[Federal Register Volume 80, Number 18 (Wednesday, January 28, 2015)]
[Rules and Regulations]
[Pages 4646-4756]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-00326]
[[Page 4645]]
Vol. 80
Wednesday,
No. 18
January 28, 2015
Part II
Department of Energy
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10 CFR Part 431
Energy Conservation Program: Energy Conservation Standards for
Automatic Commercial Ice Makers; Final Rule
Federal Register / Vol. 80 , No. 18 / Wednesday, January 28, 2015 /
Rules and Regulations
[[Page 4646]]
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DEPARTMENT OF ENERGY
10 CFR Part 431
[Docket Number EERE-2010-BT-STD-0037]
RIN 1904-AC39
Energy Conservation Program: Energy Conservation Standards for
Automatic Commercial Ice Makers
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
automatic commercial icemakers (ACIM). 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 automatic commercial ice makers as well as establishing
energy conservation standards for other classes of automatic commercial
ice makers. 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 March 30, 2015. Compliance
with the amended standards established for automatic commercial ice
makers in this final rule is required on January 28, 2018.
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-0037.
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. Sarah Butler, U.S. Department of Energy, Office of the General
Counsel, Mailstop GC-71, 1000 Independence Avenue SW., Washington, DC
20585-0121. Telephone: (202) 586-1777. Email: [email protected].
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Discussion 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 Automatic Commercial Ice
Makers
III. General Discussion
A. Equipment Classes and Scope of Coverage
B. Test Procedure
C. Technological Feasibility
1. General
2. Maximum Technologically Feasible Levels
D. Energy Savings
1. Determination of Savings
2. Significance of Savings
E. Economic Justification
1. Specific Criteria
a. Economic Impact on Manufacturers and Commercial Customers
b. Savings in Operating Costs Compared to Increase in Price
(Life Cycle Costs)
c. Energy Savings
d. Lessening of Utility or Performance of Equipment
e. Impact of Any Lessening of Competition
f. Need of the Nation To Conserve Energy
g. Other Factors
2. Rebuttable Presumption
IV. Methodology and Discussion of Comments
A. General Rulemaking Issues
1. Proposed Standard Levels
2. Compliance Date
3. Negotiated Rulemaking
4. Refrigerant Regulation
5. Data Availability
6. Supplemental Notice of Proposed Rulemaking.
7. Rulemaking Structure Comments
B. Market and Technology Assessment
1. Equipment Classes
a. Cabinet Size
b. Large-Capacity Batch Ice Makers
c. Regulation of Potable Water Use
d. Regulation of Condenser Water Use
e. Continuous Models
f. Gourmet Ice Machines
2. Technology Assessment
a. Alternative Refrigerants
C. Screening Analysis
a. General Comments
b. Drain Water Heat Exchanger
c. Tube Evaporator Design
d. Low Thermal Mass Evaporator Design
e. Microchannel Heat Exchangers
f. Smart Technologies
g. Motors
D. Engineering Analysis
1. Representative Equipment for Analysis
2. Efficiency Levels
a. Baseline Efficiency Levels
b. Incremental Efficiency Levels
c. IMH-A-Large-B Treatment
d. Maximum Available Efficiency Equipment
e. Maximum Technologically Feasible Efficiency Levels
3. Design Options
a. Design Options that Need Cabinet Growth
b. Improved Condenser Performance
c. Compressors
d. Evaporator
e. Interconnectedness of Automatic Commercial Ice Maker System
4. Cost Assessment Methodology
a. Manufacturing Cost
b. Energy Consumption Model
c. Revision of NOPR and NODA Engineering Analysis
E. Markups Analysis
F. Energy Use Analysis
G. Life-Cycle Cost and Payback Period Analysis
1. Equipment Cost
2. Installation, Maintenance, and Repair Costs
a. Installation Costs
b. Repair and Maintenance Costs
3. Annual Energy and Water Consumption
4. Energy Prices
5. Energy Price Projections
6. Water Prices
7. Discount Rates
8. Lifetime
9. Compliance Date of Standards
10. Base-Case and Standards-Case Efficiency Distributions
11. Inputs to Payback Period Analysis
12. Rebuttable Presumption Payback Period
H. National Impact Analysis--National Energy Savings and Net
Present Value
1. Shipments
2. Forecasted Efficiency in the Base Case and Standards Cases
3. National Energy Savings
4. Net Present Value of Customer Benefit
I. Customer Subgroup Analysis
J. Manufacturer Impact Analysis
1. Overview
2. Government Regulatory Impact Model
a. Government Regulatory Impact Model Key Inputs
b. Government Regulatory Impact Model Scenarios
3. Discussion of Comments
a. Conversion Costs
b. Cumulative Regulatory Burden
[[Page 4647]]
c. SNAP and Compliance Date Considerations
d. ENERGY STAR
e. Request for DOE and EPA Collaboration
f. Compliance With Refrigerant Changes Could Be Difficult
g. Small Manufacturers
h. Large Manufacturers
i. Negative Impact on Market Growth
j. Negative Impact on Non-U.S. Sales
k. Employment
l. Compliance With 12866 and 13563
m. Warranty Claims
n. Impact to Suppliers, Distributors, Dealers, and Contractors
K. Emissions Analysis
L. Monetizing Carbon Dioxide and Other Emissions Impacts
1. Social Cost of Carbon
a. Monetizing Carbon Dioxide Emissions
b. Development of Social Cost of Carbon Values
c. Current Approach and Key Assumptions
2. Valuation of Other Emissions Reductions
M. Utility Impact Analysis
N. Employment Impact Analysis
O. Regulatory 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. Life-Cycle Cost Subgroup Analysis
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. Amount and Significance of Energy Savings
b. Net Present Value of Customer Costs and Benefits
c. Water Savings
d. Indirect 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. Other Factors
C. Conclusions/Proposed Standard
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. Discussion 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. 6311-6317, as
codified), established the Energy Conservation Program for Certain
Industrial Equipment, a program covering certain industrial
equipment,\2\ which includes the focus of this final rule: Automatic
commercial ice makers (ACIM).
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\1\ For editorial reasons, upon codification in the U.S. Code,
Part C was re-designated Part A-1.
\2\ All references to EPCA in this document refer to the statute
as amended through the American Energy Manufacturing Technical
Corrections Act (AEMTCA), Public Law 112-210 (Dec. 18, 2012).
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Pursuant to EPCA, any new or amended energy conservation standard
that DOE prescribes for certain products, such as automatic commercial
ice makers, 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 6313(d)(4))
In accordance with these and other statutory criteria discussed in
this final rule, DOE is amending energy conservation standards for
automatic commercial ice makers,\3\ and new standards for covered
equipment not yet subject to energy conservation standards. The amended
standards, which consist of maximum allowable energy use per 100 lb of
ice production, are shown in Table I.1 and Table I.2. Standards shown
on Table I.1 for batch type ice makers represent the amendments to
existing standards set for cube type ice makers at 42 U.S.C.
6313(d)(1), and new standards for cube type ice makers with expanded
harvest capacities up to 4,000 pounds of ice per 24 hour period (lb
ice/24 hours) and an explicit coverage of other types of batch
machines, such as tube type ice makers. Table I.2 provides new
standards for continuous type ice-making machines, which were not
previously currently covered by DOE's existing standards. The amended
standards include, for applicable equipment classes, maximum condenser
water usage values in gallons per 100 lb of ice production. These new
and amended standards apply to all equipment manufactured in, or
imported into, the United States, on or after January 28, 2018. (42
U.S.C. 6313(d)(2)(B)(i) and (3)(C)(i))
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\3\ EPCA as amended by EPACT 2005 established maximum energy use
and maximum condenser water use standards for cube type automatic
commercial ice makers with harvest capacities between 50 and 2,500
lb ice/24 hours. In this rulemaking, DOE is amending the legislated
energy use standards for these automatic commercial ice maker types.
DOE is not, however, amending the existing condenser water use
standards for equipment with existing condenser water standards.
Table I.1--Energy Conservation Standards for Batch Type Automatic Commercial Icemakers
[Compliance required starting January 28, 2018]
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Maximum energy use kilowatt- Maximum condenser water use
Equipment type Type of cooling Harvest rate lb ice/24 hours hours (kWh)/100 lb ice * gal/100 lb ice **
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Ice-Making Head................. Water................... <300 6.88--0.0055H 200--0.022H.
>=300 and <850 5.80--0.00191H 200--0.022H.
>=850 and <1,500 4.42--0.00028H 200--0.022H.
>=1,500 and <2,500 4.0 200--0.022H.
>=2,500 and <4,000 4.0 145.
Ice-Making Head................. Air..................... <300 10--0.01233H NA.
>=300 and <800 7.05--0.0025H NA.
>=800 and <1,500 5.55--0.00063H NA.
>=1500 and <4,000 4.61 NA.
[[Page 4648]]
Remote Condensing (but not Air..................... >=50 and <1,000 7.97--0.00342H NA.
remote compressor).
>=1,000 and <4,000 4.55 NA.
Remote Condensing and Remote Air..................... <942 7.97--0.00342H NA.
Compressor.
>=942 and <4,000 4.75 NA.
Self-Contained.................. Water................... <200 9.5--0.019H 191--0.0315H.
>=200 and <2,500 5.7 191--0.0315H.
>=2,500 and <4,000 5.7 112.
Self-Contained.................. Air..................... <110 14.79--0.0469H NA.
>=110 and <200 12.42--0.02533H NA.
>=200 and <4,000 7.35 NA.
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* H = harvest rate in pounds per 24 hours, indicating the water or energy use for a given harvest rate. Source: 42 U.S.C. 6313(d).
** Water use is for the condenser only and does not include potable water used to make ice.
Table I.2--Energy Conservation Standards for Continuous Type Automatic Commercial Ice Makers
[Compliance required starting January 28, 2018]
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Maximum energy use kWh/100 lb Maximum condenser water use
Equipment type Type of cooling Harvest rate lb ice/24 hours ice * gal/100 lb ice **
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Ice-Making Head................. Water................... <801 6.48--0.00267H 180--0.0198H.
>=801 and <2,500 4.34 180--0.0198H.
>=2,500 and <4,000 4.34 130.5.
Ice-Making Head................. Air..................... <310 9.19--0.00629H NA.
>=310 and <820 8.23--0.0032H NA.
>=820 and <4,000 5.61 NA.
Remote Condensing (but not Air..................... <800 9.7--0.0058H NA.
remote compressor).
>=800 and <4,000 5.06 NA.
Remote Condensing and Remote Air..................... <800 9.9--0.0058H NA.
Compressor.
>=800 and <4,000 5.26 NA.
Self-Contained.................. Water................... <900 7.6--0.00302H 153--0.0252H.
>=900 and <2,500 4.88 153--0.0252H.
>=2,500 and <4,000 4.88 90.
Self-Contained.................. Air..................... <200 14.22--0.03H NA.
>=200 and <700 9.47--0.00624H NA.
>=700 and <4,000 5.1 NA.
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* H = harvest rate in pounds per 24 hours, indicating the water or energy use for a given harvest rate. Source: 42 U.S.C. 6313(d).
** Water use is for the condenser only and does not include potable water used to make ice.
A. Benefits and Costs to Customers
Table I.3 presents DOE's evaluation of the economic impacts of the
standards set by this final rule on customers of automatic commercial
ice makers, as measured by the average life-cycle cost (LCC) savings
\4\ and the median payback period (PBP).\5\ The average LCC savings are
positive for all equipment classes for which customers are impacted by
the new and amended standards.
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\4\ Life-cycle cost of automatic commercial ice makers 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.
\5\ 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 costs. Further discussion can be found in chapter 8 of the
final rule TSD.
Table I.3--Impacts of Today's Standards on Customers of Automatic
Commercial Ice Makers
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Average LCC
Equipment class * savings 2013$ Median PBP years
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IMH-W-Small-B....................... 214 2.7
IMH-W-Med-B......................... 308 2.1
IMH-W-Large-B **.................... NA NA
IMH-W-Large-B-1................. NA NA
IMH-W-Large-B-2................. NA NA
IMH-A-Small-B....................... 77 4.7
IMH-A-Large-B **.................... 361 2.3
IMH-A-Large-B-1................. 407 1.5
IMH-A-Large-B-2................. 110 6.9
RCU-Large-B **...................... 748 1.1
[[Page 4649]]
RCU-Large-B-1................... 743 0.9
RCU-Large-B-2................... 820 3.0
SCU-W-Large-B....................... 550 1.8
SCU-A-Small-B....................... 281 2.6
SCU-A-Large-B....................... 439 2.1
IMH-A-Small-C....................... 313 1.7
IMH-A-Large-C....................... 626 0.7
RCU-Small-C......................... 505 1.2
SCU-A-Small-C....................... 290 1.5
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* Abbreviations are: IMH is ice-making head; RCU is remote condensing
unit; SCU is self-contained unit; W is water-cooled; A is air-cooled;
Small refers to the lowest harvest category; Med refers to the Medium
category (water-cooled IMH only); RCU with and without remote
compressor were modeled as one group. For three large batch
categories, a machine at the low end of the harvest range (B-1) and a
machine at the higher end (B-2) were modeled. Values are shown only
for equipment classes that have significant volume of shipments and,
therefore, were directly analyzed. See chapter 5 of the final rule
technical support document, ``Engineering Analysis,'' for a detailed
discussion of equipment classes analyzed.
** LCC savings and PBP results for these classes are weighted averages
of the typical units modeled for the large classes, using weights
provided in TSD chapter 7.
B. Impact on Manufacturers \6\
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\6\ All dollar values presented are in 2013$ discounted back to
the year 2014.
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The industry net present value (INPV) is the sum of the discounted
cash flows to the industry from 2015 through the end of the analysis
period in 2047. Using a real discount rate of 9.2 percent, DOE
estimates that the INPV for manufacturers of automatic commercial ice
makers is $121.6 million in 2013$. Under the amended standards, DOE
expects that manufacturers may lose up to 12.5 percent of their INPV,
or approximately $15.1 million.
C. National Benefits and Costs
DOE's analyses indicate that the amended standards for automatic
commercial ice makers would save a significant amount of energy. The
lifetime energy savings for equipment purchased in the 30-year period
that begins in the year of compliance with amended and new standards
(2018-2047), \7\ relative to the base case without amended standards,
amount to 0.18 quadrillion British thermal units (quads) of cumulative
energy. This represents a savings of 8 percent relative to the energy
use of these products in the base case.
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\7\ The standards analysis period for national benefits covers
the 30-year period, plus the life of equipment purchased during the
period. In the past, DOE presented energy savings results for only
the 30-year period that begins in the year of compliance. In the
calculation of economic impacts, however, DOE considered operating
cost savings measured over the entire lifetime of products purchased
in the 30-year period. DOE has chosen to modify its presentation of
national energy savings to be consistent with the approach used for
its national economic analysis.
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The cumulative national net present value (NPV) of total customer
savings of the amended standards for automatic commercial ice makers in
2013$ ranges from $0.430 billion (at a 7-percent discount rate) to
$0.942 billion (at a 3-percent discount rate \8\). This NPV expresses
the estimated total value of future operating cost savings minus the
estimated increased installed costs for equipment purchased in the
period from 2018-2047, discounted back to the current year (2014).
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\8\ 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. Further details are provided in section IV.J.
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In addition, the amended standards are expected to have significant
environmental benefits. The energy savings described above are
estimated to result in cumulative emission reductions of 10.9 million
metric tons (MMt) \9\ of carbon dioxide (CO2), 16.2 thousand
tons of nitrogen oxides (NOX), 0.1 thousand tons of nitrous
oxide (N2O), 47.4 thousand tons of methane (CH4),
0.03 tons of mercury (Hg),\10\ and 9.3 thousand tons of sulfur dioxide
(SO2) based on energy savings from equipment purchased over
the period from 2018-2047.\11\ The cumulative reduction in
CO2 emissions through 2030 amounts to 4 MMt, which is
equivalent to the emissions resulting from the annual electricity use
of over half a million homes.
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\9\ A metric ton is equivalent to 1.1 U.S. short tons. Results
for NOX, Hg, and SO2 are presented in short
tons.
\10\ DOE calculates emissions reductions relative to the Annual
Energy Outlook 2014 (AEO2014) Reference Case, which generally
represents current legislation and environmental regulations for
which implementing regulations were available as of October 31,
2013.
\11\ DOE also estimated CO2 and CO2
equivalent (CO2eq) emissions that occur through 2030
(CO2eq includes greenhouse gases such as CH4
and N2O). The estimated emissions reductions through 2030
are 3.9 million metric tons CO2, 395 thousand tons
CO2eq for CH4, and 12 thousand tons
CO2eq for N2O.
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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.\12\ The derivation of the SCC value is discussed
in section IV.L. Using discount rates appropriate for each set of SCC
values, DOE estimates the net present monetary value of the
CO2 emissions reduction is between $0.08 and $1.11 billion,
expressed in 2013$ and discounted to 2014, with a value of $0.36
billion using the central SCC case represented by $40.5/t in 2015. DOE
also estimates the net present monetary value of the NOX
emissions reduction, expressed in 2013$ and discounted to 2014, is
between $2.1 and $22.0 million at a 7-percent discount rate, and
between $4.2 and $43.4 million at a 3-percent discount rate.\13\
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\12\ http://www.whitehouse.gov/sites/default/files/omb/assets/inforeg/technical-update-social-cost-of-carbon-for-regulator-impact-analysis.pdf.
\13\ DOE has decided to await further guidance regarding
consistent valuation and reporting of Hg emissions before it
monetizes Hg in its rulemakings.
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Table I.4 summarizes the national economic costs and benefits
expected to result from these new and amended standards for automatic
commercial ice makers.
[[Page 4650]]
Table I.4--Summary of National Economic Benefits and Costs of Amended Automatic Commercial Ice Makers Energy
Conservation Standards *
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Present value Discount rate
Category million 2013$ (%)
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Benefits
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Operating Cost Savings...................................................... 654 7
1,353 3
CO2 at 5% dr, average....................................................... 80 5
CO2 at 3% dr, average....................................................... 361 3
CO2 at 2.5% dr, average..................................................... 570 2.5
CO2 at 3% dr, 95th perc..................................................... 1,113 3
NOX Reduction Monetized Value (at $2,684/Ton) **............................ 12 7
24 3
Total Benefits [dagger]..................................................... 1,027 7
1,738 3
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Costs
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Incremental Installed Costs................................................. 224 7
411 3
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Net Benefits
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Including CO2 and NOX Reduction Monetized Value............................. 803 7
1,326 3
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* The CO2 values represent global monetized values of the SCC in 2013$ in year 2015 under several scenarios. The
values of $12, $40.5, and $62.4 per metric ton (t) are the averages of SCC distributions calculated using 5-
percent, 3-percent, and 2.5-percent discount rates, respectively. The value of $119.0/t represents the 95th
percentile of the SCC distribution calculated using a 3-percent discount rate. The SCC time series used by DOE
incorporate an escalation factor.
** The value represents the average of the low and high NOX values used in DOE's analysis.
[dagger] Total Benefits for both the 3-percent and the 7-percent cases are derived using the series
corresponding to SCC value of $40.5/t.
The benefits and costs of these new and amended standards, for
automatic commercial ice makers sold in 2018-2047, 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 the operation of equipment that meets the amended
standards (consisting primarily of operating cost savings from using
less energy and water, minus increases in equipment installed cost,
which is another way of representing customer NPV); and (2) the
annualized monetary value of the benefits of emission reductions,
including CO2 emission reductions.\14\
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\14\ 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 2014, 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 3 and 7 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.4. From the present value, DOE then calculated the
fixed annual payment over a 30-year period (2018 through 2047) 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.
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Although adding the values of operating savings to the values of
emission reductions provides an important perspective, two issues
should be considered. First, the national operating savings are
domestic U.S. customer monetary savings that occur as a result of
market transactions, whereas 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 over the lifetimes of automatic commercial ice
makers shipped from 2018 to 2047. The SCC values, on the other hand,
reflect the present value of some future climate-related impacts
resulting from the emission of 1 ton of CO2 in each year.
These impacts continue well beyond 2100.
Estimates of annualized benefits and costs of the amended standards
are shown in Table I.5. (All monetary values below are expressed in
2013$.) Table I.5 shows the primary, low net benefits, and high net
benefits scenarios. The primary estimate is the estimate in which the
operating cost savings were calculated using the Annual Energy Outlook
2014 (AEO2014) Reference Case forecast of future electricity prices.
The low net benefits estimate and the high net benefits estimate are
based on the low and high electricity price scenarios from the AEO2014
forecast, respectively.\15\ Using a 7-percent discount rate for
benefits and costs, the cost in the primary estimate of the standards
amended in this rule is $22 million per year in increased equipment
costs. (Note that DOE used a 3-percent discount rate along with the
corresponding SCC series value of $40.5/ton in 2013$ to calculate the
monetized value of CO2 emissions reductions.) The annualized
benefits are $65 million per year in reduced equipment operating costs,
$20 million in CO2 reductions, and $1.19 million in reduced
NOX emissions. In this case, the annualized net benefit
amounts to $64 million. At a 3-percent discount rate for all benefits
and costs, the cost in the primary estimate of the amended standards
presented in this rule is $23 million per year in increased equipment
costs. The benefits are $75 million per year in reduced operating
costs, $20 million in CO2 reductions, and $1.33 million in
reduced NOX emissions. In this case, the net benefit amounts
to $74 million per year.
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\15\ The AEO2014 scenarios used are the ``High Economics'' and
``Low Economics'' scenarios.
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DOE also calculated the low net benefits and high net benefits
estimates
[[Page 4651]]
by calculating the operating cost savings and shipments at the AEO2014
low economic growth case and high economic growth case scenarios,
respectively. The low and high benefits for incremental installed costs
were derived using the low and high price learning scenarios. The net
benefits and costs for low and high net benefits estimates were
calculated in the same manner as the primary estimate by using the
corresponding values of operating cost savings and incremental
installed costs.
Table I.5--Annualized Benefits and Costs of Proposed Standards for Automatic Commercial Ice Makers *
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Low net High net
Discount rate Primary benefits benefits
(%) estimate* estimate * estimate *
million 2013$ million 2013$ million 2013$
----------------------------------------------------------------------------------------------------------------
Benefits
----------------------------------------------------------------------------------------------------------------
Operating Cost Savings.................. 7 65 62 68
3 75 71 80
CO2 at 5% dr, average **................ 5 6 6 6
CO2 at 3% dr, average **................ 3 20 20 21
CO2 at 2.5% dr, average **.............. 2.5 29 28 30
CO2 at 3% dr, 95th perc **.............. 3 62 60 64
NOX Reduction Monetized Value (at $2,684/ 7 1.19 1.16 1.22
Ton) **................................ 3 1.33 1.29 1.36
Total Benefits (Operating Cost Savings, 7 86 82 90
CO2 Reduction and NOX Reduction) 3 97 92 102
[dagger]...............................
----------------------------------------------------------------------------------------------------------------
Costs
----------------------------------------------------------------------------------------------------------------
Total Incremental Installed Costs....... 7 22 23 21
3 23 24 22
----------------------------------------------------------------------------------------------------------------
Net Benefits Less Costs
----------------------------------------------------------------------------------------------------------------
Total Benefits Less Incremental Costs... 7 64 60 69
3 74 68 80
----------------------------------------------------------------------------------------------------------------
* The primary, low, and high estimates utilize forecasts of energy prices from the AEO2014 Reference Case, Low
Economic Growth Case, and High Economic Growth Case, respectively.
** These values represent global values (in 2013$) of the social cost of CO2 emissions in 2015 under several
scenarios. The values of $12, $40.5, and $62.4 per ton are the averages of SCC distributions calculated using
5-percent, 3-percent, and 2.5-percent discount rates, respectively. The value of $119.0 per ton represents the
95th percentile of the SCC distribution calculated using a 3-percent discount rate. See section IV.L for
details. For NOX, an average value ($2,684) of the low ($476) and high ($4,893) values was used.
[dagger] Total monetary benefits for both the 3-percent and 7-percent cases utilize the central estimate of
social cost of NOX and CO2 emissions calculated at a 3-percent discount rate (averaged across three integrated
assessment models), which is equal to $40.5/ton (in 2013$).
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
this 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),
6313(d)(4))
II. Introduction
The following section briefly discusses the statutory authority
underlying this final rule, as well as some of the relevant historical
background related to the establishment of amended standards for
automatic commercial ice makers.
A. Authority
Title III, Part C \16\ 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 automatic commercial ice makers, the focus of this
rule.\17\
---------------------------------------------------------------------------
\16\ For editorial reasons, upon codification in the U.S. Code,
Part C was re-designated Part A-1.
\17\ 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).
---------------------------------------------------------------------------
EPCA prescribed energy conservation standards for automatic
commercial ice makers that produce cube type ice with capacities
between 50 and 2,500 lb ice/24 hours. (42 U.S.C. 6313(d)(1)) EPCA
requires DOE to review these standards and determine, by January 1,
2015, whether amending the applicable standards is technically feasible
and economically justified. (42 U.S.C. 6313(d)(3)(A)) If amended
standards are technically feasible and economically justified, DOE must
issue a final rule by the same date. (42 U.S.C. 6313(d)(3)(B))
Additionally, EPCA granted DOE the authority to conduct rulemakings to
establish new standards for automatic commercial ice makers not covered
by 42 U.S.C. 6313(d)(1)), and DOE is using that authority in this
rulemaking. (42 U.S.C. 6313(d)(2)(A))
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 automatic commercial ice
makers, 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
[[Page 4652]]
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)) Similarly, DOE must use
these test procedures to determine whether that equipment complies with
standards adopted pursuant to EPCA. The DOE test procedure for
automatic commercial ice makers currently appears at title 10 of the
Code of Federal Regulations (CFR) part 431, subpart H.
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 6313(d)(4))
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
6313(d)(4)) DOE also may not prescribe a standard: (1) For certain
equipment, including automatic commercial ice makers, if no test
procedure has been established for the product; or (2) if DOE
determines, by rule that such standard is not technologically feasible
or economically justified. (42 U.S.C. 6295(o)(3)(A)-(B) and 6313(d)(4))
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 6313(d)(4)) 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 6313(d)(4))
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 6313(d)(4)) 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 6313(d)(4))
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. 42 U.S.C. 6295(o)(2)(B)(iii) and
6313(d)(4) Section III.E.2 presents additional discussion about the
rebuttable presumption payback period.
Additionally, 42 U.S.C. 6295(q)(1) and 6316(a) specifies
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(a)) 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(a))
Federal energy conservation requirements generally supersede State
laws or regulations concerning energy conservation testing, labeling,
and standards. (42 U.S.C. 6297(a)-(c) and 6316(f)) DOE may, however,
grant waivers of Federal preemption for particular State laws or
regulations in accordance with the test procedures and other provisions
set forth under 42 U.S.C. 6297(d) and 6316(f).
B. Background
1. Current Standards
In a final rule published on October 18, 2005, DOE adopted the
energy conservation standards and water conservation standards
prescribed by EPCA in 42 U.S.C. 6313(d)(1) for certain automatic
commercial ice makers manufactured on or after January 1, 2010. 70 FR
60407, 60415-16. These standards consist of maximum energy use and
maximum condenser water use to produce 100 pounds of ice for automatic
commercial ice makers with harvest rates between 50 and 2,500 lb ice/24
hours. These standards appear at 10 CFR part 431, subpart H, Automatic
Commercial Ice Makers. Table II.1 presents DOE's current energy
conservation standards for automatic commercial ice makers.
Table II.1--Automatic Commercial Ice Makers Standards Prescribed by EPCA--Compliance Required Beginning on January 1, 2010
--------------------------------------------------------------------------------------------------------------------------------------------------------
Maximum energy use kWh/100 Maximum condenser water use
Equipment type Type of cooling Harvest rate lb ice/24 hours lb ice * gal/100 lb ice
--------------------------------------------------------------------------------------------------------------------------------------------------------
Ice-Making Head................. Water................... <500 7.8-0.0055H ** 200-0.022H.**
>=500 and <1,436 5.58-0.0011H 200-0.022H.
[[Page 4653]]
>=1,436 4.0 200-0.022H.
Air..................... <450 10.26-0.0086H Not Applicable.
>=450 6.89-0.0011H Not Applicable.
Remote Condensing (but not Air..................... <1,000 8.85-0.0038H Not Applicable.
remote compressor).
>=1,000 5.10 Not Applicable.
Remote Condensing and Remote Air..................... <934 8.85-0.0038H Not Applicable.
Compressor.
>=934 5.30 Not Applicable.
Self-Contained.................. Water................... <200 11.4-0.019H 191-0.0315H.
>=200 7.60 191-0.0315H.
Air..................... <175 18.0-0.0469H Not Applicable.
>=175 9.80 Not Applicable.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Source: 42 U.S.C. 6313(d).
* Water use is for the condenser only and does not include potable water used to make ice.
** H = harvest rate in pounds per 24 hours, indicating the water or energy use for a given harvest rate.
2. History of Standards Rulemaking for Automatic Commercial Ice Makers
As stated above, EPCA prescribes energy conservation standards and
water conservation standards for certain cube type automatic commercial
ice makers with harvest rates between 50 and 2,500 lb ice/24 hours:
Self-contained ice makers and ice-making heads (IMHs) using air or
water for cooling and ice makers with remote condensing with or without
a remote compressor. Compliance with these standards was required as of
January 1, 2010. (42 U.S.C. 6313(d)(1)) DOE adopted these standards and
placed them under 10 CFR part 431, subpart H, Automatic Commercial Ice
Makers.
In addition, EPCA requires DOE to conduct a rulemaking to determine
whether to amend the standards established under 42 U.S.C. 6313(d)(1),
and if DOE determines that amendment is warranted, DOE must also issue
a final rule establishing such amended standards by January 1, 2015.
(42 U.S.C. 6313(d)(3)(A))
Furthermore, EPCA granted DOE authority to set standards for
additional types of automatic commercial ice makers that are not
covered in 42 U.S.C. 6313(d)(1). (42 U.S.C. 6313(d)(2)(A)) Additional
types of automatic commercial ice makers DOE identified as candidates
for standards to be established in this rulemaking include flake and
nugget, as well as batch type ice makers that are not included in the
EPCA definition of cube type ice makers.
To satisfy its requirement to conduct a rulemaking, DOE initiated
the current rulemaking on November 4, 2010 by publishing on its Web
site its ``Rulemaking Framework for Automatic Commercial Ice Makers.''
The Framework document is available at: http://www.regulations.gov/#!documentDetail;D=EERE-2010-BT-STD-0037-0024.
DOE also published a notice in the Federal Register announcing the
availability of the Framework document, as well as a public meeting to
discuss the document. The notice also solicited comment on the matters
raised in the document. 75 FR 70852 (Nov. 19, 2010). The Framework
document described the procedural and analytical approaches that DOE
anticipated using to evaluate amended standards for automatic
commercial ice makers, and identified various issues to be resolved in
the rulemaking.
DOE held the Framework public meeting on December 16, 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) equipment classes; (3) analytical approaches and methods used in
the rulemaking; (4) impacts of standards and burden on manufacturers;
(5) technology options; (6) distribution channels, shipments, and end
users; (7) impacts of outside regulations; and (8) environmental
issues. 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 automatic commercial ice makers relevant
to this rulemaking.
DOE then gathered additional information and performed preliminary
analyses to help review standards for this equipment. This process
culminated in DOE publishing a notice of another public meeting (the
January 2012 notice) to discuss and receive comments regarding the
tools and methods DOE used in performing its preliminary analysis, as
well as the analyses results. 77 FR 3404 (Jan. 24, 2012) 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-0037-0026. DOE sought comments
concerning other relevant issues that could affect amended standards
for automatic commercial ice makers. Id.
The preliminary analysis TSD provided an overview of DOE's review
of the standards for automatic commercial ice makers, 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 automatic
commercial ice makers, 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:
(1) A market and technology assessment, (2) a screening analysis, (3)
an engineering analysis, (4) an energy and water use analysis, (5) a
markups analysis, (6) a
[[Page 4654]]
life-cycle cost analysis, (7) a payback period analysis, (8) a
shipments analysis, (9) a national impact analysis (NIA) and (10) a
preliminary manufacturer impact analysis (MIA).
The public meeting announced in the January 2012 notice took place
on February 16, 2012 (February 2012 preliminary analysis public
meeting). At the February 2012 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 and validation of engineering models; (4) cost
modeling; (5) market information, including distribution channels and
distribution markups; (6) efficiency levels; (7) life-cycle costs to
customers, including installation, repair and maintenance costs, and
water and wastewater prices; and (8) historical shipments.
On March 17, 2014, DOE published a notice of proposed rulemaking
(NOPR) in the Federal Register (March 2014 NOPR). 79 FR 14846. In the
March 2014 NOPR, DOE addressed, in detail, the comments received in
earlier stages of rulemaking, and proposed amended energy conservation
standards for automatic commercial ice makers. In conjunction with the
March 2014 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/29.
The standards which DOE proposed for automatic commercial ice
makers at the NOPR stage of this rulemaking are shown in Table II.2 and
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.2--Proposed Energy Conservation Standards for Batch Type Automatic Commercial Ice Makers
--------------------------------------------------------------------------------------------------------------------------------------------------------
Maximum energy use kilowatt- Maximum condenser water use
Equipment type Type of cooling Harvest rate lb ice/24 hours hours (kWh)/100 lb ice * gal/100 lb ice **
--------------------------------------------------------------------------------------------------------------------------------------------------------
Ice-Making Head................. Water................... <500 5.84--0.0041H 200-0.022H.
>=500 and <1,436 3.88--0.0002H 200-0.022H.
>=1,436 and <2,500 3.6 200-0.022H.
>=2,500 and <4,000 3.6 145.
Ice-Making Head................. Air..................... <450 7.70--0.0065H NA.
>=450 and <875 5.17--0.0008H NA.
>=875 and <2,210 4.5 NA.
>=2,210 and <2,500 6.89--0.0011H NA.
>=2,500 and <4,000 4.1 NA.
Remote Condensing (but not Air..................... <1,000 7.52--0.0032H NA.
remote compressor).
Air..................... >=1,000 and <4,000 4.3 NA.
Remote Condensing and Remote Air..................... <934 7.52--0.0032H NA.
Compressor.
Air..................... >=934 and <4,000 4.5 NA.
Self-Contained.................. Water................... <200 8.55--0.0143H 191-0.0315H.
>=200 and <2,500 5.7 191-0.0315H.
>=2,500 and <4,000 5.7 112.
Self-Contained.................. Air..................... <175 12.6--0.0328H NA.
>=175 and <4,000 6.9 NA.
--------------------------------------------------------------------------------------------------------------------------------------------------------
* H = Harvest rate in pounds per 24 hours, indicating the water or energy use for a given harvest rate. Source: 42 U.S.C. 6313(d).
** Water use is for the condenser only and does not include potable water used to make ice.
Table II.3--Proposed Energy Conservation Standards for Continuous Type Automatic Commercial Ice Makers
--------------------------------------------------------------------------------------------------------------------------------------------------------
Maximum energy use kWh/100 Maximum condenser water use
Equipment type Type of cooling Harvest rate lb ice/24 hours lb ice * gal/100 lb ice **
--------------------------------------------------------------------------------------------------------------------------------------------------------
Ice-Making Head................. Water................... <900 6.08--0.0025H 160-0.0176H.
>=900 and <2,500 3.8 160-0.0176H.
>=2,500 and <4,000 3.8 116.
Ice-Making Head................. Air..................... <700 9.24--0.0061H NA.
>=700 and <4,000 5.0 NA.
Remote Condensing (but not Air..................... <850 7.5--0.0034H NA.
remote compressor).
>=850 and <4,000 4.6 NA.
Remote Condensing and Remote Air..................... <850 7.65--0.0034H NA.
Compressor.
>=850 and <4,000 4.8 NA.
Self-Contained.................. Water................... <900 7.28--0.0027H 153-0.0252H.
>=900 and <2,500 4.9 153-0.0252H.
>=2,500 and <4,000 4.9 90.
Self-Contained.................. Air..................... <700 9.2--0.0050H NA.
>=700 and <4,000 5.7 NA.
--------------------------------------------------------------------------------------------------------------------------------------------------------
* H = Harvest rate in pounds per 24 hours, indicating the water or energy use for a given harvest rate. Source: 42 U.S.C. 6313(d).
** Water use is for the condenser only and does not include potable water used to make ice.
[[Page 4655]]
In the March 2014 NOPR, DOE identified nineteen issues on which it
was particularly interested in receiving comments and views of
interested parties: Standards compliance dates, utilization factors,
baseline efficiency, screening analysis, maximum technology
feasibility, markups, equipment life, installation costs, open-vs
closed loop installations, ice maker shipments by type of equipment,
intermittency of manufacturer R&D and impact of standards, INPV results
and impact of standards, small businesses, consumer utility and
performance, analysis period, social cost of carbon, remote to rack
equipment, design options associated with each TSD, and standard levels
for batch type ice makers over 2,500 lb ice/hour. 79 FR 14846 at 14947-
49. After the publication of the March 2014 NOPR, DOE received written
comments on these and other issues. DOE also held a public meeting in
Washington, DC, on April 14, 2014, to discuss and receive comments
regarding the tools and methods DOE used in the NOPR analysis, as well
as the results of the analysis. DOE also invited written comments and
announced the availability of a NOPR analysis technical support
document (NOPR TSD). The NOPR TSD is available at: http://www.regulations.gov/#!documentDetail;D=EERE-2010-BT-STD-0037-0061.
The NOPR TSD described in detail DOE's analysis of potential
standard levels for automatic commercial ice makers. The document also
described the analytical framework used in considering standard levels,
including a description of the methodology, the analytical tools, and
the relationships between the various analyses. In addition, the NOPR
TSD presented each analysis that DOE performed to evaluate automatic
commercial ice makers, including descriptions of inputs, sources,
methodologies, and results. DOE included the same analyses that were
conducted at the preliminary analysis stage, with revisions based on
comments received and additional research.
At the public meeting held on April 14, 2014, DOE presented the
methodologies and results of the analyses set for in the NOPR TSD.
Interested parties provided comments. Key issues raised by stakeholders
included: (1) Whether the energy model accurately predicts efficiency
improvements; (2) the size restrictions and applications of 22-inch
wide ice makers; (3) the efficiency distributions assumed for shipments
of icemakers; and (4) the impact on manufacturers relating to design of
icemaker models, in light of the proposed compliance date of 3 years
after publication of the final rule.
In response to comments regarding the energy model used in the
analysis, DOE held a public meeting on June 19, 2014 in order to
facilitate an additional review of the energy model, gather additional
feedback and data on the energy model, and to allow for a more thorough
explanation of DOE's use of the model in the engineering analysis. 79
FR 33877 (June 13, 2014). At that meeting, DOE presented the energy
model, demonstrated its operations, and described how it was used in
the rulemaking's engineering analysis. DOE indicated in this meeting
that it was considering modifications to its NOPR analyses based on the
NOPR comments and additional research and information gathering.
On September 11, 2014, DOE published a notice of data availability
(NODA) in the Federal Register (September 2014 NODA). 79 FR 54215. The
purpose of the September 2014 NODA was to notify industry,
manufacturers, customer groups, efficiency advocates, government
agencies, and other stakeholders of the publication of the updated
rulemaking analysis for new and/or amended energy conservation
standards for automatic ice makers. The comments received since the
publication of the March 2014 NOPR, including those received at the
April 2014 and the June 2014 public meetings, provided inputs which led
DOE to revise its analysis. Stakeholders also submitted additional
information to DOE's consultant pursuant to non-disclosure agreements
regarding efficiency gains and costs of potential design options. DOE
reviewed additional market data, including published ratings of
available ice makers, to recalibrate its engineering analysis.
Generally, the revisions to the NOPR analysis as specified in the NODA
include modifications of inputs for its engineering, LCC, and NIA
analyses, adjustments of its energy model calculations, and more
thorough considerations of size-constrained ice maker applications. The
analysis revisions addressing size-constrained applications include
development of engineering analyses for three size-constrained
equipment categories and restructuring of the LCC and NIA analyses to
consider size constraints for applicable equipment classes. DOE
encouraged stakeholders to provide comments and additional information
in response to the September NODA publication.
This final rule responds to the issues raised by commenters for the
March 2014 NOPR and the September 2014 NODA.\18\
---------------------------------------------------------------------------
\18\ A parenthetical reference at the end of a quotation or
paraphrase provides the location of the item in the public record.
---------------------------------------------------------------------------
III. General Discussion
A. Equipment Classes and Scope of Coverage
When evaluating and establishing energy conservation standards, DOE
divides covered equipment into equipment classes by the type of energy
use or by capacity or other performance-related features that justifies
a different standard. In making a determination whether a performance-
related feature justifies a different standard, DOE must consider such
factors as the utility to the consumer of the feature and other factors
DOE determines are appropriate. (42 U.S.C. 6295(q)) and 6316(a))
Throughout this rulemaking, DOE's analysis has been based on a set
of equipment classes derived from the existing DOE batch commercial ice
maker standards, effective as of January 1, 2010 (42 U.S.C. 6313(d)(1))
and review of the existing ice maker market. These equipment classes
form the basis of analysis and public comments. In this final rule,
equipment class names are frequently abbreviated. These abbreviations
are shown on Table III.1.
Table III.1--List of Equipment Class Abbreviations
----------------------------------------------------------------------------------------------------------------
Harvest rate lb ice/24
Abbreviation Equipment type Condenser type hours Ice type
----------------------------------------------------------------------------------------------------------------
IMH-W-Small-B............... Ice-Making Head..... Water.......... <500 Batch.
IMH-W-Med-B................. Ice-Making Head..... Water.......... >=500 and <1,436 Batch.
[[Page 4656]]
IMH-W-Large-B *............. Ice-Making Head..... Water.......... >=1,436 and <4,000 Batch.
IMH-A-Small-B............... Ice-Making Head..... Air............ <450 Batch.
IMH-A-Large-B * ** (also IMH- Ice-Making Head..... Air............ >=450 and <875 Batch.
A-Large-B-1).
IMH-A-Extended-B * ** (also Ice-Making Head..... Air............ >=875 and <4,000 Batch.
IMH-A-Large-B-2).
RCU-NRC-Small-B............. Remote Condensing, Air............ <1,000 Batch.
not Remote
Compressor.
RCU-NRC-Large-B *........... Remote Condensing, Air............ >=1,000 and <4,000 Batch.
not Remote
Compressor.
RCU-RC-Small-B.............. Remote Condensing, Air............ <934 Batch.
and Remote
Compressor.
RCU-RC-Large-B.............. Remote Condensing, Air............ >=934 and <4,000 Batch.
and Remote
Compressor.
SCU-W-Small-B............... Self-Contained Unit. Water.......... <200 Batch.
SCU-W-Large-B............... Self-Contained Unit. Water.......... >=200 and <4,000 Batch.
SCU-A-Small-B............... Self-Contained Unit. Air............ <175 Batch.
SCU-A-Large-B............... Self-Contained Unit. Air............ >=175 and <4,000 Batch.
IMH-W-Small-C............... Ice-Making Head..... Water.......... <900 Continuous.
IMH-W-Large-C............... Ice-Making Head..... Water.......... >=900 and <4,000 Continuous.
IMH-A-Small-C............... Ice-Making Head..... Air............ <700 Continuous.
IMH-A-Large-C............... Ice-Making Head..... Air............ >=700 and <4,000 Continuous.
RCU-NRC-Small-C............. Remote Condensing, Air............ <850 Continuous.
not Remote
Compressor.
RCU-NRC-Large-C............. Remote Condensing, Air............ >=850 and <4,000 Continuous.
not Remote
Compressor.
RCU-RC-Small-C.............. Remote Condensing, Air............ <850 Continuous.
and Remote
Compressor.
RCU-RC-Large-C.............. Remote Condensing, Air............ >=850 and <4,000 Continuous.
and Remote
Compressor.
SCU-W-Small-C............... Self-Contained Unit. Water.......... <900 Continuous.
SCU-W-Large-C............... Self-Contained Unit. Water.......... >=900 and <4,000 Continuous.
SCU-A-Small-C............... Self-Contained Unit. Air............ <700 Continuous.
SCU-A-Large-C............... Self-Contained Unit. Air............ >=700 and <4,000 Continuous.
----------------------------------------------------------------------------------------------------------------
* IMH-W-Large-B, IMH-A-Large-B, and RCU-NRC-Large-B were modeled in some final analyses as two different units,
one at the lower end of the harvest range and one near the high end of the harvest range in which a
significant number of units are available. In the LCC and NIA models, the low and high harvest rate models
were denoted simply as B-1 and B-2. Where appropriate, the analyses add or perform weighted averages of the
two typical sizes to present class level results.
** IMH-A-Large-B was established by EPACT-2005 as a class between 450 and 2,500 lb ice/24 hours. In this rule,
DOE analyzed this class as two ranges, which could either be considered ``Large'' and ``Very Large'' or
``Medium'' and ``Large.'' In the LCC and NIA modeling, this was denoted as B-1 and B-2.
B. Test Procedure
On December 8, 2006, DOE published a final rule in which it
incorporated by reference Air-Conditioning and Refrigeration Institute
(ARI) Standard 810-2003, ``Performance Rating of Automatic Commercial
Ice Makers,'' with a revised method for calculating energy use, as the
DOE test procedure for this equipment. 71 FR 71340. The DOE rule
included a clarification to the energy use rate equation to specify
that the energy use be calculated using the entire mass of ice produced
during the testing period, normalized to 100 lb ice produced. Id. at
71350. ARI Standard 810-2003 requires performance tests to be conducted
according to the American National Standards Institute (ANSI)/American
Society of Heating, Refrigerating, and Air-Conditioning Engineers
(ASHRAE) Standard 29-1988 (reaffirmed 2005), ``Method of Testing
Automatic Ice Makers.'' The DOE test procedure also incorporated by
reference the ANSI/ASHRAE Standard 29-1988 (Reaffirmed 2005) as the
method of test.
On January 11, 2012, DOE published a test procedure final rule
(2012 test procedure final rule) in which it adopted several amendments
to the DOE test procedure. 77 FR 1591. The 2012 test procedure final
rule included an amendment to incorporate by reference Air-
Conditioning, Heating, and Refrigeration Institute (AHRI) Standard 810-
2007 with Addendum 1 \19\ as the DOE test procedure for this equipment.
AHRI Standard 810-2007 with Addendum 1 amends ARI Standard 810-2003 to
expand the capacity range of covered equipment, provide definitions and
specific test procedures for batch and continuous type ice makers,
provide a definition for ice hardness factor, and incorporate several
new or amended definitions regarding how water consumption and capacity
are measured, particularly for continuous type machines. 77 FR at 1592-
93. The 2012 test procedure final rule also included an amendment to
incorporate by reference the updated ANSI/ASHRAE Standard 29-2009. Id.
at 1613.
---------------------------------------------------------------------------
\19\ In March 2011, AHRI published Addendum 1 to Standard 810-
2007, which revised the definition of ``potable water use rate'' and
added new definitions for ``purge or dump water'' and ``harvest
water.''
---------------------------------------------------------------------------
In addition, the 2012 test procedure final rule included several
amendments designed to address issues that were not accounted for by
the previous DOE test procedure. 77 FR at 1593 (Jan. 11, 2012). First,
DOE expanded the scope of the test procedure to include equipment with
capacities from 50 to 4,000 lb ice/24 hours.\20\ DOE also adopted
[[Page 4657]]
amendments to provide test methods for continuous type ice makers and
to standardize the measurement of energy and water use for continuous
type ice makers with respect to ice hardness. In the 2012 test
procedure final rule, DOE also clarified the test method and reporting
requirements for remote condensing automatic commercial ice makers
designed for connection to remote compressor racks. Finally, the 2012
test procedure final rule discontinued the use of the clarified energy
use rate calculation and instead required energy-use to be calculated
per 100 lb ice as specified in ANSI/ASHRAE Standard 29-2009. The 2012
test procedure final rule became effective on February 10, 2012, and
the changes set forth in the final rule became mandatory for equipment
testing starting January 7, 2013. 77 FR 1591.
---------------------------------------------------------------------------
\20\ EPCA defines automatic commercial ice maker under 42 U.S.C.
6311(19) as ``a factory-made assembly (not necessarily shipped in 1
package) that--(A) Consists of a condensing unit and ice-making
section operating as an integrated unit, with means for making and
harvesting ice; and (B) May include means for storing ice,
dispensing ice, or storing and dispensing ice.'' 42 U.S.C.
6313(d)(1) explicitly sets standards for cube type ice makers up to
2,500 lb ice/24 hours, however, 6313(d)(2) establishes authority to
set standards for other equipment types, such as those with
capacities greater than 2,500 lb ice/24 hours, provided the
equipment types meet the EPCA definition of an automatic commercial
ice maker.
---------------------------------------------------------------------------
The test procedure amendments established in the 2012 test
procedure final rule are required to be used in conjunction with new
and amended standards promulgated as a result of this standards
rulemaking. Thus, manufacturers must use the amended test procedure to
demonstrate compliance with the new and amended energy conservation
standards on the compliance date of any energy conservation standards
established as part of this rulemaking. 77 FR at 1593 (Jan. 11, 2012).
C. Technological Feasibility
1. General
In each energy conservation 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 were
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, DOE 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 equipment 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 automatic commercial ice makers. 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
automatic commercial ice makers, it determines the maximum improvement
in energy efficiency that is technologically feasible for such
equipment. (See 42 U.S.C. 6295(p)(1) and 6313(d)(4)) Accordingly, DOE
determined the maximum technologically feasible (``max-tech'')
improvements in energy efficiency for automatic commercial ice makers
in the engineering analysis using the design options 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
automatic commercial ice makers or working prototypes. DOE notes that
it reevaluated the efficiency levels, including the max-tech levels,
when it updated its results for the NODA and final rule. See chapter 5
of the final rule TSD for the results of the analyses and a list of
technologies included in max-tech equipment. Table III.2 and Table
III.3 shows the max-tech levels determined in the engineering analysis
for batch and continuous type automatic commercial ice makers,
respectively.
Table III.2--Final Rule ``Max-Tech'' Levels for Batch Automatic
Commercial Ice Makers
------------------------------------------------------------------------
Equipment type * Energy use lower than baseline
------------------------------------------------------------------------
IMH-W-Small-B........................ 23.9%, 21.5% (22-inch wide).
IMH-W-Med-B.......................... 18.1%.
IMH-W-Large-B........................ 8.3% (at 1,500 lb ice/24 hours),
7.4% (at 2,600 lb ice/24 hours).
IMH-A-Small-B........................ 25.5%, 18.1% (22-inch wide).
IMH-A-Large-B........................ 23.4% (at 800 lb ice/24 hours),
15.8% (at 590 lb ice/24 hours,
22-inch wide), 11.8% (at 1,500
lb ice/24 hours).
RCU-Small-B.......................... Not directly analyzed.
RCU-Large-B.......................... 17.3% (at 1,500 lb ice/24 hours),
13.9% (at 2,400 lb ice/24
hours).
SCU-W-Small-B........................ Not directly analyzed.
SCU-W-Large-B........................ 29.8%.
SCU-A-Small-B........................ 32.7%.
SCU-A-Large-B........................ 29.1%.
------------------------------------------------------------------------
* IMH is ice-making head; RCU is remote condensing unit; SCU is self-
contained unit; W is water-cooled; A is air-cooled; Small refers to
the lowest harvest category; Med refers to the Medium category (water-
cooled IMH only); Large refers to the large size category; RCU units
were modeled as one with line losses used to distinguish standards.
Note: For equipment classes that were not analyzed, DOE did not develop
specific cost-efficiency curves but attributed the curve (and maximum
technology point) from one of the analyzed equipment classes.
[[Page 4658]]
Table III.3--Final Rule ``Max-Tech'' Levels for Continuous Automatic
Commercial Ice Makers
------------------------------------------------------------------------
Equipment type * Energy use lower than baseline
------------------------------------------------------------------------
IMH-W-Small-C.......................... Not directly analyzed.
IMH-W-Large-C.......................... Not directly analyzed.
IMH-A-Small-C.......................... 25.7%.
IMH-A-Large-C.......................... 23.3% lb ice.
RCU-Small-C............................ 26.6%.
RCU-Large-C............................ Not directly analyzed.
SCU-W-Small-C.......................... Not directly analyzed.
SCU-W-Large-C *........................ No units available.
SCU-A-Small-C.......................... 26.6%.
SCU-A-Large-C *........................ No units available.
------------------------------------------------------------------------
* DOE's investigation of equipment on the market revealed that there are
no existing products in either of these two equipment classes (as
defined in this final rule).
Note: For equipment classes that were not analyzed, DOE did not develop
specific cost-efficiency curves but attributed the curve (and maximum
technology point) from one of the analyzed equipment classes.
D. Energy Savings
1. Determination of Savings
For each TSL, DOE projected energy savings from automatic
commercial ice makers purchased during a 30-year period that begins in
the year of compliance with amended standards (2018-2047). The savings
are measured over the entire lifetime of products purchased in the 30-
year period. DOE used the NIA model to estimate the national energy
savings (NES) for equipment purchased over the period 2018-2047. 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 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 rule and in chapter 10 of the final rule TSD.
DOE used its NIA spreadsheet model to estimate energy savings from
amended standards for automatic commercial ice makers. The NIA
spreadsheet model (described in section IV.H of this preamble)
calculates energy savings in site energy, which is the energy directly
consumed by products at the locations where they are used.
Because automatic commercial ice makers use water, water savings
were quantified in the same way as energy savings.
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) AEO.
DOE also has begun to estimate full-fuel-cycle energy savings. 76
FR 51282 (August 18, 2011), as amended by 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 approach is based on calculations of an FFC multiplier
for each of the fuels used by automatic commercial ice makers.
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) and
6313(d)(4)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.'' The energy savings for all
of the TSLs considered in this rulemaking (presented in section
V.B.3.a) are nontrivial, and, therefore, DOE considers them
``significant'' within the meaning of section 325 of EPCA.
E. Economic Justification
1. Specific Criteria
As discussed in section III.E.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
6313(d)(4) 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 IV and V of this rule.
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.
[[Page 4659]]
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 (Life Cycle
Costs)
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 6313(d)(4) 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. DOE's LCC and PBP analysis is discussed in
further detail in section IV.G.
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 6313(d)(4)) 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 IV.H of this preamble 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 6313(d)(4)) 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 preamble 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). DOE transmitted a copy of its
proposed rule to the Attorney General with a request that the
Department of Justice (DOJ) provide its determination on this issue.
DOJ's response, that the proposed energy conservation standards are
unlikely to have a significant adverse impact on competition, is
reprinted at the end of this rule.
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
6313(d)(4))) 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, as discussed in section IV.M.
Amended standards also are likely to result in environmental
benefits in the form of reduced emissions of air pollutants and
greenhouse gases associated with energy production and use. DOE
conducts an emissions analysis to estimate how standards may affect
these emissions, as discussed in section IV.K. DOE reports the
emissions impacts from each TSL it considered, in section V.B.6 of this
rule. DOE also estimates the economic value of emissions reductions
resulting from the considered TSLs, as discussed in section IV.L.
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 6313(d)(4)) There were no other factors considered for this final
rule.
2. Rebuttable Presumption
As set forth in 42 U.S.C. 6295(o)(2)(B)(iii) and 6313(d)(4), 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 6313(d)(4). The results of these analyses serve as
the basis for DOE to evaluate the economic justification for a
potential standard level (thereby supporting or rebutting the results
of any preliminary determination of economic justification). The
rebuttable presumption payback calculation is discussed in section
IV.G.12 of this rule and chapter 8 of the final rule TSD.
IV. Methodology and Discussion of Comments
A. General Rulemaking Issues
During the April 2014 and June 2014 public meetings, and in
subsequent written comments in response to the NOPR and NODA,
stakeholders provided input regarding general issues
[[Page 4660]]
pertinent to the rulemaking, such as issues regarding proposed standard
levels and the compliance date. These issues are discussed in this
section.
1. Proposed Standard Levels
In response to the level proposed in the NOPR (TSL 3), Manitowoc
commented that there are significant deficiencies in the models and
cost assumptions that were used to arrive at the proposed efficiency
levels and that, consequently, the selected levels are not optimal from
a life-cycle cost standpoint. (Manitowoc, Public Meeting Transcript,
No. 70 at p. 24-26) Follett commented that DOE is recommending
efficiency levels that are neither technologically nor economically
justified. (Follett, No. 84 at p. 8)
Hoshizaki and Scotsman both recommended DOE select NOPR TSL 1
(Hoshizaki, No. 86 at p. 5-6; Scotsman, Public Meeting Transcript, No.
70 Public Meeting Transcript, at p. 44-46) Scotsman stated that doing
so effective 2020 is technologically feasible, economically justified,
consistent with past regulations, and will save a significant amount of
energy. (Scotsman, Public Meeting Transcript, Public Meeting
Transcript, No. 70 at p. 44-46) Although the following comment
regarding choosing a standard level mentioned ``ELs,'' efficiency
levels, DOE believes Hoshizaki intended that this comment refer to
``TSLs,'' trial standard levels levels and DOE has interpreted the
comment accordingly. Hoshizaki stated that NOPR EL1 (interpreted as
TSL1) would garner similar savings as NOPR EL3 (interpreted as TSL3)
while reducing the burden on the industry to meet such stringent
standards in such a short amount of time. (Hoshizaki, No. 86 at p. 5-6)
Scotsman stated that they have not identified technology
combinations that are suitable for achieving any efficiency level
beyond NOPR TSL 1. (Scotsman, No. 85 at p. 8b) Scotsman added that they
do not have data indicating that their machines will be able to meet
NOPR TSL 3 using the design options under consideration. (Scotsman, No.
85 at p. 7b)
Pacific Gas and Electric Company (PG&E) and San Diego Gas and
Electric Company (SDG&E), commenting jointly, and a group including the
Appliance Standards Awareness Project (ASAP), the American Council for
an Energy-Efficient Economy (ACEEE), the Alliance to Save Energy,
Natural Resources Defense Council (NRDC), and the Northwest Power and
Conservation Council (NPCC) (Joint Commenters) both recommended that
DOE adopt a higher TSL for ACIMs. (Joint Commenters, No. 87 at p. 1-2;
PG&E and SDG&E, No. 89 at p. 1-2) ASAP noted that based on their review
of the certification database, there are products existing on the
market today that meet the proposed standard levels. (ASAP, Public
Meeting Transcript, No. 70 at p. 50-52) Joint Commenters urged DOE to
adopt TSL 5 for batch type equipment and TSL 4 for continuous type
equipment. (Joint Commenters, No. 87 at p. 1-2) PG&E and SDG&E
recommended that DOE adopt the maximum cost-effective TSL for each
equipment class noting that DOE could adopt TSLs higher than TSL 3
while maintaining a net benefit to U.S. consumers. (PG&E and SDG&E, No.
89 at p. 1-2)
Although the NODA only provided data regarding the updated analysis
and did not propose a standard level, several interested parties
provided comment regarding the appropriateness of setting the ACIM
energy conservation standard at a given NODA TSL.
In their written comment, Manitowoc stated that the NODA analysis
was an improvement over the original NOPR analysis. Manitowoc stated
that they did not believe the standard should be set at a single TSL
level for all equipment classes and suggested a different TSL level for
each equipment class. Although the following comments regarding
specific classes mention ``ELs,'' efficiency levels, DOE believes
Manitowoc intended that these comments apply to ``TSLs,'' trial
standard levels and DOE has interpreted the comment accordingly. For
IMH-A batch equipment with package widths less than 48 inches (the 48-
inch corresponds to the 1,500 lb ice/24 hour representative capacity),
Manitowoc supported an efficiency level no higher than EL 3
(interpreted as TSL3). Manitowoc suggested that DOE adopt a standard
that would be limited to 5% improvement in efficiency over baseline for
the IMH-A-B2 (48-inch wide) equipment. DOE believes Manitowoc's third
point in the comments, citing the ``IMH-small'' class refers to IMH-W-
Small-B, for which Manitowoc indicated that the standard level should
be set no higher than EL 3 (interpreted as TSL3). Manitowoc also
suggested DOE adopt standards with efficiency gains no greater than
4.7% and 3.7% efficiency gains, respectfully, for the MH-W-Large-B1
(1,500 lb ice/24 hours representative capacity) and IMH-W-Large-B2
(2,600 lb ice/24 hours representative capacity) equipment. Manitowoc
suggested that DOE adopt EL 2 (interpreted as TSL2) for the RCU-NRC-B1
(1,500 lb ice/24 hours representative capacity) and RCU-NRC-B2 (2,400
lb ice/24 hours representative capacity) equipment, as well as the SCU-
A-Small and SCU-A-Large equipment classes and for 22-inch IMH
equipment. For the RCU-NRC-Large-B1, Manitowoc indicated that the 20
percent improvement in compressor energy efficiency ratio (EER) used in
DOE's analysis for this equipment is unrealistic. For the RCU-NRC-
Large-B2, Manitowoc mentioned that the increase in condenser size
considered in the DOE analysis would present significant issues with
refrigerant charge management. For the SCU-A-Small-B class, Manitowoc
indicated that the 40% improvement in compressor EER considered in
DOE's analysis is not likely to be achieved and adding a tube row to
the condenser may not be possible. For the SCU-A-Large-B class,
Manitowoc similarly commented that the compressor EER improvement and
condenser size increases considered in DOE's analyses are unrealistic.
For the 22-inch IMH equipment, Manitowoc indicated that some of the
considered design options (increase in evaporator size and/or a drain
water heat exchanger) would not be feasible due to the compact nature
of these units. Manitowoc suggested that DOE select EL 3 (interpreted
as TSL3) for IMH-A-B small and large-1 batch equipment classes (not
including 48'' models), as well as the IMH-Small equipment class and
all other equipment classes not specifically mentioned. (Manitowoc, No.
126 at p. 1-2)
Ice-O-Matic requested that DOE select NODA TSL 3. (Ice-O-Matic, No.
121 at p. 1) Scotsman suggested that DOE select NODA TSL 2. (Scotsman,
No. 125 at p. 3) Hoshizaki suggested that DOE select NODA TSL 2 for
batch units. (Hoshizaki, No. 124 at p. 3)
ASAP encouraged DOE to adopt NODA TSL 5 for batch type remote
condensing equipment and NODA TSL 4 for all other equipment classes,
noting that these choices would be cost effective. (ASAP, No. 127 at p.
1) CA IOU suggested that DOE adopt the NODA TSL for each equipment
class that saves the most energy and has a positive NPV. CA IOU noted
that DOE could adopt a level more stringent than NODA TSL 3 for all
equipment classes while maintaining a net benefit to US consumers. (CA
IOU, No. 129 at p. 1)
DOE understands the concerns voiced by stakeholders regarding their
future ability to meet standard levels as proposed in the NOPR. DOE
must adhere to the EPCA guidelines for determining the appropriate
level of standards that were outlined in sections III.E.1. In this
Final Rule, DOE selected the TSL that best meets the EPCA
[[Page 4661]]
requirements for establishing that a standard is economically
justified. (42 U.S.C. 6295(o)(2)(B)(i) and 6313(d)(4)). Since the
publication of the NOPR, DOE has revised and updated its analysis based
on stakeholders comments received at the NOPR public meeting, comments
made during the June 19 meeting, and in written comments received in
response to the NOPR and NODA. These updates included changes in its
approach to calculating the energy use associated with groups of design
options, changes in inputs for calculations of energy use and equipment
manufacturing cost, and consideration of space-constrained
applications. After applying these changes to the analyses, the
efficiency levels that DOE determined to be cost effective changed
considerably. The NODA comments described above reveal partial industry
support for the standard levels chosen by DOE in the final rule.
DOE notes that much of the commentary regarding the selection of
efficiency levels for the standard are based on more detailed comments
regarding the feasibility of design options, the savings that these
design options can achieve, and their costs. DOE response regarding
many of these comments is provided in section IV.D.3.
2. Compliance Date
In the March 2014 NOPR analysis, DOE assumed a 3-year period for
manufacturers to prepare for compliance. DOE requested comments as to
whether a January 1, 2018 effective date provides an inadequate period
for compliance and what economic impacts would be mitigated by a later
effective date.
Following the publication of the NOPR, several manufacturers and
NAFEM expressed an expected inability to meet the proposed standard
levels within the three year compliance period. (Manitowoc, No. 92 at
p. 2-3, Scotsman, No. 85 at p. 2b, Hoshizaki, No. 86 at p. 2, NAFEM,
No. 82 at pg. 2-3) Manitowoc and Hoshizaki both commented that a 5-year
compliance period would be necessary for this rulemaking. (Manitowoc,
No. 92 at p. 2-3; Hoshizaki, No. 86 at p. 2) Scotsman commented that an
8-year compliance period would be more feasible for the technology
specification, R&D investment, performance evaluation, reliability
evaluation, and manufacturing required for product redesign. Scotsman
added that the negative economic impacts of the rule would be mitigated
by a later effective date. (Scotsman, No. 85 at p. 2b-3)
AHRI, Manitowoc, and NAFEM commented that a three year compliance
period is not adequate for this rulemaking and that DOE should extend
the compliance period to allow time for manufacturers to obtain new
components. (AHRI, Public Meeting Transcript, No. 70 at p. 18; NAFEM,
No. 82 at pg. 2-3; Manitowoc, No. 92 at p. 2 -3) NAFEM and AHRI
commented that DOE should extend the compliance period by two years.
(AHRI, No. 93 at p. 2; NAFEM, No. 82 at pg. 2-3) AHRI and Manitowoc
noted that there is a potential for Environmental Protection Agency
(EPA) Significant New Alternatives Policy (SNAP) regulations to force
further product redesign and extending the compliance period would
provide relief should refrigerant regulatory issues not be finalized in
time.\21\ (AHRI, No. 93 at p. 2; Manitowoc, No. 126 at p. 3) Emerson
urged DOE to wait until after EPA finalizes its decision on
refrigerants before starting the 3-year period given to manufacturers
to meet the new standards so manufacturers can re-design for both
energy efficiency and low global warming potential (GWP) refrigerants
in one design cycle. (Emerson, No. 122, p. 1)
---------------------------------------------------------------------------
\21\ Details regarding EPA SNAP regulations are discussed in
section IV.A.4.
---------------------------------------------------------------------------
NAFEM stated that manufacturers will only be able to achieve energy
efficiency gains up to the level of NOPR TSL 1 within the five-year
compliance timeline and that the current proposal will result in the
unavailability of ice makers with the characteristics, sizes,
capacities, and volumes that are generally available in the U.S.
(NAFEM, No. 82 at p. 2) NAFEM's comment mentions a five-year compliance
timeline, although DOE proposed a three-year timeline in the NOPR. 79
FR at 14949 (March 17, 2014).
Another concern amongst manufacturers was the belief that the
proposed standard levels were based on technology that was currently
not available. At the April 2014 NOPR public meeting, Ice-O-Matic
commented that they did not believe that the technology exists to
achieve the proposed standards in the allotted time frame. (Ice-O-
Matic, Public Meeting Transcript, No. 70 at p. 33)
Joint Commenters noted that, in balancing the stringency of the
standards with the compliance dates and manufacturer impacts, they
believe that the stringency of the standard is more important for
national energy savings than the compliance dates. (Joint Commenters,
No. 87 at p. 4)
In response to the assertion that DOE's standard levels were not
based upon currently available technologies, DOE maintains that all
technology options and equipment configurations included in its NOPR
reflect technologies currently in use in automatic commercial ice
makers. For example, DOE considered use only of compressors that are
currently commercially available and which manufacturers have indicated
are acceptable for use in ice makers in confidential discussions with
DOE's contractor. Moreover, the proposed standard levels are exceeded
by the ratings of some products that are currently commercially
available. However, the standard levels established in this final rule
are significantly less stringent than the standard levels proposed in
the NOPR, and a greater percentage of currently-available products
already meet these efficiency levels. DOE expects that this reduction
in stringency and the reduced number of products requiring redesign
means that the time required for manufacturers to achieve compliance
would be reduced.
In response to the NODA, Scotsman, Manitowoc, NAFEM, and Ice-O-
Matic all requested that the effective date for the new efficiency
standard for ACIMs be extended to 5 years after the publication of the
final rule. (Scotsman, No. 125 at p. 3; Manitowoc, No. 126 at p. 3;
NAFEM, No. 123 at p. 2; Ice-O-Matic, No. 121 at p. 1) NAFEM stated that
even with the more realistic assumptions presented in the NODA,
manufactures still require an extended timeline to obtain new
components needed to meet higher efficiency levels.
In response to the request that DOE extend the compliance date
period for automatic commercial ice makers beyond the 3 years specified
by the NOPR, DOE notes that EPCA requires that the 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(d)(3)(C))
DOE believes that the modifications to the analysis, relative to the
NOPR, it announced in the NODA and made to the final rule will reduce
the burden on manufacturers to meet requirements established by this
rule, because the standard levels are less stringent and fewer ice
maker models will require redesign to meet the new standard. Therefore,
DOE has determined that the
[[Page 4662]]
3-year period is adequate and is not extending the compliance date for
ACIMs.
3. Negotiated Rulemaking
Stakeholders AHRI, Hoshizaki, Manitowoc, and the North American
Association of Food Equipment Manufactures (NAFEM) both suggested that
DOE use a negotiated rulemaking to develop ACIM standards. (AHRI,
Public Meeting Transcript, No. 70 at p. 15-16; AHRI, Public Meeting
Transcript, No. 128 at p. 1; Hoshizaki, Public Meeting Transcript, No.
70 at p. 38-39; Hoshizaki, Public Meeting Transcript, No. 124 at p. 3;
Manitowoc, Public Meeting Transcript, No. 70 at p. 344-345; NAFEM, No.
82 at p. 2; NAFEM, No. 123 at p. 1) NAFEM stated that a negotiated
rulemaking would ensure the level of enhanced dialogue needed for DOE
to effectively assess the rule's impact on end-users. (NAFEM, No. 82 at
p. 2) AHRI stated that there are significant issues in the analysis,
that the current direction of this rulemaking will place significant
burden on the industry, and that the completion of this rulemaking
under the current process will be difficult, expensive, and not timely.
(AHRI, Public Meeting Transcript, No. 70 at p. 15-16)
In response to the manufacturers' suggestion to use a negotiated
rulemaking to develop ACIM standards, DOE notes that this issue was
raised before the Appliance Standards and Rulemaking Federal Advisory
Committee (ASRAC) on June 6, 2014 and the ASRAC membership declined to
establish a working group to negotiate a final rule for ACIM energy
conservation standards. Several ASRAC members voiced concern of using
ASRAC at such a late stage in the rulemaking when it would be more
appropriate to raise these concerns in the normal public comment
process. (See public transcript at: http://www.regulations.gov/#!documentDetail;D=EERE-013-BT-NOC-0005-0025)
4. Refrigerant Regulation
Manitowoc noted that the EPA has proposed delisting R-404A, the
refrigerant used in nearly all currently available ice makers, for
commercial refrigeration applications. Manitowoc stated that while
commercial ice makers are not within the current scope for the SNAP
NOPR, it seems likely that ice makers could be affected by a subsequent
rulemaking. (Manitowoc, No. 126 at p. 3) Several interested parties,
including AHRI, NAFEM, Hoshizaki, Manitowoc, and Howe requested that
DOE consider the hardships associated with refrigerant choice
uncertainty caused by potential future EPA SNAP regulations in the
analysis (AHRI, Public Meeting Transcript, No. 70 at p. 16-18; NAFEM,
No. 82 at p. 7; Hoshizaki, No. 86 at p. 6-7; Howe, No. 88 at p. 2-3;
Manitowoc, Public Meeting Transcript, No. 70 at p. 286-287; Manitowoc,
No. 126 at p. 3) Manitowoc suggested that DOE do a sensitivity analysis
that examines what would happen to life-cycle costs, etc. if
manufacturers had to re-engineer twice. (Manitowoc, Public Meeting
Transcript, No. 70 at p. 286-287)
AHRI commented that the potential for SNAP rulemakings to require a
refrigerant change will necessitate major redesigns just to maintain
current efficiency levels. (AHRI, Public Meeting Transcript, No. 70 at
p. 16-18) Manitowoc and Hoshizaki also expressed concern regarding the
redesign work that would be needed if the EPA were to ban R-404A.
(Manitowoc, Public Meeting Transcript, No. 70 at p. 286-287; Hoshizaki,
No. 86 at p. 6-7) AHRI added that the burden of the potential EPA SNAP
rulemaking must be taken into account in the engineering and life-cycle
cost analyses. AHRI requested that DOE put a hold on the ACIM
rulemaking until after the next SNAP rollout is completed. (AHRI,
Public Meeting Transcript, No. 70 at p. 16-18)
AHRI also commented that the DOE should make an effort to look at
refrigerants because its cost-benefit analysis is based solely on a
refrigerant that may not exist three years from now. (AHRI, Public
Meeting Transcript, No. 70 at p. 284-285) AHRI noted that, because low-
GWP refrigerants also have lower heat transfer capability than R-404A,
coil sizes may need to further increase in order to maintain the
performance with other refrigerants, which could be infeasible if the
proposed standards are already calling for an increased coil size for
units using R-404A. (AHRI, Public Meeting Transcript, No. 70 at p. 293-
294)
Scotsman and Hoshizaki suggested that DOE and EPA collaborate so
that both the energy conservation rulemaking and the SNAP rulemaking
don't promulgate standards that are unduly burdensome. (Scotsman, No.
125 at p. 2; Hoshizaki, No. 86 at p. 6-7)
Manitowoc stated that even if the EPA takes no action on ice makers
in the next 3 years, the component supplier industry (compressors,
expansion valves, heat exchangers, etc.) will focus its efforts on
supporting the transition to hydrocarbons, HFO blends, and other
acceptable refrigerants for the refrigeration industry as the volume of
display case, reach-in, walk-in, and vending is significantly larger
than that for commercial ice machines. (Manitowoc, No. 126 at p. 3)
ASAP commented that the way that DOE is dealing with the
refrigerants issue is consistent with how it has dealt with it in all
other rulemakings. (ASAP, Public Meeting Transcript, No. 70 at p. 52-
53) Joint Commenters commented that DOE's approach of conducting their
analysis based on the most commonly-used refrigerants today is
appropriate and that it does not appear that a phase-out of R-404A
would negatively impact ice maker efficiency, given the fact that
propane, DR-33, and N-40 all have lower GWP and similar efficiency
compared to R-404A. (Joint Commenters, No. 87 at p. 4) NEEA expressed
their support for DOE's current refrigerant-neutral position. (NEEA,
No. 91 at p. 2)
In response to these comments, DOE notes that the EPA SNAP NOPR
mentioned by Manitowoc (see 79 FR 46149 (Aug. 6, 2014)) did not propose
to delist the use of R-404A for ACIMs. EPA proposed to delist R-404A
for certain retail food refrigeration applications including condensing
units. However, ACIMs do not qualify as retail food refrigeration
equipment and therefore will not be subject to SNAP regulations that
pertain to retail refrigeration applications. Further, alternate
refrigerants have not been proposed by the SNAP program for use in
ACIMs.\22\ DOE recognizes that the engineering analysis is based on the
use of R-404A, the most commonly used refrigerant in ACIMs, and that a
restriction of R-404A in ACIMs would have impacts on the design options
selected in the engineering analysis. However, DOE cannot speculate on
the outcome of a rulemaking in progress and can only consider in its
rulemakings rules that are currently in effect. Therefore, DOE has not
included possible outcomes of a potential EPA SNAP rulemaking in the
engineering or LCC analysis. This position is consistent with past DOE
rulings, such as in the 2011 direct final rule for room air
conditioners. 76 FR 22454 (April 21, 2011). DOE is aware of stakeholder
concerns that EPA may broaden the uses for which R-404A is phased out
at some point in the future. DOE is confident
[[Page 4663]]
that there will be an adequate supply of R-404A for compliance with the
standards being finalized in today's rule, however, consistent with EO
13563, Improving Regulation and Regulatory Review, DOE will prioritize
its review of the potential effects of any future phase-out of the
refrigerant R-404A (should there be one) on the efficiency standards
set by this rulemaking.
---------------------------------------------------------------------------
\22\ EPA on July 9, 2014 proposed new alternative refrigerants
for several applications, but not ACIMs. 79 FR 38811. EPA also, on
August 6, 2014, proposed delisting of refrigerants for several
applications, but not ACIMs. 79 FR 46126 (Aug. 6, 2014). The notice
did indicate that EPA is considering whether to delist use of R-404A
for ACIMs, but did not propose such action. 79 FR at 46149.
---------------------------------------------------------------------------
DOE does not have reason to believe that EPA's SNAP proposal to
delist R-404A for commercial refrigeration applications will have a
deleterious impact on the availability of components for ACIMs.
Although the component supplier industry may focus efforts on
supporting the transition to alternative refrigerants for the
commercial refrigeration industry as suggested by Manitowoc, the design
options included in this final rule are based on existing component
technology and do not assume an advancement in such components.
Therefore, DOE believes that those components currently on the market
will remain available for use by ACIM manufactures. DOE wishes to
clarify that it will continue to consider ACIM models meeting the
definition of automatic commercial ice makers 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.
DOE investigated ice makers which it believes use refrigerants
other than R-404A, specifically refrigerants HFC-134a and R-410A. While
these refrigerants are also HFCs, their GWP is significantly lower than
that of R-404A,\23\ and for this reason may be less likely to be
delisted for use in ice makers under future SNAP rule revisions. Based
on the available information, DOE concludes that compliance challenges
for these alternative refrigerants are not greater than for R-404A.
Table IV.1 below presents performance data of alternative-refrigerant
ice makers and compares their energy use to the energy use associated
with TSL3 for their equipment class and capacity. Thirteen of these 31
ice makers meet the TSL3 level.
---------------------------------------------------------------------------
\23\ See http://www.epa.gov/ozone/snap/subsgwps.html.
Table IV.1--Ice Makers Using Alternative Refrigerants
--------------------------------------------------------------------------------------------------------------------------------------------------------
Harvest Energy use TSL3 Energy
Refrigerant Equipment class capacity rate Energy use percent below use (kWh/100
(lb ice/24 hr) (kWh/100 lb) baseline lb)
--------------------------------------------------------------------------------------------------------------------------------------------------------
HFC-134a....................................... SCU-A-Small-B.......................... 121 8.4 31.8 9.4
R-410A......................................... IMH-W-Small-B *........................ 302 6.1 0.6 5.2
R-410A......................................... IMH-W-Small-B.......................... 305 5.2 15.1 5.2
R-410A......................................... IMH-W-Small-B.......................... 310 5.2 14.7 5.2
R-410A......................................... IMH-W-Small-B.......................... 428 4.7 13.7 5.0
R-410A......................................... IMH-W-Small-B.......................... 430 4.7 13.5 5.0
R-410A......................................... IMH-W-Small-B.......................... 494 5 1.6 4.9
R-410A......................................... IMH-W-Med-B............................ 510 5 0.4 4.8
R-410A......................................... IMH-W-Med-B *.......................... 730 4.75 0.6 4.4
R-410A......................................... IMH-W-Med-B *.......................... 1,200 4.1 3.8 4.1
R-410A......................................... IMH-A-Small-B.......................... 222 7.5 10.2 7.3
R-410A......................................... IMH-A-Small-B.......................... 300 6.2 19.3 6.3
R-410A......................................... IMH-A-Small-B.......................... 305 6.8 11.0 6.3
R-410A......................................... IMH-A-Small-B.......................... 388 6 13.3 6.1
R-410A......................................... IMH-A-Large-B.......................... 485 6 5.6 5.8
R-410A......................................... IMH-A-Large-B.......................... 714 6.1 0.1 5.3
R-410A......................................... IMH-A-Large-B.......................... 230 7.5 9.4 6.5
R-410A......................................... IMH-A-Large-B.......................... 320 6.2 17.4 6.3
R-410A......................................... IMH-A-Large-B.......................... 310 6.8 10.5 6.3
R-410A......................................... IMH-A-Large-B.......................... 405 5.8 14.4 6.0
R-410A......................................... IMH-A-Large-B.......................... 538 6 4.7 5.7
R-410A......................................... IMH-A-Large-B.......................... 714 6.1 0.1 5.3
R-410A......................................... IMH-A-Large-B *........................ 1,100 5.3 6.7 4.9
R-410A......................................... RCU-NRC-Small-B........................ 724 5.4 11.5 5.5
R-410A......................................... RCU-NRC-Small-B........................ 720 5.4 8.8 5.5
R-410A......................................... RCU-NRC-Small-B *...................... 1,200 5 2.0 4.6
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Two ice makers with these ratings, one each for full-cube and half-cube ice.
5. Data Availability
AHRI, PGE/SDG&E, and NAFEM requested that DOE make data available
for stakeholder review. (AHRI, Public Meeting Transcript, No. 70 at p.
349; PG&E and SDG&E, No. 89 at p. 3; NAFEM, No. 82 at p. 2)
Specifically, AHRI requested that DOE's test results be made available
to manufacturers for review. (AHRI, Public Meeting Transcript, No. 70
at p. 349) NAFEM suggested that DOE identify the model and serial
number of components used in the engineering analysis in order to
enhance transparency. (NAFEM, No. 82 at p. 2)
AHRI and Danfoss both suggested that DOE facilitate more informal
dialog to discuss data and assumptions for the department to receive
feedback. (AHRI, Public Meeting Transcript, No. 70 at p. 342-343;
Danfoss, No. 72 at p. 1-2)
[[Page 4664]]
Danfoss recommended that DOE publish the list of all persons, companies
and organizations they have contacted in regards to this rulemaking.
(Danfoss, No. 72 at p. 1-2)
In response to stakeholders, DOE held a public meeting on June 19
to provide stakeholders with more information about the energy modeling
used in developing the NOPR analysis. 79 FR 33877 (June 13, 2014). In
addition, DOE published a NODA presenting analyses revised based on
stakeholder comments and additional research conducted after the NOPR.
79 FR 54215 (Sept. 11, 2014). DOE's contractor also engaged in
additional discussions with manufacturers under non-disclosure
agreements after publication of the NOPR in order to collect additional
information relevant to the analyses. DOE generally does not publish
test data to avoid revealing information about product performance that
may be considered trade secrets. Also for this reason, DOE does not
intend to publish the model and serial number of equipment or
components obtained, tested, and reverse-engineered during the
analysis. DOE also does not reveal the identity of companies and
organizations from which its contractor has collected information under
non-disclosure agreement.
In their written response to the NODA, AHRI expressed their belief
that DOE's current process in this rulemaking is not compliant with the
objective of using transparent and robust analytical methods producing
results that can be explained and reproduced, as required by DOE's
process rule and guidelines. AHRI expressed their belief that it has
been difficult to analyze and provide feedback on this rulemaking as
important portions such as the energy model have not been disclosed to
the public. (AHRI, No. 128 at p. 6-8)
AHRI and NAFEM requested that DOE publically release the FREEZE
model for stakeholder review. NAFEM and AHRI stated that DOE was unable
to show that the FREEZE model functioned and was unable to produce
accurate results at the June 2014 public meeting. (AHRI, No. 128 at p.
2-3; NAFEM, No. 123 at p. 1-2) AHRI stated that given the results of
the limited runs model at the June 19th meeting, they believe that
there are serious concerns about the quality and reproducibility of the
information that is not in accordance with the applicable guidelines
for ensuring and maximizing the quality, objectivity, utility and
integrity of information disseminated to the public by the Department
of Energy. AHRI added that without public release of the model, DOE
cannot demonstrate sufficient transparency about the data and methods
such that an independent reanalysis can be undertaken by a qualified
member of the public. AHRI noted that if DOE had compelling interests
that prohibit public access to the model, DOE must identify those
interests and describe and document the rigorous checks it has
undertaken to ensure reproducibility. (AHRI, No. 128 at p. 6-8)
DOE notes that stakeholders have placed great emphasis on the
FREEZE model in their responses, but this model is only part of the
analysis. Moreover, DOE has published output of the engineering
analysis on which stakeholders have had the opportunity to comment, for
both the NOPR and NODA phases. As part of the final rule documentation,
DOE presents the revised engineering analysis output.
Over the course of the rulemaking, DOE has attained additional
information regarding the efficiency improvements associated with
different design options, through public comments as well as through
confidential information exchange between DOE's contractor and
manufacturers. As a result the efforts made by all parties in preparing
and providing this additional information, the projections of
efficiency improvements associated with the design options considered
in the analysis are based more on test data than theoretical analysis.
For example, in the NODA and final rule analysis, the energy use
reduction in a batch ice maker as a result of compressor EER
improvement is based on test data provided both in written comments and
through confidential information exchange.
In the NOPR and the NODA phases, DOE has published engineering
spreadsheets that show projected energy savings associated with
specific design options for the analyses of energy use for the ice
maker models representing most of the ice maker equipment classes.
These results document the analysis and have allowed stakeholders to
review details of the analysis as a check on accuracy. DOE's
calibration of the energy use analysis results at the highest
commercially-available efficiency levels, described in section
IV.D.4.b, provides a check of the analysis, specifically ensuring that
the group of design options required to attain these highest available
efficiency levels (as predicted by the analysis) is consistent with
actual equipment. The section presents examples of maximum available
commercial units against which the energy use calculations are
calibrated for the highest analyzed efficiency levels not using
permanent magnet motors and drain water heat exchangers. DOE conducted
calibration at this efficiency level because these design options are
not generally used in commercially available units, thus preventing
calibration with commercialized units at higher efficiency levels.
These calibration comparisons, which are discussed in section IV.D.4.b
and in Chapter 5 of the TSD, show (a) that the efficiency levels
attainable without use of permanent magnet motors and drain water heat
exchangers have not been overestimated by the analysis, and (b) the
design options that are projected to be required to attain these
maximum available efficiency levels are consistent with or conservative
(more costly) as compared with the design options used in maximum-
available ice makers that are available for purchase.
DOE is not at liberty to release the FREEZE energy model to the
public because it does not own the modeling tool.
AHRI stated that DOE did not publically provide the information
necessary for affected parties to have adequate notice and ability to
comment on the results of the public meeting. AHRI stated that DOE
failed to publically state a timeframe for collecting the data it has
requested. AHRI added that the public statement issued after the public
meeting did not indicate to whom the data should be sent. AHRI stated
their belief that without the clarity of a defined comment period, or
the knowledge of the next steps in the process DOE is not following its
own process rule and the notice and comment requirements for federal
agency rulemaking. (AHRI, No. 128 at p. 6-8)
In response to AHRI's comment, DOE expressed willingness during the
NOPR public meeting, subject to potential legal restrictions, to allow
additional information exchange by stakeholders with DOE's contractor
under non-disclosure agreement. DOE also expressed willingness to
possibly publish a NODA which would allow stakeholders additional
opportunity to comment. (DOE, NOPR Public Meeting Transcript, No. 70 at
pp. 341-344) In general, any information exchange regarding a
rulemaking is strictly limited after publication of a NOPR, in order to
limit the potential for undue influence on the process from any
particular interested party. DOE allowed additional information
exchange with stakeholders and published a NODA to allow additional
opportunity for input. 79 FR 54215 (Sept. 11, 2014). Thus, contrary to
AHRI's comment, with the
[[Page 4665]]
additional public meeting and with the issuance of the NODA,
stakeholders have had several opportunities to provide input beyond the
opportunities normally provided for an energy conservation standard
rulemaking.
6. Supplemental Notice of Proposed Rulemaking
NAFEM stated that DOE should not issue a final rule because the
revisions in the NODA did not address each issue raised in response to
the NOPR analysis. (NAFEM, No. 123 at p. 1) NAFEM and AHRI both
requested that the department issue a supplemental notice of proposed
rulemaking (SNOPR) to allow manufacturers and end users enough time to
address the substantial changes in the analysis made between the NOPR
and NODA phases. (NAFEM, No. 123 at p. 1; AHRI, No. 128 at p. 2) NAFEM
stated that there are many unknowns regarding the changes made in the
NODA analysis and noted that DOE did not identify a technologically
feasible and economically justified standard level. NAFEM also
requested that DOE release the model used to determine TSL standards.
(NAFEM, No. 123 at p. 1)
In response to AHRI and NAFEM, DOE notes that the modifications
made to the analyses in the NODA were based on stakeholder
participation, and each issue raised in response to the NOPR and NODA
have been addressed in this final rule. The objective of the NODA was
to enable stakeholders to understand the changes made in the basic
analyses as a result of input received during the NOPR phase, and DOE
believes that was accomplished. Therefore, DOE does not believe that an
SNOPR is necessary for this rulemaking. In response to NAFEM's request
for DOE to release the model used to determine the TSL standard, DOE
assumes that this refers to the FREEZE model, which is discussed in
section IV.A.5. DOE is not at liberty to release the FREEZE energy
model to the public because it does not own the modeling tool.
Regarding NAFEM's comment concerning identification of a
technologically feasible and economically justified standard level, DOE
notes that the NODA did not propose a standard level. Rather the NODA's
purpose was to provide stakeholders the opportunity to comment on
revisions in DOE's analysis.
7. Rulemaking Structure Comments
A Policy Analyst at the George Washington University Regulatory
Studies Center commented on basic underpinnings of the DOE energy
conservation standards rulemaking process. Policy Analyst commented
that DOE does not explain why sophisticated, profit-motivated
purchasers of ACIMs would suffer from informational deficits or
cognitive biases that would cause them to purchase products with high
lifetime costs without demanding higher-price, higher-efficiency
products. (Policy Analyst, No. 75 at p. 5)
Policy Analyst indicated that two of the three problems identified
by DOE, lack of access to information and information asymmetry, are
not addressed by the rule, indicating that DOE's rule is flawed.
(Policy Analyst, No. 75 at p. 6) Policy Analyst added that only one of
the problems identified by DOE is addressed by any of the metrics
stated in the proposed rule: Internalizing the externality of
greenhouse gas emissions. (Policy Analyst, No. 75 at p. 7)
Policy Analyst suggested that the proposed rule should include
DOE's plans for how it will gather information to assess the success of
the rule and whether its assumptions were accurate. (Policy Analyst,
No. 75 at p. 8) Policy Analyst added that DOE should include a
timeframe for retrospective review in its final rule. (Policy Analyst,
No. 75 at p. 8)
Policy Analyst stated that DOE should pay attention to the linkages
between the rule and the measured outcomes in order to increase its
awareness of mediating factors that may have accomplished or undermined
the stated metrics absent the rule. (Policy Analyst, No. 75 at p. 8)
In response, DOE believes there are two main reasons that
purchasers of ACIM equipment would lack complete information, causing
them to, in Policy Analyst's words, ``purchase products with high
lifetime costs without demanding higher-price, higher-efficiency
products.'' The first reason is the time involved in collection and
processing of information and the second is that the available
information is incomplete. ACIM purchasers have access only to
information that is readily available, and would not have ready access
to information about additional efficiency options that could be made
available to the market. The information that is available is dispersed
in many sources, and the cost of querying all information sources takes
the form of time taken away from the primary business of the purchaser,
whether running a hotel or provision of medical care. By virtue of
simply undertaking the energy conservation standard rulemaking, DOE
provides significant information to all who are interested via the
analyses undertaken by the rulemaking.
As the energy conservation standard rulemaking has proceeded from
the initial framework phase through to the final rule phase, DOE has
solicited information, purchased, examined and tested actual ACIM
products, and performed numerous analyses to ensure assumptions are as
accurate as possible. Once a rule is finalized, DOE continues
collecting information as well as interacting with the industry, and
such activities will enable DOE to measure whether the rule is
achieving its intended results--namely increasing the efficiency of
automatic commercial ice makers.
DOE will undertake subsequent analyses of ACIM equipment in order
to meet legislative requirements for reviewing the standard by a date
no later than 5 years after the effective date of new and amended
standards established by this rulemaking. DOE follows a standard
process in energy conservation standards rulemakings, and believes as
such, that establishing plans within this final rule for gathering
information for the next proceeding is unnecessary.
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 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 automatic commercial
ice makers 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.
[[Page 4666]]
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(a)) In deciding whether a feature justifies a
different standard, DOE considers 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.
Automatic commercial ice makers are divided into equipment classes
based on physical characteristics that affect commercial application,
equipment utility, and equipment efficiency. These equipment classes
are based on the following criteria:
Ice-making process
[cir] ``Batch'' icemakers that operate on a cyclical basis,
alternating between periods of ice production and ice harvesting
[cir] ``Continuous'' icemakers that can produce and harvest ice
simultaneously
Equipment configuration
[cir] Ice-making head (a single-package ice-making assembly that
does not include an ice storage bin)
[cir] Remote condensing (an ice maker consisting of an ice-making
head in which the ice is produced--but also without an ice storage
bin--and a separate condenser assembly that can be remotely installed,)
With remote compressor (compressor packaged with the
condenser)
Without remote compressor (compressor packaged with the
evaporator in the ice-making head)
[cir] Self-contained (with storage bin included)
Condenser cooling
[cir] Air-cooled
[cir] Water-cooled
Capacity range
Table IV.2 shows the 25 automatic commercial ice maker equipment
classes that DOE used for its analysis in this rulemaking. These
equipment classes were derived from existing DOE standards and
commercially available products. The final rule adjusts these capacity
ranges, based on this analysis, as a result of setting appropriate
energy use standards across the overall capacity range (50 to 4,000 lb
ice/24 hours) for a given type of equipment, such as all batch air-
cooled ice-making head units.
Table IV.2--Final Rule Automatic Commercial Ice Maker Equipment Classes Used for Analysis
----------------------------------------------------------------------------------------------------------------
Type of condenser Harvest capacity rate lb ice/24
Type of ice maker Equipment type cooling hours
----------------------------------------------------------------------------------------------------------------
Batch........................... Ice-Making Head......... Water.............. >=50 and <500
>=500 and <1,436
>=1,436 and <4,000
Air................ >=50 and <450
>=450 and <4,000
Remote Condensing (but Air................ >=50 and <1,000
not remote compressor). >=1,000 and <4,000
Remote Condensing and Air................ >=50 and <934
Remote Compressor. >=934 and <4,000
Self-Contained Unit..... Water.............. >=50 and <200
>=200 and <4,000
Air................ >=50 and <175
>=175 and <4,000
Continuous...................... Ice-Making Head......... Water.............. >=50 and <900
>=900 and <4,000
Air................ >=50 and <700
>=700 and <4,000
Remote Condensing (but Air................ >=50 and <850
not remote compressor). >=850 and <4,000
Remote Condensing and Air................ >=50 and <850
Remote Compressor. >=850 and <4,000
Self-Contained Unit..... Water.............. >=50 and <900
>=900 and <4,000
Air................ >=50 and <700
>=700 and <4,000
----------------------------------------------------------------------------------------------------------------
Batch type and continuous type ice makers are distinguished by the
mechanics of their respective ice-making processes. Continuous type ice
makers are so named because they simultaneously produce and harvest ice
in one continuous, steady-state process. The ice produced in continuous
processes is called ``flake'' ice or ``nugget'' ice, which can both be
a ``soft'' ice with high liquid water content, in the range from 10 to
35 percent, but can also be subcooled, i.e. be entirely frozen and at
temperature lower than 32[emsp14][deg]F. Continuous type ice makers
were not included in the EPACT 2005 standards and therefore were not
regulated by existing DOE energy conservation standards.
Existing energy conservation standards cover batch type ice makers
that produce ``cube'' ice, which is defined as ice that is fairly
uniform, hard, solid, usually clear, and generally weighs less than two
ounces (60 grams) per piece, as distinguished from flake, crushed, or
fragmented ice. 10 CFR 431.132 Batch ice makers alternate between
freezing and harvesting periods and therefore produce ice in discrete
batches rather than in a continuous process. After the freeze period,
hot gas is typically redirected from the compressor discharge to the
evaporator, melting the surface of the ice cubes that is in contact
with the evaporator surface, enabling them to be removed from the
evaporator. The water that is left in the sump at the end of the
icemaking part of the cycle is purged (drained from the unit), removing
with it the impurities that could decrease ice clarity form scale (the
result of dissolved solids in the incoming water coming out of
solution) on the ice maker
[[Page 4667]]
surfaces. Consequently, batch type ice makers typically have higher
potable water usage than continuous type ice makers.
After the publication of the Framework document, several parties
commented that machines producing ``tube'' ice, which is created in a
batch process with both freeze and harvest periods similar to the
process used for cube ice, should also be regulated. DOE notes that
tube ice machines of the covered capacity range that produce ice
fitting the definition for cube type ice are covered by the current
standards, whether or not they are referred to as cube type ice makers
within the industry. Nonetheless, DOE has addressed the commenters'
suggestions by emphasizing that all batch type ice machines are within
the scope of this rulemaking, as long as they fall within the covered
capacity range of 50 to 4,000 lb ice/24 hours. This includes tube ice
machines and other batch type ice machines (if any) that produce ice
that does not fit the definition of cube type ice. To help clarify this
issue, DOE now refers to all batch automatic commercial ice makers as
``batch type ice makers,'' regardless of the shape of the ice pieces
that they produce. 77 FR 1591 (Jan. 11, 2012).
During the April 2014 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. Cabinet Size
In the March 2014 NOPR, DOE indicated that it was not proposing to
create separate equipment classes for space-constrained units. DOE
requested comment on this issue in the preliminary analysis phase. Few
stakeholders commented on whether DOE should consider establishing
equipment classes based on cabinet size. Earthjustice supported such an
approach, while Manitowoc suggested that such an approach would be
complicated. (Earthjustice, Preliminary Analysis Public Meeting
Transcript, No. 42 at pp. 90-91; Manitowoc, (Manitowoc, Preliminary
Analysis Public Meeting Transcript, No. 42 at p. 91)) DOE also reviewed
size/efficiency trends of commercially available ice makers and
concluded that the data do not show a definitive trend suggesting
specific size limits for space-constrained classes. 79 FR 14846, at
14862 (March 17, 2014).
In response to the March 2014 NOPR, AHRI and NAFEM commented that
DOE did not conduct analysis for the full range of product offerings in
the market. (AHRI, No. 93 at p. 12-13; NAFEM, No. 82 at p. 4) AHRI,
NAFEM, and Manitowoc commented that DOE's analysis did not take into
account the difficulty associated with increasing cabinet volume for
22-inch models (i.e. ice makers that are 22 inches wide). (AHRI, No. 93
at p. 12-13; Manitowoc, No. 92 at p. 2; NAFEM, No. 82 at p. 4)
Manitowoc added that the engineering analysis focused on 30-inch
cabinets and that the design options may not all fit within the 22-inch
cabinet models. (Manitowoc, No. 92 at p. 2 and p. 26-27) AHRI stated
that they had data showing that 22-inch units cannot accommodate
evaporator or condenser growth without chassis growth which is not
possible for these size-restricted units. AHRI noted that DOE included
chassis size increases for some equipment classes without taking into
account in the engineering analysis the special case of 22-inch ice
makers. (AHRI, No. 93 at p. 12-13) NAFEM specifically requested that
DOE differentiate between 22-inch and 30-inch IMH-A-Small-B machines,
since 22-inch models cannot achieve increases in cabinet volume and 30-
inch models cannot be substituted for 22-inch models. (NAFEM, No. 82 at
p. 4) Hoshizaki also urged DOE to take 22-inch units into special
consideration in the analysis. (Hoshizaki, No. 86 at p. 8)
Manitowoc commented that 22-inch air-cooled ice-making heads are
growing in importance due to the shrinking size of restaurant kitchens
and that such machines cannot grow in height because they are already
very tall. Manitowoc asserted that this product category may disappear
if efficiency standards require significant chassis size growth.
(Manitowoc, Public Meeting Transcript, No. 70 at p. 162-164)
However, the Northwest Energy Efficiency Alliance (NEEA) stated
that they believe that DOE appropriately considered the issues
concerning increased chassis size, citing DOE's consideration of
chassis size increase only for three of the twenty-two classes
analyzed, and the fact that DOE considered only increases in height,
not increases in footprint. (NEEA, No. 91 at p. 1-2)
DOE has maintained its position from the NOPR and has not created a
new equipment class for 22-inch ACIMs. However, in response to
commenters DOE revised the NOPR analysis to consider the size
restrictions and applications of 22-inch wide ice makers in its revised
analysis. Specifically, DOE has developed cost-efficiency curves for
22-inch width units in the IMH-A-Small-B, IMH-A-Large-B, and IMH-W-
Small-B equipment classes. These curves were used in the LCC and NIA
analyses in the evaluation of efficiency levels for classes for which
22-inch ACIMs are an important category. The LCC and NIA analyses were
also revised to more carefully consider the impact of size restrictions
in applications for 30-inch units--this is discussed in greater detail
in section IV.G.2. Ultimately these revisions in the analyses led to
selection of less stringent efficiency levels for some of the affected
classes.
b. Large-Capacity Batch Ice Makers
In the November 2010 Framework document for this rulemaking, DOE
requested comments on whether coverage should be expanded from the
current covered capacity range of 50 to 2,500 lb ice/24 hours to
include ice makers producing up to 10,000 lb ice/24 hours. All
commenters agreed with expanding the harvest capacity coverage, and all
but one of the commenters supported or accepted an upper harvest
capacity cap of 4,000 lb ice/24 hours, which would be consistent with
the current test procedure, AHRI Standard 810-2007. Most commenters
categorized ice makers with harvest capacities above 4,000 lb ice/24
hours as industrial rather than commercial. Since the publication of
the framework analysis, DOE revised the test procedure, with the final
rule published in January 2012, to include all batch and continuous
type ice makers with capacities between 50 and 4,000 lb ice/24 hours.
77 FR 1591, 1613-14. In the 2012 test procedure final rule, DOE noted
that 4,000 lb ice/24 hours represented a reasonable limit for
commercial ice makers, as larger-sized ice makers were generally used
for industrial applications and testing machines up to 4,000 lb was
consistent with AHRI 810-2007. 77 FR 1591 (Jan. 11, 2012). To be
consistent with the majority of the framework comments, during the
preliminary analysis DOE discussed setting the upper harvest capacity
limit to 4,000 lb ice/24 hours, even though there are few ice makers
currently produced with capacities ranging from 2,500 to 4,000 lb ice/
24 hours. 77 FR 3404 (Jan. 24, 2012) DOE proposed in the March 2014
NOPR to set efficiency standards that include all ice makers in this
extended capacity range and has maintained this position in this final
rule.
PG&E and SDG&E commented that they support the inclusion of
previously unregulated equipment classes into the scope of this
rulemaking, including equipment with a capacity range up to 4,000 lb/24
hour. (PG&E and SDG&E,
[[Page 4668]]
No. 89 at p. 1) However, Hoshizaki, NAFEM, and AHRI commented that DOE
should refrain from regulating products with capacities above 2,500 lb
ice/24 hours, if there are not enough models in this category for DOE
to directly evaluate. (Hoshizaki, No. 86 at p. 9; Hoshizaki, No. 124 at
p. 2; AHRI, No. 93 at p. 16; NAFEM, No. 123 at p. 2) Hoshizaki
commented that large units perform differently than small units in the
ways that their compressors and condensers interact. Hoshizaki
requested that DOE not add higher levels to the standard extended
beyond 2,000 lb ice/24 hours, but have a flat level no more stringent
than the standard at 2,000 lb ice/24 hours for higher capacity
equipment. (Hoshizaki, No. 124 at p. 2)
DOE acknowledges that there are currently few automatic commercial
ice makers with harvest capacities above 2,500 lb ice/24 hours.
However, AHRI has extended the applicability of its test standard, AHRI
Standard 810-2007 with Addendum 1, ``Performance Rating of Automatic
Commercial Ice Makers,'' to ice makers up to 4,000 lb ice/24 hours.
Likewise, DOE extended the applicability of its test procedure to the
same range. 77 FR 1591 (January 11, 2012). Stakeholders have not cited
reasons that ice makers with capacities greater than 2,000 lb ice/24
hours would not be able to achieve the same efficiency levels as those
producing 2,000 lb ice/24 hours. Because it is possible that batch-type
ice makers with harvest capacities from 2,500 to 4,000 lb ice/24 hours
will be manufactured in the future, DOE does not find it unreasonable
to set standards in this rulemaking for batch type ice makers with
harvest capacities in the range up to 4,000 lb ice/24 hours. Therefore,
DOE maintains its position to include large-capacity batch type ice
makers in the scope of this rulemaking. In response to Hoshizaki's
comment, DOE notes that each product class has flat levels, i.e.
efficiency levels that do not vary with harvest capacity, beyond 2,000
lb ice/24 hours.
c. Regulation of Potable Water Use
Under EPACT 2005, water used for ice--referred to as potable
water--was not regulated for automatic commercial ice makers.
The amount of potable water used varies significantly among batch
type automatic commercial ice makers (i.e., cube, tube, or cracked ice
machines). Continuous type ice makers (i.e., flake and nugget machines)
convert essentially all of the potable water to ice, using roughly 12
gallons of water to make 100 lb ice. Batch type ice makers use an
additional 3 to 38 gallons of water in the process of making 100 lb
ice. This additional water is referred to as ``dump or purge water''
and is used to cleanse the evaporator of impurities that could
interfere with the ice-making process.
As indicated in the preliminary analysis and NOPR, DOE is not
setting potable water limits for automatic commercial ice makers.
The Natural Resource Defense Council (NRDC) commented that they
previously urged the Department to propose standards for potable water
use in batch type ice makers and that failure to do so is short-
sighted, given the increasing severity of drought conditions in many
states, and may cause states to consider their own water use standards
for ice makers. (NRDC, No. 90 at p. 54-1) NRDC urged DOE to reconsider
its decision not to evaluate and set standards for potable water use.
NRDC noted that EPCA was amended in 1992 explicitly to include water
conservation as one of its purposes. (NRDC, No. 90 at p. 1)
PG&E and SDG&E also recommended that DOE establish a maximum
potable water use requirement. PG&E and SDG&E also added that in the
event that DOE maintains that there is ambiguity in EPACT 2005 on
whether DOE is required to regulate water usage and uses its discretion
not to mandate a potable water standard PG&E and SDG&E request that DOE
comment whether states are preempted from establishing such a standard.
(PG&E and SDG&E, No. 89 at p. 4)
In response to comments from NRDC, and PG&E and SDG&E, DOE was not
given a specific mandate by Congress to regulate potable water. EPCA,
as amended, explicitly gives DOE the authority to regulate water use in
showerheads, faucets, water closets, and urinals (42 U.S.C. 6291(6),
6295(j) and (k)), clothes washers (42 U.S.C. 6295(g)(9)), dishwashers
(42 U.S.C. 6295(g)(10)), commercial clothes washers (42 U.S.C.
6313(e)), and batch (cube) commercial ice makers. (42 U.S.C. 6313(d))
With respect to batch commercial ice makers (cube type machines),
however, Congress explicitly set standards in EPACT 2005 at 42 U.S.C.
6313(d)(1) only for condenser water and noted in a footnote to the
table setting the standards that potable water use was not
included.\24\ Congress thereby recognized both types of water, and did
not provide direction to DOE with respect to potable water standards.
This ambiguity gives the DOE considerable discretion to regulate or not
regulate potable water. The U.S. Supreme Court has determined that,
when legislative intent is ambiguous, a government agency may use its
discretion in interpreting the meaning of a statute, so long as the
interpretation is reasonable.\25\ In the case of ice makers, EPACT 2005
is ambiguous on the subject of whether DOE must regulate water usage
for purposes other than condenser water usage in cube-making machines,
and DOE has chosen to use its discretion not to mandate a standard in
this case. Pursuant to 42 U.S.C. 6297(b) and (c), preemption applies
with respect to covered products and no State regulation concerning
energy efficiency, energy use, or water use of such covered product
shall be effective with respect to such product unless the State
regulation meets the specified criteria under these provisions.
---------------------------------------------------------------------------
\24\ Footnote to table at 42 U.S.C. 6313(d)(1).
\25\ Nat'l Cable & Telecomms. Ass'n v. Brand X Internet Servs.,
545 U.S. 967, 986 (2005) (quoting Chevron U.S.A. Inc. v. Natural
Res. Def. Council, Inc., 467 U.S. 837, 845 (1984)).
---------------------------------------------------------------------------
DOE elected to not set potable water limits for automatic
commercial ice makers in order to allow manufacturers to retain
flexibility in this aspect of ice maker design. The regulation of ice
maker energy use does in itself make high levels of potable water use
untenable because energy use does increase as potable water use
increases, since the additional water must be cooled down, diverting
refrigeration capacity from the primary objective of cooling and
freezing the water that will be delivered from the machine as ice.
DOE notes that ENERGY STAR has adopted potable water limits for
ENERGY STAR-compliant ice makers at 15 gal/100 lb ice for continuous
equipment classes, 20 gal/100 lb ice for IMH and RCU batch classes, and
25 gal/100 lb ice for SCU batch classes.\26\
---------------------------------------------------------------------------
\26\ http://www.energystar.gov/index.cfm?c=comm_ice_machines.pr_crit_comm_ice_machines.
---------------------------------------------------------------------------
d. Regulation of Condenser Water Use
As previously noted in section II.B.1, EPACT 2005 prescribes
maximum condenser water use levels for water-cooled cube type automatic
commercial ice makers. (42 U.S.C. 6313(d)) \27\ For units not currently
covered by the standard (continuous machines of all harvest rates and
batch machines with harvest rates exceeding 2,500 lb ice/24 hours),
there currently are no limits on condenser water use.
---------------------------------------------------------------------------
\27\ The table in 42 U.S.C. 6313(d)(1) states maximum energy and
condenser water usage limits for cube type ice machines producing
between 50 and 2,500 lb of ice per 24 hour period (lb ice/24 hours).
A footnote to the table states explicitly the water limits are for
water used in the condenser and not potable water used to make ice.
---------------------------------------------------------------------------
[[Page 4669]]
In the preliminary analysis and the NOPR, DOE indicated its intent
to primarily focus the automatic commercial ice maker rulemaking on
energy use. DOE also noted that DOE is not bound by EPCA to
comprehensively evaluate and propose reductions in the maximum
condenser water consumption levels, and likewise has the option to
allow increases in condenser water use, if this is a cost-effective way
to improve energy efficiency.
In the preliminary analysis, DOE stated that EPCA's
anti[hyphen]backsliding provision in section 325(o)(1), which lists
specific products for which DOE is forbidden from prescribing amended
standards that increase the maximum allowable water use, does not
include ice makers. However in response to the preliminary analysis,
Earthjustice asserted that DOE lacks the authority to relax condenser
water limits for water-cooled ice makers. Earthjustice argued that the
failure of section 325(o)(1) to specifically call out ice maker
condenser water use as a metric that is subject to the statute's
prohibition against the relaxation of a standard is not determinative.
On the contrary, Earthjustice maintained that the plain language of
EPCA shows that Congress intended to apply the anti[hyphen]backsliding
provision to ice makers. Earthjustice commented that section 342(d)(4)
requires DOE to adopt standards for ice[hyphen]makers ``at the maximum
level that is technically (DOE interprets the comment to mean
technologically) feasible and economically justified, as provided in
[section 325(o) and (p)].'' (42 U.S.C. 6313(d)(4)) Earthjustice stated
that, by referencing all of section 325(o), the statute pulls in each
of the distinct provisions of that subsection, including, among other
things, the anti[hyphen]backsliding provision, the statutory factors
governing economic justification, and the prohibition on adopting a
standard that eliminates certain performance characteristics. By
applying all of section 325(o) to ice[hyphen]makers, section 342(d)(4)
had already made the anti[hyphen]backsliding provision applicable to
condenser water use, according to Earthjustice. Finally, Earthjustice
stated that even if DOE concludes that the plain language of EPCA is
not clear on this point, the only reasonable interpretation is that
Congress did not intend to grant DOE the authority to relax the
condenser water use standards for ice makers. Earthjustice added that
the anti-backsliding provision is one of EPCA's most powerful tools to
improve the energy and water efficiency of appliances and commercial
equipment, and Congress would presumably speak clearly if it intended
to withhold its application to a specific product. (Earthjustice, No.
47 at pp. 4-5)
In the NOPR DOE maintained that the 42 U.S.C. Sec. 6295(o)(1) anti-
backsliding provisions apply to water in only a limited set of
residential appliances and fixtures. Therefore, an increase in
condenser water use would not be considered backsliding under the
statute. Nevertheless, the DOE did not include increases in condenser
water use as a technology option for the NOPR, NODA, and final rule.
In response to the NOPR, NRDC stated that they disagree that DOE
may lawfully relax water use standards. NRDC added that even if DOE
were correct in stating that EPCA's anti-backsliding provision does not
apply, as explored in EarthJustice's comment, DOE cannot relax the
water efficiency levels set by Congress itself. (NRDC, No. 90 at p. 1)
In this rule, DOE is not revising its NOPR position regarding the
application of anti-backsliding to ACIM condenser water use.
Nevertheless, DOE did not consider design options that would represent
increase in condenser water use in its final rule analysis.
e. Continuous Models
The EPACT 2005 amendments to EPCA did not set standards for
continuous type ice makers. Pursuant to EPCA, DOE is required to set
new or amended energy conservation standards for automatic commercial
ice makers to: (1) Achieve the maximum improvement in energy efficiency
that is technologically feasible and economically justified; and (2)
result in significant conservation of energy. (42 U.S.C. 6295(o)(2)(A)
and (o)(3)(B); 6313(d)(4))
Hoshizaki stated that due to their small market share, continuous
models should be considered separately from batch machines. (Hoshizaki,
No, 124 at p. 1)
DOE notes that it has conducted analysis for continuous models as
part of separate equipment classes than batch type models and has set
different energy standards for them.
f. Gourmet Ice Machines
AHRI stated that this rulemaking has ignored the niche market of
gourmet ice cubes. AHRI stated that gourmet ice cubes are two to three
times larger than standard ice cubes. They are also harder and denser
than conventional machine-made ice and require more energy to produce.
AHRI noted that this issue impacts small business manufacturers. (AHRI,
No. 128 at p. 5)
In response to AHRI's comment regarding gourmet ice makers, DOE has
not conducted separate analysis for such equipment. DOE has, however,
considered small business impacts, as discussed in section IV.J.3.f.
DOE notes that the ACIM rulemaking has provided stakeholders many
opportunities to provide comment on the issues that would be important
to consider in the analysis, including potential equipment classes
associated with different types of ice, whether different types of ice
provide specific utility that would be the basis of considering
separate equipment classes, and any other issues associated with such
ice that might affect the analysis. DOE does not have nor did it
receive in response to requests for comments sufficient specific
information to evaluate whether larger ice has specific consumer
utility, nor to allow separate evaluation for such equipment of costs
and benefits associated with achieving the efficiency levels considered
in the rulemaking. In the absence of information, DOE cannot conclude
that this type of ice has unique consumer utility justifying
consideration of separate equipment classes. DOE notes that
manufacturers of this equipment have the option seeking exception
relief pursuant to 41 U.S.C. 7194 from DOE's Office of Hearings and
Appeals.
2. Technology Assessment
As part of the market and technology assessment, DOE developed a
comprehensive list of technologies to improve the energy efficiency of
automatic commercial ice makers, shown in Table IV.3. Chapter 3 of the
final rule TSD contains a detailed description of each technology that
DOE identified. DOE only considered in its analysis technologies that
would impact the efficiency rating of equipment as tested under the DOE
test procedure. The technologies identified by DOE were carried through
to the screening analysis, which is discussed in section IV.C.
BILLING CODE 6450-01-P
[[Page 4670]]
[GRAPHIC] [TIFF OMITTED] TR28JA15.000
BILLING CODE 6450-01-C
The section below addresses the potential consideration of another
technology option.
a. Alternative Refrigerants
The Environmental Investigation Agency (EIA Global) urged DOE to
include hydrocarbon refrigerants as an ACIM technology option. EIA
Global expressed their concern that DOE's analysis will be incomplete
without the inclusion of hydrocarbon refrigerants and that the high
global warming potential (GWP) of current ACIM refrigerants will
further damage the stability of the climate, thus offsetting the
efficiency gains associated with standards. (EIA Global, No. 80 at p.
1)
EIA Global commented that it is likely that EPA will include
hydrocarbons as acceptable ACIM refrigerants in the near future and
urged DOE to bring a SNAP petition to do so. EIA Global added that
accepting hydrocarbons for use in ACIMs with charge sizes of 150g or
less is highly likely and that according to a United Nations
Environment Programme (UNEP) report, such refrigerants have lower
viscosity, resulting in improved cooling efficiency and reducing energy
consumption by 18 percent. (EIA Global, No. 80 at p. 2) EIA Global
noted that DOE should set standards that anticipate future
alternatives, rather than being limited to what is available today.
(EIA Global, No. 80 at p. 4-5)
EIA Global stated that including hydrocarbon refrigerants in the
analysis will be of little burden to DOE because Scotsman, Hoshizaki,
and Manitowoc already sell hydrocarbon machines throughout Europe and
other international markets and noted that these three manufacturers
have observed energy savings associated with use of these refrigerants.
(EIA Global, No. 80 at p. 1-4)
In response to EIA Global's comments, DOE notes that hydrocarbon
refrigerants have not yet been approved by the EPA SNAP program and
hence cannot be considered as a technology option in DOE's analysis.
DOE also notes that, while it is possible that HFC refrigerants
currently used in automatic commercial ice makers may be restricted by
future rules, DOE cannot speculate on the outcome of a rulemaking in
progress and can only consider in its rulemakings rules that are
currently in effect. Therefore, DOE has not included possible outcomes
of a potential EPA SNAP rulemaking. This position is consistent with
past DOE rulings, such as in the 2014 final rule for commercial
refrigeration equipment. 79 FR 17725 (March 28, 2014) DOE notes that
recent proposals by the EPA to allow use of hydrocarbon refrigerants or
to impose new restrictions on the use of HFC refrigerants do not
address automatic commercial ice maker applications. 79 FR 46126
(August 6, 2014) DOE acknowledges that there are government-wide
efforts to reduce emissions of HFCs, and such actions are being pursued
both through international diplomacy as well as domestic actions. DOE,
in concert with other relevant agencies, will continue to work with
industry and other stakeholders to identify safer and more sustainable
alternatives to HFCs while
[[Page 4671]]
evaluating energy efficiency standards for this equipment. As mentioned
in section IV.A.4, 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.
C. Screening Analysis
In the technology assessment section of this final rule, DOE
presents an initial list of technologies that can improve the energy
efficiency of automatic commercial ice makers. The purpose of the
screening analysis is to evaluate the technologies that improve
equipment efficiency to determine which of these technologies is
suitable for further consideration in its analyses. To do this, DOE
uses four screening criteria--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, section
(4)(a)(4). See chapter 4 of the final rule TSD for further discussion
of the screening analysis. Another consideration is whether a design
option provides a unique pathway towards increasing energy efficiency
and that pathway is a proprietary design that a manufacturer can only
get from one source. In this instance, such design option would be
eliminated from consideration because it would require manufacturers to
procure it from a sole source. Table IV.4 shows the EPCA criteria and
additional criteria used in this screening analysis, and the design
options evaluated using the screening criteria.
BILLING CODE 6450-01-P
[[Page 4672]]
[GRAPHIC] [TIFF OMITTED] TR28JA15.001
[[Page 4673]]
[GRAPHIC] [TIFF OMITTED] TR28JA15.002
BILLING CODE 6450-01-C
a. General Comments
Manitowoc expressed its agreement with the screening analysis.
(Manitowoc, No. 92 at p. 3) However, Scotsman requested that the
following additional criteria be used in the screening analysis: Impact
on end-user facility and operations, impact on end-user profit-
generating beverage sales, impact on machine footprint, impact on end-
user ``repair existing'' or ``purchase new'' decision hierarchy, impact
on ACIM service and installation network support capability, and impact
on manufacturer component tooling/fixture obsolescence prior to
depreciation. (Scotsman, No. 85 at p. 3b-4b)
In response to Scotsman comment, DOE notes that while DOE's
screening analysis specifically focuses on the four criteria identified
in the process rule (see 10 CFR part 430, subpart C, appendix A,
section (4)(a)(4)), some of the suggested screening criteria outlined
in Scotsman's comment are taken into account in other parts of the
analysis. Specifically, impacts to end user facility and operations,
including installations costs, are considered in the life cycle cost
analysis described in section IV.G. Impacts regarding manufacturing
tooling are examined in the manufacturing impact analysis described in
section IV.J.
b. Drain Water Heat Exchanger
Batch ice makers can benefit from drain water thermal exchange that
cools the potable water supply entering the sump, thereby reducing the
energy required to cool down and freeze the water. Technological
feasibility is demonstrated by one commercially available drain water
thermal heat exchanger that is currently sold only for aftermarket
installation. This product is designed to be installed externally to
the ice maker, and both drain water and supply water are piped through
the device.
Drain water heat exchangers, both internally mounted and externally
mounted, are design options that can increase the energy efficiency of
automatic commercial ice makers. The current test procedures would give
manufacturers credit for efficiency improvement of drain water heat
exchangers, including externally mounted drain water heat exchangers as
long as they are provided with the machine and the installation
instructions for the machine indicate that the heat exchangers are part
of the machine and must be installed as part of the overall
installation.
In response to the NODA, Manitowoc stated that drain water heat
exchangers have not been proven in the industry (DOE assumes that this
comment addresses issues such as their reliability rather than their
potential for energy savings) and their use is likely to result in
lower reliability due to issues with fouling and clogging associated
with mineral particles that naturally accumulate in the dump water for
batch cycle machines. Manitowoc also added that the high costs for
drain water heat exchangers are not justified by their efficiency
gains. (Manitowoc, No. 126 at p. 2) AHRI stated that a drain water heat
exchanger cannot reasonably be implemented in a 22-inch IMH-A-Small-B
unit. (AHRI, No. 128 at p. 2)
DOE notes that drain water heat exchangers have been discussed as a
possible technology option from the framework stage of this rulemaking.
DOE has investigated the feasibility of drain water heat exchangers
through review of product literature, patents, reports on
installations, and product teardowns, and has also conducted testing to
evaluate the claims of efficiency improvement for the technology. While
fouling of the heat exchanger is a potential concern based on the
higher mineral concentration in dump water, heat exchangers designed
for use with ice makers have been designed with electrically insulated
gaskets to substantially reduce deposition of particulates on heat
exchanger surfaces.\28\ Moreover, drain water heat exchangers would
also benefit from typical maintenance of ice machines that includes
dissolution of such mineral deposits on all components that come into
contact with potable water. DOE is not aware of data showing that the
units sold have substantial reliability issues as a consequence of
fouling in retrofit applications. Further, Manitowoc has not provided
information or test data showing that they would reduce reliability.
DOE also notes that answering the question of whether the inclusion of
a drain water heat exchanger is cost-effective is a goal of the DOE
analyses and is not considered during the screening analysis. DOE has
examined the added cost of a drain water heater along with the energy
savings resulting from its use and has found drain water heat
exchangers to be cost justified for certain equipment classes.
---------------------------------------------------------------------------
\28\ Welch, D.L., et al., U.S. Patent No. 5,555,734, Sep. 17,
1996.
---------------------------------------------------------------------------
In response to AHRI's comment suggesting that drain water heat
exchangers may not fit in a 22-inch IMH-A-Small-B cabinet, DOE notes
that the heat exchanger would be mounted outside the unit, rather than
enclosed within the cabinet. If AHRI's comment did not mean to indicate
that the objection was to placement of the heat exchanger within the
unit, the comment also did not make clear why such a component could
not be implemented specifically for a 22-inch wide unit.
In response to AHRI's comment suggesting that drain water heat
exchangers may not fit in a 22-inch IMH-A-Small-B cabinet, DOE notes
that the heat exchanger would be mounted outside the unit, rather than
enclosed within the cabinet. If AHRI's comment did not mean to indicate
that the objection was placement of the heat exchanger within the unit,
the comment also did not make clear why such a component could not be
implemented
[[Page 4674]]
specifically for a 22-inch wide unit. DOE did screen in this
technology.
c. Tube Evaporator Design
Among the technologies that DOE considered were tube evaporators
that use a vertical shell and tube configuration in which refrigerant
evaporates on the outer surfaces of the tubes inside the shell, and the
freezing water flows vertically inside the tubes to create long ice
tubes that are cut into smaller pieces during the harvest process. Some
of the largest automatic commercial ice makers in the RCU-NRC-Large-B
and the IMH-W-Large-B equipment classes use this technology. However,
DOE concluded that implementation of this technology for smaller
capacity ice makers would significantly impact equipment utility, due
to the greater weight and size of these designs, and to the altered ice
shape. DOE noted that available tube ice makers (for capacities around
1,500 lb ice/24 hours and 2,200 lb ice/24 hours) were 150 to 200
percent heavier than comparable cube ice makers. Based on the impacts
to utility of this technology, DOE screened out tube evaporators from
consideration in this analysis.
d. Low Thermal Mass Evaporator Design
DOE's analysis did not consider low thermal mass evaporator
designs. Reducing evaporator thermal mass of batch type ice makers
reduces the heat that must be removed from the evaporator after the
harvest cycle, and thus decreases refrigeration system energy use. DOE
indicated during the preliminary analysis that it was concerned about
the potential proprietary status of such evaporator designs, since DOE
is aware of only one manufacturer that produces equipment with such
evaporators. DOE has not altered its decision to screen out this
technology in its analysis.
e. Microchannel Heat Exchangers
Through discussions with manufacturers, DOE has determined that
there are no instances of energy savings associated with the use of
microchannel heat exchangers in ice makers. Manufacturers also noted
that the reduced refrigerant charge associated with microchannel heat
exchangers can be detrimental to the harvest performance of batch type
ice makers, as there is not enough charge to transfer heat to the
evaporator from the condenser.
DOE contacted microchannel manufacturers to determine whether there
were energy savings associated with use of microchannel heat exchangers
in automatic commercial ice makers. These microchannel manufacturers
noted that investigation of microchannel was driven by space
constraints rather than efficiency.
Because the potential for energy savings is inconclusive, based on
DOE analysis as well as feedback from manufacturers and heat exchanger
suppliers, and based on the potential utility considerations associated
with compromised harvest performance in batch type ice makers
associated with this heat exchanger technology's reduced refrigerant
charge, DOE screened out microchannel heat exchangers as a design
option in this rulemaking.
f. Smart Technologies
While there may be energy demand benefits associated with use of
``smart technologies'' in ice makers in that they reduce energy demand
(e.g., shift the refrigeration system operation to a time of utility
lower demand), DOE is not aware of any commercialized products or
prototypes that also demonstrate improved energy efficiency in
automatic commercial ice makers. Demand savings alone do not impact
energy efficiency, and DOE cannot consider technologies that do not
offer energy savings as measured by the DOE test procedure. Since the
scope of this rulemaking is to consider energy conservation standards
that increase the energy efficiency of automatic commercial ice makers
this technology option has been screened out because it does not save
energy as measured by the test procedure.
g. Motors
Manufacturers Follett and Manitowoc provided comment regarding the
use of higher efficiency motors in ACIMs. Follett stated that they are
not aware of gear motors more efficient than the hypoid motors they
use. (Follett, No. 84 at p. 5) Manitowoc stated that they do not
consider brushless direct-current (DC) fan motors to be cost effective.
(Manitowoc, Public Meeting Transcript, No. 70 at p. 157-159)
In response to Follett's comment, DOE notes that its consideration
of motor efficiency applies to the prime mover portion of the motor,
not the gear drive. Gear motor assemblies include both a motor which
converts electricity to shaft power and a gear drive, which converts
the high rotational speed of the motor shaft to the rotational speed
required by the auger. DOE screened in higher efficiency options for
the motor, but did not consider higher-efficiency gear drives. In
response to Manitowoc, the cost-effectiveness of a given technology,
such as DC fan motors, is not a factor that is considered when
screening technologies.
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 an approach that combines the efficiency level, design
option, and reverse engineering approaches to develop cost-efficiency
curves for automatic commercial ice makers. DOE established efficiency
levels defined as percent energy use lower than that of baseline
efficiency products. DOE's engineering analysis is based on
illustrating a typical design path to achieving the specified
percentage efficiency improvements at each level through the
incorporation of a group of design options. Finally, DOE developed
manufacturing cost models based on reverse engineering of products to
develop baseline manufacturer production costs (MPCs) and to supplement
incremental cost estimate associated with efficiency improvements.
DOE directly analyzed 19 ice maker configurations representing
different classes, capacities, and physical sizes. To develop cost-
efficiency curves, DOE collected information from multiple sources to
characterize the manufacturing cost and energy use reduction of each of
the design options or grouping of design options. DOE conducted an
extensive review of product literature on hundreds of ice makers and
selected 50 of them for testing and reverse engineering.
To gather cost and performance information of different ice maker
[[Page 4675]]
design strategies, DOE conducted interviews with ice maker
manufacturers and component vendors of compressors and fan motors
during the preliminary, NOPR, NODA, and final phases of the rulemaking
Cost information from the vendor interviews and discussions with
manufacturers provided input to the manufacturing cost model. DOE
determined incremental costs associated with specific design options
from vendor information, discussion with manufacturers, and the cost
model. DOE calculated energy use reduction based on test data, data
provided in comments, data provided in manufacturer interviews, and
using the FREEZE program, The reverse engineering, equipment testing,
vendor interviews, and manufacturer interviews provided input for the
energy analysis. Information about specific ice makers also provided
equipment examples against which the modeling results could be
calibrated. The final incremental cost estimates and the energy
modeling results together constitute the energy efficiency curves
presented in the final rule TSD chapter 5.
The cost-efficiency relationships were derived from current market
designs so that efficiency calculations could be verified by ratings or
testing. Another benefit of using market designs is that the efficiency
performance can be associated with the use of particular design options
or design option groupings. The cost of these design option changes can
then be isolated and also verified. In earlier stages of the rule DOE
had limited information on current market designs and relied on the
FREEZE model to supplement and extend its design-option energy modeling
analysis. For the NODA and Final Rule, DOE has expanded its knowledge
base of market designs through its own program of testing and reverse
engineering, but also received test and design information from ice
maker manufacturers. The cost-efficiency curves are now based on these
market designs, test data obtained both through DOE testing and from
manufacturers, specific information about component performance (e.g.
motor efficiency) on which stakeholders have been able to comment, and
in some instances use of the FREEZE model. DOE limited the projected
efficiency levels for groups of design options found in available
equipment to the maximum available efficiency levels associated with
the specific classes. The groups of design options that DOE's analysis
predicted would be required to attain these maximum efficiency levels
were consistent with those of the maximum available ice makers or were
found to provide a conservative estimate of cost compared to the market
designs of equal efficiency employing different design option groups to
attain the level.
Additional details of the engineering analysis are available in
chapter 5 of the final rule TSD.
1. Representative Equipment for Analysis
In performing its engineering analysis, DOE selected representative
units within specific equipment types to serve as analysis points in
the development of cost-efficiency curves. DOE selected models that
were representative of the typical offerings within a given equipment
class. DOE sought to select models having features and technologies
typically found in both the minimum and maximum efficiency equipment
currently available on the market.
DOE received several comments from interested parties regarding
those equipment classes not directly analyzed in the NOPR. Follett
commented that they object to the fact that only one RCU-Large-C was
purchased for testing, given that it represents nearly half of
Follett's sales. Follett added that they also object to the fact that
DOE did not analyze IMH-W-Small-C, IMH-W-Large-C, RCU-Small-C, and RCU-
Large-C, which comprise a significant portion of Follett's revenue.
Follett expressed its fear that DOE's approach could require Follett to
enact design changes that are neither technologically feasible nor
economically justified. (Follett, No. 84 at p. 7-8) Follett added that
all manufacturers have unique designs that should be noted during
reverse engineering analyses. (Follett, No. 84 at p. 8) Similarly,
Hoshizaki commented that DOE only analyzed less than 1% of available
units and that analysis did not include testing to validate proposed
design changes. (Hoshizaki, No. 86 at p. 1)
Ice-O-Matic noted that half cube machines represent a significant
portion of the industry and expressed concern that DOE did not attempt
to analyze half cube machines. (Ice-O-Matic, No. 121 at p. 3)
In response to Ice-o-Matic, DOE notes that it focused its analysis
on full cube machines based on the observation that half cube machines
may have an efficiency advantage over full cube machines. For some
models that are available in both versions, the energy use ratings are
different, and generally the half-dice version has lower energy. This
is consistent with the fact that the additional copper strips that
divide the full-cube cells into two half-cube cells also provide
additional heat transfer surface area that can enhance ice maker
performance.
In response to Follett and Hoshizaki's comments, DOE is limited in
time and resources, and as such, cannot directly analyze all models.
DOE responded to NOPR comments regarding lack of analysis of continuous
RCU units by adding direct analysis of a continuous RCU configuration
with capacity of 800 lb ice/24 hours. This capacity is near the border
between the small and large RCU continuous classes, hence it provides
representation for both capacity ranges. DOE reviewed Follett's
available continuous RCU ice maker data, as listed in the ENERGY
STAR(copyright) database, and found that nearly all of the models meet
the standard set in this rule. Of the two that don't, one has adjusted
energy use within 1 percent of the standard, and one has energy use
within 6 percent.
DOE disagrees with Hoshizaki's statement that DOE analyzed less
than one percent of available units and believes it mischaracterizes
DOE's analysis. DOE identified 656 current ice maker models in its
research of available databases and Web sites. DOE did not analyze
Hoshizaki batch ice makers, due to their proprietary evaporator
design--hence the 91 Hoshizaki batch models would not have been
considered in DOE's analysis for this reason. DOE developed 19
analyses, 3.4 percent of the remaining 565 models. Moreover, DOE
asserts that the range of models analyzed provides a good
representation of ice maker efficiency trends. DOE carefully selected
the analyzed units to represent 13 of the 25 ice maker equipment
classes listed in Table IV.2 representing roughly 93 percent of ice
maker shipments.
DOE does not generally conduct prototype testing to verify the
energy savings projections associated with specific design changes. For
this, DOE has requested data from stakeholders who have done such work.
DOE received such test data, some of it through confidential
information exchange with its contractor, and considered this data in
the analysis. Further, DOE also considered test data and design details
of commercially available ice makers, which it used to calibrate its
projections of energy reductions associated with groups of design
options.
In many cases, DOE leveraged information found by directly
analyzing similar product classes to supplement the analysis of those
secondary equipment classes which were not
[[Page 4676]]
directly analyzed. These similar equipment classes are listed in Table
IV.6. The details of why these equipment classes were chosen can be
found in chapter 5 of the final rule TSD.
Table IV.6--Directly Analyzed Equipment Classes Used To Develop
Standards for Secondary Classes
------------------------------------------------------------------------
Analyzed equipment class
Secondary equipment class associated with efficiency level
for secondary equipment class
------------------------------------------------------------------------
RCU-NRC-Small-B..................... RCU-NRC-Large-B.
RCU-RC-Small-B...................... RCU-NRC-Large-B.
RCU-RC-Large-B...................... RCU-NRC-Large-B.
SCU-W-Small-B....................... SCU-W-Large-B.
IMH-W-Small-C....................... IMH-A-Small-C.
IMH-W-Large-C....................... IMH-A-Large-C.
RCU-NRC-Large-C..................... RCU-NRC-Small-C.
RCU-RC-Small-C...................... RCU-NRC-Small-C.
RCU-RC-Large-C...................... RCU-NRC-Small-C.
SCU-W-Small-C....................... SCU-A-Small-C.
SCU-W-Large-C....................... SCU-A-Small-C.
SCU-A-Large-C....................... SCU-A-Small-C.
------------------------------------------------------------------------
2. Efficiency Levels
a. Baseline Efficiency Levels
EPCA, as amended by the EPACT 2005, prescribed the following
standards for batch type ice makers, shown in Table IV.7, effective
January 1, 2010. (42 U.S.C. 6313(d)(1)) For the engineering analysis,
DOE used the existing batch type equipment standards as the baseline
efficiency level for the equipment types under consideration in this
rulemaking. Also, DOE applied the standards for equipment with harvest
capacities up to 2,500 lb ice/24 hours as baseline efficiency levels
for the larger batch type equipment with harvest capacities between
2,500 and 4,000 lb ice/24 hours, which are currently not regulated. DOE
applied two exceptions to this approach, as discussed below.
For the IMH-W-Small-B equipment class, DOE slightly adjusted the
baseline energy use level to close a gap between the IMH-W-Small-B and
the IMH-W-Medium-B equipment classes. For equipment in the IMH-A-Large-
B equipment class with harvest capacity above 2,500 lb ice per 24
hours, DOE chose a baseline efficiency level equal to the current
standard level at the 2,500 lb ice per 24 hours capacity. In its
analysis, DOE is treating the constant portion of the IMH-A-Large-B
equipment class as a separate equipment class, IMH-A-Extended-B.
As noted in section IV.B.1.d DOE is not proposing adjustment of
maximum condenser water use standards for batch type ice makers. The
section also generally discusses DOE regulation of condenser water.
First, DOE's authority does not extend to regulation of water use,
except as explicitly provided by EPCA. Second, DOE determined that
increasing condenser water use standards to allow for more water flow
in order to reduce energy use is not cost-effective. The details of
this analysis are available in chapter 5 of the final rule TSD.
For water-cooled batch equipment with harvest capacity less than
2,500 lb ice per 24 hours, the baseline condenser water use is equal to
the current condenser water use standards for this equipment.
For water-cooled equipment with harvest capacity greater than 2,500
lb ice per 24 hours, DOE set maximum condenser water standards equal to
the current standard level for the same type of equipment with a
harvest capacity of 2,500 lb ice per 24 hours--the proposed standard
level would not continue to drop as harvest capacity increases, as it
does for equipment with harvest capacity less than 2,500 lb ice per 24
hours.
Table IV.7--Baseline Efficiency Levels for Batch Ice Makers
--------------------------------------------------------------------------------------------------------------------------------------------------------
Maximum energy use kWh/100 lb Maximum condenser water use
Equipment type Type of cooling Harvest rate lb ice/24 hours ice * gal/100 lb ice
--------------------------------------------------------------------------------------------------------------------------------------------------------
Ice--Making Head................ Water................... <500 7.80--0.0055H ** 200--0.022H.
>=500 and <1,436 5.58--0.0011H 200--0.022H.
>=1,436 4.0 145.
Air..................... <450 10.26--0.0086H Not Applicable.
>=450 and <2,500 6.89--0.0011H Not Applicable.
>=2,500 4.1 Not Applicable.
Remote Condensing (but not Air..................... <1,000 8.85--0.0038H Not Applicable.
remote compressor). >=1,000 5.10 Not Applicable.
Remote Condensing and Remote Air..................... <934 8.85--0.0038H Not Applicable.
Compressor. >=934 5.30 Not Applicable.
Self--Contained................. Water................... <200 11.4--0.019H 191--0.0
>=200 7.60 For <2,500: 191--0.0315H.
For >=2,500: 112.
Air..................... <175 18.0--0.0469H Not Applicable.
>=175 9.80 Not Applicable.
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Water use is for the condenser only and does not include potable water used to make ice.
** H = harvest rate in pounds per 24 hours, indicating the water or energy use for a given harvest rate.
Source: 42 U.S.C. 6313(d).
Currently there are no DOE energy standards for continuous type ice
makers. During the preliminary analysis, DOE developed baseline
efficiency levels using energy use data available from several sources,
as discussed in chapter 3 of the preliminary TSD. DOE chose baseline
efficiency levels that would be met by nearly all ice makers
represented in the databases, using ice hardness assumptions of 70 for
flake ice makers and 85 for nugget ice makers, since ice hardness data
was not available at the time. For the NOPR analysis, DOE used
available information published in the AHRI Directory of Certified
Product Performance, the California Energy Commission, the ENERGY STAR
program, and vendor Web sites, to update its icemaker ratings database
(``DOE icemaker ratings database''). The AHRI published equipment
ratings including ice hardness data, measured as prescribed by ASHRAE
29-2009, which is incorporated by reference in the DOE test procedure.
DOE recreated
[[Page 4677]]
its baseline efficiency levels for continuous type ice makers based on
the available AHRI data, considering primarily the ice makers for which
ice hardness data were available. DOE also adjusted the harvest
capacity break points for the continuous equipment classes based on the
new data.
The baseline efficiency levels used in the NOPR analysis for
continuous type ice makers are presented in Table IV.8. For the remote
condensing equipment, the large-capacity remote compressor and large-
capacity non-remote compressor classes have been separated and are
different by 0.2 kWh/100 lb, identical to the batch equipment
differential for the large batch classes.
Table IV.8--NOPR Baseline Efficiency Levels for Continuous Ice Maker Equipment Classes
--------------------------------------------------------------------------------------------------------------------------------------------------------
Maximum energy use kWh/100 lb Maximum condenser water use *
Equipment type Type of cooling Harvest rate lb ice/24 hours ice * gal/100 lb ice
--------------------------------------------------------------------------------------------------------------------------------------------------------
Ice-Making Head................. Water................... Small (<900) 8.1-0.00333H 160-0.0176H.
Large (>=900) 5.1 <=2,500: 160-0.0176H.
>2,500: 116.
Air..................... Small (<700) 11.0-0.00629H Not Applicable.
Large (>=700) 6.6 Not Applicable.
Remote Condensing (Remote Air..................... Small (<850) 10.2-0.00459H Not Applicable.
Compressor). Large (>=850) 6.3 Not Applicable.
Remote Condensing (Non-remote Air..................... Small (<850) 10.0-0.00459H Not Applicable.
Compressor). Large (>=850) 6.1 Not Applicable.
Self-Contained.................. Water................... Small (<900) 9.1-0.00333H 153-0.0252H.
Large (>=900) 6.1 <=2,500:
153-0.0252H.
>2,500: 90.
Air..................... Small (<700) 11.5-0.00629H
Large (>=700) 7.1
--------------------------------------------------------------------------------------------------------------------------------------------------------
* H = harvest capacity in lb ice/24 hours
After the publication of the NOPR and the NOPR public meeting, DOE
received two comments from interested parties regarding its
establishment of baseline models.
In response to the NOPR, Scotsman commented that there is not
sufficient historical data (greater than 1 year) to establish
continuous type baselines with statistical confidence. Scotsman added
that the current ASHRAE standard is biased against low-capacity
machines, and therefore does not accurately represent the energy usage
of the machine when corrected for hardness factor. (Scotsman, No. 85 at
p. 3b)
DOE has found multiple sources of information regarding the energy
efficiency of continuous ice machines on the market. As noted
previously, DOE investigated information published in the AHRI
Directory of Certified Product Performance, the California Energy
Commission, the ENERGY STAR program, and vendor Web sites to inform the
establishment of a baseline for continuous models. In regards to
Scottsman's comment that the standard is biased against low capacity
machines, DOE has set its baseline levels while considering continuous
model energy use that has been adjusted using the current ASHRAE test
standard. If the test is biased against low-capacity machines, this
bias should be reflected in the data and already be accounted for in
the selected baseline levels.
Hoshizaki stated that they believe the baseline levels presented in
the NOPR are too harsh for continuous equipment as it leaves many
ENERGY STAR units unable to meet the minimum energy efficiency
baseline. Hoshizaki noted that DOE based its analysis on the 2012 AHRI
listing. Hoshizaki requested that DOE reassess the baseline data for
all current continuous models as many more units have since been listed
on AHRI's Web site. (Hoshizaki, No. 86 at p. 2-3) Similarly, Follett
commented that some of the data on continuous type ice makers were not
available in 2012, since they were not a part of the ENERGY STAR
program until 2013, and that the baseline line might move up if recent
data was added to the plot. (Follet, Public Meeting Transcript, No. 70
at p. 76-78) PGE/SDG&E commented that they support DOE's updating their
database with new data from all sources, including the CEC, AHRI, and
NRCan databases. (PG&E and SDG&E, No. 89 at p. 3)
In response to Hoshizaki's comment about ENERGY STAR-rated
continuous models, for which there are currently no federal standard
levels that would clearly represent the baseline efficiency levels, DOE
revised its continuous class baselines so that no ENERGY STAR-rated
continuous models have energy use higher than the baseline. The revised
baseline efficiency levels for the continuous SCU classes are shown in
Table IV.9 below. However, DOE notes that baseline efficiency levels
are not required to be set at a level with which all commercially
available equipment would be compliant. There are some IMH-W models and
some IMH-A models that have energy use higher than the selected
baseline levels--this is illustrated in the comparison of equipment
data and efficiency levels in Chapter 3 of the TSD. DOE selected
baseline efficiency levels that provide a good representation of the
highest energy use exhibited by models available on the market with the
exclusion of a few outliers (i.e. models exhibiting very different
energy use than the majority of models).
[[Page 4678]]
Table IV.9--Modified Baseline Efficiency Levels for SCU Continuous Ice Maker Equipment Classes
--------------------------------------------------------------------------------------------------------------------------------------------------------
Maximum energy use kWh/100 Maximum condenser water use
Equipment type Type of cooling Harvest rate lb ice/24 hours lb ice * * gal/100 lb ice
--------------------------------------------------------------------------------------------------------------------------------------------------------
Self-Contained.................. Water................... Small (<900) 9.5--0.00378H 153--0.0252H.
Large (>=900) 6.1 <=2,500:
153--0.0252H
>2,500: 90.
Air..................... Small (<200) 16.3--0.03H Not Applicable.
Large (>=200 and 11.84--0.0078H Not Applicable.
< 700)
Extended (>= 700) 6.38 Not Applicable.
--------------------------------------------------------------------------------------------------------------------------------------------------------
* H = harvest capacity in lb ice/24 hours.
In response to the comments related to data sources DOE notes that
it has continued to update the analysis with new data as it becomes
available. This includes new information published in the AHRI
Directory of Certified Product Performance, the California Energy
Commission and the ENERGY STAR program.
In response to the NODA analysis, Hoshizaki again stated that DOE
has not conducted enough analysis to accurately portray the baseline
efficiency levels of continuous models (Hoshizaki, No. 124 at p. 1)
NAFEM also stated that the NODA continuous unit baselines do not
reflect the current models in the marketplace. (NAFEM, No. 123 at p. 2)
DOE has evaluated all available data sources in its determination
of the baseline efficiency levels for continuous units. However, as
stated above, DOE notes that the baseline level selected is not
necessarily the least efficient equipment on the market. As part of
this review of data sources, DOE has modified the baseline condenser
water use levels for IMH-W continuous classes such that they are 10
percent below the IMH-W batch baseline water use levels.
b. Incremental Efficiency Levels
For each of the 11 analyzed batch type ice-maker equipment classes
and the four analyzed continuous ice maker equipment classes, DOE
established a series of incremental efficiency levels for which it has
calculated incremental costs. DOE chose these classes to be
representative of all ice-making equipment classes, and grouped non-
analyzed equipment classes with similar analyzed equipment classes
accordingly in the downstream analysis. Table IV.10 shows the selected
incremental efficiency levels considered in the final rule analysis for
batch ice makers, and Table IV.11 shows the incremental efficiency
levels considered for continuous ice makers.
Table IV.10--Incremental Efficiency Levels for Batch Ice Maker Equipment Classes Considered in the Final Rule Analysis
--------------------------------------------------------------------------------------------------------------------------------------------------------
Harvest capacity rate lb ice/24
hours
Equipment type * ------------------------------------ EL 2 ** EL 3 EL 3A EL 4 EL 4A EL 5 (%) EL 6 (%) EL 7 (%)
Representative (%) *** (%) *** (%)
Range capacity
--------------------------------------------------------------------------------------------------------------------------------------------------------
IMH-W-Small-B............................... <500 300 10 15 20 24 .......... ..........
.................. .............. .......... .......... 22 .......... .......... ..........
IMH-W-Med-B................................. >=500 and <1,436 850 10 15 18 .......... .......... ..........
IMH-W-Large-B............................... >=1,436 1,500 8 .......... .......... .......... .......... ..........
IMH-W-Large-B............................... >=1,436 2,600 7 .......... .......... .......... .......... ..........
IMH-A-Small-B............................... <450 300 10 15 20 25 26 ..........
18
IMH-A-Large-B............................... >=450 800 10 15 20 23 .......... ..........
16
IMH-A-Large-B............................... >=450 1,500 10 12 .......... .......... .......... ..........
--------------------------------------------------------------------------------------------------------------------------------------------------------
RCU-NRC-Small-B............................. .................. Not Directly Analyzed
--------------------------------------------------------------------------------------------------------------------------------------------------------
RCU-NRC-Large-B............................. >=1,000 1,500 10 15 17 .......... .......... ..........
RCU-NRC-Large-B............................. >=1,000 2,400 10 14 .......... .......... .......... ..........
--------------------------------------------------------------------------------------------------------------------------------------------------------
RCU-RC-Small-B.............................. <934 Not Directly Analyzed
--------------------------------------------------------------------------------------------------------------------------------------------------------
RCU-RC-Large-B.............................. >=934 Not Directly Analyzed
--------------------------------------------------------------------------------------------------------------------------------------------------------
SCU-W-Small-B............................... >200 Not Directly Analyzed
--------------------------------------------------------------------------------------------------------------------------------------------------------
SCU-W-Small-B............................... >=200 300 10 15 20 25 30 ..........
SCU-A-Small-B............................... <175 110 10 15 20 25 30 33
[[Page 4679]]
SCU-A-Large-B............................... >=175 200 10 15 20 25 29 ..........
--------------------------------------------------------------------------------------------------------------------------------------------------------
* See Table III.1 for a description of these abbreviations.
** EL = efficiency level; EL 1 is the baseline efficiency level, while EL 2 through EL 7 represent increased efficiency levels.
*** DOE considered intermediate efficiency levels 3A and 4A for some equipment classes.
Table IV.11--Incremental Efficiency Levels for Continuous Type Ice Maker Equipment Classes Considered in the Final Rule Analysis
--------------------------------------------------------------------------------------------------------------------------------------------------------
Harvest capacity lb ice/24 hours
------------------------------------ EL 2 **
Equipment Type * Representative (%) EL 3 (%) EL 4 (%) EL 5 (%) EL 6 (%)
Range capacity
--------------------------------------------------------------------------------------------------------------------------------------------------------
IMH-W-Small-C........................................... <900 Not Directly Analyzed
--------------------------------------------------------------------------------------------------------------------------------------------------------
IMH-W-Large-C........................................... >=900 Not Directly Analyzed
--------------------------------------------------------------------------------------------------------------------------------------------------------
IMH-A-Small-C........................................... <700 310 10 15 20 25 26
IMH-A-Large-C........................................... >=700 820 10 15 20 23 ..........
RCU-Small-C............................................. <850 800 10 15 20 25 27
--------------------------------------------------------------------------------------------------------------------------------------------------------
RCU-Large-C............................................. >=850 Not Directly Analyzed
--------------------------------------------------------------------------------------------------------------------------------------------------------
SCU-W-Small-C........................................... <900 Not Directly Analyzed
--------------------------------------------------------------------------------------------------------------------------------------------------------
SCU-W-Large-C........................................... >=900 No existing products on the market
--------------------------------------------------------------------------------------------------------------------------------------------------------
SCU-A-Small-C........................................... <700 220 10 15 20 25 27
--------------------------------------------------------------------------------------------------------------------------------------------------------
SCU-A-Large-C........................................... >=700 No existing products on the market
--------------------------------------------------------------------------------------------------------------------------------------------------------
* See Table III.1 for a description of these abbreviations.
** EL 1 is the baseline efficiency level, while EL 2 through EL 6 represent increased efficiency levels.
In response to the NODA, Hoshizaki stated that ``there are no
models that achieve the NODA levels in SCU-A, IMH-W large, or RCU-A
large'' equipment classes. Hoshizaki added that these same levels were
not analyzed for cost curves. (Hoshizaki, No. 124 at p. 1)
As discussed above in section IV.D.1, DOE's analysis for the RCU
class was at a representative capacity of 800 lb ice/24 hours, intended
to provide representation for both small and large classes, by being at
a capacity level in the large range but within 100 lb ice/24 hours of
the small range. Continuous ice maker data that DOE collected from
publicly available sources does show that nearly all ice makers meet
the baseline efficiency levels considered in the analysis. Not all meet
the efficiency levels eventually designated as TSL 3 for the final
rule, but some ice makers over a broad capacity range in each of the
cited classes (SCU-A-C, IMH-W-C, RCU-RC-C, and RCU-NRC-C) do meet this
level, shown in Table IV.12 through Table IV.15. A comparison of the
levels achieved by commercially available ice makers with the
considered TSL levels is shown graphically in Chapter 3 of the TSD.
Table IV.12--Air-Cooled, Self-Contained, Continuous Units Meeting the Final Rule Standard
--------------------------------------------------------------------------------------------------------------------------------------------------------
Adjusted energy
Manufacturer Model Harvest capacity use (kWh/100 lb Standard (kWh/100 Hardness factor
(lb ice/24 hours) ice) lb ice)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Hoshizaki................................. F-330BAH-C.................. 222 7.99 8.08 84.5
Hoshizaki................................. F-330BAH.................... 238 7.56 7.98 69.8
Manitowoc................................. RNS0385A-161................ 248 7.75 7.92 86
Scotsman.................................. MDT5N25WS-1#................ 455 4.99 6.63 75
Hoshizaki................................. DCM-751BWH.................. 631 5.21 5.53 88.9
--------------------------------------------------------------------------------------------------------------------------------------------------------
[[Page 4680]]
Table IV.13--Water-Cooled, Ice Making Head, Continuous Units Meeting the Final Rule Standard
--------------------------------------------------------------------------------------------------------------------------------------------------------
Adjusted energy
Manufacturer Model Harvest capacity use (kWh/100 lb Standard (kWh/100 Hardness factor
(lb ice/24 hours) ice) lb ice)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Ice-O-Matic............................... GEM0450W.................... 429 4.66 5.33 (*)
Follet.................................... HC *700W **................. 535 4.43 5.05 (*)
Ice-O-Matic............................... GEM0655W.................... 578 4.2 4.94 (*)
Ice-O-Matic............................... MFI0805W.................... 604 4.26 4.87 (*)
Hoshizaki................................. F-801MWH.................... 635 4.48 4.78 75.1
Ice-O-Matic............................... GEM0650W.................... 633 3.86 4.79 (*)
Ice-O-Matic............................... MFI0800W.................... 740 3.93 4.50 (*)
Ice-O-Matic............................... GEM0956W.................... 877 3.54 4.34 (*)
Ice-O-Matic............................... GEM0955W.................... 927 3.71 4.34 (*)
Ice-O-Matic............................... MFI1256W.................... 959 3.54 4.34 (*)
Ice-O-Matic............................... MFI1255W.................... 1000 3.41 4.34 (*)
Follet.................................... HCE1400W**.................. 1150 4.31 4.34 (*)
Ice-O-Matic............................... RN-1409W.................... 1318 4.27 4.34 (*)
Ice-O-Matic............................... RN1409W-261................. 1318 4.15 4.34 88
Follet.................................... HCC1400W ***................ 1374 4.28 4.34 (*)
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Ice hardness factor assumed to be 70 for flake ice makers and 85 for nugget ice makers.
Table IV.14--Remote Condensing, Not Remote Compressor, Continuous Units Meeting the Final Rule Standard
--------------------------------------------------------------------------------------------------------------------------------------------------------
Adjusted energy
Manufacturer Model Harvest capacity use (kWh/100 lb Proposed standard Hardness factor
(lb ice/24 hours) ice) (kWh/100 lb ice)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Ice-O-Matic............................... GEM0650R.................... 550 6.41 6.51 (*)
Ice-O-Matic............................... GEM0956R.................... 825 4.77 4.915 (*)
Ice-O-Matic............................... MFI1256R.................... 950 4.79 5.06 (*)
Scotsman.................................. N1322R-32#.................. 1030 5.04 5.06 74
Scotsman.................................. F1222R-32#.................. 1050 4.97 5.06 60
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Ice hardness factor assumed to be 70 for flake ice makers and 85 for nugget ice makers.
Table IV.15--Remote Condensing, Remote Compressor, Continuous Units Meeting the Final Rule Standard
--------------------------------------------------------------------------------------------------------------------------------------------------------
Adjusted energy
Manufacturer Model Harvest capacity use (kWh/100 lb Standard (kWh/100 Hardness factor
(lb ice/24 hours) ice) lb ice)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Follet.................................... HCD700RBT................... 566 5.44 6.62 88
Manitowoc................................. RFS1278C-261................ 958 5.11 5.26 72
Follet.................................... HCD1400R ***................ 1184 4.87 5.26 (*)
Follet.................................... HCF1400RBT.................. 1195 4.59 5.26 89.4
Follet.................................... HCD1650R ***................ 1284 5.24 5.26 (*)
Follet.................................... HCF1650RBT.................. 1441 4.14 5.26 89.9
Manitowoc................................. RFS2378C-261................ 1702 5.18 5.26 68
Ice-O-Matic............................... MFI2406LS................... 2000 4.27 5.26 (*)
Scotsman.................................. FME2404RLS.................. 2000 3.54 5.26 (*)
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Ice hardness factor assumed to be 70 for flake ice makers and 85 for nugget ice makers.
c. IMH-A-Large-B Treatment
The existing DOE energy conservation standard for large air-cooled
IMH cube type ice makers is represented by an equation for which
maximum allowable energy usage decreases linearly as harvest rate
increases from 450 to 2,500 lb ice/24 hours. In the NOPR, DOE proposed
efficiency levels for this class that maintain a constant energy use in
kwh per 100 pounds of ice at large capacities to the extent that this
approach does not violate EPCA's anti-backsliding provision. 79 FR at
14877 (March 17, 2014).
DOE did not receive any comments on the approach described in the
NOPR. Therefore, DOE maintained this approach for the final rule.
d. Maximum Available Efficiency Equipment
DOE considered the most-efficient equipment available on the
market, known as maximum available equipment. For many batch equipment
classes, the maximum available equipment uses proprietary or screened-
out technology options that DOE did not consider in its engineering
analysis, such as low thermal-mass evaporators and tube evaporators for
batch type ice makers. Hence, DOE considered only batch maximum
available equipment that does not include these technologies. These
maximum available efficiency levels are shown in Table IV.16. This
information is based on DOE's icemaker ratings database (see data in
chapter 3 of the final rule TSD). The efficiency levels are represented
as an energy use percentage reduction compared to the energy use of
baseline-efficiency equipment. For some batch equipment classes, DOE
has presented maximum available efficiency levels at different capacity
levels or for 22-inch wide ice makers.
[[Page 4681]]
Table IV.16--Efficiency Levels for Maximum Available Equipment Without
Screened Technologies in Batch Ice Maker Equipment Classes
------------------------------------------------------------------------
Equipment class Energy use lower than baseline
------------------------------------------------------------------------
IMH-W-Small-B.......................... 19.2%, 16.9% (22-inch wide).
IMH-W-Med-B............................ 14.3%.
IMH-W-Large-B.......................... 5% (at 1,500 lb ice/24 hours),
2.5% (at 2,600 lb ice/24
hours).
IMH-A-Small-B.......................... 19.3%, 16.6% (22-inch wide).
IMH-A-Large-B.......................... 16.1% (at 800 lb ice/24 hours)
5.5% (at 590 lb ice/24 hours,
22-inch wide) 6.0% (at 1,500
lb ice/24 hours).
RCU-Small-B............................ 25.8%.
RCU-Large-B............................ 15.7% (at 1,500 lb ice/24
hours), 14.9% (at 2,400 lb ice/
24 hours).
SCU-W-Small-B.......................... 26.2%.
SCU-W-Large-B.......................... 27.6%.
SCU-A-Small-B.......................... 24.9%.
SCU-A-Large-B.......................... 26.4%.
------------------------------------------------------------------------
Efficiency levels for maximum available equipment in the continuous
type ice-making equipment classes are shown in Table IV.17. This
information is based on a survey of product databases and manufacturer
Web sites (see data in chapter 3 of the final rule TSD). The efficiency
levels are represented as an energy use percentage reduction compared
to the energy use of baseline-efficiency equipment.
Table IV.17--Efficiency Levels for Maximum Available Equipment for
Continuous Type Ice Maker Equipment Classes
------------------------------------------------------------------------
Equipment class Energy use lower than baseline
------------------------------------------------------------------------
IMH-W-Small-C.......................... 16.5%.
IMH-W-Large-C.......................... 12.2% (at 1,000 lb ice/24
hours), 8.6% (at 1,800 lb ice/
24 hours).
IMH-A-Small-C.......................... 28.0%.
IMH-A-Large-C.......................... 35.7% (at 820 lb ice/24 hours),
lb ice.
RCU-Small-C............................ 18.4%.
RCU-Large-C............................ 18.5%.
SCU-W-Small-C.......................... 18.7% *.
SCU-W-Large-C.......................... No equipment on the market *.
SCU-A-Small-C.......................... 29.3%.
SCU-A-Large-C.......................... No equipment on the market *.
------------------------------------------------------------------------
* DOE's inspection of currently available equipment revealed that there
are no available products in the defined SCU-W-Large-C and SCU-A-Large-
C equipment classes at this time.
In response to the maximum available efficiency levels presented in
the NODA AHRI suggested that DOE review the max available unit for the
22-inch IMH-A-Small-B equipment class which is cited at 17% as they
believe the unit may contain proprietary design options. (AHRI, No. 128
at p. 3)
DOE maintains that the representative 22-inch unit for the IMH-A-
Small-B equipment class did not contain any proprietary designs--
specifically, the model analyzed does not include any proprietary or
screened options such as low-thermal-mass evaporators or tube-ice
evaporators. Table IV.18 lists 22-inch ice makers of this class that
are in DOE's ice maker database. DOE calculated an efficiency level
equal to 12.3% for such a unit with design options included in maximum
available equipment. There are three available units with higher
efficiency level. Therefore, DOE has maintained the maximum available
level for this equipment class in the final rule engineering analysis.
Table IV.18--22-Inch IMH-A-Small-B Models
----------------------------------------------------------------------------------------------------------------
Contains proprietary
or screened
Harvest capacity rate (lb ice/24 hours) Rated energy use Percent efficiency technology (e.g.,
(kWh/100 lb ice) level low-thermal-mass or
tube evaporators)?
----------------------------------------------------------------------------------------------------------------
249........................................ 8.10 0.2 No.
290........................................ 7.23 6.9 No.
225........................................ 7.49 10.0 No.
335........................................ 6.64 10.0 No.
360........................................ 6.45 10.0 No.
310........................................ 6.80 10.5 No.
305........................................ 6.80 11.0 No.
230........................................ 7.32 11.6 No.
278........................................ 6.90 12.3 Yes.
214........................................ 7.20 14.5 No.
370........................................ 5.90 16.6 No.
255........................................ 6.60 18.2 No.
324........................................ 5.80 22.4 Yes.
----------------------------------------------------------------------------------------------------------------
e. Maximum Technologically Feasible Efficiency Levels
When DOE adopts an amended or new energy conservation standard for
a type or class of covered equipment such as automatic commercial ice
makers, it determines the maximum improvement in energy efficiency that
is technologically feasible for such equipment. (See 42 U.S.C.
6295(p)(1) and 6313(d)(4)) DOE determined maximum technologically
feasible (``max-tech'') efficiency levels for automatic commercial ice
makers in the engineering analysis by considering efficiency
improvement beyond the maximum available levels associated with two
design options that are generally not used in commercially available
equipment, brushless DC motors and drain water heat exchangers. DOE has
not screened out these design options--cost-effectiveness is not one of
the screening criteria (see section IV.C). Table IV.19 and Table IV.20
show the max-tech levels determined in the NOPR engineering analysis
for batch and continuous type automatic commercial ice makers,
respectively. These max-tech levels do not consider use of screened
technology, specifically low-thermal-mass evaporators and tube ice
evaporators.
[[Page 4682]]
Table IV.19--Final Rule Max-Tech Levels for Batch Automatic Commercial
Ice Makers
------------------------------------------------------------------------
Percent energy use lower than
Equipment type * baseline
------------------------------------------------------------------------
IMH-W-Small-B.......................... 23.9%, 21.5% (22 inch wide).
IMH-W-Med-B............................ 18.1%.
IMH-W-Large-B.......................... 8.3% (at 1,500 lb ice/24
hours), 7.4% (at 2,600 lb ice/
24 hours).
IMH-A-Small-B.......................... 25.5%, 18.1% (22 inch wide).
IMH-A-Large-B.......................... 23.4% (at 800 lb ice/24 hours),
15.8% (at 590 lb ice/24 hours,
22 inch wide), 11.8% (at 1,500
lb ice/24 hours).
RCU-Small-B............................ Not directly analyzed.
RCU-Large-B............................ 17.3% (at 1,500 lb ice/24
hours), 13.9% (at 2,400 lb ice/
24 hours).
SCU-W-Small-B.......................... Not directly analyzed.
SCU-W-Large-B.......................... 29.8%.
SCU-A-Small-B.......................... 32.7%.
SCU-A-Large-B.......................... 29.1%.
------------------------------------------------------------------------
* IMH is ice-making head; RCU is remote condensing unit; SCU is self-
contained unit; W is water-cooled; A is air-cooled; Small refers to
the lowest harvest category; Med refers to the Medium category (water-
cooled IMH only); Large refers to the large size category; RCU units
were modeled as one with line losses used to distinguish standards.
Note: For equipment classes that were not analyzed, DOE did not develop
specific cost-efficiency curves but attributed the curve (and maximum
technology point) from one of the analyzed equipment classes.
Table IV.20--Final Rule Max-Tech Levels for Continuous Automatic
Commercial Ice Makers
------------------------------------------------------------------------
Percent energy use lower than
Equipment type baseline
------------------------------------------------------------------------
IMH-W-Small-C.......................... Not directly analyzed.
IMH-W-Large-C.......................... Not directly analyzed.
IMH-A-Small-C.......................... 25.7% [dagger].
IMH-A-Large-C.......................... 23.3% (at 820 lb ice/24 hours).
RCU-Small-C............................ 26.6% [dagger].
RCU-Large-C............................ Not directly analyzed.
SCU-W-Small-C.......................... Not directly analyzed.
SCU-W-Large-C *........................ No units available.
SCU-A-Small-C.......................... 26.6% [dagger].
SCU-A-Large-C *........................ No units available.
------------------------------------------------------------------------
* DOE's investigation of equipment on the market revealed that there are
no existing products in either of these two equipment classes (as
defined in this NOPR).
** For equipment classes that were not analyzed, DOE did not develop
specific cost-efficiency curves but attributed the curve (and maximum
technology point) from one of the analyzed equipment classes
[dagger] Percent energy use lower than baseline.
Several stakeholders provided comment regarding the maximum
technological efficiency levels presented in the NOPR.
PG&E recommended that DOE continue to update its product database
to ensure that max-tech levels are set appropriately. (PG&E and SDG&E,
No. 89 at p. 3-4) Manitowoc stated that examples of currently available
models that are near the max-tech levels are not generally
representative of the full range of models in each equipment class,
explaining that small-capacity ice makers can attain higher efficiency
levels than large-capacity ice makers built using the same package
size. (Manitowoc, No. 92 at p. 3) AHRI commented that the maximum
technologically feasible efficiency levels presented in the NOPR
analysis were overestimated by up to 13% for at least 10 equipment
classes. AHRI added that the FREEZE energy model has been proven
invalid through testing, citing two examples of testing to evaluate the
efficiency improvement associated with switching to a higher-EER
compressor in which the observed efficiency improvement was
significantly less than the NOPR projections of efficiency improvement
associated with compressor switching. (AHRI, No. 93 at p. 5-6)
In response to the comment provided by PGE DOE notes that it has
continued to update the product database with new data as it becomes
available.
In response to Manitowoc, DOE notes that its analysis has
considered multiple capacity levels for key classes. Also, although DOE
agrees that higher efficiency levels may be more difficult to attain by
higher-capacity ice makers, DOE has investigated the trend of
efficiency level as a function of harvest capacity and package size and
concluded that there are no consistent trends in the available data
that would indicate which capacities should be analyzed for each
specific package size. 79 FR at 14871-3 (March 17, 2014). DOE notes
that while Manitowoc's comment indicates that higher efficiency levels
may be easier to attain for a smaller-capacity unit in a given package
size, the comment does not indicate which classes and capacities in
DOE's analysis represent capacities for which attaining higher
efficiency would be so much easier that equipment with these
characteristics would not be representative of their classes. An
example review of the relationship of harvest capacity rate, efficiency
level, and package size in volume (cubic feet) is shown in Table IV.21
for IMH air-cooled batch ice makers. The data shown does not include
ice makers with proprietary evaporator technology, nor does it include
ice makers that produce large-size (gourmet) ice cubes. The data show
that higher efficiency levels do not necessarily correlate either with
larger package sizes or the smallest harvest capacity rates--the
maximum 20.7% efficiency level is associated with a relatively small
8.3 cubic foot volume and a 530 lb ice/24 hour capacity rate.
Table IV.21--Relationship Between Harvest Capacity Rate, Efficiency Level, and Volume for IMH Air-Cooled Batch
Ice Makers Between 300 and 600 lb Ice/24 Hours
----------------------------------------------------------------------------------------------------------------
Energy use Percent
Harvest capacity rate (lb ice/24 hours) (kWh/100 lb efficiency Volume (cu ft)
ice) level * (%)
----------------------------------------------------------------------------------------------------------------
305............................................................. 6.80 11.0 6.7
310............................................................. 6.80 10.5 6.7
335............................................................. 6.64 10.0 6.7
360............................................................. 6.45 10.0 6.7
370............................................................. 5.90 16.6 7.0
380............................................................. 6.70 4.2 7.0
404............................................................. 6.10 10.1 7.3
357............................................................. 6.30 12.4 8.3
358............................................................. 5.95 17.1 8.3
368............................................................. 6.10 14.0 8.3
[[Page 4683]]
448............................................................. 6.10 4.8 8.3
448............................................................. 6.10 4.8 8.3
530............................................................. 5.00 20.7 8.3
530............................................................. 5.00 20.7 8.3
366............................................................. 6.00 15.6 8.5
459............................................................. 5.80 9.2 8.5
590............................................................. 5.90 5.5 8.9
300............................................................. 6.20 19.3 9.1
316............................................................. 6.36 15.7 9.1
320............................................................. 6.20 17.4 9.1
335............................................................. 5.97 19.1 9.1
370............................................................. 5.94 16.1 9.1
388............................................................. 6.00 13.3 9.1
390............................................................. 5.79 16.2 9.1
405............................................................. 5.80 14.4 9.1
410............................................................. 5.73 14.9 9.1
485............................................................. 6.00 5.6 9.1
490............................................................. 5.41 14.8 9.1
538............................................................. 6.00 4.7 9.1
555............................................................. 5.29 15.8 9.1
300............................................................. 6.50 15.4 9.6
380............................................................. 5.80 17.0 9.6
400............................................................. 6.40 6.2 9.6
528............................................................. 6.00 4.9 9.6
486............................................................. 5.30 16.6 17.6
----------------------------------------------------------------------------------------------------------------
* Percent energy use less than baseline energy use.
In response to AHRI, DOE notes that modifications have been made to
the engineering analysis to incorporate new data provided by interested
parties regarding the expected energy savings resulting from the
incorporation of design options. These modifications have resulted in a
reevaluation of max-tech levels for several equipment classes. See
chapter 5 of the final rule TSD for the results of the analyses and a
list of technologies included in max-tech equipment. Table IV.22 below
compares the max-tech levels of AHRI's NOPR comment to DOE's NOPR phase
max-tech levels, the maximum available efficiency levels, and the max-
tech levels of DOE's final rule analysis. The final-rule max-tech
levels are higher than the AHRI max-tech levels in only three classes,
IMH-W-Small-B, IMH-A-Small-B, and RCU-NRC-Large-B1 (1,500 lb ice/24
hour representative capacity). AHRI's comment mentions that certain
design options were removed from consideration as part of AHRI's
``correction'' of the DOE analysis. These design option changes are
described in Exhibit 3 of the comment. (AHRI, No. 93 at p. 24).
For IMH-A-Small-B, AHRI eliminated ``increase in evaporator area by
51% (with chassis growth)''. Efficiency improvement of 12.8 percent is
attributed to this design option in the final rule analysis, accounting
for more than the 7 percent difference between the DOE and AHRI max-
tech projections. For IMH-W-Small-B, AHRI similarly eliminated design
options involving increase in chassis size. AHRI indicated that design
options that increase package size should not be considered for these
classes because they include 22-inch units, which AHRI claimed to be
space-constrained. DOE retained consideration of these design options
for the final rule analysis, conducting additional analysis for 22-inch
wide models, and considering the installation cost impacts of the
larger chassis size for a representative population of units where some
rebuilding of the surrounding space would be required to accommodate
the larger size (see section IV.G.2) DOE considers package size
increase a potential for added cost, rather than a reduction in utility
that must be screened out of the analysis, since added cost is not one
of the four screening criteria. (see 10 CFR 430, subpart C, appendix A,
section (4)(a)(4)) For RCU-NRC-Large-B1, DOE's final rule max-tech
efficiency level is only 1 percent higher than the AHRI max-tech level,
and the maximum available efficiency levels is equal to the AHRI max-
tech level. For this class, AHRI modified the performance improvement
associated with higher-EER compressors. DOE's analysis uses ice maker
efficiency improvement attributable to compressor improvement slightly
better than assumed by AHRI--DOE's estimate is based on a larger
dataset of test data, evaluating the ice maker efficiency improvement
possible by using improved compressors.
Table IV.22--Comparison of AHRI Max Tech Levels With DOE NOPR and Final Rule Max Tech Levels
--------------------------------------------------------------------------------------------------------------------------------------------------------
Representative DOE NOPR max tech DOE final rule
Equipment class capacity (lb ice/ AHRI max tech (% (% below Max available (% max tech (%
24 hours) below baseline) baseline) below baseline) below baseline)
--------------------------------------------------------------------------------------------------------------------------------------------------------
IMH-W-Small-B............................................ 300 18 29 19 24
[[Page 4684]]
IMH-W-Med-B.............................................. 850 18 21 14 18
IMH-W-Large-B-1.......................................... 1500 15 17 5 8
IMH-W-Large-B-2.......................................... 2600 14 15 2.5 7
IMH-A-Small-B............................................ 300 19 31 19 26
IMH-A-Large-B-1.......................................... 800 25 29 16 16
IMH-A-Large-B-2.......................................... 1500 18 20 6 12
RCU-NRC-Large-B-1........................................ 1500 16 21 16 17
RCU-NRC-Large-B-2........................................ 2400 18 21 15 14
SCU-W-Large-B............................................ 300 30 30 28 30
SCU-A-Small-B............................................ 110 39 39 31 33
SCU-A-Large-B............................................ 200 35 35 26 29
IMH-A-Small-C............................................ 310 26 31 28 26
IMH-A-Large-C............................................ 820 30 30 36 23
SCU-A-Small-C............................................ 110 28 28 24 27
--------------------------------------------------------------------------------------------------------------------------------------------------------
In response to AHRI's comment that the FREEZE model has been proven
to be invalid, DOE notes that this comment is based on tests
illustrating the ice maker efficiency improvement associated with two
examples of switch to higher-EER compressors. AHRI points to only one
of the design options considered in the DOE's analysis, for which DOE
updated its analysis. DOE has modified its treatment of compressors in
the analysis, basing the calculation of ice maker efficiency
improvement on test data provided both by the AHRI comment and other
data provided confidentially by manufacturers to DOE's contractor.
Based on the data DOE reviewed, the ice maker energy use reduction
associated with improvement in compressor EER averages 57 percent of
the compressor energy use reduction expected based on the EER
improvement--DOE used this ratio for its analysis of batch ice makers
for the final rule. Hence, this particular issue with the engineering
analysis has been addressed through changes in DOE's approach in both
the NODA and final rule analyses.
3. Design Options
After conducting the screening analysis and removing from
consideration the technologies described above, DOE considered the
inclusion of the remaining technologies as design options in the final
rule engineering analysis. The technologies that were considered in the
engineering analysis are listed in Table IV.23, with indication of the
equipment classes to which they apply.
[GRAPHIC] [TIFF OMITTED] TR28JA15.003
a. Design Options That Need Cabinet Growth
Some of the design options considered by DOE in its technology
assessment could require an increased cabinet size. Examples of such
design options include increasing the surface area of the evaporator or
condenser, or both. Larger heat exchangers would enable the refrigerant
circuit to operate with an increased evaporating temperature and a
decreased
[[Page 4685]]
condensing temperature, thus reducing the temperature lift imposed on
the refrigeration system and hence the compressor power input. In some
cases the added refrigerant charge associated with increasing heat
exchanger size could also necessitate the installation of a refrigerant
receiver to ensure proper refrigerant charge management in all
operating conditions for which the unit is designed, thus increasing
the need for larger cabinet size.
In the preliminary analysis, DOE did not consider design options
that increase cabinet size. However, in the NOPR DOE changed the
approach and considered design options that increase cabinet size for
certain equipment classes: IMH-W-Small-B, IMH-A-Small-B, IMH-A-Large-B
(800 lb ice/24 hours representative capacity), and IMH-A-Small-C. DOE
only applied these design options for those equipment classes where the
representative baseline unit had space to grow relative to the largest
units on the market. DOE also considered size increase for the remote
condensers of RCU classes.
In response to the March 2014 NOPR, several manufacturers noted
that the size of icemakers is limited in certain applications.
Manitowoc commented that not all end users can accept larger or taller
ice-making cabinets. (Manitowoc, Public Meeting Transcript, No. 70 at
p. 133) Ice-O-Matic commented that customers want ice machines that are
able to produce more ice in a smaller physical space and that such ice
makers will be difficult to make if standards necessitate design
options that require cabinet growth. (Ice-O-Matic, Public Meeting
Transcript, No. 70 at p. 29-31)
Scotsman and AHRI both noted that cabinet size increases would
require users to either enlarge the space in the kitchen to accommodate
a larger unit or to repair older ice makers rather than buying new ones
or to make due with a smaller capacity ice maker. (AHRI, No. 93 at p.
7-8; Scotsman, Public Meeting Transcript, No. 70 at p. 126-127)
Manitowoc, Ice-O-Matic, and AHRI each stated that incorporating design
options that may increase the size of automatic commercial ice makers
will increase the likelihood that consumers refurbish rather than
replace their existing units. (Manitowoc, Public Meeting Transcript,
No. 70 at p. 129-130; Ice-O-Matic, Public Meeting Transcript, No. 70 at
p. 32-33; AHRI, No. 93 at p. 7-8) Scotsman, Manitowoc and Follett all
agreed that large ice makers would have an impact in installation
costs. (Scotsman, No. 85 at p. 5b-6b; Manitowoc, No. 92 at p. 3;
Follett, No. 84 at p. 6) Follett commented that maintenance costs will
increase because larger components will reduce serviceability and
energy-efficient components, such as a lower horsepower auger motor,
may not be as robust. (Follet, No. 70 at p. 132-133)
AHRI commented that design options which increase chassis size
should not be considered for IMH-A-Small-B, IMH-A-Large-B, IMH-W-Small-
B, and IMH-W-Med-B classes, as 22-inch units wide units account for 18%
of all ice makers sold in the US. AHRI added that if design options
which increase cabinet size are not screened out for these product
classes, there will likely be an adverse impact on product
availability. (AHRI, No. 93 at p. 4)
In contrast, PGE/SDG&E commented that they support DOE's decision
to include in the engineering analysis design options that increase
chassis size. (PG&E and SDG&E, No. 89 at p. 3) The Joint Commenters
expressed their belief that DOE has appropriately considered size
increases in their engineering analysis and that those customers who
have smaller units today could purchase a taller unit with the same
capacity, a smaller-capacity unit, or two smaller-capacity units.
(Joint Commenters, No. 87 at p. 3)
In response to the NODA analysis, CA IOU stated their support of
DOE including technically (DOE interprets this to mean technologically)
feasible design options that may increase chassis sizes in certain
cases. (CA IOU, No. 129 at p. 2)
DOE recognizes that the size of ice makers is limited in certain
applications. DOE notes that many of the equipment classes analyzed do
not require any cabinet growth to reach higher efficiency levels. DOE
considered design options involving package size increase for IMH-A-
Large-B, IMH-A-Small-B, and IMH-W-Med units. For the final rule
analyses, DOE did not consider design options which necessitate a
cabinet size increase for IMH-A-Small-C units. DOE adjusted the
analysis of installation costs to consider the impact of added costs
associated with renovation to accommodate size increase for the few
equipment classes for which DOE did consider size increase. The life
cycle cost analysis, described in section IV.G.2 details how these
added installation costs were considered in the analysis.
Table IV.24 lists the equipment classes for which DOE considered
design options that involve increase in chassis size in the final rule
analysis.
Table IV.24--Analyzed Equipment Classes Where DOE Analyzed Size-
Increasing Design Options in the Final Rule Analysis
------------------------------------------------------------------------
Harvest capacity Used design options
Unit lb ice/24 hours that increased size?
------------------------------------------------------------------------
IMH-A-Small-B................. 300 Yes.
IMH-A-Large-B (med)........... 800 Yes.
IMH-A-Large-B (large)......... 1,500 No.
IMH-W-Small-B................. 300 Yes.
IMH-W-Med-B................... 850 No.
IMH-W-Large-B................. 2,600 No.
RCU-XXX-Large-B (med)......... 1,500 For the remote
condenser, but not
for the ice-making
head.
RCU-XXX-Large-B (large)....... 2,400 For the remote
condenser, but not
for the ice-making
head.
SCU-A-Small-B................. 110 No.
SCU-A-Large-B................. 200 No.
SCU-W-Large-B................. 300 No.
IMH-A-Small-C................. 310 No.
IMH-A-Large-C (med)........... 820 No.
SCU-A-Small-C................. 110 No.
------------------------------------------------------------------------
Note: ``XXX'' refers to ``RC'' or ``NRC'' for each of the entries with
``XXX''.
[[Page 4686]]
b. Improved Condenser Performance
During the NOPR analysis, DOE considered size increase for the
condenser to reduce condensing temperature and compressor power input.
DOE requested comment on use of this design option and on the
difficulty of implementing it in ice makers with size constraints.
Follet commented that 10[emsp14][deg]F is the practical limit for
the temperature difference between the ambient air and the hot gas in
the condenser. Follet added that it is possible to increase the surface
area, but either no meaningful efficiency is gained, or the size of the
condenser would have to increase to the point that it would not fit
into tight spaces. (Follet, No. 84 at p. 5)
DOE did not consider any condenser sizes that would result in
condensing temperatures as close as 10[emsp14][deg]F to the ambient
temperatures for air-cooled icemakers.
Stakeholders AHRI, Hoshizaki, Follet, and Ice-O-Matic noted that
improved condenser performance would likely require an increase in
cabinet size. (AHRI, No. 93 at p. 4; Hoshizaki, Public Meeting
Transcript, No. 70 at p. 128-129; Ice-O-Matic, Public Meeting
Transcript, No. 70 at p. 32-33; Follet, No. 84 at p. 5)
In response to concerns about the potential need to increase
cabinet size to make space for larger condensers, DOE agrees that
increasing condenser size may require also increasing cabinet size. DOE
has limited cabinet size increases to just three equipment classes,
IMH-A-Large-B, IMH-A-Small-B, and IMH-W-Small-B. Furthermore, the
specific size increases considered for these ice makers do not involve
size increase beyond the size of ice makers that are currently being
sold. The specific size increases considered are presented in Chapter 5
of the TSD. In addition, the life cycle cost analysis considers
additional installation cost associated with a proportion of ice makers
sold as replacements that, with the new larger sizes, will not fit in
the existing spaces where the old ice makers are located (see section
IV.G.2.a).
Manitowoc commented regarding condenser size increase for water-
cooled ice makers that increasing water-cooled surface area can reduce
the condensing temperature and cause the ice machine to be unable to
harvest the ice at low inlet water temperature conditions, which
affects the performance of models in northern regions. (Manitowoc,
Public Meeting Transcript, No. 70 at p. 108-110)
DOE is aware that increasing condenser surface area may have an
impact on the ice machine's ability to harvest ice. As discussed in the
NOPR, DOE generally avoided consideration of very low condensing
temperatures in its analysis, using 101[emsp14][deg]F as a guideline
lower limit. The analysis also considered the increase in harvest cycle
energy use--Section IV.D.4 describes how the longer harvest times were
addressed in the engineering analysis.
Manitowoc noted that the NODA EL3 level for the RCU-NRC-B2
equipment class assumes a 19-inch increase in condenser width with an
additional condenser row. Manitowoc asserted that an increase this
large could lead to significant refrigerant charge issues. Therefore,
Manitowoc suggested that NODA EL2 be selected for this equipment class.
(Manitowoc, No. 126 at p. 2)
In the final rule DOE modified the engineering analysis for this
class and has eliminated one of the two condenser size increase steps
in the final rule engineering analysis. DOE notes that the final
condenser size is still smaller on the basis of refrigerant volume per
harvest capacity rate than the largest remote condenser for an RCU ice
maker observed in DOE's review of units purchased for reverse
engineering. Therefore, DOE has confidence that the refrigerant
management challenges are manageable for the maximum condenser size
considered in the analysis.
Manitowoc also noted that adding a condenser row in the SCU-A-
Small-B class may not be possible due to the small volume available in
the compact chassis required for these models. Similarly, a 9''
increase in condenser width for the SCU-A-Large-B may be unrealistic.
(Manitowoc, No. 126 at p. 2) In selecting these design options, DOE
reviewed the spatial constraints and condenser sizes within both
reverse-engineered units used as the basis for energy use calculations
for these classes. While the space underneath the ice storage bins of
these units is limited in height, there is sufficient room for the
width and depth increases that DOE considered. Based on data gathered
from these teardowns, DOE concluded that these condenser size design
options were feasible for these units.
c. Compressors
Several interested parties provided comment regarding the
feasibility of incorporating more efficient compressors in ACIMs. AHRI
urged DOE to reevaluate the feasibility of implementing more efficient
compressors into the IMH-A-Small-C product class, which Follett has
found are too small to fit larger compressors. (AHRI, No. 93 at p. 4)
Follett also individually commented that they independently evaluated a
more efficient compressor for IMH-A-Small-C and that its size made it
infeasible given the restrictions of the Follett chassis. (Follet, No.
84 at p. 8)
In response to AHRI and Follet's assertion that higher efficiency
compressors may not fit within the chassis of IMH-A-Small-C, DOE's
analysis of this class was based on use of a Copeland RST45C1E-CAV
compressor, which is no larger than the compressor used in the model
upon which DOE based the analysis. Hence, DOE concluded that use of
this higher-efficiency compressor would not require an increase in the
package size. DOE notes that it did avoid consideration of the highest-
efficiency compressors for 22-inch wide classes when these compressors
clearly are physically larger than the available space allows. In
particular, DOE did not consider use of high-efficiency Bristol
compressor in these cases, because Bristol compressors are generally
larger than other available compressors.
Several commenters, including AHRI, NEEA, Danfoss, and Ice-O-Matic
each noted that the harvest process of automatic commercial ice makers
needs to be considered when evaluating increased compressor efficiency
as a design option. (AHRI, No. 93 at p. 4; NEEA, No. 91 at p.1;
Danfoss, Public Meeting Transcript, No. 70 at p. 152-153; Ice-O-Matic,
Public Meeting Transcript, No. 70 at p. 160-161) Danfoss and Ice-O-
Matic commented that ice machines differ significantly from other
compressor-based applications in that, when harvesting ice, it is
desirable to have a less efficient compressor because the waste heat
helps harvest the ice. (Danfoss, Public Meeting Transcript, No. 70 at
p. 152-153; Ice-O-Matic, Public Meeting Transcript, No. 70 at p. 160-
161)
In response, DOE has adjusted its calculation of energy savings
associated with improved compressor efficiency in the NODA and final
rule analyses. Specifically, DOE considered all available data for
tests involving compressor replacement for batch ice makers. This
included the two examples provided in AHRI's NOPR comment. (AHRI, No.
93 at pp. 25-30) It also included information provided confidentially
to DOE's contractor. DOE reviewed the data to determine if it could be
used to robustly predict any trends of ice maker performance impacts
compared with compressor EER improvements that might vary as a function
of key parameters such as ice maker class, capacity, compressor
manufacturer, but no such trends were
[[Page 4687]]
evident. DOE used the data to develop an estimate of ice maker energy
use reduction as a fraction of compressor energy use reduction--this
value averaged 0.57 for the data set. DOE used this factor to calculate
ice maker energy use reduction for all of the batch analyses for the
NODA and final rule. Applying this approach significantly reduced the
energy savings associated with improved-EER compressors for batch ice
makers in the NODA and final rule analyses.
Howe commented that variable-speed compressors are most effective
at saving energy under part-load conditions, which is not taken into
account in the DOE test procedure. Therefore, such components would be
operating at or near maximum capacity during DOE tests, thus canceling
their positive measurable benefit. (Howe, No. 88 at p. 1)
In response to Howe's comment regarding variable speed compressors,
DOE did not consider the use of variable-speed compressors in the
analysis.
Several interested parties submitted additional concerns about the
feasibility of implementing design options involving increases in
compressor efficiency. NAFEM commented that high-efficiency compressor
motors for automatic commercial ice makers will not be available for
the foreseeable future and that the investment required was not
available for products with shipments as low as automatic commercial
ice makers (150,000/year) and that DOE must account for their
unavailability in its analysis. (NAFEM, No. 82 at p. 10)
In response, DOE considered only compressors that are currently
offered for use by compressor manufacturers. All of the compressors
considered in the analysis are currently commercially available and are
acceptable for use in ice makers as indicated by manufacturers in
confidential discussions with DOE's contractor. Hence, DOE does not
need to consider the development of new compressors with higher-
efficiency motors. The compressors considered in the analysis are
listed in the compressor database. (Compressor Database, No. 135)
In response to the NODA, Manitowoc noted that the RCU-NRC-B1
equipment class assumes an increase in compressor EER of 20% which
Manitowoc stated could not be achieved without resorting to radical
design changes and possibly the use of permanent magnet motor
technology. (Manitowoc, No. 126 at p. 3) Additionally, Manitowoc stated
that for SCU-A-Small-B and SCU-Large-B, increases in compressor EER of
40% and 25%, respectively, are unlikely to be achieved. (Manitowoc, No.
126 at p. 2)
For the RCU-NRC-Large-B-1 class, DOE based the analysis on a unit
with a compressor having a rated EER of 7.16 Btu/Wh. In order to
represent baseline performance, a less-efficient available compressor
was used in the analysis. For the final rule, DOE modified its analysis
to reflect a lower efficiency level for the unit which is the basis of
the analysis. Hence, DOE has reduced the compressor EER improvement
considered for this class from 20 percent to 10.7 percent.
For the SCU-A-Small-B class, DOE based the analysis on an ice maker
having a compressor with a rated EER of 3.3 Btu/Wh. The analysis
considered use of an available compressor having a rated EER of 4.6
Btu/Wh, a 39 percent improvement. Compressors having both these levels
of EER exist, and hence the 39 percent improvement in EER from 3.3 to
4.6 can be achieved.
For the SCU-A-Large-B class, DOE based the analysis on an ice maker
model having a compressor with a rated EER of 4.68 Btu/Wh. DOE modeled
the baseline by considering a lower EER of 4.23 Btu/Wh. Compressors
within the appropriate capacity range at this EER level do exist. The
highest-EER considered for this analysis is 5.2 Btu/Wh, which is
achieved by an available compressor of appropriate capacity--this
represents 23 percent improvement in EER, slightly less than the cited
25 percent. Compressors having both these levels of EER considered in
the analysis exist, and hence the 23 percent improvement in EER from
4.23 to 5.2 can be achieved.
In response to the NODA analysis for equipment class SCU-A-Small-C,
AHRI noted that DOE increased the ``percent energy use reduction'' from
8.5% in the NOPR to 10.91% in the NODA for the same design option,
``Changed compressor EER from 4.7 to 5.5''. AHRI requested that DOE
provide justification for this change. (AHRI, No. 128 at p.3) In the
NODA, DOE had calculated continuous ice maker percentage savings as 75%
of the compressor energy savings (0.75 x (1-4.7/5.5) = 0.109), rather
than using the results of the FREEZE model to represent the compressor
energy savings. However, the ice maker upon which the SCU-A-Small-C
analysis was based has a greater proportion of auger and fan energy use
than typical continuous units. Hence, DOE agrees that an increase in
the savings projection to 10.9% is unrealistic, and has changed the
projection.
For the final rule analysis, DOE also did not use the FREEZE model,
and instead assumed that the compressor energy use reduction would be
5% less than would be expected, based on the EER increase. The
compressor energy use for the unit started at 72% of unit energy use,
and the design options considered prior to consideration of the
improved-EER compressor already reduced energy use to 90.7% of baseline
energy use. Hence, DOE recalculated the savings for this design option
as 0.95 x (1-4.7/5.5) x 0.72 x 0.907 = 0.09 = 9%.
d. Evaporator
Follett commented that increasing the length or width of continuous
type evaporators would increase cabinet size. (Follet, Public Meeting
Transcript, No. 70 at p. 90-91) Follett also commented that increasing
the height of the continuous type evaporator is not feasible because,
in 75% of Follett's automatic commercial ice makers, the evaporator is
horizontal. Therefore, any evaporator growth would increase the
icemaker footprint so that it could no longer fit on standard beverage
dispensers. (Follett, No. 84 at p. 5-6)
DOE notes that it did not consider evaporator size increase as a
design option for continuous ice makers in the final rule engineering
analysis.
In response to the NODA, AHRI noted that IMH-W-Small-C units
typically use the same chassis as their IMH-A-Small-B counterparts and
should also be considered as space constrained units. Specifically,
AHRI recommended screening out the increased evaporator size for this
product class on the basis that the chassis could not withstand the
corresponding 4-inch increase in width. AHRI added that if evaporator
size increase option is kept for IMH-W-Small-C units, a more realistic
cost must be associated with this design option. (AHRI, No. 128 at p.
2)
In response to AHRI's comment, DOE notes that the typical use of
the same cabinet as IMH-A-Small-B does not mean there is no possible
cabinet size increase. Nevertheless DOE has eliminated this design
option step from the analysis for the IMH-A-Small-C. The evaporator
size increase was considered in the NOPR analysis in conjunction with a
condenser size increase. In the final rule analysis, this step in the
analysis now considers only the condenser size increase.
AHRI stated in its NODA comments that an 18 percent size increase
in evaporator area cannot reasonably be implemented in 22-inch IMH-A-
Small-B units. (AHRI, No. 128 at p. 2). DOE developed its 22-inch IMH-
A-Small-B analysis by removing from the 30-inch
[[Page 4688]]
chassis analysis for IMH-A-Small-B those design options that would not
fit in a 22-inch chassis. The baseline evaporator used in the model
upon which DOE based this analysis has a plate area that is relatively
small. Hence, the 18 percent size increase can fit within the chassis
of a 22-inch unit. In fact, the maximum-available 22-inch unit of this
class has an evaporator that is somewhat larger than the largest
evaporator size considered for the analysis. Hence, DOE concludes that
it did not consider excessive increase in evaporator size for the 22-
inch IMH-A-Small-B analysis.
In response to the NODA, Manitowoc stated that for IMH-A-Small-B
units, a 51% increase in evaporator surface area is not always possible
in the chassis sizes used in the industry and concluded that the max
efficiency level that should be considered is EL3. (Manitowoc, No. 126
at p. 1)
DOE agrees that the design option mentioned by Manitowoc, a 51%
increase in evaporator surface area for IMH-A-Small-B units would
require a growth in cabinet size. Consequently, DOE considered such a
growth in the engineering analysis. DOE notes that the NODA TSL 3
efficiency level for this class, 18% less energy than baseline, can be
achieved with an evaporator growth less than 51%--DOE estimates that
this would require evaporator size growth of 38%.
Manitowoc stated that the IMH-small class would likely require
chassis growth to add evaporator area. (Manitowoc, No. 126 at p. 2).
DOE assumes that this refers to the IMH-W-Small-B class and agrees that
some increase in chassis size may be required to support increases in
evaporator size. DOE notes that IMH-W-Small-B is one of the classes for
which DOE considered increase in chassis size.
e. Interconnectedness of Automatic Commercial Ice Maker System
Several commenters noted that the addition of a certain design
option may necessitate an alteration in the remaining automatic
commercial ice maker components. AHRI stated their concern with DOE's
component analysis, noting that a change in one component impacts other
components and therefore the entire price and efficiency of the entire
automatic commercial ice maker system. (AHRI, No. 128 at p. 2)
Similarly, Scotsman stated that the manufacture product cost increase
estimates do not account for system impacts when components are
changed. In most cases it is inaccurate to estimate product cost
changes by specific component as changing any component within the
refrigeration system will require changes to other components in order
to optimize performance efficiency. (Scotsman, No. 125 at p. 2)
Similarly, Howe commented that component efficiency increases are not
additive and not necessarily proportional when used in combination.
(Howe, No. 88 at p. 2)
As explained in the NOPR, DOE had attempted to conduct an
efficiency-level analysis rather than a design-option approach.
However, the efficiency-level analysis did not produce consistent
results, in some cases indicating that higher-efficiency units are less
expensive. Therefore, DOE went forward with the design option approach
and solicited comments from interested parties regarding the impact a
specific design option may have on the entire system. DOE's contractor
received some information regarding the potentially higher costs
associated with change of some components, for which it may have
underestimated overall cost increase in the NOPR phase--this
information has been incorporated into the final rule analysis.
However, absent more specific information regarding these interactions,
DOE cannot speculate on other changes that may have been appropriate to
address this issue.
Manitowoc commented that putting a larger evaporator in an ice
machine would increase refrigerant charge, thus necessitating an
accumulator, or rendering a compressor unreliable during harvest. Such
a change would also increase the mass of the evaporator, thus requiring
more energy to heat it up and cool it back down. (Manitowoc, Public
Meeting Transcript, No. 70 at p. 142-143)
DOE has not considered evaporator sizes (on the basis of evaporator
size per ice maker capacity in lb ice/24 hours) larger than those of
ice makers on the market. DOE has not observed use of accumulators and
hence concludes that the evaporator sizes considered would not require
one. While Manitowoc commented in the NOPR public meeting on the
potential for added harvest time or harvest energy use for larger
evaporators, they did not provide details in written comments showing
how this effect might impact savings associated with larger
evaporators. DOE notes that a larger evaporator would operate with
warmer evaporating temperature during the freeze cycle, and this effect
would reduce the heat required to warm the evaporator during the
harvest cycle. Without data to quantify this effect, DOE's analysis
assumed that harvest energy use would scale proportionally with
evaporator area. Hence, the increase in mass of the evaporator has been
accounted for in the estimation of the energy use reduction associated
with the design option.
Follett commented that the evaporator, auger motor, and compressor
must all be sized to balance one another and that these components
cannot easily be swapped out for other off-the-shelf components.
(Follett, No. 84 at p. 5) Follett noted that increasing evaporator
diameter is not feasible because it will increase the required torque,
necessitating a larger motor that will draw more power and negate any
efficiency gains. (Follet, No. 84 at p. 6)
DOE is no longer considering evaporator size increase as a design
option for continuous ice makers. However, DOE notes that the
engineering analysis has attempted to consider the interconnectedness
of the system components wherever possible. For example, for air cooled
condenser growth, fan power was increased to maintain a constant
airflow through a larger condenser.
Hoshizaki commented that there is a lot of trial and error involved
in pairing compressors with condensers while maintaining machine
reliability. (Hoshizaki, Public Meeting Transcript, No. 70 at p. 159-
160)
DOE realizes that there may be trial and error when pairing
components. DOE solicited feedback from manufactures regarding the
appropriateness of the use of specific compressors in the analysis. DOE
did not identify any specific limitations in compressor/condenser
pairings that it considered in its analysis in any comments or in
interviews with manufacturers.
4. Cost Assessment Methodology
In this rulemaking, DOE has adopted a combined efficiency level,
design option, and reverse engineering approaches to develop cost-
efficiency curves. To support this effort, DOE developed manufacturing
cost models based heavily on reverse engineering of products to create
a baseline MPC. DOE estimated the energy use of different design
configurations using an energy model with input data based on reverse
engineering, automatic commercial ice maker performance ratings, and
test data. DOE combined the manufacturing cost and energy modeling to
develop cost-efficiency curves for automatic commercial ice maker
equipment based to the extent possible on baseline-efficiency equipment
selected to represent their equipment classes (in some cases, analyses
were based on equipment with efficiency levels higher than baseline).
Next, DOE derived
[[Page 4689]]
manufacturer markups using publicly available automatic commercial ice
maker industry financial data, in conjunction with manufacturer
feedback. The markups were used to convert the MPC-based cost-
efficiency curves into Manufacturer Selling Price (MSP)-based curves.
The engineering analyses are summarized in an ``Engineering
Results'' spreadsheet, developed initially for the NOPR phase (NOPR
Engineering Results Spreadsheet, No. 59). This document was modified
for the NODA (Engineering Analysis Spreadsheet--NODA, No. 112) and
subsequently for the final rule (Final Rule Engineering Analysis
Spreadsheet, No. 134)
Stakeholder comments regarding DOE's NOPR and NODA engineering
analyses addressed the following broad areas:
1. Estimated costs in many cases were lower than manufacturers'
actual costs.
2. Estimated efficiency benefits of many modeled design options
were greater than the actual benefits, according to manufacturers'
experience with equipment development.
3. DOE should validate its energy use model based on comparison
with actual equipment test data.
These topics are addressed in greater detail in the sections below.
a. Manufacturing Cost
In response to the manufacturer costs presented in the NOPR,
several stakeholders indicated that the incremental costs presented in
the NOPR were optimistic. Specifically, AHRI, Follet, Manitowoc, and
Danfoss stated the belief that DOE underestimated the incremental costs
of its proposed design options. (AHRI, No. 93 at p. 4; Follet, No. 84
at p. 5; Danfoss, No. 72 at p. 3; Manitowoc, No. 98 at p. 1-2)
Scotsman commented that their data on the efficiency and costs
associated with compressor upgrade, BLDC motors, larger heat
exchangers, and drain water heat exchangers do not match the
assumptions used by DOE in its analysis. (Scotsman, No. 85 at p. 4b)
Manitowoc commented that DOE significantly underestimates the cost
associated with heat exchanger growth, higher compressor EER, and high-
efficiency fan and pump motors. (Manitowoc, No. 98 at p. 1-2) Manitowoc
also noted that their costs were not consistent with those found in the
TSD, particularly in cases involving evaporator or cabinet growth
(Manitowoc, Public Meeting Transcript, No. 70 at p. 116-117)
DOE has revised and updated its analysis based on data provided in
comments and made available through non-disclosure agreements. These
updates included changes in its approach to calculating the energy use
associated with groups of design options, changes in inputs for
calculations of energy use, and changes in calculated equipment
manufacturing cost. Comments related to the manufacturing costs of
specific design options are described in the sections below.
NAFEM and Hoshizaki stated that the cost curves were not analyzed
to demonstrate what can be achieved in five years. (NAFEM, No. 123 at
p. 2; Hoshizaki, No. 123 at p. 1)
In response to NAFEM and Hoshizaki's comment, DOE notes that the
costs in the cost curves are intended to be representative of today's
technology and current market prices.
Compressor Costs
AHRI, Danfoss, and Hoshizaki stated that DOE's assumption that a
10% compressor efficiency increase could be achieved for a 5% price
increase is flawed. (AHRI, Public Meeting Transcript, No. 70 at p. 20-
21; Danfoss, No. 72 at p. 3; Hoshizaki, No. 86 at p. 9) AHRI and
Danfoss stated that a more realistic assumption would be a 1-2%
efficiency improvement for a 5% price increase. (Danfoss, No. 72 at p.
3; AHRI, Public Meeting Transcript, No. 70 at p. 20-21) AHRI and NAFEM
both requested that the relationship between cost and compressor EER
should be corrected to reflect the approach adopted by the final CRE
rulemaking. (AHRI, No. 93 at p. 15; NAFEM, No. 82 at p. 4-5) Follet
also asserted that it is unrealistic to assume that the full efficiency
gain of a more efficient compressor will be realized at the costs
assumed by DOE in the NOPR. (Follet, No. 84 at p. 5) In response to the
NODA, AHRI stated that there was no explanation as to why the
compressor costs changed as compared to the NOPR. AHRI noted that the
NODA compressor costs were still not consistent with the approach used
in the CRE rulemaking. (AHRI, No. 128 at p. 2)
DOE maintains its position that the cost-EER relationship used in
the CRE rulemaking was based on future improvements over existing EER
levels. For example, the CRE final rule indicates that ``manufacturers
and consumers expressed concern over DOE's assumptions regarding the
advances in compressor technology anticipated before the compliance
date.'' 79 FR 17726, 17760 (March 28, 2014). Compressor suppliers and
OEMs 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''. Id. The
statement implies that manufacturers have not adopted the technology.
In the automatic commercial ice maker NOPR public meeting, Danfoss, a
compressor supplier, commented, ``these are mature technologies.
They've been around 50 or 60 years. If that sort of efficiency
improvement could be made available, it would have . . . we would have
already done it.'' The comments insinuate that DOE was contemplating
use of a technology that is not available and that the compressor
manufacturers have not used. For the automatic commercial ice maker
analysis, DOE did not consider future technologies. Rather, it
considered only compressor options that are currently being offered by
compressor suppliers. In some cases, baseline ice makers are using
compressors with relatively low efficiencies compared to the levels
that are available. It is for these cases that DOE has been projecting
the possibility of large potential for compressor efficiency
improvements. DOE has requested compressor cost data that would allow
evaluation of the relationship between actual prices paid by automatic
commercial ice maker manufacturers for the compressors and the EER
levels of the compressors, indicating that this data might be provided
confidentially to DOE's contractor. However, sufficient cost data to
allow a regression analysis to determine the efficiency-cost
relationship has not been made available. Based on limited data
supplied confidentially to DOE's contractor during the NOPR phase, DOE
initially concluded that cost does not vary significantly with EER. In
addition, DOE received some feedback during interviews with
manufacturers that the 10% improvement for 5% cost relationship is
reasonable. DOE at that time adopted this relationship in order to
avoid projecting zero cost increase associated with EER increase.
Nevertheless, DOE has modified its approach to calculating
improvement in compressor efficiency to consider the stakeholders'
comments. The analysis calculates the cost associated with compressor
EER improvement in two ways and uses the higher of these costs. The
first approach is the 10% improvement for 5% cost used in the NOPR
analysis. The second approach applies the 5% cost associated with the
[[Page 4690]]
2% improvement that the commenters cited, which DOE applied to the
analysis as if the last 2% of compressor efficiency improvement is
future efficiency improvement that would cost the cited 5%. For
example, if the compressor efficiency improvement is 10%, this approach
treated the first 8% of efficiency improvement to be associated with
currently available compressors with no cost differences, and the last
2% (from 8% to 10% improvement) as being associated with future
compressor improvement with a 5% cost premium.
Follett disputed the NOPR engineering result that showed a 20%
decrease in energy use at a cost of $61 for the IMH-A-Large-C class.
Follet noted that at an incremental cost of $60, they tested a unit
utilizing an ECM motor and a compressor with a 5% increase in
efficiency, but were only able to achieve a 9% decrease in energy use.
(Follet, No. 84 at p. 8) AHRI also noted this work, indicating that
Follett experienced less than half the efficiency gain predicted by DOE
in the NOPR when switching from an SPM to an ECM motor and using a
compressor with a 5% higher EER. AHRI further noted that, while DOE's
analysis considered a 24% improvement in compressor EER, the best
compressor that Follett was able to find improved the EER only 5%.
(AHRI, No. 93 at p. 4)
DOE notes that these comments do not indicate the initial energy
use of the tested unit, only that the 9 percent efficiency improvement
was insufficient to attain the NOPR-proposed efficiency level. Further,
the comments do not indicate the initial EER of the compressor used in
the Follett product. Since the NOPR phase, DOE has adjusted both its
energy modeling as well as its cost estimates, so as to mitigate this
issue. Based on new data collected through the NODA and final rule
phases, DOE has completed new cost efficiency curves, such that the MSP
increase for the final rule analysis associated with a 20% decrease in
energy use for the IMH-A-Large-C class is $488. The increase is so
large because, for the final rule analysis, use of design options other
than a permanent magnet gear motor to power the auger increase
efficiency less than 20% (roughly 18%), and the estimated cost of the
higher-efficiency auger motor is very high. While it is difficult to
determine whether the analysis is fully consistent with Follett's test
data, DOE believes that its revised analysis sufficiently addresses
this issue (the cost per percent improvement for the analysis is now
$24/% ($488/20%), whereas the cost per percent improvement for
Follett's cited experience is $7/% ($60/9%)). DOE does note that this
Follett example does show that continuous ice machines experience
energy use reductions at least consistent with the compressor
efficiency improvements--Follett did not indicate the reduction in
motor input wattage when switching from the shaded pole to the ECM
motor, but if the ice maker energy use reduction for the motor change
was 5%, one would conclude that the energy use reduction for the
compressor change was 4%, or 80% of the 5% improvement in compressor
EER--this contrasts markedly with some of the information provided in
stakeholder comments about the relationship between batch ice maker
energy use and compressor EER improvement. (see, e.g., AHRI, No. 93 at
pp. 25-30)
Evaporator Costs
Hoshizaki and Manitowoc stated the DOE underestimated the cost of
increasing the evaporator size in the NOPR analysis, for both batch and
continuous ice makers. Specifically, regarding the 50% evaporator size
increase considered for the IMH-A-Small-B analysis, Hoshizaki commented
that a 50% increase in evaporator height would result in a 50% MPC
increase. (Hoshizaki, No. 86 at p. 9) For this design option, DOE
calculated a $48 cost increase to the initial evaporator cost of $88 in
the NOPR analysis. Manitowoc stated that the cost presented in the NOPR
for a 50% larger evaporator is half of what they would see as a
manufacturer. Manitowoc noted that this is partially because they only
make 4000-5000 models per year of a particular cabinet size and thus do
not have as much purchasing power as an appliance manufacturer.
(Manitowoc, Public Meeting Transcript, No. 70 at p. 171-174)
In the NODA and final rule analyses, DOE adjusted the costs related
to increasing the size of the evaporator. DOE received information from
manufacturers through non-disclosure agreements regarding the expected
costs associated with increasing the size of the evaporator and has
adjusted the analysis to reflect the new data. DOE's MPC increase
projection for the same evaporator size increase for the IMH-A-Small-B
class is now $101.
As noted in section IV.D.3.d, AHRI commented that a more realistic
cost estimate is required for the evaporator increase design option for
IMH-W-Small-C units as they often use the same chassis as their IMH-A-
Small counterparts. Specifically, AHRI stated that manufacturers have
conservatively estimated that a 17% increase in evaporator size should
be 117% percent of the original evaporator's cost. (AHRI, No. 128 at p.
2) DOE believes this comment may apply to the IMH-A-Small-C class
rather than IMH-W-Small-C, since the 17% evaporator growth was
considered in the NOPR analysis for the air-cooled class. In the NOPR
phase, DOE calculated an MPC increase of $153 for the evaporator size
increase and a condenser size increase considered in the same step of
the analysis. Seventeen percent of the $1,252 contribution to MPC of
the initial evaporator is $213.
DOE acknowledges that the 17% evaporator growth would require
chassis size increase for the specific model upon which the IMH-A-
Small-C analysis is based, if implemented by increasing the length of
the auger/evaporator. As noted previously, DOE modified the analysis
and is no longer considering evaporator size increases as a design
option for any continuous units, including IMH-W-Small-C.
In response to the NODA analysis, Hoshizaki, AHRI, Manitowoc, and
NAFEM stated that increasing the evaporator by 18% with no chassis
growth is not possible for 22-inch IMH-A-Small-B machines. (Hoshizaki,
No. 124 at p. 2; AHRI, No. 128 at p. 2; Manitowoc, No. 126 at p. 2;
NAFEM, No. 123 at p. 2) Hoshizaki added that such a change would
require tooling, panel changes, and kits to fit on the machine.
Hoshizaki and NAFEM noted that these changes would cost more than the
$34 stated in the NODA. (Hoshizaki, No. 124 at p. 2; NAFEM, No. 123 at
p. 2)
DOE reviewed the cabinet size of the representative 22-inch IMH-A-
Small-B unit and found that it had space for an 18% evaporator
increase. DOE notes that the final size of the 18% larger evaporator
considered in the analysis is still smaller than evaporators found in
some 22-inch units of the same equipment class. Hence, DOE believes
that an 18% growth in evaporator size is possible and has maintained
this design option in the final rule.
Condenser Costs
Commenting on the NODA analysis for the IMH-W-Small-B, Hoshizaki
and NAFEM stated that increasing the water-cooled condenser length by
48% would require a larger cost increase than $40 stated in the NODA.
(Hoshizaki, No. 124 at p. 2; NAFEM, No. 123 at p. 2) Hoshizaki noted
that they currently are using the largest condenser offered by their
supplier, and increasing its size would necessitate a special design.
(Hoshizaki, No. 124 at p. 2)
[[Page 4691]]
In the NODA phase, DOE evaluated a 48% condenser size increase for
the representative IMH-W-Small-B unit of 22-inch width--based on a
review of typical coaxial water-cooled condenser offerings from typical
suppliers of these units, DOE has concluded that this might be a non-
standard size water-cooled condenser. In the final rule analysis for
this unit, DOE has adjusted its water-cooled condenser options to be
more consistent with standard condenser sizes, based on review of
commercially available components. Therefore, for the IMH-W-Small-B, 22
inch wide unit, DOE adjusted the analysis to instead utilize a 59%
larger condenser. The estimated MPC increase for this design option in
the final rule analysis is $58.
Regarding the NODA analysis for the IMH-A-Small-C, Hoshizaki stated
that cost of increasing the evaporator area by 17% and the condenser
height by 4 inches would be much higher than the $150 presented in the
NODA. Hoshizaki added that 22-inch wide machines could not accommodate
4 inches of height growth and would require a change in chassis.
Hoshizaki noted that condensers are standard parts from the catalogs of
suppliers and there are no condensers that would match this change.
(Hoshizaki, No. 124 at p. 2)
DOE is no longer considering evaporator growth for continuous
units. The representative unit for this equipment class has a condenser
with core height of 10 inches, width of 12 inches and a depth of 3
inches. The chassis height is 21\7/8\ inches and the chassis width is
22 inches. The representative unit has space for the condenser size
increases considered in the analysis. Based on discussions with
manufacturers and heat exchanger suppliers, DOE has found that there is
flexibility in the design of air-cooled condensers, as long as the
design conforms to the use of standard tube pitch (distances between
the tubes) patterns, fin style, and fin densities. The analysis
considered no change in these design parameters that would make the
condenser a non-standard design.
In response to the NODA analysis for the SCU-W-Large-B class, AHRI
commented on the changes in condenser size and the associated
efficiency improvement as compared to the NOPR analysis. AHRI noted
that in the NOPR analysis, DOE considered a size increase of 39%, which
was estimated to reduce energy us use 11.2%, while in the NODA a
condenser size increase of 112% led to estimated energy savings of
16.7%. AHRI stated that such an increase in condenser size would cause
issues with performance outside of rating conditions due to the large
increase in refrigerant charge. AHRI recommended that DOE reconsider
this design option. (AHRI, No. 128 at p. 3)
In response, DOE modified the analysis for the SCU-W-Large-B for
the final rule analysis, in which DOE considers a condenser size
increase of 50%, with associated energy savings of 5.5%.
Purchasing Power and Component Costs
Several commenters noted that the scale of the ice maker industry
is too small to qualify for the price discounts seen by the appliance
markets on specialized parts. (Hoshizaki, No. 86 at p. 7-8; Danfoss,
Public Meeting Transcript, No. 70 at p. 175-176) Danfoss stated that
the small scale of the industry is a barrier to implementing new
technologies and that the investment necessary to produce high-
efficiency compressors in these volumes is not feasible in the
foreseeable future. (Danfoss, No. 72 at p. 3-4)
Scotsman commented that their vendors provide ECM motors at 200-
300% over the cost of baseline motors and high-efficiency compressors
at up to 30% over the cost of baseline compressors. Scotsman added that
they have not successfully proven the performance and reliability of
such components in different applications. (Scotsman, No. 85 at p. 2)
Joint Commenters urged DOE to determine whether fan, pump, and
auger motors use ``off-the-shelf'' or custom motors if the former, this
would suggest that permanent magnet motor availability should not be a
concern. (Joint Commenters, No. 87 at p. 2-3)
In response to these comments DOE notes that it considers the
purchasing power of manufacturers in its estimation of component cost
pricing. DOE has significantly revised its component cost estimates for
the engineering analysis for the NODA and ultimately final rule phase
based on additional information obtained in discussions with
manufacturers as well as in stakeholder comments. DOE used the detailed
feedback to update its cost estimates for all ice maker components.
b. Energy Consumption Model
As part of the preliminary analysis, DOE worked with the developer
of the FREEZE energy consumption model to adapt the model to updated
correlations for refrigerant heat exchanger performance correlations
and operation in a Windows computer environment. Analysis of ice maker
performance during the preliminary analysis was primarily based on the
model. During the course of the rulemaking, DOE has received numerous
comments describing some of the shortcomings of the model. In response,
DOE has modified its energy use analysis to rely less on the FREEZE
model and more on direct calculation of energy use and energy
reductions, based on test data and on assumptions about the efficiency
of components such as motors. DOE requested that stakeholders provide
information and data to guide the analysis, and also requested comments
on the component efficiency assumptions. DOE received additional
information through comments and confidential information exchange with
DOE's contractor that helped guide adjustments to the analysis.
After the NOPR and NODA publications, stakeholders continued to
express concerns about the FREEZE model. AHRI questioned the accuracy
of the FREEZE model. (AHRI, No. 93 at p. 5-6, 16) Scotsman noted that
the FREEZE simulation program may not be able to model performance of
automatic commercial ice makers upon revision of the EPA SNAP
initiative, which may result in use of different refrigerants than are
currently used in ice makers. (Scotsman, No. 125 at p. 2)
Ice-O-Matic commented that the analysis is based on faulty
assumptions from unrelated rulemakings such as commercial
refrigeration, and that the cycles of ice machines do not resemble the
cycles of commercial refrigeration products. (Ice-O-Matic, Public
Meeting Transcript, No. 70 at p. 32) Scotsman and Manitowoc stated that
the energy model may yield unrealistic efficiency gains for some of the
design options. (Manitowoc, Public Meeting Transcript, No. 70 at p.
154-156; Scotsman, No. 125 at p. 2). Specifically, Manitowoc noted that
the energy use model significantly over-predicts the efficiency gains
associated with design options, due to its inability to account for the
harvest portion of the icemaking cycle. Manitowoc added that many
design options that reduce freeze-cycle energy use increase harvest-
cycle energy use. (Manitowoc, No. 92 at p. 1; Manitowoc, No. 126 at p.
1)
Ice-O-Matic noted that that the FREEZE model was designed for full-
size ice cubes and does not work for half-size ice cube machines. (Ice-
O-Matic, No. 121 at p. 2) Full-size cubes of the ice maker models
primarily considered in the analysis generally are cubes with
dimensions \7/8\ x \7/8\ x \7/8\ inches. Half-size cubes have
dimensions \7/8\ x \7/8\ x \3/8\ inches.
Howe and Hoshizaki both stated that DOE should test its component
design options in actual units in order to
[[Page 4692]]
validate the FREEZE model. (Howe, No. 88 at p. 2; Hoshizaki, No. 86 at
p. 6) AHRI also expressed its concern that DOE has not conducted
thorough testing to validate the efficiency gains associated with
design options and requested that DOE prove the claims made in the
engineering analysis. (AHRI, Public Meeting Transcript, No. 70 at p.
20-21)
DOE used the FREEZE energy model as a basis to estimate energy
savings potential associated with design options in the early stages of
the analysis when DOE had limited information. As more information was
made available to DOE through public comments as well as non-disclosure
agreements with manufacturers, DOE modified or replaced the results
garnered from the FREEZE energy model to better reflect the new data
collected.
In response to Scotsman's comment regarding the FREEZE model's
ability to model the performance of automatic commercial ice makers
which use alternative refrigerants, DOE notes that, as described in
section IV.A.4, it has not conducted analysis on the use of alternative
refrigerants in this rule.
In response to comments regarding the FREEZE model's ability to
model the harvest cycle, DOE notes that while the FREEZE model does not
simulate the harvest period analytically, the harvest energy is an
input for the program that DOE adjusted consistent with test data. In
short, the model's ability to accurately calculate the energy use
associated with harvest is limited only by the availability of data
showing the trends of harvest cycle energy use as different design
options are considered. DOE requested information regarding this aspect
of ice maker performance, received some information through comments
and information exchange with manufacturers, and modified the energy
use calculations accordingly.
DOE notes that the harvest cycle energy use issue associated with
the calculation of energy use for batch ice makers does not apply to
continuous ice makers, which do not have a harvest cycle. DOE concludes
that the inability to measure harvest cycle energy use cannot be a
reason to question the energy use calculations made for continuous ice
makers. DOE notes that stakeholders have not identified similar aspects
of continuous ice maker operation that could potentially be cited as
reasons for inaccuracies in the energy use calculations associated with
these ice makers.
In response to Ice-O-matic's comment regarding the FREEZE model's
ability to model half cube ice machines, DOE notes that the FREEZE
model is capable of modeling such units. However, as indicated in
section IV.D.1 DOE has chosen to base the analysis on full-cube ice
machines which, as explained in section IV.D.1, may have an efficiency
disadvantage as compared to half- dice machines. Hence, focus on full-
cube ice makers makes the analysis more conservative.
Expected Savings for Specific Design Options
Several commenters questioned the energy model's assumptions
regarding the relationship between compressor EER improvement and ice
maker efficiency improvement. AHRI stated that the assumed relationship
should be verified with laboratory tests. (AHRI, No. 93 at p. 15)
Manitowoc and Hoshizaki each stated that they tested a compressor
with 12% higher EER compared to baseline and that it yielded a 3%
efficiency improvement. (Manitowoc, Public Meeting Transcript, No. 70
at p. 138-142; Hoshizaki, Public Meeting Transcript, No. 70 at p. 152)
Ice-O-Matic commented that they tested a compressor with 10% higher EER
and that it yielded only a 2% improvement in efficiency. Ice-O-Matic
noted that this is due to the unique circumstances of the harvest
cycle, which removes a lot of the improvements that are typically seen
with compressor efficiency gains in other refrigeration equipment.
(Ice-O-Matic, Public Meeting Transcript, No. 70 at p. 148-149) Follett
noted that they observed a 9% efficiency gain with a compressor that
was 5% more efficient and an ECM fan in an IMH-A-Large-C ice maker.
Follett indicated that these design options would increase cost $60, a
cost for which the DOE NOPR analysis predicted 20% improvement.
(Follet, No. 84 at p. 8)
AHRI stated that the FREEZE energy model results during the June
19th public meeting did not support the findings DOE published in the
NOPR when swapping an upgraded compressor. Rather the model simulation
predicted that the unit with the upgraded compressor would produce more
ice and consume more energy. AHRI stated that they submitted actual
test data for this unit which showed modest efficiency savings for
upgrading the compressor. AHRI noted that this finding is contradictory
to the significant energy savings DOE claimed would be possible in the
NOPR. (AHRI, No. 128 at p. 6-7) DOE responds that accurate modeling
with any analysis requires careful validation of the input data and
that no conclusions can be drawn regarding the results that emerged
during the meeting because there was no time to ensure consistency of
the input and to review the output to understand whether there was a
valid reason for any unexpected results. One could argue, contrary to
the AHRI position, that the results showed that the FREEZE model
predicts higher energy use than would actually be consumed--DOE
realizes that such a conclusion would be meaningless. The only real
conclusion is that the program is not easy to operate and requires
careful review of both input and output in order to ensure that results
are meaningful.
To address the stakeholder concerns that the FREEZE model cannot
adequately model the effects of increased compressor efficiency on ACIM
energy consumption, DOE modified the outputs of the energy model based
on data received in the comments as well as from manufacturers under
non-disclosure agreements. DOE also performed testing on several ice-
making units and used the test data to further inform the relationship
between increased compressor efficiency and ACIM efficiency.
Operating Conditions
NAFEM, Emerson, Manitowoc, Scotsman commented that DOE's
engineering analysis is flawed because it only examines compressor
ratings at AHRI conditions, rather than over the wide range of
operating conditions experienced by ACIMs in the field. (NAFEM, No. 82
at p. 10, Emerson, Public Meeting Transcript, No. 70 at p. 144;
Manitowoc, Public Meeting Transcript, No. 70 at p. 144-146; Scotsman,
No. 85 at p. 2) Emerson noted that the AHRI rating point for
compressors is not typically where an ice machine operates which may
contribute to the issues with DOE's modeling. (Emerson, Public Meeting
Transcript, No. 70 at p. 144) Manitowoc stated that they typically use
a 10-105 condition for compressors, whereas the cost curves used a 15/
95 condition,\29\ which does not match operating conditions that occur
in ice machines. Manitowoc also noted that the
[[Page 4693]]
compressor maps cannot model what happens during the harvest event or
the pre-chill time and that the coefficient models do not include these
operating regions. (Manitowoc, Public Meeting Transcript, No. 70 at p.
144-146) Danfloss also stated that compressor maps are not useful in
developing assumptions about ice maker compressor performance.
(Danfoss, Public Meeting Transcript, No. 70 at p. 152-153)
---------------------------------------------------------------------------
\29\ Compressor performance depends on suction (inlet) and
discharge (outlet) pressures. These pressures are often represented
as the saturated refrigerant temperatures that correspond to the
pressures. For the 15/95 conditions, the saturated evaporator
temperature is 15[emsp14][deg]F and the saturated condensing
temperature is 95[emsp14][deg]F (to be technically correct, these
are represented as dew point temperatures for the refrigerant in
question, R-404A--because there is a range of temperatures at a
given pressure over which the refrigerant can coexist in equilibrium
in both liquid and vapor phases, the temperature at the high end of
this range often used).
---------------------------------------------------------------------------
AHRI noted that DOE did not take operation changes into account,
such as different batch times or energy use, when upgrading to a more
efficient compressor. (AHRI, No. 128 at p. 2)
In response to the comment that compressors operate under a wide
range of conditions in the field, DOE requested information that could
be used to guide the analysis with respect in regards to what
compressors are not suitable for use in ice makers, and/or what other
guidelines could be used to avoid consideration of ice maker designs
that are not viable in the field. DOE did not receive from stakeholders
specific guidelines that could be used to limit the degree to which a
design option might be applied for a given ice maker model in its
analysis. In response to Emerson's comment about compressor rating
conditions not being the typical operating conditions during ice maker
testing, DOE notes that the calculation of compressor performance
during the test was done at more typical compressor operating
conditions during ice maker testing, based on the full set of
performance data for the compressor--not at the compressor rating
conditions. In response to the comment regarding the 15/95 conditions
associated with the cost curves, the performance calculations for the
compressors had nothing to do with the 15/95 conditions--the 15/95
conditions were simply an intermediate step in assigning a
representative cost for a given compressor. This assignment of cost
involved converting the rated AHRI 20/120 capacity for the compressor
into a 15/95 condition by multiplying the capacity by 1.29. DOE then
used this result as described in Chapter 5 of the TSD to determine an
initial nominal cost using the relationship described in the TSD. DOE
further increased the cost based on feedback obtained about compressor
costs from manufacturers throughout the rulemaking.
DOE received data showing the trends in ice maker energy use
reduction with improved compressor EER, including data received as part
of the AHRI NOPR comment, as well as additional data received by DOE's
contractor under non-disclosure agreement. The data showed that for
batch ice makers, the ice maker energy use reduction is a fraction of
the expected energy use reduction when considering just the compressor
EER improvement. DOE applied this reduction in efficiency improvement
to its NODA and final rule analyses.
Analysis Calibration
DOE calibrated the engineering analysis by comparing the energy use
predictions associated with given sets of design options with energy
usage and design data collected from existing ice maker models. DOE
revisited these calibrations in the final rule phase. In general, DOE's
analysis for a given ice maker class is based on an existing ice maker
model with an efficiency level at or near baseline. Hence, the analysis
is calibrated to this particular ice maker model at its efficiency
level, which is based on either its rating or a combination of its
rating and the results of DOE testing. The analysis considers the
energy use impact of adding design options to improve efficiency. In
order to represent the baseline, the analysis may consider removing a
design option (or more than one if necessary) to allow representation
of a design that is at the baseline efficiency level.
DOE also calibrated its analysis using units at maximum available
efficiency levels (or in some cases, efficiency levels less than the
maximum available), specifically equipment without proprietary
technologies, such as low-thermal-mass or tube-type evaporators for
batch ice makers. DOE chose design options to reach the maximum
available efficiency levels of existing equipment. Importantly design
options involving electronically commutate motors and drain water heat
exchangers were excluded from calibration, as these were not considered
to be commonly used in current ice makers. In some cases, the set of
design options chosen to represent the maximum efficiency level matched
the designs of the maximum available efficiency level equipment. In
other cases, the designs did not match exactly, and the design of the
DOE analysis may have had more improvement in one component, while the
maximum available ice maker had more improvement in another component.
In order to ensure that DOE was not underestimating the costs
associated with the overall design improvements, DOE estimated the cost
differential between changing the major components of the analyzed max
efficiency unit to match those of the maximum available equipment.
Major components considered in this estimate were the compressor,
evaporator, condenser, and condenser fan. Table IV.25 shows this
calibration, listing: The maximum efficiency reached by each directly
analyzed equipment class, without considering ECM or drain water heat
exchanger (DWHX) design options; the efficiency of the maximum
available unit; and the cost difference associated with modifying the
major components of to match those in the maximum available. A negative
cost differential indicates that the DOE analysis predicted a higher
cost at that efficiency level compared with the maximum available unit.
The computed cost differentials are zero or negative in all but one
case, showing that the DOE analysis does not underestimate the cost of
reaching these higher efficiency levels. For the one case in which the
differential is positive, $4 for the IMH-A-Small-B 22-Inch ice maker,
the maximum available efficiency level is 5% higher than the level
predicted by DOE's energy use analysis for a comparable set of design
options. The calibration is presented in more detail in Chapter 5 of
the TSD.
Table IV.25--Maximum Available Calibration
----------------------------------------------------------------------------------------------------------------
DOE Analysis Maximum Cost
maximum available differential
Representative efficiency efficiency moving from
Equipment class capacity (lb level (% level (% analyzed to
ice/24 hours) below below maximum
baseline) baseline) available ($)
----------------------------------------------------------------------------------------------------------------
IMH-W-Small-B................................... 300 19.2 19.2 -29
IMH-W-Small-B (22-inch wide).................... 300 16.9 16.9 -34
IMH-A-Small-B................................... 300 19.3 19.3 -27
IMH-A-Small-B (22-inch wide).................... 300 11.6 16.6 +4
[[Page 4694]]
IMH-A-Large-B-Medium............................ 800 16.1 16.1 -74
IMH-A-Large-B (22-inch wide).................... 590 5.5 5.5 -13
IMH-A-Large-B-Large............................. 1500 6.2 6.0 -130
IMH-W-Med-B..................................... 850 10.4 14.3 -240
IMH-W-Large-B-2................................. 2600 2.5 2.5 0
RCU-NRC-Large-B-Med............................. 1500 15.7 15.7 -62
RCU-NRC-Large-B-Large........................... 2400 14.9 14.9 -329
SCU-A-Small-B................................... 110 26.6 24.9 -61
SCU-A-Large-B................................... 200 23.5 26.4 -28
SCU-W-Large-B................................... 300 27.6 27.6 0
IMH-A-Small-C................................... 310 19.8 28.0 -30
IMH-A-Large-C................................... 820 17.0 35.7 -11
SCU-A-Small-C................................... 220 21.8 30.1 -62
RCU-NRC-Small-C................................. 610 17.9 18.4 -40
----------------------------------------------------------------------------------------------------------------
c. Revision of NOPR and NODA Engineering Analysis
DOE developed the final engineering analysis by updating the NOPR
and NODA analyses. This included making adjustments to the
manufacturing cost model as described in section IV.D.4.a. It also
included adjustments to energy modeling as described in section IV.D.4.
DOE made several changes to the engineering analysis throughout the
course of this rulemaking. Specifically, in response to the concerns
raised by stakeholders, DOE adjusted its analysis to rely more on test
data based on input received in manufacturers' public and confidential
comments than on theoretically analysis. These changes included:
Based on new data, DOE made changes to the energy use
reductions associated with individual design options;
Based on new cost data, DOE made changes to the costs
associated with individual design options. Design options were changed
as a result of new data obtained through non-disclosure agreements with
DOE's engineering contractor and comments made during the NOPR comment
period developing an approach based on test data to determine the
condensing temperature reductions associated with use of larger water-
cooled condensers;
Based on comments made during the NOPR period, DOE added
additional cost-efficiency curves for 22-inch width units in the IMH-A-
Small-B, IMH-A-Large-B, and IMH-W-Small-B equipment classes, and an
additional cost-efficiency curve for the RCU-Small-C equipment class.
DOE calibrated the results of its calculations with maximum
available ice makers that are available in the market and which do not
incorporate proprietary technologies. This calibration at the maximum
available levels shows that the costs DOE assigned to the maximum
available level is generally higher than suggested by the compared
maximum available equipment.
DOE believes that these changes help ensure that analysis
accurately reflect technology behavior in the market. Further details
on the analyses are available in chapter 5 of the final rule TSD.
E. Markups Analysis
DOE applies multipliers called ``markups'' to the manufacturer
selling price (MSP) to calculate the customer purchase price of the
analyzed equipment. These markups are in addition to the manufacturer
markup (discussed in section IV.J.2.b) and are intended to reflect the
cost and profit margins associated with the distribution and sales of
the equipment between the manufacturer and customer. DOE identified
three major distribution channels for automatic commercial ice makers,
and markup values were calculated for each distribution channel based
on industry financial data. Table IV.26 shows the three distribution
channels and the percentage of the shipments each is assumed to
reflect. The overall markup values were then calculated by weighted-
averaging the individual markups with market share values of the
distribution channels. See chapter 6 of the TSD for more details on
DOE's methodology for markups analysis.
Table IV.26--Distribution Channel Market Shares
------------------------------------------------------------------------
National account Wholesaler channel: Contractor channel:
channel: Manufacturer Manufacturer to Contractor purchase
direct to customer (1- distributor to customer from distributor for
party) (2-party) installation (3-party)
------------------------------------------------------------------------
0% 38% 62%
------------------------------------------------------------------------
In general, DOE has found that markup values vary over a wide range
based on general economic outlook, manufacturer brand value, inventory
levels, manufacturer rebates to distributors based on sales volume,
newer versions of the same equipment model introduced into the market
by the manufacturers, and availability of cheaper or more
technologically advanced alternatives. Based on market data, DOE
divided distributor costs into
[[Page 4695]]
(1) direct cost of equipment sales; (2) labor expenses; (3) occupancy
expenses; (4) other operating expenses (such as depreciation,
advertising, and insurance); and (5) profit. DOE assumed that, for
higher efficiency equipment only, the ``other operating costs'' and
``profit'' scale with MSP, while the remaining costs stay constant
irrespective of equipment efficiency level. Thus, DOE applied a
baseline markup through which all estimated distribution costs are
collected as part of the total baseline equipment cost, and the
baseline markups were applied as multipliers only to the baseline MSP.
Incremental markups were applied as multipliers only to the MSP
increments (of higher efficiency equipment compared to baseline) and
not to the entire MSP. Taken together the two markups are consistent
with economic behavior in a competitive market--the participants are
only able to recover costs and a reasonable profit level.
DOE received a number of comments regarding markups after the
publication of the NOPR.
In written comments, Manitowoc, Hoshizaki, NAFEM, Follett and AHRI
commented that baseline and incremental markups should be equal, set at
the level of the baseline markups. (Manitowoc, No. 92 at p. 2;
Hoshizaki, No. 86 at p. 3; NAFEM, No. 82 at p. 5; Follett, No. 84 at p.
6; and AHRI, No. 93 at p. 6-7)
Some stakeholders at the NOPR public meeting commented that DOE
should not use incremental markups for incremental equipment costs
arising from the imposition of new standards and that DOE should
instead use one set of markups, that corresponds to the baseline
markups. Danfoss commented that wholesalers did not ask which part of
prices were baseline and which were incremental. (Danfoss, Public
Meeting Transcript, No. 70 at p. 197-198) Manitowoc stated that if they
change list prices, their channel partners simply add a markup, and
Manitowoc was not sure they would adopt another approach because a
regulatory change drove up costs. (Manitowoc, Public Meeting
Transcript, No. 70 at p. 192-193)
Danfoss suggested DOE go back and review the results of earlier
rulemakings and identify how markups worked in those equipment markets.
Doing so could add some credibility to the DOE markups methodology,
maybe not in time for the ACIM rulemaking but in time for later
rulemakings. (Danfoss, Public Meeting Transcript, No. 70 at p. 195)
AHRI agreed that DOE should go back and try to verify the numbers at
some point, maybe not for this rulemaking but for the next one. (AHRI,
Public Meeting Transcript, No. 70 at p. 199-200) NAFEM and Manitowoc
also suggested validation studies. (NAFEM, Public Meeting Transcript,
No. 70 at p. 198; Manitowoc, Public Meeting Transcript, No. 70 at p.
190)
ASAP stated that DOE implemented markups where every dollar spent
got the same markup in rulemakings before the year 2000. ASAP argued
that the real world does not work that way because businesses cover
fixed costs in a certain fashion, and variable costs in a certain
fashion. ASAP has done some work examining the question of how good
DOE's methods are at predicting prices. ASAP found that DOE's predicted
prices tend to be higher than they should be, based on retrospective
analysis. ASAP welcomes more retrospective analysis but notes that such
analysis won't help this docket. (ASAP, Public Meeting Transcript, No.
70 at p. 195-197)
Scotsman provided suggestions for price estimation services, and
commented that the cumulative impact on the supply chain of training,
store design modifications, maintenance, costs associated with passing
along manufacturer adjusted pricing, and retrofit of existing locations
would add significantly to the costs of the standards. (Scotsman, No.
95 at page 5)
DOE acknowledges that a detailed review of results following
compliance with prior rulemakings could provide information on
wholesaler and contractor pricing practices, and agrees that such
results would not be timely for this rulemaking. In the absence of such
information, DOE has concluded that its approach, which is consistent
with expected business behavior in competitive markets, is reasonable
to apply. If the cost of goods sold increases due to efficiency
standards, DOE continues to assume that markups would decline slightly,
leaving profit unchanged, and, thus, it uses lower markups on the
incremental costs of higher-efficiency products. This approach is
consistent with behavior in competitive markets wherein market
participants are expected to be able to recover costs and reasonable
levels of profit. If the markup remains constant while the cost of
goods sold increases, as Manitowoc, Hoshizaki, NAFEM, Follett, and AHRI
suggest, the wholesalers' profits would also increase. While this might
happen in the short run, DOE believes that the wholesale market is
sufficiently competitive 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 a competitive
market.
With respect to Manitowoc and Danfoss comments related to
differential pricing based on efficiency improvements, DOE's approach
for wholesaler markups does not imply that wholesalers differentiate
markups based on the technologies inherently present in the equipment.
Rather, it assumes that the average markup declines as the wholesalers'
cost of goods sold increases due to the higher cost of more-efficient
equipment for the reasons explained in the previous paragraph.
With respect to Scotsman's comments, DOE reviewed the suggested
price quote services and, while appreciative of the information, found
them to not provide the type of information needed for estimating
markups on a national or state average basis. As for the costs
mentioned, DOE believes costs such as passing along the manufacturer
pricing and personnel training are already embodied in markups as such
costs would be included in the data used to estimate markups and no
evidence has been entered into the record to demonstrate that the costs
caused by the proposed standards would be extraordinary. Other costs
such as building renovation and retrofit costs were included in
installation costs, as appropriate.
F. Energy Use Analysis
DOE estimated energy usage for use in the LCC and NIA models based
on the kWh/100 lb ice and gal/100 lb ice values developed in the
engineering analysis in combination with other assumptions. For the
NOPR, DOE assumed that ice makers on average are used to produce one-
half of the ice the machines could produce (i.e., a 50 percent capacity
factor). DOE also assumed that when not making ice, on average ice
makers would draw 5 watts of power. DOE modeled condenser water usage
as ``open-loop'' installations, or installations where water is used in
the condenser one time (single pass) and released into the wastewater
system.
Hoshizaki asked about the basis for the 50 percent usage factor.
(Hoshizaki, Public Meeting Transcript, No. 70 at p. 204) NEEA referred
to the usage factor as a best estimate, and noted that the 50 percent
factor had not been improved upon in response to earlier rulemaking
stages. (NEEA, Public Meeting Transcript, No. 70 at p. 204-205)
With its written comments, AHRI supplied monitored results
collected by two manufacturers and recommended that DOE revise the
utilization factor to 38%, based on the average of the data collected
from stores, cafeterias, and
[[Page 4696]]
restaurants in a variety of states. (AHRI, No. 93 at p. 2-3) Follett
commented that its data shows that ice makers run an average of 38% of
the time and that DOE should modify its analysis accordingly. (Follett,
No. 84 at p. 3) Manitowoc commented that a more accurate average duty
cycle for ACIMs is 40% based on data it had collected. (Manitowoc, No.
92 at p. 3)
NEEA recommended that DOE adjust the energy use on a weighted sales
average to reflect a higher duty cycle for ice makers that are
replacements as compared to new units, where ice demand may not be
accurately known. (NEEA, No. 91 at p. 2)
Based on the monitored results submitted by AHRI and similar
monitored results found in a report posted online,\30\ DOE utilized a
42 percent capacity factor to estimate energy usage for the LCC and NIA
models. With respect to NEEA's comment, given that DOE has no
information on new versus replacement units and that the sample of
monitored results does not include all relevant business types, DOE
used the factor based on monitored results for new and replacement
shipments for all business types.
---------------------------------------------------------------------------
\30\ Karas, A. and D. Fisher. A Field Study to Characterize
Water and Energy Use of Commercial Ice-Cube Machines and Quantify
Saving Potential. December 2007. Fisher-Nickel, Inc. San Ramon, CA.
---------------------------------------------------------------------------
G. Life-Cycle Cost and Payback Period Analysis
In response to the requirements of EPCA in (42 U.S.C.
6295(o)(2)(B)(i) and 6313(d)(4)), DOE conducts a LCC and PBP analysis
to evaluate the economic impacts of potential amended energy
conservation standards on individual commercial customers--that is,
buyers of the equipment. This section describes the analyses and the
spreadsheet model DOE used. TSD chapter 8 details the model and all the
inputs to the LCC and PBP analyses.
LCC is defined as the total customer cost over the lifetime of the
equipment, and consists of installed cost (purchase and installation
costs) and operating costs (maintenance, repair, water,\31\ and energy
costs). DOE discounts future operating costs to the time of purchase
and sums them over the expected lifetime of the unit 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 savings in annual operating costs.
DOE measures the changes in LCC and in PBP associated with a given
energy and water use standard level relative to a base-case forecast of
equipment energy and water use (or the ``baseline energy and water
use''). The base-case forecast reflects the market in the absence of
new or amended energy conservation standards.
---------------------------------------------------------------------------
\31\ Water costs are the total of water and wastewater costs.
Wastewater utilities tend to not meter customer wastewater flows,
and base billings on water commodity billings. For this reason,
water usage is used as the basis for both water and wastewater
costs, and the two are aggregated in the LCC and PBP analysis.
---------------------------------------------------------------------------
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 (which is assumed to
include at least a first level of outbound freight cost) is applied to
obtain the MSP. This value is calculated as part of the engineering
analysis (chapter 5 of the TSD). DOE then applies additional markups to
the equipment to account for the costs associated with the distribution
channels for the particular type of equipment (chapter 6 of the TSD).
Installation costs are varied by state depending on the prevailing
labor rates.
Operating costs for automatic commercial ice makers are the sum of
maintenance costs, repair costs, water, and energy costs. These costs
are incurred over the life of the equipment and therefore are
discounted to the base year (2018, which is the proposed effective date
of the amended standards that will be 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. Usually, the savings in operating costs are
due to savings in energy costs because higher-efficiency equipment uses
less energy over the lifetime of the equipment. Often, the LCC of
higher-efficiency equipment is lower compared to lower-efficiency
equipment.
The PBP of higher-efficiency equipment is obtained by dividing the
increase in the installed cost by the decrease in annual operating
cost. For this calculation, DOE uses the first-year operating cost
decreases as the estimate of the decrease in operating cost, noting
that some of the repair and maintenance costs used in the analysis are
annualized estimates of costs. DOE calculates a PBP for each efficiency
level of each equipment class. In addition to the energy costs
(calculated using the electricity price forecast for the first year),
the first-year operating costs also include annualized maintenance and
repair costs.
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.
As part of the engineering analysis, design option levels were
ordered based on increasing efficiency (decreased energy and water
consumption) and increasing MSP values. DOE developed two to seven
energy use levels for each equipment class, henceforth referred to as
``efficiency levels,'' through the analysis of engineering design
options. For all equipment classes, efficiency levels were set at
specific intervals--e.g., 10 percent improvement over base energy
usage, 15 percent improvement, 20 percent improvement. The max-tech
efficiency level is the only exception. At the max-tech level, the
efficiency improvement matched the specific levels identified in the
engineering analysis.
The base efficiency level (level 1) in each equipment class is the
least efficient and the least expensive equipment in that class. The
higher efficiency levels (level 2 and higher) exhibit progressive
increases in efficiency and cost with the highest efficiency level
corresponding to the max-tech level. LCC savings and PBP are calculated
for each selected efficiency level of each equipment class.
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 give 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 \32\ in which certain inputs were expressed as a
range of values and probability distributions that account
[[Page 4697]]
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 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.
---------------------------------------------------------------------------
\32\ 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 probable outputs
that are possible due to the uncertainties 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 proposed
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 because each
efficiency level above efficiency level 1 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, and the distribution was
assumed to be spread across all efficiency levels in the LCC analysis
(see TSD chapter 10).
Recognizing that different types of businesses and industries that
use automatic commercial ice makers face different energy prices and
apply different discount rates to purchase decisions, DOE analyzed
variability and uncertainty in the LCC and PBP results by performing
the LCC and PBP calculations for seven types of businesses: (1) Health
care; (2) lodging; (3) foodservice; (4) retail; (5) education; (6) food
sales; and (7) offices. 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 for which it is
inappropriate to use a single value for each equipment class.
Therefore, DOE assumed a distribution of equipment lifetimes that are
defined by Weibull survival functions.\33\
---------------------------------------------------------------------------
\33\ A Weibull survival function is a continuous probability
distribution function that is commonly used to approximate the
distribution of equipment lifetimes.
---------------------------------------------------------------------------
Equipment lifetime is a key input for the LCC and PBP analysis. For
automatic commercial ice maker equipment, there is a general consensus
among industry stakeholders that the typical equipment lifetime is
approximately 7 to 10 years with an average of 8.5 years. There was no
data or comment to suggest that lifetimes are unique to each equipment
class. Therefore, DOE assumed a distribution of equipment lifetimes
that is defined by Weibull survival functions, with an average value of
8.5 years.
Using monitored data on the percentage of potential ice-making
capacity that is actually used in real world installations (referred
herein as utilization factor, but also referred to as duty cycle), the
electricity and water usage of ice makers were also varied in the LCC
analysis.
Another factor influencing the LCC analysis is the physical
location in which the automatic commercial ice maker is installed.
Location is captured by using state-level inputs, including
installation costs, water and energy prices, and sales tax (plus the
associated distribution chain markups). At the national level, the
spreadsheets explicitly modeled variability in the model inputs for
water price, electricity price, and markups using probability
distributions based on the relative populations in all states.
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 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.E. DOE applied baseline markups to
baseline MSPs and incremental markups to the MSP increments associated
with higher efficiency levels.
In the NOPR analysis, DOE developed a projection of price trends
for automatic commercial ice maker equipment, indicating that based on
historical price trends the MSP would be projected to decline by 0.4
percent from the 2012 estimation of MSP values through the 2018 assumed
start date of new or amended standards. The NOPR analysis also
indicated an approximately 1.7 percent decline from the MSP values
estimated in 2012 to the end of the 30-year NIA analysis period used in
the NOPR.
AHRI questioned where the price trend data came from and asked how
confident DOE was of the numbers. (AHRI, Public Meeting Transcript, No.
70 at p. 216) In written comments, AHRI expressed concern with the
experiential learning analysis and use of a producer price index and
urged DOE to assume the MSP remain constant. (AHRI, No. 93 at p. 16-17)
PG&E and SDG&E expressed their support of DOE's use of experiential
price learning in life-cycle cost analysis. (PG&E and SDG&E, No. 89 at
p. 4)
DOE acknowledges the PG&E and SDG&G comment. In response to the
AHRI comments that the data do not support the price trends, DOE agrees
that it would be better to have data very specific to automatic
commercial ice maker price trends. However, such is not available. The
PPI used in the analysis of price trends embodies the price trends of
automatic commercial ice makers as well as related technologies,
including those used as inputs to the manufacturing process. DOE would
also note that a sensitivity analysis was performed with price trends
held constant, and doing such would not have impacted the selection of
efficiency levels for TSLs. (See appendix 10B of the final rule TSD.)
Because DOE believes there is evidence that price learning exists, DOE
continued to use price learning for the final rule.
As is customary between phases of a rulemaking, DOE re-examined the
data available and updated the price trend analysis. DOE continued to
use a subset of the air-conditioning, refrigeration, and forced air
heating equipment Producer Price Index (PPI) that includes only
commercial refrigeration and related equipment, and excludes unrelated
equipment. Using this PPI for the automatic commercial ice maker price
trends analysis yields a price decline of roughly 2.4 percent over the
period of 2013 (the year for which MSP was estimated) through 2047. For
the LCC model, between 2013 and 2018, the price decline is 0.5 percent.
2. Installation, Maintenance, and Repair Costs
a. Installation Costs
Installation cost includes labor, overhead, and any miscellaneous
materials and parts needed to install the equipment. Most automatic
commercial ice makers are installed in fairly standard configurations.
For the NOPR,
[[Page 4698]]
DOE assumed that the installation costs vary from one equipment class
to another, but not by efficiency level within an equipment class. For
the NOPR, DOE tentatively concluded that the engineering design options
did not impact the installation cost within an equipment class. DOE
therefore assumed that the installation cost for automatic commercial
ice makers did not vary among efficiency levels within an equipment
class. Costs that do not vary with efficiency levels do not impact the
LCC, PBP, or NIA results.
During the public meeting manufacturers commented that not all
customers can accommodate increased unit sizes, and that DOE must
consider additional costs incurred from modifying facilities to
accommodate ice makers with potential changes including plumbing and/or
electrical work, relocating existing equipment, and/or building
renovations. (Scotsman, Public Meeting Transcript, No. 70 at p. 126-
127; Manitowoc, Public Meeting Transcript, No. 70 at p. 133 and p. 209;
Ice-O-Matic, Public Meeting Transcript, No. 70 at p. 208 and p. 210)
In written comments, AHRI stated it was incorrect to assume
installation cost would not increase with the efficiency improvement.
(AHRI, No. 93 at p. 4) AHRI and Follett stated that larger ice makers
will require installation space modification and would result in higher
installation costs. (AHRI, No. 93 at p. 7-8; Follett, No. 84 at p. 6)
Hoshizaki stated that the current installation cost range
considerations may be correct for ice makers without size increases but
agreed with AHRI and Follett that the installation cost would increase
if the cabinet size went up, and that drain water heat exchangers would
further increase installation costs. (Hoshizaki, No. 86 at p. 3-4)
Manitowoc provided written comments, adding that remote condenser and
remote condenser with compressor units that have larger condenser coils
will require larger roof curbs or stronger mounting, depending on
whether footprint or height is affected. (Manitowoc, No. 92 at p. 3)
Scotsman stated in response to the NOPR and to the NODA that customers
with space constraints could incur costs including but not limited to
building renovation, water and wastewater service relocation, and
electric service and countertop renovations. (Scotsman, No. 85 at p.
5b-6b; No. 125 at p. 2) Scotsman also stated that any efficiency
improvement greater than 5 percent would cause cabinet size increases.
(Scotsman, No. 125 at p. 2) Policy Analyst stated that DOE should
assess whether commercial ice maker installation costs are affected by
its proposed standards. (Policy Analyst, No. 75, p. 10)
Joint Commenters commented that DOE appropriately considered design
options that increased package sizes, noting the options consumers have
for purchases and noting the opportunity consumers might have to select
smaller units given the low utilization factors used in the analysis.
(Joint Commenters, No. 87, p. 3) NEEA similarly stated that DOE
appropriately considered all the factors related to chassis size
increase (NEEA, No. 91, pp. 1-2) PG&E and SDG&E, and CA IOU noted that
it is unclear that insufficient space exists to increase chassis sizes
in all situations. (PG&E and SDG&E, No. 89, p. 3, and CA IOU, No. 129,
p. 4)
As suggested by Policy Analyst and manufacturers, DOE investigated
further the question of installation costs varying by efficiency
levels. In particular, DOE investigated the issue around increased
cabinet sizes for ice makers and modified the installation cost
calculation methodology to reflect increased installation costs for
equipment classes that are size constrained. In response to stakeholder
comments and data supplied by stakeholders, DOE revised the analysis
for three equipment classes with significant shipment volumes of 22-
inch-wide units and where height increases in the cabinets were
considered in DOE's engineering analysis. In the engineering analysis
for the final rule, DOE examined design options and efficiency level
improvements for 22-inch units for three equipment classes under a
scenario where no increase in equipment size was considered, resulting
in two separate cost-efficiency curves (space constrained and non-space
constrained) for each of these three classes (IMH-A-Small-B, IMH-A-
Large-B, and IMH-W-Small-B). Each of these equipment classes is
designed for mounting on bins, ice dispensers, or fountain dispensers,
and in the case of dispensers, generally the combination is mounted on
a counter or table. For the LCC/PBP analysis and the NIA, DOE
integrated the two curves for these equipment classes. To do so, at the
efficiency level where the 22-inch engineering cost curves end, DOE
researched the additional installation costs customers would incur in
order to raise ceilings or move walls to make it possible for the
customers to install the larger, non-22-inch units. As PG&E, SDG&E and
CA IOU stated, not all installations lack sufficient space to
accommodate increased chassis sizes. Based on the research performed
for the final rule, DOE identified percentages of customers of the non-
space constrained equipment who also face size constraints, and
estimated additional installation costs imposed by the need to raise
ceilings or address other height constraints to facilitate cabinet size
increases. Chapter 8 of the final rule TSD describes the process for
including building renovation costs in the ACIM installation costs, and
the inputs used in the analysis.
In response to Hoshizaki and Manitowoc comments, DOE researched
DWHX installation costs, and the cost to install larger remote
condensers. In both cases, DOE identified incremental installation
costs for these design options and added such to the installation costs
at the efficiency levels that include these options.
In response to Scotsman and Ice-O-Matic comments that the design
options might cause customers to need to increase the size of
electrical or water services, the specific technologies underlying the
design options studied by DOE would not require increased electrical or
water services. In performing the engineering analyses, DOE analyzed
design options for each equipment class at the same voltage levels as
existing typical units. As such, there is no reason to believe that
meeting the energy conservation standard for any specific equipment
class would require an increased electrical service. Similarly, there
is reason to believe meeting the energy conservation standard would
require greater water service, because no design options were analyzed
which would increase water usage. Water or wastewater services
relocations or countertop renovations would be required if customers
move ice makers, but DOE's belief is that moving ice makers would not
be a requirement imposed by the small cabinet size increases envisioned
in this rulemaking.
Additional information regarding the estimation of installation
costs is presented in TSD chapter 8.
b. Repair and Maintenance Costs
The repair cost is the average annual cost to the customer for
replacing or repairing components in the automatic commercial ice maker
that have failed. For the NOPR, DOE approximated repair costs based on
an assessment of the components likely to fail within the lifetime of
an automatic commercial ice maker in combination with the estimated
cost of these components developed in the engineering analysis. Under
this methodology, repair and replacement costs are based on the
original equipment costs, so the more expensive the components are, the
[[Page 4699]]
greater the expected repair or replacement cost. For design options
modeled in the engineering analysis, DOE estimated repair costs, and if
they were different than the baseline cost, the repair costs were
either increased or decreased accordingly.
Maintenance costs are associated with maintaining the proper
operation of the equipment. The maintenance cost does not include the
costs associated with the replacement or repair of components that have
failed, which are included as repair costs. In the NOPR analyses, DOE
estimated material and labor costs for preventative maintenance based
on RS Means cost estimation data and on telephone conservations with
contractors. DOE assumed maintenance cost would remain constant for all
efficiency levels within an equipment class.
AHRI commented that it is incorrect to assume that changes in
maintenance and repair will be negligible for more efficient equipment,
and that DOE should contact parts distributors to find the price
difference between permanent split-capacitor (PSC) and ECM motors and
between 2-stage and 1-stage compressors. AHRI noted that dealers
usually double their costs when invoicing equipment owners. (AHRI, No.
93 at p. 4) Similarly, Scotsman commented that the supply-chain cost
impact of the standards would be nearly equal in percentage to the
manufactured product cost increase. (Scotsman, No. 85 at p. 5b)
Scotsman commented that the expedited product development timeline
would affect manufacturers by impeding the traditional product
development process, resulting in a higher product failure rate,
additional training burden, and increased repair costs and that this
cost should be included in the analysis (Scotsman, Public Meeting
Transcript, No. 70 at p. 212, p. 218, p. 219-220).
In the final rule analysis released for the NODA, DOE added a
``repair labor cost'' to the original repair cost, reflective of the
cost of replacing individual components. DOE's research did not
identify studies or data indicating that the failure rates, and in turn
maintenance and repair costs, of energy-efficient equipment is
significantly higher than traditional equipment. In response to AHRI's
comments about contacting distributors about motors and compressors,
DOE did collect labor information directly from service companies upon
which to base the estimated labor hours. In response to AHRI's note
about the doubling of costs, the total repair chain markup underlying
DOE's estimated repair costs is 250 percent of direct equipment costs.
In response to AHRI's comment about compressors, DOE did not
include 2-stage compressors in the engineering analysis, and so the
comment does not apply.
In response to the Scotsman comment about warranty costs, DOE has
no information indicating whether or how much failure rates will change
as a result of standards implementation. To the extent that training
and warranty costs are born by manufacturers and identified in the data
collection efforts, such costs are included in the manufacturer impact
analysis.
3. Annual Energy and Water Consumption
Chapter 7 of the final rule TSD details DOE's analysis of annual
energy and water usage at various efficiency levels of automatic
commercial ice makers. Annual energy and water consumption inputs by
automatic commercial ice maker equipment class are based on the
engineering analysis estimates of kilowatt-hours of electricity per 100
lb ice and gallons of water per 100 lb ice, translated to annual
kilowatt-hours and gallons in the energy and water use analysis
(chapter 7 of the final rule TSD). The development of energy and water
usage inputs is discussed in section IV.F along with public input and
DOE's response to the public input.
4. Energy Prices
DOE calculated average commercial electricity prices using the EIA
Form EIA-826 data obtained online from the ``Database: Sales
(consumption), revenue, prices & customers'' Web page.\34\ The EIA data
are the average commercial sector retail prices calculated as total
revenues from commercial sales divided by total commercial energy sales
in kilowatt-hours, by state and for the nation. DOE received no
recommendations or suggestions regarding this set of assumptions at the
April 2014 NOPR public meeting or in written comments.
---------------------------------------------------------------------------
\34\ U.S. Energy Information Administration. Sales and revenue
data by state, monthly back to 1990 (Form EIA-826). (Last accessed
May 19, 2014). www.eia.gov/electricity/data.cfm#sales.
---------------------------------------------------------------------------
5. Energy Price Projections
To estimate energy prices in future years for the NOPR and for the
final rule, DOE multiplied the average state-level energy prices
described in the previous paragraph by the forecast of annual average
commercial energy price indices developed in the Reference Case from
AEO2014.\35\ AEO2014 forecasted prices through 2040. To estimate the
price trends after 2040, DOE assumed the same average annual rate of
change in prices as exhibited by the forecast over the 2031 to 2040
period. DOE received no recommendations or suggestions regarding this
set of assumptions at the April 2014 public meeting or in written
comments.
---------------------------------------------------------------------------
\35\ 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.
---------------------------------------------------------------------------
6. Water Prices
To estimate water prices in future years for the NOPR, DOE used
price data from the 2008,\36\ 2010,\37\ and 2012 American Water Works
Association (AWWA) Water and Wastewater Surveys.\38\ The AWWA 2012
survey was the primary data set. No data exists to disaggregate water
prices for individual business types, so DOE varied prices by state
only and not by business type within a state. For each state, DOE
combined all individual utility observations within the state to
develop one value for each state for water and wastewater service.
Since water and wastewater billings are frequently tied to the same
metered commodity values, DOE combined the prices for water and
wastewater into one total dollars per 1,000 gallons figure. DOE used
the Consumer Price Index (CPI) data for water-related consumption
(1973-2012) \39\ in developing a real growth rate for water and
wastewater price forecasts.
---------------------------------------------------------------------------
\36\ American Water Works Association. 2008 Water and Wastewater
Rate Survey. 2009. Denver, CO. Report No. 54004.
\37\ American Water Works Association. 2010 Water and Wastewater
Rate Survey. 2011. Denver, CO. Report No. 54006.
\38\ American Water Works Association. 2012 Water and Wastewater
Rate Survey. 2013. Denver, CO. Report No. 54008.
\39\ The Bureau of Labor Statistics defines CPI as a measure of
the average change over time in the prices paid by urban consumers
for a market basket of consumer goods and services. For more
information see www.bls.gov/cpi/home.htm.
---------------------------------------------------------------------------
In written comments, the Alliance stated that DOE looked only at
energy savings for air-cooled and water-cooled ACIM equipment, and that
DOE should include water and wastewater cost in the LCC analysis. The
Alliance notes that when such costs are included, air-cooled equipment
is more cost-effective than water-cooled equipment. (Alliance, No. 73
at p. 3) The Alliance further recommended that DOE should reflect the
rising costs water and wastewater cost in its life cycle analysis.
(Alliance, No. 73 at p. 3) The Alliance also
[[Page 4700]]
commented that DOE did not take into account the embedded energy needed
to pump, tread and distribute water and to collect and treat
wastewater, noting that the end user does not pay this cost and that it
is paid by the water and wastewater user. (Alliance, No. 73 at p. 3,
18-19)
DOE includes water and wastewater cost in the LCC analysis and
notes that real electric prices (2013$) escalate at roughly 0.4 percent
between 2013 and 2047, while real water and wastewater prices escalate
at roughly 2.0 percent over the same time period. DOE disagrees with
the Alliance's comment that the end user of ice does not pay for the
cost of energy embedded in the water used to make ice. This statement
implies that the hotels, restaurants and other entities that use
automatic commercial ice makers and pay the water and wastewater bills
charge prices that do not fully recover all of their costs of doing
business. DOE would agree that the end user of ice does not perceive
the cost of the ice or any of the factors of production that went into
the provision of the ice or the beverage served with the ice. However,
DOE included water and wastewater costs in the LCC analyses, thereby
capturing the cost of embedded energy in the analysis.
In response to the Alliance's comparison of equipment types, DOE's
final rule and final rule TSD present LCC results for all equipment
classes. As discussed in section II.A of this preamble, DOE's
rulemaking authority required DOE to promulgate standards that do not
eliminate features or reduce customer utility. Because the existing
standards established by Congress made water-cooled equipment separate
equipment classes differentiated by the use of water in the condenser,
DOE considers the use of water in the condenser to be a feature. For
these reasons, DOE has no reason to make determinations that one
equipment type is more cost-effective than another type.
For the final rule, DOE updated the calculation of State-level
water prices with the inclusion of 2013 consumer price index values.
7. Discount Rates
The discount rate is the rate at which future expenditures are
discounted to establish their present value. DOE determined the
discount rate by estimating the cost of capital for purchasers of
automatic commercial ice makers. Most purchasers use both debt and
equity capital to fund investments. Therefore, for most purchasers, the
discount rate is the weighted average cost of debt and equity
financing, or the weighted average cost of capital (WACC), less the
expected inflation.
DOE received no comments at the April 2014 public meeting or in
written form related to discount rates.
To estimate the WACC of automatic commercial ice maker purchasers
for the final rule, DOE used a sample of over 1,400 companies grouped
to be representative of operators of each of the commercial business
types (health care, lodging, foodservice, retail, education, food
sales, and offices) drawn from a database of 7,765 U.S. companies
presented on the Damodaran Online Web site.\40\ This database includes
most of the publicly traded companies in the United States. The WACC
approach for determining discount rates accounts for the current tax
status of individual firms on an overall corporate basis. DOE did not
evaluate the marginal effects of increased costs and the increased
depreciation due to more expensive equipment, on the overall tax
status.
---------------------------------------------------------------------------
\40\ Damodaran financial data is available at http://
pages.stern.nyu.edu/~adamodar/ (Last accessed June 6, 2014).
---------------------------------------------------------------------------
DOE used the final sample of companies to represent purchasers of
automatic commercial ice makers. DOE combined company-specific
information from the Damodaran Online Web site, long-term returns on
the Standard & Poor's 500 stock market index from the Damodaran Online
Web site, nominal long-term Federal government bond rates, and long-
term inflation to estimate a WACC for each firm in the sample.
For most educational buildings and a portion of the office
buildings and cafeterias occupied and/or operated by public schools,
universities, and state and local government agencies, DOE estimated
the cost of capital based on a 40-year geometric mean of an index of
long-term (>20 years) tax-exempt municipal bonds.\41\ \42\ Federal
office space was assumed to use the Federal bond rate, derived as the
40-year geometric average of long-term (>10 years) U.S. government
securities.\43\
---------------------------------------------------------------------------
\41\ Federal Reserve Bank of St. Louis, State and Local Bonds--
Bond Buyer Go 20-Bond Municipal Bond Index. (Last accessed April 6,
2012). Annual 1974-2011 data were available at http://research.stlouisfed.org/fred2/series/MSLB20/downloaddata?cid=32995.
\42\ Rates for 2012 and 2013 calculated from monthly data. Data
source: U.S. Federal Reserve (Last accessed July 10, 2014.)
Available at http://www.federalreserve.gov/releases/h15/data.htm.
\43\ Rate calculated with 1974-2013 data. Data source: U.S.
Federal Reserve (Last accessed July 10, 2014.) Available at http://www.federalreserve.gov/releases/h15/data.htm.
---------------------------------------------------------------------------
DOE recognizes that within the business types purchasing automatic
commercial ice makers there will be small businesses with limited
access to capital markets. Such businesses tend to be viewed as higher
risk by lenders and face higher capital costs as a result. To account
for this, DOE included an additional risk premium for small businesses.
The premium, 1.9 percent, was developed from information found on the
Small Business Administration Web site.\44\
---------------------------------------------------------------------------
\44\ Small Business Administration data on loans between $10,000
and $99,000 compared to AAA Corporate Rates. (Last accessed on June
10, 2013.) Available at http://www.sba.gov/advocacy/7540/6282.
---------------------------------------------------------------------------
Chapter 8 of the final rule TSD provides more information on the
derivation of discount rates. The average discount rate by business
type is shown on Table IV.27.
Table IV.27--Average Discount Rate by Business Type
------------------------------------------------------------------------
Average
Business type discount rate
(real) (%)
------------------------------------------------------------------------
Health Care............................................. 3.4
Lodging................................................. 7.9
Foodservice............................................. 7.1
Retail.................................................. 5.8
Education............................................... 4.0
Food Sales.............................................. 6.9
Office.................................................. 6.2
------------------------------------------------------------------------
8. Lifetime
DOE defines lifetime as the age at which typical automatic
commercial ice maker equipment is retired from service. DOE estimated
equipment lifetime based on its discussion with industry experts and
concluded a typical lifetime of 8.5 years. For the NOPR analyses, DOE
elected to use an 8.5-year average life for all equipment classes.
DOE received written comments on the typical lifetime. Scotsman
stated continuous units might have a shorter typical lifetime than
batch type units but did not provide estimates of the difference.
(Scotsman, No. 85 at p. 5b) Hoshizaki commented that 8.5 years is a
good average lifetime assumption. (Hoshizaki, No. 86 at p. 3) AHRI
commented that the average lifespan of continuous type ice makers is 7
years based on warranty data. (AHRI, No. 93 at p. 7) NAFEM commented
that DOE did not use adequate data to justify its assumed lifetime of
8.5 years and that DOE should study the difference in lifetimes between
batch type and continuous type ice makers. (NAFEM, No. 82 at p. 4)
AHRI and NAFEM both commented that the proposed rule will increase
the size and the cost of automatic commercial ice makers, and both
pointed to the example of air
[[Page 4701]]
conditioners, where efficiency standards led to larger and more
expensive units. The two stakeholders went on to state that annual air
conditioner industry sales dropped about 18% while repair parts sales
sharply increased. (NAFEM, No. 82 at p. 6 and p. 10; AHRI, No. 93 at p.
8) Follett commented that the proposed rule is so stringent that it
would create significant hardship for manufacturers and could require
compromises to reliability and serviceability, adding that the rule
could incent end-users to repair rather than replace their machines.
(Follett, No. 84, at p. 1)
With respect to NAFEM's comment about the adequacy of data, in the
framework and preliminary analysis phases of this rulemaking, DOE
surveyed the available literature and found a range of estimates of 7
to 10 years, with 8.5 being the average. Literature cited on Table
IV.28 suggested lifetimes of up to 20 years or more for automatic
commercial ice makers, and this range was supported by discussion with
experts.
Table IV.28--Estimates for Automatic Commercial Ice Maker Lifetimes
------------------------------------------------------------------------
Life Reference
------------------------------------------------------------------------
7 to 10 years.................... Arthur D. Little, 1996.\45\
8.5 years........................ California Energy Commission,
2004.\46\
8.5 years........................ Fernstrom, G., 2004.\47\
8.5 years........................ Koeller J., and H. Hoffman, 2008.\48\
7 to 10 years.................... Navigant Consulting, Inc. 2009.\49\
------------------------------------------------------------------------
With regard to the Scotsman's suggestion that continuous type ice
makers might have shorter life spans, DOE found the comment lacking
sufficient specific information to act on the comment. With respect to
the AHRI comment that continuous equipment has a 7-year life, DOE notes
that the phrase ``based on warranty data'' provided no information that
DOE could analyze to determine whether to revise the assumed equipment
lifetime. In addition, warranty claims do not necessarily correlate
with product lifetime. For this reason, DOE decided based on the
previous, generally high level of agreement with the 8.5-year lifetime
to retain that lifetime as the basic assumption, and to use the 7-year
continuous product life for sensitivity analyses.
---------------------------------------------------------------------------
\45\ Arthur D. Little, Inc. Energy Savings for Commercial
Refrigeration. Final Report. June, 1996. Submitted to the U.S.
Department of Energy's Energy Efficiency and Renewable Energy
Building Technologies Program. Washington, DC.
\46\ California Energy Commission. Update of Appliance
Efficiency Regulations. 2004. Sacramento, CA.
\47\ Fernstrom, G. B. Analysis of Standards Options For
Commercial Packaged Refrigerators, Freezers, Refrigerator-Freezers
and Ice Makers: Codes and Standards Enhancement Initiative For
PY2004: Title 20 Standards Development. 2004. Prepared by the
American Council for an Energy-Efficient Economy for Pacific Gas &
Electric Company, San Francisco, CA.
\48\ Koeller J., and H. Hoffman. A report on Potential Best
Management Practices. 2008. Prepared by Koeller and Company for the
California Urban Water Conservation Council, Sacramento, CA.
\49\ Navigant Consulting, Inc. Energy Savings Potential and R&D
Opportunities for Commercial Refrigeration. Final Report. 2009.
Submitted to the U.S. Department of Energy's Energy Efficiency and
Renewable Energy Building Technologies Program, Washington, DC.
---------------------------------------------------------------------------
With respect to the AHRI, NAFEM, and Follett comments about
refurbishment, DOE acknowledges that the increased size and prices of
automatic commercial ice makers arising from new and amended standards
could lead to equipment refurbishing or the purchase of used equipment.
DOE lacks sufficient information to explicitly model the extent of such
refurbishment but believes that it would not be significant enough to
change the rankings of TSLs. When DOE performed additional and recent
research on repair costs before issuance of the NODA, contractors
provided estimates of the hours to replace failed components such as
compressors, but some also stated that they recommended replacing the
ice maker instead of repairing it. In some cases the contractor
recommendations were based on relative repair or replacement costs and
warranties while in other cases they were based on the time it would
take to get the required, specific ice maker components. DOE also notes
that, given the engineering cost curves prepared for the final rule,
when the baseline efficiency distribution of current shipments is taken
into account, the average total cost increase faced by customers at TSL
3 is less than 3 percent. For these reasons, DOE believes that the
degree of refurbishing would not be significant enough to change the
rankings of the TSLs considered in this rule.
9. Compliance Date of Standards
EPCA prescribes that DOE must review and determine whether to amend
performance-based standards for cube type automatic commercial ice
makers by January 1, 2015. (42 U.S.C. 6313(d)(3)(A)) In addition, EPCA
requires that the 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(d)(3)(C)) For the NOPR analyses, based on the January
1, 2015 statutory deadline and giving manufacturers 3 years to meet the
new and amended standards, DOE assumed that the most likely compliance
date for the standards set by this rulemaking would be January 1, 2018.
As discussed in section IV.A.2, DOE received comments about the
compliance date, including requests to provide manufacturers 5 years to
meet the new and amended standards. As stated in section IV.A.2, DOE
believes that the modifications it made in the final rule analysis,
relative to the NOPR, will reduce the burden on manufacturers to meet
requirements established by this rule. Therefore, DOE has determined
that the 3-year period is adequate and is not extending the compliance
date for ACIMs. For the final rule, a compliance date of January 1,
2018 was used for the LCC and PBP analysis.
10. Base-Case and Standards-Case Efficiency Distributions
To 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 energy efficiency standards). DOE refers to this
distribution of equipment efficiencies as a base-case efficiency
distribution.
For the NOPR, DOE estimated market shares of each efficiency level
within each equipment class based on an analysis of the automatic
commercial ice makers available for purchase by customers. DOE analyzed
all models available as of November 2012, calculated the percentage
difference between the baseline energy usage embodied in the ice maker
rulemaking analyses, and organized the available units by the
efficiency levels. DOE then calculated the percentage of available
models falling within each efficiency level bin. This efficiency
distribution was used in the LCC and other downstream analyses as the
baseline efficiency distribution.
At the NOPR public meeting ASAP noted that the efficiency
distribution used by DOE showed manufacturers can manufacture machines
meeting the efficiency levels proposed in the NOPR.
[[Page 4702]]
(ASAP, Public Meeting Transcript, No. 70 at p. 256-257) Ice-O-Matic and
Manitowoc stated that the distribution showed available equipment, but
the equipment at the higher efficiencies might have small shipments
relative to other efficiency levels. (Ice-O-Matic, Public Meeting
Transcript, No. 70 at p. 260; Manitowoc, Public Meeting Transcript, No.
70 at p. 261-263) Hoshizaki commented that DOE's shipments analysis
would be more accurate if DOE requested actual shipment data under NDA
from manufacturers each year. (Hoshizaki, No. 86 at p. 4) At the public
meeting, manufacturers and AHRI agreed to compile shipments information
by efficiency level.
In written comments, AHRI supplied such information for batch type
equipment. AHRI also stated that DOE should not use available models in
the AHRI database to estimate shipment-weighted market shares by
efficiency levels for batch type units, because by doing so, DOE
overestimates potential energy savings by 11.3% or more. (AHRI, No. 93
at p. 8-9)
For the final rule, DOE used the efficiency distribution for batch
type equipment provided by AHRI. While DOE did not analyze AHRI's
statement of the overestimate of savings, DOE does consider the
shipment-based distribution superior to the available-unit-based
distribution. Lacking a similar shipment-based distribution for
continuous equipment classes, DOE used an available-unit-based
distribution for continuous equipment classes for the final rule.
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 (i.e., as a result of changing cost of electricity) 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, given the
conditions specified within the analysis, such as electricity prices.
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 discount rates are not used.
In written comments, Earthjustice stated that DOE inappropriately
used a 3-year payback period as an upper limit for an acceptable
customer impact without providing a justification for such, and that
DOE should revise its approach for using payback period. (Earthjustice,
No. 81, pp. 1-2) DOE acknowledges the comment and notes that, for the
NOPR, DOE intended the use of the payback period as an illustration of
the relatively significant differences between the impacts of TSLs.
12. Rebuttable Presumption Payback Period
EPCA (42 U.S.C. 6295(o)(2)(B)(iii) and 6313(d)(4)) established a
rebuttable presumption that new or amended standards are 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 that the consumer will receive during the first year as a
result of the standard, as calculated under the applicable test
procedure.
While DOE examined the rebuttable presumption criterion, it
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)(iii) and 6313(d)(4).
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).
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 the amended energy
conservation standards. The NES and NPV are analyzed at specific
efficiency levels (i.e., TSL) for each equipment class of automatic
commercial ice makers. 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 NOPR analysis, DOE forecasted the energy savings, operating cost
savings, equipment costs, and NPV of customer benefits for equipment
sold from 2018 through 2047--the year in which the last standards-
compliant equipment is shipped during the 30-year analysis.
DOE evaluates the impacts of the new and amended standards by
comparing base-case projections with standards-case projections. The
base-case projections characterize energy use and customer costs for
each equipment class in the absence of any new or amended energy
conservation standards. DOE compares these base-case projections with
projections characterizing the market for each equipment class if DOE
adopted the amended standards at each TSL. For the standards cases, DOE
assumed a ``roll-up'' scenario in which equipment at efficiency levels
that do not meet the standard level under consideration would ``roll
up'' to the efficiency level that just meets the proposed standard
level, and equipment already being purchased at efficiency levels at or
above the proposed standard level would remain unaffected.
DOE uses a Microsoft Excel spreadsheet model to calculate the
energy savings and the national customer costs and savings from each
TSL. Final rule TSD chapter 10 and appendix 10A explain the models and
how to use them, and interested parties can review DOE's analyses by
interacting with these spreadsheets. The models and documentation are
available at: http://www1.eere.energy.gov/buildings/appliance_standards/rulemaking.aspx/ruleid/29.
The NIA spreadsheet model uses average values as inputs (rather
than probability distributions of key input parameters from a set of
possible values). For the current analysis, the NIA used projections of
energy prices and commercial building starts from the AEO2014 Reference
Case. In addition, DOE analyzed scenarios that used inputs from the
AEO2014 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
chapter 10 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. Shipments
Comments related to the shipment analysis received at the April
2014 public meeting were all questions for clarification. The following
description of the shipments projection presents the shipments analysis
for the final rule. The process described in this section
[[Page 4703]]
was documented and released for comments in the NODA.
DOE obtained data from AHRI, ENERGY STAR, and U.S. Census Bureau's
Current Industrial Reports (CIR) to estimate historical shipments for
automatic commercial ice makers. AHRI provided DOE with automatic
commercial ice maker shipment data for 2010 describing the distribution
of shipments by equipment class and by harvest capacity. AHRI data
provided to DOE also included an 11-year history of total shipments
from 2000 to 2010. DOE also collected total automatic commercial ice
maker shipment data for the period of 1973 to 2009 from the CIR.
Additionally, DOE collected 2008-2012 data on ACIM shipments under the
ENERGY STAR program. The ENERGY STAR data consisted of numbers of units
meeting ENERGY STAR efficiency levels and the percent of the total
market represented, from which the total market could be estimated.
ENERGY STAR shipments only pertained to air-cooled batch equipment.
In the preliminary analysis phase, DOE relied extensively on the
CIR shipments data for the shipments projection. Subsequent to
receiving comments on the preliminary analysis shipments, DOE relied
more heavily on AHRI data for the NOPR and for the final rule shipments
projections. After the NOPR analyses were completed, analysis of ENERGY
STAR data led DOE to conclude that the AHRI data understates shipments
by approximately 9 percent and that the difference was likely due to a
greater number of manufacturers represented in the ENERGY STAR results.
However, the AHRI data gives significantly greater detail than the
ENERGY STAR data. Therefore, the final rule and the NOPR methodologies
are identical except for an upward adjustment of the historical AHRI
data by 9 percent to correct for the presumed under-reporting of non-
AHRI-members.
To determine the percentage of shipments going to replace existing
stock and the percentage represented by new installations, DOE used the
CIR data to create a series of estimates of total existing stock by
aggregating historical shipments across 8.5-year historical periods.
DOE used the CIR data to estimate a time series of shipments and total
stock for 1994 to 2006--at the time of the analysis, the last year of
data available without significant gaps in the data due to disclosure
limitations. For each year, using shipments, stock, and the 8.5-year
life of the equipment, DOE estimated that, on average, 14 percent of
shipments were for new installations and the remainder for replacement
of existing stock.
DOE then used the historical AHRI shipments to create a 2010 stock
estimate. The 2010 stock and 2010 shipments from AHRI, disaggregated
between new installations and shipments for existing stock replacement,
were combined with projections of new construction activity from
AEO2014 to generate a forecast of shipments for new installations.
Stock and shipments were first disaggregated to individual business
types based on data developed for DOE on commercial ice maker
stocks.\50\ The business types and share of stock represented by each
type are shown in Table IV.29. Using a Weibull distribution assuming
that equipment has an average life of 8.5 years and lasts from 5 to 11
years, DOE developed a 30-year series of replacement ice maker
shipments using the AHRI historical series. Using the estimated 2010
shipments to new installations, and year-to-year changes in new
commercial sector floor space additions from AEO2014, DOE estimated
future shipments for new installations. (For the NOPR, DOE used AEO2013
projections of floor space additions.) The AEO2014 floor space
additions by building type are shown in Table IV.30. The combination of
the replacement and new installation shipments yields total shipments.
The final step was to distribute total sales to equipment classes by
multiplying the total shipments by percentage shares by class. Table
IV.31 shows the percentages represented by all equipment classes, both
the primary classes modeled explicitly in all NOPR analyses as well as
the secondary classes.
---------------------------------------------------------------------------
\50\ Navigant Consulting, Inc. Energy Savings Potential and R&D
Opportunities for Commercial Refrigeration. Final Report, submitted
to the U.S. Department of Energy. September 23, 2009. p. 41.
Table IV.29--Business Types Included in Shipments Analysis
------------------------------------------------------------------------
Building type
Building type as percent of
stock (%)
------------------------------------------------------------------------
Health Care............................................. 9
Lodging................................................. 33
Foodservice............................................. 22
Retail.................................................. 8
Education............................................... 7
Food Sales.............................................. 16
Office.................................................. 4
---------------
Total............................................... 100
------------------------------------------------------------------------
Table IV.30--AEO2014 Forecast of New Building Square Footage
--------------------------------------------------------------------------------------------------------------------------------------------------------
New construction
---------------------------------------------------------------------------------------------------------------
Year million ft\2\
---------------------------------------------------------------------------------------------------------------
Health Care Lodging Foodservice Retail Education Food sales Office
--------------------------------------------------------------------------------------------------------------------------------------------------------
2013.................................... 66 147 31 279 247 21 174
2018.................................... 67 164 51 428 209 36 411
2020.................................... 65 176 47 404 197 33 451
2025.................................... 63 181 48 444 169 34 392
2030.................................... 71 150 55 515 190 39 276
2035.................................... 72 207 57 527 228 40 415
2040.................................... 76 188 56 565 252 40 403
Annual Growth Factor, 2031-2040......... 2.4% 2.5% 2.4% 2.5% 1.7% 2.3% 2.1%
--------------------------------------------------------------------------------------------------------------------------------------------------------
[[Page 4704]]
Table IV.31--Percent of Shipped Units of Automatic Commercial Ice Makers
------------------------------------------------------------------------
Percentage of
Equipment class shipments (%)
------------------------------------------------------------------------
IMH-W-Small-B........................................... 4.54
IMH-W-Med-B............................................. 2.90
IMH-W-Large-B........................................... 0.48
IMH-A-Small-B........................................... 27.08
IMH-A-Large-B........................................... 16.14
RCU-Small-B............................................. 5.43
RCU-RC/NC-Large-B....................................... 6.08
SCU-W-Small-B........................................... 0.68
SCU-W-Large-B........................................... 0.22
SCU-A-Small-B........................................... 13.85
SCU-A-Large-B........................................... 6.56
IMH-W-Small-C........................................... 0.68
IMH-W-Large-C........................................... 0.17
IMH-A-Small-C........................................... 3.53
IMH-A-Large-C........................................... 1.07
RCU-Small-C............................................. 0.83
RCU-Large-C............................................. 0.87
SCU-W-Small-C........................................... 0.15
SCU-W-Large-C........................................... 0.00
SCU-A-Small-C........................................... 8.75
SCU-A-Large-C........................................... 0.00
---------------
Total............................................... 100.00
------------------------------------------------------------------------
Source: AHRI, 2010 Shipments data submitted to DOE as part of this
rulemaking.
2. 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.G.10, and a detailed
description can be found in chapter 10 of the final rule TSD. To
estimate efficiency trends in the standards cases, DOE uses a ``roll-
up'' scenario in its standards rulemakings. 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
the efficiency level that just meets the proposed standard level, and
equipment already being purchased at efficiencies at or above the
standard level under consideration would be unaffected. Table IV.32
shows the shipment-weighted market shares by efficiency level in the
base-case scenario.
Table IV.32--Shipment-Weighted Market Shares by Efficiency Level, Base Case
--------------------------------------------------------------------------------------------------------------------------------------------------------
Market share by efficiency level Percent
Equipment class --------------------------------------------------------------------------------------------------
Level 1 Level 2 Level 3 Level 3A Level 4 Level 4A Level 5 Level 6 Level 7
--------------------------------------------------------------------------------------------------------------------------------------------------------
IMH-W-Small-B........................................ 37.1 15.6 44.8 ......... 2.5 0.0 0.0 ......... .........
IMH-W-Med-B.......................................... 55.8 20.0 15.3 ......... 8.9 ......... ......... ......... .........
IMH-W-Large-B
IMH-W-Large-B-1.................................. 87.2 12.8 ......... ......... ......... ......... ......... ......... .........
IMH-W-Large-B-2.................................. 87.2 12.8 ......... ......... ......... ......... ......... ......... .........
IMH-A-Small-B........................................ 23.7 29.5 46.8 0.0 0.0 ......... 0.0 0.0 .........
IMH-A-Large-B
IMH-A-Large-B-1.................................. 34.1 27.8 35.1 0.3 2.7 ......... ......... ......... .........
IMH-A-Large-B-2.................................. 16.8 22.5 60.8 ......... ......... ......... ......... ......... .........
RCU-Large-B
RCU-Large-B-1.................................... 43.9 36.4 18.8 ......... 1.0 ......... ......... ......... .........
RCU-Large-B-2.................................... 43.9 36.4 18.8 ......... 1.0 ......... ......... ......... .........
SCU-W-Large-B........................................ 71.6 0.6 0.0 ......... 22.5 ......... 5.4 0.0 .........
SCU-A-Small-B........................................ 51.8 15.3 12.9 ......... 8.0 ......... 12.0 0.0 0.0
SCU-A-Large-B........................................ 62.6 14.8 21.5 ......... 0.0 ......... 1.1 0.0 .........
IMH-A-Small-C........................................ 30.6 11.1 19.4 ......... 5.6 ......... 19.4 13.9 .........
IMH-A-Large-C........................................ 43.5 21.7 17.4 ......... 8.7 ......... 8.7 ......... .........
RCU-Small-C.......................................... 27.8 27.8 33.3 ......... 5.6 ......... 0.0 5.6 .........
SCU-A-Small-C........................................ 44.1 8.8 14.7 ......... 17.6 ......... 14.7 0.0 .........
--------------------------------------------------------------------------------------------------------------------------------------------------------
3. National Energy Savings
For each year in the forecast period, DOE calculates the NES for
each TSL 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, introduced in
the energy use analysis, 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. When a rebound effect occurs, it is generally because
the users of the equipment perceive it as less costly to use the
equipment and elect to use it more intensively. In the case of
automatic commercial ice makers, users of the equipment include
restaurant wait staff, hotel guests, cafeteria patrons, or hospital
staff using ice in the treatment of patients. Users of automatic
commercial ice makers tend to have little or no perception of or
personal stake in the cost of the ice and rather are using the ice to
serve a specific need. Given this, DOE believes there is very little or
no potential for a rebound effect. For the NIA, DOE used a rebound
factor of 1, or no effect, for automatic commercial ice makers.
At the NOPR phase, the only comment regarding rebound effect was
from the Policy Analyst. Policy Analyst stated that DOE should evaluate
whether there was a rebound effect caused by the previous standard.
(Policy Analyst, No. 75 at p. 10) As stated above, DOE believes that
the users of ACIM equipment would not perceive the price effects, so
DOE believes rebound effect should not be present for this equipment
and does not believe further analysis is necessary.
Inputs to the calculation of NES are annual unit energy
consumption, shipments, equipment stock, and a site-to-source
conversion factor.
The annual unit energy consumption is the site energy consumed by
an automatic commercial ice maker unit in a given year. Using the
efficiency of units at each efficiency level and the baseline
efficiency distribution, DOE determined annual forecasted shipment-
weighted average equipment efficiencies
[[Page 4705]]
that, in turn, enabled determination of shipment-weighted annual energy
consumption values.
The automatic commercial ice makers stock in a given year is the
total number of automatic commercial ice makers shipped from earlier
years (up to 12 years earlier) that remain in use in that year. The NES
spreadsheet model keeps track of the total units shipped each year. For
purposes of the NES and NPV analyses in the NOPR analysis, DOE assumed
that, based on an 8.5-year average equipment lifetimes, approximately
12 percent of the existing automatic commercial ice makers are retired
and replaced in each year. DOE assumes that, for units shipped in 2047,
any units still remaining at the end of 2055 will be replaced.
DOE uses a multiplicative factor called ``site-to-source conversion
factor'' to convert site energy consumption (at the commercial
building) into primary or source energy consumption (the energy input
at the energy generation station required to convert and deliver the
energy required at the site of consumption). These site-to-source
conversion factors account for the energy used at power plants to
generate electricity and for the losses in transmission and
distribution, as well as for natural gas losses from pipeline leakage
and energy used for pumping. For electricity, the conversion factors
vary over time due to projected changes in generation sources (that is,
the power plant types projected to provide electricity to the country).
The factors that DOE developed are marginal values, which represent the
response of the system to an incremental decrease in consumption
associated with amended energy conservation standards.
For this final rule, DOE used conversion factors based on the U.S.
energy sector modeling using the National Energy Modeling System (NEMS)
Building Technologies (NEMS-BT) version that corresponds to AEO2014 and
which provides national energy forecasts through 2040. Within the
results of NEMS-BT model runs performed by DOE, a site-to-source ratio
for commercial refrigeration was developed. The site-to-source ratio
was held constant beyond 2040 through the end of the analysis period
(30 years plus the life of equipment).
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) After evaluating both models
and the approaches discussed in the August 18, 2011, notice, 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). DOE received one comment, which
was supportive of the use of NEMS for DOE's FFC analysis.\51\
---------------------------------------------------------------------------
\51\ Docket ID: EERE-2010-BT-NOA-0028, comment by Kirk
Lundblade.
---------------------------------------------------------------------------
The approach used for this 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 and in terms of FFC savings. The
savings by TSL are summarized in terms of FFC savings in section I.C.
4. Net Present Value of Customer Benefit
The inputs for determining the NPV of the total costs and benefits
experienced by customers of the automatic commercial ice makers 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 as the difference in installation and operating
costs between the base-case scenario and standards-case scenarios. DOE
calculated operating cost savings over the life of each piece of
equipment shipped in the forecast period.
DOE multiplied monetary values in future years by the discount
factor to determine the present value of costs and savings. DOE
estimated national impacts with 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. DOE defined the present year as 2013 for the NOPR
analysis. The 7-percent real value is an estimate of the average
before-tax rate of return to private capital in the U.S. economy. DOE
used the 3-percent rate to capture the potential effects of the new and
amended standards on private consumption. This rate represents the
``societal rate of time preference,'' which is the rate at which
society discounts future consumption flows to their present.
DOE received one comment from Ice-O-Matic stating that the 7-
percent discount rate was too high when the current prime rate is 3.25
percent and the current Treasury bill rate is 3.67 percent. (Ice-O-
Matic, No. 120, p. 1; Ice-O-Matic, No. 121, p. 1) Ice-O-Matic also
indicated that the use of 7-percent discount rate inflated the rate of
return experienced by customers. (Ice-O-Matic, No. 120, p. 1)
As Ice-O-Matic noted, the discount rate is high relative to current
interest rates. However, DOE suspects that the comments misinterpreted
the use of the discount rate. In this case, the discount rate is used
to express a given number of future dollars as an equivalent number of
dollars today, whereas the comments seemed to assume the discount rate
was used as an interest rate to express a given number of dollars today
as a future value equivalent. Since the 7-percent discount rate that
DOE used in the NIA is used in accordance with OMB guidelines, DOE will
continue using it in the NIA.
As discussed in section IV.G.1, DOE included a projection of price
trends in the preliminary analysis NIA. For the NOPR, DOE reviewed and
updated the analysis with the result that the projected reference case
downward trend in prices is quite modest. For the NOPR, DOE also
developed high and low case price trend projections, as discussed in
final rule TSD appendix 10B.
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 a higher cost of capital. In general, the lower the cost of
electricity and higher the cost of capital, the more likely it is that
an entity would be disadvantaged by the requirement to purchase higher
efficiency equipment. Based on the data available to DOE, automatic
commercial ice maker ownership in three building types represent over
70 percent of the market: Food sales, foodservice, and hotels. 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 food sales, foodservice and lodging firms fall under the
definition of small businesses. Chapter
[[Page 4706]]
8 of the TSD presents the electricity price by business type and
discount rates by building types, respectively, while chapter 11
discusses these topics as they specifically relate to small businesses.
Comparing the foodservice, food sales, and lodging categories,
foodservice faces the highest energy price, with food sales and lodging
facing lower and nearly the same energy prices. Lodging faces the
highest cost of capital. Foodservice faces a higher cost of capital
than food sales. Given the cost of capital disparity, lodging was
selected for LCC subgroup analysis. With foodservice facing a higher
cost of capital, it was selected for LCC subgroup analysis because the
higher cost of capital should lead foodservice customers to value first
cost more and future electricity savings less than would be the case
for food sales customers.
Three written comments specifically focused on the customer
subgroups, all three specifically focusing on the food service
industry. U.S. Senator Toomey commented that the proposed rule will
negatively impact employment in the food services industry, which is
dominated by small businesses, and that restaurant owners would already
purchase efficient products if they were going to be able to recoup the
higher prices through savings. (U.S. Senator Toomey, No. 79 at p. 1)
NRA commented that the cost of new standards could be greater for small
businesses, due to increased capital, maintenance, repair, and
installation costs, thus affecting their payback period. (NRA, No. 69
at p. 2-3) NAFEM commented that the proposed rule will affect the food
service industry, which is also dominated by small businesses, because
they will not be able to afford equipment upgrades and will choose to
extend the life of used equipment. (NAFEM, No. 82 at p. 5)
With respect to the issue of negative employment impacts, if the
standard has a positive LCC benefit to the food service customer, such
an impact should not reduce employment. DOE notes that the LCC analysis
looks strictly at the net economic impact of a hypothetical purchase of
equipment and does not look specifically at employment. However, if the
analysis shows a net LCC benefit, the food service customer should be
better off and presumably such result should not negatively impact
employment. DOE agrees with the NRA comment that the cost of new
standards could be greater for small businesses and notes the analysis
of the impacts is precisely the point of the customer subgroup
analysis.
With respect to NAFEM's comment regarding small business's
inability to afford the equipment upgrades, if the results indicate
positive LCC benefits the presumption is that the customer's financial
situation is improved with the more efficient equipment when compared
to less efficient equipment. DOE lacks information with which to
estimate the extent to which customers might choose to extend the life
of equipment, but believes that given the relatively modest average
price increase of the proposed standard (approximately 3 percent) in
combination with the customer energy savings, the proportion of
customers who would choose life extension is small.
DOE estimated the impact on the identified customer subgroups using
the LCC spreadsheet model. The standard LCC and PBP analyses (described
in section IV.F) include various types of businesses that use automatic
commercial ice makers. For the LCC subgroup analysis, it was assumed
that the subgroups analyzed do not have access to national purchasing
accounts or to major capital markets thereby making the discount rates
higher for these subgroups. Details of the data used for LCC subgroup
analysis and results are presented in chapter 11 of the TSD.
J. Manufacturer Impact Analysis
1. Overview
DOE performed an MIA to estimate the impacts of new and amended
energy conservation standards on manufacturers of automatic commercial
ice makers. The MIA has both quantitative and qualitative aspects and
includes analyses of forecasted industry cash flows, the INPV,
investments in research and development (R&D) and manufacturing
capital, and domestic manufacturing employment. Additionally, the MIA
seeks to determine how amended energy conservation standards might
affect manufacturing employment, capacity, and competition, as well as
how standards contribute to overall regulatory burden. Finally, the MIA
serves to identify any disproportionate impacts on manufacturer
subgroups, in particular, small businesses.
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 include data on the
industry cost structure, unit production costs, product shipments,
manufacturer markups, and investments in R&D and manufacturing capital
required to produce compliant products. A key GRIM output is the INPV,
which is the sum of industry annual cash flows over the analysis
period, discounted using the industry weighted average cost of capital.
Another key output is the impact to domestic manufacturing employment.
The model estimates the impacts of more-stringent energy conservation
standards on a given industry by comparing changes in INPV and domestic
manufacturing employment between a base case and the various TSLs in
the standards case. To capture the uncertainty relating to manufacturer
pricing strategy following amended standards, the GRIM estimates a
range of possible impacts under different markup scenarios.
The qualitative part of the MIA addresses manufacturer
characteristics and market trends. Specifically, the MIA considers such
factors as manufacturing capacity, competition within the industry, the
cumulative impact of other DOE and non-DOE regulations, and impacts on
small business manufacturers. 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 automatic commercial ice
maker industry. This included a top-down cost analysis of automatic
commercial ice maker manufacturers that DOE used to derive preliminary
financial inputs for the GRIM (e.g., revenues; materials, labor,
overhead, and depreciation expenses; selling, general, and
administrative expenses (SG&A); and R&D expenses). DOE also used public
sources of information to further calibrate its initial
characterization of the automatic commercial ice maker industry,
including company Securities and Exchange Commission (SEC) 10-K
filings,\52\ corporate annual reports, the U.S. Census Bureau's
Economic Census,\53\ and Hoover's reports.\54\
---------------------------------------------------------------------------
\52\ U.S. Securities and Exchange Commission. Annual 10-K
Reports. Various Years. http://sec.gov.
\53\ U.S.Census Bureau, Annual Survey of Manufacturers: General
Statistics: Statistics for Industry Groups and Industries. http://factfinder2.census.gov/faces/nav/jsf/pages/searchresults.xhtml?refresh=t.
\54\ Hoovers Inc. Company Profiles. Various Companies. http://www.hoovers.com.
---------------------------------------------------------------------------
In Phase 2 of the MIA, DOE prepared a framework industry cash flow
analysis to quantify the impacts of new and amended energy conservation
standards. The GRIM uses several factors to determine a series of
annual cash flows starting with the announcement of the standard and
extending over a 30-year period
[[Page 4707]]
following the effective date of the standard. These factors include
annual expected revenues, costs of sales, SG&A and R&D expenses, taxes,
and capital expenditures. In general, energy conservation standards can
affect manufacturer cash flow in three distinct ways: (1) Create a need
for increased investment; (2) raise production costs per unit; and (3)
alter revenue due to higher per-unit prices and changes in sales
volumes.
In addition, during Phase 2, DOE developed interview guides to
distribute to manufacturers of automatic commercial ice makers in order
to develop other key GRIM inputs, including product and capital
conversion costs, and to gather additional information on the
anticipated effects of energy conservation standards on revenues,
direct employment, capital assets, industry competitiveness, and
subgroup impacts.
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. As part of Phase 3, DOE
also 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. Such manufacturer subgroups may
include small manufacturers, low volume manufacturers, niche players,
and/or manufacturers exhibiting a cost structure that largely differs
from the industry average.
DOE identified one subgroup, small manufacturers, for which average
cost assumptions may not hold. DOE applied the small business size
standards published by the SBA to determine whether a company is
considered a small business. 65 FR 30836 (May 15, 2000), as amended by
65 FR 53533 (Sept. 5, 2000) and 67 FR 52597 (Aug. 13, 2002), as
codified at 13 CFR part 121. The Small Business Administration (SBA)
defines a small business for North American Industry Classification
System (NAICS) 333415, ``Air-Conditioning and Warm Air Heating
Equipment and Commercial and Industrial Refrigeration Equipment
Manufacturing,'' which includes commercial ice maker manufacturing, as
having 750 or fewer employees. The 750-employee threshold includes all
employees in a business's parent company and any other subsidiaries.
Based on this classification, DOE identified seven manufacturers of
automatic commercial ice makers that qualify as small businesses. The
automatic commercial ice maker small manufacturer subgroup is discussed
in chapter 12 of the final rule TSD and in section VI.B.1 of this
rulemaking.
2. Government Regulatory Impact Model
DOE uses the GRIM to quantify the changes in industry cash flows
resulting from new or amended energy conservation standards. The GRIM
uses manufacturer costs, markups, shipments, and industry financial
information to arrive at a series of base-case annual cash flows absent
new or amended standards, beginning in 2015 and continuing through
2047. The GRIM then models changes in costs, investments, shipments,
and manufacturer margins that may result from new or amended energy
conservation standards and compares these results against those in the
base-case forecast of annual cash flows. The primary quantitative
output of the GRIM is the INPV, which DOE calculates by summing the
stream of annual discounted cash flows over the full analysis period.
For manufacturers of automatic commercial ice makers, DOE used a real
discount rate of 9.2 percent, based on the weighted average cost of
capital as derived from industry financials and feedback received
during confidential interviews with manufacturers.
The GRIM calculates cash flows using standard accounting principles
and compares changes in INPV between the base case and each TSL. The
difference in INPV between the base case and a standards case
represents the financial impact of the amended standard on
manufacturers at that particular TSL. As discussed previously, DOE
collected the necessary information to develop key GRIM inputs from a
number of sources, including publicly available data and interviews
with 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 higher efficiency equipment is typically more
expensive than manufacturing baseline equipment due to the use of more
complex, and typically more costly, components. The changes in the MPCs
of the analyzed equipment can affect the revenues, gross margins, and
cash flow of the industry, making production cost data key GRIM inputs
for DOE's analysis.
For each efficiency level of each equipment class that was directly
analyzed, DOE used the MPCs developed in the engineering analysis, as
described in section IV.B and further detailed in chapter 5 of the
final rule TSD. For equipment classes that were indirectly analyzed,
DOE used a composite of MPCs from similar equipment classes, substitute
component costs, and design options to develop an MPC for each
efficiency level. For equipment classes that had multiple units
analyzed, DOE used a weighted average MPC based on the relative
shipments of products at each efficiency level as the input for the
GRIM. Additionally, DOE used information from its reverse engineering
analysis, described in section IV.D.4, to disaggregate the MPCs into
material and labor costs. These cost breakdowns and equipment markups
were validated with manufacturers during manufacturer interviews.
Base-Case Shipments Forecast
The GRIM estimates manufacturer revenues based on total unit
shipment forecasts and the distribution of shipments by efficiency
level. Changes in sales volumes and efficiency mix over time can
significantly affect manufacturer finances. For the base-case analysis,
the GRIM uses the NIA's annual shipment forecasts from 2015, the base
year, to 2047, the end of the analysis period. See chapter 9 of the
final rule TSD for additional details.
Product Conversion Costs, Capital Conversion Costs, and Stranded Assets
New and 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 include investments in research, development, testing, marketing,
and other non-capitalized costs necessary to make product designs
comply with new or amended energy conservation standards. Capital
conversion costs include investments in property, plant, and equipment
necessary to adapt or change existing production facilities such that
new product designs can be fabricated and assembled.
If new or amended energy conservation standards require
[[Page 4708]]
investment in new manufacturing capital, there also exists the
possibility that they will render existing manufacturing capital
obsolete. In the case that this obsolete manufacturing capital is not
fully depreciated at the time new or amended standards go into effect,
this would result in the stranding of these assets, and would
necessitate the write-down of their residual un-depreciated value.
DOE used multiple sources of data to evaluate the level of product
and capital conversion costs and stranded assets manufacturers would
likely face to comply with new or amended energy conservation
standards. DOE used manufacturer interviews to gather data on the level
of investment anticipated at each proposed efficiency level and
validated these assumptions using estimates of capital requirements
derived from the product teardown analysis and engineering model
described in section IV.D.4. These estimates were then aggregated and
scaled using information gained from industry product databases to
derive total industry estimates of product and capital conversion costs
and to protect confidential information.
In general, DOE assumes that all conversion-related investments
occur between the year the final rule is published and the year by
which manufacturers must comply with the new or amended standards. The
investment figures used in the GRIM can be found in section V.B.2.a of
this preamble. 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 in section IV.J.2.b MSPs include direct manufacturing
production costs (i.e., labor, material, overhead, and depreciation
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 manufacturer markups to the MPCs estimated in the
engineering analysis. 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 earnings before interest and
taxes (EBIT) markup scenario. These scenarios lead to different markups
values that, when applied to the 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
automatic commercial ice makers and comments from manufacturer
interviews, DOE assumed the industry average markup on production costs
to be 1.25. Because this markup scenario assumes that manufacturers
would be able to maintain their gross margin percentage as production
costs increase in response to new and amended energy conservation
standards, it represents a lower bound of industry impacts (higher
industry profitability) under new and amended energy conservation
standards.
In the preservation of EBIT markup scenario, manufacturer markups
are calibrated so that EBIT in the 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 goes up,
manufacturers are generally required to reduce the markups on their
minimally compliant products to maintain a cost-competitive offering.
The implicit assumption behind this scenario is that the industry can
only maintain EBIT in absolute dollars after compliance with the
amended standard is required. Therefore, operating margin (as a
percentage) shrinks in the standards cases. This markup scenario
represents an upper bound of industry impacts (lower 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 in the NOPR TSD. In addition,
interested parties submitted written comments on the assumptions and
results of the NOPR TSD and NODA. DOE summarizes the MIA related
comments below:
a. Conversion Costs
At the NOPR Stage, several stakeholders pointed out high capital
costs and intense redesign efforts would be required by the proposed
standards. Hoshizaki commented that many of the design options
suggested in this rulemaking would require manufacturers to modify or
buy new tooling and grow packaging, pallets, and conveyor belts to
accommodate larger machines. Hoshizaki noted that these costs would
compound to over $20 million in the first year. (Hoshizaki, No. 86 at
p. 7-8) Ice-O-Matic commented that DOE should directly consider the
capital expenditures associated with tooling changes as it is a
discrete expense that is not planned from year to year. (Ice-O-Matic,
Public Meeting Transcript, No. 70 at p. 88)
As suggested by Ice-O-Matic, DOE does consider conversion expenses
to be one-time expenditures that are not planned from year-to-year. DOE
models conversion investments, including capital expenditures, as
occurring between the announcement year and standards year. These
investments result in decreases in operating profit, free cash flow,
and INPV. DOE's conversion cost estimates account for all production
line modifications associated with the design options considered in the
engineering analysis including changes in conveyor, equipment, and
tooling. For the final rule, DOE made changes to the considered design
options based on feedback from the industry. DOE believes the changes
in design options will reduce the capital requirements on industry.
Several manufacturers noted that a significant portion of their
product lines would require redesign in order to meet the standard
levels proposed in the NOPR. Specifically, Manitowoc commented that 90%
of its models would require a major redesign to meet the proposed
standards. (Manitowoc, No. 92 at p. 2-3) Similarly, Hoshizaki commented
that about 80% of their continuous type units would not be able to meet
the proposed standards. (Hoshizaki, Public Meeting Transcript, No. 70
at p. 74) Hoshizaki noted in a written comment that over 75% of units
on the market will be unable to meet the proposed standard. (Hoshizaki,
No. 86 at p. 1) Scotsman commented that 97% of their product line would
need to be replaced in order to achieve the proposed efficiency levels.
(Scotsman, No. 85 at p. 2b) Emerson estimated 70% of the batch ice
machines would need some amount of redesign in order to meet the
proposed minimum efficiency levels at the NOPR stage. (Emerson, No. 122
at p. 1) AHRI commented that 99% of the existing batch type market
would be eliminated if the proposed TSL 3 became effective and that the
impact of NOPR TSL 3 would lead to industry consolidation, loss of
jobs, and loss of
[[Page 4709]]
international sales. (AHRI, No. 93 at p. 10-12) NAFEM noted general
concerns about product obsolescence at the NOPR levels. (NAFEM, No. 82
at p. 2)
Between the NOPR and the Final Rule, DOE revised and updated its
analysis based on stakeholders comments received at the NOPR public
meeting, in additional manufacturer interviews, and in written
responses to the NOPR and NODA. These updates included changes in its
approach to calculating the energy use associated with groups of design
options, changes in inputs for calculations of energy use and equipment
manufacturing cost, and consideration of space-constrained
applications. In response to the NOPR and NODA comments, DOE adjusted
the design options it considered to reduce impacts on the industry. A
discussion of these changes can be found in section IV.D.3. After
applying the change to the analyses, the efficiency levels that DOE
determined to be cost-effective changed considerably. These revised
TSLs are presented in section V.A.
When compared to the NOPR levels, DOE believes the revised levels
proposed in section V.A will reduce the burdens on industry. Table
IV.33 below presents the portion of model that DOE estimates would
require redesign at the various final rule TSLs.
Table IV.33--Portion of Industry Models Requiring Redesign at Final Rule TSLs
----------------------------------------------------------------------------------------------------------------
Percent of models failing at each TSL
----------------------------------------------------------------------------------------------------------------
TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 Total
----------------------------------------------------------------------------------------------------------------
Batch..................................................... 27% 39% 51% 66% 84% 100%
Continuous................................................ 29 41 55 55 78 100
-----------------------------------------------------
Total................................................. 28 40 52 63 82 100
----------------------------------------------------------------------------------------------------------------
b. Cumulative Regulatory Burden
NRA and NAFEM both commented that DOE should consider the impacts
of the cumulative regulatory burden of rulemakings, including energy
conservation standards for CRE and walk-in units as well as EPA
rulemakings on refrigerants, and standards imposed nearly
simultaneously on equipment manufacturers. (NRA, No. 69 at pp. 3-4)
(NAFEM, No. 82 at pp. 6-7)
DOE is instructed to consider all Federal, product-specific burdens
that go into effect within 3 years of the compliance date of this final
rule. The list of other standards considered in the cumulative
regulatory burden analysis can be found in section V.B.2.g. DOE has
included the energy conservation standard final rules for walk-in
coolers and freezers final rule and the commercial refrigeration
equipment final rule. DOE has not included the EPA SNAP rulemaking in
this analysis. Because that rulemaking is in the NOPR stage and is not
finalized at this time, any estimation of the impact or effective dates
would be speculative.
c. SNAP and Compliance Date Considerations
AHRI stated that the burden imposed by a potential changes in
refrigerants is significant and will require major redesign just to
maintain current efficiency levels. (AHRI, No. 168 at p. 5) AHRI urged
DOE to extend the compliance period to five years or put a hold on the
ACIM standards rulemaking until the SNAP refrigerants are finalized in
order to avoid another redesign during the compliance period of the
amended ACIM energy conservation standard. (AHRI, No. 70 at p. 16)
Emerson also supported the idea of DOE starting the three-year
compliance period after EPA finalizes a decision on refrigerants,
allowing manufactures of components and equipment to re-design for both
energy efficiency and low-GWP refrigerants in one design cycle.
(Emerson, No. 122 at p.1) Ice-O-Matic proposed either a five year
compliance period for the NODA TSL 3 or that DOE chose a lower standard
level. (Ice-O-Matic, No. 121 at p. 2) Manitowoc stated that commercial
ice makers are not within the current scope of the SNAP NOPR, however
it believes that ice makers could be affected by a subsequent
rulemaking. Furthermore, Manitowoc noted that even if there is no
action on ice makers, the component suppliers to the ice maker industry
(including suppliers of compressors, expansion valves, and heat
exchangers) will be focusing their efforts on supporting the transition
to SNAP refrigerants. Consequently, the commercial ice maker industry
will be affected even if it is not directly covered by EPA rules.
Manitowoc also supported a course of action to reduce the risk of
multiple redesigns due to the refrigerant changes and an amended energy
conservation standard. (Manitowoc, No. 126 at p. 3) NEEA expressed
their support for DOE's current refrigerant-neutral position. (NEEA,
No. 91 at p. 2)
Since the SNAP rulemaking is in the NOPR stage and not finalized at
this time, any estimation of the impact or effectives dates would be
speculative, however in its August 6, 2014 proposal, EPA did not list
ACIM as a product that would be impacted by forthcoming regulations (82
FR 46126). DOE cannot speculate on the outcome of a rulemaking in
progress and can only consider in its rulemakings regulations that are
currently in effect. Therefore, DOE has not included possible outcomes
of a potential EPA SNAP rulemaking.
In response to the request that DOE extend the compliance date
period for automatic commercial ice makers beyond the 3 years specified
by the NOPR, as stated in section IV.A.2, DOE has determined that the 3
year compliance period is adequate and is not extending the compliance
date for ACIMs. In response to AHRI's comment that DOE should put a
hold on the ACIM standards rulemaking until the SNAP refrigerants are
finalized, EPCA prescribes that DOE must issue a final rule
establishing energy conservation standards for automatic commercial ice
makers not later than January 1, 2015 and DOE does not have the
authority to alter this statutory mandate. (42 U.S.C. 6313(d)(3))
d. ENERGY STAR
Manitowoc and Hoshizaki noted that the proposed standard bypasses
the ENERGY STAR level (Manitowoc, Public Meeting Transcript, No. 70 at
p. 74; Hoshizaki, No. 86 at p. 1) Manitowoc expressed concern that, if
efficiency standards were raised to the level proposed in the NOPR,
there would be no more room for an ENERGY STAR category, which would be
disruptive to the industry. (Manitowoc, Public Meeting Transcript, No.
70 at p. 74)
DOE acknowledges the importance of the ENERGY STAR program and of
understanding its interaction with
[[Page 4710]]
energy efficiency standards. However, EPCA requires DOE to establish
energy conservation standards at the maximum level that is
technologically feasible and economically justified. The standard level
considered in this final rule is estimated to reduce cumulative source
energy usage by 8% percent over the baseline, for products purchased in
2018-2047. Comparatively, the max-tech level is estimated to reduce
cumulative source energy usage by 14% percent over the baseline for the
same time period (refer to section V.B.3 for a complete discussion of
energy savings). As such, the standard level continues to leave room
for ENERGY STAR rebate programs, and therefore new ENERGY STAR levels
could be reestablished once compliance with these standards is
required.
e. Request for DOE and EPA Collaboration
Hoshizaki commented that during a previous round of refrigerant
changeovers, it took over five years to make the appropriate changes to
their product line and that it would take even longer this time due to
the highly flammable refrigerant alternatives under consideration that
would require additional redesign work. Hoshizaki requested that DOE
and EPA work together to ensure that manufacturers are not unduly
burdened with standards from both agencies. (Hoshizaki, No. 86 at p. 6-
7)
DOE recognizes that the combined effects of recent or impending
regulations may have serious consequences for some manufacturers,
groups of manufacturers, or an entire industry. As such, DOE conducts
an analysis of the cumulative regulatory burden as part of its
rulemakings pertaining to equipment efficiency. As stated previously,
however, DOE cannot speculate on the outcome of a rulemaking in
progress and can only consider in its rulemakings regulations that are
currently in effect. 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.
f. Compliance With Refrigerant Changes Could Be Difficult
NAFEM commented that municipal and state regulations and codes may
make it difficult to comply with proposed EPA refrigerant regulations
in some localities and could create hardship for manufacturers. (NAFEM,
No. 82 at p. 7)
This comment relates to proposed EPA refrigerant regulations, and
is beyond the scope of this rulemaking. DOE has forwarded the comment
to EPA's Stratospheric Protection Division.
g. Small Manufacturers
NAFEM notes that the proposed rule has a disparate impact on small
businesses because commercial ice makers are largely manufactured by
small businesses. (NAFEM, No. 82 at p. 5) AHRI agreed that this
rulemaking has impacts on small businesses and requested DOE account
for all small ACIM manufacturers. (AHRI, No. 93 at p. 12)
DOE recognizes the potential for this rule to affect small
businesses. As a result, DOE presented a small business manufacturer
sub-group analysis in the NOPR stage and in this final rule notice. DOE
used industry trade association membership directories, public product
databases, individual company Web sites, and other market research
tools to establish a draft list of covered small manufacturers. DOE
presented its draft list of covered small manufacturers to stakeholders
and industry representatives and asked if they were aware of any other
small manufacturers that should be added to the list during
manufacturer interviews and at DOE public meetings. DOE identified
seven small manufacturers at the NOPR stage. Stakeholders did not
provide any information in interviews or comments that identified
additional small manufacturers of automatic commercial ice makers. As
discussed in section VI.B, DOE applied the small business size
standards published by the SBA to determine whether a company is
considered a small manufacturer. The SBA defines a small business for
NAICS 333415 ``Air-Conditioning and Warm Air Heating Equipment and
Commercial and Industrial Refrigeration Equipment Manufacturing'' as
having 750 or fewer employees. The 750-employee threshold includes all
employees in a business's parent company and any other subsidiaries.
Given the lack of additional new information, DOE maintains that there
are seven small business manufacturers of the covered product in the
Final Regulatory Flexibility Analysis, found in section VI.B.
NAFEM did not provide any data supporting the suggestion that the
majority of domestic ice maker sales are from small manufacturers.
Based on a 2008 study by Koeller & Company,\55\ DOE understands that
the ACIM market is dominated by four manufacturers who produce
approximately 90 percent of the automatic commercial ice makers for
sale in the United States. The four major manufacturers with the
largest market share are Manitowoc, Scotsman, Hoshizaki, and Ice-O-
Matic; none of which are consider small business manufacturers. The
remaining 12 large and small manufacturers account for ten percent of
domestic sales. Thus, DOE disagrees with NAFEM's statement that a
majority of sales are from small manufacturers.
---------------------------------------------------------------------------
\55\ Koeller, John, P.E., and Herman Hoffman, P.E. A Report on
Potential Best Management Practices. Rep. The California Urban Water
Conservation Council, n.d. Web. 19 May 2014.
---------------------------------------------------------------------------
h. Large Manufacturers
Scotsman commented that DOE's INPV analysis ignores manufacturers'
current financial stability and noted that the impacts on large
manufacturers could be significantly more severe than the average.
(Scotsman, No. 85 at p.6b)
The MIA does not forecast the financial stability of individual
manufacturers. The MIA is an industry-level analysis. Inherent to this
analysis is that fact that not all industry participants will perform
equally.
i. Negative Impact on Market Growth
Follett and Hoshizaki commented that more stringent standards have
an adverse impact on innovation and development of new products.
Follett commented that DOE's analysis must account for the lost
opportunity to initiate growth projects that would expand the market.
(Follett, No. 84 at p.10) (Hoshizaki, No.86 at p.4) NRA commented that
the cost of R&D would be passed on to end-users, causing them to delay
purchasing new equipment and thus negatively affecting the ice machine
industry. (NRA, No. 69 at p. 4)
The MIA uses the annual shipments forecast from the Shipment's
Analysis as an input in the GRIM. The Shipments Analysis provides the
base case shipments as well as standards case shipments. The analysis
uses data from AHRI, ENERGY STAR, and U.S. Census Bureau's Current
Industrial Reports (CIR) to estimate historical shipments for automatic
commercial ice makers. Future shipments are broken down into
replacement units based on a stock accounting model; new sales based on
[[Page 4711]]
projections of new construction activity from AEO2014. More detail on
this methodology can be found in section IV.H.1. DOE's analysis does
not speculate on additional shipments that are the result of ``growth
projects.'' Manufacturers did not provide estimations of these growth
levels or justification for such growth levels. Thus, DOE was not able
to include such growth factors in its models.
j. Negative Impact on Non-U.S. Sales
Follett added that the additional cost of efficient components
would impact non-U.S. sales. (Follett, No. 84 at p.7) Ice-O-Matic
commented that they can't afford designs that can only be sold in North
America and that they will lose global busines. (Ice-O-Matic, No. 70 at
p.308) Scotsman stated it will be a challenge to meet DOE efficiency
thresholds, the EPA SNAP regulations and EU regulations with common
equipment platforms. Scotsman continued that the regulations will make
it difficult for domestic manufacturers to compete in the global
market, where the customers' primary decision criterion is sales price.
(Scotsman, No.125 at p. 2-3) Scotsman requested DOE's analysis account
for the impact that regulations will have on manufacturers' ability to
compete in a global market against cheaper products not governed by DOE
standards. (Scotsman, No.70 at p.43-44)
The standards in this final rule only cover equipment placed into
commerce in the domestic market, and as such, do not restrict
manufacturers from selling products below the new and amended standards
in foreign markets. DOE notes that manufacturers make products today
that meet the standard set by the 2005 energy conservation standard for
automatic commercial ice makers and are able to compete against
manufacturers with production lines in lower cost countries. In their
comments, manufacturers did not provide any information as to which
product models or which efficiencies are sold into international
markets. If the models sold internationally have efficiencies that
exceed the amended standard, then manufacturers will likely see a
production cost decrease as sales roll-up to the new standard and
production volumes increase. It is also possible that manufacturer
production costs could increase marginally due to small production
runs. However, stakeholders did not provide enough information for DOE
to model the price-sensitivity of the foreign market.
k. Employment
Ice-O-Matic commented that, if the market loses net present value,
companies are not going to accept less profit, and so there's no way
they can employ the same number of people unless they reduce their pay.
(Ice-O-Matic, No. 70 at p.313) In the NOPR public meeting, AHRI,
Scotsman, and Ice-o-matic noted concerns about DOE direct employment
estimates being too low. (No. 70 at p.320-330)
DOE analyzes the potential impacts of the energy conservation
standard on direct production labor in section V.B.2.d. This analysis
estimates the production head count, including production workers up to
the line-supervisor level who are directly involved in fabricating and
assembling a product within an original equipment manufacturer (OEM)
facility. It does not account for sales, engineering, management, and
all other workers who are not directly producing and assembling
product. DOE presents an upper and lower bound for direct employment.
DOE does not assert that employment will remain steady throughout the
analysis period.
In the NOPR, DOE clearly stated the assumptions that contributed to
its estimate of direct production employment. These assumptions
included: Unit sales, labor content per unit sold, average hourly wages
for production workers, and annual hours worked by production workers.
The calculation of production employment is discussed in detail in
chapter 12 of the TSD, section 12.7. In the NOPR and NODA comments, DOE
did not receive any comments on these key production employment
assumptions. However, DOE updated its final rule analysis based on a
revised engineering analysis, shipments analysis, and trial standard
levels.
l. Compliance With 12866 and 13563
NAFEM commented that DOE is in violation of Executive Orders 12866
and 13563. (NAFEM, No. 82 at p.8) DOE has fulfilled the obligations
required by Executive Orders 12866 and 13563. Additional information
can be found in section VI of this preamble.
m. Warranty Claims
Scotsman noted concern that the MIA results had not ``accurately
accounted for warranty increases''. (Scotsman, No.125 at p.3)
Specifically, it noted that an ECM condenser fan motor would cost
significantly more than its current component.
DOE did not explicitly factor in changes in warranty set-asides or
payments. In interviews, DOE requested manufacturers highlight key
concerns related to the rulemaking. Warranty concerns were not cited as
a key issue. In order for DOE to account for changes in warranty costs,
manufacturers would need to provide data on current product failure
rates, causes of failure and related repair costs, expected future
warranty rates, and changes in expected repair costs. Insufficient
information was provided to model a change in warranty reserve and
warranty pay out. Aside from the Scotsman data point on the cost of ECM
fan motors, no other manufacturer supplied hard data related to
warranty expenses. As a result, DOE did not incorporate a change in
warranty rate in its analysis.
n. Impact to Suppliers, Distributors, Dealers, and Contractors
AHRI commented that DOE must perform analyses to assess the impacts
of the final rule on component suppliers, distributors, dealers, and
contractors. Policy Analyst also suggested that DOE assess whether
suppliers are affected by the proposed standard. (Policy Analyst, No.
75 at p. 10) The MIA assesses the impact of amended energy conservation
standards on manufacturers of automatic commercial ice makers. Analysis
of the impacts on distributors, dealers, and contractors as a result of
energy conservation standards on manufacturers of automatic commercial
ice makers falls outside the scope of this analysis.
Impacts on component suppliers might arise if manufacturers
switched to more-efficient components, or if there was a substantial
reduction in sales orders following new or amended standards. In public
comments and in confidential interviews, manufacturers expressed that
given their low production volumes, the automatic commercial ice maker
manufacturing industry has little influence over component suppliers
relative to other commercial refrigeration equipment industries.
(Manitowoc, Preliminary Analysis Public Meeting Transcript, No. 42 at
pp. 14-15). It follows that energy conservation standards for automatic
commercial ice makers would have little impact on component suppliers
given their marginal contribution to overall commercial refrigeration
component demand.
K. Emissions Analysis
In the emissions analysis, DOE estimated the reduction in power
sector emissions of CO2, NOX, SO2, and
Hg from potential energy conservation standards for automatic
commercial ice
[[Page 4712]]
makers. 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 (Aug. 18, 2011), 77 FR 49701 (Aug. 17, 2012)) the FFC analysis
includes impacts on emissions of CH4 and N2O,
both of which are recognized as greenhouse gases (GHGs).
DOE primarily conducted the emissions analysis using emissions
factors for CO2 and most of the other gases derived from
data in the AEO2014. Combustion emissions of CH4 and
N2O were estimated using emissions intensity factors
published by the Environmental Protection Agency (EPA), GHG Emissions
Factors Hub.\56\ 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.
---------------------------------------------------------------------------
\56\ http://www.epa.gov/climateleadership/inventory/ghg-emissions.html.
---------------------------------------------------------------------------
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 gases' global warming
potential (GWP) over a 100-year time horizon. Based on the Fourth
Assessment Report of the Intergovernmental Panel on Climate Change,\57\
DOE used GWP values of 28 for CH4 and 265 for
N2O.
---------------------------------------------------------------------------
\57\ Intergovernmental Panel on Climate Change. Climate Change
2013: The Physical Science Basis. Contribution of Working Group I to
the Fifth Assessment Report of the Intergovernmental Panel on
Climate Change. 2013. Stocker, T.F., D. Qin, G.-K. Plattner, M.
Tignor, S.K. Allen, J. Boschung, A. Nauels, Y. Xia, V. Bex and P.M.
Midgley (eds.). Cambridge University Press, Cambridge, United
Kingdom and New York, NY, USA. Chapter 8.
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EIA prepares the AEO using NEMS. Each annual version of NEMS
incorporates the projected impacts of existing air quality regulations
on emissions. AEO2014 generally represents current legislation and
environmental regulations, including recent government actions, for
which implementing regulations were available as of October 31, 2013.
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 and the
District of Columbia (DC). SO2 emissions from 28 eastern
States and DC were also limited under the Clean Air Interstate Rule
(CAIR; 70 FR 25162 (May 12, 2005)), which created an allowance-based
trading program that operates along with the Title IV program. CAIR was
remanded to U.S. Environmental Protection Agency (EPA) by the U.S.
Court of Appeals for the District of Columbia Circuit but it remained
in effect.\58\ In 2011 EPA issued a replacement for CAIR, the Cross-
State Air Pollution Rule (CSAPR). 76 FR 48208 (August 8, 2011). On
August 21, 2012, the D.C. Circuit issued a decision to vacate
CSAPR.\59\ The court ordered EPA to continue administering CAIR. The
emissions factors used for this final rule, which are based on AEO2014,
assume that CAIR remains a binding regulation through 2040.\60\
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\58\ 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).
\59\ See EME Homer City Generation, LP v. EPA, 696 F.3d 7, 38
(D.C. Cir. 2012).
\60\ On April 29, 2014, the U.S. Supreme Court reversed the
judgment of the D.C. Circuit and remanded the case for further
proceedings consistent with the Supreme Court's opinion. The Supreme
Court held in part that EPA's methodology for quantifying emissions
that must be eliminated in certain states due to their impacts in
other downwind states was based on a permissible, workable, and
equitable interpretation of the Clean Air Act provision that
provides statutory authority for CSAPR. See EPA v. EME Homer City
Generation, No 12-1182, slip op. at 32 (U.S. April 29, 2014).
Because DOE is using emissions factors based on AEO2014 for today's
final rule, the analysis assumes that CAIR, not CSAPR, is the
regulation in force. The difference between CAIR and CSAPR is not
relevant for the purpose of DOE's analysis of SO2
emissions.
---------------------------------------------------------------------------
The attainment of emissions caps is typically flexible among EGUs
and is enforced through the use of emissions allowances and tradable
permits. Under existing EPA regulations, any excess SO2
emissions allowances resulting from the lower electricity demand caused
by the adoption of an efficiency standard could be used to permit
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 in 2016, however, SO2 emissions will fall as a
result of the Mercury and Air Toxics Standards (MATS) for power plants.
77 FR 9304 (Feb. 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. AEO2014 assumes that, in order
to continue operating, coal plants must have either flue gas
desulfurization or dry sorbent injection systems installed by 2016.
Both technologies are used to reduce acid gas emissions, and also
reduce SO2 emissions. Under the MATS, emissions will be far
below the cap established by CAIR, so it is unlikely that excess
SO2 emissions allowances resulting from the lower
electricity demand would be needed or used to permit offsetting
increases in SO2 emissions by any regulated EGU. Therefore,
DOE believes that efficiency standards will reduce SO2
emissions in 2016 and beyond.
CAIR established a cap on NOX emissions in 28 eastern
States and the District of Columbia.\61\ 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
permit 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 from the standards considered in this final rule
for these States.
---------------------------------------------------------------------------
\61\ CSAPR also applies to NOX and it would supersede
the regulation of NOX under CAIR. As stated previously,
the current analysis assumes that CAIR, not CSAPR, is the regulation
in force. The difference between CAIR and CSAPR with regard to DOE's
analysis of NOX emissions is slight.
---------------------------------------------------------------------------
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 reduction using emissions factors based on AEO2014, which
incorporates the MATS.
In response to the NOPR, DOE received one comment specifically
about measuring environmental benefits. Policy Analyst stated that DOE
should commit to measuring environmental benefits and reductions in
energy usage as a result of these standards. (Policy Analyst, No. 75 at
p. 10) DOE has invested a great deal of time and effort in quantifying
the energy reductions and environmental benefits of this rule, as
described in this section and as described in the discussion of the
[[Page 4713]]
NIA (IV.H). Given the dispersed nature of automatic commercial ice
makers on customer premises across the country, actual physical
measurement of the energy savings and environmental benefits would be a
large and costly undertaking which would likely not yield useful
results. However, DOE is committed to working with other governmental
agencies to continue developing tools for quantifying the environmental
benefits of proceedings such as this ACIM rulemaking. The discussion
that follows of the development of the social cost of carbon (SCC) is
the prime example of these efforts.
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 similar
to the calculation of the NPV of consumer 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 rulemaking.
For this final rule, DOE is relying on a set of values for the
social cost of carbon (SCC) that was developed by an 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 CO2. A domestic SCC value is
meant to reflect the value of damages in the United States resulting
from a unit change in CO2 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
CO2 emissions, the analyst faces a number of serious
challenges. A report from the National Research Council \62\ points out
that any assessment will suffer from uncertainty, speculation, and lack
of information about (1) future emissions of greenhouse gases, (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 serious questions
of science, economics, and ethics and should be viewed as provisional.
---------------------------------------------------------------------------
\62\ National Research Council. Hidden Costs of Energy: Unpriced
Consequences of Energy Production and Use. National Academies Press:
Washington, DC (2009).
---------------------------------------------------------------------------
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 value
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 CO2 emissions. To ensure consistency in how
benefits are evaluated across 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
Since the release of the interim values, the interagency group
reconvened on a regular basis to generate improved SCC estimates.
Specifically, 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. 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
[[Page 4714]]
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
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 integrated assessment models, 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, is
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,
although preference is given to consideration of the global benefits of
reducing CO2 emissions. Table IV.34 presents the values in
the 2010 interagency group report,\63\ which is reproduced in appendix
14A of the TSD.
---------------------------------------------------------------------------
\63\ 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.34--Annual SCC Values From 2010 Interagency Report, 2010-2050
[2007 dollars per metric ton CO2]
----------------------------------------------------------------------------------------------------------------
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 this rulemaking were generated using the
most recent versions of the three integrated assessment models that
have been published in the peer-reviewed literature.\64\ (See appendix
14-B of the final rule TSD for further information.) Table IV.35 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 14-B of the 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.
---------------------------------------------------------------------------
\64\ 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. www.whitehouse.gov/sites/default/files/omb/assets/inforeg/technical-update-social-cost-of-carbon-for-regulator-impact-analysis.pdf
Table IV.35--Annual SCC Values From 2013 Interagency Update, 2010-2050
[2007 dollars per metric ton CO2]
----------------------------------------------------------------------------------------------------------------
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
----------------------------------------------------------------------------------------------------------------
[[Page 4715]]
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. The interagency group also recognizes that the
existing models are imperfect and incomplete. The National Research
Council report mentioned in section IV.L.1.a 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 2013$ using the Gross Domestic
Product price deflator. For each of the four cases of SCC values, the
values for emissions in 2015 were $12.0, $40.5, $62.4, and $119 per
metric ton of CO2 avoided. 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 why DOE
quantified the emissions. Commenters also questioned the scientific and
economic basis of the SCC values.
Scotsman stated they did not understand the logic of predicting
emissions reductions associated with a product with such a limited
population relative to national average energy consumption. (Scotsman,
No. 95 at page 7) As stated earlier in the SCC discussion, DOE
quantifies emissions reductions as one of the societal impacts of all
standards in accordance with section 1(b) of Executive Order 12866.
A number of stakeholders stated that DOE should not use SCC values
to establish monetary figures for emissions reductions until the SCC
undergoes a more rigorous notice, review, and comment process. (AHRI,
No. 93 at pp. 13-14; The Associations, No. 77 at p. 4) The Cato
Institute commented that SCC should be barred from use until its
deficiencies are rectified. (Cato Institute, No. 74 at p. 1) Similarly,
IER stated that SCC should no longer be used in Federal regulatory
analysis and rulemakings. (IER, No. 83 at p. 2) In contrast, IPI et al.
affirmed that current SCC values are sufficiently robust and accurate
for continued use in regulatory analyses. (IPI, No. 78 at p. 1)
In conducting the interagency process that developed the SCC
values, 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. Key
uncertainties and model differences transparently and consistently
inform the range of SCC estimates. These uncertainties and model
differences are discussed in the interagency working group's reports,
which are reproduced in appendix 14A and 14B of the TSD, as are the
major assumptions. The 2010 SCC values have been used in a number of
Federal rulemakings upon which the public had opportunity to comment.
In November 2013, the OMB announced a new opportunity for public
comment on the TSD underlying the revised SCC estimates. See 78 FR
70586 (Nov. 26, 2013). 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 members of
the interagency working group on further review and revision of the SCC
estimates as appropriate.
IER commented that the SCC is inappropriate for use in federal
rulemakings because it is based on subjective modeling decisions rather
than objective observations and because it violates OMB guidelines for
accuracy, reliability, and freedom from bias. (IER, No. 83 at p. 2) The
General Accounting Office (GAO) was asked to review the Interagency
Working Group's (IWG) development of SCC estimates,\65\ and noted that
OMB and EPA participants reported that the IWG documented all major
issues consistent with Federal standards for internal control. The GAO
also found, according to its document review and interviews, that the
IWG's development process followed three principles: (1) It used
consensus-based decision making; (2) it relied on existing academic
literature and models; and (3) it took steps to disclose limitations
and incorporate new information. Further, DOE has sought to ensure that
the data and research used to support its policy decisions--including
the SCC values--are of high scientific and technical quality and
objectivity, as called for by the Secretarial Policy Statement on
Scientific Integrity.\66\ See section VI.L for DOE's evaluation of this
final rule and supporting analyses under the DOE and OMB information
quality guidelines.
---------------------------------------------------------------------------
\65\ www.directives.doe.gov/directives-documents/400-series/0411.2-APolicy.
\66\ www.gao.gov/products/GAO-14-663.
---------------------------------------------------------------------------
The Cato Institute stated that the determination of the SCC is
discordant with the best scientific literature on the equilibrium
climate sensitivity and the fertilization effect of CO2--two
critically important parameters for establishing the net externality of
CO2 emissions. (Cato Institute, No. 74 at pp. 1, 12-15) The
revised estimates that were issued in November 2013 are based on the
best available scientific information on the impacts of climate change.
The issue of equilibrium climate sensitivity is addressed in section
14A.4 of appendix 14A in the TSD. The EPA, in collaboration with other
Federal agencies, continues to investigate potential improvements to
the way in which economic damages associated with changes in
CO2 emissions are quantified.
AHRI commented that the GHG emissions reductions benefits may be
overestimated because the DOE's analysis does not take into
consideration EPA's planned regulation of GHG emissions from power
plants, which would affect the estimated carbon emissions. AHRI
suggested DOE conduct additional research on the impact of EPA's
regulations on SCC values. (AHRI, No. 93 at p. 14) As noted in section
IV.L.1, DOE participates in the IWG process. DOE believes that if
necessary and appropriate the IWG will perform research as suggested by
AHRI, but notes that results from any such research will not be timely
for inclusion in this rulemaking. With respect to AHRI's comment about
accounting for EPA's planned regulations, DOE cannot account for
regulations that are not currently in effect because whether such
regulations will be adopted and their final form are matters of
speculation at this time.
The Cato Institute commented that the IWG appears to violate the
directive in OMB Circular A-4, which states, ``Your analysis should
focus on benefits and costs that accrue to citizens and residents of
the United States. Where you choose to evaluate a regulation that
[[Page 4716]]
is likely to have effects beyond the borders of the United States,
these effects should be reported separately.'' The Cato Institute
stated that instead of focusing on domestic benefits and separately
reporting any international effects, the IWG only reports the global
costs and makes no determination of the domestic costs. (Cato
Institute, No. 74 at pp. 2-3) IER expressed similar concerns about the
IWG's use of a global perspective in reporting SCC estimates. (IER, No.
83 at pp. 16-17) AHRI commented that either domestic or global costs
and benefits should be considered, but not both. (AHRI, No. 93 at p.
14)
Although the relevant analyses address both domestic and global
impacts, the interagency group has determined that it is appropriate to
focus on 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 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 TSD.
AHRI stated that the costs of the proposed rule are calculated over
the course of a 30-year period, while avoided SCC benefit is calculated
over a 300-year period. AHRI further commented that longer-term (i.e.,
30-300 years) impacts of regulations on businesses are unknown, and
should be studied. (AHRI, No. 93 at p. 14) For the analysis of national
impacts of standards, DOE considers the lifetime impacts of equipment
shipped in a 30-year period, with energy and cost savings impacts
aggregated 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 IWG are meant to
represent the full discounted value (using an appropriate range of
discount rates) of emissions reductions occurring in a given year.
Thus, DOE multiplies the SCC values for achieving the emissions
reductions in each year of the analysis by the carbon reductions
estimated for each of those same years. Neither the costs nor the
benefits of emissions reductions outside the analytic time frame are
included in the analysis.
2. Valuation of Other Emissions Reductions
As noted in section IV.K, 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 this final rule based on
estimates found in the relevant scientific literature. Estimates of
monetary value for reducing NOX from stationary sources
range from $476 to $4,893 per ton (2013$).\67\ DOE calculated monetary
benefits using a medium value for NOX emissions of $2,684
per short ton (in 2013$), and real discount rates of 3 percent and 7
percent.
---------------------------------------------------------------------------
\67\ 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. Available at:
www.whitehouse.gov/sites/default/files/omb/assets/omb/inforeg/2006_cb/2006_cb_final_report.pdf.
---------------------------------------------------------------------------
DOE is evaluating appropriate monetization of avoided
SO2 and Hg emissions in energy conservation standards
rulemakings. It has not included such monetization in the current
analysis.
M. Utility Impact Analysis
The utility impact analysis estimates several effects on the power
generation industry that would result from the adoption of new or
amended energy conservation standards. In the utility impact analysis,
DOE analyzes the changes in electric installed capacity and generation
that result for each TSL. The utility impact analysis uses a variant of
NEMS,\68\ which is a public domain, multi-sectored, partial equilibrium
model of the U.S. energy sector. DOE uses a variant of this model,
referred to as NEMS-BT,\69\ to account for selected utility impacts of
new or amended energy conservation standards. DOE's analysis consists
of a comparison between model results for the most recent AEO Reference
Case and for cases in which energy use is decremented to reflect the
impact of potential standards. The energy savings inputs associated
with each TSL come from the NIA. Chapter 15 of the final rule TSD
describes the utility impact analysis.
---------------------------------------------------------------------------
\68\ For more information on NEMS, refer to the U.S. Department
of Energy, Energy Information Administration documentation. A useful
summary is National Energy Modeling System: An Overview 2003, DOE/
EIA-0581(2003), March, 2003.
\69\ DOE/EIA approves use of the name ``NEMS'' to describe only
an official version of the model without any modification to code or
data. Because this analysis entails some minor code modifications
and the model is run under various policy scenarios that are
variations on DOE/EIA assumptions, DOE refers to it by the name
``NEMS-BT'' (``BT'' is DOE's Building Technologies Program, under
whose aegis this work has been performed).
---------------------------------------------------------------------------
DOE received one comment about the utility impact analysis. Policy
Analyst commented that DOE should commit to measuring the effects of
these energy savings on the security, reliability, and costs of
maintaining the nation's energy system. (Policy Analyst, No. 75 at p.
10) As discussed in Chapter 15 of the TSD, DOE does quantify the
effects of the energy savings on the nation's energy system. Given the
widely dispersed nature of automatic commercial ice makers on customer
premises across the country, physically measuring the impacts would be
time-consuming and costly and would likely not result in useful
measurements of the effects. DOE has over the course of many energy
conservation standards rulemakings developed the tools and processes
used in this rulemaking to estimate the impacts on the electric utility
system, and those impacts are discussed in Chapter 15 of the TSD.
N. Employment Impact Analysis
Employment impacts from new or amended energy conservation
standards include direct and indirect impacts. Direct employment
impacts, which are addressed in the MIA, are any changes in the number
of employees of manufacturers of the equipment subject to standards.
Indirect employment impacts, which are assessed as part of the
employment impact analysis, are changes in national employment that
occur due to the shift in expenditures and capital investment caused by
the purchase and operation of more-efficient equipment. Indirect
employment impacts from standards consist of the jobs created or
eliminated in the national economy due to (1) reduced spending by end
users on energy; (2) reduced spending on new energy supply by the
utility industry; (3) increased customer spending on the purchase of
new equipment; and (4) the effects of those three factors throughout
the economy.
One method for assessing the possible effects on the demand for
labor of such shifts in economic activity is to compare sector
employment statistics developed by the Labor Department's Bureau of
Labor Statistics (BLS). BLS regularly publishes its estimates of the
number of jobs per million dollars of economic activity in different
sectors of the economy, as well as the jobs created elsewhere in the
economy by this same economic activity. Data from BLS indicate that
expenditures in the utility sector generally create fewer jobs (both
directly and indirectly) than expenditures in other sectors of the
[[Page 4717]]
economy.\70\ There are many reasons for these differences, including
wage differences and the fact that the utility sector is more capital-
intensive and less labor-intensive than other sectors. Energy
conservation standards have the effect of reducing customer utility
bills. Because reduced customer expenditures for energy likely lead to
increased expenditures in other sectors of the economy, the general
effect of efficiency standards is to shift economic activity from a
less labor-intensive sector (i.e., the utility sector) to more labor-
intensive sectors (e.g., the retail and service sectors). Thus, based
on the BLS data alone, DOE believes net national employment may
increase because of shifts in economic activity resulting from amended
energy conservation standards for automatic commercial ice makers.
---------------------------------------------------------------------------
\70\ See U.S. Department of Commerce--Bureau of Economic
Analysis. Regional Multipliers: A User Handbook for the Regional
Input-Output Modeling System (RIMS II). 1992.
---------------------------------------------------------------------------
For the standard levels considered in this final rule, DOE
estimated indirect national employment impacts using an input/output
model of the U.S. economy called Impact of Sector Energy Technologies
version 3.1.1 (ImSET).\71\ ImSET is a special-purpose version of the
``U.S. Benchmark National Input-Output'' (I-O) model, which was
designed to estimate the national employment and income effects of
energy-saving technologies. The ImSET software includes a computer-
based I-O model having structural coefficients that characterize
economic flows among the 187 sectors. ImSET's national economic I-O
structure is based on a 2002 U.S. benchmark table, specially aggregated
to the 187 sectors most relevant to industrial, commercial, and
residential building energy use. DOE notes that ImSET is not a general
equilibrium forecasting model and understands the uncertainties
involved in projecting employment impacts, especially changes in the
later years of the analysis. Because ImSET does not incorporate price
changes, the employment effects predicted by ImSET may overestimate
actual job impacts over the long run. For the final rule, DOE used
ImSET only to estimate short-term (through 2022) employment impacts.
---------------------------------------------------------------------------
\71\ Scott, M.J., O.V. Livingston, P.J. Balducci, J.M. Roop, and
R.W. Schultz. ImSET 3.1: Impact of Sector Energy Technologies. 2009.
Pacific Northwest National Laboratory, Richland, WA. Report No.
PNNL-18412. www.pnl.gov/main/publications/external/technical_reports/PNNL-18412.pdf.
---------------------------------------------------------------------------
DOE received no comments specifically on the indirect employment
impacts. Comments received were related to manufacturing employment
impacts, and DOE reiterates that the indirect employment impacts
estimated with ImSET for the entire economy differ from the direct
employment impacts in the ACIM manufacturing sector estimated using the
GRIM in the MIA, as described at the beginning of this section. The
methodologies used and the sectors analyzed in the ImSET and GRIM
models are different.
For more details on the employment impact analysis and its results,
see chapter 16 of the TSD and section V.B.3.d of this preamble.
O. Regulatory Impact Analysis
DOE prepared a regulatory impact analysis (RIA) for this
rulemaking, which is described in chapter 17 of the final rule TSD. The
RIA is subject to review by the Office of Information and Regulatory
Affairs (OIRA) in the OMB. The RIA consists of (1) a statement of the
problem addressed by this regulation and the mandate for government
action; (2) a description and analysis of policy alternatives to this
regulation; (3) a qualitative review of the potential impacts of the
alternatives; and (4) the national economic impacts of the proposed
standard.
The RIA assesses the effects of feasible policy alternatives to
amended automatic commercial ice makers standards and provides a
comparison of the impacts of the alternatives. DOE evaluated the
alternatives in terms of their ability to achieve significant energy
savings at reasonable cost and compared them to the effectiveness of
the proposed rule.
DOE identified the following major policy alternatives for
achieving increased automatic commercial ice makers efficiency:
No new regulatory action
Commercial customer tax credits
Commercial customer rebates
Voluntary energy efficiency targets
Bulk government purchases
Early replacement.
DOE qualitatively evaluated each alternative's ability to achieve
significant energy savings at reasonable cost and compared it to the
effectiveness of the proposed rule. See chapter 17 of the final rule
TSD for further details.
In response to the NOPR, DOE received comments from NAFEM stating
that NAFEM commented that DOE failed to consider the positive role of
ENERGY STAR in the marketplace, that the Federal Energy Management
Program (FEMP) already encourages manufacturers to innovate and create
energy savings, the effects of local and state initiatives, and the
effects of voluntary building standards that require high efficiency
products in the marketplace. (NAFEM, No. 82 at pp. 8-9)
In response to the NAFEM comment, DOE notes first that FEMP and
other voluntary programs tend to use ENERGY STAR as the efficiency
target levels for equipment classes covered by ENERGY STAR. DOE
recognizes that the market has achieved a roughly 60-percent success
rate in reaching the ENERGY STAR criteria for the time that ENERGY STAR
has covered automatic commercial ice makers. The market-driven
accomplishments are reflected in the distribution of shipments by
efficiency level for the base conditions, and very much influence the
results of the analysis. The selected TSL 3 yields a shipments-weighted
average efficiency improvement of approximately 8 percent. If all
customers purchased efficiency level 1 equipment (i.e., baseline
equipment), the shipments-weighted average efficiency improvement would
be over 18 percent. The difference is attributable to the combination
of ENERGY STAR, FEMP, utility incentive programs, incentive programs
operated by governmental entities and others, and customer economic
decision making.
In deciding what efficiency targets to model in the RIA, DOE noted
that modeling the new ENERGY STAR criteria would show modest energy
savings and NPV results because, as noted above, the baseline already
reflects the market-driven accomplishments. Further, ENERGY STAR
changes their criteria periodically. The first set of automatic
commercial ice maker criteria was in effect for approximately 5 years,
and the second set became effective February 1, 2013. If the ENERGY
STAR criteria are updated again after a 5-year period, the criteria
will be revised by the compliance date of this rule. Because future
ENERGY STAR criteria are unknown, DOE performed the regulatory impact
analysis using TSL 3 efficiency levels matched with the 60-percent
ENERGY STAR success rate. DOE believes that in performing the analysis
in this fashion, DOE was acknowledging the ability of the ENERGY STAR
program to reach customers and impact their decision-making.
V. Analytical Results
A. Trial Standard Levels
1. Trial Standard Level Formulation Process and Criteria
DOE selected between two and seven efficiency levels for all
equipment
[[Page 4718]]
classes for analysis. For all equipment classes, the first efficiency
level is the baseline efficiency level. Based on the results of the NIA
and other analyses, DOE selected five TSLs above the baseline level for
each equipment class for the NOPR stage of this rulemaking. Table V.1
shows the mapping between TSLs and efficiency levels.
TSL 5 was selected as the max-tech level for all equipment classes.
At this level, DOE's analysis considered that equipment would require
use of design options that generally are not used by ice makers, but
that are currently commercially available; specifically drain water
heat exchangers for batch ice makers and ECM motors for all ice maker
classes. The range of energy use reduction at the max-tech level varies
widely with the equipment class, from 7% for IMH-W-Large-B to 33% for
SCU-A-Small-B.
TSL 4 was chosen as an intermediate level between the max-tech
level and the maximum customer NPV level, subject to the requirement
that the TSL 4 NPV must be positive. ``Customer NPV'' is the NPV of
future savings obtained from the NIA. It provides a measure of the
benefits only to the customers of the automatic commercial ice makers
and does not account for the net benefits to the nation. The net
benefits to the nation also include monetized values of emissions
reductions in addition to the customer NPV. Where a sufficient number
of efficiency levels allow it, TSL 4 is set at least one level below
max-tech and one level above the efficiency level with the highest NPV.
In one case, the TSL 4 efficiency level is the maximum NPV level
because the next higher level had a negative NPV. In cases where the
maximum NPV efficiency level is the penultimate efficiency level and
the max-tech level showed a positive NPV, the TSL 4 efficiency level is
also the max-tech level.
TSL 3 was chosen to represent the group of efficiency levels with
the highest customer NPV at a 7-percent discount rate.
TSL 2 was selected to provide intermediate efficiency levels
between the TSLs 1 and 3. Note that with the number of efficiency
levels available for each equipment class, there is often overlap
between TSL levels. Thus, TSL 2 includes efficiency levels that overlap
with both TSLs 1 and 3. The intent of TSL 2 is to provide an
intermediate level that examines in efficiency options between TSLs 1
and 3.
TSL 1 was set equal to efficiency level 2. In the NOPR analysis,
DOE set efficiency level 2 to be equivalent to ENERGY STAR in effect at
the time DOE started the analysis for products rated by ENERGY STAR and
to an equivalent efficiency improvement for other equipment classes.
However, the ENERGY STAR level for automatic commercial ice makers has
since been revised.\72\ Therefore, in the NODA and final rule analysis
DOE has instead used a more consistent 10-percent level for efficiency
level 2, representing energy use 10 percent lower than the baseline
energy use. This level reflects but is not fully consistent with the
former ENERGY STAR level for those classes covered by ENERGY STAR. The
new ENERGY STAR level, defined for all air-cooled equipment classes
(i.s. IMH-A, RCU, and SCU-A classes for both batch and continuous ice
makers) does not consistently align with any of the TSLs selected by
DOE. For example, for IMH-A batch classes, the current ENERGY STAR
level corresponds roughly to TSL 1 at 300 lb ice/24 hours, TSL 3 at 800
lb ice/24 hours, and is more stringent than TSL 5 at 1,500 lb ice/24
hours. Graphical comparison of the TSLs, ENERGY STAR, and existing
products is providing in Chapter 3 of the TSL.
---------------------------------------------------------------------------
\72\ ENERGY STAR Version 2.0 for Automatic Commercial Ice Makers
became effective on February 1, 2013.
Table V.1--Mapping Between TSLs and Efficiency Levels *
--------------------------------------------------------------------------------------------------------------------------------------------------------
Equipment class TSL 1 TSL 2 TSL 3 TSL 4 TSL 5
--------------------------------------------------------------------------------------------------------------------------------------------------------
IMH-W-Small-B...................... Level 2............... Level 2............... Level 3.............. Level 3.............. Level 5.
IMH-W-Med-B........................ Level 2............... Level 2............... Level 2.............. Level 3.............. Level 4.
IMH-W-Large-B [dagger]
IMH-W-Large-B-1................ Level 1............... Level 1............... Level 1.............. Level 1.............. Level 2.
IMH-W-Large-B-2................ Level 1............... Level 1............... Level 1.............. Level 1.............. Level 2.
IMH-A-Small-B...................... Level 2............... Level 3............... Level 3A............. Level 3A............. Level 6.
IMH-A-Large-B [dagger]
IMH-A-Large-B1................. Level 2............... Level 3............... Level 3A............. Level 4.............. Level 5.
IMH-A-Large-B2................. Level 2............... Level 2............... Level 3.............. Level 3.............. Level 3.
RCU-Large-B[dagger]
RCU-Large-B1................... Level 2............... Level 2............... Level 2.............. Level 3.............. Level 4.
RCU-Large-B2................... Level 2............... Level 2............... Level 2.............. Level 2.............. Level 3.
SCU-W-Large-B...................... Level 2............... Level 4............... Level 5.............. Level 6.............. Level 6.
SCU-A-Small-B...................... Level 2............... Level 4............... Level 5.............. Level 6.............. Level 7.
SCU-A-Large-B...................... Level 2............... Level 4............... Level 5.............. Level 6.............. Level 6.
IMH-A-Small-C...................... Level 2............... Level 3............... Level 4.............. Level 4.............. Level 6.
IMH-A-Large-C...................... Level 2............... Level 2............... Level 3.............. Level 3.............. Level 5.
RCU-Small-C........................ Level 2............... Level 3............... Level 4.............. Level 4.............. Level 6.
SCU-A-Small-C...................... Level 2............... Level 3............... Level 4.............. Level 4.............. Level 6.
--------------------------------------------------------------------------------------------------------------------------------------------------------
* For three large equipment classes--IMH-W-Large-B, IMH-A-Large-B, and RCU-Large-B--because the harvest capacity range is so wide, DOE analyzed two
typical models to model the low and the high portions of the applicable range with greater accuracy. The smaller of the two is noted as B1 and the
larger as B2.
[dagger] DOE analyzed impacts for the B1 and B2 typical units and aggregated impacts to the equipment class level.
[[Page 4719]]
Table V.2 illustrates the efficiency improvements incorporated in
all TSLs.
Table V.2--Percentage Efficiency Improvement From Baseline by TSL *
----------------------------------------------------------------------------------------------------------------
Equipment class TSL 1 TSL 2 TSL 3 TSL 4 TSL 5
----------------------------------------------------------------------------------------------------------------
IMH-W-Small-B................... 10.0% 10.0% 15.0% 15.0% 23.9%
IMH-W-Med-B..................... 10.0 10.0 10.0 15.0 18.1
IMH-W-Large-B................... 0.0 0.0 0.0 0.0 8.1
IMH-W-Large-B1.............. 0.0 0.0 0.0 0.0 8.3
IMH-W-Large-B2.............. 0.0 0.0 0.0 0.0 7.4
IMH-A-Small-B................... 10.0 15.0 18.1 18.1 25.5
IMH-A-Large-B................... 10.0 14.2 15.2 18.7 21.6
IMH-A-Large-B1.............. 10.0 15.0 15.8 20.0 23.4
IMH-A-Large-B2.............. 10.0 10.0 11.8 11.8 11.8
RCU-Large-B..................... 10.0 10.0 10.0 14.7 17.1
RCU-Large-B1................ 10.0 10.0 10.0 15.0 17.3
RCU-Large-B2................ 10.0 10.0 10.0 10.0 13.9
SCU-W-Large-B................... 10.0 20.0 25.0 29.8 29.8
SCU-A-Small-B................... 10.0 20.0 25.0 30.0 32.7
SCU-A-Large-B................... 10.0 20.0 25.0 29.1 29.1
IMH-A-Small-C................... 10.0 15.0 20.0 20.0 25.7
IMH-A-Large-C................... 10.0 10.0 15.0 15.0 23.3
RCU-Small-C..................... 10.0 15.0 20.0 20.0 26.6
SCU-A-Small-C................... 10.0 15.0 20.0 20.0 26.6
----------------------------------------------------------------------------------------------------------------
* Percentage improvements for IMH-W-Large-B, IMH-A-Large-B, and RCU-Large-B are a weighted average of the B1 and
B2 units, using weights provided in TSD chapter 7.
Table V.3 illustrates the design options associated with each TSL
level, for each analyzed product class. The design options are
discussed in section IV.D.3 of this final rule and in chapter 5 of the
TSD.
Table V.3--Design Options for Analyzed Products Classes at Each TSL
--------------------------------------------------------------------------------------------------------------------------------------------------------
Equipment class Baseline TSL 1 TSL 2 TSL 3 TSL 4 TSL 5
--------------------------------------------------------------------------------------------------------------------------------------------------------
Design Options for Each TSL (options are cumulative--TSL 5 includes all preceding options)
--------------------------------------------------------------------------------------------------------------------------------------------------------
IMH-W-Small-B................... No BW Fill........ + Comp EER........ Same EL as TSL 1.. + Cond............ Same EL as TSL 3.. BW Fill
SPM PM............ + Cond............ + Evap
ECM PM
DWHX.
IMH-W-Small-B (22 inch wide).... No BW Fill........ + Comp EER........ Same EL as TSL 1.. + Cond............ Same EL as TSL 3.. N/A for 22-inch.
SPM PM............ + Cond............ BW Fill...........
IMH-W-Med-B..................... BW Fill........... + Comp EER........ Same EL as TSL 1.. Same EL as TSL 1.. + Cond............ DWHX.
SPM PM............ ECM PM............
IMH-W-Large-B1.................. BW Fill........... Same EL as Same EL as Same EL as Same EL as + Comp EER
SPM PM............ Baseline. Baseline. Baseline. Baseline. + Cond
ECM PM
DWHX.
IMH-W-Large-B2.................. BW Fill........... Same EL as Same EL as Same EL as Same EL as + Comp EER
SPM PM............ Baseline. Baseline. Baseline. Baseline. + Cond
ECM PM
DWHX.
IMH-A-Small-B................... BW Fill........... + Comp EER........ + Evap............ + Evap............ Same EL as TSL 3.. + Evap
SPM PM............ + Cond............ ECM PM
SPM FM............ + Evap............ DWHX.
ECM FM............
IMH-A-Small-B (22 inch wide).... BW Fill........... + Comp EER........ + Evap............ ECM PM............ Same EL as TSL 3.. N/A for 22-inch.
SPM PM............ + Cond............ DWHX..............
SPM FM............ + Evap............
ECM FM............
IMH-A-Large-B1.................. No BW Fill........ + Comp EER........ ECM FM............ BW Fill........... BW Fill........... DWHX.
SPM PM............ PSC FM............ BW Fill........... ECM PM............
SPM FM............ + Cond............
IMH-A-Large-B1 (22 inch wide)... No BW Fill........ + Comp EER........ BW Fill........... DWHX.............. N/A for 22-inch... N/A for 22-inch.
SPM PM............ ECM FM............ ECM PM............
SPM FM............ BW Fill........... DWHX..............
IMH-A-Large-B2.................. BW Fill........... + Comp EER........ Same EL as TSL 1.. DWHX.............. Same EL as TSL 3.. Same EL as TSL 3.
SPM PM............ ECM FM............
SPM FM............ ECM PM............
+ Cond............
DWHX..............
[[Page 4720]]
RCU-Large-B1.................... BW Fill........... + Cond............ Same EL as TSL 1.. Same EL as TSL 1.. ECM FM............ DWHX.
SPM PM............ + Comp EER........ ECM PM............
PSC FM............ + Cond............
DWHX..............
RCU-Large-B2.................... BW Fill........... + Comp EER........ Same EL as TSL 1.. Same EL as TSL 1.. Same EL as TSL 1.. DWHX.
SPM PM............ ECM FM............
PSC FM............ + Cond............
ECM PM............
SCU-W-Large-B................... No BW Fill........ BW Fill........... +Evap............. + Cond............ + Cond............ DWHX.
SPM PM............ + Evap............ + Cond............
SCU-A-Small-B................... No BW Fill........ + Cond............ + Comp EER........ PSC FM............ BW Fill........... ECM FM
SPM PM............ + Comp............ BW Fill........... ECM PM............ DWHX.
SPM FM............ EER............... ECM FM............
SCU-A-Large-B................... No BW Fill........ +Cond............. + Comp EER........ BW Fill........... ECM PM............ Same EL as TSL 4.
SPM PM............ + Comp EER........ BW Fill........... ECM FM............ DWHX..............
SPM FM............
RCU-Small-C..................... PSC AM............ + Comp EER........ ECM FM............ ECM FM............ Same EL as TSL3... + Cond
SPM FM............ PSC FM............ + Cond............ ECM AM.
IMH-A-Small-C................... PSC AM............ + Comp EER........ + Cond............ ECM FM............ Same EL as TSL 3.. ECM AM.
SPM FM............ + Cond............ ECM FM............ + Cond............
IMH-A-Large-C................... PSC AM............ + Comp EER........ Same EL as TSL 1.. + Comp EER........ Same EL as TSL 3.. + Cond
SPM FM............ + Cond............ ECM FM
ECM AM.
SCU-A-Small-C................... PSC AM............ + Cond............ + Comp EER........ + Comp EER........ Same EL as TSL 3.. ECM FM
SPM FM............ + Comp EER........ ECM FM............ ECM AM.
--------------------------------------------------------------------------------------------------------------------------------------------------------
EL = Efficiency Level
SPM = Shaded Pole Motor
PSC = Permanent Split Capacitor Motor
ECM = Electronically Commutated Motor
FM = Fan Motor (Air-Cooled Units)
AM = Auger Motor (Continuous Units)
BW Fill = Batch Water Fill Option Included
+ Cond = Increase in Condenser Size
+ Evap = Increase in Evaporator Size
+ Comp EER = Increase in Compressor EER
DWHX = Addition of Drain Water Heat Exchanger
Chapter 5 of the TSD contains full descriptions of the design
options, DOE's analyses for the equipment size increase associated with
the design options selected, and DOE's analyses of the efficiency gains
for each design option considered.
2. Trial Standard Level Equations
Table V.4 and Table V.5 translate the TSLs into potential
standards. In Table V.4, the TSLs are translated into energy
consumption standards for the batch classes, while Table V.5 provides
the potential energy consumption standards for the continuous classes.
Note that the size nomenclature for the classes (Small, Medium, Large,
and Extended) in many cases designate different capacity ranges than
the current class sizes. However, the discussion throughout this
preamble is based primarily on the current class capacity ranges--the
alternative designation is made in Table V.4 and Table V.5 for future
use when the new energy conservation standards take effect.
Table V.4--Equations Representing the TSLs for Batch Equipment Classes
[Maximum energy use in kWh/100 lb ice]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Capacity range
Batch equipment class lb ice/24 TSL 1 TSL 2 TSL 3 TSL 4 TSL 5
hours
--------------------------------------------------------------------------------------------------------------------------------------------------------
IMH-W-Small-B........................................... <300 7.19-0.0055H 7.19-0.0055H 6.88-0.0055H 6.88-0.0055H 6.32-0.0055H
IMH-W-Med-B............................................. >=300 and <850 6.28-0.00247H 6.28-0.00247H 5.8-0.00191H 5.9-0.00224H 5.17-0.00165H
IMH-W-Large-B........................................... >=850 and 4.42-0.00028H 4.42-0.00028H 4.0 4.0 3.86-0.00012H
<1500
IMH-W-Extended-B........................................ >=1,500 and 4.0 4.0 4.0 4.0 3.62 +
<2,600 0.00004H
>=2,600 4.0 4.0 4.0 4.0 3.72
IMH-A-Small-B........................................... <300 10.09-0.0106H 10.05-0.01173H 10-0.01233H 10-0.01233H 9.38-0.01233H
IMH-A-Medium-B.......................................... >=300 and <800 7.81-0.003H 7.38-0.00284H 7.05-0.0025H 7.19-0.00298H 6.31-0.0021H
IMH-A-Large-B........................................... >=800 and 6.21-0.00099H 5.56-0.00056H 5.55-0.00063H 5.04-0.00029H 4.65-0.00003H
<1,500
[[Page 4721]]
IMH-A-Extended-B........................................ >1,500 4.73 4.72 4.61 4.61 4.61
RCU-NRC-Small-B......................................... <988 * 7.97-0.00342H 7.97-0.00342H 7.97-0.00342H 7.52-0.00323H 7.35-0.00312H
RCU-NRC-Large-B......................................... >=988 * and 4.59 4.59 4.59 4.34 4.23
<1,500
RCU-NRC-Extended-B...................................... >=1,500 and 4.59 4.59 4.59 3.92 + 3.96 +
<2,400 0.00028H 0.00018H
>=2,400 4.59 4.59 4.59 4.59 4.39
RCU-RC-Small-B.......................................... <930 ** 7.97-0.00342H 7.97-0.00342H 7.97-0.00342H 7.52-0.00323H 7.35-0.00312H
RCU-RC-Large-B.......................................... >=930 ** and 4.79 4.79 4.79 4.54 4.43
<1,500
RCU-RC-Extended-B....................................... >=1,500 and < 4.79 4.79 4.79 4.12 + 4.16 +
2,400 0.00028H 0.00018H
>=2,400 4.79 4.79 4.79 4.79 4.59
SCU-W-Small-B........................................... <200 10.64-0.019H 9.88-0.019H 9.5-0.019H 9.14-0.019H 9.14-0.019H
SCU-W-Large-B........................................... >=200 6.84 6.08 5.7 5.34 5.34
SCU-A-Small-B........................................... <110 16.72-0.0469H 15.43-0.0469H 14.79-0.0469H 14.15-0.0469H 13.76-0.0469H
SCU-A-Large-B........................................... >=110 and <200 14.91-0.03044H 13.24-0.027H 12.42-0.02533H 11.47-0.02256H 10.6-0.02
SCU-A-Extended-B........................................ >=200 8.82 7.84 7.35 6.96 6.96
--------------------------------------------------------------------------------------------------------------------------------------------------------
* 985 for TSL4, 1,000 for TSL5
** 923 for TSL4, 936 for TSL5
Table V.5--Equations Representing the TSLs for Continuous Equipment Classes
[Maximum energy use in kWh/100 lb ice]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Capacity range
Continuous equipment class lb ice/24 TSL 1 TSL 2 TSL 3 TSL 4 TSL 5
hours
--------------------------------------------------------------------------------------------------------------------------------------------------------
IMH-W-Small-C........................................... <801 7.29-0.003H 6.89-0.00283H 6.48-0.00267H 6.48-0.00267H 5.75-0.00237H
IMH-W-Large-C........................................... >=801 4.59 4.59 4.34 4.34 3.93
IMH-A-Small-C........................................... <310 10.1-0.00629H 9.64-0.00629H 9.19-0.00629H 9.19-0.00629H 8.38-0.00629H
IMH-A-Large-C........................................... >=310 and <820 9.49-0.00433H 8.75-0.00343H 8.23-0.0032H 8.23-0.0032H 7.25-0.00265H
IMH-A-Extended-C........................................ >=820 5.94 5.94 5.61 5.61 5.08
RCU-NRC-Small-C......................................... <800 9.85-0.00519H 9.78-0.0055H 9.7-0.0058H 9.7-0.0058H 9.26-0.0058H
RCU-NRC-Large-C......................................... >=800 5.7 5.38 5.06 5.06 4.62
RCU-RC-Small-C.......................................... <800 10.05-0.00519H 9.98-0.0055H 9.9-0.0058H 9.9-0.0058H 9.46-0.0058H
RCU-RC-Large-C.......................................... >=800 5.9 5.58 5.26 5.26 4.82
SCU-W-Small-C........................................... <900 8.55-0.0034H 8.08 0.0032H 7.6-0.00302H 7.6-0.00302H 6.84-0.00272H
SCU-W-Large-C........................................... >=900 5.49 5.19 4.88 4.88 4.39
SCU-A-Small-C........................................... <200 15.26-0.03 14.73-0.03H 14.22-0.03H 14.22-0.03H 13.4-0.03H
SCU-A-Large-C........................................... >=200 and 700 10.66-0.00702H 10.06-0.00663H 9.47-0.00624H 9.47-0.00624H 8.52-0.00562H
SCU-A-Extended-C........................................ >=700 5.75 5.42 5.1 5.1 4.59
--------------------------------------------------------------------------------------------------------------------------------------------------------
In developing TSLs, DOE analyzed representative units for each
equipment class group, defined for the purposes of this discussion by
the ``Type of Ice Maker,'' ``Equipment Type,'' and ``Type of Condenser
Cooling'' (see Table IV.2--within each class group, further segregation
into equipment classes involves only specification of harvest capacity
rate). DOE first established a percentage reduction in energy use
associated with each TSL for the representative units. DOE calculated
the energy use (in kWh/100 lb ice) associated with this reduction for
the harvest capacity rates associated with the representative units
(called representative capacities). This provided one or more points
with which to define a TSL curve for the entire equipment class group
as a function of harvest capacity rate. DOE selected the TSL curve to
(a) pass through the points defining energy use for the TSL at the
representative capacities; (b) be continuous, with no gaps at the
representative capacities or at any other capacities; and (c) be
consistent with the energy and capacity trends for
[[Page 4722]]
commercialized products of the equipment class group.
For the IMH-A-B equipment classes, DOE sought to set efficiency
levels that do not vary with harvest capacity for the largest-capacity
equipment, but doing so would have violated EPCA's anti-backsliding
provisions. As a result, the efficiency levels for large-capacity
equipment for this class in the range up to 2,500 lb ice/24 hours were
set using multiple segments. This is discussed in section IV.D.2.c.
For the RCU-RC-Large-B, RCU-RC-Small-C, and RCU-RC-Large-C
equipment classes, the efficiency levels are 0.2 kWh/100 lb of ice
higher than those of the RCU-NRC-Large-B, RCU-NRC-Small-C, and RCU-NRC-
Large-C equipment classes, respectively, as discussed in section
IV.D.2.a. The RCU-RC-Small-B and RCU-NRC-Small-B efficiency levels are
equal, and the harvest capacity break points for the RCU-NRC classes
have been set to avoid gaps in allowable energy usage at the
breakpoints.
The TSL energy use levels calculated for the representative
capacities of the directly-analyzed equipment classes are presented
Table V.6.
Table V.6--Energy Consumption by TSL for the Representative Automatic Commercial Ice Maker Units
----------------------------------------------------------------------------------------------------------------
Representative Representative automatic commercial ice maker unit kWh/100 lb
Equipment class harvest rate lb ----------------------------------------------------------------
ice/24 hours TSL 1 TSL 2 TSL 3 TSL 4 TSL 5
----------------------------------------------------------------------------------------------------------------
IMH-W-Small-B............... 300 5.54 5.54 5.23 5.23 4.67
IMH-W-Med-B................. 850 4.18 4.18 4.18 4.00 3.76
IMH-W-Large-B-1............. 1,500 4.00 4.00 4.00 4.00 3.68
IMH-W-Large-B-2............. 2,600 4.00 4.00 4.00 4.00 3.72
IMH-A-Small-B............... 300 6.91 6.53 6.30 6.30 5.68
IMH-A-Large-B-1............. 800 5.41 5.11 5.05 4.81 4.63
IMH-A-Large-B-2............. 1,500 4.72 4.72 4.61 4.61 4.61
RCU-NRC-Large-B-1........... 1,500 4.59 4.59 4.59 4.34 4.23
RCU-NRC-Large-B-2........... 2,400 4.59 4.59 4.59 4.59 4.39
SCU-W-Large-B............... 300 6.84 6.08 5.70 5.34 5.34
SCU-A-Small-B............... 110 11.56 10.27 9.63 8.99 8.60
SCU-A-Large-B............... 200 8.82 7.84 7.35 6.96 6.96
IMH-A-Small-C............... 310 8.15 7.69 7.24 7.24 6.43
IMH-A-Large-C............... 820 5.94 5.94 5.61 5.61 5.08
RCU-Small-C................. 800 5.70 5.38 5.06 5.06 4.62
SCU-A-Small-C............... 220 9.11 8.61 8.10 8.10 7.29
----------------------------------------------------------------------------------------------------------------
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 changes in 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,
which adopts an industry-accepted test method. Using the approach
described in section IV.F, DOE calculated the LCC savings and PBPs for
the TSLs considered in this final rule. The LCC analysis is carried out
in the form of Monte Carlo simulations, and the results of LCC analysis
are distributed over a range of values. DOE presents the mean or median
values, as appropriate, calculated from the distributions of results.
Table V.7 through Table V.25 show the results of the LCC analysis
for each equipment class. Each table presents the results of the LCC
analysis, including 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.
Only five equipment classes have positive LCC savings values at TSL
5, while the remaining classes have negative LCC savings. Negative
average LCC savings imply that, on average, customers experience an
increase in LCC of the equipment as a consequence of buying equipment
associated with that particular TSL. In four of the five classes, the
TSL 5 level is not negative, but the LCC savings are less than one-
third the TSL 3 savings. All of these results indicate that the cost
increments associated with the max-tech design option are high, and the
increase in LCC (and corresponding decrease in LCC savings) indicates
that the design options embodied in TSL 5 result in negative customer
impacts. TSL 5 is associated with the max-tech level for all the
equipment classes. Drain water heat exchanger technology is the design
option associated with the max-tech efficiency levels for batch
equipment classes. For continuous equipment classes, the max-tech
design options are auger motors using permanent magnets.
The mean LCC savings associated with TSL 4 are all positive values
for all equipment classes. The mean LCC savings at all lower TSL levels
are also positive. The trend is generally an increase in LCC savings
for TSL 1 through 3, with LCC savings either remaining constant or
declining at TSL 4. In two cases, the highest LCC savings are at TSL 2:
IMH-A-Large-B1 and SCU-W-Large-B. In one case, IMH-A-Small-B, the
highest LCC savings occur at TSL1. Two of the three classes with LCC
savings maximums below TSL 3 have high one-time installation cost
adders for building renovations expected to take place when existing
units are replaced, causing the TSL3 LCC savings to be depressed
relative to the lower levels. The drop-off in LCC savings at TSL 4 is
generally associated with the relatively large cost for the max-tech
design options, the savings for which frequently span the last two
efficiency levels.
As described in section IV.H.2, DOE used a ``roll-up'' scenario in
this rulemaking. Under the roll-up scenario, DOE assumes that the
market shares of
[[Page 4723]]
the efficiency levels (in the base case) that do not meet the standard
level under consideration would be ``rolled up'' into (meaning ``added
to'') the market share of the efficiency level at the standard level
under consideration, and the market shares of efficiency levels that
are above the standard level under consideration would remain
unaffected. Customers, in the base-case scenario, who buy the equipment
at or above the TSL under consideration, would be unaffected if the
amended standard were to be set at that TSL. Customers, in the base-
case scenario, who buy equipment below the considered TSL, would be
affected if the amended standard were to be set at that TSL. Among
these affected customers, some may benefit from lower LCC of the
equipment and some may incur a net cost due to higher LCC, depending on
the inputs to LCC analysis, such as electricity prices, discount rates,
installation costs, and markups. DOE's results indicate that, with two
exceptions, nearly all customers either benefit or are unaffected by
setting standards at TSLs 1, 2, or 3, with 0 to 2 percent of customers
experiencing a net cost in all but two classes. Some customers
purchasing IMH-A-Small-B (21 percent) and IMH-A-Large-B2 (10 percent)
equipment will experience net costs at TSL3. In almost all cases, a
portion of the market would experience net costs starting with TSL 4,
although in several equipment classes the percentage is below 10
percent. At TSL 5, only in IMH-A-Large-B2 (10 percent) and SCU-W-Large-
B (44 percent) do less than 50 percent of customers show a net cost,
while in the other classes the percentage of customers with a net cost
ranges as high as 96 percent.
The median PBP values for TSLs 1 through 3 are generally less than
3 years, except for IMH-A-Small-B where the TSL 3 PBP is 4.7 years and
IMH-A-Large-B2 with a PBP of 6.9 years. The median PBP values for TSL 4
range from 0.7 years to 6.9 years.
PBP values for TSL 5 range from 4.9 years to nearly 12 years. In
eight cases, the the PBP exceeds the expected 8.5-year equipment life.
Table V.7--Summary LCC and PBP Results for IMH-W-Small-B Equipment Class
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Life-cycle cost, all customers 2013$ Life-cycle cost savings
----------------------------------------------------------------------------------------------------
Energy usage Affected % of customers that experience Payback
TSL kWh/yr Installed Discounted customers' ------------------------------------------ period,
cost operating LCC average Net benefit median years
cost savings 2013$ Net cost % No impact % %
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
1............................................................... 2,551 2,476 9,533 12,009 175 0 63 37 2.5
2............................................................... 2,551 2,476 9,533 12,009 175 0 63 37 2.5
3............................................................... 2,411 2,537 9,381 11,918 214 1 47 52 2.7
4............................................................... 2,411 2,537 9,381 11,918 214 1 47 52 2.7
5............................................................... 2,162 3,371 9,200 12,571 (534) 96 0 4 13.4
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Table V.8--Summary LCC and PBP Results for IMH-W-Med-B Equipment Class
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Life-cycle cost, all customers 2013$ Life-cycle cost savings
----------------------------------------------------------------------------------------------------
Energy usage Affected % of customers that experience Payback
TSL kWh/yr Installed Discounted customers' ------------------------------------------ period,
cost operating LCC average Net benefit median years
cost savings 2013$ Net cost % No impact % %
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
1............................................................... 5,439 4,325 21,470 25,795 308 0 44 56 2.1
2............................................................... 5,439 4,325 21,470 25,795 308 0 44 56 2.1
3............................................................... 5,439 4,325 21,470 25,795 308 0 44 56 2.1
4............................................................... 5,138 4,607 21,251 25,857 165 28 24 47 5.0
5............................................................... 4,951 4,943 21,115 26,058 (63) 65 9 26 7.6
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Table V.9--Summary LCC and PBP Results for IMH-W-Large-B Equipment Class
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Life-cycle cost, all customers 2013$ Life-cycle cost savings
----------------------------------------------------------------------------------------------------
Energy usage Affected % of customers that experience Payback
TSL kWh/yr Installed Discounted customers' ------------------------------------------ period,
cost operating LCC average Net benefit median years
cost savings 2013$ Net cost % No impact % %
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
1............................................................... 10,750 6,129 42,992 49,121 0 NA NA NA NA
2............................................................... 10,750 6,129 42,992 49,121 0 NA NA NA NA
3............................................................... 10,750 6,129 42,992 49,121 0 NA NA NA NA
4............................................................... 10,750 6,129 42,992 49,121 0 NA NA NA NA
5............................................................... 9,891 6,913 42,381 49,294 (172) 67 13 20 10.6
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Table V.10--Summary LCC and PBP Results for IMH-W-Large-B1 Equipment Class
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Life-cycle cost, all customers 2013$ Life-cycle cost savings
----------------------------------------------------------------------------------------------------
Energy usage Affected % of customers that experience Payback
TSL kWh/yr Installed Discounted customers' ------------------------------------------ period,
cost operating LCC average Net benefit median years
cost savings 2013$ Net cost % No impact % %
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
1............................................................... 9,166 5,004 37,051 42,055 0 NA NA NA NA
2............................................................... 9,166 5,004 37,051 42,055 0 NA NA NA NA
[[Page 4724]]
3............................................................... 9,166 5,004 37,051 42,055 0 NA NA NA NA
4............................................................... 9,166 5,004 37,051 42,055 0 NA NA NA NA
5............................................................... 8,405 5,747 36,509 42,256 (200) 70 13 17 11.1
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Table V.11--Summary LCC and PBP Results for IMH-W-Large-B2 Equipment Class
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Life-cycle cost, all customers 2013$ Life-cycle cost savings
----------------------------------------------------------------------------------------------------
Energy usage Affected % of customers that experience Payback
TSL kWh/yr Installed Discounted customers' ------------------------------------------ period,
cost operating LCC average Net benefit median years
cost savings 2013$ Net cost % No impact % %
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
1............................................................... 15,868 9,763 62,182 71,945 0 NA NA NA NA
2............................................................... 15,868 9,763 62,182 71,945 0 NA NA NA NA
3............................................................... 15,868 9,763 62,182 71,945 0 NA NA NA NA
4............................................................... 15,868 9,763 62,182 71,945 0 NA NA NA NA
5............................................................... 14,693 10,681 61,346 72,027 (80) 59 13 29 8.9
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Table V.12--Summary LCC and PBP Results for IMH-A-Small-B Equipment Class
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Life-cycle cost, all customers 2013$ Life-cycle cost savings
----------------------------------------------------------------------------------------------------
Energy usage Affected % of customers that experience Payback
TSL kWh/yr Installed Discounted customers' ------------------------------------------ period,
cost operating LCC average Net benefit median years
cost savings 2013$ Net cost % No impact % %
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
1............................................................... 3,184 2,539 8,420 10,959 136 1 76 22 3.4
2............................................................... 3,009 2,655 8,293 10,948 72 21 47 32 4.8
3............................................................... 2,901 2,695 8,214 10,909 77 21 0 79 4.7
4............................................................... 2,901 2,695 8,214 10,909 77 21 0 79 4.7
5............................................................... 2,640 3,331 8,048 11,379 (393) 95 0 5 11.9
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Table V.13--Summary LCC and PBP Results for IMH-A-Large-B Equipment Class
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Life-cycle cost, all customers 2013$ Life-cycle cost savings
--------------------------------------------------------------------------------------------------
Affected % of customers that experience Payback
TSL Energy usage Discounted customers' ------------------------------------------ period,
kWh/yr Installed operating LCC average median years
cost cost savings Net cost % No impact % Net benefit
2013$ %
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
1................................................................. 7,272 4,337 14,598 18,935 382 1 69 30 2.2
2................................................................. 6,964 4,418 14,230 18,648 501 1 45 53 2.4
3................................................................. 6,881 4,435 14,170 18,605 361 2 12 86 2.3
4................................................................. 6,622 4,711 13,988 18,699 265 31 12 57 3.9
5................................................................. 6,411 5,068 13,834 18,902 55 53 10 37 5.6
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Table V.14--Summary LCC and PBP Results for IMH-A-Large-B1 Equipment Class
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Life-cycle cost, all customers 2013$ Life-cycle cost savings
--------------------------------------------------------------------------------------------------
Affected % of customers that experience Payback
TSL Energy usage Discounted customers' ------------------------------------------ period,
kWh/yr Installed operating LCC average median years
cost cost savings Net cost % No impact % Net benefit
2013$ %
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
1................................................................. 6,617 4,172 13,943 18,115 439 0 66 34 1.2
2................................................................. 6,251 4,269 13,506 17,775 580 0 38 62 1.5
3................................................................. 6,192 4,275 13,464 17,738 407 0 3 97 1.5
4................................................................. 5,885 4,602 13,247 17,850 294 35 3 63 3.4
5................................................................. 5,636 5,025 13,066 18,091 45 61 0 39 5.4
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
[[Page 4725]]
Table V.15--Summary LCC and PBP Results for IMH-A-Large-B2 Equipment Class
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Life-cycle cost, all customers 2013$ Life-cycle cost savings
--------------------------------------------------------------------------------------------------
Affected % of customers that experience Payback
TSL Energy usage Discounted customers' ------------------------------------------ period,
kWh/yr Installed operating LCC average median years
cost cost savings Net cost % No impact % Net benefit
2013$ %
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
1................................................................. 10,802 5,222 18,129 23,350 76 9 83 8 7.4
2................................................................. 10,802 5,222 18,129 23,350 76 9 83 8 7.4
3................................................................. 10,591 5,298 17,975 23,273 110 10 61 29 6.9
4................................................................. 10,591 5,298 17,975 23,273 110 10 61 29 6.9
5................................................................. 10,591 5,298 17,975 23,273 110 10 61 29 6.9
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Table V.16--Summary LCC and PBP Results for RCU-Large-B Equipment Class
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Life-cycle cost, all customers 2013$ Life-cycle cost savings
--------------------------------------------------------------------------------------------------
Affected % of customers that experience Payback
TSL Energy usage Discounted customers' ------------------------------------------ period,
kWh/yr Installed operating LCC average median years
cost cost savings Net cost % No impact % Net benefit
2013$ %
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
1................................................................. 10,908 6,423 14,588 21,012 748 0 56 44 1.1
2................................................................. 10,908 6,423 14,588 21,012 748 0 56 44 1.1
3................................................................. 10,908 6,423 14,588 21,012 748 0 56 44 1.1
4................................................................. 10,362 6,813 14,213 21,026 418 23 22 55 3.3
5................................................................. 10,066 7,207 14,000 21,206 144 55 2 42 5.0
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Table V.17--Summary LCC and PBP Results for RCU-Large-B1 Equipment Class
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Life-cycle cost, all customers 2013$ Life-cycle cost savings
--------------------------------------------------------------------------------------------------
Affected % of customers that experience Payback
TSL Energy usage Discounted customers' ------------------------------------------ period,
kWh/yr Installed operating LCC average median years
cost cost savings Net cost % No impact % Net benefit
2013$ %
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
1................................................................. 10,514 6,220 14,190 20,410 743 0 56 44 0.9
2................................................................. 10,514 6,220 14,190 20,410 743 0 56 44 0.9
3................................................................. 10,514 6,220 14,190 20,410 743 0 56 44 0.9
4................................................................. 9,931 6,635 13,790 20,425 391 25 20 55 3.4
5................................................................. 9,664 6,985 13,595 20,580 161 55 1 44 4.9
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Table V.18--Summary LCC and PBP Results for RCU-Large-B2 Equipment Class
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Life-cycle cost, all customers 2013$ Life-cycle cost savings
----------------------------------------------------------------------------------------------------
Energy usage Affected % of customers that experience Payback
TSL kWh/yr Installed Discounted customers' ------------------------------------------ period,
cost operating LCC average Net benefit median years
cost savings 2013$ Net cost % No impact % %
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
1............................................................... 16,807 9,465 20,540 30,005 820 1 56 43 3.0
2............................................................... 16,807 9,465 20,540 30,005 820 1 56 43 3.0
3............................................................... 16,807 9,465 20,540 30,005 820 1 56 43 3.0
4............................................................... 16,807 9,465 20,540 30,005 820 1 56 43 3.0
5............................................................... 16,077 10,516 20,046 30,562 (109) 57 20 23 7.0
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Table V.19--Summary LCC and PBP Results for SCU-W-Large-B Equipment Class
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Life-cycle cost, all customers 2013$ Life-cycle cost savings
--------------------------------------------------------------------------------------------------
Affected % of customers that experience Payback
TSL Energy usage Discounted customers' ------------------------------------------ period,
kWh/yr Installed operating LCC average median years
cost cost savings Net cost % No impact % Net benefit
2013$ %
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
1................................................................. 3,151 3,540 10,617 14,158 444 0 28 72 1.1
2................................................................. 2,804 3,620 10,364 13,984 613 0 28 72 1.6
3................................................................. 2,630 3,664 10,238 13,902 550 0 5 94 1.8
4................................................................. 2,464 4,114 10,117 14,231 192 44 0 56 5.1
5................................................................. 2,464 4,114 10,117 14,231 192 44 0 56 5.1
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
[[Page 4726]]
Table V.20--Summary LCC and PBP Results for SCU-A-Small-B Equipment Class
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Life-cycle cost, all customers 2013$ Life-cycle cost savings
----------------------------------------------------------------------------------------------------
Energy usage Affected % of customers that experience Payback
TSL kWh/yr Installed Discounted customers' ------------------------------------------ period,
cost operating LCC average Net benefit median years
cost savings 2013$ Net cost % No impact % %
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
1............................................................... 1,962 2,799 7,193 9,992 110 0 48 52 2.2
2............................................................... 1,747 2,845 7,051 9,896 161 1 20 79 2.4
3............................................................... 1,639 2,918 6,843 9,761 281 1 12 87 2.6
4............................................................... 1,532 3,000 6,778 9,778 230 16 0 84 3.5
5............................................................... 1,473 3,416 6,737 10,153 (145) 77 0 23 8.9
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Table V.21--Summary LCC and PBP Results for SCU-A-Large-B Equipment Class
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Life-cycle cost, all customers 2013$ Life-cycle cost savings
--------------------------------------------------------------------------------------------------
Affected % of customers that experience Payback
TSL Energy usage Discounted customers' ------------------------------------------ period,
kWh/yr Installed operating LCC average median years
cost cost savings Net cost % No impact % Net benefit
2013$ %
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
1................................................................. 2,713 3,275 10,070 13,344 163 0 37 63 1.8
2................................................................. 2,414 3,345 9,685 13,030 400 0 1 99 1.6
3................................................................. 2,265 3,402 9,590 12,992 439 0 1 99 2.1
4................................................................. 2,141 3,854 9,500 13,355 71 54 0 46 6.5
5................................................................. 2,141 3,854 9,500 13,355 71 54 0 46 6.5
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Table V.22--Summary LCC and PBP Results for IMH-A-Small-C Equipment Class
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Life-cycle cost, all customers 2013$ Life-cycle cost savings
----------------------------------------------------------------------------------------------------
Energy usage Affected % of customers that experience Payback
TSL kWh/yr Installed Discounted customers' ------------------------------------------ period,
cost operating LCC average Net benefit median years
cost savings 2013$ Net cost % No impact % %
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
1............................................................... 3,872 6,674 8,869 15,543 245 0 69 31 1.5
2............................................................... 3,658 6,709 8,723 15,432 292 0 58 42 1.6
3............................................................... 3,445 6,745 8,572 15,317 313 0 39 61 1.7
4............................................................... 3,445 6,745 8,572 15,317 313 0 39 61 1.7
5............................................................... 3,201 7,264 8,552 15,816 (165) 68 14 18 8.8
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
* Values in parentheses are negative values.
Table V.23--Summary LCC and PBP Results for IMH-A-Large-C Equipment Class
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Life-cycle cost, all customers 2013$ Life-cycle cost savings
--------------------------------------------------------------------------------------------------
Affected % of customers that experience Payback
TSL Energy usage Discounted customers' ------------------------------------------ period,
kWh/yr Installed operating LCC average median years
cost cost savings Net cost % No impact % Net benefit
2013$ %
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
1................................................................. 7,445 5,538 14,275 19,813 539 0 57 43 0.7
2................................................................. 7,445 5,538 14,275 19,813 539 0 57 43 0.7
3................................................................. 7,033 5,568 13,979 19,547 626 0 35 65 0.7
4................................................................. 7,033 5,568 13,979 19,547 626 0 35 65 0.7
5................................................................. 6,348 6,310 13,705 20,015 28 54 9 37 5.9
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Table V.24--Summary LCC and PBP Results for RCU-Small-C Equipment Class
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Life-cycle cost, all customers 2013$ Life-cycle cost savings
----------------------------------------------------------------------------------------------------
Energy usage Affected % of customers that experience Payback
TSL kWh/yr Installed Discounted customers' ------------------------------------------ period,
cost operating LCC average Net benefit median years
cost savings 2013$ Net cost % No impact % %
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
1............................................................... 6,966 5,690 8,588 14,278 498 0 72 28 0.7
2............................................................... 6,580 5,758 8,319 14,078 448 0 44 55 1.2
3............................................................... 6,195 5,808 8,046 13,854 505 0 11 89 1.2
4............................................................... 6,195 5,808 8,046 13,854 505 0 11 89 1.2
5............................................................... 5,688 6,523 7,878 14,402 (73) 64 6 31 5.8
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
* Values in parentheses are negative values.
[[Page 4727]]
Table V.25--Summary LCC and PBP Results for SCU-A-Small-C Equipment Class
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Life-cycle cost, all customers 2013$ Life-cycle cost savings
----------------------------------------------------------------------------------------------------
Energy usage Affected % of customers that experience Payback
TSL kWh/yr Installed Discounted customers' ------------------------------------------ period,
cost operating LCC average Net benefit median years
cost savings 2013$ Net cost % No impact % %
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
1............................................................... 3,077 3,622 8,175 11,797 224 0 56 44 0.8
2............................................................... 2,907 3,646 8,059 11,705 278 0 47 53 1.1
3............................................................... 2,738 3,685 7,948 11,633 290 1 32 67 1.5
4............................................................... 2,738 3,685 7,948 11,633 290 1 32 67 1.5
5............................................................... 2,515 4,224 7,950 12,174 (268) 86 0 14 11.4
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
* Values in parentheses are negative values.
b. Life-Cycle Cost Subgroup Analysis
As described in section IV.I, DOE estimated the impact of amended
energy conservation standards for automatic commercial ice makers, at
each TSL, on two customer subgroups--the foodservice sector and the
lodging sector. For the automatic commercial ice makers, DOE has not
distinguished between subsectors of the foodservice industry. In other
words, DOE has been treating it as one sector as opposed to modeling
limited or full service restaurants and other types of foodservice
firms separately. Foodservice was chosen as one representative subgroup
because of the large percentage of the industry represented by family-
owned or locally owned restaurants. Likewise, lodging was chosen due to
the large percentage of the industry represented by locally owned or
franchisee-owned hotels. DOE carried out two LCC subgroup analyses, one
each for restaurants and lodging, by using the LCC spreadsheet
described in chapter 8 of the final rule TSD, but with certain
modifications. This included fixing the input for business type to the
identified subgroup, which ensured that the discount rates and
electricity price rates associated with only that subgroup were
selected in the Monte Carlo simulations (see chapter 8 of the TSD).
Another major change from the LCC analysis was an added assumption that
the subgroups do not have access to national capital markets, which
results in higher discount rates for the subgroups. The higher discount
rates lead the subgroups to place a lower value on future savings and a
higher value on the upfront equipment purchase costs. The LCC subgroup
analysis is described in chapter 11 of the TSD.
Table V.26 presents the comparison of mean LCC savings for the
small business subgroup in foodservice sector with the national average
values (LCC savings results from chapter 8 of the TSD). For TSLs 1-3,
in most equipment classes, the LCC savings for the small business
subgroup are only slightly different from the average, with some
slightly higher and others slightly lower. Table V.27 presents the
percentage change in LCC savings compared to national average values.
DOE modeled all equipment classes in this analysis, although DOE
believes it is likely that the very large equipment classes are not
commonly used in foodservice establishments. For TSLs 1-3, the
differences range from -7 percent for IMH-A-Large-B2 at TSLs 1 and 2,
to +3 percent for the same class at TSL 3 and IMH-A-Small-B at TSL 2.
For most equipment classes in Table V.27, the percentage change ranges
from a decrease in LCC savings of less than 2 percent to an increase of
2 percent. In summary, the differences are minor at TSLs 1-3.
Table V.28 presents the comparison of median PBPs for the small
business subgroup in the foodservice sector with national median values
(median PBPs from chapter 8 of the TSD). The PBP values are the same as
or shorter than the small business subgroup in all cases. This arises
because the first-year operating cost savings--which are used for
payback period--are higher, leading to a shorter payback. However,
given their higher discount rates, these customers value future savings
less, leading to lower LCC savings. First-year savings are higher
because the foodservice electricity prices are higher than the average
of all classes.
Table V.29 presents the comparison of mean LCC savings for the
small business subgroup in the lodging sector (hotels and casinos) with
the national average values (LCC savings results from chapter 8 of the
TSD). Table V.30 presents the percentage difference between LCC savings
of the lodging sector customer subgroup and national average values.
For lodging sector small business, LCC savings are lower across the
board. For TSLs 1-3, the lodging subgroup LCC savings range from 9 to
13 percent lower. The reason for this is that the energy price for
lodging is slightly lower than the average of all commercial business
types (97 percent of the average). This, combined with a higher
discount rate, reduces the value of future operating and maintenance
benefits as well as the present value of the benefits, thus resulting
in lower LCC savings. For IMH-A-Small-B the difference exceeds 20
percent, which is likely due to the higher installation cost for this
class in combination with the much higher than average discount rate.
The IMH-A-Large-B2 class is also significantly lower, in percentage
terms. DOE notes that the difference is relatively small in terms of
dollars; however, because the national average savings are small, the
difference is significant in percentage terms. The lodging subgroup
savings for IMH-A-Large-B2 are 88 percent lower than the average at
TSLs 1 and 2, and 37 percent lower at TSL 3--the level recommended for
the standard.
Table V.31 presents the comparison of median PBPs for the small
business subgroup in the lodging sector with national median values
(median PBPs from chapter 8 of the TSD). The PBP values are slightly
longer or the same for all equipment classes in the lodging small
business subgroup at all TSLs. As noted above, the energy savings would
be lower than a national average. Thus, the slightly lower median PBP
appears to be a result of a narrower electricity saving results
distribution that is close to but below the national average.
[[Page 4728]]
Table V.26--Comparison of Mean LCC Savings for the Foodservice Sector Small Business Subgroup With the National
Average Values
----------------------------------------------------------------------------------------------------------------
Mean LCC savings 2013$ *
Equipment class Category ------------------------------------------------------
TSL 1 TSL 2 TSL 3 TSL 4 TSL 5
----------------------------------------------------------------------------------------------------------------
IMH-W-Small-B..................... Small Business....... 174 174 212 212 (535)
All Business Types... 175 175 214 214 (534)
IMH-W-Med-B....................... Small Business....... 312 312 312 168 (60)
All Business Types... 308 308 308 165 (63)
IMH-W-Large-B..................... Small Business....... NA NA NA NA (169)
All Business Types... NA NA NA NA (172)
IMH-W-Large-B1.................... Small Business....... NA NA NA NA (198)
All Business Types... NA NA NA NA (200)
IMH-W-Large-B2.................... Small Business....... NA NA NA NA (77)
All Business Types... NA NA NA NA (80)
IMH-A-Small-B..................... Small Business....... 139 75 78 78 (390)
All Business Types... 136 72 77 77 (393)
IMH-A-Large-B..................... Small Business....... 387 498 359 264 54
All Business Types... 382 501 361 265 55
IMH-A-Large-B1.................... Small Business....... 444 575 404 292 43
All Business Types... 439 580 407 294 45
IMH-A-Large-B2.................... Small Business....... 81 81 114 114 114
All Business Types... 76 76 110 110 110
RCU-Large-B....................... Small Business....... 754 754 754 424 150
All Business Types... 748 748 748 418 144
RCU-Large-B1...................... Small Business....... 749 749 749 397 166
All Business Types... 743 743 743 391 161
RCU-Large-B2...................... Small Business....... 832 832 832 832 (99)
All Business Types... 820 820 820 820 (109)
SCU-W-Large-B..................... Small Business....... 431 601 541 184 184
All Business Types... 444 613 550 192 192
SCU-A-Small-B..................... Small Business....... 112 162 276 226 (148)
All Business Types... 110 161 281 230 (145)
SCU-A-Large-B..................... Small Business....... 164 392 432 65 65
All Business Types... 163 400 439 71 71
IMH-A-Small-C..................... Small Business....... 248 296 317 317 (155)
All Business Types... 245 292 313 313 (165)
IMH-A-Large-C..................... Small Business....... 544 544 630 630 44
All Business Types... 539 539 626 626 28
RCU-Small-C....................... Small Business....... 503 453 509 509 (57)
All Business Types... 498 448 505 505 (73)
SCU-A-Small-C..................... Small Business....... 225 281 293 293 (257)
All Business Types... 224 278 290 290 (268)
----------------------------------------------------------------------------------------------------------------
* Values in parenthesis are negative numbers.
Table V.27--Percentage Change in Mean LCC Savings for the Foodservice Sector Small Business Subgroup Compared to
National Average Values *
----------------------------------------------------------------------------------------------------------------
Equipment class TSL 1 (%) TSL 2 (%) TSL 3 (%) TSL 4 (%) TSL 5 (%)
----------------------------------------------------------------------------------------------------------------
IMH-W-Small-B.................................. -1 -1 -1 -1 0
IMH-W-Med-B.................................... 1 1 1 2 5
IMH-W-Large-B.................................. NA NA NA NA 1
IMH-W-Large-B1................................. NA NA NA NA 1
IMH-W-Large-B2................................. NA NA NA NA 4
IMH-A-Small-B.................................. 2 3 2 2 1
IMH-A-Large-B.................................. 1 -1 -1 -1 -2
IMH-A-Large-B1................................. 1 -1 -1 -1 -4
IMH-A-Large-B2................................. 7 7 3 3 3
RCU-Large-B.................................... 1 1 1 1 4
RCU-Large-B1................................... 1 1 1 1 3
RCU-Large-B2................................... 1 1 1 1 9
SCU-W-Large-B.................................. -3 -2 -2 -4 -4
SCU-A-Small-B.................................. 1 1 -2 -2 -2
SCU-A-Large-B.................................. 1 -2 -2 -9 -9
IMH-A-Small-C.................................. 1 1 1 1 6
IMH-A-Large-C.................................. 1 1 1 1 57
RCU-Small-C.................................... 1 1 1 1 22
SCU-A-Small-C.................................. 1 1 1 1 4
----------------------------------------------------------------------------------------------------------------
* Negative percentage values imply decrease in LCC savings, and positive percentage values imply increase in LCC
savings.
[[Page 4729]]
Table V.28--Comparison of Median Payback Periods for the Foodservice Sector Small Business Subgroup With
National Median Values
----------------------------------------------------------------------------------------------------------------
Median payback period years
Equipment class Category ------------------------------------------------------
TSL 1 TSL 2 TSL 3 TSL 4 TSL 5
----------------------------------------------------------------------------------------------------------------
IMH-W-Small-B..................... Small Business....... 2.3 2.3 2.7 2.7 12.7
All Business Types... 2.5 2.5 2.7 2.7 13.4
IMH-W-Med-B....................... Small Business....... 2.0 2.0 2.0 4.8 7.2
All Business Types... 2.1 2.1 2.1 5.0 7.6
IMH-W-Large-B..................... Small Business....... NA NA NA NA 10.0
All Business Types... NA NA NA NA 10.6
IMH-W-Large-B1.................... Small Business....... NA NA NA NA 10.5
All Business Types... NA NA NA NA 11.1
IMH-W-Large-B2.................... Small Business....... NA NA NA NA 8.4
All Business Types... NA NA NA NA 8.9
IMH-A-Small-B..................... Small Business....... 3.2 4.5 4.4 4.4 11.4
All Business Types... 3.4 4.8 4.7 4.7 11.9
IMH-A-Large-B..................... Small Business....... 2.1 2.3 2.2 3.7 5.3
All Business Types... 2.2 2.4 2.3 3.9 5.6
IMH-A-Large-B1.................... Small Business....... 1.1 1.4 1.4 3.2 5.1
All Business Types... 1.2 1.5 1.5 3.4 5.4
IMH-A-Large-B2.................... Small Business....... 7.0 7.0 6.5 6.5 6.5
All Business Types... 7.4 7.4 6.9 6.9 6.9
RCU-Large-B....................... Small Business....... 1.0 1.0 1.0 3.2 4.8
All Business Types... 1.1 1.1 1.1 3.3 5.0
RCU-Large-B1...................... Small Business....... 0.9 0.9 0.9 3.2 4.7
All Business Types... 0.9 0.9 0.9 3.4 4.9
RCU-Large-B2...................... Small Business....... 2.8 2.8 2.8 2.8 6.7
All Business Types... 3.0 3.0 3.0 3.0 7.0
SCU-W-Large-B..................... Small Business....... 1.1 1.5 1.7 4.9 4.9
All Business Types... 1.1 1.6 1.8 5.1 5.1
SCU-A-Small-B..................... Small Business....... 2.0 2.2 2.5 3.3 8.4
All Business Types... 2.2 2.4 2.6 3.5 8.9
SCU-A-Large-B..................... Small Business....... 1.7 1.6 2.0 6.2 6.2
All Business Types... 1.8 1.6 2.1 6.5 6.5
IMH-A-Small-C..................... Small Business....... 1.4 1.5 1.6 1.6 8.3
All Business Types... 1.5 1.6 1.7 1.7 8.8
IMH-A-Large-C..................... Small Business....... 0.6 0.6 0.7 0.7 5.5
All Business Types... 0.7 0.7 0.7 0.7 5.9
RCU-Small-C....................... Small Business....... 0.7 1.1 1.2 1.2 5.5
All Business Types... 0.7 1.2 1.2 1.2 5.8
SCU-A-Small-C..................... Small Business....... 0.7 1.0 1.4 1.4 10.6
All Business Types... 0.8 1.1 1.5 1.5 11.4
----------------------------------------------------------------------------------------------------------------
Table V.29--Comparison of LCC Savings for the Lodging Sector Small Business Subgroup With the National Average
Values
----------------------------------------------------------------------------------------------------------------
Mean LCC savings 2013$ *
Equipment class Category ------------------------------------------------------
TSL 1 TSL 2 TSL 3 TSL 4 TSL 5
----------------------------------------------------------------------------------------------------------------
IMH-W-Small-B..................... Small Business....... 155 155 189 189 (561)
All Business Types... 175 175 214 214 (534)
IMH-W-Med-B....................... Small Business....... 275 275 275 123 (109)
All Business Types... 308 308 308 165 (63)
IMH-W-Large-B..................... Small Business....... NA NA NA NA (221)
All Business Types... NA NA NA NA (172)
IMH-W-Large-B1.................... Small Business....... NA NA NA NA (244)
All Business Types... NA NA NA NA (200)
IMH-W-Large-B2.................... Small Business....... NA NA NA NA (148)
All Business Types... NA NA NA NA (80)
IMH-A-Small-B..................... Small Business....... 118 54 61 61 (423)
All Business Types... 136 72 77 77 (393)
IMH-A-Large-B..................... Small Business....... 337 443 321 211 (10)
All Business Types... 382 501 361 265 55
IMH-A-Large-B1.................... Small Business....... 398 523 368 237 (25)
All Business Types... 439 580 407 294 45
IMH-A-Large-B2.................... Small Business....... 9 9 70 70 70
All Business Types... 76 76 110 110 110
RCU-Large-B....................... Small Business....... 679 679 679 347 71
All Business Types... 748 748 748 418 144
[[Page 4730]]
RCU-Large-B1...................... Small Business....... 676 676 676 322 90
All Business Types... 743 743 743 391 161
RCU-Large-B2...................... Small Business....... 718 718 718 718 (205)
All Business Types... 820 820 820 820 (109)
SCU-W-Large-B..................... Small Business....... 404 553 494 129 129
All Business Types... 444 613 550 192 192
SCU-A-Small-B..................... Small Business....... 98 142 248 196 (182)
All Business Types... 110 161 281 230 (145)
SCU-A-Large-B..................... Small Business....... 146 361 392 18 18
All Business Types... 163 400 439 71 71
IMH-A-Small-C..................... Small Business....... 222 263 282 282 (189)
All Business Types... 245 292 313 313 (165)
IMH-A-Large-C..................... Small Business....... 493 493 571 571 (33)
All Business Types... 539 539 626 626 28
RCU-Small-C....................... Small Business....... 456 406 456 456 (133)
All Business Types... 498 448 505 505 (73)
SCU-A-Small-C..................... Small Business....... 204 253 261 261 (288)
All Business Types... 224 278 290 290 (268)
----------------------------------------------------------------------------------------------------------------
* Values in parentheses are negative numbers.
Table V.30--Percentage Change in Mean LCC Savings for the Lodging Sector Small Business Subgroup Compared to
National Average Values *
----------------------------------------------------------------------------------------------------------------
Equipment class TSL1 (%) TSL2 (%) TSL3 (%) TSL4 (%) TSL5 (%)
----------------------------------------------------------------------------------------------------------------
IMH-W-Small-B.................................. -11 -11 -12 -12 -5
IMH-W-Med-B.................................... -11 -11 -11 -26 -72
IMH-W-Large-B.................................. NA NA NA NA -29
IMH-W-Large-B1................................. NA NA NA NA -22
IMH-W-Large-B2................................. NA NA NA NA -84
IMH-A-Small-B.................................. -13 -25 -21 -21 -7
IMH-A-Large-B.................................. -12 -12 -11 -20 -118
IMH-A-Large-B1................................. -9 -10 -10 -19 -155
IMH-A-Large-B2................................. -88 -88 -37 -37 -37
RCU-Large-B.................................... -9 -9 -9 -17 -50
RCU-Large-B1................................... -9 -9 -9 -18 -44
RCU-Large-B2................................... -12 -12 -12 -12 -88
SCU-W-Large-B.................................. -9 -10 -10 -33 -33
SCU-A-Small-B.................................. -11 -11 -12 -15 -26
SCU-A-Large-B.................................. -10 -10 -11 -75 -75
IMH-A-Small-C.................................. -9 -10 -10 -10 -15
IMH-A-Large-C.................................. -9 -9 -9 -9 -215
RCU-Small-C.................................... -8 -9 -10 -10 -83
SCU-A-Small-C.................................. -9 -9 -10 -10 -7
----------------------------------------------------------------------------------------------------------------
* Negative percentage values imply decrease in LCC savings, and positive percentage values imply increase in LCC
savings.
Table V.31--Comparison of Median Payback Periods for the Lodging Sector Small Business Subgroup With the
National Median Values
----------------------------------------------------------------------------------------------------------------
Median payback period years
Equipment class Category ------------------------------------------------------
TSL 1 TSL 2 TSL 3 TSL 4 TSL 5
----------------------------------------------------------------------------------------------------------------
IMH-W-Small-B..................... Small Business....... 2.5 2.5 2.8 2.8 13.5
All Business Types... 2.5 2.5 2.7 2.7 13.4
IMH-W-Med-B....................... Small Business....... 2.1 2.1 2.1 5.1 7.7
All Business Types... 2.1 2.1 2.1 5.0 7.6
IMH-W-Large-B..................... Small Business....... NA NA NA NA 10.7
All Business Types... NA NA NA NA 10.6
IMH-W-Large-B1.................... Small Business....... NA NA NA NA 11.2
All Business Types... NA NA NA NA 11.1
IMH-W-Large-B2.................... Small Business....... NA NA NA NA 9.0
All Business Types... NA NA NA NA 8.9
IMH-A-Small-B..................... Small Business....... 3.4 4.8 4.7 4.7 12.3
[[Page 4731]]
All Business Types... 3.4 4.8 4.7 4.7 11.9
IMH-A-Large-B..................... Small Business....... 2.2 2.4 2.3 3.9 5.7
All Business Types... 2.2 2.4 2.3 3.9 5.6
IMH-A-Large-B1.................... Small Business....... 1.2 1.5 1.5 3.4 5.4
All Business Types... 1.2 1.5 1.5 3.4 5.4
IMH-A-Large-B2.................... Small Business....... 7.5 7.5 6.9 6.9 6.9
All Business Types... 7.4 7.4 6.9 6.9 6.9
RCU-Large-B....................... Small Business....... 1.1 1.1 1.1 3.4 5.1
All Business Types... 1.1 1.1 1.1 3.3 5.0
RCU-Large-B1...................... Small Business....... 0.9 0.9 0.9 3.5 5.0
All Business Types... 0.9 0.9 0.9 3.4 4.9
RCU-Large-B2...................... Small Business....... 3.0 3.0 3.0 3.0 7.1
All Business Types... 3.0 3.0 3.0 3.0 7.0
SCU-W-Large-B..................... Small Business....... 1.1 1.6 1.8 5.2 5.2
All Business Types... 1.1 1.6 1.8 5.1 5.1
SCU-A-Small-B..................... Small Business....... 2.2 2.4 2.6 3.5 8.9
All Business Types... 2.2 2.4 2.6 3.5 8.9
SCU-A-Large-B..................... Small Business....... 1.8 1.6 2.1 6.6 6.6
All Business Types... 1.8 1.6 2.1 6.5 6.5
IMH-A-Small-C..................... Small Business....... 1.5 1.6 1.7 1.7 9.0
All Business Types... 1.5 1.6 1.7 1.7 8.8
IMH-A-Large-C..................... Small Business....... 0.7 0.7 0.7 0.7 6.0
All Business Types... 0.7 0.7 0.7 0.7 5.9
RCU-Small-C....................... Small Business....... 0.7 1.2 1.2 1.2 5.9
All Business Types... 0.7 1.2 1.2 1.2 5.8
SCU-A-Small-C..................... Small Business....... 0.8 1.1 1.5 1.5 11.7
All Business Types... 0.8 1.1 1.5 1.5 11.4
----------------------------------------------------------------------------------------------------------------
2. Economic Impacts on Manufacturers
DOE performed an MIA to estimate the impact of amended energy
conservation standards on manufacturers of automatic commercial ice
makers. 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 of the new and
amended energy conservation standards on manufacturers of automatic
commercial ice makers. The financial impacts are represented by changes
in the industry net present value (INPV.) In addition, the tables
depict the conversion costs that DOE estimates manufacturers would
incur for all equipment classes at each TSL. The impact of the energy
efficiency standards on industry cash flow were analyzed under two
markup scenarios that correspond to the range of anticipated market
responses to amended energy conservation standards.
The first markup scenario assessed the lower bound of potential
impacts (higher profitability). DOE modeled a preservation of gross
margin percentage markup scenario, in which a uniform ``gross margin
percentage'' markup is applied across all efficiency levels. In this
scenario, DOE assumed that a manufacturer's absolute dollar markup
would increase as production costs increase in the amended energy
conservation 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 a new or amended energy conservation standard, particularly at
higher TSLs.
The second markup scenario assessed the upper bound of potential
impacts (lower profitability). DOE modeled the preservation of the EBIT
markup scenario, which assumes that manufacturers would not be able to
preserve the same overall gross margin, but instead would lower their
markup for marginally compliant products to maintain a cost-competitive
product offering and keep the same overall level of EBIT as in the base
case. Table V.32 and Table V.33 show the range of potential INPV
impacts for manufacturers of automatic commercial ice makers. The first
table reflects the lower bound of impacts (higher profitability), and
the second represents the upper bound of impacts (lower profitability).
Each scenario 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 sum of discounted cash flows through
2047, the difference in INPV between the base case and each standards
case, and the total industry conversion costs required for each
standards case.
[[Page 4732]]
Table V.32--Manufacturer Impact Analysis for Automatic Commercial Ice Makers--Preservation of Gross Margin
Percentage Markup Scenario *
----------------------------------------------------------------------------------------------------------------
Trial standard level
Units Base case ------------------------------------------------------
1 2 3 4 5
----------------------------------------------------------------------------------------------------------------
INPV........................ 2013$ millions. 121.6 115.0 112.3 109.5 109.3 109.8
Change in INPV.............. 2013$ millions. .......... (6.6) (9.3) (12.1) (12.3) (11.8)
%.............. .......... (5.4) (7.7) (10.0) (10.1) (9.7)
Product Conversion Costs.... 2013$ millions. .......... 12.3 18.1 23.8 28.1 40.3
Capital Conversion Costs.... 2013$ millions. .......... 0.2 0.6 1.3 2.0 3.9
-----------------------------------------------------------------------------------
Total Conversion Costs.. 2013$ millions. .......... 12.6 18.7 25.1 30.0 44.1
----------------------------------------------------------------------------------------------------------------
* Values in parentheses are negative numbers.
Table V.33--Manufacturer Impact Analysis for Automatic Commercial Ice Makers--Preservation of EBIT Markup
Scenario *
----------------------------------------------------------------------------------------------------------------
Trial standard level
Units Base case ------------------------------------------------------
1 2 3 4 5
----------------------------------------------------------------------------------------------------------------
INPV........................ 2013$ millions. 121.6 114.1 110.4 106.5 103.0 91.6
Change in INPV.............. 2013$ millions. .......... (7.5) (11.2) (15.1) (18.6) (30.0)
%.............. .......... (6.2) (9.2) (12.5) (15.3) (24.6)
Product Conversion Costs.... 2013$ millions. .......... 12.3 18.1 23.8 28.1 40.3
Capital Conversion Costs.... 2013$ millions. .......... 0.2 0.6 1.3 2.0 3.9
-----------------------------------------------------------------------------------
Total Conversion Costs.. 2013$ millions. .......... 12.6 18.7 25.1 30.0 44.1
----------------------------------------------------------------------------------------------------------------
* Values in parentheses are negative numbers.
Beyond impacts on INPV, DOE includes a comparison of free cash flow
between the base case and the standards case at each TSL in the year
before amended standards take effect to provide perspective on the
short-run cash flow impacts in the discussion of the following results.
At TSL 1, DOE estimates impacts on INPV for manufacturers of
automatic commercial ice makers to range from -$7.5 million to -$6.6
million, or a change in INPV of -6.2 percent to -5.4 percent. At this
TSL, industry free cash flow is estimated to decrease to $6.7 million,
or a drop of 35.7 percent, compared to the base-case value of $10.4
million in the year before the compliance date (2017).
DOE estimates that approximately 27 percent of all batch commercial
ice makers and 29 percent of all continuous commercial ice makers on
the market will require redesign to meet standards at TSL 1. At this
TSL DOE expects capital and product conversion costs of $0.2 million
and $12.3 million, respectively. Combined, the total conversion cost is
$12.5 million.
At TSL 2, DOE estimates impacts on INPV for manufacturers of
automatic commercial ice makers to range from -$11.2 million to -$9.3
million, or a change in INPV of -9.2 percent to -7.7 percent. At this
TSL, industry free cash flow is estimated to decrease to $4.8 million,
or a drop of 53.5 percent, compared to the base-case value of $10.4
million in the year before the compliance date (2017).
DOE estimates that approximately 39 percent of all batch commercial
ice makers and 41 percent of all continuous commercial ice makers on
the market will require redesign to meet standards at TSL 2. At this
TSL, DOE expects industry capital and product conversion costs of $0.6
million and of $18.1 million, respectively. Combined, the total
conversion cost is $18.7 million, 48 percent higher than those incurred
by industry at TSL 1.
At TSL 3, DOE estimates impacts on INPV for manufacturers of
automatic commercial ice makers to range from -$15.1 million to -$12.1
million, or a change in INPV of -12.5 percent to -10.0 percent. At this
TSL, industry free cash flow is estimated to decrease to $2.9 million,
or a drop of 72.4 percent, compared to the base-case value of $10.4
million in the year before the compliance date (2017).
DOE estimates that approximately 51 percent of all batch commercial
ice makers and 55 percent of all continuous commercial ice makers on
the market will require redesign to meet standards at TSL 3. At this
TSL, DOE expects industry capital and product conversion costs of $23.8
million and of $1.3 million, respectively. Combined, the total
conversion cost is $25.1 million, 34 percent higher than those incurred
by industry at TSL 2.
At TSL 4, DOE estimates impacts on INPV for manufacturers of
automatic commercial ice makers to range from -$18.6 million to -$12.3
million, or a change in INPV of -15.3 percent to -10.1 percent. At this
TSL, industry free cash flow is estimated to decrease to $0.9 million,
or a drop of 91.1 percent, compared to the base-case value of $10.4
million in the year before the compliance date (2017).
DOE estimates that approximately 66 percent of all batch commercial
ice makers and 55 percent of all continuous commercial ice makers on
the market will require redesign to meet standards at TSL 4.
Additionally, for four equipment classes, there is only one
manufacturer with products that currently meet the standard. At this
TSL, DOE expects industry capital and product conversion costs of $2.0
million and of $28.1 million, respectively. Combined, the total
conversion cost is $30.0 million, 20 percent higher than those incurred
by industry at TSL 3.
At TSL 5, DOE estimates impacts on INPV for manufacturers of
automatic commercial ice makers to range from -$30.0 million to -$11.8
million, or a change in INPV of -24.6 percent to -9.7 percent. At this
TSL, industry free cash flow is estimated to decrease to -$5.3 million,
or a drop of 151.1 percent, compared to the base-case
[[Page 4733]]
value of $10.4 million in the year before the compliance date (2017).
DOE estimates that approximately 84 percent of all batch commercial
ice makers and 78 percent of all continuous commercial ice makers on
the market will require redesign to meet standards at TSL 5.
Additionally, for five equipment classes, there is only one
manufacturer with products that currently meet the standard. At this
TSL, DOE expects industry capital and product conversion costs of $3.9
million and of $40.3 million, respectively. Combined, the total
conversion cost is $44.1 million, 47 percent higher than those incurred
by industry at TSL 4.
b. Impacts on Direct Employment
DOE used the GRIM to estimate the domestic labor expenditures and
number of domestic production workers in the base case and at each TSL
from 2015 through 2047. DOE used statistical data from the most recent
U.S Census Bureau's 2011 Annual Survey of Manufactures (ASM), the
results of the engineering analysis, and interviews with manufacturers
to determine the inputs necessary to calculate industry-wide labor
expenditures and domestic employment levels. Labor expenditures related
to the manufacture of a product are a function of the labor intensity
of the product, the sales volume, and an assumption that wages in real
terms remain constant.
In the GRIM, DOE used the labor content of each product and the
manufacturing production costs from the engineering analysis to
estimate the annual labor expenditures in the automatic commercial ice
maker industry. 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 multiplied by the labor rate found in
the U.S. Census Bureau's ASM).
The estimates of production workers in this section cover workers,
including line-supervisors, who are directly involved in fabricating
and assembling automatic commercial ice makers within an original
equipment manufacturer (OEM) facility. Workers performing services that
are closely associated with production operations, such as material
handling with a forklift, are also included as production labor.
The employment impacts shown in Table V.34 represent the potential
production employment changes that could result following the
compliance date of new and amended energy conservation standards. The
upper end of the employment results in Table V.34 estimates the maximum
increase in the number of production workers after implementation of
new or amended energy conservation standards and it assumes that
manufacturers continue to produce the same scope of covered products in
the U.S. The lower end of employment results in Table V.34 represent
the maximum decrease to the total number of U.S. production workers in
the industry due to manufacturers moving production outside of the U.S.
While the results present a range of employment impacts following the
compliance date of the new and amended energy conservation standards,
the following discussion also includes a qualitative discussion of the
likelihood of negative employment impacts at the various TSLs. Finally,
the employment impacts shown are independent of the employment impacts
from the broader U.S. economy, which are documented in chapter 13 of
the final rule TSD.
DOE estimates that in the absence of amended energy conservation
standards, there would be 389 domestic production workers involved in
manufacturing automatic commercial ice makers in 2018. Using 2011
Census Bureau data and interviews with manufacturers, DOE estimates
that approximately 84 percent of automatic commercial ice makers sold
in the United States are manufactured domestically. Table V.34 shows
the range of the impacts of potential amended energy conservation
standards on U.S. production workers in the automatic commercial ice
maker industry.
Table V.34--Potential Changes in the Total Number of Domestic Automatic Commercial Ice Maker Production Workers
in 2018
----------------------------------------------------------------------------------------------------------------
Base case TSL 1 TSL 2 TSL 3 TSL 4 TSL 5
----------------------------------------------------------------------------------------------------------------
Total Number of Domestic 389 391 402 414 418 444
Production Workers in 2018
(without changes in production
locations).......................
Potential Changes in Domestic ........... (389) to 2 (389) to 13 (389) to 25 (389) to 29 (389) to 55
Production Workers in 2018 *.....
----------------------------------------------------------------------------------------------------------------
* DOE presents a range of potential employment impacts. Values in parentheses are negative numbers.
At all TSLs, most of the design options analyzed by DOE do not
greatly alter the labor content of the final product. For example, the
use of higher efficiency compressors or fan motors involve one-time
changes to the final product but do not significantly change the amount
of production hours required for the final assembly. One manufacturer
suggested that their domestic production employment levels would only
change if market demand contracted following higher overall prices.
However, more than one manufacturer suggested that where they already
have overseas manufacturing capabilities, they would consider moving
additional manufacturing to those facilities if they felt the need to
offset a significant rise in materials costs. Provided the changes in
materials costs do not support the relocation of manufacturing
facilities, DOE would expect only modest changes to domestic
manufacturing employment balancing additional requirements for assembly
labor with the effects of price elasticity.
c. Impacts on Manufacturing Capacity
According to the majority of automatic commercial ice maker
manufacturers interviewed, new or amended energy conservation standards
that require modest changes to product efficiency will not
significantly affect manufacturers' production capacities. Any redesign
of automatic commercial ice makers would not change the fundamental
assembly of the equipment, but manufacturers do anticipate some
potential for additional lead time immediately following standards
associated with changes in sourcing of higher efficiency components,
which may be supply constrained.
One manufacturer cited the possibility of a 3- to 6-month shutdown
in the event that amended standards were set high enough to require
retooling of their entire product line. Most of the design options that
were evaluated are already available on the market as product options.
Thus, DOE
[[Page 4734]]
believes that, short of widespread retooling, manufacturers will 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 business, low-volume, 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 automatic commercial ice makers, DOE identified and evaluated
the impact of amended energy conservation standards on one subgroup:
small manufacturers. The SBA defines a ``small business'' as having
fewer than 750 employees for NAICS 333415, ``Air-Conditioning and Warm
Air Heating Equipment and Commercial and Industrial Refrigeration
Equipment Manufacturing,'' which includes ice-making machinery
manufacturing. DOE identified seven manufacturers in the automatic
commercial ice makers industry that meet this definition.
For a discussion of the impacts on the small manufacturer subgroup,
see the regulatory flexibility analysis in section VI.B of this
preamble 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
equipment efficiency.
For the cumulative regulatory burden analysis, DOE looks at other
regulations that could affect ACIM manufacturers that will take effect
approximately 3 years before or after the 2018 compliance date of
amended energy conservation standards for these products. In written
comments, manufacturers cited Federal regulations on equipment other
than automatic commercial ice makers that contribute to their
cumulative regulatory burden. The compliance years and expected
industry conversion costs of relevant amended energy conservation
standards are indicated in Table V.35.
Table V.35--Compliance Dates and Expected Conversion Expenses of Federal
Energy Conservation Standards Affecting Automatic Commercial Ice Maker
Manufacturers
------------------------------------------------------------------------
Estimated total
Federal energy conservation Approximate industry
standards compliance date conversion expense
------------------------------------------------------------------------
Commercial refrigeration 2017 $184.0M, (2012$)
equipment, 79 FR 17725 (March
28, 2014).....................
Walk-in Coolers and Freezers, 2017 $33.6.0M, (2012$)
79 FR 32049 (June 3, 2014)....
Miscellaneous Refrigeration TBD TBD
Equipment *...................
------------------------------------------------------------------------
* The final rule for this energy conservation standard has not been
published. The compliance date and analysis of conversion costs have
not been finalized at this time.
DOE discusses these and other requirements and includes the full
details of the cumulative regulatory burden analysis in chapter 12 of
the final rule TSD.
3. National Impact Analysis
a. Amount and Significance of 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 for the automatic commercial ice maker equipment
purchased during the 30-year 2018 through 2047 analysis period. Energy
impacts include the 30-year period, plus the life of equipment
purchased in the last year of the analysis, or roughly 2018 through
2057. The energy consumption calculated in the NIA is full-fuel-cycle
(FFC) energy, which quantifies savings beginning at the source of
energy production. DOE also reports primary or source energy that takes
into account losses in the generation and transmission of electricity.
FFC and primary energy are discussed in section IV.H.3.
Table V.36 presents the source NES for all equipment classes at
each TSL and the sum total of NES for each TSL.
Table V.37 presents the energy savings at each TSL for each
equipment class in the form of percentage of the cumulative energy use
of the equipment stock in the base-case scenario.
Table V.36--Cumulative National Energy Savings at Source for Equipment Purchased in 2018-2047
[Quads]
----------------------------------------------------------------------------------------------------------------
Standard level * **
Equipment class ----------------------------------------------------------------
TSL 1 TSL 2 TSL 3 TSL 4 TSL 5
----------------------------------------------------------------------------------------------------------------
IMH-W-Small-B.................................. 0.002 0.002 0.004 0.004 0.009
IMH-W-Med-B.................................... 0.005 0.005 0.005 0.008 0.010
IMH-W-Large-B [dagger]......................... 0.000 0.000 0.000 0.000 0.002
IMH-W-Large-B1................................. 0.000 0.000 0.000 0.000 0.001
IMH-W-Large-B2................................. 0.000 0.000 0.000 0.000 0.001
IMH-A-Small-B.................................. 0.011 0.023 0.037 0.037 0.071
IMH-A-Large-B [dagger]......................... 0.019 0.034 0.039 0.058 0.075
[[Page 4735]]
IMH-A-Large-B1................................. 0.016 0.031 0.035 0.055 0.071
IMH-A-Large-B2................................. 0.002 0.002 0.003 0.003 0.003
RCU-Large-B [dagger]........................... 0.015 0.015 0.015 0.029 0.037
RCU-Large-B1................................... 0.014 0.014 0.014 0.027 0.035
RCU-Large-B2................................... 0.001 0.001 0.001 0.001 0.002
SCU-W-Large-B.................................. 0.000 0.001 0.001 0.001 0.001
SCU-A-Small-B.................................. 0.007 0.018 0.024 0.032 0.036
SCU-A-Large-B.................................. 0.006 0.014 0.019 0.023 0.023
IMH-A-Small-C.................................. 0.002 0.004 0.006 0.006 0.009
IMH-A-Large-C.................................. 0.002 0.002 0.003 0.003 0.006
RCU-Small-C.................................... 0.001 0.002 0.003 0.003 0.005
SCU-A-Small-C.................................. 0.006 0.010 0.015 0.015 0.023
----------------------------------------------------------------
Total...................................... 0.077 0.130 0.171 0.219 0.307
----------------------------------------------------------------------------------------------------------------
* A value equal to 0.000 means the NES rounds to less than 0.001 quads.
** Numbers may not add to totals, due to rounding.
[dagger] IMH-W-Large-B, IMH-A-Large-B, and RCU-Large-B results are the sum of the results for the two typical
units denoted by B1 and B2.
Table V.37--Cumulative Source Energy Savings by TSL as a Percentage of Cumulative Baseline Energy Usage of
Automatic Commercial Ice Maker Equipment Purchased in 2018-2047
----------------------------------------------------------------------------------------------------------------
Base case TSL Savings as percent of baseline usage
energy ----------------------------------------------------------------
Equipment class usage
(quads) TSL 1 (%) TSL 2 (%) TSL 3 (%) TSL 4 (%) TSL 5 (%)
----------------------------------------------------------------------------------------------------------------
IMH-W-Small-B..................... 0.064 4 4 6 6 15
IMH-W-Med-B....................... 0.089 5 5 5 9 12
IMH-W-Large-B *................... 0.028 0 0 0 0 6
IMH-W-Large-B1.................... 0.018 0 0 0 0 7
IMH-W-Large-B2.................... 0.010 0 0 0 0 6
IMH-A-Small-B..................... 0.467 2 5 8 8 15
IMH-A-Large-B *................... 0.644 3 5 6 9 12
IMH-A-Large-B1.................... 0.495 3 6 7 11 14
IMH-A-Large-B2.................... 0.149 2 2 2 2 2
RCU-Large-B *..................... 0.368 4 4 4 8 10
RCU-Large-B1...................... 0.343 4 4 4 8 10
RCU-Large-B2...................... 0.026 4 4 4 4 7
SCU-W-Large-B..................... 0.004 7 14 18 23 23
SCU-A-Small-B..................... 0.150 5 12 16 21 24
SCU-A-Large-B..................... 0.102 6 14 19 23 23
IMH-A-Small-C..................... 0.071 3 5 8 8 12
IMH-A-Large-C..................... 0.044 4 4 7 7 14
RCU-Small-C....................... 0.031 3 6 10 10 16
SCU-A-Small-C..................... 0.145 4 7 10 10 16
-----------------------------------------------------------------------------
Total......................... 2.206 3 6 8 10 14
----------------------------------------------------------------------------------------------------------------
* IMH-W-Large-B, IMH-A-Large-B, and RCU-Large-B results are the sum of the results for the 2 typical units
denoted by B1 and B2.
Table V.38 presents energy savings at each TSL for each equipment
class with the FFC adjustment. The NES increases from 0.081 quads at
TSL 1 to 0.321 quads at TSL 5.
Table V.38--Cumulative National Energy Savings Including Full-Fuel-Cycle for Equipment Purchased in 2018-2047
[Quads]
----------------------------------------------------------------------------------------------------------------
Standard level * **
Equipment class ----------------------------------------------------------------
TSL 1 TSL 2 TSL 3 TSL 4 TSL 5
----------------------------------------------------------------------------------------------------------------
IMH-W-Small-B.................................. 0.002 0.002 0.004 0.004 0.010
IMH-W-Med-B.................................... 0.005 0.005 0.005 0.008 0.011
IMH-W-Large-B [dagger]......................... 0.000 0.000 0.000 0.000 0.002
[[Page 4736]]
IMH-W-Large-B1................................. 0.000 0.000 0.000 0.000 0.001
IMH-W-Large-B2................................. 0.000 0.000 0.000 0.000 0.001
IMH-A-Small-B.................................. 0.011 0.024 0.039 0.039 0.075
IMH-A-Large-B [dagger]......................... 0.020 0.035 0.040 0.061 0.078
IMH-A-Large-B1................................. 0.017 0.033 0.037 0.057 0.075
IMH-A-Large-B2................................. 0.003 0.003 0.004 0.004 0.004
RCU-Large-B [dagger]........................... 0.016 0.016 0.016 0.030 0.038
RCU-Large-B1................................... 0.015 0.015 0.015 0.029 0.037
RCU-Large-B2................................... 0.001 0.001 0.001 0.001 0.002
SCU-W-Large-B.................................. 0.000 0.001 0.001 0.001 0.001
SCU-A-Small-B.................................. 0.008 0.019 0.026 0.033 0.037
SCU-A-Large-B.................................. 0.006 0.015 0.020 0.024 0.024
IMH-A-Small-C.................................. 0.002 0.004 0.006 0.006 0.009
IMH-A-Large-C.................................. 0.002 0.002 0.003 0.003 0.007
RCU-Small-C.................................... 0.001 0.002 0.003 0.003 0.005
SCU-A-Small-C.................................. 0.007 0.011 0.016 0.016 0.024
----------------------------------------------------------------
Total...................................... 0.081 0.136 0.179 0.229 0.321
----------------------------------------------------------------------------------------------------------------
* A value equal to 0.000 means the NES rounds to less than 0.001 quads
** Numbers may not add to totals due to rounding.
[dagger] IMH-W-Large-B, IMH-A-Large-B, and RCU-Large-B results are the sum of the results for the 2 typical
units denoted by B1 and B2.
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 9, 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.\73\
The review timeframe established in EPCA generally is not synchronized
with the product lifetime, product manufacturing cycles or other
factors specific to automatic commercial ice makers. Thus, this
information is presented for informational purposes only and is not
indicative of any change in DOE's analytical methodology. The NES
results based on a 9-year analysis period are presented in Table V.39 .
The impacts are counted over the lifetime of equipment purchased in
2018 through 2026.
---------------------------------------------------------------------------
\73\ For automatic commercial ice makers, DOE is required to
review standards at least every five years after the effective date
of any amended standards. (42 U.S.C. 6313(d)(3)(B)) If new standards
are promulgated, EPCA requires DOE to provide manufacturers a
minimum of 3 and a maximum of 5 years to comply with the standards.
(42 U.S.C. 6313(d)(3)(C)) In addition, for certain other types of
commercial equipment that are not specified in 42 U.S.C. 6311(1)(B)-
(G), EPCA requires DOE to review its standards at least once every 6
years (42 U.S.C. 6295(m)(1) and 6316(a)), and either a 3-year or a
5-year period after any new standard is promulgated before
compliance is required. (42 U.S.C. 6295(m)(4) and 6316(a)) As a
result, DOE's standards for automatic commercial ice makers can be
expected to be in effect for 8 to 10 years between compliance dates,
and its standards governing certain other commercial equipment, the
period is 9 to 11 years. A 9-year analysis was selected as
representative of the time between standard revisions.
Table V.39--National Full-Fuel-Cycle Energy Savings for 9-Year Analysis Period for Equipment Purchased in 2018-
2026
[Quads]
----------------------------------------------------------------------------------------------------------------
Standard level * **
Equipment class ----------------------------------------------------------------
TSL 1 TSL 2 TSL 3 TSL 4 TSL 5
----------------------------------------------------------------------------------------------------------------
IMH-W-Small-B.................................. 0.001 0.001 0.001 0.001 0.003
IMH-W-Med-B.................................... 0.001 0.001 0.001 0.002 0.003
IMH-W-Large-B [dagger]......................... 0.000 0.000 0.000 0.000 0.001
IMH-W-Large-B1................................. 0.000 0.000 0.000 0.000 0.000
IMH-W-Large-B2................................. 0.000 0.000 0.000 0.000 0.000
IMH-A-Small-B.................................. 0.003 0.007 0.012 0.012 0.022
IMH-A-Large-B [dagger]......................... 0.006 0.011 0.012 0.018 0.023
IMH-A-Large-B1................................. 0.005 0.010 0.011 0.017 0.022
IMH-A-Large-B2................................. 0.001 0.001 0.001 0.001 0.001
RCU-Large-B [dagger]........................... 0.005 0.005 0.005 0.009 0.012
RCU-Large-B1................................... 0.005 0.005 0.005 0.009 0.011
RCU-Large-B2................................... 0.000 0.000 0.000 0.000 0.001
SCU-W-Large-B.................................. 0.000 0.000 0.000 0.000 0.000
SCU-A-Small-B.................................. 0.002 0.006 0.008 0.010 0.011
[[Page 4737]]
SCU-A-Large-B.................................. 0.002 0.004 0.006 0.007 0.007
IMH-A-Small-C.................................. 0.001 0.001 0.002 0.002 0.003
IMH-A-Large-C.................................. 0.001 0.001 0.001 0.001 0.002
RCU-Small-C.................................... 0.000 0.001 0.001 0.001 0.002
SCU-A-Small-C.................................. 0.002 0.003 0.005 0.005 0.007
----------------------------------------------------------------
Total...................................... 0.024 0.041 0.054 0.069 0.097
----------------------------------------------------------------------------------------------------------------
* A value equal to 0.000 means the NES rounds to less than 0.001 quads.
** Numbers may not add to totals due to rounding.
[dagger] IMH-W-Large-B, IMH-A-Large-B, and RCU-Large-B results are the sum of the results for the 2 typical
units denoted by B1 and B2.
b. Net Present Value of Customer Costs and Benefits
DOE estimated the cumulative NPV to the Nation of the total savings
for the 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. 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 CPI),
which has averaged about 3 percent on a pre-tax basis for the last 30
years.
Table V.40 and Table V.41 show the customer NPV results for each of
the TSLs DOE considered for automatic commercial ice makers at both 7-
percent and 3-percent discount rates, respectively. In each case, the
impacts cover the expected lifetime of equipment purchased from 2018
through 2047. Detailed NPV results are presented in chapter 10 of the
final rule TSD.
The NPV results at a 7-percent discount rate for TSL 5 were
negative for 9 classes, and also for one of the typical size units of a
large batch equipment class for which the class total was positive. In
all cases the TSL 5 NPV was significantly lower than the TSL 3 results.
This is consistent with the LCC analysis results for TSL 5, which
showed significant increase in LCC and significantly higher PBPs that
were in some cases greater than the average equipment lifetimes.
Efficiency levels for TSL 4 were chosen to correspond to the highest
efficiency level with a positive NPV for all classes at a 7-percent
discount rate. Similarly, the criteria for choice of efficiency levels
for TSL 3, TSL 2, and TSL 1 were such that the NPV values for all the
equipment classes show positive values. The criterion for TSL 3 was to
select efficiency levels with the highest NPV at a 7-percent discount
rate. Consequently, the total NPV for automatic commercial ice makers
was highest for TSL 3, with a value of $0.430 billion (2013$) at a 7-
percent discount rate. TSL 4 showed the second highest total NPV, with
a value of $0.337 billion (2013$) at a 7-percent discount rate. TSL 1,
TSL 2 and TSL 5 have a total NPV lower than TSL 3 or 4.
Table V.40--Net Present Value at a 7-Percent Discount Rate for Equipment Purchased in 2018-2047
[Billion 2013$]
----------------------------------------------------------------------------------------------------------------
Standard level *
Equipment class -------------------------------------------------------------------
TSL 1 TSL 2 TSL 3 TSL 4 TSL 5
----------------------------------------------------------------------------------------------------------------
IMH-W-Small-B............................... 0.006 0.006 0.011 0.011 (0.049)
IMH-W-Med-B................................. 0.010 0.010 0.010 0.006 (0.008)
IMH-W-Large-B **............................ 0.000 0.000 0.000 0.000 (0.002)
IMH-W-Large-B1.............................. 0.000 0.000 0.000 0.000 (0.002)
IMH-W-Large-B2.............................. 0.000 0.000 0.000 0.000 (0.000)
IMH-A-Small-B............................... 0.017 0.017 0.036 0.036 (0.238)
IMH-A-Large-B **............................ 0.043 0.109 0.120 0.109 0.021
IMH-A-Large-B1.............................. 0.043 0.109 0.119 0.107 0.020
IMH-A-Large-B2.............................. (0.000) (0.000) 0.001 0.001 0.001
RCU-Large-B **.............................. 0.042 0.042 0.042 0.035 0.007
RCU-Large-B1................................ 0.040 0.040 0.040 0.033 0.008
RCU-Large-B2................................ 0.002 0.002 0.002 0.002 (0.001)
SCU-W-Large-B............................... 0.002 0.002 0.003 0.001 0.001
SCU-A-Small-B............................... 0.016 0.037 0.076 0.068 (0.060)
SCU-A-Large-B............................... 0.014 0.059 0.064 0.004 0.004
IMH-A-Small-C............................... 0.006 0.009 0.014 0.014 (0.014)
IMH-A-Large-C............................... 0.005 0.005 0.009 0.009 (0.001)
RCU-Small-C................................. 0.002 0.004 0.008 0.008 (0.003)
[[Page 4738]]
SCU-A-Small-C............................... 0.018 0.027 0.036 0.036 (0.062)
-------------------------------------------------------------------
Total................................... 0.183 0.328 0.430 0.337 (0.406)
----------------------------------------------------------------------------------------------------------------
* A value equal to 0.000 means the NPV rounds to less than $0.001 (2013$). Values in parentheses are negative
numbers.
** IMH-W-Large-B, IMH-A-Large-B, and RCU-Large-B results are the sum of the results for the 2 typical units
denoted by B1 and B2.
Table V.41--Net Present Value at a 3-Percent Discount Rate for Equipment Purchased in 2018-2047
[Billion 2013$]
----------------------------------------------------------------------------------------------------------------
Standard level *
Equipment class -------------------------------------------------------------------
TSL 1 TSL 2 TSL 3 TSL 4 TSL 5
----------------------------------------------------------------------------------------------------------------
IMH-W-Small-B............................... 0.014 0.014 0.025 0.025 (0.074)
IMH-W-Med-B................................. 0.022 0.022 0.022 0.016 (0.008)
IMH-W-Large-B **............................ 0.000 0.000 0.000 0.000 (0.003)
IMH-W-Large-B1.............................. 0.000 0.000 0.000 0.000 (0.003)
IMH-W-Large-B2.............................. 0.000 0.000 0.000 0.000 (0.000)
IMH-A-Small-B............................... 0.039 0.046 0.092 0.092 (0.360)
IMH-A-Large-B **............................ 0.091 0.234 0.259 0.271 0.122
IMH-A-Large-B1.............................. 0.090 0.233 0.254 0.266 0.117
IMH-A-Large-B2.............................. 0.001 0.001 0.005 0.005 0.005
RCU-Large-B **.............................. 0.088 0.088 0.088 0.084 0.039
RCU-Large-B1................................ 0.084 0.084 0.084 0.080 0.039
RCU-Large-B2................................ 0.004 0.004 0.004 0.004 (0.001)
SCU-W-Large-B............................... 0.003 0.005 0.005 0.002 0.002
SCU-A-Small-B............................... 0.035 0.079 0.169 0.159 (0.075)
SCU-A-Large-B............................... 0.030 0.127 0.138 0.031 0.031
IMH-A-Small-C............................... 0.012 0.019 0.030 0.030 (0.022)
IMH-A-Large-C............................... 0.011 0.011 0.019 0.019 0.001
RCU-Small-C................................. 0.005 0.009 0.017 0.017 (0.002)
SCU-A-Small-C............................... 0.038 0.057 0.076 0.076 (0.103)
-------------------------------------------------------------------
Total................................... 0.389 0.712 0.942 0.822 (0.453)
----------------------------------------------------------------------------------------------------------------
* A value equal to 0.000 means the NPV rounds to less than $0.001 (2013$). Values in parentheses are negative
numbers.
** IMH-W-Large-B, IMH-A-Large-B, and RCU-Large-B results are the sum of the results for the 2 typical units
denoted by B1 and B2.
The NPV results based on the aforementioned 9-year analysis period
are presented in Table V.42 and Table V.43. The impacts are counted
over the lifetime of equipment purchased in 2018-2026. 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.42--Net Present Value at a 7-Percent Discount Rate for 9-Year Analysis Period for Equipment Purchased in
2018-2026
[Billion 2013$]
----------------------------------------------------------------------------------------------------------------
Standard level *
Equipment class -------------------------------------------------------------------
TSL 1 TSL 2 TSL 3 TSL 4 TSL 5
----------------------------------------------------------------------------------------------------------------
IMH-W-Small-B............................... 0.003 0.003 0.005 0.005 (0.030)
IMH-W-Med-B................................. 0.005 0.005 0.005 0.003 (0.004)
IMH-W-Large-B............................... 0.000 0.000 0.000 0.000 (0.001)
IMH-W-Large-B-1............................. 0.000 0.000 0.000 0.000 (0.001)
IMH-W-Large-B-2............................. 0.000 0.000 0.000 0.000 (0.000)
IMH-A-Small-B............................... 0.009 0.009 0.018 0.018 (0.137)
IMH-A-Large-B............................... 0.021 0.051 0.057 0.036 (0.005)
IMH-A-Large-B-1............................. 0.021 0.052 0.057 0.036 (0.006)
IMH-A-Large-B-2............................. (0.000) (0.000) 0.001 0.001 0.001
RCU-Large-B................................. 0.021 0.021 0.021 0.018 0.004
RCU-Large-B-1............................... 0.020 0.020 0.020 0.017 0.005
RCU-Large-B-2............................... 0.001 0.001 0.001 0.001 (0.001)
SCU-W-Large-B............................... 0.001 0.001 0.001 0.000 0.000
SCU-A-Small-B............................... 0.008 0.018 0.036 0.032 (0.030)
[[Page 4739]]
SCU-A-Large-B............................... 0.007 0.028 0.030 0.001 0.001
IMH-A-Small-C............................... 0.003 0.004 0.007 0.007 (0.007)
IMH-A-Large-C............................... 0.003 0.003 0.005 0.005 (0.000)
RCU-Small-C................................. 0.001 0.002 0.004 0.004 (0.001)
SCU-A-Small-C............................... 0.009 0.013 0.018 0.018 (0.030)
-------------------------------------------------------------------
Total................................... 0.090 0.158 0.207 0.147 (0.241)
----------------------------------------------------------------------------------------------------------------
* A value equal to 0.000 means the NPV rounds to less than $0.001 (2013$). Values in parentheses are negative
numbers.
Table V.43--Net Present Value at a 3-Percent Discount Rate for 9-Year Analysis Period for Equipment Purchased in
2018-2026
[Billion 2013$]
----------------------------------------------------------------------------------------------------------------
Standard level *
Equipment class -----------------------------------------------------------------
TSL 1 TSL 2 TSL 3 TSL 4 TSL 5
----------------------------------------------------------------------------------------------------------------
IMH-W-Small-B................................. 0.005 0.005 0.009 0.009 (0.038)
IMH-W-Med-B................................... 0.008 0.008 0.008 0.006 (0.002)
IMH-W-Large-B................................. 0.000 0.000 0.000 0.000 (0.001)
IMH-W-Large-B-1............................... 0.000 0.000 0.000 0.000 (0.001)
IMH-W-Large-B-2............................... 0.000 0.000 0.000 0.000 (0.000)
IMH-A-Small-B................................. 0.014 0.017 0.035 0.035 (0.168)
IMH-A-Large-B................................. 0.033 0.081 0.090 0.067 0.016
IMH-A-Large-B-1............................... 0.033 0.081 0.089 0.065 0.014
IMH-A-Large-B-2............................... 0.001 0.001 0.002 0.002 0.002
RCU-Large-B................................... 0.032 0.032 0.032 0.031 0.015
RCU-Large-B-1................................. 0.030 0.030 0.030 0.030 0.016
RCU-Large-B-2................................. 0.002 0.002 0.002 0.002 (0.000)
SCU-W-Large-B................................. 0.001 0.002 0.002 0.001 0.001
SCU-A-Small-B................................. 0.013 0.029 0.057 0.054 (0.029)
SCU-A-Large-B................................. 0.011 0.043 0.047 0.010 0.010
IMH-A-Small-C................................. 0.004 0.007 0.011 0.011 (0.008)
IMH-A-Large-C................................. 0.004 0.004 0.007 0.007 0.001
RCU-Small-C................................... 0.002 0.003 0.006 0.006 (0.001)
SCU-A-Small-C................................. 0.014 0.021 0.028 0.028 (0.037)
-----------------------------------------------------------------
Total..................................... 0.142 0.253 0.332 0.264 (0.241)
----------------------------------------------------------------------------------------------------------------
* A value equal to 0.000 means the NPV rounds to less than $0.001 (2013$). Values in parentheses are negative
numbers.
c. Water Savings
One energy-saving design option for batch type ice makers had the
additional benefit of reducing potable water usage for some types of
batch type ice makers. The water savings are identified on Table V.44.
DOE is not, as part of this rulemaking, establishing a potable water
standard. The water savings identified through the analyses are
products of the analysis of energy-saving design options.
Table V.44--Water Savings
----------------------------------------------------------------------------------------------------------------
Water savings by standard level * ** million gallons
Equipment class ----------------------------------------------------------------
TSL 1 TSL 2 TSL 3 TSL 4 TSL 5
----------------------------------------------------------------------------------------------------------------
IMH-W-Small-B.................................. 761 761 1,733 1,733 1,733
IMH-W-Med-B.................................... 0 0 0 0 0
IMH-W-Large-B.................................. 0 0 0 0 0
IMH-W-Large-B1................................. 0 0 0 0 0
IMH-W-Large-B2................................. 0 0 0 0 0
IMH-A-Small-B.................................. 0 0 0 0 -5,424
IMH-A-Large-B.................................. 0 12,501 12,501 11,733 11,733
IMH-A-Large-B1................................. 0 12,501 12,501 11,733 11,733
IMH-A-Large-B2................................. 0 0 0 0 0
RCU-Large-B.................................... 0 0 0 0 0
RCU-Large-B1................................... 0 0 0 0 0
RCU-Large-B2................................... 0 0 0 0 0
[[Page 4740]]
SCU-W-Large-B.................................. 336 336 336 336 336
SCU-A-Small-B.................................. 0 0 13,580 13,580 13,580
SCU-A-Large-B.................................. 0 9,388 9,388 9,388 9,388
IMH-A-Small-C.................................. 0 0 0 0 0
IMH-A-Large-C.................................. 0 0 0 0 0
RCU-Small-C.................................... 0 0 0 0 0
SCU-A-Small-C.................................. 0 0 0 0 0
----------------------------------------------------------------
Total...................................... 1,097 22,987 37,539 36,771 31,347
----------------------------------------------------------------------------------------------------------------
* A zero indicates no water usage reductions were identified.
** IMH-W-Large-B, IMH-A-Large-B, and RCU-Large-B results are the sum of the results for the 2 typical units
denoted by B1 and B2.
d. Indirect Employment Impacts
In addition to the direct impacts on manufacturing employment
discussed in section IV.N, DOE develops general estimates of the
indirect employment impacts of the new and amended standards on the
economy. DOE expects amended energy conservation standards for
automatic commercial ice makers to reduce energy bills for commercial
customers and expects 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 automatic commercial ice maker
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 new and
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 automatic commercial ice makers. 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 rulemaking; 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. In this input/output model, the dollars saved on
utility bills from more-efficient automatic commercial ice makers are
spent in economic sectors that create more jobs than are lost in
electric and water utilities sectors. Thus, the new and amended energy
conservation standards for automatic commercial ice makers are likely
to slightly increase the net demand for labor in the economy. 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. As shown in Table V.45, DOE estimates
that net indirect employment impacts from new and amended automatic
commercial ice makers standard are small relative to the national
economy.
Table V.45--Net Short-Term Change in Employment
[Number of employees]
------------------------------------------------------------------------
Trial standard level 2018 2022
------------------------------------------------------------------------
1.............................. 18 to 21........... 104 to 107.
2.............................. 31 to 38........... 196 to 204.
3.............................. 41 to 52........... 263 to 276.
4.............................. 41 to 63........... 315 to 340.
5.............................. 4 to 82............ 376 to 464.
------------------------------------------------------------------------
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
6313(d)(4)) 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 this rulemaking, DOE did
not consider TSLs for automatic commercial ice makers that reduce the
utility or performance of the equipment.
5. Impact of Any Lessening of Competition
EPCA directs DOE to consider any lessening of competition likely to
result from amended standards. It directs the Attorney General of the
United States (Attorney General) to determine in writing the impact, if
any, of any lessening of competition likely to result from a proposed
standard. (42 U.S.C. 6295(o)(2)(B)(i)(V) and 6313(d)(4)) To assist the
Attorney General in making such a determination, DOE provided the DOJ
with copies of this rule and the TSD for review. During MIA interviews,
domestic manufacturers indicated that foreign manufacturers have begun
to enter the automatic commercial ice maker industry, but not in
significant numbers. Manufacturers also stated that consolidation has
occurred among automatic commercial ice makers manufacturers in recent
years. Interviewed manufacturers believe that these trends may continue
in this market even in the absence of amended standards.
More than one manufacturer suggested that where they already have
overseas manufacturing capabilities, they would consider moving
additional manufacturing to those facilities if they felt the need to
offset a significant rise in materials costs. The Department
acknowledges that to be competitive in the marketplace manufacturers
must constantly re-examine their supply chains and manufacturing
infrastructure. DOE does not believe however, that at the levels
specified in this final rule, amended standards would result in
domestic firms relocating significant portions of their domestic
production capacity to other countries. The majority of automatic
commercial ice makers are manufactured in the U.S. and the amended
standards are at levels which are already met by a large portion of the
product models being manufactured. The amended standards can largely be
met using existing capital assets and during interviews, manufacturers
in general indicated they would modify their existing facilities to
comply with amended energy conservation standards.
[[Page 4741]]
6. Need of the Nation To Conserve Energy
An improvement in the energy efficiency of the equipment subject to
this final rule is likely to improve the security of the Nation's
energy system by reducing overall demand for energy. Reduced
electricity demand resulting from energy conservation may also improve
the reliability of the electricity system. As a measure of this reduced
demand, chapter 15 in the final rule TSD presents the estimated
reduction in national generating capacity for the TSLs that DOE
considered in this rulemaking.
Energy savings from new and amended standards for automatic
commercial ice makers 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 CO2, NOX, Hg, N2O,
CH4 and SO2 emissions reductions projected to
result from the TSLs considered in this rule. The table includes both
power sector emissions and upstream emissions. The upstream emissions
were calculated using the multipliers discussed in section IV.K. DOE
reports annual emissions reductions for each TSL in chapter 13 of the
final rule TSD.
Table V.46--Summary of Emissions Reduction Estimated for Automatic Commercial Ice Makers TSLs
[Cumulative for equipment purchased in 2018-2047]
----------------------------------------------------------------------------------------------------------------
TSL
----------------------------------------------------------------
1 2 3 4 5
----------------------------------------------------------------------------------------------------------------
Power Sector and Site Emissions
----------------------------------------------------------------------------------------------------------------
CO2 (million metric tons)...................... 4.68 7.87 10.38 13.25 18.62
NOX (thousand tons)............................ 3.71 6.23 8.22 10.50 14.75
Hg (tons)...................................... 0.01 0.02 0.03 0.04 0.05
N2O (thousand tons)............................ 0.06 0.11 0.14 0.18 0.25
CH4 (thousand tons)............................ 0.44 0.73 0.97 1.24 1.74
SO2 (thousand tons)............................ 4.13 6.95 9.17 11.70 16.45
----------------------------------------------------------------------------------------------------------------
Upstream Emissions
----------------------------------------------------------------------------------------------------------------
CO2 (million metric tons)...................... 0.25 0.42 0.56 0.72 1.00
NOX (thousand tons)............................ 3.59 6.03 7.96 10.17 14.29
Hg (tons)...................................... 0.00 0.00 0.00 0.00 0.00
N2O (thousand tons)............................ 0.00 0.00 0.00 0.01 0.01
CH4 (thousand tons)............................ 20.91 35.15 46.40 59.23 83.24
SO2 (thousand tons)............................ 0.04 0.08 0.10 0.13 0.18
----------------------------------------------------------------------------------------------------------------
Total Emissions
----------------------------------------------------------------------------------------------------------------
CO2 (million metric tons)...................... 4.93 8.29 10.94 13.97 19.63
NOX (thousand tons)............................ 7.30 12.26 16.19 20.67 29.04
Hg (tons)...................................... 0.01 0.02 0.03 0.04 0.05
N2O (thousand tons)............................ 0.06 0.11 0.14 0.18 0.26
CH4 (thousand tons)............................ 21.35 35.89 47.37 60.47 84.97
SO2 (thousand tons)............................ 4.18 7.02 9.27 11.83 16.62
----------------------------------------------------------------------------------------------------------------
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, 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 2013$, are $12/ton, $40.5/ton, $62.4/
ton, and $119.0/ton. These values for later years are higher due to
increasing emissions-related costs as the magnitude of projected
climate change is expected to increase.
Table V.47 presents the global value of CO2 emissions
reductions at each TSL. DOE calculated domestic values as a range from
7 percent to 23 percent of the global values, and these results are
presented in chapter 14 of the final rule TSD.
[[Page 4742]]
Table V.47--Global Present Value of CO2 Emissions Reduction for Potential Standards for Automatic Commercial Ice
Makers
----------------------------------------------------------------------------------------------------------------
SCC scenario *
---------------------------------------------------------------
TSL 3% Discount
5% Discount 3% Discount 2.5% Discount rate, 95th
rate, average rate, average rate, average percentile
----------------------------------------------------------------------------------------------------------------
million 2013$
----------------------------------------------------------------------------------------------------------------
Power Sector and Site Emissions
----------------------------------------------------------------------------------------------------------------
1............................................... 34.5 154.3 243.8 476.2
2............................................... 57.9 259.4 409.9 800.5
3............................................... 76.4 342.3 541.0 1,056.6
4............................................... 97.6 437.0 690.6 1,348.9
5............................................... 137.1 614.1 970.5 1,895.5
----------------------------------------------------------------------------------------------------------------
Upstream Emissions
----------------------------------------------------------------------------------------------------------------
1............................................... 1.8 8.2 13.0 25.4
2............................................... 3.0 13.8 21.9 42.7
3............................................... 4.0 18.2 28.8 56.3
4............................................... 5.1 23.3 36.8 71.9
5............................................... 7.2 32.7 51.8 101.0
----------------------------------------------------------------------------------------------------------------
Total Emissions
----------------------------------------------------------------------------------------------------------------
1............................................... 36.3 162.5 256.8 501.6
2............................................... 61.0 273.2 431.7 843.1
3............................................... 80.5 360.6 569.8 1,112.9
4............................................... 102.7 460.3 727.5 1,420.8
5............................................... 144.3 646.8 1,022.3 1,996.5
----------------------------------------------------------------------------------------------------------------
* For each of the four cases, the corresponding SCC value for emissions in 2015 is $12, $40.5, $62.4, and $119.0
per metric ton (2013$).
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 rulemaking 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 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 the new and amended standards for the
automatic commercial ice makers. The dollar-per-ton values that DOE
used are discussed in section IV.L. 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.
Table V.48--Present Value of NOX Emissions Reduction for Potential
Standards for Automatic Commercial Ice Makers
------------------------------------------------------------------------
3% 7%
TSL Discount Discount
rate rate
------------------------------------------------------------------------
million 2013$
------------------------------------------------------------------------
Power Sector and Site Emissions *
------------------------------------------------------------------------
1................................................. 5.6 2.9
2................................................. 9.4 4.9
3................................................. 12.4 6.5
4................................................. 15.8 8.2
5................................................. 22.2 11.6
------------------------------------------------------------------------
Upstream Emissions
------------------------------------------------------------------------
1................................................. 5.2 2.5
2................................................. 8.7 4.3
3................................................. 11.4 5.6
4................................................. 14.6 7.2
5................................................. 20.5 10.1
------------------------------------------------------------------------
Total Emissions
------------------------------------------------------------------------
1................................................. 10.7 5.4
2................................................. 18.0 9.2
3................................................. 23.8 12.1
4................................................. 30.4 15.4
5................................................. 42.7 21.7
------------------------------------------------------------------------
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 rulemaking. 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 consumer savings calculated for each TSL considered in this
rulemaking, 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
presented in section IV.L.
[[Page 4743]]
Table V.49--Automatic Commercial Ice Makers TSLs: Net Present Value of Customer Savings Combined With Net
Present Value of Monetized Benefits From CO2 and NOX Emissions Reductions
----------------------------------------------------------------------------------------------------------------
Consumer NPV at 3% Discount Rate added with:
---------------------------------------------------------------
SCC Value of SCC Value of SCC Value of SCC Value of
TSL $12/metric ton $40.5/metric $62.4/metric $119.0/metric
CO2 * and ton CO2 * and ton CO2 * and ton CO2 * and
medium value medium value medium value medium value
for NOX * for NOX * for NOX * for NOX *
----------------------------------------------------------------------------------------------------------------
billion 2013$
---------------------------------------------------------------
1............................................... 0.436 0.563 0.657 0.902
2............................................... 0.791 1.004 1.162 1.574
3............................................... 1.046 1.326 1.536 2.079
4............................................... 0.955 1.313 1.580 2.273
5............................................... (0.266) 0.237 0.612 1.587
----------------------------------------------------------------------------------------------------------------
Consumer NPV at 7% Discount Rate added with:
---------------------------------------------------------------
TSL SCC Value of SCC Value of SCC Value of SCC Value of
$12/metric ton $40.5/metric $62.4/metric $119.0/metric
CO2 * and ton CO2 * and ton CO2 * and ton CO2 * and
medium value medium value medium value medium value
for NOX * for NOX * for NOX * for NOX *
----------------------------------------------------------------------------------------------------------------
billion 2013$
---------------------------------------------------------------
1............................................... 0.225 0.351 0.445 0.690
2............................................... 0.398 0.611 0.769 1.181
3............................................... 0.523 0.803 1.012 1.555
4............................................... 0.455 0.813 1.080 1.773
5............................................... (0.240) 0.263 0.638 1.613
----------------------------------------------------------------------------------------------------------------
* These label values represent the global SCC in 2015, in 2013$. The present values have been calculated with
scenario-consistent discount rates. For NOX emissions, each case uses the medium value, which corresponds to
$2,684 per ton.
Although adding the value of customer savings to the values of
emission reductions provides a valuable perspective, the following
should be considered. First, the national customer savings are domestic
U.S. customer monetary savings that occur as a result of market
transactions, while the values of emission reductions are based on
estimates of marginal social costs, which, in the case of
CO2, are based on a global value. Second, the assessments of
customer operating cost savings and emission-related benefits are
performed with quite different time frames for analysis. For automatic
commercial ice makers, the present value of national customer savings
is measured for the lifetime of units shipped from 2018 through 2047.
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. Because of the long residence time of
CO2 in the atmosphere, these impacts continue well beyond
2100.
7. 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
6313(d)(4)) DOE considered LCC impacts on identifiable groups of
customers, such as customers of different business types, who may be
disproportionately affected by any new or amended national energy
conservation standard level. The LCC subgroup impacts are discussed in
section V.B.1.b and in final rule TSD chapter 11. DOE also considered
the reduction in generation capacity that could result from the
imposition of any new or amended national energy conservation standard
level. Electric utility impacts are presented in final rule TSD chapter
15.
C. Conclusions/Proposed Standard
Any new or amended energy conservation standard for any type (or
class) of covered product must be designed to achieve the maximum
improvement in energy efficiency that the Secretary determines is
technologically feasible and economically justified. (42 U.S.C.
6295(o)(2)(A) and 6313(d)(4)) In determining whether a proposed
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 6313(d)(4)) The new or
amended standard must also result in a significant conservation of
energy. (42 U.S.C. 6295(o)(3)(B) and 6313(d)(4))
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 are presented to 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 V.A. In addition to the quantitative results
presented in the tables below, DOE also considers other burdens and
benefits that affect economic justification including the effect of
technological feasibility, manufacturer costs, and impacts on
competition on the economic results presented. Table V.50, Table V.51,
Table V.52 and Table V.53 present a summary of the results of DOE's
quantitative analysis for each TSL. Results in Table
[[Page 4744]]
V.50 through Table V.53 are impacts from equipment purchased in the
period from 2018 through 2047. In addition to the quantitative results
presented in the tables, DOE also considers other burdens and benefits
that affect economic justification of certain customer subgroups that
are disproportionately affected by the proposed standards. Section
V.B.1.b presents the estimated impacts of each TSL for these subgroups.
Table V.50--Summary of Results for Automatic Commercial Ice Makers TSLs: National Impacts *
--------------------------------------------------------------------------------------------------------------------------------------------------------
Category TSL 1 TSL 2 TSL 3 TSL 4 TSL 5
--------------------------------------------------------------------------------------------------------------------------------------------------------
Cumulative National Energy Savings 2018 through 2047
Quads
--------------------------------------------------------------------------------------------------------------------------------------------------------
Undiscounted values................ 0.081................. 0.136................. 0.179................ 0.229................ 0.321.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Cumulative National Water Savings 2018 through 2047
billion gallons
--------------------------------------------------------------------------------------------------------------------------------------------------------
Undiscounted values................ 1.0................... 23.0.................. 37.5................. 36.8................. 31.3.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Cumulative NPV of Customer Benefits 2018 through 2047
billion 2013$
--------------------------------------------------------------------------------------------------------------------------------------------------------
3% discount rate................... 0.389................. 0.712................. 0.942................ 0.822................ (0.453).
7% discount rate................... 0.183................. 0.328................. 0.430................ 0.337................ (0.406).
--------------------------------------------------------------------------------------------------------------------------------------------------------
Industry Impacts
--------------------------------------------------------------------------------------------------------------------------------------------------------
Change in Industry NPV (2013$ (7.5) to (6.6)........ (11.2) to (9.3)....... (15.1) to (12.1)..... (18.6) to (12.3)..... (30.0) to (11.8).
million).
Change in Industry NPV (%)......... (6.2) to (5.4)........ (9.2) to (7.7)........ (12.5) to (10.0)..... (15.3) to (10.1)..... (24.6) to (9.7).
--------------------------------------------------------------------------------------------------------------------------------------------------------
Cumulative Emissions Reductions 2018 through 2047 **
--------------------------------------------------------------------------------------------------------------------------------------------------------
CO2 (MMt).......................... 4.93.................. 8.29.................. 10.94................ 13.97................ 19.63.
NOX (kt)........................... 7.30.................. 12.26................. 16.19................ 20.67................ 29.04.
Hg (t)............................. 0.01.................. 0.02.................. 0.03................. 0.04................. 0.05.
N2O (kt)........................... 0.06.................. 0.11.................. 0.14................. 0.18................. 0.26.
N2O (kt CO2eq)..................... 17.14................. 28.81................. 38.03................ 48.55................ 68.23.
CH4 (kt)........................... 21.35................. 35.89................. 47.37................ 60.47................ 84.97.
CH4 (kt CO2eq)..................... 597.78................ 1004.79............... 1326.27.............. 1693.16.............. 2379.30.
SO2 (kt)........................... 4.18.................. 7.02.................. 9.27................. 11.83................ 16.62.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Monetary Value of Cumulative Emissions Reductions 2018 through 2047 [dagger]
--------------------------------------------------------------------------------------------------------------------------------------------------------
CO2 (2013$ billion)................ 0.036 to 0.502........ 0.061 to 0.843........ 0.080 to 1.113....... 0.103 to 1.421....... 0.144 to 1.997.
NOX--3% discount rate (2013$ 10.7.................. 18.0.................. 23.8................. 30.4................. 42.7.
million).
NOX--7% discount rate (2013$ 5.4................... 9.2................... 12.1................. 15.4................. 21.7.
million).
--------------------------------------------------------------------------------------------------------------------------------------------------------
Employment Impacts
--------------------------------------------------------------------------------------------------------------------------------------------------------
Net Change in Indirect Domestic 104 to 107............ 196 to 204............ 263 to 276........... 315 to 340........... 376 to 464.
Jobs by 2022.
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Values in parentheses are negative numbers.
** ``MMt'' 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. Economic value of NOX
reductions is based on estimates at $2,684/ton.
Table V.51--Summary of Results for Automatic Commercial Ice Makers TSLs: Mean LCC Savings
[2013$]
----------------------------------------------------------------------------------------------------------------
Standard level
Equipment class -----------------------------------------------------------------
TSL 1 TSL 2 TSL 3 TSL 4 TSL 5
----------------------------------------------------------------------------------------------------------------
IMH-W-Small-B................................. $175 $175 $214 $214 ($534)
IMH-W-Med-B................................... $308 $308 $308 $165 ($63)
IMH-W-Large-B *............................... NA NA NA NA ($172)
IMH-W-Large-B1................................ NA NA NA NA ($200)
IMH-W-Large-B2................................ NA NA NA NA ($80)
IMH-A-Small-B................................. $136 $72 $77 $77 ($393)
IMH-A-Large-B *............................... $382 $501 $361 $265 $55
IMH-A-Large-B1................................ $439 $580 $407 $294 $45
IMH-A-Large-B2................................ $76 $76 $110 $110 $110
[[Page 4745]]
RCU-Large-B *................................. $748 $748 $748 $418 $144
RCU-Large-B1.................................. $743 $743 $743 $391 $161
RCU-Large-B2.................................. $820 $820 $820 $820 ($109)
SCU-W-Large-B................................. $444 $613 $550 $192 $192
SCU-A-Small-B................................. $110 $161 $281 $230 ($145)
SCU-A-Large-B................................. $163 $400 $439 $71 $71
IMH-A-Small-C................................. $245 $292 $313 $313 ($165)
IMH-A-Large-C................................. $539 $539 $626 $626 $28
RCU-Small-C................................... $498 $448 $505 $505 ($73)
SCU-A-Small-C................................. $224 $278 $290 $290 ($268)
----------------------------------------------------------------------------------------------------------------
* LCC results for IMH-W-Large-B, IMH-A-Large-B, and RCU-Large-B are a weighted average of the two sub-equipment
class level typical units shown on the table, using weights provided in TSD chapter 7.
Table V.52--Summary of Results for Automatic Commercial Ice Makers TSLs: Median Payback Period
----------------------------------------------------------------------------------------------------------------
Standard level years
Equipment class ----------------------------------------------------------------
TSL 1 TSL 2 TSL 3 TSL 4 TSL 5
----------------------------------------------------------------------------------------------------------------
IMH-W-Small-B.................................. 2.5 2.5 2.7 2.7 13.4
IMH-W-Med-B.................................... 2.1 2.1 2.1 5.0 7.6
IMH-W-Large-B*................................. NA NA NA NA 10.6
IMH-W-Large-B1................................. NA NA NA NA 11.1
IMH-W-Large-B2................................. NA NA NA NA 8.9
IMH-A-Small-B.................................. 3.4 4.8 4.7 4.7 11.9
IMH-A-Large-B*................................. 2.2 2.4 2.3 3.9 5.6
IMH-A-Large-B1................................. 1.2 1.5 1.5 3.4 5.4
IMH-A-Large-B2................................. 7.4 7.4 6.9 6.9 6.9
RCU-Large-B*................................... 1.1 1.1 1.1 3.3 5.0
RCU-Large-B1................................... 0.9 0.9 0.9 3.4 4.9
RCU-Large-B2................................... 3.0 3.0 3.0 3.0 7.0
SCU-W-Large-B.................................. 1.1 1.6 1.8 5.1 5.1
SCU-A-Small-B.................................. 2.2 2.4 2.6 3.5 8.9
SCU-A-Large-B.................................. 1.8 1.6 2.1 6.5 6.5
IMH-A-Small-C.................................. 1.5 1.6 1.7 1.7 8.8
IMH-A-Large-C.................................. 0.7 0.7 0.7 0.7 5.9
RCU-Small-C.................................... 0.7 1.2 1.2 1.2 5.8
SCU-A-Small-C.................................. 0.8 1.1 1.5 1.5 11.4
----------------------------------------------------------------------------------------------------------------
* PBP results for IMH-W-Large-B, IMH-A-Large-B, and RCU-Large-B are weighted averages of the results for the two
sub-equipment class level typical units, using weights provided in TSD chapter 7.
Table V.53--Summary of Results for Automatic Commercial Ice Maker TSLs: Distribution of Customer LCC Impacts
----------------------------------------------------------------------------------------------------------------
Standard Level percentage of customers (%)
Category ----------------------------------------------------------------
TSL 1 TSL 2 TSL 3 TSL 4 TSL 5
----------------------------------------------------------------------------------------------------------------
IMH-W-Small-B
Net Cost (%)............................... 0 0 1 1 96
No Impact (%).............................. 63 63 47 47 0
Net Benefit (%)............................ 37 37 52 52 4
IMH-W-Med-B
Net Cost (%)............................... 0 0 0 28 65
No Impact (%).............................. 44 44 44 24 9
Net Benefit (%)............................ 56 56 56 47 26
IMH-W-Large-B *
Net Cost (%)............................... NA NA NA NA 67
No Impact (%).............................. NA NA NA NA 13
Net Benefit (%)............................ NA NA NA NA 20
IMH-W-Large-B1
Net Cost (%)............................... NA NA NA NA 70
No Impact (%).............................. NA NA NA NA 13
Net Benefit (%)............................ NA NA NA NA 17
[[Page 4746]]
IMH-W-Large-B2
Net Cost (%)............................... NA NA NA NA 59
No Impact (%).............................. NA NA NA NA 13
Net Benefit (%)............................ NA NA NA NA 29
IMH-A-Small-B
Net Cost (%)............................... 1 21 21 21 95
No Impact (%).............................. 76 47 0 0 0
Net Benefit (%)............................ 22 32 79 79 5
IMH-A-Large-B *
Net Cost (%)............................... 1 1 2 31 53
No Impact (%).............................. 69 45 12 12 10
Net Benefit (%)............................ 30 53 86 57 37
IMH-A-Large-B1
Net Cost (%)............................... 0 0 0 35 61
No Impact (%).............................. 66 38 3 3 0
Net Benefit (%)............................ 34 62 97 63 39
IMH-A-Large-B2
Net Cost (%)............................... 9 9 10 10 10
No Impact (%).............................. 83 83 61 61 61
Net Benefit (%)............................ 8 8 29 29 29
RCU-Large-B *
Net Cost (%)............................... 0 0 0 23 55
No Impact (%).............................. 56 56 56 22 2
Net Benefit (%)............................ 44 44 44 55 42
RCU-Large-B1
Net Cost (%)............................... 0 0 0 25 55
No Impact (%).............................. 56 56 56 20 1
Net Benefit (%)............................ 44 44 44 55 44
RCU-Large-B2
Net Cost (%)............................... 1 1 1 1 57
No Impact (%).............................. 56 56 56 56 20
Net Benefit (%)............................ 43 43 43 43 23
SCU-W-Large-B
Net Cost (%)............................... 0 0 0 44 44
No Impact (%).............................. 28 28 5 0 0
Net Benefit (%)............................ 72 72 94 56 56
SCU-A-Small-B
Net Cost (%)............................... 0 1 1 16 77
No Impact (%).............................. 48 20 12 0 0
Net Benefit (%)............................ 52 79 87 84 23
SCU-A-Large-B
Net Cost (%)............................... 0 0 0 54 54
No Impact (%).............................. 37 1 1 0 0
Net Benefit (%)............................ 63 99 99 46 46
IMH-A-Small-C
Net Cost (%)............................... 0 0 0 0 68
No Impact (%).............................. 69 58 39 39 14
Net Benefit (%)............................ 31 42 61 61 18
IMH-A-Large-C
Net Cost (%)............................... 0 0 0 0 54
No Impact (%).............................. 57 57 35 35 9
Net Benefit (%)............................ 43 43 65 65 37
RCU-Small-C
Net Cost (%)............................... 0 0 0 0 64
No Impact (%).............................. 72 44 11 11 6
Net Benefit (%)............................ 28 55 89 89 31
SCU-A-Small-C
Net Cost (%)............................... 0 0 1 1 86
No Impact (%).............................. 56 47 32 32 0
Net Benefit (%)............................ 44 53 67 67 14
Average of Equipment Types **
Net Cost (%)............................... 1 7 6 20 75
No Impact (%).............................. 62 40 16 12 3
Net Benefit (%)............................ 37 53 77 68 22
----------------------------------------------------------------------------------------------------------------
* LCC results for IMH-W-Large-B, IMH-A-Large-B, and RCU-Large-B are a weighted average of the two sub-equipment
class level typical units shown on the table.
** Average of equipment types created by weighting the class results by 2018 shipment estimates.
[[Page 4747]]
DOE also notes that the economics literature provides a wide-
ranging discussion of how consumers trade-off upfront costs and energy
savings in the absence of government intervention. Much of this
literature attempts to explain why consumers appear to undervalue
energy efficiency improvements. There is evidence that consumers
undervalue future energy savings as a result of (1) a lack of
information; (2) a lack of sufficient salience of the long-term or
aggregate benefits; (3) a lack of sufficient savings to warrant
delaying or altering purchases (e.g., an inefficient ventilation fan in
a new building or the delayed replacement of a water pump); (4)
excessive focus on the short term, in the form of inconsistent
weighting of future energy cost savings relative to available returns
on other investments; (5) computational or other difficulties
associated with the evaluation of relevant tradeoffs; and (6) a
divergence in incentives (e.g., renter versus building owner, builder
versus home buyer). Other literature indicates that with less than
perfect foresight and a high degree of uncertainty about the future,
consumers may trade off these types of investments at a higher-than-
expected rate between current consumption and uncertain future energy
cost savings. This undervaluation suggests that regulation that
promotes energy efficiency can produce significant net private gains
(as well as producing social gains by, for example, reducing
pollution).
While DOE is not prepared at present to provide a fuller
quantifiable framework for estimating the benefits and costs of changes
in consumer purchase decisions due to an amended energy conservation
standard, DOE is committed to developing a framework that can support
empirical quantitative tools for improved assessment of the consumer
welfare impacts of appliance standards. DOE has posted a paper that
discusses the issue of consumer welfare impacts of appliance energy
efficiency standards, and potential enhancements to the methodology by
which these impacts are defined and estimated in the regulatory
process.\74\ DOE welcomes comments on how to more fully assess the
potential impact of energy conservation standards on consumer choice
and methods to quantify this impact in its regulatory analysis.
---------------------------------------------------------------------------
\74\ Sanstad, A. Notes on the Economics of Household Energy
Consumption and Technology Choice. 2010. Lawrence Berkeley National
Laboratory, Berkeley, CA. www1.eere.energy.gov/buildings/appliance_standards/pdfs/consumer_ee_theory.pdf
---------------------------------------------------------------------------
TSL 5 corresponds to the max-tech level for all the equipment
classes and offers the potential for the highest cumulative energy
savings through the analysis period from 2018 to 2047. The estimated
energy savings from TSL 5 is 0.321 quads of energy. Because one energy-
saving design option reduces potable water usage, potential savings are
estimated to be 31 billion gallons, although such savings should not be
construed to be the result of a potable water standard. DOE projects a
negative NPV for customers valued at $0.406 billion at a 7-percent
discount rate. Estimated emissions reductions are 19.6 MMt of
CO2, up to 29.0 kt of NOX and 0.05 tons of Hg.
The CO2 emissions have a value of up to $2.0 billion and the
NOX emissions have a value of $21.7 million at a 7-percent
discount rate.
For TSL 5, the mean LCC savings for five equipment classes are
positive, implying a decrease in LCC, with the decrease ranging from
$28 for the IMH-A-Large-C equipment class to $192 for the SCU-W-Large-B
equipment class.\75\ The results shown on Table V.53 indicates a large
fraction of customers would experience net LCC increases (i.e., LCC
costs rather than savings) from adoption of TSL 5, with 44 to 96
percent of customers experiencing net LCC increases. As shown on Table
V.52, customers would experience payback periods of 5 years or longer
in all equipment classes, and in many cases customers would experience
payback periods exceeding the estimated 8.5 year equipment lifetime.
---------------------------------------------------------------------------
\75\ For this section of the final rule, the discussion is
limited to results for full equipment classes. Thus, for the large
equipment classes for which DOE analyzed 2 typical unit sizes, this
discussion focuses on the weighted average or totals of the two
typical units.
---------------------------------------------------------------------------
At TSL 5, the projected change in INPV ranges from a decrease of
$30.0 million to a decrease of $11.8 million, depending on the chosen
manufacturer markup scenario. The upper bound is considered optimistic
by industry because it assumes manufacturers could pass on all
compliance costs as price increases to their customers. 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, TSL 5 could result in a net loss of up to 24.6
percent in INPV for the ACIM industry.
DOE estimates that approximately 84 percent of all batch commercial
ice makers and 78 percent of all continuous commercial ice makers on
the market will require redesign to meet standards at TSL 5. DOE
expects industry conversion costs of $44.1 million. Also of concern,
for five equipment classes, there is only 1 manufacturer with products
that could currently meet this standard.
After carefully considering the analysis results and weighing the
benefits and burdens of TSL 5, DOE finds that at TSL 5, the benefits to
the nation in the form of energy savings and emissions reductions are
outweighed by a decrease of $0.406 billion in customer NPV and a
decrease of up to 24.6 percent in INPV. Additionally, the majority of
individual customers purchasing automatic commercial ice makers built
to TSL 5 standards experience negative life-cycle cost savings, with
over 90 percent of customers of 2 equipment classes experiencing
negative life-cycle cost savings. After weighing the burdens of TSL 5
against the benefits, DOE finds TSL 5 not to be economically justified.
DOE does not propose to adopt TSL 5 in this rulemaking.
TSL 4, the next highest efficiency level, corresponds to the
highest efficiency level with a positive NPV at a 7-percent discount
rate for all equipment classes. The estimated energy savings from 2018
to 2047 are 0.229 quads of energy--an amount DOE deems significant.
Because one energy-saving design option reduces potable water usage,
potential water savings are estimated to be 37 billion gallons,
although such savings should not be construed to be the result of a
potable water standard. At TSL 4, DOE projects an increase in customer
NPV of $0.337 billion (2013$) at a 7-percent discount rate; estimated
emissions reductions of 14.0 MMt of CO2, 20.7 kt of
NOx, and 0.04 tons of Hg. The monetary value for
CO2 was estimated to be up to $1.4 billion. The monetary
value for NOX was estimated to be $15.4 million at a 7-
percent discount rate.
At TSL 4, the mean LCC savings are positive for all equipment
classes. As shown on Table V.51, mean LCC savings vary from $71 for
SCU-A-Large-B to $626 for IMH-A-Large-C, which implies that, on
average, customers will experience an LCC benefit. As shown on Table
V.53, for 7 of the 13 classes, some fraction of the customers will
experience net costs, while for 5 classes, 1 percent or less will
experience net costs. Customers in 3 classes would experience net LCC
costs of 30 percent or more, with the percentage ranging up to 54
percent for one equipment class. Median payback periods range from 0.7
years up to 6.5 years.
At TSL 4, the projected change in INPV ranges from a decrease of
$18.6 million to a decrease of $12.3 million. If the lower bound of the
range of
[[Page 4748]]
impacts is reached, TSL 4 could result in a net loss of up to 15.3
percent in INPV for manufacturers.
DOE estimates that approximately 66 percent of all batch commercial
ice makers and 55 percent of all continuous commercial ice makers on
the market will require redesign to meet standards at TSL 4. At this
TSL DOE expects industry conversion costs to total $30.0 million.
Additionally, for four equipment classes, there is only 1 manufacturer
with products that currently meet the standard.
After carefully considering the analysis results and weighing the
benefits and burdens of TSL 4, DOE finds that at TSL 4, the benefits to
the nation in the form of energy savings and emissions reductions plus
an increase of $0.337 billion in customer NPV are outweighed by a
decrease of up to 15.3 percent in INPV and issues regarding
availability of product from multiple manufacturers in some product
classes. After weighing the burdens of TSL 4 against the benefits, DOE
finds TSL 4 not to be economically justified. DOE does not propose to
adopt TSL 4 in this rule.
At TSL 3, the next highest efficiency level, estimated energy
savings from 2018 through 2047 are 0.179 quads of primary energy--an
amount DOE considers significant. Because one energy-saving design
option reduces potable water usage, potential water savings are
estimated to be 37 billion gallons, although such savings should not be
construed to be the result of a potable water standard. TSL 3 was
defined as the set of efficiencies with the highest NPV for each
analyzed equipment class. At TSL 3, DOE projects an increase in
customer NPV of $0.430 billion at a 7-percent discount rate, and an
increase of $0.942 billion at a 3-percent discount rate. Estimated
emissions reductions are 10.9 MMt of CO2, up to 16.2 kt of
NOX and 0.03 tons of Hg at TSL 3. The monetary value of the
CO2 emissions reductions was estimated to be up to $1.1
billion at TSL 3. The monetary value of the NOX emission
reductions was estimated to be $12.1 million at a 7-percent discount
rate.
At TSL 3, nearly all customers for all equipment classes are shown
to experience positive LCC savings. As shown on Table V.53 Table V.53,
the percent of customers experiencing a net cost is 2 percent or less
in 12 of 13 classes, with IMH-A-Small-B being the exception with 21
percent of customers experiencing a net cost. The payback period for
IMH-A-Small-B is 4.7 years, while for all other equipment classes the
median payback periods are 3 years or less. LCC savings range from $77
for IMH-A-Small-B to $748 for RCU-Large-B.
At TSL 3, the projected change in INPV ranges from a decrease of
$15.1 million to a decrease of $12.1 million. If the lower bound of the
range of impacts is reached, TSL 3 could result in a net loss of up to
12.5 percent in INPV for manufacturers.
DOE estimates that approximately 51 percent of all batch commercial
ice makers and 55 percent of all continuous commercial ice makers on
the market will require redesign to meet standards at TSL 3. At TSL 3,
DOE expects industry conversion costs to total $25.1 million. There are
multiple manufacturers with product that could meet this standard at
all analyzed equipment classes.
At TSL 3, the monetized CO2 emissions reduction values
range from $0.080 to $1.113 billion. The mid-range value used by DOE to
calculate total net benefits is the monetized CO2 emissions
reduction at $40.5 per ton in 2013$, which for TSL 3, is $0.361
billion. The monetized NOX emissions reductions calculated
at an intermediate value of $2,684 per ton in 2013$ are $12.1 million
at a 7-percent discount rate and $23.8 million at a 3-percent rate.
These monetized emissions reduction values were added to the customer
NPV at 3-percent and 7-percent discount rates to obtain values of
$1.326 billion and 0.803 billion, respectively, at TSL 3.
Approximately 94 percent of customers are expected to experience
net benefits (or no impact) from equipment built to TSL 3 levels. The
payback periods for TSL 3 are expected to be 3 years or less for all
but the IMH-A-Small-B.
After carefully considering the analysis results and weighing the
benefits and burdens of TSL 3, DOE concludes that setting the standards
for automatic commercial ice makers at TSL 3 will offer the maximum
improvement in energy efficiency that is technologically feasible and
economically justified and will result in significant energy savings.
Therefore, DOE today is adopting standards at TSL 3 for automatic
commercial ice makers. TSL 3 is technologically feasible because the
technologies required to achieve these levels already exist in the
current market and are available from multiple manufacturers. TSL 3 is
economically justified because the benefits to the nation in the form
of energy savings, customer NPV at 3 percent and at 7 percent, and
emissions reductions outweigh the costs associated with reduced INPV
and potential effects of reduced manufacturing capacity.
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 (Oct. 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 these standards address are as follows:
(1) Insufficient information and the high costs of gathering and
analyzing relevant information leads some customers to miss
opportunities to make cost-effective investments in energy efficiency.
(2) In some cases the benefits of more efficient equipment are not
realized due to misaligned incentives between purchasers and users. An
example of such a case is when the equipment purchase decision is made
by a building contractor or building owner who does not pay the energy
costs.
(3) There are external benefits resulting from improved energy
efficiency of automatic commercial ice makers that are not captured by
the users of such equipment. These benefits include externalities
related to public health, environmental protection and national
security that are not reflected in energy prices, such as reduced
emissions of air pollutants and greenhouse gases that impact human
health and global warming.
In addition, DOE has determined that today's regulatory action is a
``significant regulatory action'' under Executive Order 12866. DOE
presented to the Office of Information and Regulatory Affairs (OIRA) in
the OMB for review the draft rule and other documents prepared for this
rulemaking, including a regulatory impact analysis (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, Jan. 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
[[Page 4749]]
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 this 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 automatic commercial ice makers, 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
by 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,'' which includes ice-making machinery
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,\76\ the SBA Database \77\),
individual company Web sites, and market research tools (e.g., Dunn and
Bradstreet reports \78\ and Hoovers reports \79\) 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 automatic commercial ice makers. 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.
---------------------------------------------------------------------------
\76\ ``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.
\77\ ``Dynamic Small Business Search.'' SBA. (Available at: See
http://dsbs.sba.gov/dsbs/search/dsp_dsbs.cfm) (Last accessed October
12, 2011).
\78\ ``D&B[verbar]Business Information[verbar]Get Credit
Reports[verbar]888 480-6007.''. Dun & Bradstreet (Available at:
www.dnb.com) (Last accessed October 10, 2011). See www.dnb.com/.
\79\ ``Hoovers[verbar]Company Information[verbar]Industry
Information[verbar]Lists.'' D&B (2013) (Available at: See http://www.hoovers.com/) (Last accessed December 12, 2012).
---------------------------------------------------------------------------
DOE identified 16 manufacturers of automatic commercial ice makers.
Seven of those are small businesses manufacturers operating in the
United States. DOE contacted each of these companies, but only one
accepted the invitation to participate in a confidential manufacturer
impact analysis interview with DOE contractors.
In establishing today's standard levels, DOE has carefully
considered the impacts on small manufacturers when establishing the
standards for this industry. DOE's review of the industry suggests that
the five of the seven small manufacturers identified specialize in
industrial higher capacity ``tube'', ``flake'' or ``cracked'' ice
machines. Industry literature indicates that these types of ice makers
are typically designed to produce 2,000-40,000 lb/day of ice, with some
designs going as low as 1,000 lb/day. Only at the lowest end of the
tube, flake, and cracked ice platforms, typically 2,000 and 4,000 lb/
day, do these manufacturers have products within the scope of this
rulemaking. Based on product listings from manufacturer Web sites, DOE
estimates that approximately 15% of the models produced by these five
manufacturers are covered product under today's rule.
Of the remaining two small manufacturers, one exclusively produces
continuous ice makers, and one exclusively produces gourmet, large
cube, ice makers. Based on publically available information, DOE
believes that approximately two-thirds of all the models made by the
manufacturer of continuous machines already meet the standard,
positioning it well compared to an industry-at-large compliance rate of
approximately 50 percent.
DOE estimates that 10 percent of the models made by the
manufacturer of gourmet, large cube machines already meet the standard.
The low percentage indicates that this manufacturer may be
disproportionately affected by the selected standard level, but as
discussed in section IV.B.1.f, DOE does not have nor did it receive in
response to requests for comments sufficient specific information to
evaluate whether larger
[[Page 4750]]
ice has specific consumer utility, nor to allow separate evaluation for
such equipment of costs and benefits associated with achieving the
efficiency levels considered in the rulemaking. In the absence of
information, DOE cannot conclude that this type of ice has unique
consumer utility justifying consideration of separate equipment
classes. DOE notes that manufacturers of this equipment have the option
seeking exception relief pursuant to 41 U.S.C. 7194 from DOE's Office
of Hearings and Appeals.
Based on a 2008 study by Koeller & Company,\80\ DOE understands
that the ACIM market is dominated by four manufacturers who produce
approximately 90 percent of the automatic commercial ice makers for
sale in the United States. The four major manufacturers with the
largest market share are Manitowoc, Scotsman, Hoshizaki, and Ice-O-
Matic. The remaining 12 large and small manufacturers account for ten
percent of domestic sales.
---------------------------------------------------------------------------
\80\ Koeller, John, P.E., and Herman Hoffman, P.E. A Report on
Potential Best Management Practices. Rep. The California Urban Water
Conservation Council, n.d. Web. 19 May 2014.
---------------------------------------------------------------------------
DOE considered comments that all manufacturers and stakeholders
made regarding the engineering analysis and made changes to the
analysis, which are described in some detail in section III.IV.D. These
changes reduced the highest efficiency levels determined to be possible
using the design options considered in the analyses and increased the
estimated costs associated with attaining most efficiency levels.
Consequently, the most cost-effective efficiency levels for the final
rule analysis were lower than for the NOPR. This applied to specific
equipment classes associated with the products sold by some of these
small businesses, for example continuous ice makers, IMH batch ice
makers, and RCU batch ice makers. The energy standards were
consequently set at efficiency levels that will be less burdensome to
attain for the affected small businesses.
2. Description and Estimate of Compliance Requirements
For the purposes of analysis, DOE assumes that the seven small
domestic manufacturers of automatic commercial ice makers identified
account for approximately 5 percent of industry shipments. While small
business manufacturers of automatic commercial ice makers have small
overall market share, some hold substantial market share in specific
equipment classes. Several of these smaller firms specialize in
producing industrial ice machines and the covered equipment they
manufacture are extensions of industrial product lines that fall within
the range of capacity covered by this rule. Others serve niche markets.
Most have substantial portions of their business derived from equipment
outside the scope of this rulemaking, as described further below, but
are still considered small businesses based on the SBA limits for
number of employees.
At the new and amended levels, small business manufacturers of
automatic commercial ice makers are expected to face negative impacts
on INPV. For the portions of their business covered by the standard,
the impacts are approximately four times as severe as those felt by the
industry at large: a loss of 49.8 percent of INPV for small businesses
alone as compared to a loss of 12.5 percent for the industry at large.
Where conversion costs are driven by the number of platforms requiring
redesign at a particular standard level, small business manufacturers
may be disproportionately affected. Product conversion costs including
the investments made to redesign existing equipment to meet new or
amended standards or to develop entirely new compliant equipment, as
well as industry certification costs, do not scale with sales volume.
As small manufacturers' investments are spread over a much lower volume
of shipments, recovering the cost of upfront investments is
proportionately more difficult. Additionally, smaller manufacturers
typically do not have the same technical resources and testing capacity
as larger competitors.
The product conversion investments required to comply are estimated
to be over 10 times larger than the typical R&D expenditures for small
businesses, whereas the industry as a whole is estimated to incur 4
times larger than typical R&D expenditures. Where the covered equipment
from several small manufacturers are adaptations of larger platforms
with capacities above the 4,000 lb ice/24 hour threshold, it may not
prove economical for them to invest in redesigning such a small portion
of their product offering to meet standards.
In confidential interviews, manufacturers indicated that many
design options evaluated in the engineering analysis (e.g., higher
efficiency motors and compressors) would require them to purchase more
expensive components. In many industries, small manufacturers typically
pay higher prices for components due to smaller purchasing volumes
while their large competitors receive volume discounts. However, this
effect is diminished for the automatic commercial ice maker
manufacturing industry for two distinct reasons. One reason relates to
the fact that the automatic commercial ice maker industry as a whole is
a low volume industry. In confidential interviews, manufacturers
indicated that they have little influence over their suppliers,
suggesting the volume of their component orders is similarly
insufficient to receive substantial discounts. The second reason
relates to the fact that, for most small businesses, the equipment
covered by this rulemaking represents only a fraction of overall
business. Where small businesses are ordering similar components for
non-covered equipment, their purchase volumes may not be as low as is
indicated by the total unit shipments for small businesses. For these
reasons, it is expected that any volume discount for components enjoyed
by large manufacturers would not be substantially different from the
prices paid by small business manufacturers.
To estimate how small manufacturers would be potentially impacted,
DOE developed specific small business inputs and scaling factors for
the GRIM. These inputs were scaled from those used in the whole
industry GRIM using information about the product portfolios of small
businesses and the estimated market share of these businesses in each
equipment class. DOE used this information in the GRIM to estimate the
annual revenue, EBIT, R&D expense, and capital expenditures for a
typical small manufacturer and to model the impact on INPV associated
with the production of covered product; noting that for five of the
seven small businesses in this analysis, only 15% of their product
portfolio, which was based on review capacity ranges of the product
offerings listed on these manufacturers' Web sites, is covered product
under today's rule DOE then compared these impacts to those modeled for
the industry at large, and found that small manufactures could lose up
to 49.8 percent of the INPV associated with the production of covered
product; as compared to a reduction in small business INPV of 78.8
percent at the NOPR stage. Table VI.1 and Table VI.2 summarize the
impacts on small business INPV at each TSL, and Table VI.3 and Table
VI.4 summarize the changes in results at TSL 3, between the NOPR and
Final Rule analysis.
[[Page 4751]]
Table VI.1--Comparison of Small Business Manufacturers of Automatic Commercial Ice Maker INPV * to That of the
Industry at Large by TSL Under the Preservation of Gross Margin Markup Scenario **
----------------------------------------------------------------------------------------------------------------
TSL 1 TSL 2 TSL 3 TSL 4 TSL 5
----------------------------------------------------------------------------------------------------------------
Industry at Large--Impact on INPV (%).......... (6.2) (9.2) (12.5) (15.3) (24.6)
Small Businesses--Impact on INPV (%)........... (18.3) (34.2) (48.8) (51.5) (57.2)
----------------------------------------------------------------------------------------------------------------
* Small business manufacturer INPV represents only the INPV associated with the production and sale of covered
product. Many small business manufacturers produce products not covered by this rule.
** Values in parentheses are negative numbers.
Table VI.2--Comparison of Small Business Manufacturers of Automatic Commercial Ice Maker INPV * to That of the
Industry at Large by TSL Under the Preservation of EBIT Markup Scenario **
----------------------------------------------------------------------------------------------------------------
TSL 1 TSL 2 TSL 3 TSL 4 TSL 5
----------------------------------------------------------------------------------------------------------------
Industry at Large--Impact on INPV (%).......... (5.4) (7.7) (10.0) (10.1) (9.7)
Small Businesses--Impact on INPV (%)........... (19.1) (35.1) (49.8) (52.6) (68.4)
----------------------------------------------------------------------------------------------------------------
* Small business manufacturer INPV represents only the INPV associated with the production and sale of covered
product. Many small business manufacturers produce products not covered by this rule.
** Values in parentheses are negative numbers.
Table VI.3--Comparison of Small Business Manufacturers of Automatic
Commercial Ice Maker INPV * to That of the Industry at Large Under the
Preservation of Gross Margin Markup Scenario **; NOPR vs. Final Rule
------------------------------------------------------------------------
Final
NOPR TSL rule TSL
3 3
------------------------------------------------------------------------
Industry at Large--Impact on INPV (%)............. (20.5) (12.5)
Small Businesses--Impact on INPV (%).............. (76.6) (48.8)
------------------------------------------------------------------------
* Small business manufacturer INPV represents only the INPV associated
with the production and sale of covered product. Many small business
manufacturers produce products not covered by this rule.
** Values in parentheses are negative numbers.
Table VI.4--Comparison of Small Business Manufacturers of Automatic
Commercial Ice Maker INPV * to That of the Industry at Large Under the
Preservation of EBIT Markup Scenario **; NOPR vs Final Rule
------------------------------------------------------------------------
Final
NOPR TSL rule TSL
3 3
------------------------------------------------------------------------
Industry at Large--Impact on INPV (%)............. (23.5) (10.0)
Small Businesses--Impact on INPV (%).............. (78.6) (49.8)
------------------------------------------------------------------------
* Small business manufacturer INPV represents only the INPV associated
with the production and sale of covered product. Many small business
manufacturers produce products not covered by this rule.
** Values in parentheses are negative numbers.
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 new and amended standards. In addition to the
other TSLs being considered, the rulemaking TSD includes a regulatory
impact analysis (RIA). For automatic commercial ice making 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; (6)
bulk government purchases; and (7) extending the compliance date for
small entities. While these alternatives may mitigate to some varying
extent the economic impacts on small entities compared to the
standards, DOE did not consider these alternatives further because they
are either not feasible to implement without authority and funding from
Congress, or are expected to result in energy savings that are much
smaller (ranging from 39 percent to less than 53 percent) than those
that will be achieved by the new and amended standard levels. In
reviewing alternatives DOE analyzed a case in which the voluntary
programs targeted efficiencies corresponding to final rule TSL 3. DOE
also examined standards at lower efficiency levels, TSL 2 and TSL 1.
TSL 2 achieves 25 percent lower savings than TSL 3 and TSL 1 achieves
less than half the savings of TSL 3. (See Table V.50 for the estimated
impacts of standards at lower TSLs.) Voluntary programs at these levels
achieve only a fraction of the savings achieved by standards and would
provide even lower savings benefits. As shown in Table VI.1 through
Table VI.4, the changes to the efficiency levels comprising TSL 3
between the NOPR and final rule resulted in a substantial reduction in
the impacts faced by small businesses. To achieve further substantial
reductions in small business impacts would force the standard down to
TSL 1 levels, at the expense of substantial energy savings and NPV
benefits, which would be inconsistent with DOE's statutory mandate to
maximize the improvement in energy efficiency that the Secretary
determines is technologically feasible and economically justified. DOE
believes that establishing standards at TSL 3 provides the optimum
balance between energy savings benefits and impacts on small
businesses. 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 TSD for further detail on the policy
alternatives DOE considered.)
Additional compliance flexibilities may be available through other
means. For example, individual manufacturers may petition for a waiver
of the applicable test procedure. Further, EPCA provides that a
manufacturer whose annual gross revenue from all of its operations does
not exceed $8,000,000 may apply for an exemption from all or part of an
energy conservation standard for a period not longer than 24 months
after the effective date of a final rule establishing the standard.
Additionally, Section 504 of the Department of Energy Organization Act,
42 U.S.C. 7194, provides authority for the Secretary to adjust a rule
issued under EPCA in order to prevent ``special
[[Page 4752]]
hardship, inequity, or unfair distribution of burdens'' that may be
imposed on that manufacturer as a result of such rule. Manufacturers
should refer to 10 CFR part 430, subpart E, and part 1003 for
additional details.
5. Response to Small Business Comments and Comments of the Office of
Advocacy
The Chief Counsel of the SBA Office of Advocacy submitted comments
regarding the impact of the proposed standards on small businesses and
recommended that DOE use its discretion to adopt an alternative to the
proposed standard that is achievable for small manufacturers. This
letter is posted to the docket at http://www.regulations.gov/#!docketDetail;D=EERE-2010-BT-STD-0037.
DOE has taken several steps to minimize the impact of the new and
amended standards on small businesses. The comments received in
response to the proposed standards led DOE to hold an additional public
meeting and allow stakeholders more time to submit additional
information to DOE's consultant pursuant to non-disclosure agreements
regarding efficiency gains and costs of potential design options. DOE
reviewed additional market data, including published ratings of
available ice makers, to recalibrate its engineering analysis, and as a
result, revised the proposed TSL levels. DOE issued a NODA to announce
the availability of the revised analysis and sought comment from
stakeholders. In this final rule, DOE is adopting the TSL 3 presented
in the NODA. As discussed previously, the changes to the efficiency
levels comprising TSL 3 between the NOPR and final rule resulted in a
standard that is less burdensome for small businesses.
In addition, in reviewing all available data sources received in
response to the proposed standards, DOE found that the IMH-W continuous
class ice makers consume more condenser water than DOE assumed at the
NOPR stage. In setting the standard for the continuous class condenser
water use, DOE intended that the baseline reflect the existing market
for continuous type units. Based on this new data, the standard for
condenser water use is set at 10 percent below the baseline condenser
water use level for IMH-W batch ice makers, rather than 20 percent, as
was proposed in the NOPR. As a result, all IMH-W continuous class
models produced by small business manufacturers are compliant with the
condenser water use standard for this class.
DOE notes that while any one regulation may not impose a
significant burden on small business manufacturers, the combined
effects of recent or impending regulations may have consequences for
some small business manufacturers. In researching the product offerings
of small business manufacturers covered by this rulemaking, DOE did not
identify any that also manufacture products impacted by the recently
issued energy conservation standards for commercial refrigeration
equipment or walk-in coolers and freezers. DOE will continue to work
with industry to ensure that cumulative impacts from its regulations
are not unduly burdensome.
The SBA Office of Advocacy also recommended that DOE adopt a lower
TSL for small businesses because the level proposed in the NOPR would
have a disproportionately negative impact on small business
manufacturers. As discussed previously, the changes to the analysis
between the NOPR and final rule resulted in different TSLs. As such,
the efficiency levels comprising TSL 3 as set forth in this final rule
result in a substantial reduction in the impacts faced by small
business manufacturers, as compared to those proposed in the NOPR. DOE
also examined standards at lower efficiency levels, TSL 2 and TSL 1.
TSL 2 achieves 25 percent lower savings than TSL 3 and TSL 1 achieves
less than half the savings of TSL 3. (See Table V.50 for the estimated
impacts of standards at lower TSLs.) The impacts on small manufacturers
were also considered in comparison to the impacts on larger
manufacturers to ensure that small business would remain competitive in
the market. Because they compete mostly in market niches not covered by
these standards, these rules apply to about 15 percent of these
companies product in comparison to 100 percent for large business. In
addition, for one of the remaining two manufacturers, DOE estimates
that approximately two-thirds of its models already meet the energy
efficiency standard and 100 percent of its models meet the condenser
water standard. In comparison, a typical large manufacturer will need
to redesign half of their products to meet the new and amended
standards. Pursuant to DOE's statutory mandate, any new or amended
standard must maximize the improvement in energy efficiency that the
Secretary determines is both technologically feasible and economically
justified. DOE determined that TSL 3 will achieve significant energy
savings and is economically justified, and therefore is adopting TSL 3
in this final rule. DOE believes that establishing standards at TSL 3
provides the optimum balance between energy savings benefits and
impacts on small businesses.
Finally, the SBA Office of Advocacy recommended that DOE consider
extending the compliance date for small entities. DOE notes that EPCA
requires that the 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(d)(3)(C)) As described previously, the standard levels
set forth in this final rule are less stringent relative to those
proposed in the NOPR, and fewer ice maker models will require redesign
to meet the new standard. Therefore, DOE has determined that the 3-year
period is adequate and is not extending the compliance date for small
business manufacturers.
C. Review Under the Paperwork Reduction Act
Manufacturers of automatic commercial ice makers 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 automatic commercial
ice makers, 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
[[Page 4753]]
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 this final 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); 1021.410(b) and Appendix B, B(1)-(5). This final 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 final rule is available at http://energy.gov/nepa/categorical-exclusion-determinations-b51.
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 this 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 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 automatic commercial ice maker
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 automatic commercial ice
maker, 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(o),
6313(d), this final rule would establish energy conservation standards
for automatic commercial ice maker 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.
[[Page 4754]]
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 this 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.
DOE has concluded that this regulatory action, which sets forth
energy conservation standards for automatic commercial ice makers, is
not a significant energy action because the new and 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 at 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 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, Reporting and recordkeeping
requirements.
Issued in Washington, DC, on December 31, 2014.
Kathleen B. Hogan,
Deputy Assistant Secretary for Energy Efficiency, Energy Efficiency and
Renewable Energy.
For the reasons set forth in the preamble, DOE amends part 431 of
chapter II of title 10, of the Code of Federal Regulations, 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 431.136 is revised to read as follows:
Sec. 431.136 Energy conservation standards and their effective dates.
(a) All basic models of commercial ice makers must be tested for
performance using the applicable DOE test procedure in Sec. 431.134,
be compliant with the applicable standards set forth in paragraphs (b)
through (d) of this section, and be certified to the Department of
Energy under 10 CFR part 429 of this chapter.
(b) Each cube type automatic commercial ice maker with capacities
between 50 and 2,500 pounds per 24-hour period manufactured on or after
January 1, 2010 and before January 28, 2018, shall meet the following
standard levels:
[[Page 4755]]
----------------------------------------------------------------------------------------------------------------
Harvest
Equipment type Type of cooling rate lb ice/ Maximum energy use kWh/ Maximum condenser water
24 hours 100 lb ice use \1\ gal/100 lb ice
----------------------------------------------------------------------------------------------------------------
Ice-Making Head............... Water.......... <500 7.8-0.0055H \2\......... 200-0.022H.
Ice-Making Head............... Water.......... >=500 and 5.58-0.0011H............ 200-0.022H.
<1,436
Ice-Making Head............... Water.......... >=1,436 4.0..................... 200-0.022H.
Ice-Making Head............... Air............ <450 10.26-0.0086H........... Not Applicable.
Ice-Making Head............... Air............ >=450 6.89-0.0011H............ Not Applicable.
Remote Condensing (but not Air............ <1,000 8.85-0.0038H............ Not Applicable.
remote compressor).
Remote Condensing (but not Air............ >=1,000 5.1..................... Not Applicable.
remote compressor).
Remote Condensing and Remote Air............ <934 8.85-0.0038H............ Not Applicable.
Compressor.
Remote Condensing (but not Air............ >=934 5.3..................... Not Applicable.
remote compressor).
Self-Contained................ Water.......... <200 11.40-0.019H............ 191-0.0315H.
Self-Contained................ Water.......... >=200 7.6..................... 191-0.0315H.
Self-Contained................ Air............ <175 18.0-0.0469H............ Not Applicable.
Self-Contained................ Air............ >=175 9.8..................... Not Applicable.
----------------------------------------------------------------------------------------------------------------
\1\ Water use is for the condenser only and does not include potable water used to make ice.
\2\ H = harvest rate in pounds per 24 hours, indicating the water or energy use for a given harvest rate.
Source: 42 U.S.C. 6313(d).
(c) Each batch type automatic commercial ice maker with capacities
between 50 and 4,000 pounds per 24-hour period manufactured on or after
January 28, 2018, shall meet the following standard levels:
----------------------------------------------------------------------------------------------------------------
Harvest Maximum energy use
Equipment type Type of cooling rate lb ice/ kilowatt-hours (kWh)/100 Maximum condenser water
24 hours lb ice \1\ use gal/100 lb ice \2\
----------------------------------------------------------------------------------------------------------------
Ice-Making Head............... Water.......... < 300 6.88-0.0055H............ 200-0.022H.
Ice-Making Head............... Water.......... >=300 and 5.80-0.00191H........... 200-0.022H.
<850
Ice-Making Head............... Water.......... >=850 and 4.42-0.00028H........... 200-0.022H.
<1,500
Ice-Making Head............... Water.......... >=1,500 and 4.0..................... 200-0.022H.
<2,500
Ice-Making Head............... Water.......... >=2,500 and 4.0..................... 145.
<4,000
Ice-Making Head............... Air............ < 300 10-0.01233H............. NA.
Ice-Making Head............... Air............ >= 300 and 7.05-0.0025H............ NA.
< 800
Ice-Making Head............... Air............ >= 800 and 5.55-0.00063H........... NA.
< 1,500
Ice-Making Head............... Air............ >= 1500 and 4.61.................... NA.
< 4,000
Remote Condensing (but not Air............ < 988 7.97-0.00342H........... NA.
remote compressor).
Remote Condensing (but not Air............ >= 988 and 4.59.................... NA.
remote compressor). < 4,000
Remote Condensing and Remote Air............ < 930 7.97-0.00342H........... NA.
Compressor.
Remote Condensing and Remote Air............ >= 930 and 4.79.................... NA.
Compressor. < 4,000
Self-Contained................ Water.......... < 200 9.5-0.019H.............. 191-0.0315H.
Self-Contained................ Water.......... >= 200 and 5.7..................... 191-0.0315H.
< 2,500
Self-Contained................ Water.......... >= 2,500 5.7..................... 112.
and < 4,000
Self-Contained................ Air............ < 110 14.79-0.0469H........... NA.
Self-Contained................ Air............ >= 110 and 12.42-0.02533H.......... NA.
< 200
Self-Contained................ Air............ >= 200 and 7.35.................... NA.
< 4,000
----------------------------------------------------------------------------------------------------------------
\1\ H = harvest rate in pounds per 24 hours, indicating the water or energy use for a given harvest rate.
Source: 42 U.S.C. 6313(d).
\2\ Water use is for the condenser only and does not include potable water used to make ice.
[[Page 4756]]
(d) Each continuous type automatic commercial ice maker with
capacities between 50 and 4,000 pounds per 24-hour period manufactured
on or after January 28, 2018, shall meet the following standard levels:
----------------------------------------------------------------------------------------------------------------
Harvest
Equipment type Type of cooling rate lb ice/ Maximum energy use kWh/ Maximum condenser water
24 hours 100 lb ice \1\ use gal/100 lb ice \2\
----------------------------------------------------------------------------------------------------------------
Ice-Making Head............... Water.......... <801 6.48-0.00267H........... 180-0.0198H.
Ice-Making Head............... Water.......... >=801 and 4.34.................... 180-0.0198H.
<2,500
Ice-Making Head............... Water.......... >=2,500 and 4.34.................... 130.5.
<4,000
Ice-Making Head............... Air............ <310 9.19-0.00629H........... NA.
Ice-Making Head............... Air............ >=310 and 8.23-0.0032H............ NA.
<820
Ice-Making Head............... Air............ >=820 and 5.61.................... NA.
<4,000
Remote Condensing (but not Air............ <800 9.7-0.0058H............. NA.
remote compressor).
Remote Condensing (but not Air............ >=800 and 5.06.................... NA.
remote compressor). <4,000
Remote Condensing and Remote Air............ <800 9.9-0.0058H............. NA.
Compressor.
>=800 and 5.26.................... NA.
<4,000
Self-Contained................ Water.......... <900 7.6-0.00302H............ 153-0.0252H.
Self-Contained................ Water.......... >=900 and 4.88.................... 153-0.0252H.
<2,500
Self-Contained................ Water.......... >=2,500 and 4.88.................... 90.
<4,000
Self-Contained................ Air............ <200 14.22-0.03H............. NA.
Self-Contained................ Air............ >=200 and 9.47-0.00624H........... NA.
<700
Self-Contained................ Air............ >=700 and 5.1..................... NA.
<4,000
----------------------------------------------------------------------------------------------------------------
\1\ H = harvest rate in pounds per 24 hours, indicating the water or energy use for a given harvest rate.
Source: 42 U.S.C. 6313(d).
\2\ Water use is for the condenser only and does not include potable water used to make ice.
Appendix
[The following letter from the Department of Justice will not appear
in the Code of Federal Regulations.]
U.S. Department of Justice, Antitrust Division, William J. Baer,
Acting Assistant Attorney General, RFK Main Justice Building, 950
Pennsylvania Ave., NW., Washington, DC 20530-0001, (202)514-2401/
(202)616-2645 (Fax)
December 24, 2014
Eric J. Fygi, Deputy General Counsel, Department of Energy,
Washington, DC 20585
Re: Energy Conservation Standards for Automatic Commercial Ice
Makers,
Dear Deputy General Counsel Fygi:
I am responding to your December 3, 2014 letter seeking the
views of the Attorney General about the potential impact on
competition of proposed energy conservation standards for automatic
commercial ice makers. Your request was submitted under Section
325(o)(2)(B)(i)(V) of the Energy Policy and Conservation Act, as
amended (ECPA), 42 U.S.C. 6295(o)(2)(B)(i)(V), which requires the
Attorney General to make a determination of the impact of any
lessening of competition that is likely to result from the
imposition of proposed energy conservation standards. The Attorney
General's responsibility for responding to requests from other
departments about the effect of a program on competition has been
delegated to the Assistant Attorney General for the Antitrust
Division in 28 CFR Sec. 0.40(g).
In conducting its analysis the Antitrust Division examines
whether a proposed standard may lessen competition, for example, by
substantially limiting consumer choice, by placing certain
manufacturers at an unjustified competitive disadvantage, or by
inducing avoidable inefficiencies in production or distribution of
particular products. A lessening of competition could result in
higher prices to manufacturers and consumers.
We have reviewed the proposed standards contained in the Notice
of Proposed Rulemaking (79 FR 14848, March 17, 2014) (NOPR). In
light of the short time frame for our review of the proposed
standards, we also consulted with DOE staff on the issues raised by
the proposed NOPR.
Based on this review and consultation with DOE staff, our
conclusion is that the proposed energy conservation standards for
automatic commercial ice makers are unlikely to have a significant
adverse impact on competition.
Sincerely,
William J. Baer
Enclosure
[FR Doc. 2015-00326 Filed 1-27-15; 8:45 am]
BILLING CODE 6450-01-P