJ in making such a determination, DOE provided DOJ with 
copies of both the NOPR and NOPR TSD for review. DOJ subsequently 
determined that the amended standards are unlikely to have a 
significant adverse impact on competition.
f. Need of the Nation To Conserve Energy
    Another factor that DOE must consider in determining whether a new 
or amended standard is economically justified is the need for national 
energy and water conservation. (42 U.S.C. 6295(o)(2)(B)(i)(VI) and 
6316(e)(1)) The energy savings from new or amended standards are likely 
to provide improvements to the security and reliability of the Nation's 
energy system. Reductions in the demand for electricity may also result 
in reduced costs for maintaining the reliability of the Nation's 
electricity system. DOE conducts a utility impact analysis to estimate 
how new or amended standards may affect the Nation's needed power 
generation capacity.
    Energy savings from amended standards for commercial refrigeration 
equipment are also likely to result in environmental benefits in the 
form of reduced emissions of air pollutants and GHGs associated with 
energy production (i.e., from power plants). For a discussion of the 
results of the analyses relating to the potential environmental 
benefits of the amended standards, see sections IV.K, IV.L and V.B.6 of 
this document. DOE reports the expected environmental effects from the 
amended standards, as well as from each TSL it considered for 
commercial refrigeration equipment, in the emissions analysis contained 
in chapter 13 of the final rule TSD. DOE also reports estimates of the 
economic value of emissions reductions resulting from the considered 
TSLs in chapter 14 of the final rule TSD.
g. Other Factors
    EPCA allows the Secretary, in determining whether a new or amended 
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)) There were no other factors considered for today's 
final rule.
2. Rebuttable Presumption
    As set forth in 42 U.S.C. 6295(o)(2)(B)(iii) and 6316(e)(1), EPCA 
provides for a rebuttable presumption that an energy conservation 
standard is economically justified if the additional cost to the 
customer of equipment that meets the new or amended 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. DOE's LCC and PBP analyses 
generate values that calculate the PBP for customers of potential new 
and amended energy conservation standards. These analyses include, but 
are not limited to, the 3-year PBP contemplated under the rebuttable 
presumption test. However, DOE routinely conducts a full economic 
analysis that considers the full range of impacts to the customer, 
manufacturer, Nation, and environment, as required under 42 U.S.C. 
6295(o)(2)(B)(i) and 6316(e)(1). The results of these analyses serve as 
the basis for DOE to evaluate the economic justification for a 
potential standard level definitively (thereby supporting or rebutting 
the results of any preliminary determination of economic 
justification). The rebuttable presumption payback calculation is 
discussed in section IV.F.12 of this document and chapter 8 of the 
final rule TSD.

IV. Methodology and Discussion of Comments

A. General Rulemaking Issues

    During the October 2013 NOPR public meeting, and in subsequent 
written comments, stakeholders provided input regarding general issues 
pertinent to the rulemaking, including the trial standard levels and 
proposed standard levels presented, the rulemaking timeline, the 
metrics used to normalize equipment size, and other subjects. These 
issues are discussed in this section.
1. Trial Standard Levels
    In his comment, Mr. R. Kopp (Kopp) suggested that using continuous 
energy-efficiency cost-curves as opposed to discrete TSLs would provide 
a more accurate analysis. Further, he suggested that instead of setting 
a single TSL standard, DOE should adopt pathways to improve efficiency. 
(Kopp, No. 60 at p. 5)
    In its engineering analysis, DOE utilized a design-option approach, 
in which it began by modeling baseline units and then modeled 
increasingly efficient designs up to max-tech by adding design options 
one at a time in order of ascending payback period. This methodology 
reflects the options available to manufacturers in increasing the 
efficiency of their equipment, which consist of piecewise design 
improvements corresponding to the design options modeled in the 
engineering analysis. Therefore, the efficiency levels generated from 
the engineering analysis and carried through the downstream analyses to 
the development of TSLs correspond to specific packages of technologies 
and design features which could be developed and built by 
manufacturers. Since the stepwise increments along the

[[Page 17739]]

cost-efficiency curve represent tangible efficiency improvements 
attainable through the implementation of design options, DOE asserts 
that a smooth cost-efficiency curve would not be realistic, as the 
areas on the curve between the current efficiency levels would not 
correspond to any design that exists. Therefore, DOE has retained the 
approach used in the NOPR in developing this final rule.
2. Proposed Standard Levels
    Traulsen, Structural Concepts Corp. (Structural Concepts), National 
Rural Electric Cooperative Association (NRECA), and the Edison Electric 
Institute (EEI) asserted that TSL4, the level proposed in the NOPR, was 
not economically viable, noting that the marginal efficiency increase 
over TSL 3 did not justify the increased costs of compliance. 
(Traulsen, No. 65 at p. 16; \23\ Structural Concepts, Public Meeting 
Transcript, No. 62 at p. 337; NRECA, No. 88 at p. 2; EEI, No. 89 at p. 
4) Traulsen opined that any TSL with a payback period longer than 3 
years was not feasible for most manufacturers. (Traulsen, No. 65 at p. 
21) Further, NRECA and EEI urged DOE to select TSL 3 instead of TSL 4. 
However, the joint comments from the American Council for an Energy-
Efficient Economy (ACEEE), National Resources Defense Council (NRDC), 
Appliance Standards Awareness Project (ASAP), Alliance to Save Energy 
(ASE), and Northwest Energy Efficiency Alliance (NEEA) (hereafter 
referred to as the ``Joint Comment'') supported DOE's proposal to adopt 
TSL 4, noting that it represented maximum energy savings with a 
positive NPV. (Joint Comment, No. 91 at p. 1)
---------------------------------------------------------------------------

    \23\ In the comment citation format used in this document, the 
citation first presents the name of the commenter, followed by the 
number on the docket corresponding to the document in which the 
comment is contained, followed by a reference to the page in that 
document on which the comment can be found.
---------------------------------------------------------------------------

    Several manufacturers expressed an expected inability to meet the 
proposed standard levels, even with the best available technology. At 
the October public meeting, Zero Zone Inc. (Zero Zone) noted that there 
had been no significant technological advancements since the previous 
rulemaking which would make an amended standard feasible. (Zero Zone, 
Public Meeting Transcript, No. 62 at p. 62) Structural Concepts raised 
a similar concern, noting that despite using the most efficient 
technology currently available, its minimum attainable daily energy 
consumption was 30-40% above the proposed standard level. (Structural 
Concepts, Public Meeting Transcript, No. 62 at p. 133) Royal Vendors 
Inc. (Royal Vendors), in its written comment, noted that even with the 
most efficient currently-available technology, the maximum possible 
efficiency gain was 10% over the levels contained in the ENERGY STAR 
\24\ Version 3 specification. However, the Joint Comment opined that 
most of these concerns were limited to pull-down equipment, and that if 
the standard for that class were revised, there would be no need to 
revise standards for other classes. (Joint Comment, No. 91 at p. 2) 
Additionally, manufacturers opined that the percentage reduction in 
energy consumption between the existing standard and the proposed rule 
was not achievable. Hussmann Corp. (Hussmann), True Manufacturing Co., 
Inc. (True), and Hoshizaki America, Inc. (Hoshizaki) all commented that 
the efficiency improvements in excess of 60%, as proposed for SC 
equipment and the VCT.RC.M class, were neither economically feasible 
nor technologically possible. (Hussmann, No. 77 at p. 10) (True, No. 76 
at p. 1) (Hoshizaki, No. 84 at p. 1)
---------------------------------------------------------------------------

    \24\ ENERGY STAR is a joint program of the U.S. Environmental 
Protection Agency (EPA) and DOE that establishes a voluntary rating, 
certification, and labeling program for highly energy efficient 
consumer products and commercial equipment. Information on the 
program is available at: www.energystar.gov.
---------------------------------------------------------------------------

    Hoshizaki noted in its written comment that a large majority of 
currently ENERGY STAR-certified equipment would fail to meet the 
proposed standard. (Hoshizaki, No. 84 at p. 1) During the public 
meeting, Structural Concepts pointed out the relationship between the 
proposed standard and the ENERGY STAR Version 3.0 requirement, opining 
that it was impractical for a standard to be more stringent than the 
ENERGY STAR requirement. (Structural Concepts, Public Meeting 
Transcript, No. 62 at p. 305) The Joint Comment, however, noted that 
according to the ENERGY STAR-qualified products list, there already are 
products in five major self-contained equipment classes that meet or 
exceed the proposed standard. Further, the Joint Comment drew 
comparison to the 2009 final rule for residential refrigerators, noting 
that proceeding to be a precedent in which units on the market were not 
reaching the maximum technically feasible efficiency level modeled, 
since no product was using all the design options considered in DOE's 
analysis. (Joint Comment, No. 91 at p. 3) Additionally, joint comments 
from the California Investor Owned Utilities (CA IOUs) noted that all 
equipment currently listed in the CEC product database for the 
VOP.SC.M, SVO.SC.M, HZO.SC.M, and HZO.RC.M classes already met the 
proposed standard. (CA IOUs, No. 63 at p. 1)
    Stakeholders noted that, in the proposed rule, the expected 
efficiency improvement over existing standards was more stringent for 
some equipment classes than for others. Lennox International Inc. 
(Lennox) urged DOE to set standards for VCT classes which had the same 
percentage reduction from existing standard levels as open-case 
classes, and suggested that stricter VCT standards would encourage 
consumers to switch from closed to open equipment. (Lennox, No. 73 at 
p. 4) Structural Concepts opined that the proposed change in MDEC for 
SOC equipment was too drastic, further noting that for SOC and VCS 
equipment classes, it is counterintuitive for DOE to propose a greater 
relationship between size and daily energy consumption for remote 
condensing units than for self-contained units, since SC units are 
inherently less efficient. (Structural Concepts, No. 85 at p. 3) Coca-
Cola, Inc. (Coca-Cola) commented that the TSL 4 standard was more 
stringent for PD.SC.M units than for VCT.SC.M, and that this was 
counterintuitive. (Coca-Cola, Public Meeting Transcript, No. 62 at p. 
100) The CA IOUs pointed out in its written comment that the current 
standards for PD.SC.M were set through a negotiated process, whereas 
the standards for other classes were modeled. (CA IOUs, No. 63 at p. 6) 
China commented that while DOE proposed stricter standards for the 
VCT.RC.M class since the 2009 final rule, DOE was not suggesting 
amended standards for the HZO class. (China, No. 92 at p. 3)
    Another concern amongst manufacturers and consumers was the belief 
that the proposed standard levels were based on technology that was 
currently not available, but rather which DOE projected would be 
available at the time of required compliance with the proposed rule. 
Continental opined that it was impractical to develop standards based 
on currently unavailable technologies. (Continental, Public Meeting 
Transcript, No. 62 at p. 96) Coca-Cola commented that since the 
proposed standards were based on technology which was not yet 
available, the proposed standards, specifically TSL4 for VCT.SC.M 
units, were not technologically feasible. (Coca-Cola, Public Meeting 
Transcript, No. 62 at p. 74) True expressed agreement with Coca-Cola, 
stating that the proposed efficiency levels were beyond the level

[[Page 17740]]

of what industry can meet at the current time. (True, Public Meeting 
Transcript, No. 62 at p. 307) Lennox commented that the proposed 
standards for VCT units were unattainable with currently known 
technology and were not economically justified. Lennox further 
commented that under the proposed rule, only a very limited number of 
compliant VCT products would be produced and sold. (Lennox, No. 73 at 
p. 2) The North American Association of Food Equipment Manufacturers 
(NAFEM) noted that none of its member manufacturers were able to 
identify current technology options or prototype designs which met the 
proposed standard levels, and that using assumptions beyond what was 
available in the current market landscape would also improperly 
quantify the impact of the proposed rule on manufacturer costs. (NAFEM, 
No. 93 at p. 3)
    Additionally, during the October public meeting Coca-Cola and True 
commented that food safety was of prime importance in the design of 
their equipment, and should take precedence over energy savings. (Coca-
Cola, Public Meeting Transcript, No. 62 at p. 86) (True, Public Meeting 
Transcript, No. 62 at p. 350) National Restaurant Association (NRA) 
noted that the proposed standards had the potential to reduce cooling 
ability and recovery time for equipment subject to constant opening and 
closing, and that this reduced performance could compromise food 
safety. (NRA, No. 90 at p. 3) Similarly, NAFEM also noted that the 
implementation of the proposed standards would have potential negative 
effects on food safety for end-users. (NAFEM, No. 93 at p. 5)
    DOE understands the concerns voiced by stakeholders regarding their 
future ability to meet standard levels as proposed in the NOPR. Between 
the NOPR and final rule stages, DOE revised and updated its analysis 
based on stakeholders comments received at the NOPR public meeting and 
in written comments. These updates included improvements to the 
modeling of equipment geometries, design specifications, and design 
option performance and costs so as to provide a more accurate model of 
baseline and higher-efficiency designs across the classes analyzed. 
After applying these updates, DOE amended its TSLs and standard level 
equations accordingly. With respect to the comments from Zero Zone, 
Structural Concepts, and Royal Vendors regarding the ability of 
technologies needed to meet the proposed standard level, DOE analyzed 
the available technologies in its market and technology assessment and 
screening analyses, and incorporated appropriate and available 
technology options in the modeling performed as part of its engineering 
analysis. Therefore, DOE believes that the technologies and designs 
included in the analysis accurately reflect what is available to 
industry for improving equipment efficiency.
    In response to the Joint Comment, DOE notes that it evaluated 
equipment performance independently for each equipment class and thus 
did not revise standards for any one class solely based upon factors 
affecting another class. DOE believes that the updates and improvements 
to the modeling applied between the NOPR and final rule stages of this 
rulemaking have resulted in standard levels presented in today's final 
rule which address the concerns voiced by stakeholders after 
publication of the NOPR.
    In response to stakeholder comments comparing the proposed standard 
levels to ENERGY STAR levels, DOE cautions against direct comparisons 
between its standards and those set forth by ENERGY STAR due to the 
different natures of the programs and how the two different sets of 
standard levels are set. ENERGY STAR is a voluntary program which 
derives its standard levels from market data based on the performance 
of certain models of equipment currently available for purchase. ENERGY 
STAR also does not model performance or include consumer economics in 
its standard-setting process. DOE sets its standards as applicable to 
all covered equipment and develops them through specific analyses of 
equipment performance and modeling of economic impacts and other 
downstream effects. Due to the different goals and methodologies of 
these two programs, a direct comparison may not be entirely relevant. 
However, during the final rule stage, for relevant equipment 
classes,\25\ DOE did compare its engineering results to available 
ENERGY STAR data as a means of checking the modeled performance levels 
against empirical test data. With respect to the comparison by the 
California IOUs of performance of open cases to certified values from 
the CEC directory, DOE also cautions that this directory is not 
exhaustive. For example, a search of the directory shows that, for some 
equipment classes, only equipment from a single manufacturer is 
included. Therefore, while directory data is helpful in providing a 
check on DOE's results, DOE has performed independent modeling and 
analysis to derive its standard levels.
---------------------------------------------------------------------------

    \25\ ENERGY STAR only maintains standard levels applying to 
equipment classes VCS.SC.M, VCS.SC.L, VCT.SC.M, VCT.SC.L, HCS.SC.M, 
HCS.SC.L, HCT.SC.M, and HCT.SC.L. Thus, these were the only classes 
for which a comparison between the DOE and ENERGY STAR levels could 
be made.
---------------------------------------------------------------------------

    With respect to the concerns about the relative perceived 
stringencies of proposed standards for different classes, in the NOPR 
analyses, DOE examined each equipment class independently based on 
standard geometries and feature sets for representative units within 
the classes. DOE then conducted the engineering simulations and 
downstream economic analyses separately for each primary class 
examined. The results presented at the NOPR stage represent the 
suggested performance and cost values for each class based on the best 
available information at the time of that analysis. Therefore, DOE 
cautions against comparative examination of the relative stringencies 
of the various standard levels, as each was calculated independently 
and the performance and economic benefits of individual design options 
vary specific to each class. DOE also agrees with the California IOUs 
that previous standard levels should not necessarily be used as a check 
on current analytical results because the origins of those standards 
are not completely transparent, meaning that a direct comparison may be 
inappropriate due to differences between the methodologies used to set 
those standards and those used by DOE in the current rulemaking. At the 
final rule stage, DOE continued to examine each class independently 
based on the merits of the available efficiency-improving features, and 
has set amended standards for each class based on the results of those 
analyses.
    In response to the assertions that DOE's standard levels were not 
based upon currently available technologies, but rather were dependent 
upon future potential technological developments, DOE maintains that 
all technology options and equipment configurations included in its 
NOPR reflect technologies currently in use in commercial refrigeration 
equipment or related equipment types. DOE has observed these design 
options and features used in current manufacturer models offered for 
sale. The specific inputs which it used to model these design options, 
such as compressor efficiency improvements over the market baseline, 
glass door U-factor, or heat exchanger UA, were provided to the public 
for comment in the NOPR TSD and engineering analysis spreadsheet, and 
DOE has updated those inputs according to stakeholder

[[Page 17741]]

feedback and other information available during the final rule stage.
    DOE understands the concerns voiced by Coca-Cola, True, NAFEM, and 
NRA regarding food safety. DOE realizes that food safety is of the 
utmost importance to the industry, and is in fact a definitional aspect 
of the design of equipment for food storage temperatures. In its 
screening analysis, DOE is compelled by sections 4(b)(4) and 5(b) of 
the Process Rule \26\ to eliminate from consideration any technology 
that presents unacceptable problems with respect to a specific set of 
criteria, including impacts on equipment utility. Therefore, DOE 
removed from consideration technologies and design options which could 
result in such adverse impacts. Additionally, in its engineering 
analysis, DOE modeled medium-temperature equipment as having an average 
product temperature of 38[deg]F, consistent with the rating temperature 
specified in the DOE test procedure and below the 41[deg]F requirement 
of the NSF 7 \27\ food safety rating procedure. Thus, the daily energy 
consumption values produced in the engineering analysis reflect a level 
of equipment performance which ensures preservation of the ability to 
maintain food safety temperatures.
---------------------------------------------------------------------------

    \26\ Appendix A to subpart C of 10 CFR part 430, ``Procedures, 
Interpretations, and Policies for Consideration of New or Revised 
Energy Conservation Standards for Consumer Products'' is known as 
``The Process Rule.''
    \27\ This refers to the NSF/ANSI 7 procedure used to test 
equipment performance for food safety.
---------------------------------------------------------------------------

3. Rulemaking Timeline
    Some stakeholders felt that in light of the large number of 
analytical changes that could be required between the NOPR and final 
rule, DOE should extend the target date for publication of the final 
rule. Traulsen requested that DOE slow the rulemaking process down due 
to the aggressiveness of the final rule date. (Traulsen, Public Meeting 
Transcript, No. 62 at p. 347) Hillphoenix and Lennox also expressed the 
same concern, noting that a February 2014 deadline for publication of 
the final rule allowed insufficient time for the reevaluation of DOE's 
engineering analysis. (Hillphoenix, No. 71 at p. 3) (Lennox, No. 73 at 
p. 2) In contrast, the New York State Attorney General (NYSAG) 
commented that the delay in amending these efficiency standards not 
only violated Congressional mandates, but has also prolonged the time 
that inefficient products stay in the market. NYSAG further commented 
that these delays have led to avoidable pollution and waste of 
resources. (NYSAG, No. 92 at p. 1)
    While DOE appreciates the input from commenters requesting that the 
timeline for this rulemaking be extended, none of the commenters has 
provided any details or specifics with regard to what specifically they 
believe would require extra time. In reviewing its analyses to date, 
the inputs received at the NOPR public meeting and in subsequent 
written comment, DOE believes that the time allotted is sufficient in 
order to allow for full and proper analysis required in order to 
develop the final rule. In fact, DOE conducted an efficient and 
thorough effort to promulgate the final rule within the constraints of 
the time allotted. With regard to NYSAG's comment, DOE notes that it 
has moved as efficiently as possible while conducting the thorough 
analysis required to set appropriate standards.
4. Normalization Metrics
    Following publication of the NOPR, DOE received comment on the 
normalization metrics used to scale allowable daily energy consumption 
under the standard levels as a function of equipment size. Depending on 
the design and intended application of each equipment class, DOE 
proposed energy standard levels using either total display area or 
volume as a metric. Structural Concepts commented that DOE's metrics 
for the VCT and HCT families were inconsistent, since some proposed 
standards for classes within the families were based on total display 
area (TDA) while others were based on volume, NAFEM stated that 
industry participants use volume, rather than linear feet, to estimate 
total market size. (Structural Concepts, No. 85 at p. 3) (NAFEM, No. 93 
at p. 6)
    DOE understands that the selection of appropriate measures of case 
size is important to the standards-setting process across all covered 
equipment classes. For the self-contained equipment with doors for 
which standards were set in the EPACT 2005 legislation, volume was 
identified in the statute as the normalization metric. (42 U.S.C. 
6313(c)(2)) For the equipment covered by the 2009 final rule, DOE 
selected the metrics of volume for equipment with solid doors and TDA 
for display-type equipment. Because radiation and conduction through 
doors are the primary heat transfer pathways for CRE equipment with 
transparent doors, DOE concluded that TDA is the metric that best 
quantifies this effect. Likewise, for equipment without doors, the 
majority of heat load occurs due to warm air infiltration, and DOE 
determined that TDA would also be the most appropriate metric for 
capturing these effects. DOE also stated its conclusion that for these 
equipment types, where the function is to display merchandise for sale, 
TDA best quantifies the ability of a piece of equipment to perform that 
function. On the other hand, equipment with solid doors is designed for 
storage, and volume was determined to be the most appropriate metric 
for quantifying the storage capacity of the unit. 72 FR 41177-78 (July 
26, 2007).
    DOE does not believe, based on its discussions with manufacturers 
and comments solicited over the course of this rulemaking that the 
fundamental concepts underlying the choices of TDA or volume as the 
normalization metric for any given class of equipment have changed. In 
line with the reasons stated above, DOE is retaining the current 
normalization metrics for the respective equipment classes, consisting 
of both the metrics set forth in the 2009 final rule and those 
prescribed by the EPACT 2005 standards for self-contained equipment 
with doors.
    In response to the comment from NAFEM regarding the usage of linear 
feet, DOE wishes to clarify that it did not use linear feet of 
equipment as a measure of equipment size in its engineering analysis, 
nor as a metric when estimating total market size in its shipments 
analysis. Rather, DOE utilized linear feet as a normalization metric in 
the national impacts and other downstream analyses when accounting for 
the aggregate costs and benefits of today's final rule. DOE believes 
that the units used in making representations of equipment market size 
are accurate, and DOE did not modify them for the final rule analysis.
5. Conformance With Executive Orders and Departmental Policies
    At the NOPR public meeting, and in a subsequent written comment, 
Traulsen opined that the proposed rule violates Executive Order 12866. 
Specifically, Traulsen stated that the rule failed to identify the 
failures of private markets or public institutions that warrant new 
agency action, since the industry had actively embraced voluntary 
efficiency goals and standards. (Traulsen, No. 65 at p.16) Section 
1(b)(1) of Executive Order 12866 requires each agency to identify the 
problem that it intends to address, including, where applicable, the 
failures of private markets or public institutions that warrant new 
agency action, as well as to assess the significance of that problem. 
In section VI.A of today's document (and also in the NOPR), DOE has 
identified the problems that it has

[[Page 17742]]

addressed by amending energy conservation standards for commercial 
refrigeration equipment. For certain segments of the companies that 
purchase commercial refrigeration equipment, such as small grocers, 
these problems may include a lack of consumer information and/or 
information processing capability about energy efficiency opportunities 
in the commercial refrigeration equipment market. In addition, the 
market for commercial refrigeration equipment is affected by 
electricity prices that do not reflect all of the social and 
environmental costs associated with electricity use. When such 
externalities are not included in the decisions made by market actors, 
this is considered a market failure by economists.
    Traulsen asserted that the proposed rule was in violation of 
Executive Order 13563 and the Information Quality Act since the 
assumptions in DOE's analysis did not use the best available techniques 
to quantify the benefits of the rule. (Traulsen, No. 65 at pp.16-17) 
DOE believes that the analysis described in today's document is based 
on the best available techniques that were suited to the data available 
to analyze commercial refrigeration equipment. Further, Traulsen did 
not point to any specific techniques in its comment that would have 
been superior to those employed by DOE.
    NAFEM expressed concern that the proposed rule was in violation of 
Executive Orders because it had a disproportionate negative impact on 
small businesses, failed to consider non-regulatory alternatives, and 
since DOE had made no contact with end-users in order to understand 
impact on users. (NAFEM, No. 93 at p. 14) Traulsen stated that DOE 
should consider supplementing regulatory action with other forms of 
non-regulatory alternatives, such as expanded collaboration with ENERGY 
STAR, rebates, and incentive programs. (Traulsen, No. 65 at p. 15)
    As discussed in section V.B.1.b of this document, DOE believes that 
today's rule would not have a disproportionate negative impact on small 
businesses. DOE did consider non-regulatory alternatives to amended 
standards, as described in detail in chapter 17 of the final rule TSD. 
Finally, DOE requested comment from the public and held public meetings 
that were attended by representatives of end-users of commercial 
refrigeration equipment (e.g., ACCA, Coca-Cola, and NAFEM).
    NAFEM also opined that the proposed rule violated the Secretarial 
Policy Statement of Scientific Integrity, since the analysis was not 
independently peer-reviewed by qualified experts, underlying 
assumptions were not clearly explained, and since DOE failed to 
accurately contextualize uncertainties pertaining to non-regulatory 
alternatives. (NAFEM, No. 93 at p. 14)
    The Secretary's March 23, 2012 ``Secretarial Policy Statement of 
Scientific Integrity'' \28\ sets forth a policy for DOE employees and 
states, in relevant part, that ``DOE will ensure that data and research 
used to support policy decisions are of high scientific and technical 
objectivity. Scientific and technical objectivity will be supported 
through independent peer review by qualified experts, where feasible 
and appropriate, and consistent with law.'' With respect to DOE's 
analysis underlying this final rule, DOE has solicited and thoroughly 
considered comment and data from expert CRE manufacturers throughout 
the rulemaking process. DOE does not believe that any additional expert 
review of its analysis is either necessary or appropriate.
---------------------------------------------------------------------------

    \28\ https://www.directives.doe.gov/references/secretarial_policy_statement_on_scientific_integrity/view.
---------------------------------------------------------------------------

    Further, the assumptions used in DOE's analysis are described in 
detail in the NOPR TSD and in the final rule TSD. DOE is not aware of 
the uncertainties pertaining to non-regulatory alternatives mentioned 
only in a general sense by NAFEM.
6. Offset Factors
    In presenting the NOPR standard levels, DOE adopted and modified 
the offset factors from the 2009 final rule and EPACT 2005 standard 
levels to define the energy consumption of a unit at zero volume or 
TDA, thus setting the y-intercepts of the linear standard level 
equations proposed at levels intended to represent ``end effects'' 
inherent in all equipment. Some stakeholders expressed disagreement 
with DOE's modeling of offset factors. Hillphoenix commented that 
offset factors were designed to account for factors which remained 
constant over a range of equipment sizes. Hillphoenix further commented 
that such factors as conduction end effects typically do not vary with 
size. (Hillphoenix, No. 71 at p. 2) Traulsen commented that DOE's 
modeled offset factors were not empirically determined. (Traulsen, No. 
65 at p. 19) The Air-Conditioning, Heating, and Refrigeration Institute 
(AHRI) commented that it was impossible for stakeholders to compare the 
offset factors within the current rulemaking with the previous 
rulemaking's values. (AHRI, No. 75 at p. 14)
    In developing offset factors for the NOPR, DOE scaled existing 
offset factors from the EPACT 2005 and 2009 final rule standard levels 
based on the percentage reduction in energy use modeled at the 
representative unit size. This allowed the NOPR standard level 
equations to reflect energy allowances which proposed a standard 
percentage reduction in allowable consumption across all equipment 
sizes. While DOE agrees with Traulsen that the offset factors were not 
empirically determined, the factors were based upon scaling 
proportional to modeled equipment performance and applied to the 
existing offset factors which have been well-established and vetted 
through development of and compliance with the existing standards 
containing them.
    In response to the comment from Hillphoenix, DOE agrees that there 
are certain fixed effects which will be encountered by any piece of 
equipment, such as a minimum amount of conduction, or energy 
consumption attributable to the presence of a minimum of a single fan 
motor, for example. For the final rule, and in response to the concern 
of stakeholders, DOE adjusted its offset factors to account for these 
constant effects. In equipment for which DOE developed offset factors 
for use in standard level equations in its 2009 final rule, DOE 
retained the same offset factors in the development of the trial 
standard levels presented in today's document. DOE believes that the 
retention of these factors accurately reflects the presence of fixed 
end-effect behavior in this equipment, which remains independent of the 
design options elsewise implemented in the equipment. For the equipment 
for which standard levels were set by EPACT 2005, DOE had no background 
information as to how those offset factors were developed. Therefore, 
in developing trial standard levels for today's final rule, DOE 
adjusted those offset factors based on available data from directories 
of certified product performance. For more information on the 
development of offset factors, please see chapter 5 of the final rule 
TSD.

B. 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

[[Page 17743]]

primarily on publicly available information (e.g., manufacturer 
specification sheets, industry publications) and data submitted by 
manufacturers, trade associations, and other stakeholders. The subjects 
addressed in the market and technology assessment for this rulemaking 
include: (1) Quantities and types of equipment sold and offered for 
sale; (2) retail market trends; (3) equipment covered by the 
rulemaking; (4) equipment classes; (5) manufacturers; (6) regulatory 
requirements and non-regulatory programs (such as rebate programs and 
tax credits); and (7) technologies that could improve the energy 
efficiency of the equipment under examination. DOE researched 
manufacturers of commercial refrigeration equipment and made a 
particular effort to identify and characterize small business 
manufacturers. See chapter 3 of the final rule TSD for further 
discussion of the market and technology assessment.
1. Equipment Classes
    In evaluating and establishing energy conservation standards, DOE 
generally divides covered equipment into classes by the type of energy 
used, or by capacity or other performance-related feature that 
justifies a different standard for equipment having such a feature. (42 
U.S.C. 6295(q) and 6316(e)(1)) In deciding whether a feature justifies 
a different standard, DOE must consider factors such as the utility of 
the feature to users. DOE normally establishes different energy 
conservation standards for different equipment classes based on these 
criteria.
    Commercial refrigeration equipment can be divided into various 
equipment classes categorized by specific physical and design 
characteristics. These characteristics impact equipment efficiency, 
determine the kind of merchandise that the equipment can be used to 
display, and affect how the customer can access that merchandise. Key 
physical and design characteristics of commercial refrigeration 
equipment are the operating temperature, the presence or absence of 
doors (i.e., closed cases or open cases), the type of doors used 
(transparent or solid), the angle of the door or air curtain \29\ 
(horizontal, semivertical, or vertical), and the type of condensing 
unit (remote condensing or self-contained). The following list shows 
the key characteristics of commercial refrigeration equipment that DOE 
developed as part of the January 2009 final rule (74 FR at 1099-1100 
(January 9, 2009)), and used during this rulemaking:
---------------------------------------------------------------------------

    \29\ An air curtain is a continuously moving stream of air, 
driven by fans, which exits on one side of the opening in an open 
refrigerated case and re-enters on the other side via an intake 
grille. The function of the air curtain is to cover the opening in 
the case with this sheet of air, which minimizes the infiltration of 
warmer ambient air into the refrigerated space.
---------------------------------------------------------------------------

1. Operating Temperature
     Medium temperature (38 [deg]F, refrigerators)
     Low temperature (0 [deg]F, freezers)
     Ice-cream temperature (-15 [deg]F, ice-cream freezers)
2. Door Type
     Equipment with transparent doors
     Equipment with solid doors
     Equipment without doors
3. Orientation (air-curtain or door angle)
     Horizontal
     Semivertical
     Vertical
4. Type of Condensing Unit
     Remote condensing
     Self-contained
    Additionally, because EPCA specifically sets a separate standard 
for refrigerators with a self-contained condensing unit designed for 
pull-down temperature applications and transparent doors, DOE has 
created a separate equipment class for this equipment. (42 U.S.C. 
6313(c)(3)) DOE included this equipment in the form of a separate 
family with a single class (PD.SC.M). A total of 49 equipment classes 
were created, and these are listed in chapter 3 of the TSD using the 
nomenclature developed in the January 2009 final rule. 74 FR at 1100 
(January 9, 2009).
    During the October 2013 NOPR public meeting and in subsequent 
written comments, a number of stakeholders addressed issues related to 
proposed equipment classes and the inclusion of certain types of 
equipment in the analysis. These topics are discussed in this section.
a. Equipment Subcategories
    In their written comments, Continental, NAFEM, True and Traulsen 
all expressed concern that the equipment classes defined by DOE in the 
proposed rule did not sufficiently encompass various sub-
classifications, especially with regard to pass-through and reach-in 
cases. (Continental, No. 87 at p. 1) (NAFEM, No. 93 at p. 7) (True, No. 
76 at p. 3) (Traulsen, No. 65 at p. 16) Further, Traulsen and True 
pointed out that a multitude of custom-built and niche equipment 
exists, which would require further analysis in order to determine a 
viable standard. (Traulsen, No. 65 at p. 20) (True, No. 76 at p. 1)
    In response to the concerns of interested parties, DOE believes 
that its existing equipment class structure is sufficient to account 
for the majority of variation in type and combination of equipment 
geometry, condensing unit configuration, and operating temperature. DOE 
provides allowances in its standards to account for the energy needs of 
different equipment sizes through its use of standard level equations 
constructed in the form of linear equations varying with equipment size 
(as measured by volume or TDA) and through its use of offset factors to 
represent energy end-effects. DOE also accommodates variation in 
operating temperature outside of its three rating temperatures through 
the use of a lowest application product temperature provision in its 
test procedure. 77 FR at 10305 (February 21, 2012)
b. Floral Equipment
    In the context of niche equipment classes, the Society of American 
Florists (SAF) noted that the floral industry uses purpose-designed 
refrigeration equipment, including sliding door floral display coolers 
(self-contained), open air access floral display coolers (reach-in), 
countertop floral display coolers and long door floral display coolers 
(swinging or sliding doors, top-mounted or remote condensing unit). SAF 
further added that most of these units are custom-built, since floral 
cooling systems are balanced to keep humidity high, and that special 
low-velocity coils are utilized to blow air through the unit while 
maintaining temperature and high humidity levels--features not 
available in stock equipment. (SAF, No. 74 at p. 3)
    DOE believes that its division of covered equipment into numerous 
classes is sufficiently broad to capture the level of differentiation 
present within the commercial refrigeration equipment market. The 
equipment types described in the comment from SAF would fall into a 
number of existing equipment classes for which DOE has conducted 
analyses in this rulemaking. Additionally, DOE has recognized the 
temperature issues which may be present in floral cases, and has 
accommodated those different operating temperatures by developing and 
implementing a provision in its test procedure allowing equipment which 
cannot reach the specified DOE rating temperature to be tested at its 
lowest application product temperature. 77 FR at 10305 (February 21, 
2012)
2. Technology Assessment
    As part of the market and technology assessment performed for the 
final rule analysis, DOE developed a comprehensive list of technologies 
that would be expected to improve the

[[Page 17744]]

energy efficiency of commercial refrigeration equipment. Chapter 3 of 
the TSD contains a detailed description of each technology that DOE 
identified. Although DOE identified a complete list of technologies 
that improve efficiency, DOE only considered in its analysis 
technologies that would impact the efficiency rating of equipment as 
tested under the DOE test procedure. Therefore, DOE excluded several 
technologies from the analysis during the technology assessment because 
they do not improve the rated efficiency of equipment as measured under 
the specified test procedure. Technologies that DOE determined impact 
the rated efficiency were carried through to the screening analysis and 
are discussed in section IV.C.
a. Technologies Applicable to All Equipment
    In the NOPR analysis market and technology assessment, DOE listed 
the following technologies that would be expected to improve the 
efficiency of all equipment: higher efficiency lighting, higher 
efficiency lighting ballasts, remote lighting ballast location, higher 
efficiency expansion valves, higher efficiency evaporator fan motors, 
variable-speed evaporator fan motors and evaporator fan motor 
controllers, higher efficiency evaporator fan blades, increased 
evaporator surface area, low-pressure differential evaporators, 
increased case insulation or improvements, defrost mechanisms, defrost 
cycle controls, vacuum insulated panels, and occupancy sensors for 
lighting controls. These technologies are discussed in depth in chapter 
3 of the NOPR TSD. Not all of these technologies were considered in the 
engineering analysis; some were screened out or removed from 
consideration on technical grounds. After the publication of the NOPR 
analysis, DOE received numerous stakeholder comments regarding these 
technologies, discussed below.
Low Pressure Differential Evaporators
    Traulsen commented that low pressure differential evaporators would 
require larger spaces between fins and tubes, which could in turn 
reduce overall efficiency by allowing frost build-up. (Traulsen, No. 65 
at p. 7) Low-pressure differential evaporators reduce energy 
consumption by reducing the power of evaporator fan motors, often by 
increasing the air gap between fins. However, as noted in chapter 5 of 
the NOPR TSD, in space-constrained equipment such as commercial 
refrigeration equipment, this reduction usually comes from a decrease 
in evaporator coil surface area, which generally requires a lower 
saturated evaporator temperature (SET) to achieve the same discharge 
air temperature and cooling potential. This, in turn, results in a 
reduction in compressor efficiency. Therefore, DOE agrees with Traulsen 
that low pressure differential evaporators are not a viable option for 
consideration in this rulemaking and did not consider them as a design 
option.
Defrost Mechanisms
    Traulsen commented that in order for DOE to advocate for improved 
defrost sensors, new designs would need to be implemented, and that the 
compliance date suggested in the NOPR would not allow for the levels of 
research and development (R&D) necessary to achieve this improvement. 
(Traulsen, No. 65 at p. 8) DOE wishes to clarify that it did not 
consider advanced defrost sensors as a design option within the 
analyses conducted at the NOPR or final rule stages of this rulemaking. 
Much equipment currently manufactured already uses partial defrost 
cycle control in the form of cycle temperature-termination control. 
However, defrost cycle initiation is still scheduled at regular 
intervals. Full defrost cycle control would involve a method of 
detecting frost buildup and initiating defrost. This could be 
accomplished using an optical sensor or through use of a sensor to 
detect the temperature differential across the evaporator coil. 
However, DOE understands that both of these methods are currently 
unreliable due to fouling of the coil with dust and other surface 
contaminants, which becomes more of an issue as cases age. Because of 
these issues, DOE agrees with Traulsen's concerns and did not consider 
defrost cycle control as a design option at the NOPR or final rule 
stages. Instead, the defrost lengths modeled in the engineering 
analysis were based on defrost times gathered through review of 
manufacturer literature, manufacturer interviews, and data collected 
through laboratory testing of equipment currently available on the 
market.
Light Emitting Diode Lighting
    After publication of the NOPR, Traulsen commented that DOE's 
assertion of consumer enthusiasm towards LEDs lacked basis in reality. 
Further, Traulsen commented that any weight given to this assertion in 
the calculations was null. (Traulsen, No. 65 at p. 4) During its 
analysis, DOE considered design options based on their availability on 
the market and on the screening criteria set forth by the Process Rule. 
In considering LED lighting as a design option, DOE did so after 
researching existing product offerings on the market and conferring 
with manufacturers in confidential interviews. DOE did not factor 
``consumer enthusiasm'' into its decision to include LED lighting as 
asserted by Traulsen, but instead considered this design option based 
on the information available from the current equipment market and the 
technology's ability to reduce the measured energy consumption of 
covered equipment.
b. Technologies Relevant Only to Equipment With Doors
    In chapter 3 of the NOPR TSD, DOE mentioned three technologies that 
could apply only to doored equipment: anti-fog films, anti-sweat heater 
controllers, and high performance doors. Not all of these technologies 
were considered in the NOPR engineering analysis, as some were screened 
out or removed from consideration on technical grounds. The following 
sections discuss stakeholder comments regarding these technologies.
Anti-Fog Films
    Traulsen commented that while DOE called for the use of advanced 
hydrophobic materials in the form of anti-fog films to prevent 
condensation build-up, there were concerns with regard to the NSF 
certification of this feature. (Traulsen, No. 65 at p. 11) DOE wishes 
to clarify that, while it included anti-fog films for consideration in 
the NOPR market and technology assessment, it did not include them as a 
design option in the engineering analysis. For a full discussion of why 
DOE did not consider anti-fog films, please see chapter 5 of the NOPR 
TSD. DOE agrees with Traulsen's concerns, amongst others, and continued 
to exclude this technology from its analysis at the final rule stage.
Anti-Sweat Heater Controllers
    In its statements at the NOPR public meeting, the California IOUs 
urged DOE to consider anti-sweat heater controllers as a design option 
due to their large savings potential. (CA IOUs, Public Meeting 
Transcript, No. 62 at p. 19) However, in its written comment, Traulsen 
pointed out that these may be impractical, since sensor technologies 
had high failure rates in kitchen environments. (Traulsen, No. 65 at p. 
11)
    DOE addressed consideration of this technology in chapter 4 of the 
NOPR TSD. Anti-sweat heater controllers modulate the operation of anti-
sweat heaters by reducing heater power when

[[Page 17745]]

humidity is low, and operate most effectively when a constant ambient 
dew point cannot be maintained. However, in the context of the DOE test 
procedure, anti-sweat heater controllers solely serve to keep the power 
to the anti-sweat heaters at the levels necessary for the test 
conditions. These fixed conditions of 75 [deg]F and 55 percent relative 
humidity are the conditions that ASHRAE has determined to be generally 
representative of commercial refrigeration equipment operating 
environments and which DOE has adopted in its test procedure. While 
anti-sweat heater controllers could modulate the anti-sweat power to a 
further extent in the field so as to account for more or less extreme 
ambient conditions, a system equipped with anti-sweat heater 
controllers will not likely exhibit significantly different performance 
at test procedure conditions than a unit with anti-sweat heaters tuned 
for constant 75/55 conditions. Because they would have no impact on 
measured energy consumption under the DOE test procedure, DOE did not 
consider anti-sweat heater controllers in the engineering analysis.
c. Technologies Applicable Only to Equipment Without Doors
    In chapter 3 of the NOPR TSD, DOE mentioned two technologies, air-
curtain design and night curtains, that potentially could be used to 
improve the efficiency of commercial refrigeration equipment without 
doors. Air curtain design was not considered in the NOPR engineering 
analysis, as it was screened out and removed from consideration 
because, according to the information available to DOE, advanced air 
curtain designs are still in research and development stages and are 
not yet available for use in the manufacture of commercial 
refrigeration equipment. The following sections address stakeholder 
comments regarding technologies applicable to equipment without doors.
Air-Curtain Design
    In its written comment, Traulsen expressed concern over the use of 
advanced air curtain designs. (Traulsen, No. 65 at p. 11) DOE agrees 
with Traulsen that advanced air curtain designs are not currently a 
feasible option for use in commercial refrigeration equipment. Sections 
4(a) and 5(b) of the Process Rule specifically set ``practicability to 
manufacture, install, and service'' as a criterion that should be 
satisfied for technology to be considered as a design option. In 
chapter 4 of the NOPR TSD, DOE explained that advanced air curtain 
designs are only in the research stage and, therefore, that it would be 
impracticable to manufacture, install, and service this technology on 
the scale necessary to serve the relevant market at the time an amended 
standard would become effective. For that reason, DOE screened out 
improved air curtains as a design option for improving the energy 
efficiency of commercial refrigeration equipment.

C. Screening Analysis

    DOE uses four screening criteria to determine which design options 
are suitable for further consideration in a standards rulemaking. 
Namely, design options will be removed from consideration if they are 
not technologically feasible; are not practicable to manufacture, 
install, or service; have adverse impacts on product utility or product 
availability; or have adverse impacts on health or safety. 10 CFR part 
430, subpart C, appendix A, sections (4)(a)(4) and (5)(b).
    In comments received after the NOPR publication, Traulsen commented 
that, while DOE screened out certain technology options due to impacts 
on end-users, it was unclear why the same technology option was 
screened out for some equipment classes but not others. (Traulsen, No. 
65 at p. 2)
    During the screening analysis, DOE considered sections 4(b)(4) and 
5(b) of the Process Rule, which provide guidance in determining whether 
to eliminate from consideration any technology that presents 
unacceptable problems with respect to certain criteria. These criteria 
include technological feasibility, practicability to manufacture, 
install, and service, impacts on equipment utility or equipment 
availability, and adverse impacts on health or safety. If DOE 
determines that a technology, or a combination of technologies, meet 
any of the criteria set forth in section 5(b) of the Process Rule, it 
will be eliminated from consideration. This screening process is 
applied to each candidate technology being considered, and is 
applicable across all equipment classes. Therefore, in response to the 
comment from Traulsen, DOE does not believe that it screened out any 
particular technology options for some classes but not others.
    Based on all available information, DOE has concluded that: (1) All 
of the efficiency levels discussed in today's document are 
technologically feasible; (2) equipment at these efficiency levels 
could be manufactured, installed, and serviced on a scale needed to 
serve the relevant markets; (3) these efficiency levels would not force 
manufacturers to use technologies that would adversely affect product 
utility or availability; and (4) these efficiency levels would not 
adversely affect consumer health or safety. Thus, the efficiency levels 
that DOE analyzed and discusses in this document are all achievable 
through technology options that were ``screened in'' during the 
screening analysis.

D. Engineering Analysis

    The engineering analysis determines the manufacturing costs of 
achieving increased efficiency or decreased energy consumption. DOE 
historically has used the following three methodologies to generate the 
manufacturing costs needed for its engineering analyses: (1) The 
design-option approach, which provides the incremental costs of adding 
to a baseline model design options that will improve its efficiency; 
(2) the efficiency-level approach, which provides the relative costs of 
achieving increases in energy efficiency levels, without regard to the 
particular design options used to achieve such increases; and (3) the 
cost-assessment (or reverse engineering) approach, which provides 
``bottom-up'' manufacturing cost assessments for achieving various 
levels of increased efficiency, based on detailed data as to costs for 
parts and material, labor, shipping/packaging, and investment for 
models that operate at particular efficiency levels.
    As discussed in the Framework document, preliminary analysis, and 
NOPR analysis, DOE conducted the engineering analyses for this 
rulemaking using a design-option approach for commercial refrigeration 
equipment. The decision to use this approach was made due to several 
factors, including the wide variety of equipment analyzed, the lack of 
numerous levels of equipment efficiency currently available in the 
market, and the prevalence of relatively easily implementable energy-
saving technologies applicable to this equipment. More specifically, 
DOE identified design options for analysis, used a combination of 
industry research and teardown-based cost modeling to determine 
manufacturing costs, and employed numerical modeling to determine the 
energy consumption for each combination of design options used to 
increase equipment efficiency. DOE selected a set of 25 high-shipment 
classes, referred to as ``primary'' classes, to analyze directly in the 
engineering analysis. Additional details of the engineering analysis 
are available in chapter 5 of the final rule TSD.

[[Page 17746]]

1. Representative Equipment for Analysis
a. Representative Unit Selection
    In performing its engineering analysis, DOE selected representative 
units for each primary equipment class to serve as analysis points in 
the development of cost-efficiency curves. In selecting these units, 
DOE researched the offerings of major manufacturers to select models 
that were generally representative of the typical offerings produced 
within the given equipment class. Unit sizes, configurations, and 
features were based on high-shipment-volume designs prevalent in the 
market. Using this data, a set of specifications was developed defining 
a representative unit for each primary equipment class. These 
specifications include geometric dimensions, quantities of components 
(such as fans), operating temperatures, and other case features that 
are necessary to calculate energy consumption. Modifications to the 
units modeled were made as needed to ensure that those units were 
representative of typical models from industry, rather than a specific 
unit offered by one manufacturer. This process created a representative 
unit for each equipment class with typical characteristics for physical 
parameters (e.g., volume, TDA), and minimum performance of energy-
consuming components (e.g., fans, lighting).
b. Baseline Models
    DOE created a set of baseline design specifications for each 
equipment class analyzed directly in the engineering model. Each set of 
representative baseline unit specifications, when combined with the 
lowest technological level of each design option applicable to the 
given equipment class, defines the energy consumption and cost of the 
lowest efficiency equipment analyzed for that class. Chapter 5 of the 
final rule TSD sets forth the specifications that DOE chose for each 
equipment class and discusses baseline models in greater detail.
    One complexity involved in developing an engineering baseline was 
due to the variety of designs and technology options that manufacturers 
could utilize in order to meet the recently-implemented standards 
arising from EPACT 2005 and the 2009 final rule. Through its analyses, 
DOE determined that manufacturers were utilizing a wide variety of 
design paths in order to meet the necessary performance level. 
Therefore, in order to develop its engineering results for the current 
rule, DOE retained the engineering baseline and associated technologies 
used in its January 2009 final rule engineering analysis and expanded 
them to accommodate the new equipment classes covered by the standards 
initially established by EPCA. (42 U.S.C. 6313(c)(2)-(3)) DOE then 
added technologies to this baseline to develop its cost-efficiency 
curves, and ordered the technology options from lowest to highest 
payback period. The result was a set of cost-efficiency curves 
reflecting what DOE believes to be the most cost-effective means of 
meeting the existing standards, as well as that of attaining the higher 
levels of performance reflected in today's rule.
    As a result, some of the engineering results represent levels of 
unit performance that are below the standard levels for equipment 
currently on the market and subject to DOE's existing standards. (10 
CFR 431.66). However, in its LCC and other downstream analyses, DOE 
accounted for this fact by utilizing a standards baseline as the 
minimum efficiency level examined, thereby truncating the engineering 
design option levels so that the lowest efficiency point analyzed 
corresponded to the current standard level with which that particular 
model of equipment would have to comply. The exact procedure is 
described in section IV.F and additional details are provided in 
chapter 8 of the final rule TSD.
    After publication of the NOPR and the NOPR public meeting, DOE 
received a number of comments from interested parties regarding its 
establishment of baseline models, and the features and design 
specifications included in those baseline models. The subsequent 
sections contain those comments and DOE's responses.
Composition of Baseline
    Southern Store Fixtures Inc. (Southern Store Fixtures), AHRI, 
Hussmann and Structural Concepts expressed concern that, by keeping the 
baseline consistent between the previous rule and the proposed rule, 
DOE had failed to account for the efficiency improvement brought about 
by the previous standard, thereby overestimating the potential for 
energy savings. (Southern Store Fixtures, No. 67 at p. 2) (AHRI, No. 75 
at p. 2) (Hussmann, No. 77 at p. 9) (Structural Concepts, No. 85 at p. 
1) Additionally, AHRI noted that although the current rulemaking 
retains the baseline specifications and some related technologies from 
the previous rulemaking, there are differences in the baseline energy 
consumption across the two rulemakings. (AHRI, No. 75 at p. 4)
    The Joint Comment pointed out that, for some equipment classes, 
many ENERGY STAR-qualified products were rated as being less efficient 
than the modeled baseline. Further, the Joint Comment urged DOE to re-
evaluate the baseline levels for equipment classes for which the 
current standards were established by EPACT 2005. (Joint Comment, No. 
91 at p. 5)
    In response to the comments raised by interested parties regarding 
the modeled equipment baseline, DOE points out that there is currently 
no prescriptive requirement that commercial refrigeration equipment use 
any specific combination of features to meet the existing EPACT 2005 or 
2009 final rule standard levels. For this reason, and in order to 
ensure a proper ordering of the implementation of efficiency-improving 
technologies in its engineering analysis, DOE started with an 
engineering baseline which was, in many cases, below the performance 
level mandated by the current standards. DOE then modeled equipment 
with increasingly higher levels of performance by implementing the 
applicable design options in order of ascending payback period. The 
result of this was a modeled configuration reflecting, based on the 
information available to DOE, the most cost-effective way to build a 
model which complies with the existing standards. Then, DOE continued 
to add the remaining design options until it reached the max-tech 
level. It was these additional efficiency levels above the performance 
level required by the existing standard that were considered as 
offering incremental efficiency improvements beyond the level required 
at the time of the analysis.
    Energy savings and downstream impacts (such as life-cycle cost and 
national net present value results) were calculated based on a base 
case efficiency distribution in which minimum-efficiency products 
available today are assumed to comply with existing standards. 
Therefore the modeled design options up to the level of performance 
required by existing standards did not have any impact on the energy or 
cost savings attributed to the amended standards prescribed today, but 
rather, served only to align the engineering cost-efficiency curve with 
the technologies which present the shortest-payback options for 
reducing energy consumption. As a result, DOE believes that the 
assertion of some stakeholders that its methodology overstates the 
energy savings attributable to today's rule is inaccurate.
    With regard to the specific technology modeling that was discussed 
by AHRI, DOE updated modeling of some baseline design options and 
components from the 2009 final rule to the current

[[Page 17747]]

rulemaking to ensure the most accurate possible depiction of components 
currently available on the market. In the final rule stage, DOE 
revisited these design option parameters based on stakeholder comments 
and further revised them where appropriate so as to ensure a greater 
degree of accuracy in the engineering model inputs. Therefore, DOE 
understands that there may be adjustments to the numerical outputs of 
the modeling of baseline units between rulemakings and rulemaking 
stages.
    In response to the issue raised in the Joint Comment, DOE wishes to 
point out that the ENERGY STAR-qualified directory \30\ is, by design, 
not necessarily an exhaustive source of information for all models 
available on the market. However, DOE has adjusted its modeling of 
baseline units in the final rule stage of the analysis and, in 
conducting comparisons between its engineering results and market data 
such as the ENERGY STAR directory, has found agreement between the 
performance results obtained from its engineering analysis and the data 
points contained in the ENERGY STAR directory.
---------------------------------------------------------------------------

    \30\ Available http://www.energystar.gov/certified-products/certified-products.
---------------------------------------------------------------------------

Condensate Pan Heaters
    In their written comments, manufacturers provided input on the 
modeling of condensate pan heaters in baseline and higher-performance 
units. Traulsen noted that closed door refrigerators were modeled in 
the NOPR engineering analysis as not requiring electric condensate pan 
heaters, while freezers were modeled as using this component, even 
though refrigerators face the same physical limitations as freezers. 
Further, Traulsen commented that DOE should consider the power required 
to bring condensate pan heaters to operating temperature and the idle 
power consumption of empty condensate pans when reviewing energy 
conservation strategies. Further, Traulsen expressed the belief that 
electric condensate pan heaters are an important feature which cannot 
be ignored. (Traulsen, No. 65 at p. 1) Similarly, Hussmann also 
commented that in self-contained medium-temperature units, 
manufacturers are required to use condensate evaporator pans, the lack 
of which would reduce utility to end-users. (Hussmann, No. 77 at p. 7)
    In response to the comments provided by Traulsen and Hussmann, DOE 
revisited its engineering analysis and added condensate pan heaters for 
medium-temperature vertical closed-door cases to its analytical model. 
Additionally, in response to Traulsen's suggestion, DOE added a factor 
of an additional 10% pan energy consumption to its modeling of 
condensate pan energy use in order to account for the energy needed to 
bring the pan up to temperature. However, DOE did not add further 
energy in its engineering simulation to account for idle consumption of 
empty condensate pans, as DOE understands that most condensate pan 
heaters use float switches or other sensor devices to activate the pan 
heater only when the water level is sufficiently high to require it, 
minimizing operation of heaters with empty pans.
Defrost
    In its written comment, Traulsen provided additional information to 
assist in DOE's modeling of defrost systems. Traulsen commented that 
while the DOE model assumed that all VCT.SC.M and VCS.SC.M units employ 
off-cycle defrost systems, this is not true in real-life applications. 
Traulsen further commented that, for most refrigerator models, it uses 
an electric defrost element. Traulsen further noted that if electric 
defrost were included, all theoretical models would fail to meet the 
proposed standard. Additionally, Traulsen commented that DOE's model 
seems to ignore desired features such as hot-gas defrost and electric 
defrost systems, even though they are widely available in the market.
    Traulsen commented that defrost cycles tend to terminate when the 
evaporator coil reaches a predetermined temperature, but the time 
period required for melting all accumulated frost varies with the mass 
of the evaporator coil and surrounding components. Further, Traulsen 
noted that the DOE spreadsheet appears not to account for these 
accommodations, and fails to account for increased defrost length when 
using enhanced evaporator coils, which have a 50% higher mass than the 
baseline coil designs. Traulsen commented that, in the DOE NOPR 
engineering model, defrost heater wattage only varied in proportion to 
the length of the cabinet, and not with the cabinet height or volume. 
Furthermore, Traulsen noted that the heater wattage calculated for 
full-height closed door cabinets appear to be too high. (Traulsen, No. 
65 at p. 11) Structural Concepts commented that the multipliers used to 
model defrost cycles should differ between open and closed type cases. 
(Structural Concepts, No. 85 at p. 3)
    After the NOPR public meeting and upon receipt of comments, DOE 
researched defrost mechanisms applied in medium-temperature 
applications. Specifically, DOE investigated this subject through 
review of manufacturer literature such as manuals and replacement parts 
catalogs, as well as through testing and teardown of selected units. 
The results of this investigation contradicted Traulsen's assertion 
that electric defrost is commonly used in medium-temperature units, as 
DOE did not find evidence of this. Additionally, examination of public 
certification databases such as the ENERGY STAR directory showed 
equipment performance levels inconsistent with the use of substantial 
amounts of electric defrost. Therefore, DOE did not find sufficient 
evidence to warrant adding the modeling of electric defrost to its 
engineering analysis. With respect to the discussion of hot gas 
defrost, DOE understands that this feature is currently used by some 
manufacturers in the market, but did not explicitly model it due to 
concerns raised through comments and in manufacturer interviews 
regarding reliability issues with this feature.
    In response to the comments from Traulsen and Structural Concepts 
regarding defrost cycle lengths, DOE based its modeling of defrost 
cycles for various equipment classes based on a number of sources, 
including manufacturer literature, manufacturer interviews, and testing 
of equipment currently on the market. Thus DOE agrees that the defrost 
length values should vary by equipment class, and has modeled them as 
such in its engineering analysis. With respect to Traulsen's comment on 
additional defrost power being needed for larger evaporator coils, DOE 
constrained the size of the evaporator coils modeled in the final rule 
analysis, thus mitigating concern over this issue. Additionally, in the 
final rule engineering analysis, for vertical freezers, DOE adjusted 
the modeled defrost heater wattages based on inputs from Traulsen's 
comment and other sources. DOE believes that these changes better 
reflects the actuality of defrost mechanisms utilized in these 
equipment classes.
Lighting Configurations
    Hillphoenix commented that the number of shelves, and therefore 
shelf lights, varies greatly for SVO cases depending on the height of 
the case. Hillphoenix further commented that there exist ``extreme 
configuration differences'' among cases within the same class. 
(Hillphoenix, No. 71 at p. 4)

[[Page 17748]]

    In developing its engineering analysis for this rulemaking, DOE 
collected data on common designs within the industry. This information 
included specifications on lighting configurations and formed the basis 
for the representative units modeled within the engineering analysis. 
Based on input collected over the course of the current rulemaking and 
in the development of the 2009 final rule, DOE believes that its design 
specifications, including lighting configurations, are accurate and 
representative of the various covered classes, including SVO cases. 
Additionally, DOE notes that for SVO cases, the allowable energy 
consumption under the existing and amended standards is a function of 
TDA. Cases with greater height, such as those suggested by Hillphoenix, 
would have a greater measured total display area and thus would be 
allowed a proportionally larger amount of energy. Therefore, DOE 
believes that its existing analytical methodology accounts for the 
concerns raised by Hillphoenix.
Infiltration Loads
    Manufacturers opined that DOE's modeling of air infiltration caused 
by door openings could be improved. Continental Refrigerator 
(Continental), Hussmann, and Traulsen all commented that air exchange 
during door openings significantly affects system energy consumption. 
(Hussmann, No. 77 at p. 3) (Traulsen, No. 65 at p. 10) (Continental, 
No. 87 at p. 2) Specifically, True commented that door openings and the 
resultant air exchange could account for between 15% and 25% of a 
unit's energy consumption. (True, Public Meeting Transcript, No. 62 at 
p. 151)
    Traulsen commented that the energy consumption formulas for closed 
door models fail to account for gasket losses (heat gain or added 
load), and that it was concerned with the use of the air infiltration 
load models applied, especially with respect to closed door units, 
since real world conditions can vary from those experienced during the 
ASHRAE test procedure. (Traulsen, No. 65 at p. 10) Moreover, 
Continental noted that the percentage of air that is exchanged varies 
greatly with the configuration and type of cabinet. Continental further 
commented that the DOE model did not provide sufficient explanation of 
how air infiltration loads were calculated for different cabinet types. 
(Continental, Public Meeting Transcript, No. 62 at p. 123) Structural 
Concepts commented that the multipliers used to model infiltration 
should differ between open and closed type cases. (Structural Concepts, 
No. 85 at p. 3) ACEEE commented that tracer gas analysis, a well-
established technology, could be used to analyze the actual air 
exchange that occurs during door openings. (ACEEE, Public Meeting 
Transcript, No. 62 at p. 154)
    DOE understands the significance of air infiltration and is aware 
of its impact on the modeled energy consumption of commercial 
refrigeration equipment. In response to these comments, DOE reviewed 
its modeled infiltrated air mass values between the NOPR and final rule 
stages of the rulemaking. Specifically, DOE adjusted the values for a 
variety of classes to better align with new information presented in 
stakeholder comments and other sources. This included adjustments to 
account for the impacts of the respective air densities at the three 
DOE rating temperatures, and scaling to better simulate the impacts of 
case geometry. For full details on the infiltration levels modeled, 
please refer to chapter 5 and appendix 5A of the final rule TSD.
    With respect to the comment from True regarding the percentage of 
case heat load attributable to infiltration, DOE's engineering model 
provides a specific breakdown of the constituent components of the case 
heat loads modeled in its simulation. A review of the DOE engineering 
model shows the contribution of infiltration to case heat load for 
closed-door units to be in line with the figures provided by True. In 
response to the comment from Traulsen, DOE believes that gasket losses 
are accounted for in its infiltrated air mass values. These values were 
derived from manufacturer literature based upon test performance under 
ASHRAE conditions, and thus would encapsulate all phenomena, including 
gasket losses, encountered by the unit which contribute to the 
infiltration load during operation. The engineering model simulates 
performance under the DOE test procedure, and thus changes which may be 
encountered in the field such as those noted by Traulsen are not 
specifically relevant to the calculated daily energy consumption values 
used for standards setting purposes. Therefore, DOE does not see a need 
to change its methodology to account for this attribute.
    DOE agrees with Continental and Structural Concepts that wide 
variation in infiltration is observed among different equipment 
classes, particularly between open and closed cases. DOE believes that 
its updated air infiltration values better account for differences that 
exist in infiltration loads among cases of different configurations, 
geometries, sizes, and operating temperatures.
    With respect to the comment from ACEEE, DOE understands that tracer 
gas analysis could be used in a controlled laboratory environment to 
possibly determine infiltration rates into commercial refrigeration 
equipment. However, within the scope, time frame, and resources of this 
rulemaking process, DOE did not pursue that method to further 
investigate infiltration effects. Instead, DOE continued to base its 
approach on infiltration load values calculated from manufacturer 
literature, and adjusted those values based upon comments received 
after publication of the NOPR. DOE believes that this is an accurate 
approach, consistent with methodologies employed in other past and 
current rulemakings, which is substantiated by the best available data 
as of the time of this analysis.
2. Design Options
    After conducting the screening analysis and removing from 
consideration technologies that did not warrant inclusion on technical 
grounds, DOE included the remaining technologies as design options in 
the energy consumption model for its engineering analysis:
     Higher efficiency lighting and occupancy sensors for VOP, 
SVO, and SOC equipment families (horizontal fixtures);
     higher efficiency lighting and occupancy sensors for VCT 
and PD equipment families (vertical fixtures);
     improved evaporator coil design;
     higher efficiency evaporator fan motors;
     improved case insulation;
     improved doors for VCT equipment family, low temperature 
and ice-cream temperature (hinged);
     improved doors for VCT and PD equipment families, medium 
temperature (hinged);
     improved doors for HCT equipment family, low temperature 
and ice-cream temperature (sliding);
     improved doors for HCT equipment family, medium 
temperature (sliding);
     improved doors for SOC equipment family, medium 
temperature (sliding);
     improved condenser coil design (for self-contained 
equipment only);
     higher efficiency condenser fan motors (for self-contained 
equipment only);
     higher efficiency compressors (for self-contained 
equipment only); and
     night curtains (equipment without doors only).
    After publication of the NOPR, DOE received a number of comments on 
its choice and implementation of certain design options within the 
engineering analysis. The following sections address these stakeholder 
comments.

[[Page 17749]]

a. Fluorescent Lamp Ballasts
    Traulsen commented that markets have already trended towards 
electronic (solid-state) ballasts to modulate power provided by T8 
lights. Traulsen raised concern that DOE analysis might therefore be 
unfairly overstating savings from the adoption of TSL4 by including 
electronic ballasts as a design option in its analysis. (Traulsen, No. 
65 at p. 4)
    DOE understands that electronic ballasts are ubiquitous in the 
commercial refrigeration equipment market within cases that use 
fluorescent lighting and agrees with the comment presented by Traulsen. 
In its NOPR engineering analysis, DOE modeled the baseline design 
option in cases with lighting as comprised of T8 fluorescent fixtures 
with electronic ballasts. At improved levels of efficiency, DOE 
implemented super-T8 fluorescent lighting, LED lighting, and LED 
lighting with occupancy sensors. DOE did not model magnetic ballasts 
within its NOPR engineering analysis. Given the comments received at 
the NOPR stage, DOE retained this stance in its final rule engineering 
analysis.
    With regard to Traulsen's assertion that DOE might be overstating 
savings, DOE wishes to clarify that energy savings and downstream 
impacts (such as life-cycle cost and national net present value 
results) were calculated using a base case efficiency distribution in 
which minimum-efficiency products available today are assumed to comply 
with existing standards. Therefore, the modeled design options up to 
the level of performance required by existing standards did not have 
any impact on the energy or cost savings attributed to the amended 
standards set forth today, but rather, served only to align the 
engineering cost-efficiency curve with the technologies which present 
the shortest-payback options for reducing energy consumption.
b. Condenser Fans
    Southern Store Fixtures and AHRI commented that the modeling of 
electronically commutated motors (ECMs) in condenser fan applications 
was redundant, since they believe that all equipment in compliance with 
the 2009 final rule are already using ECMs. (Southern Store Fixtures, 
No. 67 at p. 4) (AHRI, No. 75 at p. 7)
    DOE understands that manufacturers may currently be choosing to 
utilize ECM fan motors as part of their designs on the market. However, 
the 2009 final rule and EPACT 2005 standards do not include 
prescriptive requirements, so DOE is unable to assume that 
manufacturers have all used any one single design path in order to 
achieve the necessary performance levels. Instead, DOE started its 
analysis with an engineering baseline representing designs less 
sophisticated than needed to meet the current standard levels, and 
added all available design options, including some previously 
considered in the 2009 final rule, until reaching the max tech 
efficiency level. This method allowed DOE to order all design options 
in the most cost-effective manner. However, only those modeled 
efficiency levels having performance above the level required by 
existing standards were considered as contributing to the energy and 
cost savings attributable to this rule. For a further explanation of 
this methodology, please see section IV.D.1.b, ``Baseline Models.''
c. Evaporator Fans
    Southern Store Fixtures and AHRI commented that the modeling of ECM 
fan motors in evaporators was redundant, since they believe that all 
equipment in compliance with the 2009 final rule is already using ECMs. 
(Southern Store Fixtures, No. 67 at p. 4) (AHRI, No. 75 at p. 7) 
Continental commented that shutting off the fans during door-opening 
could cause the evaporator coil to freeze up, and thus that this should 
not be considered as an option. (Continental, Public Meeting 
Transcript, No. 62 at p. 153)
    DOE understands that many manufacturers may currently be choosing 
to utilize ECM fan motors as part of their designs on the market at 
this time. However, the 2009 final rule and EPACT 2005 standards do not 
include prescriptive requirements, so DOE was unable to assume that 
manufacturers all chose any one single design path in order to achieve 
the necessary performance levels. Instead, DOE started with a simpler 
engineering baseline representing equipment performance at a lower 
level than that permitted by current standards, and added all design 
options, including some previously considered in the 2009 final rule, 
until reaching the max tech level. This method allowed DOE to order all 
design options in the most cost-effective manner. However, only those 
modeled efficiency levels performance above the level required by 
existing standards were considered as contributing to the energy and 
cost savings attributable to this rule. For a further explanation of 
this methodology, please see section IV.D.1.b, ``Baseline Models.''
    DOE agrees with the concerns of Continental regarding turning off 
evaporator fans, and did not model evaporator fan controls as a design 
option in this rulemaking due to a number of issues including the 
integrity of the air curtain on open cases and food safety issues due 
to lack of air circulation arising from stopping the evaporator fans. 
For a full discussion of this issue, please see chapter 5 of the final 
rule TSD.
d. Design Options Impacting Equipment Form Factor
    Some manufacturers and consumer groups urged DOE to screen out any 
design options which would even marginally affect the geometry of a 
model, either by increasing its total footprint or reducing the cooled 
internal space. Specifically, these comments referred to DOE's 
consideration of added insulation thickness as a design option. True 
commented that it was impractical to increase the total footprint of 
equipment since almost all commercial kitchen equipment has a fixed 
footprint and replacement units must fit into the same space as old 
units. (True, No. 76 at p. 1) Continental commented that a \1/2\'' 
increase in insulation of walls could have a significant impact on end-
users and manufacturers, since equipment is often designed for very 
specific footprints and layouts. Continental further commented that 
while an inch less inside space or an inch larger cabinet may seem 
insignificant, it may be important to end-users. (Continental, Public 
Meeting Transcript, No. 62 at p. 103) Traulsen, too, noted that both 
internal capacity and footprint of a unit were its key selling points. 
(Traulsen, No. 65 at p. 7) Hoshizaki, True, AHRI, NAFEM, SAF, 
Continental, Structural Concepts and Hillphoenix all opined that 
increasing the case insulation requirement by even \1/2\'', would lead 
to a significant increase in footprint, or decrease in internal 
volume--both of which would detrimentally affect consumer utility, 
since many commercial environments have very limited floor space. 
(Hoshizaki, No. 84 at p. 2) (True, No. 76 at p. 3) (AHRI, No. 75 at p. 
6) (NAFEM, No. 93 at p. 5) (SAF, No. 74 at p. 6) (Continental, No. 87 
at p. 3) (Structural Concepts, No. 85 at p. 2) (Hillphoenix, No. 71 at 
p. 3)
    DOE understands stakeholder concerns over unit form factor, and 
discussed these concerns thoroughly in its manufacturer interviews 
conducted at the NOPR stage of the rulemaking. At that time, 
manufacturers agreed that the addition of \1/2\'' of insulation above 
the baseline thicknesses modeled (1.5'', 2'', and 2.5'' for 
refrigerators, freezers, and ice cream freezers, respectively) was 
feasible, albeit at the expense of equipment redesign and replacement 
of

[[Page 17750]]

foaming fixtures. DOE incorporated cost figures for these factors into 
the engineering and manufacturer impact analyses so as to account for 
the costs of additional foam as a design option. With respect to the 
concerns over additional foam thickness having an impact on the 
usefulness of the product to consumers, DOE notes that in its teardown 
analyses it encountered a number of models currently on the market 
utilizing the increased foam wall thicknesses which it modeled. Since 
manufacturers are already employing these wall thicknesses in 
currently-available models, DOE believes that this serves as a proof of 
concept and that the resulting changes to form factor would be of 
minimal impact to end users. DOE also would like to remind stakeholders 
that it is not setting prescriptive standards, and should manufacturers 
value some features over others, they are free to use different design 
paths in order to attain the performance levels required by today's 
rule.
e. Vacuum Insulated Panels (VIPs)
    True, Structural Concepts, and Traulsen commented that the use of 
VIPs is very cost-prohibitive and can reduce the structural strength of 
the unit. Additionally, Traulsen recommended further discussion on the 
use of vacuum insulated panels, specifically on the structural 
integrity and associated trade-offs of this technology. (Traulsen, No. 
65 at p. 10) (True, No. 76 at p. 3) (Structural Concepts, No. 85 at p. 
2)
    DOE considered vacuum insulated panels as a design option in its 
engineering analysis because they have the potential to improve 
equipment efficiency, are available on the market today, are currently 
used in refrigeration equipment, and pass the screening criteria set 
forth in sections 4(b)(4) and 5(b) of the Process Rule. However, DOE 
understands that there is a high level of cost required to implement 
this design option, including redesign costs, and sought to reflect 
that fact through appropriate cost values obtained from manufacturer 
interviews and other sources and included in its analyses. As a result, 
vacuum insulated panels appear only in max-tech designs for each 
equipment class, and are not included in any of the modeled 
configurations selected in setting the standard levels put forth in 
today's document.
f. Variable-Speed Fan Motors
    Traulsen commented that while DOE suggested varying condenser and 
evaporator fan speeds to improve performance, Traulsen equipment is 
used in applications in which food safety concerns make this option 
infeasible. Traulsen further commented that NSF issues related to food 
safety and sanitation must be a primary consideration over energy 
savings. (Traulsen, No. 65 at p. 5) However, ebm-papst, Inc. (ebm-
papst) noted that variable speed condenser fans have successfully been 
deployed in the European market. (ebm-papst, No. 70 at p. 3)
    DOE agrees with Traulsen's concerns over food safety issues arising 
from possible implementation of evaporator fan control schemes. DOE 
noted in chapter 5 of its NOPR TSD that the effectiveness of the air 
curtain in equipment without doors is very sensitive to changes in 
airflow, and fan motor controllers could disrupt the air curtain. The 
potential of disturbance to the air curtain, which could lead to higher 
infiltration loads, does not warrant the use of evaporator fan motor 
controllers in equipment without doors, even if there were some 
reduction in fan energy use. With respect to equipment with doors, DOE, 
in its discussions with manufacturers, found that there are concerns in 
industry about the implementation of variable-speed fan technology due 
to the need to meet food safety and maximum temperature requirements. 
Varying the fan speed would reduce the movement of air within the case, 
potentially leading to the development of ``hot spots'' in some areas 
of the case, where temperatures could exceed the desired value. This 
finding aligns with the concerns raised by Traulsen. Some industry 
representatives also stated during interviews that the use of such 
controllers could have unintended consequences, in which fans would be 
inadvertently run at full power to attempt to overcome a frosted or 
dirty coil, resulting in wasted energy. Due to the uncertainties that 
exist with respect to these technologies, DOE did not consider 
variable-speed evaporator fan motors or evaporator fan motor 
controllers as a design option in its NOPR or final rule analyses.
    In response to the comment from ebm-papst, DOE points out that it 
discussed condenser fan controls in chapter 4 of its NOPR TSD. Because 
testing under the ANSI/ASHRAE Standard 72 test procedure is conducted 
at a constant ambient temperature, there is little opportunity to 
account for the adaptive technology of varying condenser fan motor 
speed to reduce daily energy consumption of a given model. Moreover, 
DOE understands that condenser fan motor controllers function best when 
paired with a variable-speed modulating compressor, a technology that 
DOE understands to be only in the early stages of implementation in 
this industry. Therefore, DOE did not consider variable-speed condenser 
fan motors or condenser fan motor controllers as design options in its 
engineering analysis.
g. Improved Transparent Door Designs
    In the NOPR, DOE modeled triple pane, low-e coated glass in the 
configuration of an advanced design option for vertical medium-
temperature cases with transparent doors. Hussmann commented that low-e 
coatings have an inherent tint to them, which reduces the visibility of 
merchandise through a triple-paned, low-e coated glass door. (Hussmann, 
Public Meeting Transcript, No. 62 at p. 99) SAF, AHRI and NRA also 
expressed concern over product visibility associated with this 
technology. (SAF, No. 74 at p. 6) (AHRI, No. 75 at p. 6) (NRA, No. 90 
at p. 5) Traulsen, NAFEM, Continental, Royal Vendors, and True noted 
that triple-pane glass doors are much heavier than double-paned doors, 
and increase the risk of the unit tipping over, especially when it is 
near empty. Additionally, True pointed out that triple-paned glass led 
to reduced thermo-break in hinge areas, reduction in internal volume of 
sliding doors, failure to clear the Underwriters Laboratories (UL) 471 
tip-test,\31\ door opening difficulties due to added mass and easier 
breakage. Traulsen also noted that an enhanced door would require 
design changes including heavier hinges, and a complete redesign of 
sliding doors with applications in narrow aisles. (Continental, No. 87 
at p. 3) (NAFEM, No. 93 at p. 7) (True, No. 76 at p. 2) (Traulsen, No. 
65 at p. 10)
---------------------------------------------------------------------------

    \31\ UL standard 471, ``Commercial Refrigerators and Freezers,'' 
is a safety standard applicable to this equipment. Part of this 
procedure includes a test of the ability of the unit to avoid 
tipping over under certain conditions. This is the ``tip test'' 
referenced by the commenter.
---------------------------------------------------------------------------

    Additionally, AHRI commented that, for HCT equipment, the NOPR TSD 
considered two extra panes of glass for high-performance doors that 
were used in low and ice-cream temperatures, whereas only a single 
extra pane of glass was used for medium temperature high- performance 
doors. (AHRI, No. 75 at p. 7)
    The CA IOUs disagreed with the comments from many manufacturers and 
trade associations, and in a written comment opined that triple-pane, 
low-e transparent doors were feasible in medium temperature 
applications and were already found in existing

[[Page 17751]]

equipment. (CA IOUs, No. 63 at p. 6) The Joint Comment suggested that 
if the use of triple-pane, low-e doors were to reduce product 
visibility, then increased lighting levels may be more energy-efficient 
than reverting to double-pane glass. (Joint Comment, No. 91 at p. 4)
    DOE understands the concern of manufacturers and other interested 
parties regarding the applicability and appropriateness of triple-pane, 
low-e doors in medium temperature equipment. The range of concerns 
suggests that manufacturers may encounter significant issues of 
redesign, recertification, consumer choice, and possible loss of some 
functionality were this feature to be implemented across all medium-
temperature glass-door units. Therefore, in its final rule modeling of 
glass doors, DOE restricted its high-performance design to consider 
only two panes of glass for medium-temperature cases.
    In response to AHRI's comments regarding HCT doors, DOE asserts 
that HCT doors as modeled in its engineering analysis for the NOPR 
featured the same number of panes of glass in both low/ice cream and 
medium temperature designs. For these equipment types, the baseline 
door featured a single pane of glass, while the high-performance door 
featured a second pane of glass. These designs are consistent with what 
DOE has observed on the market and in the design of similar equipment. 
Therefore, DOE retained these designs, with respect to the number of 
panes of glass modeled, in its final rule engineering analysis.
    DOE agrees with the CA IOUs that some equipment currently on the 
market for medium-temperature applications does feature triple-pane, 
low-e glass doors. However, this is not a standard design and DOE 
understands the concerns of manufacturers in applying this feature to 
the entirety of their product lines. Due to concerns over applicability 
and implementation of triple-pane, low-e doors in all medium-
temperature products, DOE retained a double-pane design in its final 
rule engineering analysis simulation of improved glass door 
performance. However, DOE wishes to point out again that it is not 
setting prescriptive design requirements, and thus manufacturers are 
free to use only those designs and technologies they see fit in order 
to attain the level of performance specified in today's final rule.
h. High-Performance Coil Designs
    In order to model improved performance, DOE considered the use of 
improved evaporator and condenser coils as design options. However, 
many manufacturers felt that while these design options provided 
theoretical efficiency gain, there are several practical issues which 
mitigated these gains in the field. Heatcraft commented that the phrase 
``improved evaporator coil design'' was a very generic term, and that 
coils that can be designed for high efficiency in a laboratory 
environment may not serve the purpose of the equipment functionally in 
the field. (Heatcraft, Public Meeting Transcript, No. 62 at p. 77) 
Danfoss, Traulsen, Southern Store Fixtures, Royal Vendors and True 
commented that higher fin density for evaporators and condensers would 
lead to frequent clogging and freezing, which could not only cause an 
increase in energy use, but also cause the unit to not maintain 
temperature levels required for safe storage of food. (Danfoss, No. 61 
at p. 4) (Traulsen, No. 65 at p. 6) (Southern Store Fixtures, No. 67 at 
p. 3) (Royal, No. 68 at p. 1) (True, Public Meeting Transcript, No. 62 
at p. 67)
    At the NOPR stage, DOE modeled an improved evaporator coil with a 
larger number of tube passes than the baseline design; however, 
Traulsen commented that if an evaporator with a larger number of tube 
passes is selected, there is an increased risk of refrigerant pressure 
drop through the coils. Traulsen further commented that, with multiple 
tubing circuits, this drop could be so substantial that the refrigerant 
could fail to make its way back to the compressor. (Traulsen, No. 65 at 
p. 6)
    DOE also modeled rifled evaporator tubes to improve coil 
performance in its NOPR analyses. Southern Store Fixtures commented 
that the use of rifled tubing for evaporator coils may have no 
significant improvement in coil performance for commercial 
refrigeration systems. (Southern Store Fixtures, No. 67 at p. 3) AHRI 
commented that rifling of evaporator coil tubes is common in the 
industry, but that in practical applications, lower evaporation 
temperatures and lower flow rates result in no significant efficiency 
improvement attributable to internally enhanced tubing. (AHRI, No. 75 
at p. 3) Continental commented that rifled tubing for evaporator coils 
causes turbulence in refrigerant flow, leading to slugging and stress 
concentrations, which lead to increased maintenance costs and failure 
possibilities. (Continental, No. 87 at p. 2)
    Another concern amongst manufacturers was the effect of 
incorporating larger evaporator and condenser coils into a unit. AHRI 
noted that there had been drastic reductions in the overall width and 
depth of the modeled evaporator coils since the last rulemaking. 
Further, AHRI noted that while DOE relied on its contractors for 
details on coil construction, it did not provide any references to 
studies that justify changes in coil dimensions. (AHRI, No. 75 at p. 5) 
Traulsen commented that larger coils would require equipment redesign, 
resulting in possible obsolescence of smaller lines and custom 
applications. (Traulsen, No. 65 at p. 6) Hillphoenix commented that the 
use of taller coils would decrease the amount of product that could be 
put in the case, or would move the product further away from consumers, 
and that this would be unacceptable to retailers. (Hillphoenix, No. 71 
at p. 4) Hussmann commented that increasing evaporator and condenser 
coil dimensions would involve engineering costs associated with 
redesigning parts of the case that interface with the coil. (Hussmann, 
No. 77 at p. 2) Structural Concepts commented that changing the overall 
height of heat exchangers would require that either the display 
capacity to be reduced, or the overall height of a unit be increased, 
which would impact utility negatively. (Structural Concepts, No. 85 at 
p. 2) Continental commented that in under-counter and worktop units, 
limited space is available for a condensing unit, and increasing the 
size of the condenser coil is not practical. (Continental, No. 87 at p 
2)
    In response to the comment from Heatcraft regarding DOE's reference 
to ``improved evaporator coil design,'' DOE points to chapter 5 of its 
TSD, where it specifically outlines the geometries and features 
included in this coil design. With respect to the concerns of 
Heatcraft, Danfoss, Traulsen, Southern Store Fixtures, Royal Vendors, 
and True that coil designs must remain functional in the field, DOE 
only considered features which were proven through field use in current 
coil designs. In a review of the coil designs at the final rule stage, 
DOE removed from consideration designs featuring increased fin pitch, 
and instead retained the modeled fin pitches at levels seen in teardown 
units. DOE believes that this action addresses the concerns of these 
stakeholders over the issues of clogging and freezing that could be 
encountered with higher-fin-pitch coils.
    When modeling coil configurations at baseline and improved levels 
of efficiency, DOE evaluated the overall performance of the coils 
within the context of specific refrigeration systems in which they 
would be used. This included numerical simulation of coil performance 
accounting for pressure drops. DOE excluded from consideration coil 
designs which proved

[[Page 17752]]

impractical, or which had negative energy impacts. Therefore, DOE 
believes Traulsen's concern regarding pressure drops over larger 
numbers of tube passes to be unsubstantiated. Additionally, DOE re-
evaluated its coil designs at the final rule stage based on stakeholder 
comments and additional data from teardowns, incorporating many of the 
concerns expressed in these comments during coil modeling at the final 
rule stage.
    Based on stakeholder comments including those of Southern Store 
Fixtures, AHRI, and Continental, DOE removed consideration of coil tube 
rifling from its analysis of improved heat exchanger performance at the 
final rule stage of this rulemaking. DOE believes that this action 
addresses the concerns voiced by stakeholders over the inapplicability 
of rifled tubing to some commercial refrigeration designs and issues 
with reduced refrigerant flow, slugging, and other negative effects.
    During the final rule stage, DOE revised its modeling of evaporator 
and condenser coils based on new information gained through stakeholder 
comments and additional teardowns. In this analysis, it addressed the 
concerns expressed by manufacturers and other parties regarding the 
size constraints imposed upon heat exchangers in commercial 
refrigeration applications. With respect to the comments from AHRI, DOE 
notes that it did re-evaluate its coil designs from the 2009 rulemaking 
to produce designs that better approximate the configurations and 
performance attributes of coils found in the market. In response to the 
concerns of Hillphoenix, Hussmann, Structural Concepts, and 
Continental, during its final rule engineering modeling, DOE kept the 
size of modeled evaporator coils constant based on geometries seen in 
teardown units, and instead modified only features which could improve 
coil performance without growing the footprint of the coil. When 
modeling condenser coils, DOE allowed for a modest inclusion of an 
additional coil row in the direction of airflow. This was consistent 
with advanced designs seen in production units today, and DOE believes 
that this added coil size would not be sufficient to cause major 
impacts on unit form factor.
i. Higher-Efficiency Fan Blades
    Traulsen commented that DOE modeling of higher efficiency fan 
blades did include specific details pertaining to the implementation of 
this design option, including energy savings, method of cost modeling, 
and other attributes. (Traulsen, No. 65 at p. 5) ebm-papst commented 
that fan selection should be based on airflow at the operating point 
and should not be limited to axial and tangential fans. (ebm-papst, No. 
70 at p. 3)
    In response to Traulsen's comment, DOE wishes to clarify that DOE 
did not consider higher-efficiency fan blades as a design option within 
its NOPR or final rule engineering analyses. Most commercial 
refrigeration equipment currently uses stamped sheet metal or plastic 
axial fan blades. DOE was not able to identify any axial fan blade 
technology that is significantly more efficient than what is currently 
used, but did identify tangential fan blades as an alternative fan 
blade technology that might improve efficiency. However, tangential fan 
blades in small sizes are themselves less efficient at moving air, and 
thus require greater motor shaft power. Because of these competing 
effects, DOE did not consider tangential fan blades as a design option 
in its analyses. Additionally, with regard to ebm-papst's comment, DOE 
did not encounter any other fan blade technologies aside from axial and 
tangential fans which were available for application in commercial 
refrigeration equipment. Consistent with the comment from ebm-papst, 
DOE modeled fan motor and blade combinations so as to provide needed 
airflow across the heat exchangers consistent with what is used in 
designs currently available on the market.
j. ECM Fan Motors
    ebm-papst, in its written comment, noted that a variety of fans 
with electronically commutated (EC) motors (ECMs) were available on the 
market which provided wire-to-air efficiency of 65-70%. ebm-papst 
further commented that EC motors are compact and easily integrated into 
all levels of refrigeration systems. Also, ebm-papst commented that EC 
fans compatible with alternative refrigerants are now available on the 
market. (ebm-papst, No. 70 at p. 4)
    DOE agrees with ebm-papst regarding the performance and 
availability of ECM fan motors for commercial refrigeration 
applications. In its preliminary and NOPR analyses, DOE considered EC 
motors as a design option for evaporator and condenser fan applications 
in all equipment classes where such fans were present. Additionally, 
DOE modeled an overall efficiency of 66% for EC motors, which is 
consistent with the figure provided by ebm-papst. DOE retained this 
modeling of EC motors in the final rule analyses.
k. Lighting Occupancy Sensors and Controls
    In its analysis, DOE considered lighting occupancy sensors as a 
design option with the potential to reduce unit energy consumption. 
However, Traulsen commented that the study of occupancy sensors which 
DOE cited did not account for different traffic patterns, and only 
covered 30 days of data collection with LEDs at full power and 60 days 
with LEDs dimmed. Traulsen expressed concern that this analysis used 
insufficient data to support the savings assumed by TSL4. (Traulsen, 
No. 65 at p. 12) Hillphoenix commented that the occupancy sensor credit 
for VOP.RC.L was higher than for all other classes. (Hillphoenix, No. 
71 at p. 7)
    Some manufacturers questioned the need for occupancy sensors. AHRI 
commented that since manual night curtains are modeled, it could be 
assumed that when the curtains are deployed, the CRE lighting systems 
can also be manually turned off during periods of inactivity. (AHRI, 
No. 75 at p. 4) Structural Concepts commented that requiring occupancy 
sensors on cases that will be going to twenty-four hour stores would be 
a cost-burden with no associated energy savings. (Structural Concepts, 
No. 85 at p. 2) However, the Joint Comment suggested that the use of 
lighting sensors could further reduce the energy consumption of max-
tech options for self-contained vertical closed transparent door units. 
(Joint Comment, No. 91 at p. 4)
    DOE based its modeling of lighting occupancy sensors and scheduled 
controls on the provisions of the DOE test procedure as amended by the 
2012 final rule. 77 FR at 10292 (February 21, 2012). These provisions 
allow for cases featuring these technologies to be tested with the 
lights turned off for a fixed period of time. DOE applied these 
provisions specifically across all classes in which occupancy sensors 
and scheduled controls were considered as a design option. Therefore, 
DOE believes Traulsen's assertions regarding DOE's modeled savings 
levels to be incorrect, as DOE did not model savings potential based on 
field studies, but rather on the specific provisions of the DOE test 
procedure. In response to the comment from Hillphoenix, DOE wishes to 
clarify that occupancy sensors were not given an absolute credit in the 
form of a kWh/day reduction, but instead were modeled as they are 
treated under the DOE test procedure, where they are given an allowance 
for lighting off time. This modified lighting run time was incorporated 
into DOE's engineering analysis model for cases including

[[Page 17753]]

lighting occupancy sensors, and the model was run for the particular 
case configuration being examined. Therefore, due to differences in 
case geometries, features, and design options, DOE cautions against 
direct comparisons of the absolute merits of specific technologies 
across different equipment classes, as such comparisons may be 
misleading.
    With respect to the comment from AHRI, DOE does not consider a 
manual light switch to be a lighting controller under the provisions of 
its test procedure, since this device does not have the inherent 
ability to reduce energy consumption and since the method of test 
included in the procedure requires that all lighting be activated 
during the test. In its 2012 test procedure final rule, DOE added a 
provision specifically to allow for the testing of units including 
occupancy sensors and scheduled controls, but this does not include 
manual light switches. 77 FR at 10292 (February 21, 2012). Therefore, 
DOE maintains that a manual light switch is not a lighting control and 
shall not be treated as such during the conduct of the DOE test 
procedure.
    In response to the concerns of Structural Concepts, occupancy 
sensors have the potential to operate at all times, turning off 
lighting to save energy during periods of inactivity, then reactivating 
the lights when shoppers are present. DOE understands that, even in 24-
hour stores, there are periods when a high density of shoppers may not 
be present, and thus when lighting occupancy sensors would present the 
potential to save energy. DOE agrees with the Joint Comment that 
lighting occupancy sensors offer the potential to reduce the energy 
consumption of equipment in classes to which they are applicable, 
including the particular class noted in the comment. Therefore, DOE 
retained its modeling of this design option in its final rule 
engineering analysis.
l. Night Curtains
    DOE analyzed night curtains as a design option with the potential 
to reduce equipment energy consumption. However, Southern Store 
Fixtures commented that, while DOE modeled a reduction in heat load 
when night curtains were employed, there was no cost analysis presented 
to justify this option. Furthermore, Southern Store Fixtures referred 
to a Pacific Gas and Electric Company (PG&E) report which asserted that 
night curtains were not cost effective due to poor economics, and a 
study funded by the California Energy Commission which reported a 
minimum 6.63 year and maximum 21.56 year payback period on night 
curtains. (Southern Store Fixtures, No. 67 at p. 6) Structural Concepts 
commented that night curtains should be excluded from the analysis 
since they were deemed by DOE as not ``required.'' Structural Concepts 
further commented that twenty-four-hour stores would not be able to use 
night curtains. (Structural Concepts, No. 85 at p. 2)
    Regarding the types of night curtains that were modeled by DOE, 
AHRI commented that DOE did not explore automatic night curtains and 
Southern Store Fixtures commented that there were no night curtains 
currently available that are suited for curved display cases. (Southern 
Store Fixtures, No. 67 at p. 5) (AHRI, No. 75 at p. 3)
    In response to the comment from Southern Store Fixtures on cost 
analysis, DOE wishes to clarify that it did include a cost analysis of 
night curtains in its engineering analysis. Costs per foot of night 
curtain were included in DOE's engineering spreadsheet model as 
released to the public, and served as the basis of DOE's placement of 
night curtains in the engineering cost-efficiency curves, as design 
options were ordered from lowest to highest calculated payback period. 
Regarding the mention of the PG&E report as presented to CEC, DOE 
understands that that report focused largely on time-variant economic 
factors such as the savings at peak-load conditions, rather than the 
overall life cycle cost savings and payback periods calculated by DOE. 
Therefore, due to a different focus and methodology, that organization 
may have reached a different conclusion than that attained by DOE. DOE 
plans to retain its analytical methodology as used across a variety of 
rulemaking efforts and believes that that methodology is appropriate 
and soundly evaluates the economic and energy savings benefits of 
design options including night curtains.
    With respect to the comments from Structural Concepts, DOE agrees 
that use of night curtains is not required since DOE is setting a 
performance standard based on daily energy consumption under the DOE 
test procedure, rather than a prescriptive standard mandating the use 
of specific features. However, DOE is charged with exploring all 
avenues of reducing measured energy consumption, and the ability of the 
DOE test procedure to quantify savings attributed to night curtains 
justifies DOE's inclusion of this technology in its analysis. In 
addition, DOE notes that night curtains may be used in 24-hour stores 
during periods of low customer traffic, and that consideration of this 
feature in equipment offered for sale would provide store operators 
with the availability of an additional mechanism for attaining energy 
savings.
    DOE agrees with AHRI that it did not explore automatic night 
curtains, as it did not find a readily available automatic night 
curtain technology that was applicable to the relevant case designs, 
including vertical and semivertical open cases. With respect to the 
comment from Southern Store Fixtures on case geometries, DOE believes 
that night curtains are available that apply to the vast majority of 
open case designs. Further, DOE is not setting a prescriptive standard; 
night curtains are one design option, but not required under the 
amended standard.
3. Refrigerants
    For the preliminary and NOPR analyses, DOE considered two 
refrigerants, hydrofluorocarbons (HFCs) R-134a and R-404a, because 
these are the industry-standard choices for use in the vast majority of 
commercial refrigeration equipment covered by this rulemaking. This 
selection was consistent with the modeling performed in the January 
2009 final rule, which was based on industry research and stakeholder 
feedback at that time. After the publication of the NOPR, DOE received 
a number of comments on potential future issues relating to 
refrigerants for this equipment.
    ACEEE commented that the DOE had not taken into consideration the 
use of propane and other hydrocarbon refrigerants, which are in use 
internationally and are now allowed in limited quantities by the U.S. 
Environmental Protection Agency (EPA). ACEEE further commented that it 
has manufacturer statements to show that these refrigerants 
considerably improve equipment efficiency. (ACEEE, Public Meeting 
Transcript, No. 62 at p. 40) Danfoss commented that Montreal Protocol 
\32\ amendments requiring the phasing out of HFCs would likely come 
into effect before this standard's compliance date. Additionally, 
Danfoss commented that this action would make DOE's ``refrigerant 
neutral'' stance flawed, and that DOE must consider the increased 
uncertainty and regulatory burden from the use of low-global warming 
potential (GWP) refrigerants in its analysis. (Danfoss, No. 61 at p. 2) 
Coca-Cola, too, opined that by not directly analyzing alternative 
refrigerants, DOE was showing a bias

[[Page 17754]]

towards HFCs. (Coca-Cola, Public Meeting Transcript, No. 62 at p. 121) 
The CA IOUs commented that alternative refrigerants are being used both 
internationally and in the United States. The CA IOUs further commented 
that, given the potential for EPA regulations on HFC usage, DOE should 
be prepared to adopt the levels of performance included in its proposed 
standards to reflect the performance abilities of other refrigerants. 
(CA IOUs, No. 63 at p. 8)
---------------------------------------------------------------------------

    \32\ The Montreal Protocol is an international agreement, first 
signed in 1987, in which signatories pledged to phase out the 
production and use of ozone depleting substances.
---------------------------------------------------------------------------

    AHRI commented that the potential for changes in Federal 
refrigerant policy over the next few years will require the industry to 
use refrigerants with low GWP, putting into question the applicability 
of the proposed standard over extended time periods. AHRI further 
stated that there was a possibility of refrigerant switching having 
adverse impacts on equipment performance. (AHRI, No. 75 at p. 10) True 
commented that the refrigerants modeled in the analysis, R404 and 
R134a, are both currently being reviewed by the EPA Significant New 
Alternatives Policy (SNAP) program \33\ for possible removal from 
commercial refrigeration applications. (True, Public Meeting 
Transcript, No. 62 at p. 123) Lennox, too, noted that non-HFC 
refrigerants might become a growing part of the CRE market in the 
foreseeable future. (Lennox, No. 73 at p. 5) Additionally, Hillphoenix 
commented that manufacturers are being pushed towards low GWP 
refrigerants which will have an impact on coil and evaporator designs, 
as well as efficiency curves for compressors. (Hillphoenix, No. 71 at 
p. 2)
---------------------------------------------------------------------------

    \33\ EPA SNAP is the U.S. government regulatory program 
responsible for maintaining the list of alternatives to ozone 
depleting substances allowed for use within specific applications, 
including refrigeration, in the United States.
---------------------------------------------------------------------------

    ACEEE asserted that the market already has begun to move away from 
HFC refrigerants. (ACEEE, Public Meeting Transcript, No. 62 at p. 185) 
Coca-Cola commented that it was seeking to stop using HFCs and switch 
over to R744, R290 and R600A, not only to improve energy efficiency, 
but also to make the units environmentally benign. (Coca-Cola, Public 
Meeting Transcript, No. 62 at p. 88) Further, Coca-Cola commented that 
it is already purchasing a large number (28% in the United States) of 
R744 cabinets, and aim to be using only R744 within three years. (Coca-
Cola, Public Meeting Transcript, No. 62 at p. 128) Continental 
commented that refrigerants such as propane and CO2 have been approved 
by EPA and are actively being evaluated and tested in products. 
Continental further commented that alternative refrigerants have the 
potential to affect the performance of equipment. (Continental, No. 87 
at p. 1) AHRI also commented that a change in refrigerant policy would 
impact refrigerants which are used as blowing agents for foams, 
possibly resulting in lower insulation performance values. (AHRI, No. 
75 at p. 10) Providing an additional view, the Joint Comment noted that 
the use of propane as a refrigerant could improve efficiency of units 
by 7-11%. Additionally, the Joint Comment pointed out that while DOE 
did not model non-HFC refrigerants, manufacturers have the option of 
using more efficient refrigerants. (Joint Comment, No. 91 at p. 4)
    Specifically, many stakeholders wished for DOE to consider propane 
(R290) as a viable alternative refrigerant. Danfoss commented that the 
inclusion of natural refrigerants in the analysis was a critical issue, 
since, unlike higher-efficiency compressors, the technology is already 
available. Danfoss urged DOE to consider propane, isobutane and carbon 
dioxide as viable refrigerants. (Danfoss, Public Meeting Transcript, 
No. 62 at p. 126) ACEEE commented that DOE's decision to screen out 
propane refrigerant as a design option had seriously impacted the 
downstream analyses. (ACEEE, Public Meeting Transcript, No. 62 at p. 
127) However, both Structural Concepts and True noted that they could 
consider propane as a refrigerant for some, but not all, of their 
products, since the 150 gram SNAP limit restricted total compressor 
capacity. (Structural Concepts, Public Meeting Transcript, No. 62 at p. 
127) (True, Public Meeting Transcript, No. 62 at p. 127)
    In its written comment, however, Traulsen commented that, while 
alternative refrigerants were discussed in the public meeting, DOE 
should remain technology neutral with regard to those refrigerants at 
this time, since there was a risk of conflict with other programs such 
as EPA SNAP and UL, and since the costs to switch over to alternative 
refrigerants is high. (Traulsen, No. 65 at p. 18)
    While DOE appreciates the input from stakeholders at the public 
meeting and in subsequent written comment, DOE does not believe that 
there is sufficient specific, actionable data presented at this 
juncture to warrant a change in its analysis and assumptions regarding 
the refrigerants used in commercial refrigeration applications. As of 
now, there is inadequate publicly-available data on the design, 
construction, and operation of equipment featuring alternative 
refrigerants to facilitate the level of analysis of equipment 
performance which would be needed for standard-setting purposes. DOE is 
aware that many low-GWP refrigerants are being introduced to the 
market, and wishes to ensure that this rule is consistent with the 
phase-down of HFCs proposed by the United States under the Montreal 
Protocol. DOE continues to welcome comments on experience within the 
industry with the use of low-GWP alternative refrigerants. Moreover, 
there are currently no mandatory initiatives such as refrigerant phase-
outs driving a change to alternative refrigerants. Absent such action, 
DOE will continue to analyze the most commonly-used, industry-standard 
refrigerants in its analysis.
    DOE wishes to clarify that it will continue to consider CRE models 
meeting the definition of commercial refrigeration equipment to be part 
of their applicable covered equipment class, regardless of the 
refrigerant that the equipment uses. If a manufacturer believes that 
its design is subjected to undue hardship by regulations, the 
manufacturer may petition DOE's Office of Hearing and Appeals (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.
4. Cost Assessment Methodology
    During the preliminary analysis, DOE developed costs for the core 
case structure of the representative units it modeled, based on cost 
estimates performed in the analysis for the January 2009 final rule. 
For more information, see chapter 5 of the preliminary analysis TSD, 
pp. 5-3 to 5-8. DOE also developed costs for the design option levels 
implemented, based on publicly available information and price quotes 
provided during manufacturer interviews. These costs were combined in 
the engineering cost model based on the specifications of a given 
modeled unit in order to yield manufacturer production cost (MPC) 
estimates for each representative unit at each configuration modeled. 
At the preliminary analysis rulemaking stage, DOE's component cost 
estimates were based on data developed from manufacturer interviews, 
estimates from the January 2009 final rule, and publicly available cost 
information. During the NOPR analysis, DOE augmented this

[[Page 17755]]

information with data from physical teardowns of commercial 
refrigeration equipment currently on the market.
    During the development of the engineering analysis for the NOPR, 
DOE interviewed manufacturers to gain insight into the commercial 
refrigeration industry, and to request feedback on the engineering 
analysis methodology, data, and assumptions that DOE used. Based on the 
information gathered from these interviews, along with the information 
obtained through a teardown analysis and public comments, DOE refined 
the engineering cost model. Next, DOE derived manufacturer markups 
using publicly available commercial refrigeration industry financial 
data, in conjunction with manufacturer feedback. The markups were used 
to convert the MPCs into MSPs. These results were used as the basis for 
the downstream calculations at the NOPR stage of the rulemaking.
    At the NOPR public meeting and in subsequent written comments, DOE 
received further input from stakeholders regarding the methodologies 
and inputs used in DOE's cost assessment. DOE incorporated this input 
in updating its modeling at the final rule stage. Further discussion of 
the comments received and the analytical methodology used is presented 
in the following subsections. For additional detail, see chapter 5 of 
the final rule TSD.
a. Teardown Analysis
    In the preliminary analysis TSD, DOE expressed its intent to update 
its core case cost estimates, which were at that time developed based 
on estimates from the January 2009 final rule, through performing 
physical teardowns of selected units. These core case costs consist of 
the costs to manufacture the structural members, insulation, shelving, 
wiring, etc., but not the costs associated with the components that 
could directly affect energy consumption, which were considered 
collectively as design options and served as one of many inputs to the 
engineering cost model. DOE first selected representative units for 
physical teardown based on available offerings from the catalogs of 
major manufacturers. DOE selected units that had sizes and feature sets 
similar to those of the representative units modeled in the engineering 
analytical model. DOE selected units for teardown representing each of 
the equipment families, with the exception of the HZO family.\34\ The 
units were then disassembled into their base components, and DOE 
estimated the materials, processes, and labor required for the 
manufacture of each individual component. This process is referred to 
as a ``physical teardown.'' Using the data gathered from the physical 
teardowns, DOE characterized each component according to its weight, 
dimensions, material, quantity, and the manufacturing processes used to 
fabricate and assemble it. These component data were then entered into 
a spreadsheet and organized by system and subsystem levels to produce a 
comprehensive bill of materials (BOM) for each unit analyzed through 
the physical teardown process.
---------------------------------------------------------------------------

    \34\ The reason why no HZO units were torn down was that the HZO 
family is the least complex of the equipment classes with respect to 
its construction. DOE felt that there was no additional data which 
could be gained from teardown of this equipment which would not have 
already been captured by the teardowns of other units.
---------------------------------------------------------------------------

    The physical teardowns allowed DOE to identify the technologies, 
designs, and manufacturing techniques that manufacturers incorporated 
into the equipment that DOE analyzed. The result of each teardown was a 
structured BOM, incorporating all materials, components, and fasteners, 
classified as either raw materials or purchased parts and assemblies, 
and characterizing the materials and components by weight, 
manufacturing processes used, dimensions, material, and quantity. The 
BOMs from the teardown analysis were then modified, and the results 
used as one of the inputs to the cost model to calculate the MPC for 
each representative unit modeled. The MPCs resulting from the teardowns 
were then used to develop an industry average MPC for each equipment 
class analyzed.
    At the final rule stage of the rulemaking, in response to comments 
regarding the technologies incorporated into commercial refrigeration 
equipment at various levels of performance, DOE procured additional 
models of equipment on the market and performed further teardown 
assessment of the construction and componentry featured in these 
models. The data from these supplemental teardowns, coupled with known 
performance of the purchased units from independent testing or ENERGY 
STAR certification, allowed DOE to compare the performance of models 
currently on the market to the results of modeling of the same 
equipment configurations using its engineering simulation. This 
comparison provided a validation check on the results of the 
simulations. See chapter 5 of the final rule TSD for more details on 
the teardown analysis.
b. Cost Model
    The cost model for this rulemaking was divided into two parts. The 
first of these was a standalone core case cost model, based on physical 
teardowns, that was used for developing the core case costs for the 25 
directly analyzed equipment classes. This cost model is a spreadsheet 
that converts the materials and components in the BOMs from the 
teardowns units into MPC dollar values based on the price of materials, 
average labor rates associated with manufacturing and assembling, and 
the cost of overhead and depreciation, as determined based on 
manufacturer interviews and DOE expertise. To convert the information 
in the BOMs to dollar values, DOE collected information on labor rates, 
tooling costs, raw material prices, and other factors. For purchased 
parts, the cost model estimates the purchase price based on volume-
variable price quotations and detailed discussions with manufacturers 
and component suppliers. For fabricated parts, the prices of raw metal 
materials (e.g., tube, sheet metal) are estimated based on 5-year 
averages calculated from cost estimates obtained from sources including 
the American Metal Market and manufacturer interviews. The cost of 
transforming the intermediate materials into finished parts is 
estimated based on current industry pricing.
    The function of the cost model described above is solely to convert 
the results of the physical teardown analysis into core case costs. To 
achieve this, components immaterial to the core case cost (lighting, 
compressors, fans, etc.) were removed from the BOMs, leaving the cost 
model to generate values for the core case costs for each of the 
teardown points. Then, these teardown-based core case BOMs were used to 
develop a ``parameterized'' computational cost model, which allows a 
user to virtually manipulate case parameters such as height, length, 
insulation thickness, and number of doors by inputting different 
numerical values for these features to produce new cost estimates. For 
example, a user could start with the teardown data for a two-door case 
and expand the model of the case computationally to produce a cost 
estimate for a three-door case by changing the parameter representing 
the number of doors, which would in turn cause the model to scale other 
geometric and cost parameters defining the overall size of the case. 
This parameterized model, coupled with the design specifications chosen 
for each representative unit modeled in the engineering analysis, was 
used to

[[Page 17756]]

develop core case MPC cost estimates for each of the 25 directly 
analyzed representative units. These values served as one of several 
inputs to the engineering cost model.
    The engineering analytical model, as implemented by DOE in a 
Microsoft Excel spreadsheet, also incorporated the engineering cost 
model, the second cost modeling tool used in this analysis. In the 
engineering cost model, core case costs developed based on physical 
teardowns were one input, and costs of the additional components 
required for a complete piece of equipment (those components treated as 
design options) were another input. The two inputs were added together 
to arrive at an overall MPC value for each equipment class. Based on 
the configuration of the system at a given design option level, the 
appropriate design option costs were added to the core case cost to 
reflect the cost of the entire system. Costs for design options were 
calculated based on price quotes from publicly available sources and 
discussions with commercial refrigeration equipment manufacturers. 
Chapter 5 of the final rule TSD describes DOE's cost model and 
definitions, assumptions, data sources, and estimates.
c. Manufacturer Production Cost
    Once the cost estimates for all the components of each 
representative unit, including the core case cost and design option 
costs, were finalized, DOE totaled the costs in the engineering cost 
model to calculate the MPC. DOE estimated the MPC at each efficiency 
level considered for each directly analyzed equipment class, from the 
baseline through the max-tech. After incorporating all of the 
assumptions into the cost model, DOE calculated the percentages 
attributable to each element of total production cost (i.e., materials, 
labor, depreciation, and overhead). DOE used these production cost 
percentages in the MIA (see section IV.J). At the NOPR stage of the 
rulemaking, DOE revised the cost model assumptions used for the 
preliminary analysis based on teardown analysis, updated pricing, and 
additional manufacturer feedback, which resulted in refined MPCs and 
production cost percentages. DOE once again updated the analysis at the 
final rule stage based on input from the NOPR public meeting and 
subsequent written comments. DOE calculated the average equipment cost 
percentages by equipment class. Chapter 5 of the TSD presents DOE's 
estimates of the MPCs for this rulemaking, along with the different 
percentages attributable to each element of the production costs that 
comprise the total MPC.
d. Cost-Efficiency Relationship
    The result of the engineering analysis is a cost-efficiency 
relationship. DOE created a separate relationship for each input 
capacity associated with each commercial refrigeration equipment class 
examined for this rule. DOE also created 25 cost-efficiency curves, 
representing the cost-efficiency relationship for each commercial 
refrigeration equipment class.
    To develop cost-efficiency relationships for commercial 
refrigeration equipment, DOE examined the cost differential to move 
from one design option to the next for manufacturers. DOE used the 
results of teardowns to develop core case costs for the equipment 
classes modeled, and added those results to costs for design options 
developed from publicly available pricing information and manufacturer 
interviews. Additional details on how DOE developed the cost-efficiency 
relationships and related results are available in the chapter 5 of the 
final rule TSD. Chapter 5 of the final rule TSD also presents these 
cost-efficiency curves in the form of energy efficiency versus MPC. 
After the publication of the NOPR analysis, several stakeholders 
provided input and feedback regarding DOE's cost modeling methodology 
and costs used for specific components and design options. 
Specifically, DOE received comments regarding core case costs, LED cost 
specifications, component sourcing and cost information, and coil 
costs. The following sections address these stakeholder comments and 
concerns.
Core Case Costs
    Traulsen commented that DOE's assumption of core costs not changing 
for more efficient design option levels is flawed. Traulsen further 
pointed out that costs for shelving, wiring, air curtain grills, trim, 
etc. do change in all cases when internal or external product footprint 
is altered. (Traulsen, No. 65 at p. 15)
    DOE understands that changes to design requiring adjustment to a 
unit's form factor would have an impact on the cost of production of 
the unit, and would result in the manufacturer incurring redesign 
costs. Of the design options considered, most would not have a 
significant impact in these areas, as they consist largely of component 
swaps or bolt-on component additions. However, for the design options 
which would affect unit format, DOE considered incremental materials 
costs and redesign costs, as well as capital expenditures, in its 
engineering and MIA analyses. Therefore, DOE believes that it has 
sufficiently addressed the concerns raised by Traulsen.
Light-Emitting Diode Cost Specifications
    Several stakeholders expressed reservations over DOE's use of LED 
price projections, opining that DOE had likely underestimated the price 
of LEDs. Traulsen commented that according to DOE's Solid State 
Lighting Multi-Year Program Plan (MYPP), there is a breakthrough in LED 
performance required in 2015 that would decrease the life-cycle energy 
of LED lamps. Traulsen asserted that these projections were based on 
the assumption of continued governmental R&D support, and that there is 
evidence of declining R&D support for LEDs. Traulsen further commented 
that this lack of certainty made some assumptions in DOE analysis 
questionable. (Traulsen, No. 65 at p. 3) Hussmann noted that, 
typically, LED fixtures cost twice as much as T8 fluorescent ballasts. 
(Hussmann, No. 77 at p. 2) Structural Concepts commented that the 
prices of LED fixtures would likely be 37-40% higher than DOE 
predictions for 2017. (Structural Concepts, No. 85 at p. 2) Similarly, 
Hillphoenix commented that DOE had modeled a zero cost for drivers and 
that current LED prices are on the order of three times that estimated 
in the model. (Hillphoenix, No. 71 at p. 1) Traulsen noted that for 
VCT.SC systems, the added cost of using LED systems was greater than 
$120 per unit. (Traulsen, No. 65 at p. 3) True commented that it was 
unlikely for LED prices to continue to drop. (True, No. 76 at p. 1) 
Hillphoenix commented that LED lighting for the VCT.RC.M and VCT.RC.L 
classes had experienced an 83% reduction in cost from the previous 
rulemaking to the current rulemaking analysis. (Hillphoenix, No. 71 at 
p. 7) Conversely, the Joint Comment concurred with DOE's analysis, 
noting that the incorporation of LED price projections significantly 
improved the analysis by reflecting a realistic estimate of LED costs. 
(Joint Comment, No. 91 at p. 5)
    In its NOPR analysis, DOE incorporated price projections from its 
Solid-State Lighting Program \35\ into its MPC values for the primary 
equipment classes. The price projections for LED case lighting were 
developed from projections developed for the DOE Solid-State Lighting 
Program 2012 report, Energy Savings Potential of

[[Page 17757]]

Solid-State Lighting in General Illumination Applications (``the energy 
savings report'').\36\ In the appendix to this report, price 
projections from 2010 to 2030 were provided in ($/klm) for LED lamps 
and LED luminaires. DOE analyzed the models used in the Solid-State 
Lighting Program work and determined that the LED luminaire projection 
would serve as an appropriate proxy for a cost projection to apply to 
refrigerated case LEDs. The price projections presented in the Solid-
State Lighting Program's energy savings report are based on the DOE's 
2011 Multi-Year Program Plan (MYPP). The MYPP is developed based on 
input from manufacturers, researchers, and other industry experts. 
Table IV.1 shows the normalized LED price deflators used in the final 
rule analysis.
---------------------------------------------------------------------------

    \35\ The DOE Solid-State Lighting Program is a program within 
DOE's Office of Energy Efficiency & Renewable Energy. More 
information on the program is available at http://www1.eere.energy.gov/buildings/ssl/.
    \36\ Navigant Consulting, Inc., Energy Savings Potential for 
Solid-State Lighting in General Illumination Applications. 2012. 
Prepared for the U.S. Department of Energy--Office of Energy 
Efficiency and Renewable Energy Building Technologies Office, 
Washington, DC.

                         Table IV.1--LED Price Deflators Used in the Final Rule Analysis
----------------------------------------------------------------------------------------------------------------
                                Normalized to   Normalized to                      Normalized to   Normalized to
             Year                   2013             2017             Year             2013            2017
----------------------------------------------------------------------------------------------------------------
2010.........................           2.998           5.652   2021............           0.361           0.681
2011.........................           1.799           3.392   2022............           0.335           0.631
2012.........................           1.285           2.423   2023............           0.312           0.588
2013.........................           1.000           1.885   2024............           0.292           0.550
2014.........................           0.819           1.543   2025............           0.274           0.517
2015.........................           0.693           1.306   2026............           0.259           0.488
2016.........................           0.601           1.133   2027............           0.245           0.462
2017.........................           0.530           1.000   2028............           0.232           0.438
2018.........................           0.475           0.895   2029............           0.221           0.417
2019.........................           0.430           0.810   2030............           0.211           0.398
2020.........................           0.393           0.740   * 2031-2046.....           0.211           0.398
----------------------------------------------------------------------------------------------------------------

    During the NOPR stage, DOE incorporated the price projection trends 
from the energy savings report into its engineering analysis by using 
the data to develop a curve of decreasing LED prices normalized to a 
base year. That base year corresponded to the year when LED price data 
was collected for the NOPR analyses of this rulemaking from catalogs, 
manufacturer interviews, and other sources. DOE started with this 
commercial refrigeration equipment-specific LED cost data and then 
applied the anticipated trend from the energy savings report to 
forecast the projected cost of LED fixtures for commercial 
refrigeration equipment at the time of required compliance with the 
proposed rule (2017). These 2017 cost figures were incorporated into 
the engineering analysis as comprising the LED cost portions of the 
MPCs for the primary equipment classes.
    The LCC analysis (section IV.F) was carried out with the 
engineering numbers that account for the 2017 prices of LED luminaires. 
The reduction in price of LED luminaires from 2018 through 2030 was 
taken into account in the NIA (section IV.H). The cost reductions were 
calculated for each year from 2018 through 2030 and subtracted from the 
equipment costs in the NIA. The reduction in lighting maintenance costs 
\37\ due to reduction in LED prices for equipment installed in 2018 to 
2030 were also calculated and appropriately deducted from the lighting 
maintenance costs.
---------------------------------------------------------------------------

    \37\ Discussion related to lighting maintenance costs for 
commercial refrigeration equipment can be found in section 0, and a 
more detailed explanation can be found in chapter 8 of the final 
rule TSD.
---------------------------------------------------------------------------

    While DOE understands the concerns of manufacturers over 
projections of LED prices in the future, DOE made the decision to 
incorporate these projections based on stakeholder input, past market 
trends, and DOE research within the lighting field, which includes 
regular interaction with manufacturers and suppliers of LED lighting 
technologies. With respect to the comments from Traulsen, DOE does not 
see any specific hurdles in the market that indicate that levels 
predicted in the MYPP will fail to be realized. DOE appreciates the 
comments from Hussmann, Structural Concepts, Hillphoenix, Traulsen, and 
True regarding present and future LED prices. However, based on past 
market trends and the current research supporting the MYPP, DOE 
continued to utilize these LED price projections in the modeling 
underlying today's final rule. As a point of clarification to the 
comment presented by Hillphoenix, DOE wishes to mention that the 
modeled costs include all components of the LED fixture, including 
drivers, emitters, housing, and wiring. DOE agrees with the assertion 
of the Joint Comment that incorporation of LED price projections allow 
the analysis to better depict market conditions which will be 
encountered by manufacturers at the time of their compliance with the 
amended standard set forth in today's rule.
Component Sourcing and Cost Information
    In its written comment following publication of the NOPR, Hoshizaki 
commented that the engineering cost analysis was unrealistic and 
incomplete since specific parts suppliers, part numbers, and parts 
costs were not listed. (Hoshizaki, No. 84 at p. 1)
    In developing its engineering cost model, DOE gathered a wide 
variety of input information, including component and material costs, 
to serve as the basis for this model. Much of this information was 
collected under nondisclosure agreement by DOE's contractors, or from 
sources which are not publicly available. Therefore, in order to 
protect the sensitive nature of this information, DOE is unable to 
disclose the information in its notice or technical support document. 
However, in developing its engineering performance and cost models, DOE 
ensured that the components and features being modeled did not present 
any intellectual property issues with respect to sourcing or 
implementation. That is, DOE ensured that the features modeled were 
consistent with designs and components available on the open market to 
the entire range of CRE manufacturers.
Coil Costs
    Some manufacturers opined that DOE had underestimated the cost of 
manufacturing improved evaporator and condenser coils. Southern Store 
Fixtures commented that using smaller tubes in

[[Page 17758]]

a fixed size evaporator was found through their internal studies to 
allow for only 8% performance improvement, while incurring a 290% cost 
increase. Southern Store Fixtures noted that making changes to a 
condensing unit would make the cost 80% higher than the standard 
catalog price. (Southern Store Fixtures, No. 67 at p. 3) AHRI commented 
that DOE had underestimated the added costs associated with the 
implementation of higher efficiency evaporator coils. (AHRI, No. 75 at 
p. 5) Traulsen, too, commented that DOE estimated values of the cost to 
manufacture improved coils was much lower than a cost figure provided 
to it by the largest provider of CRE coils in the U.S. (Traulsen, No. 
65 at p. 6) Hillphoenix concurred with DOE on the modeled price of 
condenser coils, but noted that evaporator coils cost nearly three to 
four times as much as condenser coils. Hillphoenix qualified this 
assertion by pointing out that the necessary customization, as well as 
the increased assembly cost (labor) of a lower fin density and longer 
width coil, contributed to the increased price of the evaporator coil. 
(Hillphoenix, No. 71 at p. 1)
    In response to the comment from Southern Store Fixtures, DOE did 
not consider smaller-diameter tubes in its evaporator coil designs as 
modeled in the final rule engineering analysis. Additionally, DOE 
modeled the components of the condensing unit--coil, fans, compressor, 
and cost to assemble--independently, rather than modeling the cost of a 
single prepackaged assembly. DOE believes that this modeling accurately 
reflects the costs incurred by manufacturers when producing the 
condensing units of self-contained equipment.
    Regarding the concerns of AHRI, Traulsen and Hillphoenix on the 
modeled costs of condenser and evaporator coils, DOE revisited this 
modeling for the final rule. DOE based its modeling of coil costs on 
information gathered from teardowns of coils present in units currently 
available on the market, and then used these inputs in conjunction with 
an internal cost model to develop costs to manufacture for these 
components. These costs factor in the prices of raw materials, the 
costs of processing, forming, and assembly operations, and other key 
costs integral to the development of the components. DOE updated its 
coil costs for the final rule taking into account the design changes to 
the form factors of its modeled coils and the information provided in 
stakeholder comments regarding the relative costs of different coil 
types. DOE is confident in its use of this methodology, which has been 
implemented and vetted through use in a number of other past and 
ongoing rulemaking analyses. For further information regarding coil 
modeling, please see chapter 5 of the final rule TSD.
e. Manufacturer Markup
    To account for manufacturers' non-production costs and profit 
margin, DOE applies a non-production cost multiplier (the manufacturer 
markup) to the full MPC. The resulting MSP is the price at which the 
manufacturer can recover all production and non-production costs and 
earn a profit. To meet new or amended energy conservation standards, 
manufacturers often introduce design changes to their product lines 
that result in increased MPCs. Depending on the competitive environment 
for this equipment, some or all of the increased production costs may 
be passed from manufacturers to retailers and eventually to customers 
in the form of higher purchase prices. The MSP should be high enough to 
recover the full cost of the equipment (i.e., full production and non-
production costs) and yield a profit. The manufacturer markup has an 
important bearing on profitability. A high markup under a standards 
scenario suggests manufacturers can readily pass along the increased 
variable costs and some of the capital and equipment conversion costs 
(one-time expenditures) to customers. A low markup suggests that 
manufacturers will not be able to recover as much of the necessary 
investment in plant and equipment.
    To calculate the manufacturer markups, DOE used 10-K reports 
submitted to the SEC by the six publicly owned commercial refrigeration 
equipment companies in the United States. (SEC 10-K reports can be 
found using the search database available at www.sec.gov/edgar/searchedgar/webusers.htm.) The financial figures necessary for 
calculating the manufacturer markup are net sales, costs of sales, and 
gross profit. DOE averaged the financial figures spanning the years 
from 2004 to 2010 \38\ to calculate the markups. For commercial 
refrigeration equipment, to calculate the average gross profit margin 
for the periods analyzed for each firm, DOE summed the gross profit 
earned during all of the aforementioned years and then divided the 
result by the sum of the net sales for those years. DOE presented the 
calculated markups to manufacturers during the manufacturer interviews 
for the NOPR (see section IV.D.4.g). DOE considered manufacturer 
feedback to supplement the calculated markup, and refined the markup to 
better reflect the commercial refrigeration market. DOE developed the 
manufacturer markup by weighting the feedback from manufacturers on a 
market share basis because manufacturers with larger market shares more 
significantly affect the market average. DOE used a constant markup to 
reflect the MSPs of both the baseline equipment and higher efficiency 
equipment. DOE used this approach because amended standards may 
transform high-efficiency equipment, which currently is considered to 
be premium equipment, into baseline equipment. See chapter 5 of the 
final rule TSD for more details about the manufacturer markup 
calculation.
---------------------------------------------------------------------------

    \38\ Typically, DOE uses the data for the 5 years preceding the 
year of analysis. However, in this case additional data were 
available up to 2004. Hence, data from 2004 to 2010 were used for 
these calculations.
---------------------------------------------------------------------------

f. Shipping Costs
    The final component of the MSP after the MPC and manufacturer 
markup is the shipping cost associated with moving the equipment from 
the factory to the first point on the distribution chain. During 
interviews, manufacturers stated that the specific party (manufacturer 
or buyer) that incurs that cost for a given shipment may vary based on 
the terms of the sale, the type of account, the manufacturer's own 
business practices, and other factors. However, for consistency, DOE 
includes shipping costs as a component of MSP. In calculating the 
shipping costs for use in its analysis, DOE first gathered estimates of 
the cost to ship a full trailer of manufactured equipment an average 
distance in the United States, generally representative of the distance 
from a typical manufacturing facility to the first point on the 
distribution chain. DOE then used representative unit sizes to 
calculate a volume for each unit. Along with the dimensions of a 
shipping trailer and a loading factor to account for inefficiencies in 
packing, DOE used this cost and volume information to develop an 
average shipping cost for each equipment class directly analyzed.
g. Manufacturer Interviews
    Throughout the rulemaking process, DOE has sought and continues to 
seek feedback and insight from interested parties that would improve 
the information used in its analyses. DOE interviewed manufacturers as 
a part of the NOPR MIA (see section IV.J). During the interviews, DOE 
sought feedback on all aspects of its analyses for commercial 
refrigeration equipment. For the engineering analysis, DOE discussed

[[Page 17759]]

the analytical assumptions and estimates, cost model, and cost-
efficiency curves with manufacturers. DOE considered all of the 
information learned from manufacturers when refining the cost model and 
assumptions. However, DOE incorporated equipment and manufacturing 
process figures into the analysis as averages to avoid disclosing 
sensitive information about individual manufacturers' equipment or 
manufacturing processes. The results of the manufacturer interview 
process conducted before the release of the NOPR were augmented with 
additional information provided in written comments after the NOPR and 
at the NOPR public meeting. More details about the manufacturer 
interviews are contained in chapter 12 of the final rule TSD.
5. Energy Consumption Model
    The energy consumption model is the second key analytical model 
used in constructing cost-efficiency curves. This model estimates the 
daily energy consumption, calculated using the DOE test procedure, of 
commercial refrigeration equipment in kilowatt-hours at various 
performance levels using a design-option approach. In this methodology, 
a unit is initially modeled at a baseline level of performance, and 
higher-efficiency technologies, referred to as design options, are then 
implemented and modeled to produce incrementally more-efficient 
equipment designs. The model is specific to the types of equipment 
covered under this rulemaking, but is sufficiently generalized to model 
the energy consumption of all covered equipment classes. DOE developed 
the energy consumption model as a Microsoft Excel spreadsheet.\39\
---------------------------------------------------------------------------

    \39\ Available at http://www1.eere.energy.gov/buildings/appliance_standards/rulemaking.aspx/ruleid/27.
---------------------------------------------------------------------------

    For a given equipment class, the model estimates the daily energy 
consumption for the baseline, as well as the energy consumption of 
subsequent levels of performance above the baseline. The model 
calculates each performance level separately. For the baseline level, a 
corresponding cost is calculated using the cost model, which is 
described in section IV.D.4.b. For each level above the baseline, the 
changes in system cost due to the implementation of various design 
options are used to recalculate the cost. Collectively, the data from 
the energy consumption model are paired with the cost model data to 
produce points on cost-efficiency curves corresponding to specific 
equipment configurations. After the publication of the NOPR analysis, 
DOE received numerous stakeholder comments regarding the methodology 
and results of the energy consumption model.
a. Release of Engineering Model for Review
    At the NOPR public meeting, Zero Zone and ACEEE urged DOE to make 
its engineering spreadsheet model publicly available. (Zero Zone, 
Public Meeting Transcript, No. 62 at p. 70) (ACEEE, Public Meeting 
Transcript, No. 62 at p. 125) DOE agreed with Zero Zone and ACEEE and 
released the engineering spreadsheet model for public review shortly 
after the NOPR public meeting. Stakeholder review of the model served 
as the basis for many of the specific comments and suggestions 
discussed in today's document and incorporated into DOE's final rule 
analysis.
b. Anti-Sweat Heater Power
    Some stakeholders opined that the DOE model did not fully consider 
some equipment classes and components which used anti-sweat heat. 
Traulsen noted that, due to gasket and breaker strip inefficiencies, 
VCS.SC.L and VCS.SC.M equipment will require some auxiliary heat around 
door perimeters to prevent condensation, even at ambient conditions of 
75 [deg]F and 55% RH. (Traulsen, No. 65 at p. 11) Hussmann noted that 
no-heat doors for VCT.RC.M were not suitable in high-humidity 
conditions, since they could lead to condensation on the doors and the 
risk of water dripping onto the floor. (Hussmann, No. 77 at p. 9) AHRI 
commented that there was no clear justification provided for why 
certain doors were modeled with anti-sweat heat power and others were 
modeled without it, further pointing out, that anti-sweat heat is not 
limited only to doors, but often also applies to frames and mullions 
too. (AHRI, No. 75 at p. 8)
    DOE appreciates the input from commenters regarding the use of 
anti-sweat heat and has updated its engineering model for the final 
rule stage to better reflect the needs of different equipment classes 
in this respect. In response to the comment from Traulsen and based on 
additional investigational teardowns performed at the final rule stage, 
DOE added anti-sweat heater power to some solid-door classes in order 
to account for inefficiencies in gasketing which could otherwise result 
in condensation or frost issues. The magnitude of the power of these 
heaters was developed based on figures included in stakeholder comments 
applicable to classes VCS.SC.M and VCS.SC.L, as well as from 
measurements taken during teardown analysis performed at the final rule 
stage.
    During manufacturer interviews and in investigations of the current 
offerings of commercial refrigeration equipment manufacturers and door 
suppliers, DOE encountered a number of ``energy-free'' transparent door 
designs for medium-temperature applications. This served as the basis 
for the modeling of some doors without anti-sweat heat in the NOPR 
analysis, as referenced by AHRI and Hussmann. However, in response to 
the concerns of stakeholders over an assumption of zero energy doors 
being too strict for field applications, DOE added a modest amount of 
anti-sweat heat to its modeling of transparent doors for medium-
temperature applications in the final rule engineering analysis. DOE 
believes that this modeled design provides energy savings benefits over 
standard designs while maintaining the ability to utilize some anti-
sweat heat to prevent condensation issues during use.
    In response to the concerns of AHRI, DOE wishes to clarify that for 
transparent door classes, the modeled ``door'' anti-sweat heat includes 
all anti-sweat heat on the face of the unit, including frame, mullion, 
and glass heat. This anti-sweat heat is included with the modeling of 
the door because generally, the display case manufacturer purchases the 
doors and frames as a single item, inclusive of the anti-sweat heaters, 
which is then installed in an opening in the case body. For cases with 
solid doors, as well as open cases, the perimeter, gasket, mullion, 
and/or face heater power is included under the category of ``non-door 
anti-sweat power'' in the design specifications tab of the engineering 
analysis spreadsheet model. Therefore, while the needed power may be 
accounted for differently among the different classes, the appropriate 
heater types are modeled for each class. DOE believes that its efforts 
in updating anti-sweat heater powers modeled in the engineering 
analysis for the final rule sufficiently and directly address the 
concerns voiced by stakeholders at the NOPR stage.
c. Coil Performance Modeling
    Stakeholders offered feedback to DOE on how the simulation of coil 
performance could be improved to better reflect the performance of 
evaporator and condenser coils in the field. Traulsen commented that 
while DOE states that evaporators can be designed to have a discharge 
air temperature that is a minimum of 10 degrees F colder than the 
product temperature, the baseline model in the

[[Page 17760]]

analysis shows a product-to-refrigerant temperature difference of 11 
degrees F. Traulsen further sought clarification on where the 
improvement in evaporator performance could be attained since the 
temperature differential at the baseline was already low. (Traulsen, 
No. 65 at p. 5) Hussmann commented that the gap between discharge air 
temperature and saturated evaporator temperature was unrealistically 
low for certain equipment classes. (Hussmann, No. 77 at p. 10)
    Hillphoenix and AHRI noted that, conventionally, coil UA \40\ is 
calculated using log-mean temperature difference (LMTD) and inlet 
temperature. Further, Hillphoenix commented that the use of what it 
perceived to be incorrect formulae had led to over-estimation of UA for 
condensers and evaporators, and that different methods were used to 
calculate UA for condensers than were used for evaporators. (AHRI, No. 
75 at p. 5) (Hillphoenix, No. 71 at p. 5).
---------------------------------------------------------------------------

    \40\ Coil UA is a lumped parameter describing the heat transfer 
capability of a heat exchanger, accounting for the thermal 
transmittance (U) and surface area (A) of the specific heat 
exchanger design.
---------------------------------------------------------------------------

    AHRI commented that since both the previous and current rulemakings 
included rifled tubing and increased fin pitch, the total prototype 
energy consumption should have been the same across rulemakings. 
Further, AHRI commented that the prototype condenser coil scenario is 
not fully representative of all condensers for SC equipment. (AHRI, No. 
75 at p. 8)
    In response to the concerns of Traulsen and Hussmann, DOE re-
evaluated its parameters for modeling of coil temperature performance. 
Specifically, it adjusted the temperature differential between product 
temperature and saturated evaporator temperature to be 15 [deg]F for 
certain classes under the baseline configuration. DOE believes that 
this is a more accurate representation of evaporator performance based 
on the feedback that it has received from comments and data from 
testing and equipment literature. The result is that the temperature 
differential at the baseline and high-performance level is higher, 
reflecting the adjustments to this parameter suggested by stakeholders.
    In the engineering model, evaporator coil UA is calculated as a 
function of case heat load and a log mean temperature difference based 
on the saturated evaporator temperature, discharge air temperature, and 
return air temperature. This is the same methodology that was used in 
the 2009 final rule engineering analysis, which underwent rigorous 
examination by stakeholders. Therefore, DOE believes that Hillphoenix 
and AHRI are misinterpreting DOE's methodology when discussing 
evaporator performance. Additionally, with respect to the comment that 
different formulae were applied to the modeling of evaporators and 
condensers, DOE agrees with this fact, but does not believe that this 
is an incorrect methodology. The modeling of the evaporator reflects 
the fact that chilled case air is being recirculated, whereas modeling 
of the condenser reflects the fact that the condenser is rejecting heat 
to an ambient environment which functions as an effectively infinite 
thermal sink. Therefore, DOE believes that these different performance 
environments warrant different modeling, and maintains its methodology 
for conducting this modeling in the final rule.
    With regard to the concern of AHRI over disparities between the 
coil performance levels modeled in the 2009 final rule and the current 
rulemaking, DOE performed new analysis for the current rulemaking based 
on teardowns and simulation conducted at the NOPR stage. At the final 
rule stage, based on further input from stakeholder comments, DOE again 
updated this performance and cost modeling. Therefore, due to the fact 
that the analysis was conducted anew at each of these stages and is not 
directly related to the analysis conducted for the 2009 final rule, DOE 
believes that the differences in modeled performance are reasonable and 
reflect improvements to DOE's understanding of baseline and high-
performance coil designs.
    In reference to AHRI's mention of the applicability of DOE's 
condenser coil design to a variety of commercial refrigeration 
equipment, DOE modeled a baseline coil based upon geometries and 
features measured from teardowns of representative models for sale on 
the market today, and then implemented further design improvements 
based on the inputs of outside subject matter experts and within the 
guidance provided by stakeholder comments and feedback. The engineering 
model then expands the cost and capacity of the modeled coil to adjust 
to the needs of different equipment sizes being simulated. Thus, DOE 
believes that the modeled coil design accurately reflects the real-
world needs of condenser heat exchangers for this equipment.
d. Compressor Performance Modeling
    Manufacturers and consumers expressed concern over DOE's 
assumptions regarding the advances in compressor technology anticipated 
before the compliance date. Danfoss, Traulsen, AHRI, True, Structural 
Concepts, Continental, NAFEM and Hoshizaki commented that if a 10% 
compressor efficiency improvement were possible for a 5% cost increase, 
then it is most likely that manufacturers would have already adopted 
this technology. (Traulsen, No. 65 at p. 12) (AHRI, No. 75 at p. 9) 
(True, No. 76 at p. 2) (Structural Concepts, No. 85 at p. 2) 
(Continental, No. 87 at p. 2) (NAFEM, No. 93 at p. 3) (Hoshizaki, No. 
84 at p. 2) Further, Danfoss stated that, at most, a 1-2% increase in 
efficiency could be gained for a 5% cost increase. (Danfoss, No. 61 at 
p. 2)
    DOE appreciates the specific and detailed input which it received 
from manufacturers and suppliers regarding its previous assumptions of 
potential improvements in compressor efficiency and the corresponding 
costs to attain these performance increases. In light of these 
comments, DOE updated its performance and cost modeling of compressors 
for the final rule analysis. Specifically, DOE implemented the 
suggestion of Danfoss, a major supplier, which stated that a 2% 
increase in performance over today's standard offerings, with a 
corresponding cost increase of 5%, is attainable. DOE believes that 
these parameters better reflect the options available to manufacturers 
of commercial refrigeration equipment.
e. Insulation Modeling
    Some stakeholders felt that DOE's analytical model of case 
insulation had failed to sufficiently capture its effect on 
manufacturing processes and field performance. Continental and 
Structural Concepts commented that the actual R-value of urethane foam 
insulation is significantly lower than the value modeled. (Structural 
Concepts, No. 85 at p. 2) (Continental, No. 87 at p. 3) AHRI and True 
suggested that an R-Value of 6 per inch was more realistic for 
insulation than the currently modeled 8 per inch. (AHRI, No. 75 at p. 
5) (True, No. 76 at p. 3) Concurrently, NAFEM commented that 1.25 
inches of added insulation would actually be required to meet the level 
of insulating performance included in the proposed standard. (NAFEM, 
No. 93 at p. 5) True commented that there was a loss of insulation 
value over time using urethane insulation and plastic liners. (True, 
No. 76 at p. 3)
    Traulsen commented that the DOE assumption that increased 
insulation would not affect cabinet structure was incorrect. Traulsen 
further noted that some aspects of cabinet geometry and features where 
the highest level of heat

[[Page 17761]]

leakage occur appear to be beyond the scope of DOE's model. (Traulsen, 
No. 65 at p. 7) Continental, too, commented that cabinet geometry would 
lead to low in-place insulation values, requiring much thicker 
insulation in some areas than others, to achieve the proposed 
standards. (Continental, No. 87 at p. 3)
    Traulsen commented that since the 2009 rule noted that a \1/2\'' 
insulation increase was not viable for some classes, and since no 
significant changes in technology have occurred, DOE should exclude 
this design option from a proposed standard level. (Traulsen, No. 65 at 
p. 8)
    In response to the comments from Structural Concepts, Continental, 
AHRI, True, and NAFEM, DOE believes that an R-value of 8 per inch is 
accurate for foamed-in-place polyurethane insulation as used in 
commercial refrigeration equipment. DOE has corroborated this value in 
past and ongoing rulemakings against product literature, supplier and 
academic studies, and discussions in manufacturer interviews. Therefore 
DOE believes that this is an accurate value and has maintained it for 
the modeling of foam performance in its final rule engineering 
analysis. With regard to the comment from True on changes in insulative 
value of foam over time, DOE notes that certification of equipment is 
conducted at or shortly after the time of manufacture, and thus 
equipment in that state is modeled in DOE's engineering analysis. DOE 
did not model the performance of equipment at points long after the 
time of manufacture.
    DOE based its modeling of case heat loads on measured geometries as 
seen in units purchased and torn down over the course of the 
rulemaking, as well as on product literature for designs currently on 
the market. DOE notes that these geometries in some cases included the 
level of increased foam thicknesses modeled as a design option, meaning 
that manufacturers were already including these increases and 
accounting for their effects. Thus, since proof of concept is already 
being presented in today's equipment market, DOE does not believe that 
there are inaccuracies in its levels of modeled foam thickness. In 
response to the comment from Traulsen, DOE believes that its model 
sufficiently accounts for the thermal effects of conduction, 
infiltration, and other heat loads incident upon the refrigerated case. 
With respect to Continental's concerns, DOE has examined a wide variety 
of case designs on the market, but generally has not encountered 
instances in which low in-place insulation thicknesses have been 
observed. In most instances that DOE has examined, manufacturers have 
maintained a standard thickness throughout the body of the case. 
Therefore, DOE believes that its insulation modeling is accurate and 
consistent with designs currently produced by the industry.
    DOE conducted its current analysis based on the latest available 
information regarding equipment designs, cost and performance of design 
options and components, and downstream factors such as electricity 
price forecasts. This information was updated entirely from the 2009 
rule. Therefore, in response to Traulsen's comment that DOE should not 
consider a design option in this analysis just because it was not 
included in the analytical levels corresponding to standards set for 
some classes in 2009, DOE cautions that a direct comparison between the 
two rulemakings may not be accurate. Changes in prices, market factors, 
and other inputs since 2009 mean that outcomes between the two analyses 
could be different. Therefore, DOE has conducted the current analysis 
in isolation based on the best currently available data, and has set 
the standard levels included in today's rule using the results of that 
analysis.
f. Lighting Performance
    Several manufacturers opined that DOE had modeled LED performance 
too aggressively. Southern Store Fixtures commented that even with more 
directional light from LED systems, higher wattage LEDs with higher 
number of diodes than those modeled by DOE would be required to provide 
illumination comparable to a fluorescent system. (Southern Store 
Fixtures, No. 67 at p. 2) Traulsen, in agreement with other commenters, 
noted that LEDs require more watts per lumen than high efficiency T8 
lighting which uses reflectors. (Traulsen, No. 65 at p. 3) Continental 
commented that, while LEDs are significantly more directional than 
fluorescent lights, the efficacy modeled by DOE was overestimated. 
(Continental, No. 87 at p. 2) More specifically, AHRI commented that 
although LEDs are directional, the DOE assumption that the output of 4-
ft & 5-ft LEDs is only 29% of that associated with T8 lighting is 
flawed, since the directional nature of LEDs cannot fully compensate 
for such a large differential. (AHRI, No. 75 at p. 3) Additionally, 
True commented that due to the varied nature of illumination needs 
across products, many models require higher wattages if LEDs are used. 
(True, No. 76 at p. 1) AHRI added that reducing the light output into 
cases through use of LEDs would affect consumer utility. (AHRI, No. 75 
at p. 4) Traulsen commented that CRE applications, especially those 
requiring low temperature settings, could experience degradation in LED 
color quality and shorter lifespans. Traulsen further commented that 
the variety of displayed packaging or product types may need special 
light colors, and that one size fits all approach to LED lighting could 
lead to loss of utility. (Traulsen, No. 65 at p. 4)
    Providing an additional viewpoint, the CA IOUs commented that the 
assumed level of efficacy for LED technology (54 lumens per watt) was 
very conservative. The CA IOUs further noted that using the 
DesignLights Consortium online database, the current simple average for 
all vertical refrigerated case lighting was 59 lumens per watt, with 
the average for products added in 2013 being 66 lumens per watt. (CA 
IOUs, No. 63 at p. 7)
    AHRI commented that comparisons between T8, super T8, and LED 
lighting systems as modeled in the previous and current rulemakings 
suggest that no significant improvements have been made in lighting 
since the last rulemaking cycle. (AHRI, No. 75 at p. 2)
    With regard to specific equipment classes, Hillphoenix commented 
that the savings from SVO.RC.M due to LED lighting was the same as for 
VOP.RC.M even though the semi-vertical cases would have fewer shelf 
lights than the vertical open cases. (Hillphoenix, No. 71 at p. 6) 
Further, AHRI commented that in the case of VCT.RC.M and VCT.RC.L 
equipment, the LED lighting design option provides about an 80-83% 
increased energy consumption reduction for the current rulemaking as 
compared to the previous rulemaking. (AHRI, No. 75 at p. 9)
    DOE agrees with the comments from Southern Store Fixtures, 
Continental, and Traulsen that, in absolute terms, LED lighting 
produces fewer output lumens per watt than T8 fluorescent lighting. 
However, DOE understands that due to the directionality of LED 
lighting, a much greater percentage of the lighting is incident upon 
the product, rather than being diffused into the cabinet. With respect 
to the concerns of AHRI and Continental that this directionality is 
still not sufficient to compensate for the levels of lighting modeled 
in the engineering analysis, DOE asserts that it based its modeling 
directly on the specific configurations of equipment being shipped on 
the market at the time of the analysis. When selecting LED lighting 
specifications to model, DOE performed research through manufacturer 
literature and catalogs,

[[Page 17762]]

studies of lighting manufacturer product literature, and physical 
teardowns of existing units on the market. Developed based on this 
data, DOE believes that its lighting specifications reflect the current 
needs of customers and designs produced by manufacturers to satisfy 
those needs.
    In addition, based on new information provided by stakeholder 
comments at the final rule stage, DOE has increased the modeled lumen 
output of its LED fixtures by roughly 20% across all classes. DOE 
believes that this added modeled light output serves to address the 
concerns presented by stakeholders in their comments. Additionally, DOE 
understands that manufacturers have concerns over the applicability of 
LED lighting to the wide variety of models merchandised within 
commercial refrigeration equipment. During its manufacturer interviews, 
DOE specifically addressed this subject, speaking to manufacturers of a 
broad range of equipment about their use of LEDs. Generally, 
manufacturers stated that LED technology has advanced sufficiently that 
issues with color matching and product color illumination are no longer 
as significant as in the past. DOE's research into current manufacturer 
designs aligns with this finding, as manufacturers are using LED 
lighting in all applicable equipment families. With respect to concerns 
over LED lifetimes, based on its discussions with manufacturers, DOE 
does understand that there still remain variations in quality and 
durability of LED products based on the chosen supplier, but that LED 
reliability has improved significantly to its current state. 
Additionally, DOE has accounted for the need for replacement of LED 
lighting fixtures as part of the maintenance costs analyzed in its 
life-cycle cost and payback period analysis.
    After receiving the comment from the CA IOUs regarding standard 
efficacies of LED fixtures produced today, DOE researched the 
referenced DesignLights Consortium online database and found that the 
listed data agreed with the performance levels stated in the comment 
from the CA IOUs. In response to this new data, DOE updated its 
efficacy figures for the modeled LED fixtures in line with those levels 
depicted for models currently on the market per the database. This 
resulted in an approximate 20% increase in modeled lumen output for all 
LED fixtures modeled. DOE believes that this adjustment allows its LED 
modeling to better reflect the level of technology currently available 
on the market, while simultaneously addressing concerns from 
manufacturers and other stakeholder about low levels of product 
illumination using LED lighting.
    DOE agrees with AHRI that no major new lighting technologies have 
come onto the market since the conduct of the 2009 rulemaking; that is, 
that the options currently available to manufacturers consist largely 
of T8 fluorescent and LED lighting. Therefore, in building up 
engineering cost-efficiency curves depicting the price and performance 
of equipment from baseline to max-tech levels, DOE included these 
technologies in the baseline and higher-efficiency scenarios and 
implemented energy-saving lighting features alongside other design 
options in order of ascending payback period. With respect to AHRI's 
assertion of significant new improvements to lighting technologies 
since the modeling for the 2009 final rule was performed, DOE points 
out that it updated the prices and performance levels of the various 
lighting technologies to reflect new information since the 2009 
rulemaking, and reordered its design options and cost-efficiency curves 
correspondingly.
    In response to the comments from AHRI and Hillphoenix comparing the 
perceived relative efficacies of specific design options in the 
engineering analysis to the incremental performance changes associated 
with them in the 2009 rule, DOE cautions against making such 
comparisons since many other factors were not held constant. Updates to 
the baseline configuration, improved pricing and performance modeling, 
inclusion of new design options, and updated design option ordering all 
mean that the modeled order of implementation of design options, and 
the effects of those design options being implemented, has in many 
instances changed since the 2009 final rule analysis. Therefore, a 
direct comparison would be inaccurate and unfair. Similarly, DOE 
cautions against direct comparisons of specific incremental results 
across different equipment classes. Engineering results for each 
equipment class were calculated independently based upon the best 
available data on equipment configuration, design option performance, 
and costs. Therefore, the results of each class should be examined 
independently, and there was no interrelation to other classes built 
into the model.
g. Transparent Door Performance
    Stakeholders expressed concern over the modeled improvements in 
transparent door performance between the current and previous 
rulemaking analyses. AHRI commented that there was a decrease of over 
60% in the U-factors for transparent doors between the previous final 
rule and the current NOPR, even though both results were arrived at 
using the Lawrence Berkeley National Laboratory (LBNL) WINDOW \41\ 
software. Further, AHRI noted that the U-factor associated with high-
performance doors for VCT.M equipment in 2009 did not even meet the 
level of performance suggested by the U-factor that is listed in the 
current TSD for standard doors. (AHRI, No. 75 at p. 9) Similarly, 
Hussmann commented that the U-factors and anti-sweat heat values for 
transparent doors in various classes were significantly lower than in 
the 2009 final rule, and that base cases in the current NOPR analysis 
did not meet the definition of high-performance from the previous 
analysis. (Hussmann, No. 77 at p. 2) Hillphoenix commented that the U-
factor and heater power varied for identical classes from the previous 
rulemaking to the current. (Hillphoenix, No. 71 at p. 7) AHRI commented 
that for HCT.M equipment, while the overall U-Factor specified for 
standard doors seems appropriate, the U-factor for high-performance 
doors seems very low. (AHRI, No. 75 at p. 10)
---------------------------------------------------------------------------

    \41\ This software is an industry-accepted, publicly-available 
software tool used to model the performance of various fenestration 
components such as windows. More information is available at http://windows.lbl.gov/software/window/window.html.
---------------------------------------------------------------------------

    In response to the stakeholder concerns regarding the modeled 
performance of transparent doors, DOE revisited its modeling of this 
feature as part of its final rule engineering analysis. In doing so, it 
incorporated comments and suggestions from stakeholders received during 
the NOPR public meeting and in written comments after the publication 
of the NOPR regarding design attributes such as the number of panes of 
glass modeled, the use of low-e coatings, and appropriate levels of 
anti-sweat heat. DOE also gathered additional information through 
physical inspection and teardown of several additional glass-door 
models procured during the final rule stage. Based on these inputs, DOE 
modeled the various types of glass doors using the latest version of 
the LBL WINDOW software to develop new, more accurate whole-door U-
factors. In response to the comments on alignment of the previous and 
current baseline door designs, DOE did in some cases, where 
appropriate, retain the U-factors and anti-sweat powers used at the 
baseline in the 2009 final rule. However, in other instances where DOE 
found evidence that the market baseline and

[[Page 17763]]

features included in standard door offerings had evolved since that 
time, DOE sought to include in its baseline designs features which 
reflect the current offerings of major door manufacturers. For full 
details on the modeled performance attributes of transparent doors, 
please see chapter 5 of the final rule TSD.
h. Validation of Engineering Results
    DOE's engineering results as presented in the NOPR were based on 
the results of analytical modeling. Several stakeholders, however, felt 
that the analysis was purely theoretical and did not account for 
factors affecting field performance. Hoshizaki commented that DOE's 
engineering analysis considers a theoretical base case with no 
experimental or physical data to support the model. (Hoshizaki, No. 84 
at p. 1) Traulsen commented that the MDEC targets were evaluated by 
using a theoretical prototype based on market trends and assumptions, 
and contrasted that with DOE's statement in the NOPR TSD that design 
options comprising the maximum technologically feasible level must have 
been physically demonstrated. Further, Traulsen noted that the 
engineering analysis was only an academic exercise based on computer 
simulations rather than physical results. (Traulsen, No. 65 at p. 2)
    Hoshizaki, ACEEE and Lennox urged DOE to perform validation testing 
and physically demonstrate the achievement of the proposed efficiency 
improvement levels. (Hoshizaki, No. 84 at p. 2) (ACEEE, Public Meeting 
Transcript, No. 62 at p. 351) (Lennox, No. 73 at p. 2) Similarly, NAFEM 
noted that the modeled maximum-technology designs were not backed by 
tests or prototypes. (NAFEM, No. 93 at p. 3) The CA IOUs strongly urged 
DOE to calibrate and validate its model with test and prototype data, 
asserting that while many of the assumptions made by DOE might hold 
true in theory, they may not be physically possible to realize. (CA 
IOUs, No. 63 at p. 6)
    Traulsen commented that the success of the 2009 final rule standard 
could have been reviewed using voluntary databases containing empirical 
data of commonly-produced units. Traulsen further commented that DOE 
should base its future MDEC targets on data regarding best practices 
and technologies available in the market, as indicated by these 
databases. (Traulsen, No. 65 at p. 2)
    The Joint Comment noted that DOE utilized a theoretical engineering 
model approach for the 2011 residential refrigerators final rule. 76 FR 
57516 (Sept. 15, 2011) Further, the Joint Comment noted that the 2011 
residential refrigeration model's max-tech levels were 59% more 
efficient than the existing standard, even though the most efficient 
model available at the time was only 27% more efficient. (Joint 
Comment, No. 91 at p. 2)
    DOE agrees that its results are based on analytical modeling, but 
disagrees with the assertions from Hoshizaki and Traulsen that the 
simulation and modeling were purely theoretical in nature. DOE based 
its analysis on a model which was developed for the 2009 final rule and 
updated to accommodate the needs of this current rulemaking. Inputs to 
the model included data from tangible sources such as manufacturer 
literature, manufacturer interviews, production facility tours, reverse 
engineering and teardown of existing products on the market, and tests 
of commercial refrigeration equipment and components. DOE maintains its 
assertion, contrary to Traulsen's comment, that all design options 
modeled have been physically demonstrated in the commercial 
refrigeration market or in comparable products.
    In agreement with the Joint Comment, DOE points to the 2011 
residential refrigerators final rule, the 2009 commercial refrigeration 
equipment final rule, and the 2009 refrigerated beverage vending 
machine final rule as examples of cases where analytical tools and 
simulation have been used to develop effective energy efficiency 
standards. 76 FR 57516 (Sept. 15, 2011); 74 FR 1092 (Jan. 9, 2009); 74 
FR 44914 (Aug. 31, 2009) Additionally, DOE notes that it recently 
issued a rule, strongly supported by industry, which will allow 
manufacturers to use alternative energy determination methods (AEDMs), 
which are non-testing methodologies and analytical tools, to certify 
the performance of their equipment. 78 FR 79579 (December 31, 2013)
    In response to the comments from Traulsen, Hoshizaki, ACEEE, the CA 
IOUs, Lennox, and NAFEM that DOE perform validation testing to confirm 
the veracity of its model, at the final rule stage DOE procured a 
number of commercial refrigeration units currently on the market, 
including high-performance units featuring advanced designs. It 
gathered physical test data on each unit from certification directories 
and, in some cases, from independent laboratory tests conducted by DOE 
on the units. DOE then performed physical teardowns and inspection of 
the units to quantify the features and design attributes included in 
each model. Then, DOE used this empirically-determined data as inputs 
into its engineering model, allowing the model to simulate these 
specific manufacturer models as closely as possible. The results showed 
good alignment between the model outputs and the physical test results 
across a range of equipment classes and efficiencies, validating the 
abilities of the model. For further information on this validation 
exercise, please see chapter 5 of the final rule TSD.
    With regard to the suggestion from Traulsen that DOE reference 
existing equipment performance databases, at the final rule stage of 
this rulemaking, DOE utilized information from the ENERGY STAR \42\ and 
California Energy Commission \43\ appliance databases as a point of 
comparison to its engineering analysis results. This allowed DOE to 
compare its analytical results to existing directories of certified 
data and ensure that the results fell within a reasonable range of 
performance values. However, DOE notes that neither of these databases 
is necessarily comprehensive and exhaustive of all models offered for 
sale in the United States, and that market data only capture those 
designs which are currently being built, not all of those which may be 
feasible. For these reasons, while DOE compared its results against 
those databases as a check, it continued to use a design option 
approach and simulation as the basis for developing its engineering 
analysis results, rather than developing standard levels solely from 
existing market data.
---------------------------------------------------------------------------

    \42\ http://www.energystar.gov/certified-products/certified-products.
    \43\ http://www.appliances.energy.ca.gov/Default.aspx.
---------------------------------------------------------------------------

E. Markups Analysis

    DOE applies multipliers called ``markups'' to the MSP to calculate 
the customer purchase price of the analyzed equipment. These markups 
are in addition to the manufacturer markup (discussed in section 
IV.D.4.e) and are intended to reflect the cost and profit margins 
associated with the distribution and sales of the equipment. DOE 
identified three major distribution channels for commercial 
refrigeration equipment, and markup values were calculated for each 
distribution channel based on industry financial data. The overall 
markup values were then calculated by weighted-averaging the individual 
markups with market share values of the distribution channels.
    In estimating markups for CRE and other products, DOE develops 
separate markups for the cost of baseline

[[Page 17764]]

equipment and the incremental cost of higher-efficiency equipment. 
Incremental markups are applied as multipliers only to the MSP 
increments of higher-efficiency equipment compared to baseline, and not 
to the entire MSP.
    Traulsen stated that, in its experience, the initial markup on 
equipment will be consistent with production costs, and that the 
incremental markups will increase with higher levels of product 
efficiency due to product differentiation. (Traulsen, No. 65 at p. 18) 
DOE agrees that manufacturer markups are often larger on higher-
efficiency equipment due to product differentiation strategies. 
However, DOE's approach considers a situation in which products at any 
given efficiency level may be the baseline products under new or 
amended standards (i.e., they just meet the standard). In that 
situation, a typical markup would apply. DOE uses average values for 
manufacturer markups.
    Traulsen also stated that it did not believe that wholesalers 
differentiate markups based on the technologies inherently present in 
this equipment and that, in its experience, wholesalers/resellers will 
use traditional markup rates regardless of equipment's energy 
efficiency. (Traulsen, No. 65 at p. 18)
    DOE's approach for wholesaler markups does not imply that 
wholesalers differentiate markups based on the technologies inherently 
present in the equipment. It assumes that the average markup declines 
as the wholesalers' cost of goods sold increases due to the higher cost 
of more-efficient equipment. If the markup remains constant while the 
cost of goods sold increases, as Traulsen's comment suggests, the 
wholesalers' profits would also increase. While this might happen in 
the short run, DOE believes that the wholesale market is sufficiently 
competitive such that there would be pressure on margins. DOE 
recognizes that attempting to capture the market response to changing 
cost conditions is difficult. However, DOE's approach is consistent 
with the mainstream understanding of firm behavior in competitive 
markets.
    See chapter 6 of the final rule TSD for more details on DOE's 
markups analysis.

F. Life-Cycle Cost and Payback Period Analysis

    DOE conducts LCC analysis to evaluate the economic impacts of 
potential amended energy conservation standards on individual 
commercial customers--that is, buyers of the equipment. LCC is defined 
as the total customer cost over the life of the equipment, and consists 
of purchase price, installation costs, and operating costs 
(maintenance, repair, and energy costs). DOE discounts future operating 
costs to the time of purchase and sums them over the expected lifetime 
of the piece of equipment. PBP is defined as the estimated amount of 
time it takes customers to recover the higher installed costs of more-
efficient equipment through savings in operating costs. DOE calculates 
the PBP by dividing the increase in installed costs by the average 
savings in annual operating costs.
    As part of the engineering analysis, design option levels were 
ordered based on increasing efficiency (i.e., decreasing energy 
consumption) and increasing MSP. For the LCC analysis, DOE chose a 
maximum of eight levels, henceforth referred to as ``efficiency 
levels,'' from the list of engineering design option levels. For 
equipment classes for which fewer than eight design option levels were 
defined in the engineering analysis, all design option levels were 
used. However, for equipment classes where more than eight design 
option levels were defined, DOE selected specific levels to analyze in 
the following manner:
    1. The lowest and highest energy consumption levels provided in the 
engineering analysis were preserved.
    2. If the difference in reported energy consumptions and reported 
manufacturer price between sequential levels was minimal, only the 
higher efficiency level was selected.
    3. If the energy consumption savings benefit between efficiency 
levels relative to the increased cost was very similar across multiple 
sequential levels, an intermediate level was not selected as an 
efficiency level.
    The first efficiency level (Level 0) in each equipment class is the 
least efficient and the least expensive equipment configuration in that 
class. The higher efficiency levels (Level 1 and higher) exhibit 
progressive increases in efficiency and cost from Level 0. The highest 
efficiency level in each equipment class corresponds to the max-tech 
level. Each higher efficiency level represents a potential new standard 
level.
    The installed cost of equipment to a customer is the sum of the 
equipment purchase price and installation costs. The purchase price 
includes MPC, to which a manufacturer markup and outbound freight cost 
are applied to obtain the MSP. This value is calculated as part of the 
engineering analysis (chapter 5 of the final rule TSD). DOE then 
applies additional markups to the equipment to account for the markups 
associated with the distribution channels for the particular type of 
equipment (chapter 6 of the final rule TSD). Installation costs were 
varied by state, depending on the prevailing labor rates.
    Operating costs for commercial refrigeration equipment are the sum 
of maintenance costs, repair costs, and energy costs. These costs are 
incurred over the life of the equipment and therefore are discounted to 
the base year (2017, which is the compliance date of any amended 
standards that are established as part of this rulemaking).
    The sum of the installed cost and the operating cost, discounted to 
reflect the present value, is termed the life-cycle cost or LCC. 
Generally, customers incur higher installed costs when they purchase 
higher efficiency equipment, and these cost increments will be 
partially or wholly offset by savings in the operating costs over the 
lifetime of the equipment. LCC savings are calculated for each 
efficiency level of each equipment class.
    The PBP of higher efficiency equipment is obtained by dividing the 
increase in the installed cost by the decrease in annual operating 
cost. In addition to energy costs (calculated using the electricity 
price forecast for the first year), the annual operating cost includes 
annualized maintenance and repair costs. PBP is calculated for each 
efficiency level of each equipment class.
    Apart from MSP, installation costs, and maintenance and repair 
costs, other important inputs for the LCC analysis are markups and 
sales tax, equipment energy consumption, electricity prices and future 
price trends, expected equipment lifetime, and discount rates.
    Many inputs for the LCC analysis are estimated from the best 
available data in the market, and in some cases the inputs are 
generally accepted values within the industry. In general, each input 
value has a range of values associated with it. While single 
representative values for each input may yield an output that is the 
most probable value for that output, such an analysis does not provide 
the general range of values that can be attributed to a particular 
output value. Therefore, DOE carried out the LCC analysis in the form 
of Monte Carlo simulations,\44\ in which certain inputs

[[Page 17765]]

were expressed as a range of values and probability distributions to 
account for the ranges of values that may be typically associated with 
the respective input values. The results, or outputs, of the LCC 
analysis are presented in the form of mean and median LCC savings; 
percentages of customers experiencing net savings, net cost and no 
impact in LCC; and median PBP. For each equipment class, 10,000 Monte 
Carlo simulations were carried out. The simulations were conducted 
using Microsoft Excel and Crystal Ball, a commercially available Excel 
add-in used to carry out Monte Carlo simulations.
---------------------------------------------------------------------------

    \44\ Monte Carlo simulation is, generally, a computerized 
mathematical technique that allows for computation of the outputs 
from a mathematical model based on multiple simulations using 
different input values. The input values are varied based on the 
uncertainties inherent to those inputs. The combination of the input 
values of different inputs is carried out in a random fashion to 
simulate the different probable input combinations. The outputs of 
the Monte Carlo simulations reflect the various outputs that are 
possible due to the variations in the inputs.
---------------------------------------------------------------------------

    LCC savings and PBP are calculated by comparing the installed costs 
and LCC values of standards-case scenarios against those of base-case 
scenarios. The base-case scenario is the scenario in which equipment is 
assumed to be purchased by customers in the absence of the amended 
energy conservation standards. Standards-case scenarios are scenarios 
in which equipment is assumed to be purchased by customers after the 
amended energy conservation standards, determined as part of the 
current rulemaking, go into effect. The number of standards-case 
scenarios for an equipment class is equal to one less than the total 
number of efficiency levels in that equipment class, since each 
efficiency level above Efficiency Level 0 represents a potential 
amended standard. Usually, the equipment available in the market will 
have a distribution of efficiencies. Therefore, for both base-case and 
standards-case scenarios, in the LCC analysis, DOE assumed a 
distribution of efficiencies in the market (see section IV.F.10).
    Recognizing that each building that uses commercial refrigeration 
equipment is unique, DOE analyzed variability in the LCC and PBP 
results by performing the LCC and PBP calculations for seven types of 
businesses: (1) Supermarkets; (2) wholesaler/multi-line retail stores, 
such as ``big-box stores,'' ``warehouses,'' and ``supercenters''; (3) 
convenience and small specialty stores, such as meat markets and wine, 
beer, and liquor stores; (4) convenience stores associated with 
gasoline stations; (5) full-service restaurants; (6) limited service 
restaurants; and (7) other foodservice businesses, such as caterers and 
cafeterias. Different types of businesses face different energy prices 
and also exhibit differing discount rates that they apply to purchase 
decisions.
    Expected equipment lifetime is another input whose value varies 
over a range. Therefore, DOE assumed a distribution of equipment 
lifetimes that are defined by Weibull survival functions.\45\
---------------------------------------------------------------------------

    \45\ A Weibull survival function is a continuous probability 
distribution function that is used to approximate the distribution 
of equipment lifetimes of commercial refrigeration equipment.
---------------------------------------------------------------------------

    Another important factor influencing the LCC analysis is the State 
in which the commercial refrigeration equipment is installed. Inputs 
that vary based on this factor include energy prices and sales tax. At 
the national level, the spreadsheets explicitly modeled variability in 
the inputs for electricity price and markups, using probability 
distributions based on the relative shipments of units to different 
States and business types.
    Detailed descriptions of the methodology used for the LCC analysis, 
along with a discussion of inputs and results, are presented in chapter 
8 and appendices 8A and 8B of the final rule TSD.
1. Equipment Cost
    To calculate customer equipment costs, DOE multiplied the MSPs 
developed in the engineering analysis by the distribution channel 
markups, described in section IV.D.5. DOE applied baseline markups to 
baseline MSPs, and incremental markups to the MSP increments associated 
with higher efficiency levels.
    DOE developed an equipment price trend for CRE based on the 
inflation-adjusted index of the producer price index (PPI) for air 
conditioning, refrigeration, and forced air heating from 1978 to 
2012.\46\ A linear regression of the inflation-adjusted PPI shows a 
slight downward trend (see appendix 10D of the final rule TSD). To 
project a future trend, DOE extrapolated the historic trend using the 
regression results. For the LCC and PBP analysis, this default trend 
was applied between the present and the first year of compliance with 
amended standards, 2017.
---------------------------------------------------------------------------

    \46\ Bureau of Labor Statistics, Producer Price Index Industry 
Data, Series: PCU3334153334153.
---------------------------------------------------------------------------

2. Installation Costs
    Installation cost includes labor, overhead, and any miscellaneous 
materials and parts needed to install the equipment. The installation 
costs may vary from one equipment class to another, but they do not 
vary with efficiency levels within an equipment class. DOE retained the 
nationally representative installation cost values from the January 
2009 final rule and simply escalated the values from 2007$ to 2012$, 
resulting in installation costs of $2,299 for all remote condensing 
equipment and $862 for all self-contained equipment.
    Hussmann opined that as equipment becomes more expensive, it will 
also become more difficult to install, which will result in higher 
installation labor costs. (Hussmann, No. 77 at p. 5) DOE has found no 
evidence to support the notion that higher-efficiency (and more 
expensive) commercial refrigeration equipment lead to an increase in 
installations costs. The installation costs derived for the NOPR and 
final rule are based on a detailed list of installation and 
commissioning procedures, which DOE believes to be representative of 
current industry practice. These installation and commissioning details 
can be found in chapter 8 of the final rule TSD.
    NAFEM asserted that DOE failed to take into account the 
ramifications of the proposed standard on a variety of end-uses, such 
as restaurants, grocery stores, and convenience stores. For these end-
users floor space is limited, and increasing efficiency may increase 
the equipment size to store the same amount of goods. NAFEM suggests 
that increasing the thickness of foam insulation would decrease storage 
and display capacity of equipment and will likely result in a 
limitation of the products offered for sale by these users. (NAFEM, No. 
93 at pp. 3-4)
    As described in detail in section IV.D.2.d of today's rule, DOE, in 
its teardown analyses, encountered a number of models currently on the 
market utilizing the increased foam wall thicknesses which it modeled. 
Since manufacturers are already employing these wall thicknesses in 
currently-available models, DOE believes that this serves as a proof of 
concept and that the resulting changes to form factor would be of 
minimal impact to end users. DOE also would like to remind stakeholders 
that it is not setting prescriptive standards, and should manufacturers 
value some features over others, they are free to use different design 
paths in order to attain the performance levels required by today's 
rule.
3. Maintenance and Repair Costs
    Maintenance costs are associated with maintaining the operation of 
the equipment. DOE split the maintenance costs into regular maintenance 
costs and lighting maintenance costs. Regular maintenance activities, 
which include cleaning evaporator and condenser coils, drain pans, 
fans, and intake screens; inspecting door gaskets and seals; 
lubricating hinges; and checking

[[Page 17766]]

starter panel, control, and defrost system operation, were considered 
to be equivalent for equipment at all efficiency levels. Lighting 
maintenance costs are the costs incurred to replace display case 
lighting at regular intervals in a preventative fashion. Because lights 
and lighting configuration change with efficiency levels, lighting 
maintenance costs vary with efficiency levels. As stated in chapter 5 
of the TSD, for efficiency levels that incorporate LED lights as a 
design option, the expected reduction in LED costs beyond 2017 was 
taken into account when calculating the lighting maintenance costs.
    Repair cost is the cost to the customer of replacing or repairing 
failed components. DOE calculated repair costs based on the typical 
failure rate of refrigeration system components, original equipment 
manufacturer (OEM) cost of the components, and an assumed markup value 
to account for labor cost.
    Several stakeholders stated that DOE's estimated repair and 
maintenance costs were too low. The National Restaurant Association 
commented that, in general, maintenance costs would be much higher. 
(NRA, No. 90 at p. 3) Hussmann asserted that the condensate evaporator 
pan, which is often present in self-contained equipment, must be 
periodically cleaned and serviced, which increases the maintenance 
costs for such equipment, and that self-contained equipment that 
utilizes enhanced condenser coils needs to be cleaned more frequently 
due to the greater density of fins on the condenser. (Hussmann, No. 77 
at p. 4) Hussmann further commented that equipment using ECM has higher 
repair costs. (Hussmann, No. 77 at p. 5) True commented that 
fluorescent lamps in low temperature applications fail more commonly, 
so there is a substantial increase in the cost of lighting for freezers 
compared to refrigerators. LEDs do not have this problem. (True, Public 
Meeting Transcript, No. 62 at p. 186) Continental commented that 
smaller refrigeration systems have higher maintenance costs due to 
tighter tolerances. (Continental, Public Meeting Transcript, No. 62 at 
p. 186)
    DOE requested information from stakeholders regarding maintenance 
and repair costs specifically related to any of the design options used 
for this rulemaking. DOE believes its maintenance costs per linear foot 
are consistent with current industry practices and are sufficient to 
account for the additional time required to clean closely placed 
condenser coils and other considerations related to tight space. DOE 
does not believe that any design option used in the higher efficiency 
equipment considered in this rulemaking would lead to higher costs for 
regular maintenance activities. Therefore, DOE retained its approach of 
using the same costs for regular maintenance for all efficiency levels. 
However, repair costs have been modeled to be proportional to the OEM 
cost of the components and, consequently, are higher for higher 
efficiency equipment.
4. Annual Energy Consumption
    Typical annual energy consumption of commercial refrigeration 
equipment at each considered efficiency level is obtained from the 
engineering analysis results (see chapter 5 of the final rule TSD).
5. Energy Prices
    DOE calculated state average commercial electricity prices using 
the U.S. Energy Information Administration's (EIA's) ``Database of 
Monthly Electric Utility Sales and Revenue Data.'' \47\ DOE calculated 
an average national commercial price by (1) estimating an average 
commercial price for each utility company by dividing the commercial 
revenues by commercial sales; and (2) weighting each utility by the 
number of commercial customers it served by state.
---------------------------------------------------------------------------

    \47\ U.S. Energy Information Administration. EIA-826 Sales and 
Revenue Spreadsheets. (Last accessed May 16, 2012). www.eia.doe.gov/cneaf/electricity/page/eia826.html.
---------------------------------------------------------------------------

6. Energy Price Projections
    To estimate energy prices in future years, DOE extrapolated the 
average state electricity prices described above using the forecast of 
annual average commercial electricity prices developed in the Reference 
Case from AEO2013.\48\ AEO2013 forecasted prices through 2040. To 
estimate the price trends after 2040, DOE assumed the same average 
annual rate of change in prices as from 2031 to 2040.
---------------------------------------------------------------------------

    \48\ The spreadsheet tool that DOE used to conduct the LCC and 
PBP analyses allows users to select price forecasts from either 
AEO's High Economic Growth or Low Economic Growth Cases. Users can 
thereby estimate the sensitivity of the LCC and PBP results to 
different energy price forecasts.
---------------------------------------------------------------------------

7. Equipment Lifetime
    DOE defines lifetime as the age at which a commercial refrigeration 
equipment unit is retired from service. DOE based expected equipment 
lifetime on discussions with industry experts, and concluded that a 
typical lifetime of 10 years is appropriate for most commercial 
refrigeration equipment in large grocery/multi-line stores and 
restaurants. Industry experts believe that operators of small food 
retail stores, on the other hand, tend to use CRE longer. In the NOPR, 
DOE used 15 years as the average equipment lifetime for remote 
condensing equipment in small food retail stores. DOE reflects the 
uncertainty of equipment lifetimes in the LCC analysis for both 
equipment markets as probability distributions, as discussed in section 
8.2.3.5 of the final rule TSD.
    Several commenters responded on the subject of equipment lifetimes. 
NAFEM asserted that DOE had overestimated the lifetime of commercial 
refrigeration equipment, and suggested that DOE reach out to end-users 
and manufacturers for a more accurate estimate. (NAFEM, No. 93 at p. 7) 
Traulsen commented that commercial refrigeration equipment is too 
diverse to be lumped into categories of different lifetimes, as the 
lifetime of a unit depends on how it is used by a customer in each 
environment. Traulsen added that without including the time spent in 
the used equipment market, the estimate of equipment life is too low. 
(Traulsen, No. 65 at p. 21) The National Restaurant Association also 
commented that DOE's assumption of a 10 to 15 year lifetime is too low. 
(NRA, No. 90 at p. 3) Hussmann and Hoshizaki both commented that DOE's 
equipment lifetime estimates are reasonable at 10 and 15 years. 
(Hussmann, No. 77 at p. 7) (Hoshizaki, No. 84 at p. 1)
    DOE recognizes that the lifetime of commercial refrigeration 
equipment is dependent on customer type and usage environment. In the 
NOPR, DOE used an average lifetime of 15 years for remote condensing 
equipment for small retail stores, and 10 years for all other business 
types. These lifetimes are the averages of distributions with a maximum 
lifetime of 20 and 15 years, respectively, for remote condensing 
equipment for small retail stores, and all other business types. DOE 
received comments indicating that the lifetimes for small businesses 
aside from small retail were too low in the NOPR, and that equipment 
used in small businesses of other types were likely to have increased 
lifetimes as well. DOE agrees with these statements, and adopted 
figures for the average and maximum lifetime of 15 and 20 years, 
respectively, for equipment operated by small businesses of all types. 
The equipment lifetimes for all other business types remains unchanged 
from the NOPR with an average and maximum lifetime of 10 and 15 years, 
respectively. Equipment lifetimes are described in detail in chapter 8 
of the TSD.

[[Page 17767]]

8. Discount Rates
    In calculating the LCC, DOE applies discount rates to estimate the 
present value of future operating costs to the customers of commercial 
refrigeration equipment.\49\ DOE derived the discount rates for the 
commercial refrigeration equipment analysis by estimating the average 
cost of capital for a large number of companies similar to those that 
could purchase commercial refrigeration equipment. This resulted in a 
distribution of potential customer discount rates from which DOE 
sampled in the LCC analysis. Most companies use both debt and equity 
capital to fund investments, so their cost of capital is the weighted 
average of the cost to the company of equity and debt financing.
---------------------------------------------------------------------------

    \49\ The LCC analysis estimates the economic impact on the 
individual customer from that customer's own economic perspective in 
the year of purchase and therefore needs to reflect that 
individual's own perceived cost of capital. By way of contrast DOE's 
analysis of national impact requires a societal discount rate. These 
rates used in that analysis are 7 percent and 3 percent, as required 
by OMB Circular A-4, September 17, 2003.
---------------------------------------------------------------------------

    DOE estimated the cost of equity financing by using the Capital 
Asset Pricing Model (CAPM).\50\ The CAPM assumes that the cost of 
equity is proportional to the amount of systematic risk associated with 
a company.
---------------------------------------------------------------------------

    \50\ Harris, R.S. Applying the Capital Asset Pricing Model. UVA-
F-1456. Available at SSRN: http://ssrn.com/abstract=909893.
---------------------------------------------------------------------------

    Mercatus Center, George Mason University (Mercatus) commented that 
the CAPM includes the risk associated with a firm's failure, but it 
does not estimate the risk associated with any individual item used in 
by the firm, nor does it estimate the failure risk associated with a 
particular site of operation. (Mercatus, No. 72 at p. 3)
    The cost of capital is commonly used to estimate the present value 
of cash flows to be derived from a typical company project or 
investment, and the CAPM is among the most widely used models to 
estimate the cost of equity financing. The types of risk mentioned by 
Mercatus may exist, but the cost of equity financing tends to be high 
when a company faces a large degree of systematic risk, and it tends to 
be low when the company faces a small degree of systematic risk. DOE's 
approach estimates this risk for the set of companies that could 
purchase commercial refrigeration equipment. See chapter 8 of the final 
rule TSD for further discussion.
9. Compliance Date of Standards
    EPCA requires that any amended standards established in this 
rulemaking must apply to equipment that is manufactured on or after 3 
years after the final rule is published in the Federal Register unless 
DOE determines, by rule, that a 3-year period is inadequate, in which 
case DOE may extend the compliance date for that standard by an 
additional 2 years. (42 U.S.C. 6313(c)(6)(C)) Based on these criteria, 
DOE assumed that the most likely compliance date for standards set by 
this rulemaking would be in 2017. Therefore, DOE calculated the LCC and 
PBP for commercial refrigeration equipment under the assumption that 
compliant equipment would be purchased in 2017.
    Continental and Lennox commented that an extension of compliance 
dates of the amended standards may not be required so long as the 
standards are based on whatever technology was currently available. 
(Continental, Public Meeting Transcript, No. 62 at p. 334; Lennox, No. 
73 at p. 2) Traulsen noted that, should the compliance date be extended 
by a further three years, then it was possible, albeit unlikely, that 
the proposed standards could be realized. (Traulsen, No. 65 at p. 24) 
Providing a contrary view, the Joint Comment asserted that a three year 
compliance time period appeared feasible for the proposed standard. In 
addition, the Joint Comment pointed out that the initial statutory 
deadline for the final rule was January 2013. (Joint Comment, No. 91 at 
p. 13) Earthjustice noted that if the compliance date were extended, 
this may have an impact on how alternative refrigerants feature in the 
next round of analysis. (Earthjustice, Public Meeting Transcript, No. 
62 at p. 334)
    In response to the inputs of stakeholders during the NOPR public 
meeting and in written comment, DOE believes that a compliance date 
three years after issuance of the final rule is reasonable and 
appropriate. A three-year period is the standard length of time given 
between final rule issuance and required compliance, with exceptions 
generally being made only in circumstances specifically warranting 
them. Additionally, the commercial refrigeration industry and related 
industries have proven in the past that a three-year period is adequate 
to produce equipment meeting updated standards. Therefore, DOE is not 
including an extension of the period to comply with standards in 
today's final rule document.
    In their written and verbal comments after publication of the NOPR, 
stakeholders noted that in ascertaining the compliance date for the CRE 
standards rule, DOE should take into account other, currently open 
rulemakings, which could affect or be affected by the proposed rule. 
True commented that the new timeline for this rulemaking, alongside the 
recent negotiated settlements regarding the certification of commercial 
equipment, could lead to a situation where the new standards could be 
enforced, but not the certification requirement. (True, Public Meeting 
Transcript, No. 62 at p. 28) Traulsen requested that DOE refrain from 
issuing new CRE standards until the CRE test procedure is finalized. 
(Traulsen, No. 65 at p. 16) The final rule for the CRE test procedure 
was issued prior to today's rule for CRE standards. Therefore, DOE sees 
no conflict between the issuance of the two rules.
    Additionally, Structural Concepts commented that in order to have a 
product line ready by 2017, the design phase would need to start at 
least three years prior, and therefore new standards should only be 
based on existing technologies. (Structural Concepts, Public Meeting 
Transcript, No. 62 at p. 72)
    DOE agrees with Structural Concepts that existing technologies 
should be the basis of its engineering analysis, and has considered 
only currently-available technologies in that analysis. Additionally, 
the three-year compliance period required by EPCA in most circumstances 
is consistent with the required length of design time suggested by 
Structural Concepts.
10. Base-Case Efficiency Distributions
    To accurately estimate the share of affected customers who would 
likely be impacted by a standard at a particular efficiency level, 
DOE's LCC analysis considers the projected distribution of efficiencies 
of equipment that customers purchase under the base case (that is, the 
case without new or amended energy efficiency standards). DOE refers to 
this distribution of equipment efficiencies as a base-case efficiency 
distribution.
    In the NOPR, DOE's methodology to estimate market shares of each 
efficiency level within each equipment class is a cost-based method 
consistent with the approaches that were used in the EIA's National 
Energy Modeling System (NEMS) \51\ and in the Canadian Integrated 
Modeling System (CIMS)52 53

[[Page 17768]]

for estimating efficiency choices within each equipment class.
---------------------------------------------------------------------------

    \51\ U.S. Energy Information Administration. National Energy 
Modeling System Commercial Model (2004 Version). 2004. Washington, 
DC.
    \52\ The CIMS Model was originally known as the Canadian 
Integrated Modeling System, but as the model is now being applied to 
other countries, the acronym is now used as its proper name.
    \53\ Energy Research Group/M.K. Jaccard & Associates. 
Integration of GHG Emission Reduction Options using CIMS. 2000. 
Vancouver, B.C. www.emrg.sfu.ca/media/publications/
Reports%20for%20Natural%20Resources%20Canada/Rollup.pdf.
---------------------------------------------------------------------------

    At the NOPR public meeting, True stated that 62 percent of the 
commercial refrigeration equipment sold in the United States is 
certified under ENERGY STAR. (True, Public Meeting Transcript, No. 62 
at p. 302)
    For today's final rule, DOE revised its approach for determining 
the base case efficiency distribution to better account for market data 
from the ENERGY STAR program. DOE's understanding of the CRE market is 
that consumers of commercial refrigeration equipment fall into two 
categories: Those that purchase equipment at the lowest available first 
cost (also lowest efficiency) and those that purchase equipment at a 
somewhat higher first cost with higher efficiency. Thus, for the final 
rule DOE developed a base case efficiency distribution consisting of 
two categories: Purchases at the baseline and purchases at higher 
efficiency.
    For equipment classes that are covered by ENERGY STAR,\54\ DOE 
assumed that baseline equipment accounts for all products that are not 
ENERGY STAR certified. The ENERGY STAR share is divided between the 
ENERGY STAR 2.1 level and the more recent ENERGY STAR 3.0 level, which 
will become effective in October 2014. For CRE classes that are not 
covered by ENERGY STAR, DOE estimated the share of equipment at the 
baseline based on the output from the customer choice model for 
commercial refrigeration used for EIA's Annual Energy Outlook 2013 (AEO 
2013).\55\ For the higher efficiency equipment, DOE included all 
efficiency levels for which the retail price is not more than 10 
percent above the baseline price, and divided the equipment between the 
baseline and the higher-efficiency market. Table IV.2 shows the 
shipment-weighted market shares by efficiency level in the base-case 
scenario. The method for developing the base-case efficiency 
distribution is explained in detail in chapter 8 of the final rule TSD.
---------------------------------------------------------------------------

    \54\ These classes consist of VCT.SC.M, VCT.SC.L, VCS.SC.M, 
VCS.SC.L, HCT.SC.M, HCT.SC.L, HCS.SC.M., and HCS.SC.L
    \55\ U.S. Energy Information Administration. Annual Energy 
Outlook 2013. 2013. Washington, DC. DOE/EIA-0383(2013).

                                            Table IV.2--Market Shares by Efficiency Level, Base Case in 2017
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                           Base-case efficiency distribution (%)
                         Equipment class                         ---------------------------------------------------------------------------------------
                                                                     Base       EL 1       EL 2       EL 3       EL 4       EL 5       EL 6       EL 7
--------------------------------------------------------------------------------------------------------------------------------------------------------
VOP.RC.M........................................................         60         40          0          0          0          0          0          0
VOP.RC.L........................................................         60         20         20          0          0          0          0          0
VOP.SC.M........................................................         60         40          0          0          0          0          0          0
VCT.RC.M........................................................         60         14         13         13          0          0          0          0
VCT.RC.L........................................................         60         20         20          0          0          0          0          0
VCT.SC.M........................................................         90          0         10          0          0          0          0          0
VCT.SC.L........................................................         90          0         10          0          0          0          0          0
VCT.SC.I........................................................         60          8          8          8          8          8          0          0
VCS.SC.M........................................................         60          0         30          0          0          0         10          0
VCS.SC.L........................................................         60         30          0          0         10          0          0          0
VCS.SC.I........................................................         60          8          8          8          8          8          0          0
SVO.RC.M........................................................         60         40          0          0          0          0          0          0
SVO.SC.M........................................................         60         40          0          0          0          0          0          0
SOC.RC.M........................................................         60         40          0          0          0          0          0          0
SOC.SC.M........................................................         60         40          0          0          0          0          0          0
HZO.RC.M........................................................         60         40          0          0          0          0          0          0
HZO.RC.L........................................................         60         20         20          0          0          0          0          0
HZO.SC.M........................................................         60         20         20          0          0          0          0          0
HZO.SC.L........................................................         60         20         20          0          0          0          0          0
HCT.SC.M........................................................         60          0          0         40          0          0          0          0
HCT.SC.L........................................................         60          0          0         30          0          0          0         10
HCT.SC.I........................................................         60         40          0          0          0          0          0          0
HCS.SC.M........................................................         90          0          0          0          0          0         10          0
HCS.SC.L........................................................         90          0          0          0          0          0         10          0
PD.SC.M.........................................................         60         40          0          0          0          0          0          0
--------------------------------------------------------------------------------------------------------------------------------------------------------

11. Inputs to Payback Period Analysis
    Payback period is the amount of time it takes the customer to 
recover the higher purchase cost of more energy efficient equipment as 
a result of lower operating costs. Numerically, the PBP is the ratio of 
the increase in purchase cost to the decrease in annual operating 
expenditures. This type of calculation is known as a ``simple'' PBP 
because it does not take into account changes in operating cost over 
time or the time value of money; that is, the calculation is done at an 
effective discount rate of zero percent. PBPs are expressed in years. 
PBPs greater than the life of the equipment mean that the increased 
total installed cost of the more-efficient equipment is not recovered 
in reduced operating costs over the life of the equipment.
    The inputs to the PBP calculation are the total installed cost to 
the customer of the equipment for each efficiency level and the average 
annual operating expenditures for each efficiency level in the first 
year. The PBP calculation uses the same inputs as the LCC analysis, 
except that electricity price trends and discount rates are not used.
12. Rebuttable-Presumption Payback Period
    Sections 325(o)(2)(B)(iii) and 345(e)(1)(A) of EPCA, (42 U.S.C. 
6295(o)(2)(B)(iii) and 42 U.S.C. 6316(e)(1)(A)), establish a rebuttable 
presumption applicable to commercial refrigeration equipment. The 
rebuttable presumption states that a new or amended standard 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

[[Page 17769]]

of the energy savings during the first year that the consumer will 
receive as a result of the standard, as calculated under the applicable 
test procedure. This rebuttable presumption test is an alternative way 
of establishing economic justification.
    To evaluate the rebuttable presumption, DOE estimated the 
additional cost of purchasing more-efficient, standards-compliant 
equipment, and compared this cost to the value of the energy saved 
during the first year of operation of the equipment. DOE interprets 
that the increased cost of purchasing standards-compliant equipment 
includes the cost of installing the equipment for use by the purchaser. 
DOE calculated the rebuttable presumption PBP, or the ratio of the 
value of the increased installed price above the baseline efficiency 
level to the first year's energy cost savings. When the rebuttable 
presumption PBP is less than 3 years, the rebuttable presumption is 
satisfied; when the rebuttable presumption PBP is equal to or more than 
3 years, the rebuttable presumption is not satisfied. Note that this 
PBP calculation does not include other components of the annual 
operating cost of the equipment (i.e., maintenance costs and repair 
costs).
    While DOE examined the rebuttable presumption, it also considered 
whether the standard levels considered are economically justified 
through a more detailed analysis of the economic impacts of these 
levels pursuant to 42 U.S.C. 6295(o)(2)(B)(i). The results of this 
analysis served as the basis for DOE to evaluate the economic 
justification for a potential standard level definitively (thereby 
supporting or rebutting the results of any preliminary determination of 
economic justification).

G. Shipments

    Complete historical shipments data for commercial refrigeration 
equipment could not be obtained from any one single source. Therefore, 
for the NOPR DOE used data from multiple sources to estimate historical 
shipments. The major sources were 2005 shipments data provided by ARI 
as part of its comments submitted in response to the January 2009 final 
rule Framework document, ARI 2005 Report (Docket No. EERE-2006-BT-STD-
0126, ARI, No. 7, Exhibit B at p. 1); Commercial Refrigeration 
Equipment to 2014 by Freedonia Group, Inc.\56\; 2008, and 2012 Size and 
Shape of Industry by the North American Association of Food Equipment 
Manufacturers; 57 58 and Energy Savings Potential and R&D 
Opportunities for Commercial Refrigeration prepared by Navigant 
Consulting, Inc. for DOE.\59\
---------------------------------------------------------------------------

    \56\ Freedonia Group, Inc. Commercial Refrigeration Equipment to 
2014. 2010. Cleveland, OH. Study 2261. www.freedoniagroup.com/Commercial-Refrigeration-Equipment.html.
    \57\ North American Association of Food Equipment Manufacturers. 
2008 Size and Shape of Industry. 2008. Chicago, IL.
    \58\ North American Association of Food Equipment Manufacturers. 
20012 Size and Shape of Industry. 2012. Chicago, IL.
    \59\ Navigant Consulting, Inc. Energy Savings Potential and R&D 
Opportunities for Commercial Refrigeration. 2009. Prepared by 
Navigant Consulting, Inc. for the U.S. Department of Energy, 
Washington, DC.
---------------------------------------------------------------------------

    Historical linear feet of shipped units is the figure used to 
depict the annual amount of commercial refrigeration equipment capacity 
shipped, and is an alternative way to express shipments data. DOE 
determined the linear feet shipped for any given year by multiplying 
each unit shipped by its associated average length, and then summing 
all the linear footage values. Chapter 9 of the final rule TSD presents 
the representative equipment class lengths used for the conversion of 
per-unit shipments to linear footage within each equipment class.
    DOE divided historical annual shipments into new and replacement 
categories by building type. First, equipment types were identified by 
the type of business they generally serve. For example, vertical open 
cases with remote condensing units are associated with large grocers 
and multi-line retail stores. When there was no strong association 
between the building type and equipment class, equipment was 
distributed across broader building types. Second, a ratio of new 
versus replacement equipment was developed based on commercial floor 
space estimates. Using the expected useful life of commercial 
refrigeration equipment and commercial floor space stock, additions, 
and retirements, ratios were developed of new versus replacement stock. 
Using these and related factors (e.g., the division of foodservice into 
the three building types--limited service restaurants, full-service 
restaurants, and other), DOE distributed commercial refrigeration 
equipment shipments among building types and new versus replacement 
shipments.
    DOE then estimated the annual linear footage shipped for each of 
the 25 primary equipment classes used to represent the commercial 
refrigeration equipment market. The fractions shown in Table IV.3 were 
held constant over the analysis period.

 Table IV.3--Percent of Shipped Linear Feet of Commercial Refrigeration
                                Equipment
------------------------------------------------------------------------
                                                           Percentage of
                     Equipment class                        linear feet
                                                             shipped *
------------------------------------------------------------------------
VOP.RC.M................................................            10.3
VOP.RC.L................................................             0.5
VOP.SC.M................................................             1.3
VCT.RC.M................................................             0.8
VCT.RC.L................................................            10.7
VCT.SC.M................................................             4.8
VCT.SC.L................................................             0.2
VCT.SC.I................................................             0.3
VCS.SC.M................................................            25.4
VCS.SC.L................................................            15.0
VCS.SC.I................................................             0.1
SVO.RC.M................................................             8.2
SVO.SC.M................................................             1.1
SOC.RC.M................................................             2.1
SOC.SC.M................................................             0.2
HZO.RC.M................................................             1.3
HZO.RC.L................................................             4.0
HZO.SC.M................................................             0.1
HZO.SC.L................................................             0.2
HCT.SC.M................................................             0.1
HCT.SC.L................................................             0.4
HCT.SC.I................................................             0.4
HCS.SC.M................................................             4.4
HCS.SC.L................................................             0.6
PD.SC.M.................................................             7.6
------------------------------------------------------------------------
* The percentages in this column do not sum to 100 percent because
  shipments of secondary equipment classes and certain other equipment
  classes that were not analyzed in this rulemaking were not included.

    The amount of new and existing commercial floor space is the main 
driver for future commercial refrigeration equipment shipments. The 
model divides commercial floor space into new construction floor space 
and existing floor space.
    DOE projected square footage of new construction as a driver of CRE 
demand to scale annual new commercial refrigeration equipment 
shipments. DOE took the projected floor space construction after the 
year 2009 from the NEMS projection underlying AEO 2013. The new 
construction growth rates over the last 10 years of the AEO 2013 
forecast (2031 through 2040) were used to extend the AEO forecast out 
until 2046 to develop the full 30-year forecast needed for the NIA.
    True stated during the NOPR public meeting that DOE's shipments 
estimates for the VCT.SC.M equipment class were 20 to 30 percent of 
actual shipments. (True, Public Meeting Transcript, No. 62 at pp. 240-
242) This statement was supported by Coca-Cola, which asserted that it 
alone purchased 180,000 linear feet of VCT.SC.M equipment domestically 
compared to the 155,000 linear feet of VCT.SC.M equipment presented in 
the NOPR. (Coca-Cola, Public Meeting Transcript, No. 62 at p.

[[Page 17770]]

242) True followed up its public meeting statements with written 
comment stating that its estimate of the self-contained market was four 
to six times larger than what was stated in the proposed rule. (True, 
No. 76 at p. 1) Traulsen suggested that DOE use newer data, such as 
those in the NAFEM 2012 ``Size and Shape of the Industry'' study to 
improve the accuracy of its shipments analysis. (Traulsen, No. 65 at p. 
15)
    Although neither True nor Coca-Cola provided DOE with shipments 
data to support their assertions, the magnitude of the discrepancy in 
shipments identified by these comments led DOE to revise its shipments 
estimates for the final rule. DOE reviewed three sources of data in 
developing the revision. First, DOE reviewed the most recent data 
published by the EPA's ENERGY STAR Program.\60\ These EPA data include 
both an estimate of total units shipped, and an estimate of the 
fraction that are ENERGY STAR compliant, from 2003 to 2012. The ENERGY 
STAR estimates of total unit shipments show somewhat slow growth from 
2003 to 2010, and a significant increase between 2010 and 2011, with 
shipments increasing by a factor of two. Second, DOE reviewed the most 
recent North American Association of Food Equipment Manufacturers Size 
and Shape of the Industry \61\ report published in 2012. This report 
provides industry total estimates of sales in dollar values. These data 
show an increase of approximately 60 percent in sales of the relevant 
covered equipment between 2008 and 2011. Third, DOE reviewed equipment 
saturation estimates calculated from data in the Energy Information 
Agency's (EIA) Commercial Buildings Energy Consumption Survey (CBECS) 
for 1999 and 2003. The CBECS surveys include a count of the number of 
refrigerated cases in a building, which was be converted to a 
saturation value that represents the average number of cases per 
building. These data indicate a growth in saturation between 1999 and 
2003, particularly for closed refrigeration cases. The existence of a 
trend in equipment saturations was not accounted for in the NOPR 
analyses. Taken together, all three data sources support the claims 
made by stakeholders that DOE's shipments published in the NOPR were 
substantially underestimated.
---------------------------------------------------------------------------

    \60\ Energy Star. Unit Shipment and Sales Data Archives. 
Available at: http://www.energystar.gov/index.cfm?c=partners.unit_shipment_data_archives (Last accessed 12/5/2013).
    \61\ North American Association of Food Equipment Manufacturers. 
2012 Size and Shape of Industry. 2012. Chicago, IL.
---------------------------------------------------------------------------

    For the final rule, DOE modified the shipments analysis to include 
a trend in equipment saturations between 2003 and 2012. The trend was 
calculated by (1) smoothing the growth in shipments in the ENERGY STAR 
data to a constant annual growth rate, (2) correcting to account for 
the growth in total new and existing commercial floor space, and (3) 
applying the resulting trend in saturations for the years 2004 to 2012. 
Before 2003 and after 2012 equipment saturations are held constant. The 
net result is a doubling of equipment saturations between 2003 and 
2012, with corresponding increases in the shipments estimates, which 
are generally consistent in magnitude with stakeholder comments. These 
corrections were applied uniformly to all equipment types and 
applications, and thus do not affect the distribution of equipment by 
building type or by equipment class.
    Detailed description of the procedure to calculate future shipments 
is presented in chapter 9 of the final rule TSD.
1. Impact of Standards on Shipments
    Several stakeholders stated that customer purchase behavior would 
change in response to an increase in equipment prices due to more 
stringent standards. At the NOPR public meeting, Hussmann commented 
that it had noticed a shift from the open VOP.RC.M to the closed 
VCT.RC.M equipment class, possibly due to energy savings being valued 
by customers (primarily supermarkets). (Hussmann, Public Meeting 
Transcript, No. 62 at pp. 236-37) However, Hussmann noted that the 
shift could be reversed if closed equipment diminished in its utility 
as a merchandising platform. (Hussmann, Public Meeting Transcript, No. 
62 at p. 237) Hillphoenix and Danfoss stated that if standards require 
the use of triple-pane coated glass, reduction in visibility will 
result in users shifting back to less-efficient open cases. (Danfoss, 
No. 61 at p. 4; Hillphoenix, No. 71 at p. 2) Hussmann noted that it had 
not observed a reversal of the trend toward closed units in response to 
previous efficiency standards. (Hussmann, Public Meeting Transcript, 
No. 62 at p. 235)
    DOE recognizes that increased cost for closed equipment meeting the 
amended standards in today's final rule has the potential to influence 
a shift from more efficient closed equipment to open equipment. 
However, DOE did not have sufficient information on customer behavior 
to model the degree of such equipment switching as part of the NIA. 
Further, DOE has concluded that the amended standards in today's final 
rule will not diminish the utility of commercial refrigeration 
equipment, and they do not require triple-pane coated glass.
    Several stakeholders commented that, in response to a possible 
price increase due to standards, CRE customers may prolong the life of 
existing equipment through refurbishment. Danfoss asserted that a 15 to 
20 percent increase in prices will reduce demand for new units and 
increase sales of used of refurbished units. (Danfoss, No. 61 at p. 3) 
NAFEM commented that any standard where the payback on new equipment is 
longer than 2 years will likely steer users into the refurbished 
market. (NAFEM, No. 93 at pp. 7-8) Traulsen commented that the impact 
of refurbishing equipment was not fully represented by DOE, especially 
in the small business environment where customers are likely to hold 
onto equipment longer. (Traulsen, No. 65 at p. 19) Hussmann stated that 
due to price increases resulting from higher efficiency, the 
refurbishment of old equipment will reduce the market for new 
equipment. (Hussmann, No. 77 at p. 5)
    DOE acknowledges that increases in price due to amended standards 
could lead to more refurbishing of equipment (or purchase of used 
equipment), which would have the effect of deferring the shipment of 
new equipment for a period of time. DOE did not have enough information 
on CRE customer behavior to explicitly model the extent of refurbishing 
at each TSL. However, DOE believes that the extent of refurbishing 
would not be so significant as to change the ranking of the TSLs 
considered for today's rule.

H. National Impact Analysis--National Energy Savings and Net Present 
Value

    The NIA assesses the NES and the NPV of total customer costs and 
savings that would be expected as a result of amended energy 
conservation standards. The NES and NPV are analyzed at specific 
efficiency levels for each equipment class of commercial refrigeration 
equipment. DOE calculates the NES and NPV based on projections of 
annual equipment shipments, along with the annual energy consumption 
and total installed cost data from the LCC analysis. For the final rule 
analysis, DOE forecasted the energy savings, operating cost savings, 
equipment costs, and NPV of customer benefits over the lifetime of 
equipment sold from 2017 through 2046.
    DOE evaluated the impacts of the amended standards by comparing 
base-case projections with standards-case projections. The base-case 
projections

[[Page 17771]]

characterize energy use and customer costs for each equipment class in 
the absence of any amended energy conservation standards. DOE compares 
these projections with projections characterizing the market for each 
equipment class if DOE were to adopt an amended standard at specific 
energy efficiency levels for that equipment class.
    DOE uses a Microsoft Excel spreadsheet model to calculate the 
energy savings and the national customer costs and savings from each 
TSL. The final rule TSD and other documentation that DOE provides 
during the rulemaking help explain the models and how to use them, and 
interested parties can review DOE's analyses by interacting with these 
spreadsheets. The NIA spreadsheet model uses average values as inputs 
(as opposed to probability distributions of key input parameters from a 
set of possible values).
    For the final rule analysis, the NIA used projections of energy 
prices and commercial building starts from the AEO2013 Reference Case. 
In addition, DOE analyzed scenarios that used inputs from the AEO2013 
Low Economic Growth and High Economic Growth Cases. These cases have 
lower and higher energy price trends, respectively, compared to the 
Reference Case. NIA results based on these cases are presented in 
appendix 10D of the final rule TSD.
    A detailed description of the procedure to calculate NES and NPV, 
and inputs for this analysis are provided in chapter 10 of the final 
rule TSD.
1. Forecasted Efficiency in the Base Case and Standards Cases
    The method for estimating the market share distribution of 
efficiency levels is presented in section IV.F.10, and a detailed 
description can be found in chapter 8 of the final rule TSD.
    As discussed in section IV.F.10 of today's rule, DOE revised the 
distribution of equipment efficiencies in the base case to better 
account for data from ENERGY STAR. For equipment covered by ENERGY 
STAR, for the NIA DOE estimated that the market will move over time to 
adopt higher efficiency ENERGY STAR rated equipment. DOE estimated that 
for equipment not covered by ENERGY STAR, there is limited market 
demand for higher efficiency equipment, and the base case efficiency 
distribution would not change over time.
    To estimate market behavior in the standards cases, DOE uses a 
``roll-up'' scenario. Under the roll-up scenario, DOE 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 efficiencies above the standard level under 
consideration would be unaffected.
    To project trends in standards-case efficiency after the initial 
shift in the compliance year, DOE used the same assumptions as in the 
base case for equipment covered or not covered by ENERGY STAR.
    The estimated efficiency trends in the base case and standards 
cases are further described in chapter 8 of the final rule TSD.
2. National Energy Savings
    For each year in the forecast period, DOE calculates the NES for 
each potential standard level by multiplying the stock of equipment 
affected by the energy conservation standards by the estimated per-unit 
annual energy savings. DOE typically considers the impact of a rebound 
effect in its calculation of NES for a given product. A rebound effect 
occurs when users operate higher efficiency equipment more frequently 
and/or for longer durations, thus offsetting estimated energy savings. 
DOE did not incorporate a rebound factor for commercial refrigeration 
equipment because it is operated 24 hours a day, and therefore there is 
no potential for a rebound effect.
    Major inputs to the calculation of NES are annual unit energy 
consumption, shipments, equipment stock, a site-to-primary energy 
conversion factor, and a full fuel cycle factor.
    The annual unit energy consumption is the site energy consumed by a 
commercial refrigeration unit in a given year. Because the equipment 
classes analyzed represent equipment sold across a range of sizes, 
DOE's ``unit'' in the NES is actually expressed as a linear foot of 
equipment in an equipment class, and not an individual unit of 
commercial refrigeration equipment of a specific size. DOE determined 
annual forecasted shipment-weighted average equipment efficiencies 
that, in turn, enabled determination of shipment-weighted annual energy 
consumption values.
    The NES spreadsheet model keeps track of the total linear footage 
of commercial refrigeration units shipped each year. The commercial 
refrigeration equipment stock in a given year is the total linear 
footage of commercial refrigeration equipment shipped from earlier 
years that is still in use in that year, based on the equipment 
lifetime.
    To estimate the national energy savings expected from energy 
conservation standards, DOE uses a multiplicative factor to convert 
site energy consumption (energy use at the location where the appliance 
is operated) into primary or source energy consumption (the energy 
required to deliver the site energy). For today's final rule, DOE used 
conversion factors based on AEO 2013. For electricity, the conversion 
factors vary over time because of projected changes in generation 
sources (i.e., the types of power plants projected to provide 
electricity to the country). Because the AEO does not provide energy 
forecasts beyond 2040, DOE used conversion factors that remain constant 
at the 2040 values throughout the rest of the forecast.
    DOE has historically presented NES in terms of primary energy 
savings. In response to the recommendations of a committee on ``Point-
of-Use and Full-Fuel-Cycle Measurement Approaches to Energy Efficiency 
Standards'' appointed by the National Academy of Science, DOE announced 
its intention to use full-fuel-cycle (FFC) measures of energy use and 
greenhouse gas and other emissions in the national impact analyses and 
emissions analyses included in future energy conservation standards 
rulemakings. 76 FR 51281 (August 18, 2011) While DOE stated in that 
document that it intended to use the Greenhouse Gases, Regulated 
Emissions, and Energy Use in Transportation (GREET) model to conduct 
the analysis, it also said it would review alternative methods, 
including the use of NEMS. After evaluating both models and the 
approaches discussed in the August 18, 2011 document, DOE published a 
statement of amended policy in the Federal Register in which DOE 
explained its determination that NEMS is a more appropriate tool for 
its FFC analysis and its intention to use NEMS for that purpose. 77 FR 
49701 (August 17, 2012).
    The approach used for today's final rule, and the FFC multipliers 
that were applied, are described in appendix 10D of the final rule TSD. 
NES results are presented in both primary energy and FFC savings in 
section V.B.3.a.
3. Net Present Value of Customer Benefit
    The inputs for determining the NPV of the total costs and benefits 
experienced by customers of the commercial refrigeration equipment are: 
(1) Total annual installed cost; (2) total annual savings in operating 
costs; and (3) a discount factor. DOE calculated net national customer 
savings for each year

[[Page 17772]]

as the difference between the base-case scenario and standards-case 
scenarios in terms of installation and operating costs. DOE calculated 
operating cost savings over the life of each piece of equipment shipped 
in the forecast period.
    As discussed in section IV.F.1, DOE developed an equipment price 
trend for commercial refrigeration equipment based on the inflation-
adjusted index of the PPI for air conditioning, refrigeration, and 
forced air heating from 1978 to 2012. A linear regression of the 
inflation-adjusted PPI shows a slight downward trend (see appendix 10D 
of the final rule TSD). To project a future trend over the analysis 
period, DOE extrapolated the historic trend using the regression 
results.
    DOE multiplied monetary values in future years by the discount 
factor to determine the present value of costs and savings. DOE 
estimated national impacts using both a 3-percent and a 7-percent real 
discount rate as the average real rate of return on private investment 
in the U.S. economy. These discount rates are used in accordance with 
the Office of Management and Budget (OMB) guidance to Federal agencies 
on the development of regulatory analysis (OMB Circular A-4, September 
17, 2003), and section E, ``Identifying and Measuring Benefits and 
Costs,'' therein. The 7-percent rate is an estimate of the average 
before-tax rate of return on private capital in the U.S. economy, and 
reflects the returns on real estate and small business capital, 
including corporate capital. DOE used this discount rate to approximate 
the opportunity cost of capital in the private sector because recent 
OMB analysis has found the average rate of return on capital to be near 
this rate. In addition, DOE used the 3-percent rate to capture the 
potential effects of amended standards on private consumption. This 
rate represents the rate at which society discounts future consumption 
flows to their present value. It can be approximated by the real rate 
of return on long-term government debt (i.e., yield on Treasury notes 
minus 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. DOE 
defined the present year as 2014 for the analysis.

I. Customer Subgroup Analysis

    In analyzing the potential impact of new or amended standards on 
commercial customers, DOE evaluates the impact on identifiable groups 
(i.e., subgroups) of customers, such as different types of businesses 
that may be disproportionately affected. Small businesses typically 
face higher cost of capital. In general, the higher the cost of 
capital, the more likely it is that an entity would be disadvantaged by 
a requirement to purchase higher efficiency equipment. Based on data 
from the 2007 U.S. Economic Census and size standards set by the U.S. 
Small Business Administration (SBA), DOE determined that a majority of 
small grocery and convenience stores and restaurants fall under the 
definition of small businesses.
    Comparing the small grocery and convenience store category to the 
convenience store with gas station category, both face the same cost of 
capital, but convenience stores with gas stations generally incur lower 
electricity prices, which would tend to render higher-efficiency 
equipment not cost-effective. To examine a ``worst case'' situation, 
convenience stores with gas stations were chosen for the subgroup 
analysis. Limited-service restaurants and full-service restaurants have 
similar electricity price and discount rates. DOE chose to study full-
service restaurants for the subgroup analysis because a higher 
percentage of full-service restaurants tend to be operated by 
independent small businesses, as compared to limited-service (fast-
food) restaurants. DOE believes that these two subgroups are broadly 
representative of small businesses that use CRE.
    DOE estimated the impact on the identified customer subgroups using 
the LCC spreadsheet model. The input for business type was fixed to the 
identified subgroup, which ensured that the discount rates and 
electricity prices associated with only that subgroup were selected in 
the Monte Carlo simulations. The discount rate was further increased by 
applying the small firm premium to the WACC. In addition, DOE assumed 
that the subgroups do not have access to national purchasing accounts 
and, consequently, face a higher distribution channel markup. Apart 
from these changes, all other inputs for the subgroup analysis are the 
same as those in the LCC analysis. Details of the data used for the 
subgroup analysis and results are presented in chapter 11 of the final 
rule TSD.
    The Society of American Florists stated that the percent of 
refrigerated product sold at retail by florists is higher than in other 
retail industries and that they would be particularly sensitive to an 
increase in equipment price. (SAF, No. 74 at p. 3) SAF suggested that 
DOE should conduct analyses for floriculture growers, wholesalers, and 
retail florists to determine the impact of amended standards on these 
end-users. (SAF, No. 74 at p. 7)
    While the subgroups considered by DOE do not exactly correspond to 
florist-related businesses, DOE believes that the impacts experienced 
by the selected subgroups are indicative of the impacts that would be 
experienced by florist-related businesses. Thus, the analyses suggested 
by SAF are not warranted.
    The National Restaurant Association suggested that DOE re-analyze 
the small business subgroups based on more accurate costs and equipment 
lifetime assumptions. (NRA, No. 90 at p. 2) DOE has used the best 
available data to estimate equipment costs and lifetime for the 
considered subgroups, so there would be no basis for re-analysis.
    Mercatus stated that 26 percent of restaurants fail in their first 
year and by year three the rate of failure is just over 60 percent; 
therefore, it is not rational for these types of customers to purchase 
more efficient equipment before realizing a net benefit. (Mercatus, No. 
72 at p. 3) DOE acknowledges that some CRE units may outlive the 
particular business that purchased them new, but the customer that 
purchases the used equipment would see the energy cost benefits of 
higher-efficiency equipment.
    Several parties stated that higher equipment costs will induce 
small businesses to purchase used or refurbished equipment. The 
National Restaurant Association commented that an equipment cost 
increase of 15 to 20 percent will force small restaurants to purchase 
used or refurbished equipment. (NRA, No. 90 at p. 3) The Air 
Conditioning Contractors of America (ACCA) commented that small 
consumers would elect to extend the life of existing equipment rather 
than purchase new more expensive equipment. (ACCA, Public Meeting 
Transcript, No. 62 at pp. 343-44) True commented that individually 
owned restaurants would elect to purchase used equipment due to lower 
first cost instead of purchasing new, more efficient equipment. (True, 
Public Meeting Transcript, No. 62 at p. 208) Traulsen opined that 
smaller entities are more likely to keep existing equipment longer, and 
will be negatively affected by the proposed standard. (Traulsen, No. 65 
at p. 19) Hoshizaki commented that the proposed standards will increase 
costs and deter small business owners from buying new equipment. 
(Hoshizaki, No. 84 at p. 1)
    DOE acknowledges that some small businesses may respond to amended 
CRE standards by purchasing used or refurbished equipment. However, as 
discussed in section V.B.1.b, DOE did not have sufficient information 
to evaluate the likely extent of this

[[Page 17773]]

response. The consumer subgroup results (shown in section V.B.1.b of 
this document) indicate that in nearly all cases the considered small 
business subgroups see higher average LCC savings and lower median 
payback periods when compared to all CRE customers. These results 
suggest that most small businesses would find it beneficial to purchase 
new commercial refrigeration equipment that meets today's standards.

J. Manufacturer Impact Analysis

1. Overview
    DOE performed a MIA to estimate the financial impact of amended 
energy conservation standards on manufacturers of commercial 
refrigeration equipment and to understand the impact of such standards 
on employment and manufacturing capacity. The MIA has both quantitative 
and qualitative aspects. The quantitative part of the MIA primarily 
relies on the Government Regulatory Impact Model (GRIM), an industry 
cash-flow model with inputs specific to this rulemaking. The key GRIM 
inputs are data on the industry cost structure, product costs, 
shipments, and assumptions about markups and conversion expenditures. 
The key output is the INPV. Different sets of markup scenarios will 
produce different results. The qualitative part of the MIA addresses 
factors such as equipment characteristics, impacts on particular 
subgroups of manufacturers, and important market and product trends. 
The complete MIA is outlined in chapter 12 of the final rule TSD.
    DOE conducted the MIA for this rulemaking in three phases. In Phase 
1 of the MIA, DOE prepared a profile of the commercial refrigeration 
equipment industry that includes a top-down cost analysis of 
manufacturers used to derive preliminary financial inputs for the GRIM 
(e.g., sales general and administration (SG&A) expenses; research and 
development (R&D) expenses; and tax rates). DOE used public sources of 
information, including company SEC 10-K filings, corporate annual 
reports, the U.S. Census Bureau's Economic Census, and Hoover's 
reports.
    In Phase 2 of the MIA, DOE prepared an industry cash-flow analysis 
to quantify the impacts of an amended energy conservation standard. In 
general, more-stringent energy conservation standards can affect 
manufacturer cash flow in three distinct ways: (1) By creating a need 
for increased investment; (2) by raising production costs per unit; and 
(3) by altering revenue due to higher per-unit prices and possible 
changes in sales volumes.
    In Phase 3 of the MIA, DOE conducted structured, detailed 
interviews with a representative cross-section of manufacturers. During 
these interviews, DOE discussed engineering, manufacturing, 
procurement, and financial topics to validate assumptions used in the 
GRIM and to identify key issues or concerns.
    Additionally, in Phase 3, DOE evaluated subgroups of manufacturers 
that may be disproportionately impacted by amended standards, or that 
may not be accurately represented by the average cost assumptions used 
to develop the industry cash-flow analysis. For example, small 
manufacturers, niche players, or manufacturers exhibiting a cost 
structure that largely differs from the industry average could be more 
negatively affected.
    DOE identified one subgroup, small manufacturers, for separate 
impact analyses. DOE applied the small business size standards 
published by the SBA to determine whether a company is considered a 
small business. 65 FR 30836, 30848 (May 15, 2000), as amended at 65 FR 
53533, 53544 (September 5, 2000) and codified at 13 CFR part 121. To be 
categorized as a small business under North American Industry 
Classification System (NAICS) 333415, ``Air-Conditioning and Warm Air 
Heating Equipment and Commercial and Industrial Refrigeration Equipment 
Manufacturing,'' a commercial refrigeration manufacturer and its 
affiliates may employ a maximum of 750 employees. The 750-employee 
threshold includes all employees in a business's parent company and any 
other subsidiaries. Based on this classification, DOE identified at 
least 32 commercial refrigeration equipment manufacturers that qualify 
as small businesses. The commercial refrigeration equipment small 
manufacturer subgroup is discussed in chapter 12 of the final rule TSD 
and in section I.A.1 of this document.
2. Government Regulatory Impact Model
    DOE uses the GRIM to quantify the changes in the commercial 
refrigeration equipment industry cash flow due to amended standards 
that result in a higher or lower industry value. The GRIM analysis uses 
a standard, annual cash-flow analysis that incorporates manufacturer 
costs, markups, shipments, and industry financial information as 
inputs, and models changes in costs, investments, and manufacturer 
margins that would result from new and amended energy conservation 
standards. The GRIM spreadsheet uses the inputs to arrive at a series 
of annual cash flows, beginning with the base year of the analysis, 
2013 in this case, and continuing to 2046. DOE calculated INPVs by 
summing the stream of annual discounted cash flows during this period. 
For commercial refrigeration equipment manufacturers, DOE used a real 
discount rate of 10 percent. DOE's discount rate estimate was derived 
from industry financials and then modified according to feedback during 
manufacturer interviews.
    The GRIM calculates cash flows using standard accounting principles 
and compares changes in INPV between a base case and various TSLs (the 
standards cases). The difference in INPV between the base case and a 
standards case represents the financial impact of the amended standard 
on manufacturers. As discussed previously, DOE collected the 
information on the critical GRIM inputs from a number of sources, 
including publicly available data and interviews with a number of 
manufacturers (described in the next section). The GRIM results are 
shown in section V.B.2.a. Additional details about the GRIM can be 
found in chapter 12 of the final rule TSD.
a. Government Regulatory Impact Model Key Inputs
Manufacturer Production Costs
    Manufacturing a higher efficiency product is typically more 
expensive than manufacturing a baseline product due to the use of more 
complex components, which are more costly than baseline components. The 
changes in the MPCs of the analyzed products can affect the revenues, 
gross margins, and cash flow of the industry, making these product cost 
data key GRIM inputs for DOE's analysis.
    In the MIA, DOE used the MPCs for each considered efficiency level 
calculated in the engineering analysis, as described in section IV.B 
and further detailed in chapter 5 of the NOPR TSD. In addition, DOE 
used information from its teardown analysis, described in section 
IV.D.4.a, to disaggregate the MPCs into material, labor, and overhead 
costs. To calculate the MPCs for equipment above the baseline, DOE 
added incremental material, labor, overhead costs from the engineering 
cost-efficiency curves to the baseline MPCs. These cost breakdowns and 
equipment markups were validated with manufacturers during manufacturer 
interviews.

[[Page 17774]]

Base-Case Shipments Forecast
    The GRIM estimates manufacturer revenues based on total unit 
shipment forecasts and the distribution of these values by efficiency 
level. Changes in sales volumes and efficiency mix over time can 
significantly affect manufacturer finances. For this analysis, the GRIM 
uses the NIA's annual shipment forecasts derived from the shipments 
analysis from 2013, the base year, to 2046, the end of the analysis 
period. See chapter 9 of the final rule TSD for additional details.
Product and Capital Conversion Costs
    Amended energy conservation standards will cause manufacturers to 
incur conversion costs to bring their production facilities and product 
designs into compliance. For the MIA, DOE classified these conversion 
costs into two major groups: (1) Product conversion costs and (2) 
capital conversion costs. Product conversion costs are investments in 
research, development, testing, marketing, and other non-capitalized 
costs necessary to make product designs comply with a new or amended 
energy conservation standard. Capital conversion costs are investments 
in property, plant, and equipment necessary to adapt or change existing 
production facilities such that new product designs can be fabricated 
and assembled.
    To evaluate the level of capital conversion expenditures 
manufacturers would likely incur to comply with amended energy 
conservation standards, DOE used manufacturer interviews to gather data 
on the level of capital investment required at each efficiency level. 
DOE validated manufacturer comments through estimates of capital 
expenditure requirements derived from the product teardown analysis and 
engineering model described in section IV.D.4. Further adjustments were 
made to capital conversion costs based on feedback in the NOPR written 
comments. The key driver of capital conversion costs was new production 
equipment associated with improving cabinet insulation.
    DOE assessed the product conversion costs at each level by 
integrating data from quantitative and qualitative sources. DOE 
considered feedback regarding the potential costs of each efficiency 
level from multiple manufacturers to determine conversion costs such as 
R&D expenditures and certification costs. Manufacturer data were 
aggregated to better reflect the industry as a whole and to protect 
confidential information. For the final rule, adjustments were made to 
product conversion costs based on feedback in the NOPR written comments 
submitted following the NOPR. Key drivers of product conversion costs 
included the re-design effort associated with modifying cabinets to 
incorporate improved cabinet insulation, along with the product and 
food safety certification costs associated with redesigning key 
equipment components.
    In general, DOE assumes that all conversion-related investments 
occur between the year of publication of the final rule and the year by 
which manufacturers must comply with an amended standard. The 
investment figures used in the GRIM can be found in section V.B.2.a of 
this document. For additional information on the estimated product 
conversion and capital conversion costs, see chapter 12 of the final 
rule TSD.
b. Government Regulatory Impact Model Scenarios
Markup Scenarios
    As discussed above, MSPs include direct manufacturing production 
costs (i.e., labor, material, and overhead estimated in DOE's MPCs) and 
all non-production costs (i.e., SG&A, R&D, and interest), along with 
profit. To calculate the MSPs in the GRIM, DOE applied markups to the 
MPCs estimated in the engineering analysis and then added in the cost 
of shipping. Modifying these markups in the standards case yields 
different sets of impacts on manufacturers. For the MIA, DOE modeled 
two standards-case markup scenarios to represent the uncertainty 
regarding the potential impacts on prices and profitability for 
manufacturers following the implementation of amended energy 
conservation standards: (1) A preservation of gross margin percentage 
markup scenario; and (2) a preservation of operating profit markup 
scenario. These scenarios lead to different markups values that, when 
applied to the inputted MPCs, result in varying revenue and cash flow 
impacts.
    Under the preservation of gross margin percentage scenario, DOE 
applied a single uniform ``gross margin percentage'' markup across all 
efficiency levels. As production costs increase with efficiency, this 
scenario implies that the absolute dollar markup will increase as well. 
Based on publicly available financial information for manufacturers of 
commercial refrigeration equipment and comments from manufacturer 
interviews, DOE assumed the non-production cost markup--which includes 
SG&A expenses, R&D expenses, interest, and profit--to be 1.42. Because 
this markup scenario assumes that manufacturers would be able to 
maintain their gross margin percentage markups as production costs 
increase in response to an amended energy conservation standard, the 
scenario represents a high bound to industry profitability under an 
amended energy conservation standard.
    In the preservation of operating profit scenario, manufacturer 
markups are set so that operating profit 1 year after the compliance 
date of the amended energy conservation standard is the same as in the 
base case. Under this scenario, as the cost of production and the cost 
of sales go up, manufacturers are generally required to reduce their 
markups to a level that maintains base-case operating profit. The 
implicit assumption behind this markup scenario is that the industry 
can only maintain its operating profit in absolute dollars after 
compliance with the amended standard is required. Therefore, operating 
margin in percentage terms is squeezed (reduced) between the base case 
and standards case. DOE adjusted the manufacturer markups in the GRIM 
at each TSL to yield approximately the same earnings before interest 
and taxes in the standards case in the year after the compliance date 
of the amended standards as in the base case. This markup scenario 
represents a low bound to industry profitability under an amended 
energy conservation standard.
3. Discussion of Comments
    During the NOPR public meeting, interested parties commented on the 
assumptions and results of the analyses as described in the TSD. Oral 
and written comments addressed several topics, including volume 
purchasing of components, refrigerants, redesign issues, LED material 
costs, the GRIM, foaming fixtures, cumulative regulatory burden, 
certification costs, and issues specific to small manufacturers.
a. Volume Purchasing of Components
    Traulsen commented that the prices of high-efficiency condenser fan 
motors were higher than DOE stated, and that this would place a cost 
burden on small manufacturers who could not receive a purchase volume 
discount. (Traulsen, No. 65 at p. 4) DOE recognizes that small 
manufacturers face pricing disadvantages for key components in both the 
base case and the standards case. This issue is incorporated into the 
discussion of Regulatory Flexibility in section VI.B.2 of this final 
rule.

[[Page 17775]]

b. Refrigerants
    True commented that there was the potential for a substantial cost 
increase to manufacturers in the very near future due to the phasing 
out of HFCs. True further commented that new refrigerants may have an 
incremental cost of 5-10 times over what is currently being paid for 
refrigerants. (True, Public Meeting Transcript, No. 62 at p. 279) The 
use of alternative refrigerants by manufacturers of commercial 
refrigeration equipment would not arise as a direct result of this 
rule, and thus was not considered in this analysis. Furthermore, there 
is no requirement mandating the use of alternative refrigerants at this 
time. DOE does not include the impacts of pending legislation or 
unfinalized regulations in its analyses, as any impact would be 
speculative.
c. Redesign Issues
    Several manufacturers pointed out that high capital costs were 
required by the proposed standards. Traulsen asserted that up to 95% of 
all equipment would need to be redesigned as a result of the proposed 
standard. (Traulsen, No. 62 at p. 315) True added that the cost of 
redesigning and retooling entire product lines, and including the costs 
of new refrigerants, would be cost prohibitive. (True, No. 62 at p. 
341) With regard to the specific cost of replacing foaming fixtures, 
True commented that new fixtures could cost several hundred thousand 
dollars, and modifying fixtures in order to manufacture thicker foam 
panels could cost $40,000-$50,000 per fixture, while Southern Store 
Fixtures noted that it would have to change over 3,000 molds and 1,000 
foaming fixtures for its entire product line, and that it would cost 
much more than the assumed $2,500,000. (True, No. 62 at p. 340) (SSF, 
No. 67 at p. 3)
    With regard to capital costs, True commented that switching from 
double-pane to triple pane glass would require new tooling and molds 
for manufacturing, costing up to $300,000 per door model produced, and 
that if the interior volume of a unit were to change due to thicker 
foam, all shelving systems and weld fixtures would need to be 
redesigned. (True, No. 76 at p. 3) Furthermore, Traulsen commented that 
changing fixture depth would cause a change in production time per 
unit, and that this cost had not been reflected in the DOE analysis. 
(Traulsen, No. 65 at p. 9) Similarly, Hussmann commented that there was 
a substantial engineering cost associated with re-engineering case 
components in order to incorporate increased foam thickness. 
Specifically, Hussmann noted that in order to maintain outside 
dimensions of a case and increase insulation thickness, manufacturers 
would be required to redesign and retool every component based on the 
case's internal dimensions. (Hussmann, No. 77 at p. 2) Hoshizaki, also 
expressed the same concern, adding that that DOE underestimated the 
cost associated with increasing foam thickness by \1/2\'', since this 
increase would require engineering, testing, tooling, production line 
changeover, down-time, packaging changes, and certification. 
(Hoshizaki, No. 84 at p. 2)
    DOE estimated the conversion costs associated with increases in 
foam thickness based on direct input from the industry in interviews, 
as well as through analysis of production equipment that is part of the 
engineering cost model. DOE's analysis included capital conversion 
costs, including as tooling costs and production line upgrades, and 
product conversion costs, including redesign efforts, testing costs, 
industry certifications, and marketing changes. Differences in packing 
and shipping costs were also accounted for in the shipping cost 
component of the engineering analysis.
    In its NOPR analysis, DOE recognized the need for new foaming 
fixtures to accommodate thicker panels. However, for the final rule 
analysis, DOE revised its estimate of fixture investment for the entire 
CRE industry upward to $210 million.
    At the NOPR stage, the MIA analysis did not associate a conversion 
cost with changes in display door designs based on DOE's understanding 
that the vast majority of CRE manufacturers consider display doors to 
be purchased parts. Furthermore, in the final rule engineering 
analysis, DOE does not consider triple-pane display doors as a design 
option in its analysis. However, for the final rule, DOE updated its 
manufacturer impact analysis to account for the conversion costs 
associated with changes in door design and specification, such as 
moving from single-pane to double-pane for horizontal cases with 
transparent doors.
d. LED Material Costs
    Structural Concepts commented that the implementation of LEDs would 
cost over $500,000 annually in material costs alone. (Structural 
Concepts, No. 85 at p. 3) DOE agrees with Structural Concepts that some 
design options, such as LED lighting, require larger upfront 
investments in component inventory by manufacturers. DOE accounts for 
investment in more expensive components and greater amounts of raw 
materials as increases in working capital. Increases in working capital 
decrease free cash flow and are reflected in industry net present value 
(INPV), which DOE considers as a key input when selecting a standard 
level.
e. GRIM
    AHRI asserted that the GRIM model should account for periodic 
revisions to energy standards and potential changes in refrigerant 
policy when estimating the INPV. (AHRI, No. 75 at p. 11) Additionally, 
AHRI commented that, since the GRIM predicts INPV across an extended 
period, the model should have accounted for impacts on manufacturers 
due to periodic revisions of energy conservation standards and 
potential changes to refrigerant policy, and that the INPV range at 
TSL4 was grossly underestimated since there will likely be up to five 
revisions to CRE standards by 2046. (AHRI, No. 75 at p. 13) However, 
DOE does not take unfinalized regulation into account in its analysis. 
Any forecast of amendments to the standard level in the future and the 
potential costs of those changes would be purely speculative and, 
therefore, outside the scope of analysis.
f. Cumulative Regulatory Burden
    Traulsen commented that the cost burden to manufacturers of 
complying with both the 2009 and 2017 rules, which overlap, is 
unmanageable. (Traulsen, No. 65 at p. 22) Lennox also stated that the 
proposed standards would place significant cumulative regulatory burden 
on manufacturers. (Traulsen, No. 65 at p. 9)
    DOE defines cumulative regulatory burden (CRB) as regulations that 
go into effect within 3 years of the effective date of the standard 
under consideration. As a result, the 2009 amended standard is not one 
of the regulations listed in the CRB analysis in section V.B.2.e of 
this document. However, the market changes and equipment price impacts 
that resulted from the 2009 standard are incorporated into DOE's 
analyses.
g. Certification Costs
    AHRI commented that the implementation of higher efficiency 
compressors should include costs associated with safety certification 
(UL, etc.), compliance with NSF Standards, and recertification due to 
the induced change in the equipment performance. (AHRI, No. 75 at p. 
13) In its NOPR and final rule analyses, DOE accounted for the UL and 
NSF certification costs associated with compressor changes. While UL 
and NSF certification costs can vary by manufacturers, DOE used an 
industry average combined cost of

[[Page 17776]]

$8,000 per model for those certifications in its final rule analysis.
h. Small Manufacturers
    In its written comment, Traulsen expressed the opinion that the 
proposed rule would have a significant economic impact on a substantial 
number of small businesses and was therefore in violation of the 
Regulatory Flexibility Act. In particular, Traulsen drew attention to 
page 55983, column 2 of the Federal Register NOPR document, which 
stated that DOE could not certify that the proposed standards would not 
have a significant impact on a significant number of small businesses. 
(Traulsen, No. 65 at p.16) The George Washington University (GWU) also 
asserted in its comment that the proposed rule affected small 
businesses--both manufacturers and consumers--since it did not maintain 
flexibility and freedom of choice. (GWU, No. 66 at p. 11) To better 
understand the potential impact of the final rule on small businesses, 
DOE provides an assessment of the impacts on small manufacturers in 
section VI.B.

K. Emissions Analysis

    In the emissions analysis, DOE estimated the reduction in power 
sector emissions of CO2, NOX, sulfur dioxide 
(SO2) and Hg from amended energy conservation standards for 
commercial refrigeration equipment. In addition, DOE estimates 
emissions impacts in production activities (extracting, processing, and 
transporting fuels) that provide the energy inputs to power plants. 
These are referred to as ``upstream'' emissions. Together, these 
emissions account for the full-fuel-cycle (FFC). In accordance with 
DOE's FFC Statement of Policy (76 FR 51282 (August 18, 2011)) 77 FR 
49701 (August 17, 2012), the FFC analysis includes impacts on emissions 
of methane (CH4) and nitrous oxide (N2O), both of 
which are recognized as greenhouse gases.
    DOE primarily conducted the emissions analysis using emissions 
factors for CO2 and most of the other gases derived from 
data in AEO 2013, supplemented by data from other sources. DOE 
developed separate emissions factors for power sector emissions and 
upstream emissions. The method that DOE used to derive emissions 
factors is described in chapter 13 of the final rule TSD.
    For CH4 and N2O, DOE calculated emissions 
reduction in tons and also in terms of units of carbon dioxide 
equivalent (CO2eq). Gases are converted to CO2eq 
by multiplying the physical units by the gas' global warming potential 
(GWP) over a 100 year time horizon. Based on the Fourth Assessment 
Report of the Intergovernmental Panel on Climate Change,\62\ DOE used 
GWP values of 25 for CH4 and 298 for N2O.
---------------------------------------------------------------------------

    \62\ Forster, P., V. Ramaswamy, P. Artaxo, T. Berntsen, R. 
Betts, D.W. Fahey, J. Haywood, J. Lean, D.C. Lowe, G. Myhre, J. 
Nganga, R. Prinn, G. Raga, M. Schulz and R. Van Dorland. 2007: 
Changes in Atmospheric Constituents and in Radiative Forcing. In 
Climate Change 2007: The Physical Science Basis. Contribution of 
Working Group I to the Fourth Assessment Report of the 
Intergovernmental Panel on Climate Change. S. Solomon, D. Qin, M. 
Manning, Z. Chen, M. Marquis, K.B. Averyt, M.Tignor and H.L. Miller, 
Editors. 2007. Cambridge University Press, Cambridge, United Kingdom 
and New York, NY, USA. p. 212.
---------------------------------------------------------------------------

    EIA prepares the Annual Energy Outlook using the National Energy 
Modeling System (NEMS). Each annual version of NEMS incorporates the 
projected impacts of existing air quality regulations on emissions. AEO 
2013 generally represents current legislation and environmental 
regulations, including recent government actions, for which 
implementing regulations were available as of December 31, 2012.
    SO2 emissions from affected electric generating units 
(EGUs) are subject to nationwide and regional emissions cap-and-trade 
programs. Title IV of the Clean Air Act sets an annual emissions cap on 
SO2 for affected EGUs in the 48 contiguous States (42 U.S.C. 
7651 et seq.) and the District of Columbia (D.C.). SO2 
emissions from 28 eastern States and D.C. were also limited under the 
Clean Air Interstate Rule (CAIR; 70 FR 25162 (May 12, 2005)), which 
created an allowance-based trading program. CAIR was remanded to the 
U.S. Environmental Protection Agency (EPA) by the U.S. Court of Appeals 
for the District of Columbia but it remained in effect.\63\ See North 
Carolina v. EPA, 550 F.3d 1176 (D.C. Cir. 2008); North Carolina v. EPA, 
531 F.3d 896 (D.C. Cir. 2008). In 2011, EPA issued a replacement for 
CAIR, the Cross-State Air Pollution Rule (CSAPR). 76 FR 48208 (Aug. 8, 
2011). On August 21, 2012, the D.C. Circuit issued a decision to vacate 
CSAPR.\64\ The court ordered EPA to continue administering CAIR. The 
AEO 2013 emissions factors used for today's final rule assume that CAIR 
remains a binding regulation through 2040.
---------------------------------------------------------------------------

    \63\ See North Carolina v. EPA, 550 F.3d 1176 (D.C. Cir. 2008); 
North Carolina v. EPA, 531 F.3d 896 (D.C. Cir. 2008).
    \64\ See EME Homer City Generation, LP v. EPA, 696 F.3d 7, 38 
(D.C. Cir. 2012), cert. granted, 81 U.S.L.W. 3567, 81 U.S.L.W. 3696, 
81 U.S.L.W. 3702 (U.S. June 24, 2013) (No. 12-1182).
---------------------------------------------------------------------------

    The attainment of emissions caps is typically flexible among EGUs 
and is enforced through the use of tradable emissions allowances. Under 
existing EPA regulations, any excess SO2 emissions 
allowances resulting from the lower electricity demand caused by the 
adoption of a new or amended efficiency standard could be used to allow 
offsetting increases in SO2 emissions by any regulated EGU. 
In past rulemakings, DOE recognized that there was uncertainty about 
the effects of efficiency standards on SO2 emissions covered 
by the existing cap-and-trade system, but it concluded that negligible 
reductions in power sector SO2 emissions would occur as a 
result of standards.
    Beginning around 2015, however, SO2 emissions will fall 
as a result of the Mercury and Air Toxics Standards (MATS) for power 
plants. 77 FR 9304 (February 16, 2012). In the final MATS rule, EPA 
established a standard for hydrogen chloride as a surrogate for acid 
gas hazardous air pollutants (HAP), and also established a standard for 
SO2 (a non-HAP acid gas) as an alternative equivalent 
surrogate standard for acid gas HAP. The same controls are used to 
reduce HAP and non-HAP acid gas; thus, SO2 emissions will be 
reduced as a result of the control technologies installed on coal-fired 
power plants to comply with the MATS requirements for acid gas. AEO2013 
assumes that, in order to continue operating, coal plants must have 
either flue gas desulfurization or dry sorbent injection systems 
installed by 2015. Both technologies, which are used to reduce acid gas 
emissions, also reduce SO2 emissions. Under the MATS, NEMS 
shows a reduction in SO2 emissions when electricity demand 
decreases (e.g., as a result of energy efficiency standards). Emissions 
will be far below the cap that would be established by CAIR, so it is 
unlikely that excess SO2 emissions allowances resulting from 
the lower electricity demand would be needed or used to allow 
offsetting increases in SO2 emissions by any regulated EGU. 
Therefore, DOE believes that energy efficiency standards will reduce 
SO2 emissions in 2015 and beyond.
    CAIR established a cap on NOX emissions in 28 eastern 
States and the District of Columbia. Energy conservation standards are 
expected to have little effect on NOX emissions in those 
States covered by CAIR because excess NOX emissions 
allowances resulting from the lower electricity demand could be used to 
allow offsetting increases in NOX emissions. However, 
standards would be expected to reduce NOX emissions in the 
States not affected by the caps, so DOE estimated NOX 
emissions reductions

[[Page 17777]]

from the standards considered in today's final rule for these States.
    The MATS limit mercury emissions from power plants, but they do not 
include emissions caps and, as such, DOE's energy conservation 
standards would likely reduce Hg emissions. DOE estimated mercury 
emissions factors based on AEO2013, which incorporates the MATS.

L. Monetizing Carbon Dioxide and Other Emissions Impacts

    As part of the development of the standards in this final rule, DOE 
considered the estimated monetary benefits from the reduced emissions 
of CO2 and NOX that are expected to result from 
each of the TSLs considered. In order to make this calculation 
analogous to the calculation of the NPV of customer benefit, DOE 
considered the reduced emissions expected to result over the lifetime 
of equipment shipped in the forecast period for each TSL. This section 
summarizes the basis for the monetary values used for each of these 
emissions and presents the values considered in this final rule.
    For today's final rule, DOE is relying on a set of values for the 
SCC that was developed by a Federal interagency process. The basis for 
these values is summarized below, and a more detailed description of 
the methodologies used is provided as an appendix to chapter 14 of the 
final rule TSD.
1. Social Cost of Carbon
    The SCC is an estimate of the monetized damages associated with an 
incremental increase in carbon emissions in a given year. It is 
intended to include (but is not limited to) changes in net agricultural 
productivity, human health, property damages from increased flood risk, 
and the value of ecosystem services. Estimates of the SCC are provided 
in dollars per metric ton of carbon dioxide. A domestic SCC value is 
meant to reflect the value of damages in the United States resulting 
from a unit change in carbon dioxide emissions, while a global SCC 
value is meant to reflect the value of damages worldwide.
    Under section 1(b) of Executive Order 12866, agencies must, to the 
extent permitted by law, ``assess both the costs and the benefits of 
the intended regulation and, recognizing that some costs and benefits 
are difficult to quantify, propose or adopt a regulation only upon a 
reasoned determination that the benefits of the intended regulation 
justify its costs.'' The purpose of the SCC estimates presented here is 
to allow agencies to incorporate the monetized social benefits of 
reducing CO2 emissions into cost-benefit analyses of 
regulatory actions. The estimates are presented with an acknowledgement 
of the many uncertainties involved and with a clear understanding that 
they should be updated over time to reflect increasing knowledge of the 
science and economics of climate impacts.
    As part of the interagency process that developed these SCC 
estimates, technical experts from numerous agencies met on a regular 
basis to consider public comments, explore the technical literature in 
relevant fields, and discuss key model inputs and assumptions. The main 
objective of this process was to develop a range of SCC values using a 
defensible set of input assumptions grounded in the existing scientific 
and economic literatures. In this way, key uncertainties and model 
differences transparently and consistently inform the range of SCC 
estimates used in the rulemaking process.
a. Monetizing Carbon Dioxide Emissions
    When attempting to assess the incremental economic impacts of 
carbon dioxide emissions, the analyst faces a number of challenges. A 
report from the National Research Council \65\ points out that any 
assessment will suffer from uncertainty, speculation, and lack of 
information about (1) future emissions of GHGs, (2) the effects of past 
and future emissions on the climate system, (3) the impact of changes 
in climate on the physical and biological environment, and (4) the 
translation of these environmental impacts into economic damages. As a 
result, any effort to quantify and monetize the harms associated with 
climate change will raise questions of science, economics, and ethics 
and should be viewed as provisional.
---------------------------------------------------------------------------

    \65\ National Research Council. Hidden Costs of Energy: Unpriced 
Consequences of Energy Production and Use. 2009. National Academies 
Press: Washington, DC.
---------------------------------------------------------------------------

    Despite the limits of both quantification and monetization, SCC 
estimates can be useful in estimating the social benefits of reducing 
CO2 emissions. The agency can estimate the benefits from 
reduced (or costs from increased) emissions in any future year by 
multiplying the change in emissions in that year by the SCC values 
appropriate for that year. The net present value of the benefits can 
then be calculated by multiplying each of these future benefits by an 
appropriate discount factor and summing across all affected years.
    It is important to emphasize that the interagency process is 
committed to updating these estimates as the science and economic 
understanding of climate change and its impacts on society improves 
over time. In the meantime, the interagency group will continue to 
explore the issues raised by this analysis and consider public comments 
as part of the ongoing interagency process.
b. Development of Social Cost of Carbon Values
    In 2009, an interagency process was initiated to offer a 
preliminary assessment of how best to quantify the benefits from 
reducing carbon dioxide emissions. To ensure consistency in how 
benefits are evaluated across Federal agencies, the Administration 
sought to develop a transparent and defensible method, specifically 
designed for the rulemaking process, to quantify avoided climate change 
damages from reduced CO2 emissions. The interagency group 
did not undertake any original analysis. Instead, it combined SCC 
estimates from the existing literature to use as interim values until a 
more comprehensive analysis could be conducted. The outcome of the 
preliminary assessment by the interagency group was a set of five 
interim values: global SCC estimates for 2007 (in 2006$) of $55, $33, 
$19, $10, and $5 per metric ton of CO2. These interim values 
represented the first sustained interagency effort within the U.S. 
government to develop an SCC for use in regulatory analysis. The 
results of this preliminary effort were presented in several proposed 
and final rules.
c. Current Approach and Key Assumptions
    After the release of the interim values, the interagency group 
reconvened on a regular basis to generate improved SCC estimates. 
Specially, the group considered public comments and further explored 
the technical literature in relevant fields. The interagency group 
relied on three integrated assessment models commonly used to estimate 
the SCC: the FUND, DICE, and PAGE models. These models are frequently 
cited in the peer-reviewed literature and were used in the last 
assessment of the Intergovernmental Panel on Climate Change (IPCC). 
Each model was given equal weight in the SCC values that were 
developed.
    Each model takes a slightly different approach to model how changes 
in emissions result in changes in economic damages. A key objective of 
the interagency process was to enable a consistent exploration of the 
three models, while respecting the different approaches to quantifying 
damages

[[Page 17778]]

taken by the key modelers in the field. An extensive review of the 
literature was conducted to select three sets of input parameters for 
these models: climate sensitivity, socio-economic and emissions 
trajectories, and discount rates. A probability distribution for 
climate sensitivity was specified as an input into all three models. In 
addition, the interagency group used a range of scenarios for the 
socio-economic parameters and a range of values for the discount rate. 
All other model features were left unchanged, relying on the model 
developers' best estimates and judgments.
    The interagency group selected four sets of SCC values for use in 
regulatory analyses. Three sets of values are based on the average SCC 
from the three IAMs, at discount rates of 2.5, 3, and 5 percent. The 
fourth set, which represents the 95th percentile SCC estimate across 
all three models at a 3-percent discount rate, was included to 
represent higher than expected impacts from temperature change further 
out in the tails of the SCC distribution. The values grow in real terms 
over time. Additionally, the interagency group determined that a range 
of values from 7 percent to 23 percent should be used to adjust the 
global SCC to calculate domestic effects,\66\ although preference is 
given to consideration of the global benefits of reducing 
CO2 emissions. Table IV.4 presents the values in the 2010 
interagency group report,\67\ which is reproduced in appendix 14A of 
the DOE final rule TSD.
---------------------------------------------------------------------------

    \66\ It is recognized that this calculation for domestic values 
is approximate, provisional, and highly speculative. There is no a 
priori reason why domestic benefits should be a constant fraction of 
net global damages over time.
    \67\ Social Cost of Carbon for Regulatory Impact Analysis Under 
Executive Order 12866. Interagency Working Group on Social Cost of 
Carbon, United States Government, February 2010. www.whitehouse.gov/sites/default/files/omb/inforeg/for-agencies/Social-Cost-of-Carbon-for-RIA.pdf.

                      Table IV.4--Annual SCC Values From 2010 Interagency Report, 2010-2050
                                          [2007 dollars per metric ton]
----------------------------------------------------------------------------------------------------------------
                                                                           Discount Rate
                                                 ---------------------------------------------------------------
                                                        5%              3%             2.5%             3%
                      Year                       ---------------------------------------------------------------
                                                                                                       95th
                                                      Average         Average         Average       percentile
----------------------------------------------------------------------------------------------------------------
2010............................................             4.7            21.4            35.1            64.9
2015............................................             5.7            23.8            38.4            72.8
2020............................................             6.8            26.3            41.7            80.7
2025............................................             8.2            29.6            45.9            90.4
2030............................................             9.7            32.8            50.0           100.0
2035............................................            11.2            36.0            54.2           109.7
2040............................................            12.7            39.2            58.4           119.3
2045............................................            14.2            42.1            61.7           127.8
2050............................................            15.7            44.9            65.0           136.2
----------------------------------------------------------------------------------------------------------------

    The SCC values used for today's document were generated using the 
most recent versions of the three integrated assessment models that 
have been published in the peer-reviewed literature.\68\ Table IV.5 
shows the updated sets of SCC estimates in 5-year increments from 2010 
to 2050. The full set of annual SCC estimates between 2010 and 2050 is 
reported in appendix 14B of the DOE final rule TSD. The central value 
that emerges is the average SCC across models at the 3 percent discount 
rate. However, for purposes of capturing the uncertainties involved in 
regulatory impact analysis, the interagency group emphasizes the 
importance of including all four sets of SCC values.
---------------------------------------------------------------------------

    \68\ Technical Update of the Social Cost of Carbon for 
Regulatory Impact Analysis Under Executive Order 12866. Interagency 
Working Group on Social Cost of Carbon, United States Government. 
May 2013; revised November 2013. http://www.whitehouse.gov/sites/default/files/omb/assets/inforeg/technical-update-social-cost-of-carbon-for-regulator-impact-analysis.pdf.

                      Table IV.5--Annual SCC Values from 2013 Interagency Report, 2010-2050
                                          [2007 dollars per metric ton]
----------------------------------------------------------------------------------------------------------------
                                                                           Discount rate
                                                 ---------------------------------------------------------------
                                                        5%              3%             2.5%             3%
                      Year                       ---------------------------------------------------------------
                                                                                                       95th
                                                      Average         Average         Average       percentile
----------------------------------------------------------------------------------------------------------------
2010............................................              11              32              51              89
2015............................................              11              37              57             109
2020............................................              12              43              64             128
2025............................................              14              47              69             143
2030............................................              16              52              75             159
2035............................................              19              56              80             175
2040............................................              21              61              86             191
2045............................................              24              66              92             206
2050............................................              26              71              97             220
----------------------------------------------------------------------------------------------------------------

    It is important to recognize that a number of key uncertainties 
remain, and that current SCC estimates should be treated as provisional 
and revisable since they will evolve with improved scientific and 
economic understanding.

[[Page 17779]]

The interagency group also recognizes that the existing models are 
imperfect and incomplete. The 2009 National Research Council report 
mentioned above points out that there is tension between the goal of 
producing quantified estimates of the economic damages from an 
incremental ton of carbon and the limits of existing efforts to model 
these effects. There are a number of analytic challenges that are being 
addressed by the research community, including research programs housed 
in many of the Federal agencies participating in the interagency 
process to estimate the SCC. The interagency group intends to 
periodically review and reconsider those estimates to reflect 
increasing knowledge of the science and economics of climate impacts, 
as well as improvements in modeling.
    In summary, in considering the potential global benefits resulting 
from reduced CO2 emissions, DOE used the values from the 
2013 interagency report adjusted to 2012$ using the GDP price deflator. 
For each of the four sets of SCC values, the values for emissions in 
2015 were $11.8, $39.7, $61.2, and $117 per metric ton avoided (values 
expressed in 2012$). DOE derived values after 2050 using the relevant 
growth rates for the 2040-2050 period in the interagency update.
    DOE multiplied the CO2 emissions reduction estimated for 
each year by the SCC value for that year in each of the four cases. To 
calculate a present value of the stream of monetary values, DOE 
discounted the values in each of the four cases using the specific 
discount rate that had been used to obtain the SCC values in each case.
    In responding to the NOPR, many commenters questioned the 
scientific and economic basis of the SCC values. These commenters made 
extensive comments about: The alleged lack of economic theory 
underlying the models; the sufficiency of the models for policy-making; 
potential flaws in the models' inputs and assumptions (including the 
discount rates and climate sensitivity chosen); whether there had been 
adequate peer review of the three models; whether there had been 
adequate peer review of the interagency TSD supporting the 2013 SCC 
values; \69\ whether the SCC estimates comply with OMB's ``Final 
Information Quality Bulletin for Peer Review'' \70\ and DOE's own 
guidelines for ensuring and maximizing the quality, objectivity, 
utility and integrity of information disseminated by DOE; and why DOE 
is considering global benefits of carbon dioxide emission reductions 
rather than solely domestic benefits. (See AHRI, No. 75; Joint Comment 
from America's Natural Gas Alliance, the American Chemistry Council, 
the American Petroleum Institute, the National Association of Home 
Builders, the National Association of Manufacturers, the Portland 
Cement Association, and the U.S. Chamber of Commerce (ANGA et al/
Chamber of Commerce), No. 79; Cato Institute (Cato), No. 69; EEI, No. 
89; GWU, No. 66; Mercatus, No. 72; NRECA, No. 88; Traulsen, No. 65. 
Several other parties expressed support for the derivation and 
application of the SCC values. (Joint Comment from the Environmental 
Defense Fund, Institute for Policy Integrity, Natural Resources Defense 
Council, and the Union of Concerned Scientists, No. 83; ASAP, No. 91; 
Kopp, No. 60)
---------------------------------------------------------------------------

    \69\ Available at: http://www.whitehouse.gov/sites/default/files/omb/inforeg/social_cost_of_carbon_for_ria_2013_update.pdf.
    \70\ Available at: http://www.cio.noaa.gov/services_programs/pdfs/OMB_Peer_Review_Bulletin_m05-03.pdf.
---------------------------------------------------------------------------

    In response to the comments on the SCC values, DOE acknowledges the 
limitations in the SCC estimates, which are discussed in detail in the 
2010 interagency group report. Specifically, uncertainties in the 
assumptions regarding climate sensitivity, as well as other model 
inputs such as economic growth and emissions trajectories, are 
discussed and the reasons for the specific input assumptions chosen are 
explained. Regarding discount rates, there is not consensus in the 
scientific or economics literature regarding the appropriate discount 
rate to use for intergenerational time horizons. The SCC estimates thus 
use a reasonable range of discount rates, from 2.5% to 5%, in order to 
show the effects that different discount rate assumptions have on the 
estimated values. More information about the choice of discount rates 
can be found in the 2010 interagency group report starting on page 17.
    Regarding peer review of the models, the three integrated 
assessment models used to estimate the SCC are frequently cited in the 
peer-reviewed literature and were used in the last assessment of the 
IPCC. In addition, new versions of the models that were used in 2013 to 
estimate revised SCC values were published in the peer-reviewed 
literature (see appendix 14B of the DOE final rule TSD for discussion).
    DOE believes that the SCC estimates comply with OMB's Final 
Information Quality Bulletin for Peer Review and DOE's own guidelines 
for ensuring and maximizing the quality, objectivity, utility and 
integrity of information disseminated by DOE.\71\
---------------------------------------------------------------------------

    \71\ https://www.directives.doe.gov/references/secretarial_policy_statement_on_scientific_integrity/view.
---------------------------------------------------------------------------

    As to why DOE is considering global benefits of carbon dioxide 
emission reductions rather than solely domestic benefits, a global 
measure of SCC because of the distinctive nature of the climate change 
problem, which is highly unusual in at least two respects. First, it 
involves a global externality: Emissions of most greenhouse gases 
contribute to damages around the world even when they are emitted in 
the United States. Second, climate change presents a problem that the 
United States alone cannot solve. The issue of global versus domestic 
measures of the SCC is further discussed in appendix 14A of the DOE 
final rule TSD.
    AHRI stated that DOE calculates the present value of the costs of 
standards to consumers and manufacturers over a 30-year period, but the 
SCC values reflect the present value of future climate related impacts 
well beyond 2100. AHRI stated that DOE's comparison of 30 years of cost 
to hundreds of years of presumed future benefits is inconsistent and 
improper. (AHRI, No. 84 at p. 12)
    For the analysis of national impacts of the proposed standards, DOE 
considered the lifetime impacts of equipment shipped in a 30-year 
period. With respect to energy and energy cost savings, impacts 
continue past 30 years until all of the equipment shipped in the 30-
year period is retired. With respect to the valuation of CO2 
emissions reductions, the SCC estimates developed by the interagency 
working group are meant to represent the full discounted value (using 
an appropriate range of discount rates) of emissions reductions 
occurring in a given year. DOE is thus comparing the costs of achieving 
the emissions reductions in each year of the analysis, with the carbon 
reduction value of the emissions reductions in those same years. 
Neither the costs nor the benefits of emissions reductions outside the 
analytic time frame are included in the analysis.
    In November 2013, OMB announced a new opportunity for public 
comment on the interagency technical support document underlying the 
revised SCC estimates. See 78 FR 70586. The comment period for the OMB 
announcement closed on February 26, 2014. OMB is currently reviewing 
comments and considering whether further revisions to the 2013 SCC 
estimates are warranted. DOE stands ready to work with OMB and the 
other

[[Page 17780]]

members of the interagency working group on further review and revision 
of the SCC estimates as appropriate.
2. Valuation of Other Emissions Reductions
    DOE investigated the potential monetary benefit of reduced 
NOX emissions from the potential standards it considered. As 
noted above, DOE has taken into account how new or amended energy 
conservation standards would reduce NOX emissions in those 
22 States not affected by emissions caps. DOE estimated the monetized 
value of NOX emissions reductions resulting from each of the 
TSLs considered for today's final rule based on estimates found in the 
relevant scientific literature. Estimates of monetary value for 
reducing NOX from stationary sources range from $468 to 
$4,809 per ton (2012$).\72\ DOE calculated monetary benefits using a 
medium value for NOX emissions of $2,639 per short ton (in 
2012$), and real discount rates of 3 percent and 7 percent.
---------------------------------------------------------------------------

    \72\ For additional information, refer to U.S. Office of 
Management and Budget, Office of Information and Regulatory Affairs, 
2006 Report to Congress on the Costs and Benefits of Federal 
Regulations and Unfunded Mandates on State, Local, and Tribal 
Entities, Washington, DC.
---------------------------------------------------------------------------

    DOE is evaluating appropriate monetization of avoided 
SO2 and Hg emissions in energy conservation standards 
rulemakings. It has not included monetization in the current analysis.

M. Utility Impact Analysis

    The utility impact analysis estimates several important effects on 
the utility industry of the adoption of new or amended standards. For 
this analysis, DOE used the National Energy Modeling System--Building 
Technologies (NEMS-BT) \73\ model to generate forecasts of electricity 
consumption, electricity generation by plant type, and electric 
generating capacity by plant type, that would result from each 
considered TSL. DOE obtained the energy savings inputs associated with 
efficiency improvements to considered products from the NIA. DOE 
conducts the utility impact analysis as a scenario that departs from 
the latest AEO Reference Case. In the analysis for today's rule, the 
estimated impacts of standards are the differences between values 
forecasted by NEMS-BT and the values in the AEO2013 Reference Case. For 
more details on the utility impact analysis, see chapter 15 of the 
final rule TSD.
---------------------------------------------------------------------------

    \73\ The EIA allows the use of the name ``NEMS'' to describe 
only an AEO version of the model without any modification to code or 
data. Because the present analysis entails some minor code 
modifications and runs the model under various policy scenarios that 
deviate from AEO assumptions, the name ``NEMS-BT'' refers to the 
model as used here. For more information on NEMS, refer to The 
National Energy Modeling System: An Overview, DOE/EIA-0581 (98) 
(Feb.1998), available at: http://tonto.eia.doe.gov/FTPROOT/forecasting/058198.pdf.
---------------------------------------------------------------------------

N. Employment Impact Analysis

    Employment impacts are one of the factors that DOE considers in 
selecting an efficiency standard. Employment impacts include direct and 
indirect impacts. Direct employment impacts are any changes that affect 
employment of commercial refrigeration equipment manufacturers, their 
suppliers, and related service firms. Indirect impacts are those 
changes in employment in the larger economy which occur because of the 
shift in expenditures and capital investment caused by the purchase and 
operation of more-efficient commercial refrigeration equipment. Direct 
employment impacts are analyzed as part of the MIA. Indirect impacts 
are assessed as part of the employment impact analysis.
    Indirect employment impacts from amended 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; (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 Nation's economy. DOE expects the net monetary 
savings from amended standards to stimulate other forms of economic 
activity. DOE also expects these shifts in spending and economic 
activity to affect the demand for labor.
    In developing this analysis for today's standard, DOE estimated 
indirect national employment impacts using an input/output model of the 
U.S. economy, called ImSET (Impact of Sector Energy Technologies), 
developed by DOE's Building Technologies Program. ImSET is an economic 
analysis model that characterizes the interconnections among 188 
sectors of the economy as national input/output structural matrices, 
using data from the U.S. Department of Commerce's 1997 Benchmark U.S. 
input/output table.\74\ 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 sectors of 
the economy. DOE estimated changes in expenditures using the NIA model. 
ImSET then estimated the net national indirect employment impacts that 
amended commercial refrigeration equipment efficiency standards could 
have on employment by sector.
---------------------------------------------------------------------------

    \74\ U.S. Department of Commerce, Bureau of Economic Analysis. 
Benchmark Input-Output Accounts. 1997. U.S. Government Printing 
Office: Washington, DC.
---------------------------------------------------------------------------

    For more details on the employment impact analysis and its results, 
see chapter 16 of the TSD.

V. Analytical Results

A. Trial Standard Levels

1. Trial Standard Level Formulation Process and Criteria
    Based on the results of the LCC analysis and NIA, DOE selected five 
TSLs above the baseline level for each equipment class for the final 
rule. TSL 5 was selected at the max-tech level for all equipment 
classes. TSL 4 was chosen so as to group the efficiency levels with the 
highest energy savings combined with a positive customer NPV at a 7-
percent discount rate. TSL 3 was chosen to represent the group of 
efficiency levels with the highest customer NPV at a 7-percent discount 
rate. TSL 2 and TSL 1 were chosen to provide intermediate efficiency 
levels that fill the gap between the baseline efficiency levels and TSL 
3.
    For the HCT.SC.I, HZO.RC.M, and HZO.RC.L equipment classes, there 
is only one efficiency level above baseline. For the HZO.SC.L equipment 
class, there are no efficiency levels above baseline, because there was 
only one analytical design analyzed engineering analysis compliant with 
the 2009 final rule. While TSL 5 was associated with the max-tech level 
for HCT.SC.I, HZO.RC.M, and HZO.RC.L equipment classes, TSLs 1 through 
4 did not have corresponding efficiency levels that satisfied the TSL 
formulation criteria. Therefore, the baseline efficiency level was 
assigned to TSL 1 through TSL 4 for each of these equipment classes. 
Table V.1 shows the mapping between TSLs and efficiency levels.

[[Page 17781]]



                                                  Table V.1--Mapping Between TSLs and Efficiency Levels
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                       Intermediate level      Intermediate level          Max NPV *          Max NES NPV * >0-           Max-tech
                                    -----------------------------------------------------------------------        [dagger]       ----------------------
          Equipment class                                                                                  -----------------------
                                              TSL 1                   TSL 2                  TSL 3                  TSL 4                  TSL 5
--------------------------------------------------------------------------------------------------------------------------------------------------------
VOP.RC.M...........................  Baseline..............  Baseline..............  EL 1.................  EL 3.................  EL 4.
VOP.RC.L...........................  Baseline..............  Baseline..............  EL 1.................  EL 2.................  EL 3.
VOP.SC.M...........................  Baseline..............  Baseline..............  Baseline.............  EL 1.................  EL 2.
VCT.RC.M...........................  Baseline..............  Baseline..............  EL 1.................  EL 3.................  EL 4.
VCT.RC.L...........................  EL 1..................  EL 1..................  EL 2.................  EL 3.................  EL 4.
VCT.SC.M...........................  EL 1..................  EL 2..................  EL 3.................  EL 5.................  EL 7.
VCT.SC.L...........................  EL 1..................  EL 3..................  EL 5.................  EL 7.................  EL 7.
VCT.SC.I...........................  EL 1..................  EL 1..................  EL 1.................  EL 3.................  EL 4.
VCS.SC.M...........................  EL 1..................  EL 2..................  EL 4.................  EL 6.................  EL 7.
VCS.SC.L...........................  EL 1..................  EL 3..................  EL 5.................  EL 6.................  EL 7.
VCS.SC.I...........................  EL 1..................  EL 2..................  EL 4.................  EL 4.................  EL 5.
SVO.RC.M...........................  EL 1..................  EL 1..................  EL 1.................  EL 3.................  EL 4.
SVO.SC.M...........................  Baseline..............  Baseline..............  Baseline.............  EL 1.................  EL 3.
SOC.RC.M...........................  Baseline..............  Baseline..............  Baseline.............  EL 1.................  EL 4.
SOC.SC.M...........................  Baseline..............  Baseline..............  Baseline.............  EL 2.................  EL 4.
HZO.RC.M...........................  Baseline..............  Baseline..............  Baseline.............  Baseline.............  EL 1.
HZO.RC.L...........................  Baseline..............  Baseline..............  Baseline.............  Baseline.............  EL 1.
HZO.SC.M...........................  Baseline..............  EL 1..................  EL 1.................  EL 2.................  EL 3.
HZO.SC.L...........................  Baseline..............  Baseline..............  Baseline.............  Baseline.............  Baseline.
HCT.SC.M...........................  EL 2..................  EL 3..................  EL 4.................  EL 6.................  EL 7.
HCT.SC.L...........................  EL 2..................  EL 3..................  EL 4.................  EL 6.................  EL 7.
HCT.SC.I...........................  Baseline..............  Baseline..............  Baseline.............  Baseline.............  EL 1.
HCS.SC.M...........................  EL 1..................  EL 2..................  EL 3.................  EL 4.................  EL 6.
HCS.SC.L...........................  EL 1..................  EL 2..................  EL 3.................  EL 5.................  EL 6.
PD.SC.M............................  EL 1..................  EL 2..................  EL 3.................  EL 4.................  EL 7.
--------------------------------------------------------------------------------------------------------------------------------------------------------
* NPV is estimated at a 7 percent discount rate.

2. Trial Standard Level Equations
    Because of the equipment size variation within each equipment class 
and the use of daily energy consumption as the efficiency metric, DOE 
developed a methodology to express efficiency standards in terms of a 
normalizing metric. DOE used two normalizing metrics that were each 
used for certain equipment classes: (1) Volume (V), and (2) total 
display area (TDA). The use of these two normalization metrics allows 
for the development of a standard in the form of a linear equation that 
can be used to represent the entire range of equipment sizes within a 
given equipment class.
    DOE retained the respective normalization metric (TDA or volume) 
previously used in the EPACT 2005, AEMTCA, or January 2009 final rule 
standard for each covered equipment class. (42 U.S.C. 6313(c)(2)-(3)); 
74 FR at 1093 (January 9, 2009). Additionally, for its January 2009 
final rule, DOE developed offset factors as a method to adjust the 
energy efficiency requirements for smaller equipment in each equipment 
class analyzed. These offset factors, which form the y-intercept on a 
plot of each standard level equation (representing a limit case of zero 
volume or zero TDA), accounted for certain components of the 
refrigeration load (such as conduction end effects) that remain 
constant even when equipment sizes vary. These constant loads affect 
smaller cases disproportionately. The offset factors were intended to 
approximate these constant loads and provide a fixed end point in an 
equation that describes the relationship between energy consumption and 
the corresponding normalization metric. 74 FR at 1118-19 (January 9, 
2009). The standard level equations prescribed by EPACT 2005 also 
contained similar fixed parts not multiplied by the volume metric and 
which correspond to these offset factors. (42 U.S.C. 6313(c)(2)) In 
this final rule, DOE retained the January 2009 final rule offset 
factors at all TSLs, and updated those included in the EPACT 2005 
standards to reflect size-based trends in energy consumption for each 
equipment class. See chapter 5 of the TSD for further details and 
discussion of offset factors.
    For the equipment classes covered under this rulemaking, the 
standards equation at each TSL is presented in the form of MDEC (in 
kilowatt-hours per day), normalized by a volume (V) or TDA metric, with 
an offset factor added to that value. These equations take 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)

    The standards equations may be used to prescribe the MDEC for 
equipment of different sizes within the same equipment class. Chapter 9 
of the final rule TSD explains the methodology used for selecting TSLs 
and developing the coefficients shown in Table V.3.

  Table V.2--CDEC Values by TSL for Representative Units Analyzed in the Engineering Analysis for Each Primary
                                                 Equipment Class
----------------------------------------------------------------------------------------------------------------
                                                            CDEC Values by TSL kWh/day
         Equipment class         -------------------------------------------------------------------------------
                                       TSL 1           TSL 2           TSL 3           TSL 4           TSL 5
----------------------------------------------------------------------------------------------------------------
VOP.RC.M........................           46.84           46.84           38.02           36.1            35.65
VOP.RC.L........................          105.6           105.6           104.94          101.70          100.01

[[Page 17782]]

 
VOP.SC.M........................           30.01           30.01           30.01           29.91           29.71
VCT.RC.M........................           13.65           13.65           11.8            11.49           10.99
VCT.RC.L........................           35.34           35.34           34.78           34.50           33.04
VCT.SC.M........................            6.83            5.99            5.64            5.45            5.15
VCT.SC.L........................           27.46           18.23           17.16           16.05           16.05
VCT.SC.I........................           19.52           19.52           19.52           18.95           18.11
VCS.SC.M........................            5.29            4.03            3.69            3.45            3.03
VCS.SC.L........................           13.94           12.94           12.19           12.08           11.13
VCS.SC.I........................           18.70           18.01           17.43           17.43           16.04
SVO.RC.M........................           29.45           29.45           29.45           28.01           27.70
SVO.SC.M........................           26.32           26.32           26.32           25.65           25.4
SOC.RC.M........................           22.74           22.74           22.74           22.31           21.56
SOC.SC.M........................           27.72           27.72           27.72           26.61           26.12
HZO.RC.M........................           14.47           14.47           14.47           14.47           14.15
HZO.RC.L........................           32.36           32.36           32.36           32.36           31.08
HZO.SC.M........................           14.66           14.16           14.16           14.02           13.75
HZO.SC.L........................           29.92           29.92           29.92           29.92           29.92
HCT.SC.M........................            1.62            0.99            0.90            0.79            0.61
HCT.SC.L........................            2.15            2.03            1.92            1.73            1.32
HCT.SC.I........................            3.13            3.13            3.13            3.13            2.33
HCS.SC.M........................            1.42            1.36            1.28            1.26            0.98
HCS.SC.L........................            1.78            1.67            1.53            1.29            0.71
PD.SC.M.........................            4.73            3.90            3.78            3.75            3.41
----------------------------------------------------------------------------------------------------------------


                                                  Table V.3--Equations Representing the Standards at Each TSL for All Primary Equipment Classes
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                  Trial standard levels for primary equipment classes analyzed
        Equipment class        -----------------------------------------------------------------------------------------------------------------------------------------------------------------
                                         Baseline                    TSL 1                      TSL 2                      TSL 3                      TSL 4                      TSL 5
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
VOP.RC.M......................  0.82 x TDA + 4.07........  0.8 x TDA + 4.07.........  0.8 x TDA + 4.07.........  0.64 x TDA + 4.07........  0.6 x TDA + 4.07.........  0.59 x TDA + 4.07.
VOP.RC.L......................  2.27 x TDA + 6.85........  2.21 x TDA + 6.85........  2.21 x TDA + 6.85........  2.2 x TDA + 6.85.........  2.12 x TDA + 6.85........  2.09 x TDA + 6.85.
VOP.SC.M......................  1.74 x TDA + 4.71........  1.69 x TDA + 4.71........  1.69 x TDA + 4.71........  1.69 x TDA + 4.71........  1.69 x TDA + 4.71........  1.67 x TDA + 4.71.
VCT.RC.M......................  0.22 x TDA + 1.95........  0.18 x TDA + 1.95........  0.18 x TDA + 1.95........  0.15 x TDA + 1.95........  0.15 x TDA + 1.95........  0.14 x TDA + 1.95.
VCT.RC.L......................  0.56 x TDA + 2.61........  0.5 x TDA + 2.61.........  0.5 x TDA + 2.61.........  0.49 x TDA + 2.61........  0.49 x TDA + 2.61........  0.47 x TDA + 2.61.
VCT.SC.M......................  0.12 x V + 3.34..........  0.1 x V + 2.05...........  0.1 x V + 1.21...........  0.1 x V + 0.86...........  0.1 x V + 0.68...........  0.1 x V + 0.38.
VCT.SC.L......................  0.75 x V + 4.1...........  0.48 x V + 4.1...........  0.29 x V + 4.1...........  0.29 x V + 2.95..........  0.29 x V + 1.84..........  0.29 x V + 1.84.
VCT.SC.I......................  0.67 x TDA + 3.29........  0.62 x TDA + 3.29........  0.62 x TDA + 3.29........  0.62 x TDA + 3.29........  0.6 x TDA + 3.29.........  0.57 x TDA + 3.29.
VCS.SC.M......................  0.1 x V + 2.04...........  0.07 x V + 2.04..........  0.05 x V + 1.69..........  0.05 x V + 1.36..........  0.05 x V + 1.11..........  0.05 x V + 0.7.
VCS.SC.L......................  0.4 x V + 1.38...........  0.26 x V + 1.38..........  0.24 x V + 1.38..........  0.22 x V + 1.38..........  0.22 x V + 1.38..........  0.2 x V + 1.38.
VCS.SC.I......................  0.38 x V + 0.88..........  0.37 x V + 0.88..........  0.36 x V + 0.88..........  0.34 x V + 0.88..........  0.34 x V + 0.88..........  0.32 x V + 0.88.
SVO.RC.M......................  0.83 x TDA + 3.18........  0.66 x TDA + 3.18........  0.66 x TDA + 3.18........  0.66 x TDA + 3.18........  0.62 x TDA + 3.18........  0.61 x TDA + 3.18.
SVO.SC.M......................  1.73 x TDA + 4.59........  1.7 x TDA + 4.59.........  1.7 x TDA + 4.59.........  1.7 x TDA + 4.59.........  1.65 x TDA + 4.59........  1.63 x TDA + 4.59
SOC.RC.M......................  0.51 x TDA + 0.11........  0.44 x TDA + 0.11........  0.44 x TDA + 0.11........  0.44 x TDA + 0.11........  0.44 x TDA + 0.11........  0.42 x TDA + 0.11.
SOC.SC.M......................  0.6 x TDA + 1............  0.52 x TDA + 1...........  0.52 x TDA + 1...........  0.52 x TDA + 1...........  0.5 x TDA + 1............  0.49 x TDA + 1.
HZO.RC.M......................  0.35 x TDA + 2.88........  0.35 x TDA + 2.88........  0.35 x TDA + 2.88........  0.35 x TDA + 2.88........  0.35 x TDA + 2.88........  0.34 x TDA + 2.88.
HZO.RC.L......................  0.57 x TDA + 6.88........  0.55 x TDA + 6.88........  0.55 x TDA + 6.88........  0.55 x TDA + 6.88........  0.55 x TDA + 6.88........  0.53 x TDA + 6.88.
HZO.SC.M......................  0.77 x TDA + 5.55........  0.76 x TDA + 5.55........  0.72 x TDA + 5.55........  0.72 x TDA + 5.55........  0.71 x TDA + 5.55........  0.68 x TDA + 5.55.
HZO.SC.L......................  1.92 x TDA + 7.08........  1.9 x TDA + 7.08.........  1.9 x TDA + 7.08.........  1.9 x TDA + 7.08.........  1.9 x TDA + 7.08.........  1.9 x TDA + 7.08.
HCT.SC.M......................  0.12 x V + 3.34..........  0.06 x V + 1.09..........  0.06 x V + 0.46..........  0.06 x V + 0.37..........  0.06 x V + 0.27..........  0.06 x V + 0.09.
HCT.SC.L......................  0.75 x V + 4.1...........  0.08 x V + 1.47..........  0.08 x V + 1.35..........  0.08 x V + 1.23..........  0.08 x V + 1.05..........  0.08 x V + 0.63.
HCT.SC.I......................  0.56 x TDA + 0.43........  0.56 x TDA + 0.43........  0.56 x TDA + 0.43........  0.56 x TDA + 0.43........  0.56 x TDA + 0.43........  0.4 x TDA + 0.43.
HCS.SC.M......................  0.1 x V + 2.04...........  0.05 x V + 1.05..........  0.05 x V + 0.98..........  0.05 x V + 0.91..........  0.05 x V + 0.89..........  0.02 x V + 0.81.
HCS.SC.L......................  0.4 x V + 1.38...........  0.06 x V + 1.38..........  0.06 x V + 1.26..........  0.06 x V + 1.12..........  0.06 x V + 0.89..........  0.06 x V + 0.31.
PD.SC.M.......................  0.126 x V + 3.51.........  0.11 x V + 1.76..........  0.11 x V + 0.93..........  0.11 x V + 0.81..........  0.11 x V + 0.78..........  0.11 x V + 0.44.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

    In addition to the 25 primary equipment classes analyzed, DOE 
evaluated existing and potential amended standards for 24 secondary 
equipment classes of commercial refrigeration equipment covered in this 
rulemaking that were not directly analyzed in the engineering analysis. 
DOE's approach to evaluating standards for these secondary equipment 
classes involves extension multipliers developed using the engineering 
results for the primary equipment classes analyzed and a set of 
matched-pair analyses performed during the January 2009 final rule 
analysis.\75\ In addition,

[[Page 17783]]

DOE believes that standards for certain primary equipment classes can 
be directly applied to similar secondary equipment classes. Chapter 5 
of the final rule TSD discusses the development of the extension 
multipliers.
---------------------------------------------------------------------------

    \75\ The matched-pair analyses compared calculated energy 
consumption levels for pieces of equipment with similar designs but 
one major construction or operational difference; for example, 
vertical open remote condensing cases operating at medium and low 
temperatures. The relationships between these sets of units were 
used to determine the effect of the design or operational difference 
on applicable equipment. For more information, please see chapter 5 
of the 2009 final rule TSD, which can be found at http://www.regulations.gov/#!documentDetail;D=EERE-2006-STD-0126-0058.
---------------------------------------------------------------------------

    Using the extension multiplier approach, DOE developed an 
additional set of TSLs and associated equations for the secondary 
equipment classes, as shown in Table V.4. The TSLs shown in Table V.4 
do not necessarily satisfy the criteria spelled out in section V.A. DOE 
is presenting the standards equations developed for each TSL for all 47 
equipment classes to allow interested parties to better observe the 
ramifications of each TSL across the range of equipment sizes on the 
market.

                                                 Table V.4--Equations Representing the Standards at Each TSL for All Secondary Equipment Classes
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                 Trial standard levels for secondary equipment classes analyzed
        Equipment class        -----------------------------------------------------------------------------------------------------------------------------------------------------------------
                                         Baseline                    TSL 1                      TSL 2                      TSL 3                      TSL 4                      TSL 5
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
VOP.RC.I......................  2.89 x TDA + 8.7.........  2.81 x TDA + 8.7.........  2.81 x TDA + 8.7.........  2.79 x TDA + 8.7.........  2.7 x TDA + 8.7..........  2.65 x TDA + 8.7.
SVO.RC.L......................  2.27 x TDA + 6.85........  2.21 x TDA + 6.85........  2.21 x TDA + 6.85........  2.2 x TDA + 6.85.........  2.12 x TDA + 6.85........  2.09 x TDA + 6.85.
SVO.RC.I......................  2.89 x TDA + 8.7.........  2.81 x TDA + 8.7.........  2.81 x TDA + 8.7.........  2.79 x TDA + 8.7.........  2.7 x TDA + 8.7..........  2.65 x TDA + 8.7.
HZO.RC.I......................  0.72 x TDA + 8.74........  0.7 x TDA + 8.74.........  0.7 x TDA + 8.74.........  0.7 x TDA + 8.74.........  0.7 x TDA + 8.74.........  0.67 x TDA + 8.74.
VOP.SC.L......................  4.37 x TDA + 11.82.......  4.25 x TDA + 11.82.......  4.25 x TDA + 11.82.......  4.25 x TDA + 11.82.......  4.24 x TDA + 11.82.......  4.2 x TDA + 11.82.
VOP.SC.I......................  5.55 x TDA + 15.02.......  5.4 x TDA + 15.02........  5.4 x TDA + 15.02........  5.4 x TDA + 15.02........  5.38 x TDA + 15.02.......  5.34 x TDA + 15.02.
SVO.SC.L......................  4.34 x TDA + 11.51.......  4.26 x TDA + 11.51.......  4.26 x TDA + 11.51.......  4.26 x TDA + 11.51.......  4.13 x TDA + 11.51.......  4.08 x TDA + 11.51.
SVO.SC.I......................  5.52 x TDA + 14.63.......  5.41 x TDA + 14.63.......  5.41 x TDA + 14.63.......  5.41 x TDA + 14.63.......  5.24 x TDA + 14.63.......  5.18 x TDA + 14.63.
HZO.SC.I......................  2.44 x TDA + 9...........  2.42 x TDA + 9...........  2.42 x TDA + 9...........  2.42 x TDA + 9...........  2.42 x TDA + 9...........  2.42 x TDA + 9.
SOC.RC.L......................  1.08 x TDA + 0.22........  0.93 x TDA + 0.22........  0.93 x TDA + 0.22........  0.93 x TDA + 0.22........  0.91 x TDA + 0.22........  0.88 x TDA + 0.22.
SOC.RC.I......................  1.26 x TDA + 0.26........  1.09 x TDA + 0.26........  1.09 x TDA + 0.26........  1.09 x TDA + 0.26........  1.07 x TDA + 0.26........  1.03 x TDA + 0.26.
SOC.SC.I......................  1.76 x TDA + 0.36........  1.53 x TDA + 0.36........  1.53 x TDA + 0.36........  1.53 x TDA + 0.36........  1.5 x TDA + 0.36.........  1.45 x TDA + 0.36.
VCT.RC.I......................  0.66 x TDA + 3.05........  0.59 x TDA + 3.05........  0.59 x TDA + 3.05........  0.58 x TDA + 3.05........  0.57 x TDA + 3.05........  0.55 x TDA + 3.05.
HCT.RC.M......................  0.16 x TDA + 0.13........  0.16 x TDA + 0.13........  0.16 x TDA + 0.13........  0.16 x TDA + 0.13........  0.16 x TDA + 0.13........  0.12 x TDA + 0.13.
HCT.RC.L......................  0.34 x TDA + 0.26........  0.34 x TDA + 0.26........  0.34 x TDA + 0.26........  0.34 x TDA + 0.26........  0.34 x TDA + 0.26........  0.24 x TDA + 0.26.
HCT.RC.I......................  0.4 x TDA + 0.31.........  0.4 x TDA + 0.31.........  0.4 x TDA + 0.31.........  0.4 x TDA + 0.31.........  0.4 x TDA + 0.31.........  0.28 x TDA + 0.31.
VCS.RC.M......................  0.11 x V + 0.26..........  0.11 x V + 0.26..........  0.1 x V + 0.26...........  0.1 x V + 0.26...........  0.1 x V + 0.26...........  0.09 x V + 0.26.
VCS.RC.L......................  0.23 x V + 0.54..........  0.23 x V + 0.54..........  0.22 x V + 0.54..........  0.21 x V + 0.54..........  0.21 x V + 0.54..........  0.19 x V + 0.54.
VCS.RC.I......................  0.27 x V + 0.63..........  0.27 x V + 0.63..........  0.25 x V + 0.63..........  0.25 x V + 0.63..........  0.25 x V + 0.63..........  0.23 x V + 0.63.
HCS.SC.I......................  0.38 x V + 0.88..........  0.37 x V + 0.88..........  0.36 x V + 0.88..........  0.34 x V + 0.88..........  0.34 x V + 0.88..........  0.32 x V + 0.88.
HCS.RC.M......................  0.11 x V + 0.26..........  0.11 x V + 0.26..........  0.1 x V + 0.26...........  0.1 x V + 0.26...........  0.1 x V + 0.26...........  0.09 x V + 0.26.
HCS.RC.L......................  0.23 x V + 0.54..........  0.23 x V + 0.54..........  0.22 x V + 0.54..........  0.21 x V + 0.54..........  0.21 x V + 0.54..........  0.19 x V + 0.54.
HCS.RC.I......................  0.27 x V + 0.63..........  0.27 x V + 0.63..........  0.25 x V + 0.63..........  0.25 x V + 0.63..........  0.25 x V + 0.63..........  0.23 x V + 0.63.
SOC.SC.L*.....................  0.75 x V + 4.10..........  1.1 x TDA + 2.1..........  1.1 x TDA + 2.1..........  1.1 x TDA + 2.1..........  1.05 x TDA + 2.1.........  1.03 x TDA + 2.1.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
* Equipment class SOC.SC.L was inadvertently grouped under the category self-contained commercial freezers with transparent doors in the standards prescribed by EPCA, as amended by EPACT 2005.
  (42 U.S.C. 6313(c)(2)) The baseline expression is thus given by the expression 0.75 x V + 4.10, which is the current standard for SOC.SC.L equipment. A similar anomaly (of inadvertent
  classification under a different equipment category) for SOC.SC.M equipment was corrected by the standard established by AEMTCA. (42 U.S.C. 6313(c)(4)) However, no such corrective action has
  been prescribed for standards for SOC.SC.L equipment. In establishing a new standard for SOC.SC.M equipment, AEMTCA also changed the normalization metric from volume (V) to total display
  area (TDA). Accordingly, DOE is promulgating amended standards for SOC.SC.M equipment with TDA as the normalization metric (see Table V.3), DOE derives the standard for secondary equipment
  classes based on the standard of a primary equipment that has similar characteristics as the secondary equipment class under consideration (see chapter 5 of the final rule TSD for details).
  For the equipment class SOC.SC.L, the standard was derived from the standard level selected for equipment class SOC.SC.M. Since the standard for SOC.SC.M is in terms of TDA, the standard for
  SOC.SC.L equipment has also been specified in terms of TDA. Therefore, while the baseline expression has been shown with V as the normalization metric, the expressions for TSLs 1 through 5
  have been shown in terms of TDA. This change of normalization metric for equipment class SOC.SC.L is consistent with the legislative intent, evident in AEMTCA, for equipment class SOC.SC.M.

B. Economic Justification and Energy Savings

1. Economic Impacts on Commercial Customers
a. Life-Cycle Cost and Payback Period
    Customers affected by new or amended standards usually incur higher 
purchase prices and lower operating costs. DOE evaluates these impacts 
on individual customers by calculating the LCC and the PBP associated 
with the TSLs. The results of the LCC analysis for each TSL were 
obtained by comparing the installed and operating costs of the 
equipment in the base-case scenario (scenario with no amended energy 
conservation standards) against the standards-case scenarios at each 
TSL. The energy consumption values for both the base-case and 
standards-case scenarios were calculated based on the DOE test 
procedure conditions specified in the 2012 test procedure final rule. 
77 FR 10292, 10318-21 (February 21, 2012) The DOE test procedure 
adopted an industry-accepted test method and has been widely accepted 
as a reasonably accurate representation of the conditions to which a 
vast majority of the equipment covered in this rulemaking is subjected 
during actual use. As described in section IV.F, the LCC analysis was 
carried out in the form of Monte Carlo simulations. Consequently, the 
results are distributed over a range of values, as opposed to a single 
deterministic value. DOE presents the mean or median values, as 
appropriate, calculated from the distributions of results.

[[Page 17784]]

    Table V.5 through Table V.29 show key results of the LCC and PBP 
analysis for each equipment class. Each table presents the mean LCC, 
mean LCC savings, median PBP, and distribution of customer impacts in 
the form of percentages of customers who experience net cost, no 
impact, or net benefit.
    All of the equipment classes, except for VCT.SC.L, have negative 
LCC savings values at TSL 5. Negative average LCC savings imply that, 
on average, customers experience an increase in LCC as a consequence of 
buying equipment associated with that particular TSL.
    The mean LCC savings associated with TSL 4 vary by equipment class, 
and are negative for some equipment classes with significant market 
shares. The mean LCC savings at today's standard, TSL 3, are all 
positive. (LCC savings are equal in cases in which both TSLs are 
associated with the same efficiency level.)
    Generally, customers who currently buy equipment in the base case 
scenario at or above the level of performance specified by the TSL 
under consideration would be unaffected if the amended standard were to 
be set at that TSL. Customers who buy equipment below the level of the 
TSL under consideration would be affected if the amended standard were 
to be set at that TSL. Among these affected customers, some may benefit 
(lower LCC) and some may incur net cost (higher LCC). DOE's results 
indicate that only a small percentage of customers may benefit from an 
amended standard that is set at TSL 5. At TSL 4, the percentage of 
customers who experience net benefits or no impacts ranges from 0 to 92 
percent. At TSL 3, a larger percentage of customers experience net 
benefits or no impacts as compared to TSL 4. At TSLs 1 and 2, almost 
all customers experience either net benefits or no impacts.
    For all of the equipment classes, except VCT.SC.L, the median PBPs 
for TSL 5 are greater than the average lifetime of the equipment, 
indicating that a majority of customers may not be able to recover the 
higher equipment installed costs through savings in operating costs 
during the life of the equipment. The median PBP values for TSL 4 range 
from 1.4 years to 63.1 years. The median PBP values at TSL 3 are all 
below the average lifetime of a majority of the commercial 
refrigeration equipment under consideration is 10 to 15 years. 
Therefore, PBP results for TSL 3 indicate that, in general, the 
majority of customers will be able to recover the increased purchase 
costs associated with equipment that is compliant with TSL 3 through 
operating cost savings within the lifetime of the equipment.

                                          Table V.5--Summary LCC and PBP Results for VOP.RC.M Equipment Class*
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                  Life-cycle cost, all customers  2012$                Life-cycle cost savings
                                                 -------------------------------------------------------------------------------------------
                                        Annual                                             Affected      % of Customers that experience**       Median
                TSL                     energy                  Discounted                customers' ---------------------------------------   payback
                                     consumption   Installed    operating       LCC        average                                              period
                                        kWh/yr        cost         cost                    savings      Net cost    No impact   Net benefit     years
                                                                                            2012$      (percent)    (percent)    (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
1..................................       17,095       10,527        2,376       30,748  ...........            0          100            0  ...........
2..................................       17,095       10,527        2,376       30,748  ...........            0          100            0  ...........
3..................................       13,877       11,988        2,099       29,826          922            4           41           55          5.7
4..................................       13,177       12,786        2,071       30,374           -5           64            0           36          9.9
5..................................       13,013       15,901        2,202       34,572       -4,203          100            0            0         34.1
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Percentages may not add up to 100 percent due to rounding.


                                          Table V.6--Summary LCC and PBP Results for VOP.RC.L Equipment Class*
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                  Life-cycle cost, all customers  2012$                Life-cycle cost savings
                                                 -------------------------------------------------------------------------------------------
                                        Annual                                             Affected      % of Customers that experience**       Median
                TSL                     energy                  Discounted                customers' ---------------------------------------   payback
                                     consumption   Installed    operating       LCC        average                                              period
                                        kWh/yr        cost         cost                    savings      Net cost    No impact   Net benefit     years
                                                                                            2012$      (percent)    (percent)    (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
1..................................       38,544       11,699        4,445       49,574  ...........            0          100            0  ...........
2..................................       38,544       11,699        4,445       49,574  ...........            0          100            0  ...........
3..................................       38,301       11,799        4,427       49,521           53            7           40           53          5.7
4..................................       37,117       12,631        4,353       49,707         -148           59           20           21          7.2
5..................................       36,502       17,725        4,534       56,289       -6,701          100            0            0          9.9
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Percentages may not add up to 100 percent due to rounding.


                                          Table V.7--Summary LCC and PBP Results for VOP.SC.M Equipment Class*
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                   Life-cycle cost, all customers 2012$                Life-cycle cost savings
                                                 -------------------------------------------------------------------------------------------
                                        Annual                                             Affected      % of Customers that experience**       Median
                TSL                     energy                  Discounted                customers' ---------------------------------------   payback
                                     consumption   Installed    operating       LCC        average                                              period
                                        kWh/yr        cost         cost                    savings      Net cost    No impact   Net benefit     years
                                                                                            2012$      (percent)    (percent)    (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
1..................................       10,953        6,365        1,340       20,337  ...........            0          100            0  ...........
2..................................       10,953        6,365        1,340       20,337  ...........            0          100            0  ...........
3..................................       10,953        6,365        1,340       20,337  ...........            0          100            0  ...........
4..................................       10,917        6,432        1,339       20,391          -54           60           40            0          5.7

[[Page 17785]]

 
5..................................       10,846        7,483        1,368       21,742       -1,384          100            0            0          7.2
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Percentages may not add up to 100 percent due to rounding.


                                          Table V.8--Summary LCC and PBP Results for VCT.RC.M Equipment Class*
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                  Life-cycle cost, all customers  2012$                Life-cycle cost savings
                                                 -------------------------------------------------------------------------------------------
                                        Annual                                             Affected      % of Customers that experience**       Median
                TSL                     energy                  Discounted                customers' ---------------------------------------   payback
                                     consumption   Installed    operating       LCC        average                                              period
                                        kWh/yr        cost         cost                    savings      Net cost    No impact   Net benefit     years
                                                                                            2012$      (percent)    (percent)    (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
1..................................        4,981       12,951        1,263       23,996  ...........            0          100            0  ...........
2..................................        4,981       12,951        1,263       23,996  ...........            0          100            0  ...........
3..................................        4,307       13,102        1,185       23,454          542            0           40           60          2.1
4..................................        4,192       13,384        1,193       23,803           41           36           13           51          6.6
5..................................        4,011       17,093        1,341       28,775       -4,937          100            0            0        364.7
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Percentages may not add up to 100 percent due to rounding.


                                          Table V.9--Summary LCC and PBP Results for VCT.RC.L Equipment Class*
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                  Life-cycle cost, all customers  2012$                Life-cycle cost savings
                                                 -------------------------------------------------------------------------------------------
                                        Annual                                             Affected      % of Customers that experience**       Median
                TSL                     energy                  Discounted                customers' ---------------------------------------   payback
                                     consumption   Installed    operating       LCC        average                                              period
                                        kWh/yr        cost         cost                    savings      Net cost    No impact   Net benefit     years
                                                                                            2012$      (percent)    (percent)    (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
1..................................       12,898       14,411        2,081       32,705          647            0           40           60          1.8
2..................................       12,898       14,411        2,081       32,705          647            0           40           60          1.8
3..................................       12,694       14,508        2,066       32,665          526            4           20           76          2.7
4..................................       12,593       14,809        2,070       32,996           93           43            0           57          6.3
5..................................       12,061       19,567        2,232       39,125       -6,036          100            0            0        194.7
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Percentages may not add up to 100 percent due to rounding.


                                          Table V.10--Summary LCC and PBP Results for VCT.SC.M Equipment Class*
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                   Life-cycle cost, all customers 2012$                Life-cycle cost savings
                                                 -------------------------------------------------------------------------------------------
                                        Annual                                             Affected      % of Customers that experience**       Median
                TSL                     energy                  Discounted                customers' ---------------------------------------   payback
                                     consumption   Installed    operating       LCC        average                                              period
                                        kWh/yr        cost         cost                    savings      Net cost    No impact   Net benefit     years
                                                                                            2012$      (percent)    (percent)    (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
1..................................        2,491        5,184          490       10,025          -10           71           10           18         23.4
2..................................        2,184        5,336          452        9,800          214            1           10           89          4.8
3..................................        2,057        5,401          442        9,767          226            3            0           97          5.3
4..................................        1,991        5,487          440        9,830          163           17            0           83          7.0
5..................................        1,879        6,831          478       11,534       -1,541          100            0            0         96.2
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Percentages may not add up to 100 percent due to rounding.


                                          Table V.11--Summary LCC and PBP Results for VCT.SC.L Equipment Class
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                  Life-cycle cost, all customers  2012$                Life-cycle cost savings
                                                 -------------------------------------------------------------------------------------------
                                        Annual                                             Affected     90 of Customers that experience **      Median
                TSL                     energy                  Discounted                customers' ---------------------------------------   payback
                                     consumption   Installed    operating       LCC        average                                              period
                                        kWh/yr        cost         cost                    savings      Net cost    No impact   Net benefit     years
                                                                                            2012$      (percent)    (percent)     (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
1..................................       10,022        6,498        1,270       19,135        2,503            0           10           90          0.5

[[Page 17786]]

 
2..................................        6,654        6,822          964       16,397        4,709            0            0          100          0.8
3..................................        6,262        7,003          917       16,105        5,001            0            0          100          1.1
4..................................        5,857        8,909          948       18,294        2,812           11            0           89          4.7
5..................................        5,857        8,909          948       18,294        2,812           11            0           89          4.7
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Percentages may not add up to 100 percent due to rounding.


                                         Table V.12--Summary LCC and PBP Results for VCT.SC.I Equipment Class *
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                  Life-cycle cost, all customers  2012$                Life-cycle cost savings
                                                 -------------------------------------------------------------------------------------------
                                        Annual                                             Affected     90 of Customers that experience **      Median
                TSL                     energy                  Discounted                customers' ---------------------------------------   payback
                                     consumption   Installed    operating       LCC        average                                              period
                                        kWh/yr        cost         cost                    savings      Net cost    No impact   Net benefit     years
                                                                                            2012$      (percent)    (percent)     (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
1..................................        7,124        7,305        1,015       17,384           18           10           40           50          7.2
2..................................        7,124        7,305        1,015       17,384           18           10           40           50          7.2
3..................................        7,124        7,305        1,015       17,384           18           10           40           50          7.2
4..................................        6,916        7,509        1,003       17,468          -68           65           24           11         16.2
5..................................        6,609        9,780        1,057       20,242       -2,834           84           16            0        663.6
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Percentages may not add up to 100 percent due to rounding.


                                         Table V.13--Summary LCC and PBP Results for VCS.SC.M Equipment Class *
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                  Life-cycle cost, all customers  2012$                Life-cycle cost savings
                                                 -------------------------------------------------------------------------------------------
                                        Annual                                             Affected     % of Customers that experience **       Median
                TSL                     energy                  Discounted                customers' ---------------------------------------   payback
                                     consumption   Installed    operating       LCC        average                                              period
                                        kWh/yr        cost         cost                    savings      Net cost    No impact   Net benefit     years
                                                                                            2012$      (percent)    (percent)     (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
1..................................        1,929        3,572          368        6,378          223            0           40           60          0.5
2..................................        1,469        3,601          326        6,083          518            0           40           60          0.6
3..................................        1,346        3,651          318        6,067          363            7           10           83          1.4
4..................................        1,258        3,734          314        6,125          305           25           10           65          2.6
5..................................        1,105        5,062          365        7,828       -1,428          100            0            0         48.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Percentages may not add up to 100 percent due to rounding.


                                         Table V.14--Summary LCC and PBP Results for VCS.SC.L Equipment Class *
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                  Life-cycle cost, all customers  2012$                Life-cycle cost savings
                                                 -------------------------------------------------------------------------------------------
                                        Annual                                             Affected     % of Customers that experience **       Median
                TSL                     energy                  Discounted                customers' ---------------------------------------   payback
                                     consumption   Installed    operating       LCC        average                                              period
                                        kWh/yr        cost         cost                    savings      Net cost    No impact   Net benefit     years
                                                                                            2012$      (percent)    (percent)     (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
1..................................        5,088        4,007          702        9,374          588            0           40           60          0.6
2..................................        4,722        4,083          672        9,215          550            0           10           90          1.3
3..................................        4,448        4,216          653        9,201          507            7            0           93          2.5
4..................................        4,410        4,238          651        9,213          495            9            0           91          2.7
5..................................        4,062        5,988          703       11,349       -1,640          100            0            0         31.8
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Percentages may not add up to 100 percent due to rounding.


[[Page 17787]]


                                         Table V.15--Summary LCC and PBP Results for VCS.SC.I Equipment Class *
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                  Life-cycle cost, all customers  2012$                Life-cycle cost savings
                                                 -------------------------------------------------------------------------------------------
                                        Annual                                             Affected     % of Customers that experience **       Median
                TSL                     energy                  Discounted                customers' ---------------------------------------   payback
                                     consumption   Installed    operating       LCC        average                                              period
                                        kWh/yr        cost         cost                    savings      Net cost    No impact   Net benefit     years
                                                                                            2012$      (percent)    (percent)     (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
1..................................        6,824        4,349          895       11,195           41            0           40           60          2.6
2..................................        6,574        4,420          876       11,117          114            0           32           68          3.6
3..................................        6,361        4,515          861       11,096          113            9           17           75          5.0
4..................................        6,361        4,515          861       11,096          113            9           17           75          5.0
5..................................        5,855        6,839          927       13,909       -2,710           92            8            0        183.7
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Percentages may not add up to 100 percent due to rounding.


                                         Table V.16--Summary LCC and PBP Results for SVO.RC.M Equipment Class *
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                  Life-cycle cost, all customers  2012$                Life-cycle cost savings
                                                 -------------------------------------------------------------------------------------------
                                        Annual                                             Affected     % of Customers that experience **       Median
                TSL                     energy                  Discounted                customers' ---------------------------------------   payback
                                     consumption   Installed    operating       LCC        average                                              period
                                        kWh/yr        cost         cost                    savings      Net cost    No impact   Net benefit     years
                                                                                            2012$      (percent)    (percent)     (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
1..................................       10,748       10,304        1,694       24,841          564            7           40           54          6.2
2..................................       10,748       10,304        1,694       24,841          564            7           40           54          6.2
3..................................       10,748       10,304        1,694       24,841          564            7           40           54          6.2
4..................................       10,226       10,875        1,670       25,201          -19           67            0           33         10.4
5..................................       10,111       12,867        1,752       27,873       -2,691          100            0            0         29.9
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Percentages may not add up to 100 percent due to rounding.


                                       Table V.17--Summary LCC and PBP Results for SVO.SC.M Equipment ClassSec.  *
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                   Life-cycle cost, all customers 2012$                Life-cycle cost savings
                                                 -------------------------------------------------------------------------------------------
                                        Annual                                             Affected     % of Customers that experienceSec.      Median
                TSL                     energy                  Discounted                customers' -------------------**------------------   payback
                                     consumption   Installed    operating       LCC        average                                              period
                                        kWh/yr        cost         cost                    savings      Net cost    No impact   Net benefit     years
                                                                                            2012$      (percent)    (percent)    (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
1..................................        9,608        4,980        1,150       16,733  ...........            0          100            0  ...........
2..................................        9,608        4,980        1,150       16,733  ...........            0          100            0  ...........
3..................................        9,608        4,980        1,150       16,733  ...........            0          100            0  ...........
4..................................        9,361        5,157        1,132       16,728            6           32           40           27         10.9
5..................................        9,271        5,897        1,151       17,648         -917          100            0            0        151.6
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Percentages may not add up to 100 percent due to rounding.


                                         Table V.18--Summary LCC and PBP Results for SOC.RC.M Equipment Class *
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                   Life-cycle cost, all customers 2012$                Life-cycle cost savings
                                                 -------------------------------------------------------------------------------------------
                                        Annual                                             Affected     % of Customers that experience **       Median
                TSL                     energy                  Discounted                customers' ---------------------------------------   payback
                                     consumption   Installed    operating       LCC        average                                              period
                                        kWh/yr        cost         cost                    savings      Net cost    No impact   Net benefit     years
                                                                                            2012$      (percent)    (percent)    (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
1..................................        8,300       13,971        1,679       28,172  ...........            0          100            0  ...........
2..................................        8,300       13,971        1,679       28,172  ...........            0          100            0  ...........
3..................................        8,300       13,971        1,679       28,172  ...........            0          100            0  ...........
4..................................        8,144       14,144        1,674       28,301         -128           60           40            0         38.0
5..................................        7,869       15,879        1,729       30,492       -2,268          100            0            0        114.1
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Percentages may not add up to 100 percent due to rounding.


[[Page 17788]]


                                         Table V.19--Summary LCC and PBP Results for SOC.SC.M Equipment Class *
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                   Life-cycle cost, all customers 2012$                Life-cycle cost savings
                                                 -------------------------------------------------------------------------------------------
                                        Annual                                             Affected     % of Customers that experience **       Median
                TSL                     energy                  Discounted                customers' ---------------------------------------   payback
                                     consumption   Installed    operating       LCC        average                                              period
                                        kWh/yr        cost         cost                    savings      Net cost    No impact   Net benefit     years
                                                                                            2012$      (percent)    (percent)    (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
1..................................       10,119       13,965        1,821       27,861  ...........            0          100            0  ...........
2..................................       10,119       13,965        1,821       27,861  ...........            0          100            0  ...........
3..................................       10,119       13,965        1,821       27,861  ...........            0          100            0  ...........
4..................................        9,711       14,332        1,808       28,128         -209          100            0            1         28.7
5..................................        9,533       15,880        1,868       30,123       -2,204          100            0            0         25.3
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Percentages may not add up to 100 percent due to rounding.


                                         Table V.20--Summary LCC and PBP Results for HZO.RC.M Equipment Class *
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                   Life-cycle cost, all customers 2012$                Life-cycle cost savings
                                                 -------------------------------------------------------------------------------------------
                                        Annual                                             Affected     % of Customers that experience **       Median
                TSL                     energy                  Discounted                customers' ---------------------------------------   payback
                                     consumption   Installed    operating       LCC        average                                              period
                                        kWh/yr        cost         cost                    savings      Net cost    No impact   Net benefit     years
                                                                                            2012$      (percent)    (percent)    (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
1..................................        5,282        8,290        1,036       16,958  ...........            0          100            0  ...........
2..................................        5,282        8,290        1,036       16,958  ...........            0          100            0  ...........
3..................................        5,282        8,290        1,036       16,958  ...........            0          100            0  ...........
4..................................        5,282        8,290        1,036       16,958  ...........            0          100            0  ...........
5..................................        5,165        9,921        1,103       19,137       -2,180           60           40            0  ...........
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Percentages may not add up to 100 percent due to rounding.


                                         Table V.21--Summary LCC and PBP Results for HZO.RC.L Equipment Class *
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                   Life-cycle cost, all customers 2012$                Life-cycle cost savings
                                                 -------------------------------------------------------------------------------------------
                                        Annual                                             Affected     % of Customers that experience **       Median
                TSL                     energy                  Discounted                customers' ---------------------------------------   payback
                                     consumption   Installed    operating       LCC        average                                              period
                                        kWh/yr        cost         cost                    savings      Net cost    No impact   Net benefit     years
                                                                                            2012$      (percent)    (percent)    (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
1..................................       11,812        8,504        1,673       22,548  ...........            0          100            0  ...........
2..................................       11,812        8,504        1,673       22,548  ...........            0          100            0  ...........
3..................................       11,812        8,504        1,673       22,548  ...........            0          100            0  ...........
4..................................       11,812        8,504        1,673       22,548  ...........            0          100            0  ...........
5..................................       11,344       11,822        1,787       26,795       -4,249           60           40            0        288.9
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Percentages may not add up to 100 percent due to rounding.


                                         Table V.22--Summary LCC and PBP Results for HZO.SC.M Equipment Class *
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                   Life-cycle cost, all customers 2012$                Life-cycle cost savings
                                                 -------------------------------------------------------------------------------------------
                                        Annual                                             Affected     % of Customers that experience **       Median
                TSL                     energy                  Discounted                customers' ---------------------------------------   payback
                                     consumption   Installed    operating       LCC        average                                              period
                                        kWh/yr        cost         cost                    savings      Net cost    No impact   Net benefit     years
                                                                                            2012$      (percent)    (percent)    (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
1..................................        5,351        2,605          629        9,022  ...........            0          100            0  ...........
2..................................        5,168        2,698          615        8,967           55            5           40           54          6.9
3..................................        5,168        2,698          615        8,967           55            5           40           54          6.9
4..................................        5,118        2,763          613        9,013           -4           50           21           29         11.8
5..................................        5,018        3,689          636       10,163       -1,154          100            0            0        194.7
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Percentages may not add up to 100 percent due to rounding.


[[Page 17789]]


                                         Table V.23--Summary LCC and PBP Results for HZO.SC.M Equipment Class *
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                   Life-cycle cost, all customers 2012$                Life-cycle cost savings
                                                 -------------------------------------------------------------------------------------------
                                        Annual                                             Affected     % of Customers that experience **       Median
                TSL                     energy                  Discounted                customers' ---------------------------------------   payback
                                     consumption   Installed    operating       LCC        average                                              period
                                        kWh/yr        cost         cost                    savings      Net cost    No impact   Net benefit     years
                                                                                            2012$      (percent)    (percent)    (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
1..................................       10,922        5,008        1,265       17,894  ...........            0          100            0  ...........
2..................................       10,922        5,008        1,265       17,894  ...........            0          100            0  ...........
3..................................       10,922        5,008        1,265       17,894  ...........            0          100            0  ...........
4..................................       10,922        5,008        1,265       17,894  ...........            0          100            0  ...........
5..................................       10,922        5,008        1,265       17,894  ...........            0          100            0  ...........
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Percentages may not add up to 100 percent due to rounding.


                                          Table V.24--Summary LCC and PBP Results for HCT.SC.M Equipment Class
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                   Life-cycle cost, all customers 2012$                Life-cycle cost savings
                                                 -------------------------------------------------------------------------------------------
                                        Annual                                             Affected     % of Customers that experience **       Median
                TSL                     energy                  Discounted                customers' ---------------------------------------   payback
                                     consumption   Installed    operating       LCC        average                                              period
                                        kWh/yr        cost         cost                    savings      Net cost    No impact   Net benefit     years
                                                                                            2012$      (percent)    (percent)    (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
1..................................          590        2,101          140        3,577           66            0           40           60          2.5
2..................................          360        2,198          122        3,478          165            0           40           60          4.7
3..................................          327        2,213          120        3,476          101           20            0           80          5.8
4..................................          289        2,279          120        3,534           43           45            0           55          9.2
5..................................          224        2,807          131        4,175         -599          100            0            0         46.6
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Percentages may not add up to 100 percent due to rounding.


                                         Table V.25--Summary LCC and PBP Results for HCT.SC.L Equipment Class *
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                   Life-cycle cost, all customers 2012$                Life-cycle cost savings
                                                 -------------------------------------------------------------------------------------------
                                        Annual                                             Affected     % of Customers that experience **       Median
                TSL                     energy                  Discounted                customers' ---------------------------------------   payback
                                     consumption   Installed    operating       LCC        average                                              period
                                        kWh/yr        cost         cost                    savings      Net cost    No impact   Net benefit     years
                                                                                            2012$      (percent)    (percent)    (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
1..................................          785        2,297          190        3,882          428            0           41           59          1.8
2..................................          742        2,312          187        3,876          435            0           41           59          2.0
3..................................          701        2,330          185        3,870          293           10           10           80          2.5
4..................................          632        2,399          182        3,915          248           29           10           61          3.6
5..................................          480        3,120          200        4,775         -613           87           10            3         19.5
--------------------------------------------------------------------------------------------------------------------------------------------------------
** Percentages may not add up to 100 percent due to rounding.


                                         Table V.26--Summary LCC and PBP Results for HCT.SC.I Equipment Class *
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                   Life-cycle cost, all customers 2012$                Life-cycle cost savings
                                                 -------------------------------------------------------------------------------------------
                                        Annual                                             Affected      % of Customers that experience**       Median
                TSL                     energy                  Discounted                customers' ---------------------------------------   payback
                                     consumption   Installed    operating       LCC        average                                              period
                                        kWh/yr        cost         cost                    savings      Net cost    No impact   Net benefit     years
                                                                                            2012$      (percent)    (percent)    (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
1..................................        1,141        2,490          240        4,348  ...........            0          100            0  ...........
2..................................        1,141        2,490          240        4,348  ...........            0          100            0  ...........
3..................................        1,141        2,490          240        4,348  ...........            0          100            0  ...........
4..................................        1,141        2,490          240        4,348  ...........            0          100            0  ...........
5..................................          849        3,553          264        5,587       -1,240           61           39            0         23.8
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Percentages may not add up to 100 percent due to rounding.


[[Page 17790]]


                                         Table V.27--Summary LCC and PBP Results for HCS.SC.M Equipment Class *
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                   Life-cycle cost, all customers 2012$                Life-cycle cost savings
                                                 -------------------------------------------------------------------------------------------
                                        Annual                                             Affected     % of Customers that experience **       Median
                TSL                     energy                  Discounted                customers' ---------------------------------------   payback
                                     consumption   Installed    operating       LCC        average                                              period
                                        kWh/yr        cost         cost                    savings      Net cost    No impact   Net benefit     years
                                                                                            2012$      (percent)    (percent)    (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
1..................................          518        1,986          146        3,100           12            0            9           91          2.9
2..................................          495        1,993          145        3,095           17            1            9           90          3.7
3..................................          466        2,008          143        3,097           15           10            9           80          5.5
4..................................          461        2,014          144        3,107            5           42            9           48          7.5
5..................................          358        2,488          157        3,679         -568           91            9            0        680.6
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Percentages may not add up to 100 percent due to rounding.


                                         Table V.28--Summary LCC and PBP Results for HCS.SC.L Equipment Class *
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                   Life-cycle cost, all customers 2012$                Life-cycle cost savings
                                                 -------------------------------------------------------------------------------------------
                                        Annual                                             Affected     % of Customers that experience **       Median
                TSL                     energy                  Discounted                customers' ---------------------------------------   payback
                                     consumption   Installed    operating       LCC        average                                              period
                                        kWh/yr        cost         cost                    savings      Net cost    No impact   Net benefit     years
                                                                                            2012$      (percent)    (percent)    (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
1..................................          650        2,006          160        3,224           31            0           10           90          1.4
2..................................          609        2,013          156        3,205           50            0           10           90          1.7
3..................................          558        2,028          153        3,191           64            0           10           90          2.5
4..................................          472        2,093          148        3,222           33           20           10           70          6.2
5..................................          260        2,663          156        3,845         -590           90           10            0         68.9
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Percentages may not add up to 100 percent due to rounding.


                                          Table V.29--Summary LCC and PBP Results for PD.SC.M Equipment Class *
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                   Life-cycle cost, all customers 2012$                Life-cycle cost savings
                                                 -------------------------------------------------------------------------------------------
                                        Annual                                             Affected     % of Customers that experience **       Median
                TSL                     energy                  Discounted                customers' ---------------------------------------   payback
                                     consumption   Installed    operating       LCC        average                                              period
                                        kWh/yr        cost         cost                    savings      Net cost    No impact   Net benefit     years
                                                                                            2012$      (percent)    (percent)    (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
1..................................        1,726        3,502          342        6,732            8           28           39           33          9.3
2..................................        1,422        3,654          310        6,574          163            3            0           97          5.3
3..................................        1,381        3,677          308        6,572          165            5            0           95          5.6
4..................................        1,369        3,691          308        6,587          150            8            0           92          6.0
5..................................        1,243        4,808          340        7,989       -1,252          100            0            0        102.2
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Percentages may not add up to 100 percent due to rounding.

b. Customer Subgroup Analysis
    As described in section IV.I, DOE estimated the impact of potential 
amended efficiency standards for commercial refrigeration equipment on 
two representative customer subgroups: full-service restaurants and 
convenience stores with gas stations.
    The results for full-service restaurants are presented only for the 
self-contained equipment classes because full-service restaurants that 
are small businesses generally do not use remote condensing equipment. 
Table V.30 presents the comparison of mean LCC savings for the subgroup 
with the values for all CRE customers. For all TSLs in all equipment 
classes save one, the LCC savings for this subgroup are higher (or less 
negative) than the national average values. This can be attributed to 
the longer average lifetimes of CRE used by small business customers, 
and higher electricity prices in the case of full service restaurants.
    Table V.31 compares median PBPs for full-service restaurants with 
the values for all CRE customers. The PBP values are lower for the 
small business subgroup in all cases save one, which is consistent with 
the decrease in LCC savings.

  Table V.30--Comparison of Mean LCC Savings for the Full-Service Restaurants Subgroup With the Savings for All
                                                  CRE Customers
----------------------------------------------------------------------------------------------------------------
                                                                          Mean LCC savings 2012$ *
          Equipment class                  Category       ------------------------------------------------------
                                                             TSL 1      TSL 2      TSL 3      TSL 4      TSL 5
----------------------------------------------------------------------------------------------------------------
VOP.SC.M..........................  Small Business.......  .........  .........  .........      $(57)   $(1,508)

[[Page 17791]]

 
                                    All Business Types...  .........  .........  .........      $(54)   $(1,384)
VCT.SC.M..........................  Small Business.......         $0       $299       $330       $280   $(1,391)
                                    All Business Types...      $(10)       $214       $226       $163   $(1,541)
VCT.SC.L..........................  Small Business.......     $3,073     $5,868     $6,254     $4,163     $4,163
                                    All Business Types...     $2,503     $4,709     $5,001     $2,812     $2,812
VCT.SC.I..........................  Small Business.......        $34        $34        $34      $(12)   $(2,706)
                                    All Business Types...        $18        $18        $18      $(68)   $(2,834)
VCS.SC.M..........................  Small Business.......       $375       $870       $652       $632   $(1,031)
                                    All Business Types...       $223       $518       $363       $305   $(1,428)
VCS.SC.L..........................  Small Business.......       $979       $971       $999     $1,000     $(936)
                                    All Business Types...       $588       $550       $507       $495   $(1,640)
VCS.SC.I..........................  Small Business.......        $81       $257       $321       $321   $(2,241)
                                    All Business Types...        $41       $114       $113       $113   $(2,710)
SOC.SC.M..........................  Small Business.......  .........  .........  .........      $(74)   $(1,952)
                                    All Business Types...  .........  .........  .........     $(209)   $(2,204)
SVO.SC.M..........................  Small Business.......  .........  .........  .........        $53     $(871)
                                    All Business Types...  .........  .........  .........         $6     $(917)
HZO.SC.M..........................  Small Business.......  .........        $92        $92        $33   $(1,097)
                                    All Business Types...  .........        $55        $55       $(4)   $(1,154)
HZO.SC.L..........................  Small Business.......  .........  .........  .........  .........  .........
                                    All Business Types...  .........  .........  .........  .........  .........
HCT.SC.M..........................  Small Business.......        $81       $216       $137        $85     $(546)
                                    All Business Types...        $66       $165       $101        $43     $(599)
HCT.SC.L..........................  Small Business.......       $687       $707       $487       $468     $(319)
                                    All Business Types...       $428       $435       $293       $248     $(613)
HCT.SC.I..........................  Small Business.......  .........  .........  .........  .........   $(1,081)
                                    All Business Types...  .........  .........  .........  .........   $(1,240)
HCS.SC.M..........................  Small Business.......        $23        $38        $48        $38     $(477)
                                    All Business Types...        $12        $17        $15         $5     $(568)
HCS.SC.L..........................  Small Business.......        $55        $91       $127       $133     $(381)
                                    All Business Types...        $31        $50        $64        $33     $(590)
----------------------------------------------------------------------------------------------------------------


 Table V.31--Comparison of Median Payback Periods for the Full-Service Restaurants Subgroup With the Values for
                                                All CRE Customers
----------------------------------------------------------------------------------------------------------------
                                                                          Mean LCC savings 2012$ *
          Equipment class                  Category       ------------------------------------------------------
                                                             TSL 1      TSL 2      TSL 3      TSL 4      TSL 5
----------------------------------------------------------------------------------------------------------------
VOP.SC.M..........................  Small Business.......  .........  .........  .........       54.1      541.3
                                    All Business Types...  .........  .........  .........       63.1      593.2
VCT.SC.M..........................  Small Business.......       12.9        4.1        4.5        5.9       64.8
                                    All Business Types...       23.4        4.8        5.3        7.0       96.2
VCT.SC.L..........................  Small Business.......        0.4        0.7        0.9        4.0        4.0
                                    All Business Types...        0.5        0.8        1.1        4.7        4.7
VCT.SC.I..........................  Small Business.......        5.8        5.8        5.8       12.4      310.0
                                    All Business Types...        7.2        7.2        7.2       16.2      663.6
VCS.SC.M..........................  Small Business.......        0.4        0.5        1.2        2.1       22.4
                                    All Business Types...        0.5        0.6        1.4        2.6       48.0
VCS.SC.L..........................  Small Business.......        0.5        1.1        2.0        2.2       19.2
                                    All Business Types...        0.6        1.3        2.5        2.7       31.8
VCS.SC.I..........................  Small Business.......        2.1        2.9        3.9        3.9       91.7
                                    All Business Types...        2.6        3.6        5.0        5.0      183.7
SOC.SC.M..........................  Small Business.......  .........  .........  .........       15.5      221.7
                                    All Business Types...  .........  .........  .........       28.7       25.3
SVO.SC.M..........................  Small Business.......  .........  .........  .........        8.9      124.3
                                    All Business Types...  .........  .........  .........       10.9      151.6
HZO.SC.M..........................  Small Business.......  .........        5.7        5.7        9.5      166.7
                                    All Business Types...  .........        6.9        6.9       11.8      194.7
HZO.SC.L..........................  Small Business.......  .........  .........  .........  .........  .........
                                    All Business Types...  .........  .........  .........  .........  .........
HCT.SC.M..........................  Small Business.......        2.1        4.0        4.7        7.5       33.9
                                    All Business Types...        2.5        4.7        5.8        9.2       46.6
HCT.SC.L..........................  Small Business.......        1.5        1.6        2.0        2.9       14.0
                                    All Business Types...        1.8        2.0        2.5        3.6       19.5
HCT.SC.I..........................  Small Business.......  .........  .........  .........  .........      176.3

[[Page 17792]]

 
                                    All Business Types...  .........  .........  .........  .........       23.8
HCS.SC.M..........................  Small Business.......        2.3        2.9        4.2        5.4      136.0
                                    All Business Types...        2.9        3.7        5.5        7.5      680.6
HCS.SC.L..........................  Small Business.......        1.1        1.4        2.1        4.7       27.9
                                    All Business Types...        1.4        1.7        2.5        6.2       68.9
PD.SC.M...........................  Small Business.......        6.9        4.5        4.7        5.0       63.3
                                    All Business Types...        9.3        5.3        5.6        6.0      102.2
----------------------------------------------------------------------------------------------------------------

    Table V.32 presents the comparison of mean LCC savings for 
convenience stores with gasoline stations with the national average 
values at each TSL. This comparison shows higher (or less negative) LCC 
savings for the subgroups in nearly all instances.
    Table V.33 presents the comparison of median PBPs for convenience 
stores with gasoline stations with national median values at each TSL. 
This comparison shows lower PBP for the subgroup in nearly all cases.

  Table V.32--Comparison of Mean LCC Savings for Convenience Stores With Gasoline Stations With Savings for All
                                                  CRE Customers
----------------------------------------------------------------------------------------------------------------
                                                                          Mean LCC savings * 2012$
          Equipment class                  Category       ------------------------------------------------------
                                                             TSL 1      TSL 2      TSL 3      TSL 4      TSL 5
----------------------------------------------------------------------------------------------------------------
VOP.RC.M..........................  Small Business.......  .........  .........     $1,334       $299   $(4,003)
                                    All Business Types...  .........  .........       $922       $(5)   $(4,203)
VOP.RC.L..........................  Small Business.......  .........  .........        $82         $2   $(6,703)
                                    All Business Types...  .........  .........        $53     $(148)   $(6,701)
VOP.SC.M..........................  Small Business.......  .........  .........  .........      $(62)   $(1,485)
                                    All Business Types...  .........  .........  .........      $(54)   $(1,384)
VCT.RC.M..........................  Small Business.......  .........  .........       $636       $135   $(4,544)
                                    All Business Types...  .........  .........       $542        $41   $(4,937)
VCT.RC.L..........................  Small Business.......       $751       $751       $634       $213   $(5,486)
                                    All Business Types...       $647       $647       $526        $93   $(6,036)
VCT.SC.M..........................  Small Business.......       $(8)       $214       $229       $169   $(1,479)
                                    All Business Types...      $(10)       $214       $226       $163   $(1,541)
VCT.SC.L..........................  Small Business.......     $2,489     $4,699     $4,988     $2,878     $2,878
                                    All Business Types...     $2,503     $4,709     $5,001     $2,812     $2,812
VCT.SC.I..........................  Small Business.......        $19        $19        $19      $(59)   $(2,732)
                                    All Business Types...        $18        $18        $18      $(68)   $(2,834)
VCS.SC.M..........................  Small Business.......       $299       $696       $511       $476   $(1,157)
                                    All Business Types...       $223       $518       $363       $305   $(1,428)
VCS.SC.L..........................  Small Business.......       $785       $765       $763       $758   $(1,190)
                                    All Business Types...       $588       $550       $507       $495   $(1,640)
VCS.SC.I..........................  Small Business.......        $62       $189       $224       $224   $(2,354)
                                    All Business Types...        $41       $114       $113       $113   $(2,710)
SVO.RC.M..........................  Small Business.......       $966       $966       $966       $340   $(2,148)
                                    All Business Types...       $564       $564       $564      $(19)   $(2,691)
SVO.SC.M..........................  Small Business.......  .........  .........  .........         $5     $(891)
                                    All Business Types...  .........  .........  .........         $6     $(917)
SOC.RC.M..........................  Small Business.......  .........  .........  .........      $(93)   $(2,058)
                                    All Business Types...  .........  .........  .........     $(128)   $(2,268)
HZO.RC.M **.......................  Small Business.......  .........  .........  .........  .........   $(2,015)
                                    All Business Types...  .........  .........  .........  .........   $(2,180)
HZO.RC.L **.......................  Small Business.......  .........  .........  .........  .........   $(3,880)
                                    All Business Types...  .........  .........  .........  .........   $(4,249)
HZO.SC.M..........................  Small Business.......  .........        $55        $55       $(3)   $(1,114)
                                    All Business Types...  .........        $55        $55       $(4)   $(1,154)
HZO.SC.L **.......................  Small Business.......  .........  .........  .........  .........  .........
                                    All Business Types...  .........  .........  .........  .........  .........
HCT.SC.M..........................  Small Business.......        $62       $151        $92        $35     $(591)
                                    All Business Types...        $66       $165       $101        $43     $(599)
HCT.SC.L..........................  Small Business.......       $535       $548       $374       $343     $(451)
                                    All Business Types...       $428       $435       $293       $248     $(613)
HCT.SC.I..........................  Small Business.......  .........  .........  .........  .........   $(1,106)
                                    All Business Types...  .........  .........  .........  .........   $(1,240)
HCS.SC.M..........................  Small Business.......        $18        $28        $32        $23     $(498)
                                    All Business Types...        $12        $17        $15         $5     $(568)

[[Page 17793]]

 
HCS.SC.L..........................  Small Business.......        $44        $71        $97        $87     $(453)
                                    All Business Types...        $31        $50        $64        $33     $(590)
PD.SC.M...........................  Small Business.......        $14       $186       $190       $177   $(1,159)
                                    All Business Types...         $8       $163       $165       $150   $(1,252)
----------------------------------------------------------------------------------------------------------------


 Table V.33--Comparison of Median Payback Periods for Convenience Stores With Gasoline Stations With Values for
                                                All CRE Customers
----------------------------------------------------------------------------------------------------------------
                                                                        Median payback period  years
          Equipment class                  Category       ------------------------------------------------------
                                                              TSL1       TSL2       TSL3       TSL4       TSL5
----------------------------------------------------------------------------------------------------------------
VOP.RC.M..........................  Small Business.......  .........  .........        5.5        9.0       25.1
                                    All Business Types...  .........  .........        5.7        9.9       34.1
VOP.RC.L..........................  Small Business.......  .........  .........        5.8       10.2      195.3
                                    All Business Types...  .........  .........        6.1       11.3      310.0
VOP.SC.M..........................  Small Business.......  .........  .........  .........       69.5      513.9
                                    All Business Types...  .........  .........  .........       63.1      593.2
VCT.RC.M..........................  Small Business.......  .........  .........        1.9        5.8      308.8
                                    All Business Types...  .........  .........        2.1        6.6      364.7
VCT.RC.L..........................  Small Business.......        1.7        1.7        2.5        5.7      171.0
                                    All Business Types...        1.8        1.8        2.7        6.3      194.7
VCT.SC.M..........................  Small Business.......       18.2        4.5        5.0        6.5       82.7
                                    All Business Types...       23.4        4.8        5.3        7.0       96.2
VCT.SC.L..........................  Small Business.......        0.4        0.8        1.0        4.4        4.4
                                    All Business Types...        0.5        0.8        1.1        4.7        4.7
VCT.SC.I..........................  Small Business.......        6.6        6.6        6.6       14.3      531.1
                                    All Business Types...        7.2        7.2        7.2       16.2      663.6
VCS.SC.M..........................  Small Business.......        0.5        0.6        1.3        2.3       26.4
                                    All Business Types...        0.5        0.6        1.4        2.6       48.0
VCS.SC.L..........................  Small Business.......        0.5        1.2        2.2        2.4       22.2
                                    All Business Types...        0.6        1.3        2.5        2.7       31.8
VCS.SC.I..........................  Small Business.......        2.3        3.2        4.3        4.3      118.4
                                    All Business Types...        2.6        3.6        5.0        5.0      183.7
SVO.RC.M..........................  Small Business.......        5.4        5.4        5.4        8.4       20.7
                                    All Business Types...        6.2        6.2        6.2       10.4       29.9
SVO.SC.M..........................  Small Business.......  .........  .........  .........       10.0      150.5
                                    All Business Types...  .........  .........  .........       10.9      151.6
SOC.RC.M..........................  Small Business.......  .........  .........  .........       23.2      656.6
                                    All Business Types...  .........  .........  .........       38.0      114.1
SOC.SC.M..........................  Small Business.......  .........  .........  .........       18.2      265.4
                                    All Business Types...  .........  .........  .........       28.7       25.3
HZO.RC.M..........................  Small Business.......  .........  .........  .........  .........  .........
                                    All Business Types...  .........  .........  .........  .........  .........
HZO.RC.L..........................  Small Business.......  .........  .........  .........  .........       59.8
                                    All Business Types...  .........  .........  .........  .........      288.9
HZO.SC.M..........................  Small Business.......  .........        6.4        6.4       10.8      174.0
                                    All Business Types...  .........        6.9        6.9       11.8      194.7
HZO.SC.L..........................  Small Business.......  .........  .........  .........  .........  .........
                                    All Business Types...  .........  .........  .........  .........  .........
HCT.SC.M..........................  Small Business.......        2.3        4.4        5.4        8.5       40.5
                                    All Business Types...        2.5        4.7        5.8        9.2       46.6
HCT.SC.L..........................  Small Business.......        1.7        1.8        2.3        3.3       15.6
                                    All Business Types...        1.8        2.0        2.5        3.6       19.5
HCT.SC.I..........................  Small Business.......  .........  .........  .........  .........      208.9
                                    All Business Types...  .........  .........  .........  .........       23.8
HCS.SC.M..........................  Small Business.......        2.6        3.3        4.7        6.2      151.6
                                    All Business Types...        2.9        3.7        5.5        7.5      680.6
HCS.SC.L..........................  Small Business.......        1.3        1.6        2.3        5.3       33.7
                                    All Business Types...        1.4        1.7        2.5        6.2       68.9
PD.SC.M...........................  Small Business.......        8.0        4.9        5.2        5.6       78.9
                                    All Business Types...        9.3        5.3        5.6        6.0      102.2
----------------------------------------------------------------------------------------------------------------


[[Page 17794]]

c. Rebuttable Presumption Payback
    As discussed in section IV.F.12, EPCA provides a rebuttable 
presumption that a given standard is economically justified if the 
increased purchase cost for a product that meets the standard is less 
than three times the value of the first-year energy savings resulting 
from the standard. However, DOE routinely conducts a full economic 
analysis that considers the full range of impacts, including those to 
the customer, 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 evaluate definitively the 
economic justification for a potential standard level (thereby 
supporting or rebutting the results of any preliminary determination of 
economic justification). Therefore, if the rebuttable presumption is 
not met, DOE may justify its standard on another basis.
    Table V.34 shows the rebuttable payback periods analysis for each 
equipment class.

  Table V.34--Summary of Results for Commercial Refrigeration Equipment TSLs: Rebuttable Median Payback Period
----------------------------------------------------------------------------------------------------------------
                                          Median Payback Period  years
-----------------------------------------------------------------------------------------------------------------
         Equipment class               TSL 1           TSL 2           TSL 3           TSL 4           TSL 5
----------------------------------------------------------------------------------------------------------------
VOP.RC.M........................  ..............  ..............             5.1             7.6            17.3
VOP.RC.L........................  ..............  ..............             4.6             7.3            36.2
VOP.SC.M........................  ..............  ..............  ..............            21.2           127.9
VCT.RC.M........................  ..............  ..............             2.5             6.8            56.3
VCT.RC.L........................             2.2             2.2             3.0             6.6            43.0
VCT.SC.M........................             4.4             5.4             5.5             6.5            28.1
VCT.SC.L........................             0.5             0.8             1.1             4.2             4.2
VCT.SC.I........................             5.0             5.0             5.0             9.5            48.7
VCS.SC.M........................             0.4             0.6             1.2             2.1            16.5
VCS.SC.L........................             0.5             1.2             2.1             2.3            13.6
VCS.SC.I........................             2.3             3.0             3.8             3.8            28.7
SVO.RC.M........................             5.4             5.4             5.4             7.8            16.5
SVO.SC.M........................  ..............  ..............  ..............             8.1            35.9
SOC.RC.M........................  ..............  ..............  ..............            12.4            54.3
SOC.SC.M........................  ..............  ..............  ..............            10.2            39.8
HZO.RC.M........................  ..............  ..............  ..............  ..............           156.3
HZO.RC.L........................  ..............  ..............  ..............  ..............            79.5
HZO.SC.M........................  ..............             5.6             5.6             8.1            42.9
HZO.SC.L........................  ..............  ..............  ..............  ..............  ..............
HCT.SC.M........................             2.2             4.0             4.4             6.6            20.9
HCT.SC.L........................             1.7             1.8             2.2             3.0            11.4
HCT.SC.I........................  ..............  ..............  ..............  ..............            40.8
HCS.SC.M........................             2.5             2.9             4.0             4.5            30.5
HCS.SC.L........................             1.3             1.6             2.2             4.5            16.7
PD.SC.M.........................             4.9             5.4             5.5             5.7            26.7
----------------------------------------------------------------------------------------------------------------

2. Economic Impacts on Manufacturers
    DOE performed an MIA to estimate the impact of amended energy 
conservation standards on manufacturers of commercial refrigeration 
equipment. The following section describes the expected impacts on 
manufacturers at each TSL. Chapter 12 of the final rule TSD explains 
the analysis in further detail.
a. Industry Cash-Flow Analysis Results
    The following tables depict the financial impacts (represented by 
changes in INPV) of amended energy standards on manufacturers as well 
as the conversion costs that DOE estimates manufacturers would incur 
for all equipment classes at each TSL. To evaluate the range of cash 
flow impacts on the commercial refrigeration industry, DOE modeled two 
different scenarios using different assumptions for markups that 
correspond to the range of anticipated market responses to amended 
standards.
    To assess the lower (less severe) end of the range of potential 
impacts, DOE modeled a preservation of gross margin percentage markup 
scenario, in which a uniform ``gross margin percentage'' markup was 
applied across all potential efficiency levels. In this scenario, DOE 
assumed that a manufacturer's absolute dollar markup would increase as 
production costs increase in the amended standards case. Manufacturers 
have indicated that it is optimistic to assume that they would be able 
to maintain the same gross margin percentage markup as their production 
costs increase in response to an amended efficiency standard, 
particularly at higher TSLs. To assess the higher (more severe) end of 
the range of potential impacts, DOE modeled the preservation of 
operating profit markup scenario, which assumes that manufacturers 
would be able to earn the same operating margin in absolute dollars in 
the amended standards case as in the base case. Table V.35 and Table 
V.36 show the potential INPV impacts for commercial refrigeration 
equipment manufacturers at each TSL: Table V.35 reflects the lower 
bound of impacts and Table V.36 represents the upper bound.
    Each of the modeled scenarios results in a unique set of cash flows 
and corresponding industry values at each TSL. In the following 
discussion, the INPV results refer to the difference in industry value 
between the base case and each potential amended standards case that 
results from the sum of discounted cash flows from the base year 2013 
through 2046, the end of the analysis period. To provide perspective on 
the short-run cash flow impact, DOE includes in the discussion of the 
results below a comparison of free cash flow between the base case and 
the standards

[[Page 17795]]

case at each TSL in the year before amended standards take effect.

       Table V.35--Manufacturer Impact Analysis for Commercial Refrigeration Equipment--Preservation of Gross Margin Percentage Markup Scenario *
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                               Trial standard level
                                                           Units              Base case ----------------------------------------------------------------
                                                                                              1            2            3            4            5
--------------------------------------------------------------------------------------------------------------------------------------------------------
INPV........................................  2012$ Millions................    2,660.0    2,650.1      2,651.3      2,566.1      2,470.6      2,475.6
Change in INPV..............................  2012$ Millions................  .........       (9.9)        (8.7)       (93.9)      (189.4)      (184.4)
                                              (%)...........................  .........       (0.37)       (0.33)       (3.53)       (7.12)       (6.93)
Product Conversion Costs....................  2012$ Millions................  .........       20.6         32.1        125.9        194.2        282.1
Capital Conversion Costs....................  2012$ Millions................  .........        3.5          3.6         58.1        160.7        499.7
Total Conversion Costs......................  2012$ Millions................  .........       24.1         35.6        184.0        354.9        781.8
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Values in parentheses are negative values.


           Table V.36--Manufacturer Impact Analysis for Commercial Refrigeration Equipment--Preservation of Operating Profit Markup Scenario *
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                               Trial standard level
                                                           Units              Base case ----------------------------------------------------------------
                                                                                              1            2            3            4            5
--------------------------------------------------------------------------------------------------------------------------------------------------------
INPV........................................  2012$ Millions................    2,660.0    2,636.1      2,617.1      2,495.0      2,339.1      1,515.2
Change in INPV..............................  2012$ Millions................  .........      (23.9)       (42.9)      (165.0)      (320.9)    (1,144.8)
                                              (%)...........................  .........       (0.90)       (1.61)       (6.20)      (12.07)      (43.04)
Product Conversion Costs....................  2012$ Millions................  .........       20.6         32.1        125.9        194.2        282.1
Capital Conversion Costs....................  2012$ Millions................  .........        3.5          3.6         58.1        160.7        499.7
Total Conversion Costs......................  2012$ Millions................  .........       24.1         35.6        184.0        354.9        781.8
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Values in parentheses are negative values.

    At TSL 1, DOE estimates impacts on INPV for commercial 
refrigeration equipment manufacturers to range from -$23.9 million to -
$9.9 million, or a change in INPV of -0 percent to -0.37 percent. At 
this potential standard level, industry free cash flow is estimated to 
decrease by approximately 4.16 percent to $192.1 million, compared to 
the base-case value of $200.4 million in the year before the compliance 
date (2016).
    The INPV impacts at TSL 1 are relatively minor because DOE 
manufacturer production costs do not increase significant. The average 
unit price for the industry (calculated by dividing industry revenue by 
industry unit shipments) increases 0.8% from $2,892.72 to $2,916.55 in 
the standards year. Few capital conversion costs are expected because 
DOE anticipates that manufacturers would be able to make simple 
component swaps to meet the efficiency levels for each equipment class 
at this TSL. However, product conversion costs are required for 
industry certifications to incorporate the new components into existing 
designs. Industry conversion costs total $24.1 million.
    Under the preservation of gross margin percentage markup scenario, 
impacts on manufacturers are marginally negative because while 
manufacturers can maintain their gross margin percentages, they also 
incur conversion costs that offset the higher profits that they gain 
from increasing their selling prices to accommodate higher production 
costs. However, the effects of these conversion costs are more apparent 
in the preservation of operating profit markup scenario because 
manufacturers earn the same operating profit at TSL 1 as they do in the 
base case. In general, manufacturers stated that the preservation of 
operating profit scenario is a more likely representation of the 
industry than the preservation of operating profit scenario, especially 
as MPCs increase.
    At TSL 2, DOE estimates impacts on INPV for commercial 
refrigeration equipment manufacturers to range from -$42.9 million to -
$8.7 million, or a change in INPV of -1.61 percent to -0.33 percent. At 
this potential standard level, industry free cash flow is estimated to 
decrease by approximately 6.04 percent to $188.3 million, compared to 
the base-case value of $200.4 million in the year before the compliance 
date (2016).
    Although DOE continues to expect mild INPV impacts on the industry 
at TSL 2, product conversion costs do increase. Nearly 20% of product 
in the industry would require some level of component redesign, such as 
changes in evaporator coil, condenser coil, or compressor selection, 
that would necessitate UL or NSF certification changes. These industry 
certification investments push total industry conversion costs to $35.4 
million.
    At TSL 3, DOE estimates impacts on INPV for commercial 
refrigeration equipment manufacturers to range from -$165.0 million to 
-$93.9 million, or a change in INPV of -6.20 percent to -3.53 percent. 
At this potential standard level, industry free cash flow is estimated 
to decrease by approximately 33.64 percent to $133.0 million, compared 
to the base-case value of $200.4 million in the year before the 
compliance date (2016).
    At TSL 3, the expected design options do not dramatically alter 
manufacturer per unit production costs. Average unit costs increase by 
4.1% to $3,011.93 while industry shipments remain steady. However, DOE 
expects higher conversion costs at TSL 3 due to the possible need for 
improved insulation for high-volume products, such as VCS.SC.L, which 
accounts for approximately 18.3 percent of total shipments, and 
VCT.RC.L, which accounts for approximately 4.1 percent. In total, DOE 
expects 5 of the 24 equipment classes to require improved insulation 
due to higher standards. The need for improved insulation necessitates 
redesign efforts for the cabinet as well as interior components. 
Furthermore, thicker insulation requires investment in new production 
tooling.

[[Page 17796]]

Total industry conversion costs reach $184.0 million.
    At TSL 4, DOE estimates impacts on INPV for commercial 
refrigeration equipment manufacturers range from -$320.9 million to -
$189.4 million, or a change in INPV of -12.7 percent to -7.12 percent. 
At this potential standard level, industry free cash flow is estimated 
to decrease by approximately 67.84 percent to $64.4 million, compared 
to the base-case value of $200.4 million in the year before the 
compliance date (2016).
    The drop in INPV at TSL 4 is driven by conversion costs. Industry 
average unit price increases 7.6% and industry shipments are modeled to 
remain steady. However, the need for new tooling to accommodate 
additional foam insulation in 16 of the 25 analyzed equipment classes 
pushes up industry conversion costs. The redesign effort, coupled with 
industry certification costs, push product conversion costs up to 
$194.2 million. Total industry conversion costs are expected to reach 
$354.9 million.
    At TSL 5, DOE estimates impacts on INPV for commercial 
refrigeration equipment manufacturers to range from -$1,144.85 million 
to -$184.4 million, or a change in INPV of -43.04 percent to -6.93 
percent. At this potential standard level, industry free cash flow is 
estimated to decrease by approximately 158.32 percent to -$116.9 
million, compared to the base-case value of $200.4 million in the year 
before the compliance date (2016).
    A substantial increase in conversion costs are expected at TSL 5 
due to the possible need for VIP technology. VIPs are not currently 
used by any commercial refrigeration equipment manufacturers and the 
production of VIPs would require processes different from those used to 
produce standard foam panels. High R&D investments would be necessary 
to integrate the technology into CRE cases. Based on industry feedback, 
DOE estimated the R&D investment to be 1-2 times the industry's typical 
annual R&D expenditure and the capital conversion cost to be more than 
double the cost of all current fixtures in use. Total industry 
conversion costs total $781.8 million.
b. Impacts on Direct Employment
    To quantitatively assess the impacts of amended energy conservation 
standards on employment, DOE used the GRIM to estimate the domestic 
labor expenditures and number of employees in the base case and at each 
TSL from 2013 through 2046. DOE used statistical data from the U.S. 
Census Bureau's 2011 Annual Survey of Manufacturers (ASM), the results 
of the engineering analysis, the commercial refrigeration equipment 
shipments forecast, and interviews with manufacturers to determine the 
inputs necessary to calculate industry-wide labor expenditures and 
domestic employment levels. Labor expenditures related to manufacturing 
of the product are a function of the labor intensity of the product, 
the sales volume, and an assumption that wages remain fixed in real 
terms over time. The total labor expenditures in each year are 
calculated by multiplying the MPCs by the labor percentage of MPCs.
    The total labor expenditures in the GRIM were then converted to 
domestic production employment levels by dividing production labor 
expenditures by the annual payment per production worker (production 
worker hours times the labor rate found in the U.S. Census Bureau's 
2011 ASM). The estimates of production workers in this section cover 
workers, including line supervisors who are directly involved in 
fabricating and assembling a product within the OEM facility. Workers 
performing services that are closely associated with production 
operations, such as materials handling tasks using forklifts, are also 
included as production labor. DOE's estimates only account for 
production workers who manufacture the specific products covered by 
this rulemaking.

                      Table V.37--Potential Changes in the Number of Commercial Refrigeration Equipment Production Workers in 2017
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                  Trial Standard Level *
                                 -----------------------------------------------------------------------------------------------------------------------
                                     Base Case             1                    2                    3                    4                    5
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total Number of Domestic                   7,779  7,779..............  7,779..............  7,779..............  7,780..............  8,220
 Production Workers in 2017
 (assuming no changes in
 production locations).
Range of Potential Changes in                 --  (7,7790) to 0......  (7,740) to 0.......  (7,779) to 0.......  (7,779) to 1.......  (7,779) to 441.
 Domestic Production Workers in
 2017 **.
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Numbers in parentheses are negative numbers.
** DOE presents a range of potential employment impacts, where the lower range represents the scenario in which all domestic manufacturers move
  production to other countries.

    The employment impacts shown in Table V.37 represent the potential 
production employment changes that could result following the 
compliance date of an amended energy conservation standard. The upper 
end of the results in the table estimates the maximum increase in the 
number of production workers after the implementation of new energy 
conservation standards and it assumes that manufacturers would continue 
to produce the same scope of covered products within the United States. 
The lower end of the range indicates the total number of U.S. 
production workers in the industry who could lose their jobs if all 
existing production were moved outside of the United States. Though 
manufacturers stated in interviews that shifts in production to foreign 
countries are unlikely, the industry did not provide enough information 
for DOE fully quantify what percentage of the industry would move 
production at each evaluated standard level.
    The majority of design options analyzed in the engineering analysis 
require manufacturers to purchase more-efficient components from 
suppliers. These components do not require significant additional labor 
to assemble. A key component of a commercial refrigeration equipment 
unit that requires fabrication labor by the commercial refrigeration 
equipment manufacturer is the shell of the unit, which needs to be 
formed and foamed in. Although this activity may require new production 
equipment if thicker insulation is needed to meet higher efficiency 
levels, the process of building the foamed-in-place cases would 
essentially remain the same, and therefore require no additional labor

[[Page 17797]]

costs. As a result, labor needs are not expected to increase as the 
amended energy conservation standard increases from baseline to TSL 4.
    At TSL 5, the introduction of vacuum insulation panels may lead to 
greater labor requirements. In general, the production and handling of 
VIPs will require more labor than the production of standard 
refrigerated cases. This is due to the delicate nature of VIPs and the 
additional labor necessary to embed them into a display case. The 
additional labor and handling associated with these panels account for 
the increase in labor at the max-tech trial standard level.
    DOE notes that the employment impacts discussed here are 
independent of the employment impacts to the broader U.S. economy, 
which are documented in the Employment Impact Analysis, chapter 16 of 
the TSD.
c. Impacts on Manufacturing Capacity
    According to the majority of commercial refrigeration equipment 
manufacturers interviewed, amended energy conservation standards will 
not significantly affect manufacturers' production capacities. An 
amended energy conservation standard for commercial refrigeration 
equipment would not change the fundamental assembly of the equipment, 
but manufacturers do anticipate potential for changes to tooling and 
fixtures. The most significant of these would come as a result of any 
redesigns performed to accommodate additional foam insulation 
thickness. However, most of the design options being evaluated are 
already available on the market as product options. Thus, DOE believes 
manufacturers would be able to maintain manufacturing capacity levels 
and continue to meet market demand under amended energy conservation 
standards.
d. Impacts on Subgroups of Manufacturers
    Small manufacturers, niche equipment manufacturers, and 
manufacturers exhibiting a cost structure substantially different from 
the industry average could be affected disproportionately. As discussed 
in section IV.J, using average cost assumptions to develop an industry 
cash-flow estimate is inadequate to assess differential impacts among 
manufacturer subgroups.
    For commercial refrigeration equipment, DOE identified and 
evaluated the impact of amended energy conservation standards on one 
subgroup: Small manufacturers. The SBA defines a ``small business'' as 
having 750 employees or less for NAICS 333415, ``Air-Conditioning and 
Warm Air Heating Equipment and Commercial and Industrial Refrigeration 
Equipment Manufacturing.'' Based on this definition, DOE identified 32 
manufacturers in the commercial refrigeration equipment industry that 
are small businesses.
    For a discussion of the impacts on the small manufacturer subgroup, 
see the regulatory flexibility analysis in section VI.B of this 
document and chapter 12 of the final rule TSD.
e. Cumulative Regulatory Burden
    While any one regulation may not impose a significant burden on 
manufacturers, the combined effects of recent or impending regulations 
may have serious consequences for some manufacturers, groups of 
manufacturers, or an entire industry. Assessing the impact of a single 
regulation may overlook this cumulative regulatory burden. In addition 
to energy conservation standards, other regulations can significantly 
affect manufacturers' financial operations. Multiple regulations 
affecting the same manufacturer can strain profits and lead companies 
to abandon product lines or markets with lower expected future returns 
than competing products. For these reasons, DOE conducts an analysis of 
cumulative regulatory burden as part of its rulemakings pertaining to 
appliance efficiency.
    For the cumulative regulatory burden analysis, DOE looks at other 
regulations that could affect CRE manufacturers that will take effect 
approximately three years before or after the 2017 compliance date of 
amended energy conservation standards for these products. In 
interviews, manufacturers cited Federal regulations on certification, 
on walk-in cooler and freezer equipment, and from ENERGY STAR as 
contributing to their cumulative regulatory burden. The compliance 
years and expected industry conversion costs are listed below:
Walk-In Cooler and Freezer Energy Conservation Standard Rulemaking
    Nine commercial refrigeration equipment manufacturers also produce 
walk-ins, and therefore they must comply with two rulemakings that 
follow similar timelines. These manufacturers will incur conversion 
costs for both types of products at around the same time, which could 
be a significant strain on resources. In the 2013 NOPR for walk-ins, 
the proposed standard was estimated to require conversion costs of $71 
million (in 2012$) to be incurred by the industry ahead of the 2017 
compliance date. 78 FR 55781. However, the analysis is not final and 
these figures are subject to change in the forthcoming final rule for 
walk-in coolers and freezers. DOE discusses these and other 
requirements, and includes the full details of the cumulative 
regulatory burden, in chapter 12 of the final rule TSD.
Certification, Compliance, and Enforcement Rule
    Many manufacturers have expressed concerns about the Certification, 
Compliance, and Enforcement (CC&E) March 2011 final rule, which allows 
DOE to enforce the energy and water conservation standards for covered 
products and equipment, and provides for more accurate, comprehensive 
information about the energy and water use characteristics of products 
sold in the United States. The rule revises former certification 
regulations so that the Department has the information it needs to 
ensure that regulated products sold in the United States comply with 
the law. According to the rule, manufacturers of covered consumer 
products and commercial and industrial equipment must certify on an 
annual basis, by means of a compliance statement and a certification 
report, that each of their basic models meets its applicable energy 
conservation, water conservation, and/or design standard before it is 
distributed within the United States. For purposes of certification 
testing, the determination that a basic model complies with the 
applicable conservation standard must be based on sampling procedures, 
which currently require that a minimum of two units of a basic model 
must be tested in order to certify that the model is compliant (unless 
the product-specific regulations specify otherwise). 76 FR 12422 (March 
7, 2011).
    However, DOE recognizes that sampling requirements can create 
burden for certain commercial refrigeration equipment manufacturers who 
build one-of-a kind customized units and have a large number of basic 
models. Therefore, DOE conducted a rulemaking to expand AEDM coverage 
and issued a final rule on December 31, 2013. (78 FR 79579) An AEDM is 
a computer modeling or mathematical tool that predicts the performance 
of non-tested basic models. In the final rule, DOE is allowing CRE 
manufacturers to rate their basic models using AEDMs, reducing the need 
for sample units and reducing burden on manufacturers. More information 
can be found at http://www1.eere.energy.gov/buildings/appliance_standards/implement_cert_and_enforce.html. DOE

[[Page 17798]]

discusses these and other requirements, and includes the full details 
of the cumulative regulatory burden, in chapter 12 of the final rule 
TSD.
EPA's ENERGY STAR
    Some stakeholders have also expressed concern regarding potential 
conflicts with other certification programs, in particular EPA's ENERGY 
STAR requirements. However, DOE notes that certain standards, such as 
ENERGY STAR, are voluntary for manufacturers. As such, they are not 
part of DOE's consideration of cumulative regulatory burden.
    DOE discusses these and other non-Federal regulations in chapter 12 
of the NOPR TSD.
3. National Impact Analysis
a. Energy Savings
    DOE estimated the NES by calculating the difference in annual 
energy consumption for the base-case scenario and standards-case 
scenario at each TSL for each equipment class and summing up the annual 
energy savings over the lifetime of all equipment purchased in 2017-
2046.
    Table V.38 presents the primary NES (taking into account losses in 
the generation and transmission of electricity) for all equipment 
classes and the sum total of NES for each TSL, and
    Table V.39 presents estimated FFC energy savings for each 
considered TSL. The total FFC NES progressively increases from 1.195 
quads at TSL 1 to 4.207 quads at TSL 5.

           Table V.38--Cumulative National Primary Energy Savings for Equipment Purchased in 2017-2046
----------------------------------------------------------------------------------------------------------------
                                                                       Quads
         Equipment class         -------------------------------------------------------------------------------
                                       TSL 1           TSL 2           TSL 3           TSL 4           TSL 5
----------------------------------------------------------------------------------------------------------------
VOP.RC.M........................           0.000           0.000           0.403           0.550           0.584
VOP.RC.L........................           0.000           0.000           0.001           0.011           0.017
VOP.SC.M........................           0.000           0.000           0.000           0.002           0.007
VCT.RC.M........................           0.000           0.000           0.006           0.008           0.010
VCT.RC.L........................           0.096           0.096           0.130           0.150           0.259
VCT.SC.M........................           0.010           0.060           0.093           0.110           0.139
VCT.SC.L........................           0.018           0.041           0.045           0.050           0.050
VCT.SC.I........................           0.001           0.001           0.001           0.003           0.008
VCS.SC.M........................           0.309           0.687           0.794           0.870           1.080
VCS.SC.L........................           0.450           0.631           0.808           0.839           1.121
VCS.SC.I........................           0.000           0.001           0.002           0.002           0.005
SVO.RC.M........................           0.229           0.229           0.229           0.316           0.335
SVO.SC.M........................           0.000           0.000           0.000           0.010           0.016
SOC.RC.M........................           0.000           0.000           0.000           0.004           0.016
SOC.SC.M........................           0.000           0.000           0.000           0.001           0.002
HZO.RC.M........................           0.000           0.000           0.000           0.000           0.002
HZO.RC.L........................           0.000           0.000           0.000           0.000           0.023
HZO.SC.M........................           0.000           0.001           0.001           0.001           0.002
HZO.SC.L........................           0.000           0.000           0.000           0.000           0.000
HCT.SC.M........................           0.000           0.001           0.001           0.002           0.002
HCT.SC.L........................           0.011           0.012           0.012           0.013           0.016
HCT.SC.I........................           0.000           0.000           0.000           0.000           0.005
HCS.SC.M........................           0.004           0.008           0.013           0.013           0.030
HCS.SC.L........................           0.001           0.002           0.003           0.005           0.010
PD.SC.M.........................           0.046           0.271           0.301           0.310           0.403
                                 -------------------------------------------------------------------------------
    Total.......................           1.176           2.041           2.844           3.270           4.140
----------------------------------------------------------------------------------------------------------------


       Table V.39--Cumulative National Full-Fuel-Cycle Energy Savings for Equipment Purchased in 2017-2046
----------------------------------------------------------------------------------------------------------------
                                                                       Quads
         Equipment class         -------------------------------------------------------------------------------
                                       TSL 1           TSL 2           TSL 3           TSL 4           TSL 5
----------------------------------------------------------------------------------------------------------------
VOP.RC.M........................           0.000           0.000           0.410           0.559           0.593
VOP.RC.L........................           0.000           0.000           0.001           0.011           0.018
VOP.SC.M........................           0.000           0.000           0.000           0.002           0.007
VCT.RC.M........................           0.000           0.000           0.006           0.008           0.010
VCT.RC.L........................           0.098           0.098           0.132           0.153           0.263
VCT.SC.M........................           0.010           0.061           0.094           0.112           0.141
VCT.SC.L........................           0.018           0.042           0.046           0.050           0.050
VCT.SC.I........................           0.001           0.001           0.001           0.003           0.008
VCS.SC.M........................           0.314           0.699           0.807           0.884           1.097
VCS.SC.L........................           0.458           0.641           0.821           0.852           1.139
VCS.SC.I........................           0.000           0.001           0.002           0.002           0.005
SVO.RC.M........................           0.233           0.233           0.233           0.321           0.340
SVO.SC.M........................           0.000           0.000           0.000           0.010           0.016
SOC.RC.M........................           0.000           0.000           0.000           0.004           0.016
SOC.SC.M........................           0.000           0.000           0.000           0.001           0.002
HZO.RC.M........................           0.000           0.000           0.000           0.000           0.002
HZO.RC.L........................           0.000           0.000           0.000           0.000           0.023
HZO.SC.M........................           0.000           0.001           0.001           0.001           0.002
HZO.SC.L........................           0.000           0.000           0.000           0.000           0.000
HCT.SC.M........................           0.000           0.001           0.001           0.002           0.002

[[Page 17799]]

 
HCT.SC.L........................           0.011           0.012           0.012           0.013           0.016
HCT.SC.I........................           0.000           0.000           0.000           0.000           0.005
HCS.SC.M........................           0.004           0.008           0.013           0.014           0.030
HCS.SC.L........................           0.001           0.002           0.003           0.005           0.010
PD.SC.M.........................           0.047           0.275           0.306           0.315           0.410
                                 -------------------------------------------------------------------------------
    Total.......................           1.195           2.074           2.889           3.323           4.207
----------------------------------------------------------------------------------------------------------------

    Circular A-4 requires agencies to present analytical results, 
including separate schedules of the monetized benefits and costs that 
show the type and timing of benefits and costs. Circular A-4 also 
directs agencies to consider the variability of key elements underlying 
the estimates of benefits and costs. For this rulemaking, DOE undertook 
a sensitivity analysis using nine rather than 30 years of product 
shipments. The choice of a 9-year period is a proxy for the timeline in 
EPCA for the review of certain energy conservation standards and 
potential revision of and compliance with such revised standards.\76\ 
The review timeframe established in EPCA generally does not overlap 
with the product lifetime, product manufacturing cycles or other 
factors specific to commercial refrigeration equipment. Thus, this 
information is presented for informational purposes only and is not 
indicative of any change in DOE's analytical methodology. The primary 
and full-fuel cycle NES results based on a 9-year analysis period are 
presented in Table V.40 and Table V.41, respectively. The impacts are 
counted over the lifetime of products purchased in 2017-2025.
---------------------------------------------------------------------------

    \76\ EPCA requires DOE to review its standards at least once 
every 6 years (42 U.S.C. 6295(m)(1), 6316(e)), and requires, for 
certain products, a 3-year period after any new standard is 
promulgated before compliance is required, except that in no case 
may any new standards be required within 6 years of the compliance 
date of the previous standards. (42 U.S.C. 6295(m)(4), 
6316(e)).While adding a 6-year review to the 3-year compliance 
period sums to 9 years, DOE notes that it may undertake reviews at 
any time within the 6-year period, and that the 3 year compliance 
date may be extended to 5 years. A 9-year analysis period may not be 
appropriate given the variability that occurs in the timing of 
standards reviews and the fact that, for some consumer products, the 
period following establishment of a new or amended standard before 
which compliance is required is 5 years rather than 3 years.

                Table V.40--Cumulative National Primary Energy Savings for 9-Year Analysis Period
                                       [Equipment purchased in 2017-2025]
----------------------------------------------------------------------------------------------------------------
                                                                       Quads
         Equipment class         -------------------------------------------------------------------------------
                                       TSL 1           TSL 2           TSL 3           TSL 4           TSL 5
----------------------------------------------------------------------------------------------------------------
VOP.RC.M........................           0.000           0.000           0.099           0.134           0.143
VOP.RC.L........................           0.000           0.000           0.000           0.003           0.004
VOP.SC.M........................           0.000           0.000           0.000           0.000           0.002
VCT.RC.M........................           0.000           0.000           0.002           0.002           0.003
VCT.RC.L........................           0.024           0.024           0.032           0.037           0.063
VCT.SC.M........................           0.003           0.017           0.025           0.029           0.036
VCT.SC.L........................           0.005           0.011           0.012           0.013           0.013
VCT.SC.I........................           0.000           0.000           0.000           0.001           0.002
VCS.SC.M........................           0.075           0.168           0.198           0.219           0.270
VCS.SC.L........................           0.110           0.156           0.202           0.209           0.278
VCS.SC.I........................           0.000           0.000           0.001           0.001           0.001
SVO.RC.M........................           0.056           0.056           0.056           0.077           0.082
SVO.SC.M........................           0.000           0.000           0.000           0.002           0.004
SOC.RC.M........................           0.000           0.000           0.000           0.001           0.004
SOC.SC.M........................           0.000           0.000           0.000           0.000           0.001
HZO.RC.M........................           0.000           0.000           0.000           0.000           0.000
HZO.RC.L........................           0.000           0.000           0.000           0.000           0.006
HZO.SC.M........................           0.000           0.000           0.000           0.000           0.000
HZO.SC.L........................           0.000           0.000           0.000           0.000           0.000
HCT.SC.M........................           0.000           0.000           0.000           0.000           0.001
HCT.SC.L........................           0.003           0.003           0.003           0.003           0.004
HCT.SC.I........................           0.000           0.000           0.000           0.000           0.001
HCS.SC.M........................           0.001           0.002           0.003           0.004           0.008
HCS.SC.L........................           0.000           0.001           0.001           0.001           0.003
PD.SC.M.........................           0.011           0.066           0.074           0.076           0.099
                                 -------------------------------------------------------------------------------
    Total.......................           0.289           0.504           0.707           0.814           1.027
----------------------------------------------------------------------------------------------------------------


[[Page 17800]]


            Table V.41--Cumulative Full Fuel Cycle National Energy Savings for 9-Year Analysis Period
                                       [Equipment purchased in 2017-2025]
----------------------------------------------------------------------------------------------------------------
                                                                       quads
         Equipment class         -------------------------------------------------------------------------------
                                       TSL 1           TSL 2           TSL 3           TSL 4           TSL 5
----------------------------------------------------------------------------------------------------------------
VOP.RC.M........................           0.000           0.000           0.100           0.137           0.145
VOP.RC.L........................           0.000           0.000           0.000           0.003           0.004
VOP.SC.M........................           0.000           0.000           0.000           0.000           0.002
VCT.RC.M........................           0.000           0.000           0.002           0.002           0.003
VCT.RC.L........................           0.024           0.024           0.032           0.037           0.064
VCT.SC.M........................           0.003           0.017           0.025           0.029           0.037
VCT.SC.L........................           0.005           0.012           0.013           0.014           0.014
VCT.SC.I........................           0.000           0.000           0.000           0.001           0.002
VCS.SC.M........................           0.077           0.171           0.201           0.222           0.275
VCS.SC.L........................           0.112           0.158           0.205           0.213           0.283
VCS.SC.I........................           0.000           0.000           0.001           0.001           0.001
SVO.RC.M........................           0.057           0.057           0.057           0.079           0.083
SVO.SC.M........................           0.000           0.000           0.000           0.002           0.004
SOC.RC.M........................           0.000           0.000           0.000           0.001           0.004
SOC.SC.M........................           0.000           0.000           0.000           0.000           0.001
HZO.RC.M........................           0.000           0.000           0.000           0.000           0.000
HZO.RC.L........................           0.000           0.000           0.000           0.000           0.006
HZO.SC.M........................           0.000           0.000           0.000           0.000           0.000
HZO.SC.L........................           0.000           0.000           0.000           0.000           0.000
HCT.SC.M........................           0.000           0.000           0.000           0.000           0.001
HCT.SC.L........................           0.003           0.003           0.003           0.003           0.004
HCT.SC.I........................           0.000           0.000           0.000           0.000           0.001
HCS.SC.M........................           0.001           0.002           0.004           0.004           0.008
HCS.SC.L........................           0.000           0.001           0.001           0.001           0.003
PD.SC.M.........................           0.011           0.067           0.075           0.077           0.100
                                 -------------------------------------------------------------------------------
    Total.......................           0.294           0.513           0.719           0.828           1.045
----------------------------------------------------------------------------------------------------------------

b. Net Present Value of Customer Costs and Benefits
    DOE estimated the cumulative NPV to the Nation of the net savings 
for CRE customers that would result from potential standards at each 
TSL. In accordance with OMB guidelines on regulatory analysis (OMB 
Circular A-4, section E, September 17, 2003), DOE calculated NPV using 
both a 7-percent and a 3-percent real discount rate.
    Table V.42 and Table V.43 show the customer NPV results for each of 
the TSLs DOE considered for commercial refrigeration equipment at 7-
percent and 3-percent discount rates, respectively. The impacts cover 
the expected lifetime of equipment purchased in 2017-2046.
    The NPV results at a 7-percent discount rate are negative for all 
equipment classes at TSL 5 except for the VCT.SC.L equipment class. 
Efficiency levels for TSL 4 were chosen to correspond to the highest 
efficiency level with a near positive NPV at a 7-percent discount rate 
for each equipment class. The criterion for TSL 3 was to select 
efficiency levels with the highest NPV at a 7-percent discount rate. 
Consequently, the total NPV is highest for TSL 3. TSL 2 shows the 
second highest total NPV at a 7-percent discount rate. TSL 1 has a 
total NPV lower than TSL 2.

           Table V.42-- Net Present Value of Customer Costs and Benefits at a 7-Percent Discount Rate
----------------------------------------------------------------------------------------------------------------
                                                                  billion 2012$ *
         Equipment class         -------------------------------------------------------------------------------
                                       TSL 1           TSL 2           TSL 3           TSL 4           TSL 5
----------------------------------------------------------------------------------------------------------------
VOP.RC.M........................           0.000           0.000           0.570           0.171          -2.941
VOP.RC.L........................           0.000           0.000           0.001          -0.004          -0.240
VOP.SC.M........................           0.000           0.000           0.000          -0.009          -0.374
VCT.RC.M........................           0.000           0.000           0.013          -0.003          -0.271
VCT.RC.L........................           0.212           0.212           0.234          -0.005          -4.423
VCT.SC.M........................          -0.006           0.039           0.058          -0.003          -1.531
VCT.SC.L........................           0.059           0.118           0.123           0.040           0.040
VCT.SC.I........................           0.000           0.000           0.000          -0.004          -0.141
VCS.SC.M........................           0.756           1.748           1.829           1.659          -6.820
VCS.SC.L........................           1.164           1.502           1.579           1.550          -4.692
VCS.SC.I........................           0.001           0.002           0.003           0.003          -0.050
SVO.RC.M........................           0.291           0.291           0.291           0.081          -1.493
SVO.SC.M........................           0.000           0.000           0.000          -0.003          -0.215
SOC.RC.M........................           0.000           0.000           0.000          -0.011          -0.342
SOC.SC.M........................           0.000           0.000           0.000          -0.003          -0.032
HZO.RC.M........................           0.000           0.000           0.000           0.000          -0.123
HZO.RC.L........................           0.000           0.000           0.000           0.000          -0.734
HZO.SC.M........................           0.000           0.000           0.000           0.000          -0.025
HZO.SC.L........................           0.000           0.000           0.000           0.000           0.000

[[Page 17801]]

 
HCT.SC.M........................           0.001           0.002           0.002           0.000          -0.014
HCT.SC.L........................           0.024           0.024           0.025           0.022          -0.030
HCT.SC.I........................           0.000           0.000           0.000           0.000          -0.076
HCS.SC.M........................           0.008           0.012           0.012           0.007          -0.342
HCS.SC.L........................           0.003           0.005           0.006           0.004          -0.047
PD.SC.M.........................           0.007           0.183           0.183           0.146          -3.475
                                 -------------------------------------------------------------------------------
    Total.......................           2.519           4.139           4.928           3.637         -28.390
----------------------------------------------------------------------------------------------------------------
* A value of $0.000 means NES values are less than 0.001 billion 2012$.


           Table V.43-- Net Present Value of Customer Costs and Benefits at a 3-Percent Discount Rate
----------------------------------------------------------------------------------------------------------------
                                                                  billion 2012$ *
         Equipment class         -------------------------------------------------------------------------------
                                       TSL 1           TSL 2           TSL 3           TSL 4           TSL 5
----------------------------------------------------------------------------------------------------------------
VOP.RC.M........................           0.000           0.000           1.500           0.882          -4.894
VOP.RC.L........................           0.000           0.000           0.004           0.003          -0.433
VOP.SC.M........................           0.000           0.000           0.000          -0.016          -0.683
VCT.RC.M........................           0.000           0.000           0.029           0.001          -0.496
VCT.RC.L........................           0.481           0.481           0.551           0.125          -8.007
VCT.SC.M........................          -0.006           0.119           0.185           0.086          -2.712
VCT.SC.L........................           0.124           0.252           0.265           0.116           0.116
VCT.SC.I........................           0.001           0.001           0.001          -0.005          -0.254
VCS.SC.M........................           1.656           3.838           4.074           3.825         -11.832
VCS.SC.L........................           2.551           3.333           3.626           3.592          -7.824
VCS.SC.I........................           0.001           0.005           0.007           0.007          -0.090
SVO.RC.M........................           0.790           0.790           0.790           0.476          -2.443
SVO.SC.M........................           0.000           0.000           0.000           0.003          -0.383
SOC.RC.M........................           0.000           0.000           0.000          -0.018          -0.625
SOC.SC.M........................           0.000           0.000           0.000          -0.004          -0.058
HZO.RC.M........................           0.000           0.000           0.000           0.000          -0.227
HZO.RC.L........................           0.000           0.000           0.000           0.000          -1.350
HZO.SC.M........................           0.000           0.001           0.001           0.000          -0.044
HZO.SC.L........................           0.000           0.000           0.000           0.000           0.000
HCT.SC.M........................           0.002           0.004           0.004           0.002          -0.024
HCT.SC.L........................           0.054           0.056           0.057           0.053          -0.039
HCT.SC.I........................           0.000           0.000           0.000           0.000          -0.137
HCS.SC.M........................           0.019           0.029           0.033           0.022          -0.594
HCS.SC.L........................           0.006           0.010           0.014           0.012          -0.076
PD.SC.M.........................           0.046           0.577           0.602           0.537          -6.090
                                 -------------------------------------------------------------------------------
    Total.......................           5.727           9.497          11.742           9.698         -49.199
----------------------------------------------------------------------------------------------------------------
* value of $0.000 means NES values are less than 0.001 billion 2012$. Values in parentheses are negative values.

    The NPV results based on the aforementioned 9-year analysis period 
are presented in Table V.44 and Table V.45. The impacts are counted 
over the lifetime of equipment purchased in 2017-2025. As mentioned 
previously, this information is presented for informational purposes 
only and is not indicative of any change in DOE's analytical 
methodology or decision criteria.

  Table V.44--Net Present Value of Customer Costs and Benefits at a 7-Percent Discount Rate for 9-Year Analysis
                                                     Period
                                       [Equipment purchased in 2017-2025]
----------------------------------------------------------------------------------------------------------------
                                                                  billion 2012$*
         Equipment class         -------------------------------------------------------------------------------
                                       TSL 1           TSL 2           TSL 3           TSL 4           TSL 5
----------------------------------------------------------------------------------------------------------------
VOP.RC.M........................           0.000           0.000           0.237           0.036          -1.454
VOP.RC.L........................           0.000           0.000           0.000          -0.002          -0.116
VOP.SC.M........................           0.000           0.000           0.000          -0.005          -0.179
VCT.RC.M........................           0.000           0.000           0.006          -0.002          -0.130
VCT.RC.L........................           0.099           0.099           0.107          -0.009          -2.130
VCT.SC.M........................          -0.004           0.020           0.027          -0.003          -0.736
VCT.SC.L........................           0.029           0.059           0.061           0.021           0.021
VCT.SC.I........................           0.000           0.000           0.000          -0.002          -0.068

[[Page 17802]]

 
VCS.SC.M........................           0.342           0.792           0.827           0.732          -3.338
VCS.SC.L........................           0.528           0.681           0.709           0.693          -2.311
VCS.SC.I........................           0.000           0.001           0.001           0.001          -0.024
SVO.RC.M........................           0.118           0.118           0.118           0.012          -0.742
SVO.SC.M........................           0.000           0.000           0.000          -0.002          -0.104
SOC.RC.M........................           0.000           0.000           0.000          -0.006          -0.165
SOC.SC.M........................           0.000           0.000           0.000          -0.001          -0.015
HZO.RC.M........................           0.000           0.000           0.000           0.000          -0.059
HZO.RC.L........................           0.000           0.000           0.000           0.000          -0.353
HZO.SC.M........................           0.000           0.000           0.000           0.000          -0.012
HZO.SC.L........................           0.000           0.000           0.000           0.000           0.000
HCT.SC.M........................           0.000           0.001           0.001           0.000          -0.007
HCT.SC.L........................           0.011           0.011           0.011           0.010          -0.018
HCT.SC.I........................           0.000           0.000           0.000           0.000          -0.037
HCS.SC.M........................           0.004           0.006           0.006           0.003          -0.182
HCS.SC.L........................           0.001           0.002           0.003           0.002          -0.025
PD.SC.M.........................           0.000           0.079           0.077           0.059          -1.680
                                 -------------------------------------------------------------------------------
    Total.......................           1.129           1.869           2.191           1.536         -13.863
----------------------------------------------------------------------------------------------------------------
* A value of $0.000 means NES values are less than 0.001 billion 2012$. Values in parentheses are negative
  values.


  Table V.45--Net Present Value of Customer Costs and Benefits at a 3-Percent Discount Rate for 9-Year Analysis
                                                     Period
                                       [Equipment purchased in 2017-2025]
----------------------------------------------------------------------------------------------------------------
                                                                  billion 2012$*
         Equipment class         -------------------------------------------------------------------------------
                                       TSL 1           TSL 2           TSL 3           TSL 4           TSL 5
----------------------------------------------------------------------------------------------------------------
VOP.RC.M........................           0.000           0.000           0.446           0.208          -1.814
VOP.RC.L........................           0.000           0.000           0.001          -0.001          -0.154
VOP.SC.M........................           0.000           0.000           0.000          -0.006          -0.240
VCT.RC.M........................           0.000           0.000           0.010           0.000          -0.174
VCT.RC.L........................           0.160           0.160           0.179           0.027          -2.829
VCT.SC.M........................          -0.004           0.044           0.062           0.025          -0.957
VCT.SC.L........................           0.045           0.092           0.096           0.043           0.043
VCT.SC.I........................           0.000           0.000           0.000          -0.002          -0.090
VCS.SC.M........................           0.533           1.239           1.314           1.204          -4.295
VCS.SC.L........................           0.824           1.078           1.160           1.143          -2.885
VCS.SC.I........................           0.000           0.001           0.002           0.002          -0.032
SVO.RC.M........................           0.231           0.231           0.231           0.108          -0.914
SVO.SC.M........................           0.000           0.000           0.000           0.000          -0.136
SOC.RC.M........................           0.000           0.000           0.000          -0.007          -0.221
SOC.SC.M........................           0.000           0.000           0.000          -0.002          -0.021
HZO.RC.M........................           0.000           0.000           0.000           0.000          -0.080
HZO.RC.L........................           0.000           0.000           0.000           0.000          -0.475
HZO.SC.M........................           0.000           0.000           0.000           0.000          -0.016
HZO.SC.L........................           0.000           0.000           0.000           0.000           0.000
HCT.SC.M........................           0.001           0.001           0.001           0.000          -0.009
HCT.SC.L........................           0.017           0.018           0.018           0.016          -0.020
HCT.SC.I........................           0.000           0.000           0.000           0.000          -0.049
HCS.SC.M........................           0.007           0.010           0.011           0.007          -0.237
HCS.SC.L........................           0.002           0.004           0.005           0.004          -0.031
PD.SC.M.........................           0.009           0.178           0.182           0.158          -2.171
                                 -------------------------------------------------------------------------------
    Total.......................           1.826           3.056           3.719           2.929         -17.805
----------------------------------------------------------------------------------------------------------------
* A value of $0.000 means NES values are less than 0.001 billion 2012$. Values in parentheses are negative
  values.

c. Employment Impacts
    In addition to the direct impacts on manufacturing employment 
discussed in section V.B.2, DOE develops general estimates of the 
indirect employment impacts of amended standards on the economy. As 
discussed above, DOE expects energy amended conservation standards for 
commercial refrigeration equipment to reduce energy bills for 
commercial customers, and the resulting net savings to be redirected to 
other forms of economic activity. DOE also realizes that these shifts 
in spending and economic activity by commercial

[[Page 17803]]

refrigeration equipment owners could affect the demand for labor. Thus, 
indirect employment impacts may result from expenditures shifting 
between goods (the substitution effect) and changes in income and 
overall expenditure levels (the income effect) that occur due to the 
imposition of amended standards. These impacts may affect a variety of 
businesses not directly involved in the decision to make, operate, or 
pay the utility bills for commercial refrigeration equipment. To 
estimate these indirect economic effects, DOE used an input/output 
model of the U.S. economy using U.S. Department of Commerce, Bureau of 
Economic Analysis (BEA) and BLS data (as described in section IV.J of 
this document; see chapter 16 of the final rule TSD for more details).
    Customers who purchase more-efficient equipment pay lower amounts 
towards utility bills, which results in job losses in the electric 
utilities sector. However, in the input/output model, the dollars saved 
on utility bills are re-invested in economic sectors that create more 
jobs than are lost in the electric utilities sector. Thus, the amended 
energy conservation standards for commercial refrigeration equipment 
are likely to slightly increase the net demand for labor in the 
economy. As shown in chapter 16 of the final rule TSD, DOE estimates 
that net indirect employment impacts from commercial refrigeration 
equipment amended standards are very small relative to the national 
economy. However, the net increase in jobs might be offset by other, 
unanticipated effects on employment. Neither the BLS data nor the 
input/output model used by DOE includes the quality of jobs.
4. Impact on Utility or Performance of Equipment
    In performing the engineering analysis, DOE considers design 
options that would not lessen the utility or performance of the 
individual classes of equipment. (42 U.S.C. 6295(o)(2)(B)(i)(IV) and 
6316(e)(1)) As presented in the screening analysis (chapter 4 of the 
final rule TSD), DOE eliminates from consideration any design options 
that reduce the utility of the equipment. For today's final rule, DOE 
concluded that none of the efficiency levels considered for commercial 
refrigeration equipment reduce the utility or performance of the 
equipment.
5. Impact of Any Lessening of Competition
    EPCA directs DOE to consider any lessening of competition that is 
likely to result from standards. It also directs the Attorney General 
of the United States (Attorney General) to determine the impact, if 
any, of any lessening of competition likely to result from a proposed 
standard and to transmit such determination to the Secretary within 60 
days of the publication of a proposed rule and simultaneously published 
proposed rule, together with an analysis of the nature and extent of 
the impact. (42 U.S.C. 6295(o)(2)(B)(i)(V) and (B)(ii)) To assist the 
Attorney General in making a determination for CRE standards, DOE 
provided the Department of Justice (DOJ) with copies of the NOPR and 
the TSD for review. DOE received no adverse comments from DOJ regarding 
the proposal.
6. Need of the Nation To Conserve Energy
    An improvement in the energy efficiency of the equipment subject to 
today's final rule is likely to improve the security of the Nation's 
energy system by reducing overall demand for energy. Reduced 
electricity demand may also improve the reliability of the electricity 
system. Reductions in national electric generating capacity estimated 
for each considered TSL are reported in chapter 14 of the final rule 
TSD.
    Energy savings from amended standards for commercial refrigeration 
equipment could also produce environmental benefits in the form of 
reduced emissions of air pollutants and GHGs associated with 
electricity production. Table V.46 provides DOE's estimate of 
cumulative emissions reductions projected to result from the TSLs 
considered in this rule. The table includes both power sector emissions 
and upstream emissions. DOE reports annual emissions reductions for 
each TSL in chapter 13 of the final rule TSD.

 Table V.46--Cumulative Emissions Reduction Estimated for Commercial Refrigeration Equipment TSLs for Equipment
                                             Purchased in 2017-2046
----------------------------------------------------------------------------------------------------------------
                                                                        TSL
                                 -------------------------------------------------------------------------------
                                         1               2               3               4               5
----------------------------------------------------------------------------------------------------------------
                                             Power Sector Emissions
----------------------------------------------------------------------------------------------------------------
CO[ihel2] (million metric tons).           54.9            95.4           133.0           152.9           193.6
SO[ihel2] (thousand tons).......           84.9           147.4           205.5           236.3           299.1
NOX (thousand tons).............          -11.4           -19.9           -28.1           -32.3           -40.7
Hg (tons).......................            0.10            0.17            0.24            0.28            0.35
N[ihel2]O (thousand tons).......            1.3             2.3             3.2             3.7             4.7
CH4 (thousand tons).............            7.7            13.3            18.6            21.4            27.1
----------------------------------------------------------------------------------------------------------------
                                               Upstream Emissions
----------------------------------------------------------------------------------------------------------------
CO[ihel2] (million metric tons).            3.7             6.4             8.9            10.2            13.0
SO[ihel2] (thousand tons).......            0.8             1.4             1.9             2.2             2.8
NOX (thousand tons).............           50.6            87.8           122.4           140.7           178.2
Hg (tons).......................            0.00            0.00            0.00            0.01            0.01
N[ihel2]O (thousand tons).......            0.0             0.1             0.1             0.1             0.1
CH4 (thousand tons).............          307.2           533.3           743.1           854.6          1081.9
----------------------------------------------------------------------------------------------------------------
                                                 Total Emissions
----------------------------------------------------------------------------------------------------------------
CO[ihel2] (million metric tons).           58.6           101.7           141.9           163.2           206.5
SO[ihel2] (thousand tons).......           85.7           148.8           207.4           238.5           301.9
NOX (thousand tons).............           39.2            67.9            94.3           108.4           137.4
Hg (tons).......................            0.10            0.18            0.25            0.28            0.36
N[ihel2]O (thousand tons).......            1.4             2.4             3.3             3.8             4.8

[[Page 17804]]

 
CH4 (thousand tons).............          314.9           546.6           761.7           875.9          1109.0
----------------------------------------------------------------------------------------------------------------

    As part of the analysis for this final rule, DOE estimated monetary 
benefits likely to result from the reduced emissions of CO2 
and NOX that were estimated for each of the TSLs considered. 
As discussed in section IV.L, for CO2, DOE used values for 
the SCC developed by an interagency process. The interagency group 
selected four sets of SCC values for use in regulatory analyses. Three 
sets are based on the average SCC from three integrated assessment 
models, at discount rates of 2.5 percent, 3 percent, and 5 percent. The 
fourth set, which represents the 95th-percentile SCC estimate across 
all three models at a 3-percent discount rate, is included to represent 
higher-than-expected impacts from temperature change further out in the 
tails of the SCC distribution. The four SCC values for CO2 
emissions reductions in 2015, expressed in 2012$, are $11.8/ton, $39.7/
ton, $61.2/ton, and $117/ton. The values for later years are higher due 
to increasing emissions-related costs as the magnitude of projected 
climate change increases.
    Table V.47 presents the global value of CO2 emissions 
reductions at each TSL. DOE calculated domestic values as a range from 
7 percent to 23 percent of the global values, and these results are 
presented in chapter 14 of the final rule TSD.

    Table V.47--Global Present Value of CO[ihel2] Emissions Reduction for Potential Standards for Commercial
                                             Refrigeration Equipment
----------------------------------------------------------------------------------------------------------------
                                                                     SCC Scenario
                                       ------------------------------------------------------------------------
                  TSL                                                                            3% discount
                                           5% discount       3% discount      2.5% discount      rate, 95th
                                          rate, average     rate, average     rate, average      percentile
 
                                       ------------------------------million 2012$------------------------------
----------------------------------------------------------------------------------------------------------------
                                             Power Sector Emissions
----------------------------------------------------------------------------------------------------------------
1.....................................               392              1762              2787              5438
2.....................................               682              3063              4844              9452
3.....................................               952              4274              6758             13187
4.....................................              1095              4916              7773             15167
5.....................................              1385              6220              9836             19192
----------------------------------------------------------------------------------------------------------------
                                               Upstream Emissions
----------------------------------------------------------------------------------------------------------------
1.....................................                25               115               183               356
2.....................................                43               200               317               617
3.....................................                61               278               442               861
4.....................................                70               320               508               990
5.....................................                88               405               643              1253
----------------------------------------------------------------------------------------------------------------
                                                 Total Emissions
----------------------------------------------------------------------------------------------------------------
1.....................................               417              1877              2970              5794
2.....................................               725              3263              5161             10070
3.....................................              1012              4552              7200             14047
4.....................................              1164              5236              8281             16157
5.....................................              1473              6625             10479             20444
----------------------------------------------------------------------------------------------------------------

    DOE is well aware that scientific and economic knowledge about the 
contribution of CO2 and other GHG emissions to changes in 
the future global climate and the potential resulting damages to the 
world economy continues to evolve rapidly. Thus, any value placed in 
this final rule on reducing CO2 emissions is subject to 
change. DOE, together with other Federal agencies, will continue to 
review various methodologies for estimating the monetary value of 
reductions in CO2 and other GHG emissions. This ongoing 
review will consider the comments on this subject that are part of the 
public record for this final rule and other rulemakings, as well as 
other methodological assumptions and issues. However, consistent with 
DOE's legal obligations, and taking into account the uncertainty 
involved with this particular issue, DOE has included in this final 
rule the most recent values and analyses resulting from the ongoing 
interagency review process.
    DOE also estimated a range for the cumulative monetary value of the 
economic benefits associated with NOX emission reductions 
anticipated to result from amended commercial refrigeration equipment 
standards. Table V.48 presents the present value of cumulative 
NOX emissions reductions for each TSL calculated using the 
average dollar-per-ton values and 7-percent and 3-percent discount 
rates.

[[Page 17805]]



   Table V.48--Present Value of NOX Emissions Reduction for Potential
            Standards for Commercial Refrigeration Equipment
------------------------------------------------------------------------
                                                   million 2012$
                                         -------------------------------
                   TSL                      3% Discount     7% Discount
                                               rate            rate
------------------------------------------------------------------------
                         Power Sector Emissions
------------------------------------------------------------------------
1.......................................           -25.3           -18.9
2.......................................           -44.4           -33.2
3.......................................           -62.4           -46.6
4.......................................           -71.9           -53.7
5.......................................           -90.6           -67.7
------------------------------------------------------------------------
                           Upstream Emissions
------------------------------------------------------------------------
1.......................................            68.7            32.6
2.......................................           119.4            56.7
3.......................................           166.5            79.3
4.......................................           191.5            91.2
5.......................................           242.4           115.3
------------------------------------------------------------------------
                             Total Emissions
------------------------------------------------------------------------
1.......................................            43.4            13.7
2.......................................            75.0            23.6
3.......................................           104.1            32.6
4.......................................           119.6            37.4
5.......................................           151.8            47.6
------------------------------------------------------------------------

7. Summary of National Economic Impact
    The NPV of the monetized benefits associated with emission 
reductions can be viewed as a complement to the NPV of the customer 
savings calculated for each TSL considered in this final rule. Table 
V.49 presents the NPV values that result from adding the estimates of 
the potential economic benefits resulting from reduced CO2 
and NOX emissions in each of four valuation scenarios to the 
NPV of customer savings calculated for each TSL, at both a 7-percent 
and a 3-percent discount rate. The CO2 values used in the 
table correspond to the four scenarios for the valuation of 
CO2 emission reductions discussed above.

  Table V.49--Commercial Refrigeration Equipment TSLs: Net Present Value of Consumer Savings Combined With Net
                    Present Value of Monetized Benefits From CO2 and NOX Emissions Reductions
----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
                                           Consumer NPV at 37% Discount Rate added with Value of Emissions Based
                                                                            on:
                                         -----------------------------------------------------------------------
TSL                                           SCC Value of      SCC Value of      SCC Value of      SCC Value of
                                          $11.8/metric ton  $39.7/metric ton  $61.2/metric ton   $117/metric ton
                                                CO2\*\ and        CO2\*\ and        CO2\*\ and        CO2\*\ and
                                          Medium Value for  Medium Value for  Medium Value for  Medium Value for
                                                       NOX               NOX               NOX               NOX
                                         -----------------------------------------------------------------------
                                                                       billion 2012$
----------------------------------------------------------------------------------------------------------------
1.......................................               6.2               7.6               8.7              11.6
2.......................................              10.3              12.8              14.7              19.6
3.......................................              12.9              16.4              19.0              25.9
4.......................................              11.0              15.1              18.1              26.0
5.......................................             -47.6             -42.4             -38.6             -28.6
----------------------------------------------------------------------------------------------------------------
                                           Consumer NPV at 7% Discount Rate added with Value of Emissions Based
                                                                            on:
                                         -----------------------------------------------------------------------
TSL                                           SCC Value of      SCC Value of      SCC Value of      SCC Value of
                                          $11.8/metric ton  $39.7/metric ton  $61.2/metric ton   $117/metric ton
                                                CO2\*\ and        CO2\*\ and        CO2\*\ and        CO2\*\ and
                                          Medium Value for  Medium Value for  Medium Value for  Medium Value for
                                                       NOX               NOX               NOX               NOX
                                         -----------------------------------------------------------------------
                                                                       billion 2012$
----------------------------------------------------------------------------------------------------------------
1.......................................               3.0               4.4               5.5               8.3
2.......................................               4.9               7.4               9.3              14.2
3.......................................               6.0               9.5              12.2              19.0
4.......................................               4.8               8.9              12.0              19.8
5.......................................             -26.9             -21.7             -17.9              -7.9
----------------------------------------------------------------------------------------------------------------
* These label values represent the global SCC in 2015, in 2012$. The present values have been calculated with
  scenario-consistent discount rates.

    Although adding the value of customer savings to the values of 
emission reductions provides a valuable perspective, two issues should 
be considered. First, the national operating cost savings are domestic 
U.S. customer monetary savings that occur as a result of market 
transactions, while the value of CO2 reductions is based on 
a global value. Second, the assessments of operating cost savings and 
the SCC are performed with different methods that use quite different 
time frames for analysis. The national operating cost savings is 
measured for the lifetime of products shipped in 2017-2046. The SCC 
values, on the other hand, reflect the present value of future climate-
related impacts resulting from the emission of one metric ton of 
CO2 in each year. These impacts continue well beyond 2100.
8. Other Factors
    EPCA allows the Secretary, 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)) DOE

[[Page 17806]]

has not considered other factors in development of the standards in 
this final rule.

C. Conclusions

    Any new or amended energy conservation standard for any type (or 
class) of covered product shall 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 6316(e)(1)) In determining whether a standard is 
economically justified, the Secretary must determine whether the 
benefits of the standard exceed its burdens to the greatest extent 
practicable, considering the seven statutory factors discussed 
previously. (42 U.S.C. 6295(o)(2)(B)(i) and 6316(e)(1)) The new or 
amended standard must also result in a significant conservation of 
energy. (42 U.S.C. 6295(o)(3)(B) and 6316(e)(1))
    For today's rulemaking, DOE considered the impacts of potential 
standards at each TSL, beginning with the maximum technologically 
feasible level, to determine whether that level met the evaluation 
criteria. If the max-tech level was not justified, DOE then considered 
the next most efficient level and undertook the same evaluation until 
it reached the highest efficiency level that is both technologically 
feasible and economically justified and saves a significant amount of 
energy.
    To aid the reader in understanding the benefits and/or burdens of 
each TSL, tables in this section summarize the quantitative analytical 
results for each TSL, based on the assumptions and methodology 
discussed herein. The efficiency levels contained in each TSL are 
described in section IV.A.1. In addition to the quantitative results 
presented in the tables below, DOE also considers other burdens and 
benefits that affect economic justification. These include the impacts 
on identifiable subgroups of consumers who may be disproportionately 
affected by a national standard, and impacts on employment. Section 
IV.I presents the estimated impacts of each TSL for the considered 
subgroups. DOE discusses the impacts on employment in CRE manufacturing 
in section IV.J and discusses the indirect employment impacts in 
section IV.N.
1. Benefits and Burdens of Trial Standard Levels Considered for 
Commercial Refrigeration Equipment
    Table V.50 through Table V.53 summarizes the quantitative impacts 
estimated for each TSL for CRE.

                                                  Table V.50--Summary of Results for Commercial Refrigeration Equipment TSLs: National Impacts*
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
              Category                            TSL 1                           TSL 2                          TSL 3                          TSL 4                          TSL 5
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                      Cumulative National Energy Savings 2017 through 2060
                                                                                              quads
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                     1.176.........................  2.041.........................  2.844........................  3.270........................  4.140.
With full-fuel cycle...............  1.195.........................  2.074.........................  2.889........................  3.323........................  4.207.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                               Cumulative NPV of Customer Benefits
                                                                                          2012$ billion
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
3% discount rate...................  5.73..........................  9.50..........................  11.74........................  9.70.........................  (49.20).
7% discount rate...................  2.52..........................  4.14..........................  4.93.........................  3.64.........................  (28.39).
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                        Industry Impacts
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Change in Industry NPV (2012$        (23.9) to (9.9)...............  (42.9) to (8.7)...............  (165.0) to (93.9)............  (320.9) to (189.4)...........  (1,144.8) to (184.4).
 million).
Change in Industry NPV (%).........  (0.90) to (0.37)..............  (1.61) to (0.33)..............  (6.20) to (3.53).............  (12.07) to (7.12)............  (43.04) to (6.93).
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                Cumulative Emissions Reductions**
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
CO2 (Mt)...........................  58.6..........................  101.7.........................  141.9........................  163.2........................  206.5.
SO2 (kt)...........................  85.7..........................  148.8.........................  207.4........................  238.5........................  301.9.
NOX (kt)...........................  39.2..........................  67.9..........................  94.3.........................  108.4........................  137.4.
Hg (t).............................  0.10..........................  0.18..........................  0.25.........................  0.28.........................  0.36.
N2O (kt)...........................  1.4...........................  2.4...........................  3.3..........................  3.8..........................  4.8.
N2O (kt CO2eq).....................  408.8.........................  709.4.........................  988.1........................  1136.2.......................  1438.8.
CH4 (kt)...........................  314.9.........................  546.6.........................  761.7........................  875.9........................  1109.0.
CH4 (kt CO2eq).....................  7872.6........................  13665.9.......................  19043.5......................  21898.5......................  27724.7.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                        Monetary Value of Cumulative Emissions Reductions
                                                                                      2012$ million[dagger]
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
CO2................................  417 to 5794...................  725 to 10070..................  1012 to 14047................  1164 to 16157................  1473 to 20444.
NOX--3% discount rate..............  43.4..........................  75.0..........................  104.1........................  119.6........................  151.8.
NOX--7% discount rate..............  13.7..........................  23.6..........................  32.6.........................  37.4.........................  47.6.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
** ``Mt'' stands for million metric tons; ``kt'' stands for kilotons; ``t'' stands for tons. CO2eq is the quantity of CO2 that would have the same global warming potential (GWP).
[dagger] Range of the economic value of CO2 reductions is based on estimates of the global benefit of reduced CO2 emissions.


[[Page 17807]]


          Table V.51--Summary of Results for Commercial Refrigeration Equipment TSLs: Mean LCC Savings
----------------------------------------------------------------------------------------------------------------
                                             Mean LCC Savings* 2012$
-----------------------------------------------------------------------------------------------------------------
         Equipment Class               TSL 1           TSL 2           TSL 3           TSL 4           TSL 5
----------------------------------------------------------------------------------------------------------------
VOP.RC.M........................  ..............  ..............             922              -5          -4,203
VOP.RC.L........................  ..............  ..............              53            -148          -6,701
VOP.SC.M........................  ..............  ..............  ..............             -54          -1,384
VCT.RC.M........................  ..............  ..............             542              41          -4,937
VCT.RC.L........................             647             647             526              93          -6,036
VCT.SC.M........................             -10             214             226             163          -1,541
VCT.SC.L........................           2,503           4,709           5,001           2,812           2,812
VCT.SC.I........................              18              18              18             -68          -2,834
VCS.SC.M........................             223             518             363             305          -1,428
VCS.SC.L........................             588             550             507             495          -1,640
VCS.SC.I........................              41             114             113             113          -2,710
SVO.RC.M........................             564             564             564             -19          -2,691
SVO.SC.M........................  ..............  ..............  ..............               6            -917
SOC.RC.M........................  ..............  ..............  ..............            -128          -2,268
SOC.SC.M........................  ..............  ..............  ..............            -209          -2,204
HZO.RC.M........................  ..............  ..............  ..............  ..............          -2,180
HZO.RC.L........................  ..............  ..............  ..............  ..............          -4,249
HZO.SC.M........................  ..............              55              55              -4          -1,154
HZO.SC.L........................  ..............  ..............  ..............  ..............               -
HCT.SC.M........................              66             165             101              43            -599
HCT.SC.L........................             428             435             293             248            -613
HCT.SC.I........................  ..............  ..............  ..............  ..............          -1,240
HCS.SC.M........................              12              17              15               5            -568
HCS.SC.L........................              31              50              64              33            -590
PD.SC.M.........................               8             163             165             150          -1,252
----------------------------------------------------------------------------------------------------------------
* ``NA'' means ``not applicable,'' because for equipment classes HZO.RC.M, HZO.RC.L, and HZO.SC.L, TSLs 1
  through 4 are associated with the baseline efficiency level.


        Table V.52--Summary of Results for Commercial Refrigeration Equipment TSLs: Median Payback Period
----------------------------------------------------------------------------------------------------------------
                                          Median Payback Period  years
-----------------------------------------------------------------------------------------------------------------
         Equipment Class               TSL 1           TSL 2           TSL 3           TSL 4           TSL 5
----------------------------------------------------------------------------------------------------------------
VOP.RC.M........................  ..............  ..............             5.7             9.9            34.1
VOP.RC.L........................  ..............  ..............             6.1            11.3           310.0
VOP.SC.M........................  ..............  ..............  ..............            63.1           593.2
VCT.RC.M........................  ..............  ..............             2.1             6.6           364.7
VCT.RC.L........................             1.8             1.8             2.7             6.3           194.7
VCT.SC.M........................            23.4             4.8             5.3             7.0            96.2
VCT.SC.L........................             0.5             0.8             1.1             4.7             4.7
VCT.SC.I........................             7.2             7.2             7.2            16.2           663.6
VCS.SC.M........................             0.5             0.6             1.4             2.6            48.0
VCS.SC.L........................             0.6             1.3             2.5             2.7            31.8
VCS.SC.I........................             2.6             3.6             5.0             5.0           183.7
SVO.RC.M........................             6.2             6.2             6.2            10.4            29.9
SVO.SC.M........................  ..............  ..............  ..............            10.9           151.6
SOC.RC.M........................  ..............  ..............  ..............            38.0           114.1
SOC.SC.M........................  ..............  ..............  ..............            28.7            25.3
HZO.RC.M........................  ..............  ..............  ..............  ..............  ..............
HZO.RC.L........................  ..............  ..............  ..............  ..............           288.9
HZO.SC.M........................  ..............             6.9             6.9            11.8           194.7
HZO.SC.L........................  ..............  ..............  ..............  ..............  ..............
HCT.SC.M........................             2.5             4.7             5.8             9.2            46.6
HCT.SC.L........................             1.8             2.0             2.5             3.6            19.5
HCT.SC.I........................  ..............  ..............  ..............  ..............            23.8
HCS.SC.M........................             2.9             3.7             5.5             7.5           680.6
HCS.SC.L........................             1.4             1.7             2.5             6.2            68.9
PD.SC.M.........................             9.3             5.3             5.6             6.0          102.2
----------------------------------------------------------------------------------------------------------------
* ``NA'' means ``not applicable,'' because for equipment classes HZO.RC.M, HZO.RC.L, and HZO.SC.L, TSLs 1
  through 4 are associated with the baseline efficiency level.


[[Page 17808]]


Table V.53--Summary of Results for Commercial Refrigeration Equipment TSLs: Distribution of Customer LCC Impacts
----------------------------------------------------------------------------------------------------------------
            Category                  TSL 1 *         TSL 2 *         TSL 3 *         TSL 4 *         TSL 5 *
----------------------------------------------------------------------------------------------------------------
VOP.RC.M:
    Net Cost (%)................               0               0               4              64             100
    No Impact (%)...............             100             100              41               0               0
    Net Benefit (%).............               0               0              55              36               0
VOP.RC.L:
    Net Cost (%)................               0               0               7              59             100
    No Impact (%)...............             100             100              40              20               0
    Net Benefit (%).............               0               0              53              21               0
VOP.SC.M:
    Net Cost (%)................               0               0               0              60             100
    No Impact (%)...............             100             100             100              40               0
    Net Benefit (%).............               0               0               0               0               0
VCT.RC.M:
    Net Cost (%)................               0               0               0              36             100
    No Impact (%)...............             100             100              40              13               0
    Net Benefit (%).............               0               0              60              51               0
VCT.RC.L:
    Net Cost (%)................               0               0               4              43             100
    No Impact (%)...............              40              40              20               0               0
    Net Benefit (%).............              60              60              76              57               0
VCT.SC.M:
    Net Cost (%)................              71               1               3              17             100
    No Impact (%)...............              10              10               0               0               0
    Net Benefit (%).............              18              89              97              83               0
VCT.SC.L:
    Net Cost (%)................               0               0               0              11              11
    No Impact (%)...............              10               0               0               0               0
    Net Benefit (%).............              90             100             100              89              89
VCT.SC.I:
    Net Cost (%)................              10              10              10              65              84
    No Impact (%)...............              40              40              40              24              16
    Net Benefit (%).............              50              50              50              11               0
VCS.SC.M:
    Net Cost (%)................               0               0               7              25             100
    No Impact (%)...............              40              40              10              10               0
    Net Benefit (%).............              60              60              83              65               0
VCS.SC.L:
    Net Cost (%)................               0               0               7               9             100
    No Impact (%)...............              40              10               0               0               0
    Net Benefit (%).............              60              90              93              91               0
VCS.SC.I:
    Net Cost (%)................               0               0               9               9              92
    No Impact (%)...............              40              32              17              17               8
    Net Benefit (%).............              60              68              75              75               0
SVO.RC.M:
    Net Cost (%)................               7               7               7              67             100
    No Impact (%)...............              40              40              40               0               0
    Net Benefit (%).............              54              54              54              33               0
SVO.SC.M:
    Net Cost (%)................               0               0               0              32             100
    No Impact (%)...............             100             100             100              40               0
    Net Benefit (%).............               0               0               0              27               0
SOC.RC.M:
    Net Cost (%)................               0               0               0              60             100
    No Impact (%)...............             100             100             100              40               0
    Net Benefit (%).............               0               0               0               0               0
SOC.SC.M:
    Net Cost (%)................               0               0               0             100             100
    No Impact (%)...............             100             100             100               0               0
    Net Benefit (%).............               0               0               0               1               0
HZO.RC.M: **
    Net Cost (%)................               0               0               0               0              60
    No Impact (%)...............             100             100             100             100              40
    Net Benefit (%).............               0               0               0               0               0
HZO.RC.L: **
    Net Cost (%)................               0               0               0               0              60
    No Impact (%)...............             100             100             100             100              40
    Net Benefit (%).............               0               0               0               0               0
HZO.SC.M:
    Net Cost (%)................               0               5               5              50             100
    No Impact (%)...............             100              40              40              21               0

[[Page 17809]]

 
    Net Benefit (%).............               0              54              54              29               0
HZO.SC.L:
    Net Cost (%)................               0               0               0               0               0
    No Impact (%)...............             100             100             100             100             100
    Net Benefit (%).............               0               0               0               0               0
HCT.SC.M:
    Net Cost (%)................               0               0              20              45             100
    No Impact (%)...............              40              40               0               0               0
    Net Benefit (%).............              60              60              80              55               0
HCT.SC.L:
    Net Cost (%)................               0               0              10              29              87
    No Impact (%)...............              41              41              10              10              10
    Net Benefit (%).............              59              59              80              61               3
HCT.SC.I:
    Net Cost (%)................               0               0               0               0              61
    No Impact (%)...............             100             100             100             100              39
    Net Benefit (%).............               0               0               0               0               0
HCS.SC.M:
    Net Cost (%)................               0               1              10              42              91
    No Impact (%)...............               9               9               9               9               9
    Net Benefit (%).............              91              90              80              48               0
HCS.SC.L:
    Net Cost (%)................               0               0               0              20              90
    No Impact (%)...............              10              10              10              10              10
    Net Benefit (%).............              90              90              90              70               0
PD.SC.M:
    Net Cost (%)................              28               3               5               8             100
    No Impact (%)...............              39               0               0               0               0
    Net Benefit (%).............              33              97              95              92              0
----------------------------------------------------------------------------------------------------------------
* Values have been rounded to the nearest integer. Therefore, some of the percentages may not add up to 100.

    TSL 5 corresponds to the max-tech level for all the equipment 
classes and offers the potential for the highest cumulative energy 
savings. The estimated energy savings from TSL 5 is 4.21 quads, an 
amount DOE deems significant. TSL 5 shows a net negative NPV for 
customers with estimated increased costs valued at $28.39 billion at a 
7-percent discount rate. Estimated emissions reductions are 206.5 Mt of 
CO2, 137.4 kt of NOX, 301.9 kt of SO2, 
and 0.36 tons of Hg. The CO2 emissions have a value of $1.5 
billion to $20.4 billion and the NOX emissions have a value 
of $47.6 million at a 7-percent discount rate.
    For TSL 5 the mean LCC savings for all equipment classes, except 
for VCT.SC.L are negative, implying an increase in LCC. The median PBP 
is longer than the lifetime of the equipment for nearly all/most 
equipment classes. The share of customers that would experience a net 
benefit (positive LCC savings) is very low in nearly all equipment 
classes.
    At TSL 5, manufacturers may expect diminished profitability due to 
large increases in product costs, capital investments in equipment and 
tooling, and expenditures related to engineering and testing. The 
projected change in INPV ranges from a decrease of $1,144.8 million to 
a decrease of $184.4 million based on DOE's manufacturer markup 
scenarios. The upper bound of -$184.4 million is considered an 
optimistic scenario for manufacturers because it assumes manufacturers 
can fully pass on substantial increases in equipment costs to their 
customers. DOE recognizes the risk of large negative impacts on 
industry if manufacturers' expectations concerning reduced profit 
margins are realized. TSL 5 could reduce commercial refrigeration 
equipment INPV by up to 43.04 percent if impacts reach the lower bound 
of the range.
    After carefully considering the analyses results and weighing the 
benefits and burdens of TSL 5, DOE finds that the benefits to the 
Nation from TSL 5, in the form of energy savings and emissions 
reductions, are outweighed by the burdens, in the form of a large 
decrease in customer NPV, negative LCC savings and very long PBPs for 
nearly all equipment classes, and a decrease in manufacturer INPV. DOE 
concludes that the burdens of TSL 5 outweigh the benefits and, 
therefore, does not find TSL 5 to be economically justifiable.
    TSL 4 corresponds to the highest efficiency level, in each 
equipment class, with a near positive NPV at a 7-percent discount rate. 
The estimated energy savings from TSL 4 is 3.32 quads, an amount DOE 
deems significant. TSL 4 shows a net positive NPV for customers with 
estimated benefit of at $3.64 billion at a 7-percent discount rate. 
Estimated emissions reductions are 163.2 Mt of CO2, 108.4 kt 
of NOX, 238.5 kt of SO2, and 0.28 tons of Hg. The 
CO2 emissions have a value of $1.2 billion to $16.1 billion 
and the NOX emissions have a value of $37.4 million at a 7-
percent discount rate.
    At TSL 4, the mean LCC savings among equipment classes affected by 
standards range from -$209 for HCS.SC.M to $2,812 for VOP.RC.M.\77\ The 
median PBP ranges from 2.6 years to 63.1 years. The share of customers 
that would experience a net benefit (positive LCC savings) ranges from 
0 percent to 91 percent.
---------------------------------------------------------------------------

    \77\ For equipment classes HZO.RC.M, HZO.RC.L, and HZO.SC.L, and 
HCT.SC.I TSL 4 is associated with the baseline level because these 
equipment classes have only one efficiency level above baseline and 
each of those higher efficiency levels yields a negative NPV. 
Therefore, there are no efficiency levels that satisfy the criteria 
used for selection of TSLs 1 through 4.
---------------------------------------------------------------------------

    At TSL 4, the projected change in INPV ranges from a decrease of 
$320.9 million to a decrease of $189.4 million. At TSL 4, DOE 
recognizes the risk of negative impacts if manufacturers' expectations 
concerning reduced profit

[[Page 17810]]

margins are realized. If the lower bound of the range of impacts is 
reached, as DOE expects, TSL 4 could result in a net loss of 12.07 
percent in INPV for commercial refrigeration equipment manufacturers.
    After carefully considering the analyses results and weighing the 
benefits and burdens of TSL 4, DOE finds that the benefits to the 
Nation from TSL 4, in the form of energy savings and emissions 
reductions, an increase in customer NPV, and positive mean LCC savings 
for many equipment classes, are outweighed by the burdens, in the form 
of negative mean LCC savings for many equipment classes (including 
several classes with a significant share of total shipments), long PBPs 
for some equipment classes, the fact that over half of customers would 
experience a net cost (negative LCC savings) in many equipment classes, 
and a decrease in manufacturer INPV. DOE concludes that the burdens of 
TSL 4 outweigh the benefits and, therefore, does not find TSL 4 to be 
economically justifiable.
    Next, DOE considered TSL 3. The estimated energy savings from TSL 3 
is 2.89 quads, an amount DOE deems significant. TSL 3 shows a positive 
NPV for customers valued at $4.93 billion at a 7-percent discount rate. 
Estimated emissions reductions are 141.9 Mt of CO2, 94.3 kt 
of NOX, 207.4 kt of SO2, and 0.25 tons of Hg. The 
CO2 emissions have a value of $1.0 billion to $14.0 billion 
and the NOX emissions have a value of $32.6 million at a 7-
percent discount rate.
    At TSL 3, the mean LCC savings for affected equipment classes range 
from $18 to $5,001.\78\ The median PBP ranges from 1.1 years to 7.2 
years. The share of customers that would experience a net benefit 
(positive LCC savings) is over 50 percent for all affected equipment 
classes.
---------------------------------------------------------------------------

    \78\ Equipment classes VOP.SC.M, SVO.SC.M, SOC.RC.M, SOC.SC.M, 
HZO.RC.M, HZO.RC.L, HZO.SC.L, and HCT.SC.I at TSL 3 are associated 
with the baseline level.
---------------------------------------------------------------------------

    At TSL 3, the projected change in INPV ranges from a decrease of 
$165.0 million to a decrease of $93.9 million. At TSL 3, DOE recognizes 
the risk of negative impacts if manufacturers' expectations concerning 
reduced profit margins are realized. If the lower bound of the range of 
impacts is reached, as DOE expects, TSL 3 could result in a net loss of 
6.20 percent in INPV for commercial refrigeration equipment 
manufacturers.
    After careful consideration of the analyses results and, weighing 
the benefits and burdens of TSL 3, DOE finds that the benefits to the 
Nation from TSL 3, in the form of energy savings and emissions 
reductions, an increase in customer NPV, positive mean LCC savings for 
all affected equipment classes, PBPs that are less than seven years for 
most of the affected equipment classes, and the fact that over half of 
customers would experience a net benefit in nearly all affected 
equipment classes, outweigh the burdens, in the form of a decrease in 
manufacturer INPV. The Secretary concludes that TSL 3 will offer the 
maximum improvement in efficiency that is technologically feasible and 
economically justified and will result in the significant conservation 
of energy. Therefore, DOE today is adopting standards at TSL 3 for 
commercial refrigeration equipment. The amended energy conservation 
standards for commercial refrigeration equipment, which consist of 
maximum daily energy consumption (MDEC) values as a function of either 
refrigerated volume or total display area (TDA), are shown in Table 
V.54.

                Table V.54--Energy Conservation Standards for Commercial Refrigeration Equipment
                                  [Compliance required starting March 27, 2017]
----------------------------------------------------------------------------------------------------------------
                                          Standard level **                                   Standard level
          Equipment class *                   ,[dagger]            Equipment class *           **,[dagger]
----------------------------------------------------------------------------------------------------------------
VCT.RC.L............................  0.49 x TDA + 2.61.        VOP.RC.I...............  2.79 x TDA + 8.7.
VOP.RC.M............................  0.63 x TDA + 4.07.        SVO.RC.L...............  2.2 x TDA + 6.85.
SVO.RC.M............................  0.66 x TDA + 3.18.        SVO.RC.I...............  2.79 x TDA + 8.7.
HZO.RC.L............................  0.55 x TDA + 6.88.        HZO.RC.I...............  0.7 x TDA + 8.74.
HZO.RC.M............................  0.35 x TDA + 2.88.        VOP.SC.L...............  4.25 x TDA + 11.82.
VCT.RC.M............................  0.15 x TDA + 1.95.        VOP.SC.I...............  5.4 x TDA + 15.02.
VOP.RC.L............................  2.2 x TDA + 6.85.         SVO.SC.L...............  4.26 x TDA + 11.51.
SOC.RC.M............................  0.44 x TDA + 0.11.        SVO.SC.I...............  5.41 x TDA + 14.63.
VOP.SC.M............................  1.69 x TDA + 4.71.        HZO.SC.I...............  2.42 x TDA + 9.
SVO.SC.M............................  1.7 x TDA + 4.59.         SOC.RC.L...............  0.93 x TDA + 0.22.
HZO.SC.L............................  1.9 x TDA + 7.08.         SOC.RC.I...............  1.09 x TDA + 0.26.
HZO.SC.M............................  0.72 x TDA + 5.55.        SOC.SC.I...............  1.53 x TDA + 0.36.
HCT.SC.I............................  0.56 x TDA + 0.43.        VCT.RC.I...............  0.58 x TDA + 3.05.
VCT.SC.I............................  0.62 x TDA + 3.29.        HCT.RC.M...............  0.16 x TDA + 0.13.
VCS.SC.I............................  0.34 x V + 0.88.          HCT.RC.L...............  0.34 x TDA + 0.26.
VCT.SC.M............................  0.1 x V + 0.86.           HCT.RC.I...............  0.4 x TDA + 0.31.
VCT.SC.L............................  0.29 x V + 2.95.          VCS.RC.M...............  0.1 x V + 0.26.
VCS.SC.M............................  0.05 x V + 1.36.          VCS.RC.L...............  0.21 x V + 0.54.
VCS.SC.L............................  0.22 x V + 1.38.          VCS.RC.I...............  0.25 x V + 0.63.
HCT.SC.M............................  0.06 x V + 0.37.          HCS.SC.I...............  0.34 x V + 0.88.
HCT.SC.L............................  0.08 x V + 1.23.          HCS.RC.M...............  0.1 x V + 0.26.
HCS.SC.M............................  0.05 x V + 0.91.          HCS.RC.L...............  0.21 x V + 0.54.
HCS.SC.L............................  0.06 x V + 1.12.          HCS.RC.I...............  0.25 x V + 0.63.
PD.SC.M.............................  0.11 x V + 0.81.          SOC.SC.L...............  1.1 x TDA + 2.1.
SOC.SC.M............................  0.52 x TDA + 1.
----------------------------------------------------------------------------------------------------------------
* 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
  closed with transparent doors, VCS = vertical closed with solid doors, HCT = horizontal closed with
  transparent doors, HCS = horizontal closed with solid doors, SOC = service over counter, or PD = pull-down);
  (2) an operating mode code (RC = remote condensing or SC = self-contained); and (3) a rating temperature code
  (M = medium temperature (38  2 [deg]F), L = low temperature (0  2 [deg]F), or I = ice-
  cream temperature (-15  2 [deg]F)). For example, ``VOP.RC.M'' refers to the ``vertical open,
  remote condensing, medium temperature'' equipment class. See discussion in chapter 3 of the final rule
  technical support document (TSD) for a more detailed explanation of the equipment class terminology.
** ``TDA'' is the total display area of the case, as measured in the Air-Conditioning, Heating, and
  Refrigeration Institute (AHRI) Standard 1200-2010, appendix D.
[dagger] ``V'' is the volume of the case, as measured in American National Standards Institute (ANSI)/
  Association of Home Appliance Manufacturers (AHAM) Standard HRF-1-2004.


[[Page 17811]]

2. Summary of Benefits and Costs (Annualized) of the Standards
    The benefits and costs of today's standards, for equipment sold in 
2017-2046, can also be expressed in terms of annualized values. The 
annualized monetary values are the sum of (1) the annualized national 
economic value of the benefits from operating the product (consisting 
primarily of operating cost savings from using less energy, minus 
increases in equipment purchase and installation costs, which is 
another way of representing consumer NPV), plus (2) the annualized 
monetary value of the benefits of emission reductions, including 
CO2 emission reductions.\79\
---------------------------------------------------------------------------

    \79\ DOE used a two-step calculation process to convert the 
time-series of costs and benefits into annualized values. First, DOE 
calculated a present value in 2013, the year used for discounting 
the NPV of total consumer costs and savings, for the time-series of 
costs and benefits using discount rates of three and seven percent 
for all costs and benefits except for the value of CO2 
reductions. For the latter, DOE used a range of discount rates, as 
shown in Table I.3. From the present value, DOE then calculated the 
fixed annual payment over a 30-year period (2017 through 2046) that 
yields the same present value. The fixed annual payment is the 
annualized value. Although DOE calculated annualized values, this 
does not imply that the time-series of cost and benefits from which 
the annualized values were determined is a steady stream of 
payments.
---------------------------------------------------------------------------

    Estimates of annualized benefits and costs of today's standards are 
shown in Table V.55. The results under the primary estimate are as 
follows. Using a 7-percent discount rate for benefits and costs other 
than CO2 reduction, for which DOE used a 3-percent discount 
rate along with the average SCC series that uses a 3-percent discount 
rate, the cost of the standards in today's rule is $256 million per 
year in increased equipment costs, while the benefits are $710 million 
per year in reduced equipment operating costs, $246 million in 
CO2 reductions, and $3.01 million in reduced NOX 
emissions. In this case, the net benefit amounts to $704 million per 
year. Using a 3-percent discount rate for all benefits and costs and 
the average SCC series, the cost of the standards in today's rule is 
$264 million per year in increased equipment costs, while the benefits 
are $900 million per year in reduced operating costs, $246 million in 
CO2 reductions, and $5.64 million in reduced NOX 
emissions. In this case, the net benefit amounts to $888 million per 
year.

  Table V.55--Annualized Benefits and Costs of New and Amended Standards for Commercial Refrigeration Equipment
----------------------------------------------------------------------------------------------------------------
                                                                          Million 2012$/year
                                                     -----------------------------------------------------------
                                     Discount rate                         Low net benefits    High net benefits
                                                       Primary estimate*       estimate*           estimate*
----------------------------------------------------------------------------------------------------------------
                                                    Benefits
----------------------------------------------------------------------------------------------------------------
Operating Cost Savings..........  7%................  710...............  688...............  744.
                                  3%................  900...............  865...............  947.
CO2 Reduction at ($11.8/t case)   5%................  73................  73................  73.
 **.
CO2 Reduction at ($39.7/t case)   3%................  246...............  246...............  246.
 **.
CO2 Reduction at ($61.2/t         2.5%..............  361...............  361...............  361.
 case)**.
CO2 Reduction at ($117.0/t case)  3%................  760...............  760...............  760.
 **.
NOX Reduction at ($2,591/ton) **  7%................  3.01..............  3.01..............  3.01.
                                  3%................  5.64..............  5.64..............  5.64.
    Total Benefits [dagger].....  7% plus CO2 range.  786 to 1,474......  764 to 1,451......  820 to 1,508.
                                  7%................  960...............  937...............  994.
                                  3% plus CO2 range.  978 to 1,666......  943 to 1,631......  1,026 to 1,713.
                                  3%................  1,152.............  1,117.............  1,200.
----------------------------------------------------------------------------------------------------------------
                                                      Costs
----------------------------------------------------------------------------------------------------------------
Incremental Equipment Costs.....  7%................  256...............  250...............  261.
                                  3%................  264...............  258...............  271.
----------------------------------------------------------------------------------------------------------------
                                                  Net Benefits
----------------------------------------------------------------------------------------------------------------
        Total [dagger]..........  7% plus CO2 range.  530 to 1,218......  513 to 1,201......  559 to 1,246.
                                  7%................  704...............  687...............  733.
                                  3% plus CO2 range.  714 to 1,402......  685 to 1,373......  755 to 1,442.
                                  3%................  888...............  859...............  929.
----------------------------------------------------------------------------------------------------------------
* This table presents the annualized costs and benefits associated with commercial refrigeration equipment
  shipped in 2017-2046. These results include benefits to customers which accrue after 2046 from the products
  purchased in 2017-2046. The results account for the incremental variable and fixed costs incurred by
  manufacturers due to the amended standard, some of which may be incurred in preparation for the final rule.
  The primary, low, and high estimates utilize projections of energy prices from the AEO 2013 Reference case,
  Low Estimate, and High Estimate, respectively. In addition, incremental equipment costs reflect a medium
  decline rate for projected product price trends in the Primary Estimate, a low decline rate for projected
  product price trends in the Low Benefits Estimate, and a high decline rate for projected product price trends
  in the High Benefits Estimate. The methods used to derive projected price trends are explained in section
  IV.H.
** The CO2 values represent global monetized values of the SCC, in 2012$, in 2015 under several scenarios of the
  updated SCC values. The first three cases use the averages of SCC distributions calculated using 5%, 3%, and
  2.5% discount rates, respectively. The fourth case represents the 95th percentile of the SCC distribution
  calculated using a 3% discount rate. The SCC time series used by DOE incorporate an escalation factor. The
  value for NOX is the average of the low and high values used in DOE's analysis.

[[Page 17812]]

 
[dagger] Total Benefits for both the 3-percent and 7-percent cases are derived using the series corresponding to
  average SCC with 3-percent discount rate. In the rows labeled ``7% plus CO2 range'' and ``3% plus CO2 range,''
  the operating cost and NOX benefits are calculated using the labeled discount rate, and those values are added
  to the full range of CO2 values.

VI. Procedural Issues and Regulatory Review

A. Review Under Executive Orders 12866 and 13563

    Section 1(b)(1) of Executive Order 12866, ``Regulatory Planning and 
Review,'' 58 FR 51735 (October 4, 1993), requires each agency to 
identify the problem that it intends to address, including, where 
applicable, the failures of private markets or public institutions that 
warrant new agency action, as well as to assess the significance of 
that problem. The problems that today's standards address are as 
follows:
    (1) For certain segments of the companies that purchase commercial 
refrigeration equipment, such as small grocers, there may be a lack of 
consumer information and/or information processing capability about 
energy efficiency opportunities in the commercial refrigeration 
equipment market.
    (2) There is asymmetric information (one party to a transaction has 
more and better information than the other) and/or high transactions 
costs (costs of gathering information).
    (3) There are external benefits resulting from improved energy 
efficiency of commercial refrigeration equipment that are not captured 
by the users of such equipment. These benefits include externalities 
related to environmental protection that are not reflected in energy 
prices, such as reduced emissions of greenhouse gases. DOE attempts to 
quantify some of the external benefits through use of Social Cost of 
Carbon values.
    In addition, DOE has determined that today's regulatory action is 
an ``economically significant regulatory action'' under section 3(f)(1) 
of Executive Order 12866. Accordingly, section 6(a)(3) of the Executive 
Order requires that DOE prepare a regulatory impact analysis (RIA) on 
today's rule and that the Office of Information and Regulatory Affairs 
(OIRA) in the Office of Management and Budget (OMB) review this rule. 
DOE presented to OIRA for review the draft rule and other documents 
prepared for this rulemaking, including the RIA, and has included these 
documents in the rulemaking record. The assessments prepared pursuant 
to Executive Order 12866 can be found in the technical support document 
for this rulemaking.
    DOE has also reviewed this regulation pursuant to Executive Order 
13563, issued on January 18, 2011 (76 FR 3281, January 21, 2011). EO 
13563 is supplemental to and explicitly reaffirms the principles, 
structures, and definitions governing regulatory review established in 
Executive Order 12866. To the extent permitted by law, agencies are 
required by Executive Order 13563 to: (1) Propose or adopt a regulation 
only upon a reasoned determination that its benefits justify its costs 
(recognizing that some benefits and costs are difficult to quantify); 
(2) tailor regulations to impose the least burden on society, 
consistent with obtaining regulatory objectives, taking into account, 
among other things, and to the extent practicable, the costs of 
cumulative regulations; (3) select, in choosing among alternative 
regulatory approaches, those approaches that maximize net benefits 
(including potential economic, environmental, public health and safety, 
and other advantages; distributive impacts; and equity); (4) to the 
extent feasible, specify performance objectives, rather than specifying 
the behavior or manner of compliance that regulated entities must 
adopt; and (5) identify and assess available alternatives to direct 
regulation, including providing economic incentives to encourage the 
desired behavior, such as user fees or marketable permits, or providing 
information upon which choices can be made by the public.
    DOE emphasizes as well that Executive Order 13563 requires agencies 
to use the best available techniques to quantify anticipated present 
and future benefits and costs as accurately as possible. In its 
guidance, the Office of Information and Regulatory Affairs has 
emphasized that such techniques may include identifying changing future 
compliance costs that might result from technological innovation or 
anticipated behavioral changes. For the reasons stated in the preamble, 
DOE believes that today's final rule is consistent with these 
principles, including the requirement that, to the extent permitted by 
law, benefits justify costs and that net benefits are maximized.

B. Review Under the Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires 
preparation of an final regulatory flexibility analysis (FRFA) for any 
rule that by law must be proposed for public comment, unless the agency 
certifies that the rule, if promulgated, will not have a significant 
economic impact on a substantial number of small entities. 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 the General 
Counsel's Web site (http://energy.gov/gc/office-general-counsel).
    For manufacturers of commercial refrigeration equipment, the Small 
Business Administration (SBA) has set a size threshold, which defines 
those entities classified as ``small businesses'' for the purposes of 
the statute. DOE used the SBA's small business size standards to 
determine whether any small entities would be subject to the 
requirements of the rule. 65 FR 30836, 30848 (May 15, 2000), as amended 
at 65 FR 53533, 53544 (September 5, 2000) and codified at 13 CFR Part 
121.The size standards are listed by North American Industry 
Classification System (NAICS) code and industry description and are 
available at http://www.sba.gov/sites/default/files/files/Size_Standards_Table.pdf. Commercial refrigeration equipment manufacturing 
is classified under NAICS 333415, ``Air-Conditioning and Warm Air 
Heating Equipment and Commercial and Industrial Refrigeration Equipment 
Manufacturing.'' The SBA sets a threshold of 750 employees or less for 
an entity to be considered as a small business for this category. Based 
on this threshold, DOE present the following FRFA analysis:
1. Description and Estimated Number of Small Entities Regulated
    During its market survey, DOE used available public information to 
identify potential small manufacturers. DOE's research involved 
industry trade association membership directories (including AHRI), 
public databases (e.g., AHRI Directory,\80\ the SBA Database \81\), 
individual company Web sites, and

[[Page 17813]]

market research tools (e.g., Dunn and Bradstreet reports \82\ and 
Hoovers reports \83\) to create a list of companies that manufacture or 
sell products covered by this rulemaking. DOE also asked stakeholders 
and industry representatives if they were aware of any other small 
manufacturers during manufacturer interviews and at DOE public 
meetings. DOE reviewed publicly available data and contacted select 
companies on its list, as necessary, to determine whether they met the 
SBA's definition of a small business manufacturer of covered commercial 
refrigeration equipment. DOE screened out companies that do not offer 
products covered by this rulemaking, do not meet the definition of a 
``small business,'' or are foreign owned.
---------------------------------------------------------------------------

    \80\ ``AHRI Certification Directory.'' AHRI Certification 
Directory. AHRI. (Available at: https://www.ahridirectory.org/ahridirectory/pages/home.aspx) (Last accessed October 10, 2011). See 
www.ahridirectory.org/ahriDirectory/pages/home.aspx.
    \81\ ``Dynamic Small Business Search.'' SBA. (Available at: See 
http://dsbs.sba.gov/dsbs/search/dsp_dsbs.cfm) (Last accessed 
October 12, 2011).
    \82\ ``D&B  Business Information  Get Credit 
Reports  888 480-6007.''. Dun & Bradstreet (Available at: 
www.dnb.com) (Last accessed October 10, 2011). See www.dnb.com/.
    \83\ ``Hoovers  Company Information  Industry 
Information  Lists.'' D&B (2013) (Available at: See http://www.hoovers.com/) (Last accessed December 12, 2012).
---------------------------------------------------------------------------

    DOE identified 54 companies selling commercial refrigeration 
equipment in the United States. Nine of the companies are foreign-owned 
firms. Of the remaining 45 companies, about 70 percent (32 companies) 
are small domestic manufacturers. DOE contacted eight domestic 
commercial refrigeration equipment manufacturers for interviews and all 
eight companies accepted. Of these eight companies, four were small 
businesses.
2. Description and Estimate of Compliance Requirements
    The 32 identified domestic manufacturers of commercial 
refrigeration equipment that qualify as small businesses under the SBA 
size standard account for approximately 26 percent of commercial 
refrigeration equipment shipments.\84\ While some small businesses have 
significant market share (e.g., Continental has a 4-percent market 
share for foodservice commercial refrigeration \84\), the majority of 
small businesses have less than a 1-percent market share. These smaller 
firms often specialize in designing custom products and servicing niche 
markets.
---------------------------------------------------------------------------

    \84\ 32nd Annual Portrait of the U.S. Appliance Industry. 
Appliance Magazine. September 2009. 66(7).
---------------------------------------------------------------------------

    At the amended level, the average small manufacturer is expected to 
face capital conversion costs that are nearly five times typical annual 
capital expenditures, and product conversion costs that are roughly 
double the typical annual R&D spending, as shown in Table VI.1. At the 
amended level, the conversion costs are driven by the incorporation of 
thicker insulation into case designs. The thicker case designs 
necessitate the purchase of new jigs for production. Manufacturers 
estimate of the cost of modifying an existing jig at approximately 
$50,000. Manufacturer estimates of the cost of a new jig ranged from 
$100,000 to $300,000, depending on the jig size and design. In addition 
to the cost of jigs, changes in case thickness may require product 
redesign due to changes in the interior volume of the equipment. All 
shelving and internally fitted components would need to be redesigned 
to fit the revised cabinet's interior dimensions. Furthermore, changes 
in insulation and in refrigeration components could necessitate new 
industry certifications.
    The proposed standard could cause small manufacturers to be at a 
disadvantage relative to large manufacturers. The capital conversion 
costs represent a smaller percentage of annual capital expenditures for 
large manufacturers than for small manufacturers. The capital 
conversion costs are 49 percent of annual capital expenditures for an 
average large manufacturer, while capital conversion costs are 278 
percent of annual capital expenditures for an average small 
manufacturer. Small manufacturers may have greater difficulty obtaining 
credit, or may obtain less favorable terms than larger competitors when 
financing the equipment necessary to meet the amended standard.
    Manufacturers indicated that many design options evaluated in the 
engineering analysis (e.g., higher efficiency lighting, motors, and 
compressors) would force them to purchase more expensive components. 
Due to smaller purchasing volumes, small manufacturers typically pay 
higher prices for components, while their large competitors receive 
volume discounts. At the amended standard, small businesses will likely 
have greater increases in component costs than large businesses and 
will thus be at a pricing disadvantage.
    To estimate how small manufacturers would be impacted, DOE used the 
market share of small manufacturers to estimate the annual revenue, 
earnings before interest and tax (EBIT), R&D expense, and capital 
expenditures for a typical small manufacturer. DOE then compared these 
costs to the required capital and product conversion costs at each TSL 
for both an average small manufacturer (Table VI.1) and an average 
large manufacturer (Table VI.2). The conversion costs in these tables 
are presented relative to annual financial metrics for the purposes of 
comparing impacts of small versus large manufacturers. In practice, 
these conversion costs will likely be spread out over a period of 
multiple years. TSL 3 represents the level adopted in today's final 
rule:

  Table VI.1--Comparison of an Average Small Commercial Refrigeration Equipment Manufacturer's Conversion Costs to Annual Expenses, Revenue, and Profit
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                      Capital conversion cost
                                                         as a percentage of    Product conversion cost   Total conversion cost    Total conversion cost
                         TSL                               annual capital         as a percentage of       as a percentage of       as a percentage of
                                                            expenditures          annual R&D expense         annual revenue            annual EBIT
--------------------------------------------------------------------------------------------------------------------------------------------------------
TSL 1...............................................                       20                       45                        1                       13
TSL 2...............................................                       20                       71                        2                       18
TSL 3...............................................                      330                      278                       11                      129
TSL 4...............................................                      913                      428                       26                      296
TSL 5...............................................                     2838                      622                       70                      792
--------------------------------------------------------------------------------------------------------------------------------------------------------


[[Page 17814]]


  Table VI.2--Comparison of an Average Large Commercial Refrigeration Equipment Manufacturer's Conversion Costs to Annual Expenses, Revenue, and Profit
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                      Capital conversion cost
                                                         as a percentage of    Product conversion cost   Total conversion cost    Total conversion cost
                         TSL                               annual capital         as a percentage of       as a percentage of       as a percentage of
                                                            expenditures          annual R&D expense         annual revenue            annual EBIT
--------------------------------------------------------------------------------------------------------------------------------------------------------
TSL 1...............................................                        3                       49                        1                       10
TSL 2...............................................                        3                       49                        1                       10
TSL 3...............................................                       46                       49                        2                       20
TSL 4...............................................                      128                       49                        3                       40
TSL 5...............................................                      398                       49                        9                      104
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Small firms would likely be at a disadvantage relative to larger 
firms in meeting the amended energy conservation standard for 
commercial refrigeration equipment. The small businesses face 
disadvantages in terms of access to capital, the cost of re-tooling 
production lines and investing in redesigns, and pricing for key 
components. As a result, DOE could not certify that the amended 
standards would not have a significant impact on a significant number 
of small businesses.
3. Duplication, Overlap, and Conflict With Other Rules and Regulations
    DOE is not aware of any rules or regulations that duplicate, 
overlap, or conflict with the rule being adopted today.
4. Significant Alternatives to the Rule
    The discussion above analyzes impacts on small businesses that 
would result from DOE's amended standards. In addition to the other 
TSLs being considered, the rulemaking TSD includes a regulatory impact 
analysis (RIA). For commercial refrigeration equipment, the RIA 
discusses the following policy alternatives: (1) No change in standard; 
(2) consumer rebates; (3) consumer tax credits; and (4) manufacturer 
tax credits; (5) voluntary energy efficiency targets; and (6) bulk 
government purchases. While these alternatives may mitigate to some 
varying extent the economic impacts on small entities compared to the 
standards, DOE determined that the energy savings of these alternatives 
are significantly smaller than those that would be expected to result 
from adoption of the amended standard levels. Accordingly, DOE is 
declining to adopt any of these alternatives and is adopting the 
standards set forth in this rulemaking. (See chapter 17 of the final 
rule TSD for further detail on the policy alternatives DOE considered.)

C. Review Under the Paperwork Reduction Act

    Manufacturers of commercial refrigeration equipment must certify to 
DOE that their products comply with any applicable energy conservation 
standards. In certifying compliance, manufacturers must test their 
products according to the DOE test procedures for commercial 
refrigeration equipment, including any amendments adopted for those 
test procedures. DOE has established regulations for the certification 
and recordkeeping requirements for all covered consumer products and 
commercial equipment, including commercial refrigeration equipment. (76 
FR 12422 (March 7, 2011). The collection-of-information requirement for 
the certification and recordkeeping is subject to review and approval 
by OMB under the Paperwork Reduction Act (PRA). This requirement has 
been approved by OMB under OMB control number 1910-1400. Public 
reporting burden for the certification is estimated to average 20 hours 
per response, including the time for reviewing instructions, searching 
existing data sources, gathering and maintaining the data needed, and 
completing and reviewing the collection of information.
    Notwithstanding any other provision of the law, no person is 
required to respond to, nor shall any person be subject to a penalty 
for failure to comply with, a collection of information subject to the 
requirements of the PRA, unless that collection of information displays 
a currently valid OMB Control Number.

D. Review Under the National Environmental Policy Act of 1969

    Pursuant to the National Environmental Policy Act (NEPA) of 1969, 
DOE has determined that the rule fits within the category of actions 
included in Categorical Exclusion (CX) B5.1 and otherwise meets the 
requirements for application of a CX. See 10 CFR part 1021, App. B, 
B5.1(b); Sec.  1021.410(b) and Appendix B, B(1)-(5). The rule fits 
within the category of actions because it is a rulemaking that 
establishes energy conservation standards for consumer products or 
industrial equipment, and for which none of the exceptions identified 
in CX B5.1(b) apply. Therefore, DOE has made a CX determination for 
this rulemaking, and DOE does not need to prepare an Environmental 
Assessment or Environmental Impact Statement for this rule. DOE's CX 
determination for this rule is available at http://cxnepa.energy.gov/.

E. Review Under Executive Order 13132

    Executive Order 13132, ``Federalism.'' 64 FR 43255 (Aug. 10, 1999) 
imposes certain requirements on Federal agencies formulating and 
implementing policies or regulations that preempt State law or that 
have Federalism implications. The Executive Order requires agencies to 
examine the constitutional and statutory authority supporting any 
action that would limit the policymaking discretion of the States and 
to carefully assess the necessity for such actions. The Executive Order 
also requires agencies to have an accountable process to ensure 
meaningful and timely input by State and local officials in the 
development of regulatory policies that have Federalism implications. 
On March 14, 2000, DOE published a statement of policy describing the 
intergovernmental consultation process it will follow in the 
development of such regulations. 65 FR 13735. EPCA governs and 
prescribes Federal preemption of State regulations as to energy 
conservation for the products that are the subject of today's final 
rule. States can petition DOE for exemption from such preemption to the 
extent, and based on criteria, set forth in EPCA. (42 U.S.C. 6297) No 
further action is required by 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,'' imposes on Federal agencies the general duty 
to adhere to the

[[Page 17815]]

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. 61 FR 4729 (February 7, 
1996). 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, this final rule meets the 
relevant standards of Executive Order 12988.

G. Review Under the Unfunded Mandates Reform Act of 1995

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) 
requires each Federal agency to assess the effects of Federal 
regulatory actions on State, local, and Tribal governments and the 
private sector. Public Law 104-4, sec. 201 (codified at 2 U.S.C. 1531). 
For an amended regulatory action likely to result in a rule that may 
cause the expenditure by State, local, and Tribal governments, in the 
aggregate, or by the private sector of $100 million or more in any one 
year (adjusted annually for inflation), section 202 of UMRA requires a 
Federal agency to publish a written statement that estimates the 
resulting costs, benefits, and other effects on the national economy. 
(2 U.S.C. 1532(a), (b)) The UMRA also requires a Federal agency to 
develop an effective process to permit timely input by elected officers 
of State, local, and Tribal governments on a ``significant 
intergovernmental mandate,'' and requires an agency plan for giving 
notice and opportunity for timely input to potentially affected small 
governments before establishing any requirements that might 
significantly or uniquely affect small governments. On March 18, 1997, 
DOE published a statement of policy on its process for 
intergovernmental consultation under UMRA. 62 FR 12820. DOE's policy 
statement is also available at http://energy.gov/gc/office-general-counsel.
    DOE has concluded that this final rule would likely require 
expenditures of $100 million or more on the private sector. Such 
expenditures may include: (1) Investment in research and development 
and in capital expenditures by commercial refrigeration equipment 
manufacturers in the years between the final rule and the compliance 
date for the new standards, and (2) incremental additional expenditures 
by consumers to purchase higher-efficiency commercial refrigeration 
equipment, starting at the compliance date for the applicable standard.
    Section 202 of UMRA authorizes a Federal agency to respond to the 
content requirements of UMRA in any other statement or analysis that 
accompanies the final rule. 2 U.S.C. 1532(c). The content requirements 
of section 202(b) of UMRA relevant to a private sector mandate 
substantially overlap the economic analysis requirements that apply 
under section 325(o) of EPCA and Executive Order 12866. The 
SUPPLEMENTARY INFORMATION section of the notice of final rulemaking and 
the ``Regulatory Impact Analysis'' section of the TSD for this final 
rule respond to those requirements.
    Under section 205 of UMRA, the Department is obligated to identify 
and consider a reasonable number of regulatory alternatives before 
promulgating a rule for which a written statement under section 202 is 
required. 2 U.S.C. 1535(a). DOE is required to select from those 
alternatives the most cost-effective and least burdensome alternative 
that achieves the objectives of the rule unless DOE publishes an 
explanation for doing otherwise, or the selection of such an 
alternative is inconsistent with law. As required by 42 U.S.C. 6295(d), 
(f), and (o), 6313(e), and 6316(a), today's final rule would establish 
energy conservation standards for commercial refrigeration equipment 
that are designed to achieve the maximum improvement in energy 
efficiency that DOE has determined to be both technologically feasible 
and economically justified. A full discussion of the alternatives 
considered by DOE is presented in the ``Regulatory Impact Analysis'' 
chapter 17 of the TSD for today's final rule.

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

    Section 654 of the Treasury and General Government Appropriations 
Act, 1999 (Pub. L. 105-277) requires Federal agencies to issue a Family 
Policymaking Assessment for any rule that may affect family well-being. 
This rule would not have any impact on the autonomy or integrity of the 
family as an institution. Accordingly, DOE has concluded that it is not 
necessary to prepare a Family Policymaking Assessment.

I. Review Under Executive Order 12630

    DOE has determined, under Executive Order 12630, ``Governmental 
Actions and Interference with Constitutionally Protected Property 
Rights'' 53 FR 8859 (March 18, 1988), that this regulation would not 
result in any takings that might require compensation under the Fifth 
Amendment to the U.S. Constitution.

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 Federal 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 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 
at OMB, a Statement of Energy Effects for any significant energy 
action. A ``significant energy action'' is defined as any action by an 
agency that promulgates or is expected to lead to promulgation of a 
final rule, and that: (1) Is a significant regulatory action under 
Executive Order 12866, or any successor order; and (2) is likely to 
have a significant adverse effect on the supply, distribution, or use 
of energy, or (3) is designated by the Administrator of OIRA as a 
significant energy action. For any significant energy action, the 
agency must give a detailed statement of any adverse effects on energy 
supply, distribution, or use should the proposal be implemented, and of 
reasonable alternatives to the action and their expected benefits on 
energy supply, distribution, and use.

[[Page 17816]]

    DOE has concluded that today's regulatory action, which sets forth 
energy conservation standards for commercial refrigeration equipment, 
is not a significant energy action because the amended standards are 
not likely to have a significant adverse effect on the supply, 
distribution, or use of energy, nor has it been designated as such by 
the Administrator at OIRA. Accordingly, DOE has not prepared a 
Statement of Energy Effects on the final 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 Policy (OSTP), issued its Final Information 
Quality Bulletin for Peer Review (the Bulletin). 70 FR 2664 (January 
14, 2005). The Bulletin establishes that certain scientific information 
shall be peer reviewed by qualified specialists before it is 
disseminated by the Federal Government, including influential 
scientific information related to agency regulatory actions. The 
purpose of the bulletin is to enhance the quality and credibility of 
the Government's scientific information. Under the Bulletin, the energy 
conservation standards rulemaking analyses are ``influential scientific 
information,'' which the Bulletin defines as scientific information the 
agency reasonably can determine will have, or does have, a clear and 
substantial impact on important public policies or private sector 
decisions. 70 FR 2667.
    In response to OMB's Bulletin, DOE conducted formal in-progress 
peer reviews of the energy conservation standards development process 
and analyses and has prepared a Peer Review Report pertaining to the 
energy conservation standards rulemaking analyses. Generation of this 
report involved a rigorous, formal, and documented evaluation using 
objective criteria and qualified and independent reviewers to make a 
judgment as to the technical/scientific/business merit, the actual or 
anticipated results, and the productivity and management effectiveness 
of programs and/or projects. The ``Energy Conservation Standards 
Rulemaking Peer Review Report'' dated February 2007 has been 
disseminated and is available at the following Web site: 
www1.eere.energy.gov/buildings/appliance_standards/peer_review.html.

M. Congressional Notification

    As required by 5 U.S.C. 801, DOE will report to Congress on the 
promulgation of this rule prior to its effective date. The report will 
state that it has been determined that the rule is not a ``major rule'' 
as defined by 5 U.S.C. 804(2).

VII. Approval of the Office of the Secretary

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

List of Subjects in 10 CFR Part 431

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

    Issued in Washington, DC, on February 28, 2014.
David T. Danielson,
Assistant Secretary, Energy Efficiency and Renewable Energy.

    For the reasons stated in the preamble, DOE amends part 431 of 
chapter II, subchapter D, of title 10 of the Code of Federal 
Regulations, to read 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 is amended by adding in alphabetical order a 
definition for ``Service over counter'' to read as follows:


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

* * * * *
    Service over counter means equipment that has sliding or hinged 
doors in the back intended for use by sales personnel, with glass or 
other transparent material in the front for displaying merchandise, and 
that has a height not greater than 66 inches and is intended to serve 
as a counter for transactions between sales personnel and customers. 
``Service over the counter, self-contained, medium temperature 
commercial refrigerator'', also defined in this section, is one 
specific equipment class within the service over counter equipment 
family.
* * * * *

0
3. Section 431.66 is amended by:
0
a. Revising paragraph (a)(3);
0
b. Revising paragraph (b)(1) introductory text;
0
c. Revising paragraph (c);
0
d. Revising paragraph (d) introductory text; and
0
c. Adding paragraph (e).
    The revisions and addition read as follows:


Sec.  431.66  Energy conservation standards and their effective dates.

    (a) * * *
    (3) For the purpose of paragraph (d) of this section, the term 
``TDA'' means the total display area (ft\2\) of the case, as defined in 
ARI Standard 1200-2006, appendix D (incorporated by reference, see 
Sec.  431.63). For the purpose of paragraph (e) of this section, the 
term ``TDA'' means the total display area (ft\2\) of the case, as 
defined in AHRI Standard 1200 (I-P)-2010, appendix D (incorporated by 
reference, see Sec.  431.63).
    (b)(1) Each commercial refrigerator, freezer, and refrigerator-
freezer with a self-contained condensing unit designed for holding 
temperature applications manufactured on or after January 1, 2010 and 
before March 27, 2017 shall have a daily energy consumption (in 
kilowatt-hours per day) that does not exceed the following:
* * * * *
    (c) Each commercial refrigerator with a self-contained condensing 
unit designed for pull-down temperature applications and transparent 
doors manufactured on or after January 1, 2010 and before March 27, 
2017 shall have a daily energy consumption (in kilowatt-hours per day) 
of not more than 0.126V + 3.51.
    (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 and before March 27, 2017 shall have a daily 
energy consumption (in kilowatt-hours per day) that does not exceed the 
levels specified:
* * * * *
    (e) Each commercial refrigerator, freezer, and refrigerator-freezer 
with a self-contained condensing unit designed for holding temperature 
applications and with solid or transparent doors; commercial 
refrigerator with a self-contained condensing unit designed for pull-
down temperature applications and with transparent doors; 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 March 27, 2017, shall have a 
daily energy consumption (in kilowatt-hours per day) that does not 
exceed the levels specified:

[[Page 17817]]

    (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...........  0.64 x TDA + 4.07.
 Refrigerators and Commercial
 Freezers.
                                                                                  0 (L)          <32  VOP.RC.L...........  2.2 x TDA + 6.85.
                                                       Semivertical Open         38 (M)         >=32  SVO.RC.M...........  0.66 x TDA + 3.18.
                                                        (SVO).
                                                                                  0 (L)          <32  SVO.RC.L...........  2.2 x TDA + 6.85.
                                                       Horizontal Open           38 (M)         >=32  HZO.RC.M...........  0.35 x TDA + 2.88.
                                                        (HZO).
                                                                                  0 (L)          <32  HZO.RC.L...........  0.55 x TDA + 6.88.
                                                       Vertical Closed           38 (M)         >=32  VCT.RC.M...........  0.15 x TDA + 1.95.
                                                        Transparent (VCT).
                                                                                  0 (L)          <32  VCT.RC.L...........  0.49 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           38 (M)         >=32  VCS.RC.M...........  0.1 x V + 0.26.
                                                        Solid (VCS).
                                                                                  0 (L)          <32  VCS.RC.L...........  0.21 x V + 0.54.
                                                       Horizontal Closed         38 (M)         >=32  HCS.RC.M...........  0.1 x V + 0.26.
                                                        Solid (HCS).
                                                                                  0 (L)          <32  HCS.RC.L...........  0.21 x V + 0.54.
                                                       Service Over              38 (M)         >=32  SOC.RC.M...........  0.44 x TDA + 0.11.
                                                        Counter (SOC).
                                                                                  0 (L)          <32  SOC.RC.L...........  0.93 x TDA + 0.22.
Self-Contained Commercial         Self-Contained (SC)  Vertical Open (VOP)       38 (M)         >=32  VOP.SC.M...........  1.69 x TDA + 4.71.
 Refrigerators and Commercial
 Freezers Without Doors.
                                                                                  0 (L)          <32  VOP.SC.L...........  4.25 x TDA + 11.82.
                                                       Semivertical Open         38 (M)         >=32  SVO.SC.M...........  1.7 x TDA + 4.59.
                                                        (SVO).
                                                                                  0 (L)          <32  SVO.SC.L...........  4.26 x TDA + 11.51.
                                                       Horizontal Open           38 (M)         >=32  HZO.SC.M...........  0.72 x TDA + 5.55.
                                                        (HZO).
                                                                                  0 (L)          <32  HZO.SC.L...........  1.9 x TDA + 7.08.
Self-Contained Commercial         Self-Contained (SC)  Vertical Closed           38 (M)         >=32  VCT.SC.M...........  0.1 x V + 0.86.
 Refrigerators and Commercial                           Transparent (VCT).
 Freezers With Doors.
                                                                                  0 (L)          <32  VCT.SC.L...........  0.29 x V + 2.95.
                                                       Vertical Closed           38 (M)         >=32  VCS.SC.M...........  0.05 x V + 1.36.
                                                        Solid (VCS).
                                                                            ...........          <32  VCS.SC.L...........  0.22 x V + 1.38.
                                                       Horizontal Closed         38 (M)         >=32  HCT.SC.M...........  0.06 x V + 0.37.
                                                        Transparent (HCT).
                                                                                  0 (L)          <32  HCT.SC.L...........  0.08 x V + 1.23.
                                                       Horizontal Closed    ...........         >=32  HCS.SC.M...........  0.05 x V + 0.91.
                                                        Solid (HCS).
                                                                                  0 (L)          <32  HCS.SC.L...........  0.06 x V + 1.12.
                                                       Service Over         ...........         >=32  SOC.SC.M...........  0.52 x TDA + 1.
                                                        Counter (SOC).
                                                                                  0 (L)          <32  SOC.SC.L...........  1.1 x TDA + 2.1.
Self-Contained Commercial         Self-Contained (SC)  Pull-Down (PD).....       38 (M)         >=32  PD.SC.M............  0.11 x V + 0.81.
 Refrigerators with Transparent
 Doors for Pull-Down Temperature
 Applications.
Commercial Ice-Cream Freezers...  Remote (RC)........  Vertical Open (VOP)      -15 (I)       <=-5**  VOP.RC.I...........  2.79 x TDA + 8.7.
                                                       Semivertical Open    ...........  ...........  SVO.RC.I...........  2.79 x TDA + 8.7.
                                                        (SVO).
                                                       Horizontal Open      ...........  ...........  HZO.RC.I...........  0.7 x TDA + 8.74.
                                                        (HZO).
                                                       Vertical Closed      ...........  ...........  VCT.RC.I...........  0.58 x TDA + 3.05.
                                                        Transparent (VCT).

[[Page 17818]]

 
                                                       Horizontal Closed    ...........  ...........  HCT.RC.I...........  0.4 x TDA + 0.31.
                                                        Transparent (HCT).
                                                       Vertical Closed      ...........  ...........  VCS.RC.I...........  0.25 x V + 0.63.
                                                        Solid (VCS).
                                                       Horizontal Closed    ...........  ...........  HCS.RC.I...........  0.25 x V + 0.63.
                                                        Solid (HCS).
                                                       Service Over         ...........  ...........  SOC.RC.I...........  1.09 x TDA + 0.26.
                                                        Counter (SOC).
                                  Self-Contained (SC)  Vertical Open (VOP)  ...........  ...........  VOP.SC.I...........  5.4 x TDA + 15.02.
                                                       Semivertical Open    ...........  ...........  SVO.SC.I...........  5.41 x TDA + 14.63.
                                                        (SVO).
                                                       Horizontal Open      ...........  ...........  HZO.SC.I...........  2.42 x TDA + 9.
                                                        (HZO).
                                                       Vertical Closed      ...........  ...........  VCT.SC.I...........  0.62 x TDA + 3.29.
                                                        Transparent (VCT).
                                                       Horizontal Closed    ...........  ...........  HCT.SC.I...........  0.56 x TDA + 0.43.
                                                        Transparent (HCT).
                                                       Vertical Closed      ...........  ...........  VCS.SC.I...........  0.34 x V + 0.88.
                                                        Solid (VCS).
                                                       Horizontal Closed    ...........  ...........  HCS.SC.I...........  0.34 x V + 0.88.
                                                        Solid (HCS).
                                                       Service Over         ...........  ...........  SOC.SC.I...........  1.53 x TDA + 0.36.
                                                        Counter (SOC).
--------------------------------------------------------------------------------------------------------------------------------------------------------
* The meaning of the letters in this column is indicated in the 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 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 (e)(1) of this section for that compartment's equipment 
class. Measure the CDEC or TDEC for the entire case as described in 
Sec.  431.66(d)(2)(i) through (iii), except that where measurements and 
calculations reference ARI Standard 1200-2006 (incorporated by 
reference, see Sec.  431.63), AHRI Standard 1200 (I-P)-2010 
(incorporated by reference, see Sec.  431.63) shall be used.
    (3) For remote condensing and self-contained wedge cases, measure 
the CDEC or TDEC according to the AHRI Standard 1200 (I-P)-2010 test 
procedure (incorporated by reference, see Sec.  431.63). For wedge 
cases in equipment classes for which a volume metric is used, the MDEC 
shall be the amount derived from the appropriate standards equation in 
paragraph (e)(1) of this section. For wedge cases of equipment classes 
for which a TDA metric is used, the MDEC for each model shall be the 
amount derived by incorporating into the standards equation in 
paragraph (e)(1) of this section for the 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.

[FR Doc. 2014-05082 Filed 3-27-14; 8:45 am]
BILLING CODE 6450-01-P