[Federal Register Volume 82, Number 4 (Friday, January 6, 2017)]
[Proposed Rules]
[Pages 1608-1621]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-29990]


 ========================================================================
 Proposed Rules
                                                 Federal Register
 ________________________________________________________________________
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 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
 
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 

  Federal Register / Vol. 82, No. 4 / Friday, January 6, 2017 / 
Proposed Rules  

[[Page 1608]]



DEPARTMENT OF ENERGY

10 CFR Part 430

[Docket Number EERE-2014-BT-STD-0048]
RIN 1904-AD37


Energy Conservation Program: Energy Conservation Standards for 
Consumer Central Air Conditioners and Heat Pumps

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

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Energy Policy and Conservation Act of 1975 (EPCA), as 
amended, prescribes energy conservation standards for various consumer 
products, including consumer central air conditioners and heat pumps. 
EPCA also requires the U.S. Department of Energy (DOE) to periodically 
determine whether more-stringent, amended standards would be 
technologically feasible and economically justified, and would save a 
significant amount of energy. In this proposed rule, DOE proposes to 
amend the energy conservation standards for consumer central air 
conditioners and heat pumps identical to those set forth in a direct 
final rule published elsewhere in this Federal Register. If DOE 
receives an adverse comment and determines that such comment may 
provide a reasonable basis for withdrawing the direct final rule, DOE 
will publish a notice withdrawing the direct final rule and will 
proceed with this proposed rule.

DATES: DOE will accept comments, data, and information regarding the 
proposed standards no later than April 26, 2017.
    Comments regarding the likely competitive impact of the proposed 
standard should be sent to the Department of Justice contact listed in 
the ADDRESSES section before February 6, 2017.

ADDRESSES: Instructions: Any comments submitted must identify the 
proposed rule for energy conservation standards for consumer central 
air conditioners and heat pumps, and provide docket number EERE-2014-
BT-STD-0048 and/or regulatory information number (RIN) 1904-AD37. 
Comments may be submitted using any of the following methods:
    1. Federal eRulemaking Portal: www.regulations.gov. Follow the 
instructions for submitting comments.
    2. Email: [email protected]. Include the docket 
number and/or RIN in the subject line of the message. Submit electronic 
comments in WordPerfect, Microsoft Word, PDF, or ASCII file format, and 
avoid the use of special characters or any form of encryption.
    3. Postal Mail: Appliance and Equipment Standards Program, U.S. 
Department of Energy, Building Technologies Office, Mailstop EE-5B, 
1000 Independence Avenue SW., Washington, DC, 20585-0121. If possible, 
please submit all items on a compact disc (CD), in which case it is not 
necessary to include printed copies.
    4. Hand Delivery/Courier: Appliance and Equipment Standards 
Program, U.S. Department of Energy, Building Technologies Office, 950 
L' Enfant Plaza, SW., 6th Floor, Washington, DC, 20024. Telephone: 
(202) 586-6636. If possible, please submit all items on a CD, in which 
case it is not necessary to include printed copies.
    No telefacsimilies (faxes) will be accepted. For detailed 
instructions on submitting comments and additional information on the 
rulemaking process, see section III of this document (``Public 
Participation'').
    Written comments regarding the burden-hour estimates or other 
aspects of the collection-of-information requirements contained in this 
proposed rule may be submitted to Office of Energy Efficiency and 
Renewable Energy through the methods listed above and by email to 
[email protected].
    EPCA requires the Attorney General to provide DOE a written 
determination of whether the proposed standard is likely to lessen 
competition. The U.S. Department of Justice Antitrust Division invites 
input from market participants and other interested persons with views 
on the likely competitive impact of the proposed standard. Interested 
persons may contact the Division at [email protected] 
before February 6, 2017. Please indicate in the ``Subject'' line of 
your email the title and Docket Number of this proposed rule.
    Docket: The dockets, which include 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 dockets are listed in the www.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 for consumer central air conditioners 
and heat pumps can be found at: www1.eere.energy.gov/buildings/appliance_standards/rulemaking.aspx/ruleid/72. The www.regulations.gov 
Web page contains instructions on how to access all documents, 
including public comments, in the docket.
    For further information on how to submit a comment or review other 
public comments and the docket, contact the Appliance and Equipment 
Standards staff at (202) 586-6636 or by email: 
[email protected].

FOR FURTHER INFORMATION CONTACT: Mr. Antonio Bouza, U.S. Department of 
Energy, Office of Energy Efficiency and Renewable Energy, Building 
Technologies Office, EE-5B, 1000 Independence Avenue SW., Washington, 
DC 20585-0121. Telephone: (202) 586-4563. Email: 
[email protected].
    Ms. Johanna Jochum, U.S. Department of Energy, Office of the 
General Counsel, GC-33, 1000 Independence Avenue SW., Washington, DC, 
20585-0121. Telephone: (202) 287-6307. Email: 
[email protected].

SUPPLEMENTARY INFORMATION: 

Table of Contents

I. Introduction
    A. Authority
    B. Background
II. Proposed Standards
    1. Benefits and Burdens of TSLs Considered for Central Air 
Conditioner and Heat Pump Standards

[[Page 1609]]

    2. Summary of Benefits and Costs (Annualized) of the Proposed 
Amended Standards
III. Public Participation
    A. Submission of Comments
IV. Procedural Issues and Regulatory Review
V. Approval of the Office of the Secretary

I. Introduction

A. Authority

    Title III, Part B of the Energy Policy and Conservation Act of 1975 
(EPCA or the Act), Public Law 94-163 (42 U.S.C. 6291-6309, as codified) 
established the Energy Conservation Program for Consumer Products Other 
Than Automobiles, a program covering most major household appliances 
(collectively referred to as ``covered products''), which includes the 
consumer central air conditioners and heat pumps that are the subject 
of this rulemaking. (42 U.S.C. 6292(a)(3))
    Pursuant to EPCA, DOE's energy conservation program for covered 
products consists essentially of four parts: (1) Testing; (2) labeling; 
(3) the establishment of Federal energy conservation standards; and (4) 
certification and enforcement procedures. The Federal Trade Commission 
(FTC) is primarily responsible for labeling, and DOE implements the 
remainder of the 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 
covered product prior to the adoption of a new or amended energy 
conservation standard. (42 U.S.C. 6295(o)(3)(A) and (r)) Manufacturers 
of covered products must use the prescribed DOE test procedure as the 
basis for certifying to DOE that their products comply with the 
applicable energy conservation standards adopted under EPCA and when 
making representations to the public regarding the energy use or 
efficiency of those products. (42 U.S.C. 6293(c) and 6295(s)) 
Similarly, DOE must use these test procedures to determine whether the 
products comply with standards adopted pursuant to EPCA. (42 U.S.C. 
6295(s)) The DOE test procedures for central air conditioners and heat 
pumps appear at title 10 of the Code of Federal Regulations (CFR) part 
430, subpart B, appendix M and M1.
    The National Appliance Energy Conservation Act of 1987 (NAECA; Pub. 
L. 100-12) included amendments to EPCA that established the original 
energy conservation standards for central air conditioners and heat 
pumps. (42 U.S.C. 6295(d)(1)-(2)) EPCA, as amended, also requires DOE 
to conduct two cycles of rulemakings to determine whether to amend the 
energy conservation standards for central air conditioners and heat 
pumps. (42 U.S.C. 6295(d)(3)) The first cycle culminated in a final 
rule published in the Federal Register on August 17, 2004 (the August 
2004 Rule), which prescribed energy conservation standards for central 
air conditioners and heat pumps manufactured or imported on and after 
January 23, 2006. 69 FR 50997. DOE completed the second of the two 
rulemaking cycles by issuing a direct final rule on June 6, 2011 (2011 
Direct Final Rule), which was published in the Federal Register on June 
27, 2011. 76 FR 37408. The 2011 Direct Final Rule (June 2011 DFR) 
amended standards for central air conditioners and heat pumps 
manufactured on or after January 1, 2015.
    EPCA requires DOE to periodically review its already established 
energy conservation standards for a covered product. Not later than six 
years after issuance of any final rule establishing or amending a 
standard, DOE must publish a notice of determination that standards for 
the product do not need to be amended, or a notice of proposed 
rulemaking including new proposed standards. (42 U.S.C. 6295(m)(1)) 
Pursuant to this requirement, the next review that DOE would need to 
conduct must occur no later than six years from the issuance of the 
2011 direct final rule. This direct final rule fulfills that 
requirement.
    DOE must follow specific statutory criteria for prescribing new or 
amended standards for covered products, including consumer central air 
conditioners and heat pumps. Any new or amended standard for a covered 
product 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 (3)(B)) Furthermore, DOE may not adopt any 
standard that would not result in the significant conservation of 
energy. (42 U.S.C. 6295(o)(3)) Moreover, DOE may not prescribe a 
standard: (1) For certain products, including consumer central air 
conditioners and heat pumps, if no test procedure has been established 
for the product, or (2) if DOE determines by rule that the proposed 
standard is not technologically feasible or economically justified. (42 
U.S.C. 6295(o)(3)(A)-(B)) In deciding whether a proposed standard is 
economically justified, after receiving comments on the proposed 
standard, DOE must determine whether the benefits of the standard 
exceed its burdens. (42 U.S.C. 6295(o)(2)(B)(i)) DOE must make this 
determination by, to the greatest extent practicable, considering the 
following seven factors:
    (1) The economic impact of the standard on manufacturers and 
consumers of the products subject to the standard;
    (2) The savings in operating costs throughout the estimated average 
life of the covered products in the type (or class) compared to any 
increase in the price, initial charges, or maintenance expenses for the 
covered products that are likely to result from the standard;
    (3) The total projected amount of energy (or as applicable, water) 
savings likely to result directly from the standard;
    (4) Any lessening of the utility or the performance of the covered 
products likely to result from the standard;
    (5) The impact of any lessening of competition, as determined in 
writing by the Attorney General, that is likely to result from the 
standard;
    (6) The need for national energy and water conservation; and
    (7) Other factors the Secretary of Energy (Secretary) considers 
relevant.
    (42 U.S.C. 6295(o)(2)(B)(i)(I)-(VII))
    DOE notes that the current energy conservation standards for 
central air conditioners and heat pumps (set forth at 10 CFR 430.32(c)) 
contain requirements for seasonal energy efficiency ratio (SEER), 
heating seasonal performance factor (HSPF), energy efficiency ratio 
(EER), and average off mode power consumption. Standards based upon the 
latter two metrics were newly adopted in the June 27, 2011 DFR for the 
reasons stated in that rulemaking. 76 FR 37408. As discussed in section 
II.B.1 and section II.B.3 of this proposed rule, DOE has chosen to 
specify performance standards based on EER and SEER for only the 
southwest region of the country. Pursuant to its mandate under 42 
U.S.C. 6295(m)(1), this DOE rulemaking has considered amending the 
existing energy conservation standards for central air conditioners and 
heat pumps, and DOE is adopting the amended standards contained in this 
direct final rule.
    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 a covered 
product. (42 U.S.C. 6295(o)(1)) Also, the Secretary may not prescribe 
an amended or new standard if interested persons have established by a 
preponderance of evidence that the standard is likely to result in the 
unavailability in the United States of any covered product type (or 
class) or

[[Page 1610]]

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))
    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)) DOE 
generally considers these criteria as part of its analysis but 
consistently conducts a more thorough analysis of a given standard's 
projected impacts that extends beyond this presumption.
    Additionally, 42 U.S.C. 6295(q)(1) specifies requirements when 
promulgating an energy conservation standard for a covered product that 
has two or more subcategories. In this case, DOE must specify a 
different standard level for a type or class of covered product 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 products within such type (or class); or (B) 
have a capacity or other performance-related feature that other 
products within such type (or class) do not have and such feature 
justifies a higher or lower standard. (42 U.S.C. 6295(q)(1)) In 
determining whether a performance-related feature justifies a different 
standard for a group of products, 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))
    Under 42 U.S.C. 6295(o)(6), which was added to EPCA by section 
306(a) of the Energy Independence and Security Act of 2007 (EISA 2007; 
Pub. L. 110-140), DOE may consider the establishment of regional 
standards for central air conditioners and heat pumps. Specifically, in 
addition to a base national standard for a product, DOE may for central 
air conditioners and heat pumps, establish one or two more-restrictive 
regional standards. (42 U.S.C. 6295(o)(6)(B)) The regions must include 
only contiguous States (with the exception of Alaska and Hawaii, which 
may be included in regions with which they are not contiguous), and 
each State may be placed in only one region (i.e., an entire State 
cannot simultaneously be placed in two regions, nor can it be divided 
between two regions). (42 U.S.C. 6295(o)(6)(C)) Further, DOE can 
establish the additional regional standards only: (1) Where doing so 
would produce significant energy savings in comparison to a single 
national standard, (2) if the regional standards are economically 
justified, and (3) after considering the impact of these standards on 
consumers, manufacturers, and other market participants, including 
product distributors, dealers, contractors, and installers. (42 U.S.C. 
6295(o)(6)(D))
    Federal energy conservation requirements generally supersede State 
laws or regulations concerning energy conservation testing, labeling, 
and standards. (42 U.S.C. 6297(a)-(c)) DOE may, however, grant waivers 
of Federal preemption for particular State laws or regulations, in 
accordance with the procedures and other provisions set forth under 42 
U.S.C. 6297(d).
    Pursuant to further amendments to EPCA contained in EISA 2007, 
Public Law 110-140, any final rule for new or amended energy 
conservation standards promulgated after July 1, 2010, is required to 
address standby mode and off mode energy use. (42 U.S.C. 6295(gg)(3)) 
Specifically, when DOE adopts a standard for a covered product after 
that date, it must, if justified by the criteria for adoption of 
standards under EPCA (42 U.S.C. 6295(o)), incorporate standby mode and 
off mode energy use into a single standard, or, if that is not 
feasible, adopt a separate standard for such energy use for that 
product. (42 U.S.C. 6295(gg)(3)(A)-(B)) The SEER and HSPF metrics for 
central air conditioners and heat pumps already account for standby 
mode energy use, and the current standards include limits on off mode 
energy use.
    As mentioned previously, EISA 2007 amended EPCA, in relevant part, 
to grant DOE authority to issue a final rule (hereinafter referred to 
as a ``direct final rule'') establishing an energy conservation 
standard on receipt of a statement submitted jointly by interested 
persons that are fairly representative of relevant points of view 
(including representatives of manufacturers of covered products, 
States, and efficiency advocates), as determined by the Secretary, that 
contains recommendations with respect to an energy or water 
conservation standard that are in accordance with the provisions of 42 
U.S.C. 6295(o). (42 U.S.C. 6295(p)(4)) Pursuant to 42 U.S.C. 
6295(p)(4), the Secretary must also determine whether a jointly-
submitted recommendation for an energy or water conservation standard 
satisfies 42 U.S.C. 6295(o) or 42 U.S.C. 6313(a)(6)(B), as applicable.
    A notice of proposed rulemaking (NOPR) that proposes an identical 
energy efficiency standard must be published simultaneously with the 
direct final rule, and DOE must provide a public comment period of at 
least 110 days on this proposal. (42 U.S.C. 6295(p)(4)(A)-(B)) While 
DOE typically provides a comment period of 60 days on proposed 
standards, in this case, DOE provides a comment period of the same 
length as the comment period on the direct final rule--i.e. 110 days. 
Based on the comments received during this period, the direct final 
rule will either become effective, or DOE will withdraw it not later 
than 120 days after its issuance if (1) one or more adverse comments is 
received, and (2) DOE determines that those comments, when viewed in 
light of the rulemaking record related to the direct final rule, 
provide a reasonable basis for withdrawal of the direct final rule 
under 42 U.S.C. 6295(o) and for DOE to continue this rulemaking under 
the NOPR. (42 U.S.C. 6295(p)(4)(C)) Receipt of an alternative joint 
recommendation may also trigger a DOE withdrawal of the direct final 
rule in the same manner. Id.
    Typical of other rulemakings, it is the substance, rather than the 
quantity, of comments that will ultimately determine whether a direct 
final rule will be withdrawn. To this end, the substance of any adverse 
comment(s) received will be weighed against the anticipated benefits of 
the jointly-submitted recommendations and the likelihood that further 
consideration of the comment(s) would change the results of the 
rulemaking. DOE notes that, to the extent an adverse comment had been 
previously raised and addressed in the rulemaking proceeding, such a 
submission will not typically provide a basis for withdrawal of a 
direct final rule. Nevertheless, if the Secretary makes such a 
determination, DOE must withdraw the direct final rule and proceed with 
the simultaneously-published NOPR. DOE must publish in the Federal 
Register the reason why the direct final rule was withdrawn. Id.

B. Background

    According to the Energy Policy and Conservation Act's 6-year review 
requirement (42 U.S.C. 6295(m)(1)), DOE must publish a notice of 
proposed rulemaking to propose new standards for consumer central air 
conditioner and heat pump products or a notice of determination that 
the existing standards do not need to be amended by

[[Page 1611]]

June 6, 2017. On November 5, 2014, DOE initiated efforts pursuant to 
the 6-year lookback requirement by publishing a request for information 
(RFI) regarding central air conditioners and heat pumps to solicit 
comments on whether to amend the current energy conservation standards 
for consumer central air conditioner and heat pump products. 79 FR 
65603. The November 2014 RFI also described the procedural and 
analytical approaches that DOE anticipated to use in order to evaluate 
potential amended energy conservation standards for central air 
conditioners and heat pumps.
    On August 28, 2015, DOE published a notice of data availability 
(NODA) describing analysis to be used in support of the central air 
conditioners and heat pumps standards rulemaking. 80 FR 52206. The 
analysis for this notice provided the results of a series of DOE 
provisional analyses regarding potential energy savings and economic 
impacts of amending the central air conditioner and heat pump energy 
conservation standards. These analyses were conducted for the following 
categories: Engineering, consumer impacts, national impacts, and 
manufacturer impacts.
    In response to the November 2014 RFI, Lennox formally requested 
that DOE convene a negotiated rulemaking to address potential 
amendments to the current standards, which would help ensure that all 
stakeholders have input into the discussion, analysis, and outcome of 
the rulemaking. (Lennox, No. 22) Other key industry stakeholders made 
similar suggestions. (American Council for an Energy-Efficient Economy, 
No. 23; Air Conditioning Contractors of America, No. 25; Heating, Air 
Conditioning & Refrigeration Distributors International, No. 26) ASRAC 
carefully evaluated this request, and the Committee voted to charter a 
working group to support the negotiated rulemaking effort requested by 
these parties.
    Subsequently, DOE determined that the complexity of the CAC/HP 
rulemaking necessitated a combined effort to address these equipment 
types to ensure a comprehensive vetting of all issues and related 
analyses to support any final rule setting standards. To this end, DOE 
solicited the public for membership nominations to the CAC/HP Working 
Group that would be formed under the ASRAC charter by issuing a Notice 
of Intent to Establish the Central Air Conditioners and Heat Pumps 
Working Group To Negotiate a Notice of Proposed Rulemaking for Energy 
Conservation Standards. 80 FR 40938 (July 14, 2015). The CAC/HP Working 
Group was established under ASRAC in accordance with the Federal 
Advisory Committee Act (FACA) and the Negotiated Rulemaking Act--with 
the purpose of discussing and, if possible, reaching consensus on a set 
of energy conservation standards to propose/finalize for CACs and HPs. 
The CAC/HP Working Group was to consist of fairly representative 
parties having a defined stake in the outcome of the proposed 
standards, and would consult, as appropriate, with a range of experts 
on technical issues.
    DOE received 26 nominations for membership. Ultimately, the CAC/HP 
Working Group consisted of 15 members, including one member from ASRAC 
and one DOE representative.\1\ The CAC/HP Working Group met ten times 
(nine times in-person and once by teleconference). The meetings were 
held on August 26, 2015, September 10, 2015, September 28-29, 2015, 
October 13-14, 2015, October 26-27, 2015. November 18-19, 2015, 
December 1-2, 2015, December 16-17, 2015, January 11-12, 2016, and a 
webinar on January 19, 2016.
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    \1\ The group members were Tony Bouza (U.S. Department of 
Energy), Marshall Hunt (Pacific Gas & Electric Company, San Diego 
Gas & Electric Company, Southern California Edison, and Southern 
California Gas Company), Andrew deLaski (Appliance Standards 
Awareness Project and ASRAC representative), Meg Waltner (Natural 
Resources Defense Council), John Hurst (Lennox), Karen Meyers (Rheem 
Manufacturing Company), Charles McCrudden (Air Conditioning 
Contractors of America), Harvey Sachs (American Council for an 
Energy Efficient Economy), Russell Tharp (Goodman Manufacturing), 
Karim Amrane (Air-Conditioning, Heating, and Refrigeration 
Institute), Don Brundage (Southern Company), Kristen Driskell 
(California Energy Commission), John Gibbons (United Technologies), 
Steve Porter (Johnstone Supply), and Jim Vershaw (Ingersoll Rand).
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    During the CAC/HP Working Group discussions, participants discussed 
setting new standards for single-package air conditioners. 
Specifically, arguments were made against raising the standard level 
for single-package systems due to the unavailability of full product 
lines, which span the entire range of cooling capacities, with 
efficiencies that are only modestly greater (i.e., 15 SEER) than the 
current standard level (i.e., 14 SEER). (ASRAC Public Meeting, No. 80 
at pp. 75-6) After being informed that the national energy savings from 
a 15 SEER standard for single-package systems would be small (i.e., 
approximately 0.1 quads), the Working Group agreed not to recommend 
raising the standards for these product classes. (ASRAC Public Meeting, 
No. 80 at pp. 90-91). In addition, some parties wanted the Group to 
recommend a level for standards for split-system heat pumps that would 
encourage use of two-speed equipment (i.e., greater than 15 SEER), but 
the manufacturer representatives objected to this proposal due to two 
primary concerns: (1) Only a single compressor manufacturer supplies 
two-stage compressors, thereby creating the possibility of a limited or 
constrained supply of the most critical component of a two-speed system 
and (2) the likelihood, in replacement installations, that the 
utilization of existing thermostat control wiring could result in the 
use of only high-speed, thereby eliminating the efficiency gain 
resulting from low-speed operation during part-load conditions.
    The CAC/HP Working Group successfully reached consensus on 
recommended energy conservation standards, as well as test procedure 
amendments for CACs and HPs. On January 19, 2016, the CAC/HP Working 
Group submitted the Term Sheet to ASRAC outlining its recommendations, 
which ASRAC subsequently adopted.\2\
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    \2\ Available at (copy and paste into browser): https://www.regulations.gov/document?D=EERE-2014-BT-STD-0048-0076.
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    After carefully considering the consensus recommendations for 
amending the energy conservation standards for CACs and HPs submitted 
by the CAC/HP Working Group and adopted by ASRAC, DOE has determined 
that these recommendations are in accordance with the statutory 
requirements of 42 U.S.C. 6295(p)(4) for the issuance of a direct final 
rule.
    More specifically, these recommendations comprise a statement 
submitted by interested persons who are fairly representative of 
relevant points of view on this matter. In reaching this determination, 
DOE took into consideration the fact that the CAC/HP Working Group, in 
conjunction with ASRAC members who approved the recommendations, 
consisted of representatives of manufacturers of the covered equipment 
at issue, States, and efficiency advocates--all of which are groups 
specifically identified by Congress as relevant parties to any 
consensus recommendation. (42 U.S.C. 6295(p)(4)(A)) As delineated 
above, the Term Sheet was signed and submitted by a broad cross-section 
of interests, including the manufacturers who produce the subject 
products, trade associations representing these manufacturers and 
installation contractors, environmental and energy-efficiency advocacy 
organizations, and electric utility companies. Although States were not 
direct signatories to the Term Sheet, the ASRAC Committee approving the 
CAC/HP Working Group's

[[Page 1612]]

recommendations included at least two members representing States--one 
representing the National Association of State Energy Officials (NASEO) 
and one representing the State of California.\3\ Moreover, DOE does not 
read the statute as requiring a statement submitted by all interested 
parties before the Department may proceed with issuance of a direct 
final rule. By explicit language of the statute, the Secretary has the 
discretion to determine when a joint recommendation for an energy or 
water conservation standard has met the requirement for 
representativeness (i.e., ``as determined by the Secretary''). Id.
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    \3\ These individuals were Deborah E. Miller (NASEO) and David 
Hungerford (California Energy Commission).
---------------------------------------------------------------------------

    DOE also evaluated whether the recommendation satisfies 42 U.S.C. 
6295(o), as applicable. In making this determination, DOE conducted an 
analysis to evaluate whether the potential energy conservation 
standards under consideration achieve the maximum improvement in energy 
efficiency that is technologically feasible and economically justified 
and result in significant energy conservation. The evaluation is the 
same comprehensive approach that DOE typically conducts whenever it 
considers potential energy conservation standards for a given type of 
product or equipment.
    DOE has considered the recommended energy conservation standards 
and believes that they meet the EPCA requirements for issuance of a 
direct final rule. As a result, DOE published a direct final rule 
establishing energy conservation standards for consumer central air 
conditioners and heat pumps elsewhere in this Federal Register. If DOE 
receives adverse comments that may provide a reasonable basis for 
withdrawal and withdraws the direct final rule, DOE will consider those 
comments and any other comments received in determining how to proceed 
with this proposed rule.
    For further background information on the proposed standards and 
the supporting analyses, please see the direct final rule published 
elsewhere in this Federal Register. That document includes additional 
discussion of the EPCA requirements for promulgation of energy 
conservation standards; the current standards for consumer central air 
conditioners and heat pumps; the history of the standards rulemakings 
establishing such standards; and information on the test procedures 
used to measure the energy efficiency of consumer central air 
conditioners and heat pumps. The document also contains an in-depth 
discussion of the analyses conducted in support of this rulemaking, the 
methodologies DOE used in conducting those analyses, and the analytical 
results.

II. Proposed Standards

    When considering new or amended energy conservation standards, the 
standards that DOE adopts 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)) In determining 
whether a standard is economically justified, the Secretary must 
determine whether the benefits of the standard exceed its burdens by, 
to the greatest extent practicable, considering the seven statutory 
factors discussed previously. (42 U.S.C. 6295(o)(2)(B)(i)) The new or 
amended standard must also result in significant conservation of 
energy. (42 U.S.C. 6295(o)(3)(B))
    For this proposed rule, DOE considered the impacts of amended 
standards for central air conditioners and heat pumps at each TSL, 
beginning with the maximum technologically feasible level, to determine 
whether that level was economically justified. Where the max-tech level 
was not justified, DOE then considered the next-most-efficient level 
and undertook the same evaluation until it reached the highest 
efficiency level that is both technologically feasible and economically 
justified and saves a significant amount of energy.
    To aid the reader in understanding the benefits and/or burdens of 
each TSL, tables in this section summarize the quantitative analytical 
results for each TSL. In addition to the quantitative results presented 
in the tables, DOE also considers other burdens and benefits that 
affect economic justification. These include the impacts on 
identifiable subgroups of consumers who may be disproportionately 
affected by a standard and impacts on employment.
1. Benefits and Burdens of TSLs Considered for Central Air Conditioner 
and Heat Pump Standards
    Table II-1 and Table II-2 summarize the quantitative impacts 
estimated for each TSL for central air conditioners and heat pumps. The 
national impacts are measured over the lifetime of central air 
conditioners and heat pumps purchased in the 30-year period that begins 
in the anticipated first year of compliance with any amended standards 
(2021-2050 or, in the case of the recommended TSL, 2023-2052). The 
energy savings, emissions reductions, and value of emissions reductions 
refer to full-fuel-cycle results. The efficiency levels contained in 
each TSL are described in section V.A of the direct final rule.

                             Table II-1--Summary of Results for Central Air Conditioner and Heat Pump TSLs: National Impacts
--------------------------------------------------------------------------------------------------------------------------------------------------------
            Category                         TSL 1                     Recommended TSL                    TSL 3                         TSL 4
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               FFC National Energy Savings
--------------------------------------------------------------------------------------------------------------------------------------------------------
Quads..........................  1.3..........................  3.2.........................  8.6.........................  14.2.
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                   NPV of Consumer Costs and Benefits (2015$ billion)
--------------------------------------------------------------------------------------------------------------------------------------------------------
3% discount rate...............  5.7..........................  12.2........................  1.1.........................  (28.1).
7% discount rate...............  1.3..........................  2.5.........................  (10.0)......................  (31.4).
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                  Cumulative Emissions Reduction (Total FFC Emissions)
--------------------------------------------------------------------------------------------------------------------------------------------------------
CO2 (million metric tons)......  76.68........................  188.3.......................  508.7.......................  841.0.
SO2 (thousand tons)............  40.94........................  100.8.......................  272.4.......................  452.4.
NOX (thousand tons)............  142.4........................  350.3.......................  944.2.......................  1,559.
Hg (tons)......................  0.151........................  0.372.......................  1.005.......................  1.669.

[[Page 1613]]

 
CH4 (thousand tons)............  341.2........................  842.4.......................  2,264.......................  3,738.
CH4 (million tons CO2eq) *.....  9,553........................  23,586......................  63,387......................  104,677.
N2O (thousand tons)............  0.858........................  2.114.......................  5.711.......................  9.481.
N2O (thousand tons CO2eq) *....  227.5........................  560.3.......................  1,514.......................  2,512.
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                   Value of Emissions Reduction (Total FFC Emissions)
--------------------------------------------------------------------------------------------------------------------------------------------------------
CO2 (2015$ billion) **.........  0.482 to 6.997...............  1.143 to 16.855.............  3.190 to 46.375.............  5.298 to 76.950.
NOX--3% discount rate (2015$     222.2 to 506.6...............  528.1 to 1204.1.............  1471.5 to 3355.0............  2448.1 to 5581.5.
 million).
NOX--7% discount rate (2015$     80.0 to 180.4................  178.6 to 402.6..............  525.4 to 1184.5.............  875.0 to 1972.9.
 million).
--------------------------------------------------------------------------------------------------------------------------------------------------------
* CO2eq is the quantity of CO2 that would have the same global warming potential (GWP).
** Range of the economic value of CO2 reductions is based on estimates of the global benefit of reduced CO2 emissions.
Note: Parentheses indicate negative values.


                  Table II-2--Summary of Results for Central Air Conditioners and Heat Pumps by TSL: Manufacturer and Consumer Impacts
--------------------------------------------------------------------------------------------------------------------------------------------------------
            Category                         TSL 1                    Recommended TSL *                   TSL 3                         TSL 4
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  Manufacturer Impacts
--------------------------------------------------------------------------------------------------------------------------------------------------------
Industry NPV (2015$ million)...  3,852.0 to 4,466.2...........  3,803.9 to 4,381.9..........  3,382.0 to 4,512.2..........  3,360.6 to 4,889.6.
No-new-standards case INPV =
 $4,496.1.
Change in Industry NPV (%).....  (14.3) to (0.7)..............  (15.4) to (2.5).............  (24.8) to 0.4...............  (25.3) to 8.8.
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                          Consumer Average LCC Savings (2015$)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Split Air Conditioners.........  N: $43.......................  N: $43......................  ($122)......................  ($304).
                                 HD: $169.....................  HD: $150....................
                                 HH: $82......................  HH: $39.....................
Split Heat Pumps...............  $72..........................  $131........................  ($25).......................  ($425).
Package Air Conditioners.......  N/A..........................  N/A.........................  $43.........................  ($80).
Package Heat Pumps.............  N/A..........................  N/A.........................  $115........................  $115.
Space-Constrained Air            N/A..........................  N/A.........................  N/A.........................  $58.
 Conditioners.
Small-Duct High-Velocity.......  N/A..........................  N/A.........................  N/A.........................  ($540).
Shipment-Weighted Average **...  $68..........................  $75.........................  ($71).......................  ($315).
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               Consumer Simple PBP (years)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Split Air Conditioners.........  N: 10.5......................  N: 10.5.....................  15.2........................  19.2.
                                 HD: 5.4......................  HD: 7.6.....................
                                 HH: 5.5......................  HH: 7.7.....................
Split Heat Pumps...............  5.2..........................  4.9.........................  9.4.........................  14.9.
Package Air Conditioners.......  N/A..........................  N/A.........................  8.9.........................  12.3.
Package Heat Pumps.............  N/A..........................  N/A.........................  5.2.........................  5.2.
Space-Constrained Air            N/A..........................  N/A.........................  N/A.........................  11.6.
 Conditioners.
Small-Duct High-Velocity.......  N/A..........................  N/A.........................  N/A.........................  34.3.
Shipment-Weighted Average **...  6.0..........................  6.7.........................  12.5........................  16.8.
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                         % of Consumers that Experience Net Cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
Split Air Conditioners.........  N: 25%.......................  N: 25%......................  63%.........................  75%.
                                 HD: 14%......................  HD: 42%.....................
                                 HH: 15%......................  HH: 45%.....................
Split Heat Pumps...............  9%...........................  20%.........................  54%.........................  79%.
Package Air Conditioners.......  N/A..........................  N/A.........................  53%.........................  69%.
Package Heat Pumps.............  N/A..........................  N/A.........................  39%.........................  39%.
Space-Constrained Air            N/A..........................  N/A.........................  N/A.........................  60%.
 Conditioners.
Small-Duct High-Velocity.......  N/A..........................  N/A.........................  N/A.........................  90%.
Shipment-Weighted Average *....  14%..........................  28%.........................  59%.........................  74%.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: Parentheses indicate negative values. N = North region. HD = Hot-dry region; HH = Hot-humid region.
* There are no impacts for Package Air Conditioners. Package Heat Pumps, Space-Constrained Air Conditioners, and Small-Duct High-Velocity because the
  standard levels are at the baseline efficiency.
** Weighted by shares of each product class in total projected shipments in 2021. Does not include shipments for SCAC and SDHV.

    First, DOE considered TSL 4, which would save an estimated total of 
14.2 quads of energy, an amount DOE considers significant. TSL 4 has an 
estimated NPV of consumer benefit of -$31.4 billion using a 7-percent 
discount rate, and -$28.1 billion using a 3-percent discount rate.

[[Page 1614]]

    The cumulative emissions reductions at TSL 4 are 841 Mt of 
CO2, 452.4 thousand tons of SO2, 1,559 thousand 
tons of NOX, 1.669 tons of Hg, 3,738 thousand tons of 
CH4, and 9.481 thousand tons of N2O. The 
estimated monetary value of the CO2 emissions reductions at 
TSL 4 ranges from $5.298 billion to $76.950 billion.
    At TSL 4, the average LCC savings is -$304 for split air 
conditioners, -$425 for split heat pumps, -$80 for package air 
conditioners, $115 for package heat pumps, $58 for space-constrained 
air conditioners, and -$540 for small-duct high-velocity air 
conditioners. The simple PBP is 19.2 years for split air conditioners, 
14.9 years for split heat pumps, 12.3 years for package air 
conditioners, 5.2 years for package heat pumps, 11.6 years for space-
constrained air conditioners, and 34.3 years for small-duct high-
velocity air conditioners. The share of consumers experiencing a net 
LCC cost is 75 percent for split air conditioners, 79 percent for split 
heat pumps, 69 percent for package air conditioners, 39 percent for 
package heat pumps, 60 percent for space-constrained air conditioners, 
and 90 percent for small-duct high-velocity air conditioners.
    At TSL 4, the projected change in INPV ranges from a decrease of 
$1,135.6 million to an increase of $393.5 million. If the more severe 
range of impacts is reached, TSL 4 could result in a net loss of up to 
25.3 percent of INPV for manufacturers.
    After considering the analysis and weighing the benefits and the 
burdens, the Secretary has tentatively concluded that, at TSL 4 for 
central air conditioner and heat pump standards, the benefits of energy 
savings and emissions reductions would be outweighed by the negative 
NPV of total consumer benefits at a 3-percent and 7-percent discount 
rate, negative average consumer LCC savings for most product classes, 
and the reduction in industry value.
    Next, DOE considered TSL 3, which would save an estimated total of 
8.6 quads of energy, an amount DOE considers significant. TSL 3 has an 
estimated NPV of consumer benefit of -$10 billion using a 7-percent 
discount rate, and $1.1 billion using a 3-percent discount rate.
    The cumulative emissions reductions at TSL 3 are 508.7 Mt of 
CO2, 272.4 thousand tons of SO2, 944.2 thousand 
tons of NOX, 1.005 tons of Hg, 2,264 thousand tons of 
CH4, and 5.711 thousand tons of N2O. The 
estimated monetary value of the CO2 emissions reductions at 
TSL 3 ranges from $3.190 billion to $46.375 billion.
    At TSL 3, the average LCC savings is -$122 for split air 
conditioners, -$25 for split heat pumps, $43 for package air 
conditioners, and $115 for package heat pumps. The simple PBP is 15.2 
years for split air conditioners, 9.4 years for split heat pumps, 8.9 
years for package air conditioners, and 5.2 years for package heat 
pumps. The share of consumers experiencing a net LCC cost is 63 percent 
for split air conditioners, 54 percent for split heat pumps, 53 percent 
for package air conditioners, and 39 percent for package heat pumps. 
There are no impacts on space-constrained air conditioners or small-
duct high-velocity air conditioners at TSL 3.
    At TSL 3, the projected change in INPV ranges from a decrease of 
$1,114.2 million to an increase of $16.1 million. If the more severe 
range of impacts is reached, TSL 3 could result in a net loss of up to 
24.8 percent of INPV for manufacturers.
    After considering the analysis and weighing the benefits and the 
burdens, the Secretary has tentatively concluded that at TSL 3 for 
central air conditioner and heat pump standards, the benefits of energy 
savings, positive NPV of consumer benefit at a 3-percent discount rate, 
and emissions reductions would be outweighed by the negative NPV of 
consumer benefit at a 7-percent discount rate, negative average LCC 
savings for most product classes, and the potential reduction in INPV 
for manufacturers.
    Next, DOE considered the Recommended TSL, which would save an 
estimated total of 3.2 quads of energy, an amount DOE considers 
significant. The Recommended TSL has an estimated NPV of consumer 
benefit of $2.5 billion using a 7-percent discount rate, and $12.2 
billion using a 3-percent discount rate.
    The cumulative emissions reductions under the Recommended TSL are 
188.3 Mt of CO2, 100.8 thousand tons of SO2, 
350.3 thousand tons of NOX, 0.372 tons of Hg, 842.4 thousand 
tons of CH4, and 2.114 thousand tons of N2O. The 
estimated monetary value of the CO2 emissions reductions 
ranges from $1.143 billion to $16.855 billion.
    Under the Recommended TSL, the average LCC savings for split air 
conditioners is $43 in the north region, $150 in the hot dry region, 
$39 in the hot humid region, and $131 for split heat pumps. The simple 
payback period for split air conditioners is 10.5 years in the north 
region, 7.6 years in the hot dry region, 7.7 years in the hot humid 
region, and 4.9 years for split heat pumps. The share of consumers 
experiencing a net LCC cost for split air conditioners is 25 percent in 
the north region, 42 percent in the hot dry region, 45 percent in the 
hot humid region, and 20 percent for split heat pumps. There are no 
impacts to packaged air conditioners, packaged heat pumps, space-
constrained air conditioners, and small-duct high-velocity air 
conditioners under the Recommended TSL.
    Under the Recommended TSL, the projected change in INPV ranges from 
a decrease of $692.3 million to a decrease of $114.2 million. If the 
more severe range of impacts is reached, TSL 3 could result in a net 
loss of up to 15.4 percent of INPV for manufacturers.
    After considering the analysis and weighing the benefits and the 
burdens, the Secretary has tentatively concluded that under the 
Recommended TSL for central air conditioner and heat pump standards, 
the benefits of energy savings, positive NPV of consumer benefit, 
positive impacts on consumers (as indicated by positive average LCC 
savings and favorable PBPs), and emission reductions, would outweigh 
the negative impacts on some consumers and the potential reduction in 
INPV for manufacturers.
    Under the authority provided by 42 U.S.C. 6295(p)(4), DOE is 
issuing this notice of proposed rulemaking that proposes amended energy 
conservation standards for central air conditioners and heat pumps at 
the Recommended TSL. The proposed amended energy conservation standards 
for central air conditioners and heat pumps as determined by the DOE 
test procedure at the time of the 2015-2016 ASRAC negotiations are 
presented in Table II-3.

[[Page 1615]]



    Table II-3--Proposed Amended Energy Conservation Standards for Central Air Conditioners and Heat Pumps as
              Determined by the DOE Test Procedure at the Time of the 2015-2016 ASRAC Negotiations
----------------------------------------------------------------------------------------------------------------
                                             National               Southeast *            Southwest **
          Product class          -------------------------------------------------------------------------------
                                       SEER            HSPF            SEER            SEER             EER
----------------------------------------------------------------------------------------------------------------
Split-System Air Conditioners                 14  ..............              15              15   12.2/10.2 ***
 with a Certified Cooling
 Capacity <45,000 Btu/h.........
Split-System Air Conditioners                 14  ..............            14.5            14.5   11.7/10.2 ***
 with a Certified Cooling
 Capacity >=45,000 Btu/h........
Split-System Heat Pumps.........              15             8.8  ..............  ..............  ..............
Single-Package Air Conditioners               14  ..............  ..............  ..............            11.0
 [dagger].......................
Single-Package Heat Pumps                     14             8.0  ..............  ..............  ..............
 [dagger].......................
Space-Constrained Air                         12  ..............  ..............  ..............  ..............
 Conditioners [dagger]..........
Space-Constrained Heat Pumps                  12             7.4  ..............  ..............  ..............
 [dagger].......................
Small-Duct High-Velocity Systems              12             7.2  ..............  ..............  ..............
 [dagger].......................
----------------------------------------------------------------------------------------------------------------
* Southeast includes: The states of Alabama, Arkansas, Delaware, Florida, Georgia, Hawaii, Kentucky, Louisiana,
  Maryland, Mississippi, North Carolina, Oklahoma, Puerto Rico, South Carolina, Tennessee, Texas, Virginia, the
  District of Columbia, and the U.S. territories.
** Southwest includes the states of Arizona, California, Nevada, and New Mexico.
*** The 10.2 EER amended energy conservation standard applies to split-system air conditioners with a seasonal
  energy efficiency ratio greater than or equal to 16.
[dagger] The energy conservation standards for small-duct high velocity and space-constrained product classes
  remain unchanged from current levels.

    Table II-4 shows the amended energy conservation standards for 
central air conditioners and heat pumps as determined by the test 
procedure final rule issued by DOE on November 30, 2016, hereinafter 
referred to as the ``November 2016 test procedure final rule''.\4\ 
(Docket No. EERE-2016-BT-TP-0029)
---------------------------------------------------------------------------

    \4\ The test procedure final rule issued by DOE on November 30, 
2016, is accessible via the DOE Web site at: http://energy.gov/eere/buildings/downloads/issuance-2016-11-30-energy-conservation-program-test-procedures-central-air.

 Table II-4--Amended Energy Conservation Standards for Central Air Conditioners and Heat Pumps as Determined by
                                   the November 2016 Test Procedure Final Rule
----------------------------------------------------------------------------------------------------------------
                                             National               Southeast *            Southwest **
          Product class          -------------------------------------------------------------------------------
                                       SEER2           HSPF2           SEER2           SEER2           EER2
----------------------------------------------------------------------------------------------------------------
Split-System Air Conditioners               13.4  ..............            14.3            14.3    11.7/9.8 ***
 with a Certified Cooling
 Capacity <45,000 Btu/h.........
Split-System Air Conditioners               13.4  ..............            13.8            13.8    11.2/9.8 ***
 with a Certified Cooling
 Capacity >=45,000 Btu/h........
Split-System Heat Pumps.........            14.3             7.5  ..............  ..............  ..............
Single-Package Air Conditioners             13.4  ..............  ..............  ..............            10.6
 [dagger].......................
Single-Package Heat Pumps                   13.4             6.8  ..............  ..............  ..............
 [dagger].......................
Space-Constrained Air                       11.7  ..............  ..............  ..............  ..............
 Conditioners [dagger]..........
Space-Constrained Heat Pumps                11.9             6.3  ..............  ..............  ..............
 [dagger].......................
Small-Duct High-Velocity Systems              12             6.1  ..............  ..............  ..............
 [dagger].......................
----------------------------------------------------------------------------------------------------------------
* Southeast includes: The states of Alabama, Arkansas, Delaware, Florida, Georgia, Hawaii, Kentucky, Louisiana,
  Maryland, Mississippi, North Carolina, Oklahoma, Puerto Rico, South Carolina, Tennessee, Texas, Virginia, the
  District of Columbia, and the U.S. territories.
** Southwest includes the states of Arizona, California, Nevada, and New Mexico.
*** The 9.8 EER amended energy conservation standard applies to split-system air conditioners with a seasonal
  energy efficiency ratio greater than or equal to 15.2.
[dagger] The energy conservation standards for small-duct high velocity and space-constrained product classes
  remain unchanged from current levels.

    The following paragraph describes how DOE translated the energy 
conservation standards in Table II-3--which are in terms of SEER, HSPF, 
and EER as determined by the DOE test procedure at the time of the 
2015-2016 ASRAC Negotiations--to the energy conservation standard 
levels in Table II-4--which are in terms of SEER2, HSPF2, and EER2 as 
determined by the November 2016 test procedure final rule. DOE used a 
methodology consistent with the recommendations of the CAC/HP Working 
Group to translate the SEER standard levels to SEER2 standard levels 
for the split-system and single-package product classes. Note that the 
heating load line slope factor established by the November 2016 test 
procedure final rule is different than the heating load line slope 
factors used by the CAC/HP Working Group in their Term Sheet 
recommendation #9. DOE translated the HSPF standard levels to HSPF2 
standard levels for split-system and single-package heat pumps by 
adjusting for the intermediate heating load line slope factor 
established by the November 2016 test procedure final rule using 
interpolation. (November 2016 Test Procedure Final Rule, pp. 127-130)
    Comments in response to the provisional translations for HSPF2 for 
split system and single-package heat pumps are summarized in the 
November 2016 test procedure final rule. (November 2016 Test Procedure 
Final Rule, pp. 127-130). Commenters agreed with the translation for 
split-system heat pumps, but industry commenters felt that the 6.8 
value was too high for single-package heat pumps.

[[Page 1616]]

Alternative HSPF2 values that were suggested in comments ranged from 
6.5 (Docket No. EERE-2016-BT-TP-0029, Lennox, No. 25 at p. 10) to 6.7 
(Docket No. EERE-2016-BT-TP-0029, Goodman, No. 39 at p. 10) Data 
provided under confidentiality supports the range suggested in 
comments. DOE combined that data with the data it used to validate its 
interpolated value of 6.8. DOE found that the combined data shows that 
6.7 HSPF2 is an appropriate translation. For this reason, DOE is 
proposing 6.7 HSPF2 for single-package heat pumps in this notice.
    The August 2016 test procedure SNOPR and November 2016 test 
procedure final rule did not include translated levels for small-duct 
high velocity (SDHV) and space-constrained products. Neither did 
Recommendation #9 of the Term Sheet. Recommendation #9 did, however, 
state that the energy conservation standards for those product classes 
should remain unchanged from current levels (i.e. that there would be 
no change in stringency). (ASRAC Term Sheet, No. 76 at pp. 4-5) On 
October 27, 2016, DOE published a notice of data availability (NODA) 
that provided provisional translations of the CAC/HP Working Group's 
recommended energy conservation standard levels for small-duct high 
velocity and space constrained products (which are in terms of the test 
procedure at the time of the 2015-2016 Negotiations) into levels 
consistent with the test procedure proposed in the August 2016 test 
procedure SNOPR. Table II-5 presents the provisional translations 
included in the October 2016 NODA. Note that multiple provisional 
translations from SEER to SEER2 are included for space-constrained air 
conditioners and heat pumps because, at the time of the NODA 
publication, DOE had not finalized the test procedure which would 
establish the minimum external static pressure requirements.

  Table II-5--Provisional Translations of CAC/HP Working Group-Recommended Energy Conservation Standard Levels
                                          Included in October 2016 NODA
----------------------------------------------------------------------------------------------------------------
                                       CAC/HP Working group recommendation    August 2016 test procedure SNOPR
                                     --------------------------------------              translation
            Product class                                                  -------------------------------------
                                             SEER               HSPF              SEER2              HSPF2
----------------------------------------------------------------------------------------------------------------
Small-Duct High-Velocity Systems....                 12                7.2                 12                6.1
Space-Constrained Air Conditioners..  .................  .................     11.6 */11.8 **  .................
Space-Constrained Heat Pumps........                 12  .................     11.5 */11.9 **                6.3
----------------------------------------------------------------------------------------------------------------
* Estimated SEER2 at 0.50 in. wc.
** Estimated SEER2 at 0.30 in. wc.

    In developing its provisional translations for space-constrained 
air conditioners published in the NODA, DOE reviewed existing test 
data, adjusted relevant measurements based on blower performance data, 
and translated the levels based on the average impact. For the space-
constrained and SDHV heat pump translations published in the NODA, DOE 
also reviewed test data and confirmed that the 15% reduction from HSPF 
to HSPF2 that DOE observed for split-system and single-package heat 
pumps was appropriate also for space-constrained and SDHV heat pumps.
    In written comments, manufacturers and AHRI expressed support for 
DOE's provisional translations for SDHV products. Unico stated that it 
reviewed all of its test reports from the previous two years and found 
its range of results validated DOE's translations for SDHV products. 
(Unico, No. 95 at p. 2). AHRI and Lennox also expressed support for 
DOE's SEER and HPSF to SEER2 and HSPF2 levels for SDHV products. (AHRI, 
No. 94 at p. 1; Lennox, No. 97 at p. 1) EEI commented that it did not 
agree with DOE's translation because the HSPF appears to drop by 
approximately 15.3%, even though there has been no change to the 
product. (EEI, No. 96 at p. 2).
    Regarding the concern expressed by EEI, DOE's translations do not 
assume nor reflect any change to product design. EPCA requires DOE to 
consider changes in energy conservation standards if a test procedure 
change alters the measurement, but does not prohibit a test procedure 
change that alters the measurement. (42 U.S.C. 6293(e)) In the November 
2016 test procedure final rule, DOE adopted provisions that amend the 
test procedure required to determine representations for CAC/HP, 
including SDHV products. These provisions impact the value of the test 
procedure results. For instance, the November 2016 test procedure final 
rule assumes higher heating loads for heat pumps in colder outdoor 
conditions, which will typically result in lower HSPF2 ratings. 
(November 2016 Test Procedure Final Rule, pp. 110-127) Simply stated, 
an SDHV product tested in accordance with the test procedure at the 
time of the 2015-2016 ASRAC Negotiations will get a different rating 
than the same SDHV product (without design changes) tested in 
accordance with the test procedure adopted in the November 2016 test 
procedure final rule. DOE's translations are intended to reflect these 
differences. DOE is using ``SEER2'', ``HSPF2'', and ``EER2'' to 
distinguish ratings determined by the November 2016 test procedure from 
the SEER, HSPF and EER ratings determined by past test procedures to 
mitigate confusion that may result from the possibility that products 
available before and after the November 2016 test procedure may have a 
different SEER2/HSPF2/EER2 than SEER/HSPF/EER rating despite no changes 
to design.
    Unico's SDHV data validate DOE's translations, which are also 
supported by AHRI and Lennox. DOE did not receive any other comments or 
data suggesting that its translations for SDHV products are 
inappropriate. For these reasons, DOE is proposing the SDHV 
translations presented in the October 2016 NODA in this NOPR.
    AHRI is concerned that the SEER2 translation DOE presented for 
space-constrained air conditioners is too high by 0.1. AHRI calculated 
SEER2 to be 11.7 at 0.30 in. wc. rather than 11.8. AHRI provided data 
for 4 space-constrained products to illustrate its results. (AHRI, No. 
94 at p. 2). Lennox also commented that DOE's SEER2 translation for 
space-constrained air conditioners is too high by 0.1. (Lennox, No. 97 
at p. 2) AHRI and Lennox also commented that DOE should adopt the same 
SEER2 standard for space-constrained air conditioners and heat pumps 
(AHRI, No. 94 at p.2; Lennox, No. 97 at p. 2) First Co. strongly 
disagrees with DOE's proposed translation of SEER to SEER2 values for 
space-constrained air conditioners because DOE's methodology for

[[Page 1617]]

determining SEER2 fails to account for the significant SEER reduction 
resulting from what they claim to be ``new'' coil-only testing 
requirements for space-constrained air conditioners. First Co. is 
referring to amendments to the certification requirements of 10 CFR 429 
adopted for CAC/HP in the June 2016 test procedure final rule, which 
became effective in July 2016 and are required for representations 
starting December 5, 2016. (10 CFR 429.16(a)(1)) First Co. stated that 
prior to the June 2016 test procedure final rule, space constrained 
units, which are manufactured and sold only for installation with 
blower coil indoor units, have been tested with blower coil units with 
high-efficiency motors (ECMs). The high-efficiency motors average 200W/
1000 scfm or less for indoor power compared with the default fan power 
value of 365W/1000 scfm applied under the ``coil- only'' test. First 
Co. claims that the impact of the ``coil-only'' test alone is 
approximately a 10% reduction in SEER of these products from 12 SEER to 
10.8 SEER, and that DOE's methodology is flawed because it uses a 
starting point of 365W/1000 (i.e., the ``coil-only'' default fan power 
value of the current test procedure) and only considers the change in 
energy usage from 365W/1000 scfm to 441 W/1000 scfm. They claim that 
this ignores the increase in energy usage from 200W/1000 scfm to 365W/
1000 scfm, and the resulting SEER reduction, caused by the imposition 
of the ``coil-only'' test. First Co. submits that SEER2 should be 
calculated by applying the following methodology, which takes into 
account the new ``coil-only'' test and the changes in the August 2016 
test procedure SNOPR: Replace 200W/1000 scfm (test data using ECM) with 
411 W/1000 scfm and recalculate the SEER. First Co. indicates that 
applying this methodology, SEER will be reduced by approximately 10% 
for the coil only test and by an additional 4% to account for the 
suggested 411 W/1000 scfm number, resulting in a 10.4 SEER2 rating for 
space constrained air conditioners. (First Co., No. 93 at pp. 1, 2)
    DOE appreciates the space-constrained air conditioner translation 
data provided by AHRI. DOE combined AHRI's data with the data DOE used 
to develop DOE's provisional translations. Note that after the October 
2016 NODA, DOE issued the November 2016 test procedure final rule in 
which it adopted a minimum external static pressure requirement of 0.3 
in. wc. for space-constrained air conditioners and heat pumps. 
(November 2016 Test Procedure Final Rule, pp. 97-99) Consequently, DOE 
combined AHRI's data with DOE's data reflective of performance at that 
operating condition. Once combined, the data validates AHRI's assertion 
that 11.7 is the appropriate SEER2 level for space-constrained air 
conditioners at 0.3 in. wc. Thus, DOE is adopting 11.7 SEER2 as the 
standard level for space-constrained air conditioners in this final 
rule. DOE disagrees with AHRI and Lennox that 11.7 SEER2 should also be 
used for space-constrained heat pumps. While space-constrained air 
conditioners are required to certify at least one coil-only combination 
that is representative of the least efficient coil-only combination 
distributed in commerce, space-constrained heat pumps have no coil-only 
requirement. (10 CFR 429.16(a)(1)) AHRI derived 11.7 SEER2 using 406 W/
1000 scfm (the default fan power at 0.3 in. wc.) for indoor fan power 
consumption. As discussed in the November 2015 test procedure SNOPR and 
subsequently referenced in the November 2016 test procedure final rule, 
this default fan power value is reflective of the weighted-average 
performance of indoor fan by motor type distribution projected for the 
effective date of this standard, which includes a significant majority 
of lower-efficiency PSC motors. 80 FR 69319-20 and (November 2016 Test 
Procedure Final Rule, p. 104) First Co. states that most space-
constrained blower-coil systems currently sold include a high-
efficiency ECM motor. (First Co., No 93 at pp. 1-2) Brushless permanent 
magnet motors (often referred to as ``ECM'') are more efficient than 
PSC motors. Thus, 406 W/1000 scfm is not representative of the field 
operation of space-constrained blower-coil systems being sold. DOE's 
provisional analysis presented in the October 2016 NODA is consistent 
with First Co.'s claims, showing that higher-efficiency motors 
typically used in space-constrained blower-coil systems sold today 
consume less than 406 W/1000 scfm, resulting in a higher SEER2 level 
for space-constrained blower-coil systems compared to space-constrained 
coil-only systems. DOE did not receive any additional comments or data 
regarding the SEER2 level for space-constrained heat pumps. For these 
reasons, DOE finds that a higher SEER2 level for space-constrained heat 
pumps--which is based on blower-coil performance--compared to space-
constrained air-conditioners--which is based on coil-only performance--
is appropriate. DOE adopts its provisional translation of 11.9 SEER2 
for space-constrained heat pumps for these reasons.
    DOE provided a response to First Co.'s comment regarding the 
required coil-only test for testing of space constrained products in 
the November 30, 2016 test procedure final rule. (November 2016 Test 
Procedure Final Rule, pp. 146-148)
2. Summary of Benefits and Costs (Annualized) of the Proposed Amended 
Standards
    The benefits and costs of the proposed amended standards can also 
be expressed in terms of annualized values. The annualized monetary 
values are the sum of: (1) The annualized national economic value 
(expressed in 2015$) of the benefits from operation of products that 
meet the proposed standards (consisting primarily of operating cost 
savings from using less energy, minus increases in product purchase 
costs, which is another way of representing consumer NPV), and (2) the 
annualized monetary value of the benefits of emission reductions, 
including CO2 emission reductions.\5\
---------------------------------------------------------------------------

    \5\ To convert the time-series of costs and benefits into 
annualized values, DOE calculated a present value in 2016, the year 
used for discounting the NPV of total consumer costs and savings. 
For the benefits, DOE calculated a present value associated with 
each year's shipments in the year in which the shipments occur 
(e.g., 2020 or 2030), and then discounted the present value from 
each year to 2016. The calculation uses discount rates of 3 and 7 
percent for all costs and benefits except for the value of 
CO2 reductions, for which DOE used case-specific discount 
rates. Using the present value, DOE then calculated the fixed annual 
payment over a 30-year period, starting in the compliance year, that 
yields the same present value.
---------------------------------------------------------------------------

    Estimates of annualized benefits and costs of the proposed amended 
standards for central air conditioners and heat pumps, expressed in 
2015$, are shown in Table II-6. The results under the primary estimate 
are as follows.
    Using a 7-percent discount rate for benefits and costs other than 
CO2 reduction, (for which DOE used a 3-percent discount rate 
along with the average SCC series that uses a 3-percent discount rate 
($40.6/t in 2015)), the estimated cost of the proposed standards is 
$741 million per year in increased product costs, while the estimated 
benefits are $1,041 million per year in reduced product operating 
costs, $337 million per year in CO2 reductions, and $22 
million per year in reduced NOX emissions. In this case, the 
net benefit would amount to $659 million per year.
    Using a 3-percent discount rate for all benefits and costs and the 
average SCC series that uses a 3-percent discount rate ($40.6/t in 
2015), the estimated cost of the proposed standards is $747 million per 
year in increased product costs,

[[Page 1618]]

while the estimated benefits are $1,488 million per year in reduced 
product operating costs, $337 million per year in CO2 
reductions, and $32 million per year in reduced NOX 
emissions. In this case, the net benefit would amount to $1,110 million 
per year.
    DOE also notes that, using a 7-percent discount rate for only the 
increased product costs and the reduced product operating costs, the 
net benefit would amount to $300 million per year. Using a 3-percent 
discount rate for only the increased product costs and the reduced 
product operating costs, the net benefit would amount to $741 million 
per year.

         Table II-6--Annualized Benefits and Costs of Proposed Amended Standards (Recommended TSL) for Central Air Conditioners and Heat Pumps *
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                   Million 2015$/year
                                                               -----------------------------------------------------------------------------------------
                                        Discount rate  %                                                                     High net benefits  estimate
                                                                     Primary estimate *       Low net benefits  estimate *                *
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                        Benefits
--------------------------------------------------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings  7............................  1,041.......................  1,005.......................  1,147.
                                 3............................  1,488.......................  1,425.......................  1,653.
CO2 Reduction (using mean SCC    5............................  100.........................  100.........................  100.
 at 5% discount rate) **.
CO2 Reduction (using mean SCC    3............................  337.........................  337.........................  337.
 at 3% discount rate) **.
CO2 Reduction (using mean SCC    2.5..........................  494.........................  494.........................  494.
 at 2.5% discount rate) **.
CO2 Reduction (using 95th        3............................  1,027.......................  1,027.......................  1,027.
 percentile SCC at 3% discount
 rate ) **.
NOX Reduction [dagger].........  7............................  22..........................  22..........................  49.
                                 3............................  32..........................  32..........................  73.
Total Benefits [dagger][dagger]  7 plus CO2 range.............  1,163 to 2,090..............  1,127 to 2,054..............  1,296 to 2,223.
                                 7............................  1,400.......................  1,364.......................  1,533.
                                 3 plus CO2 range.............  1,620 to 2,547..............  1,557 to 2,484..............  1,826 to 2,753.
                                 3............................  1,857.......................  1,794.......................  2,063.
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                          Costs
--------------------------------------------------------------------------------------------------------------------------------------------------------
Consumer Incremental Installed   7............................  741.........................  784.........................  723.
 Costs.
                                 3............................  747.........................  799.........................  725.
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                      Net Benefits
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total [dagger][dagger].........  7 plus CO2 range.............  422 to 1,349................  342 to 1,269................  573 to 1,500.
                                 7............................  659.........................  580.........................  810.
                                 3 plus CO2 range.............  873 to 1,800................  757 to 1,684................  1,100 to 2,028.
                                 3............................  1,110.......................  994.........................  1,338.
--------------------------------------------------------------------------------------------------------------------------------------------------------
* This table presents the annualized costs and benefits associated with central air conditioners and heat pumps shipped in 2023-2052. These results
  include benefits to consumers which accrue after 2050 from the products purchased in 2023-2052. The incremental installed costs include incremental
  equipment cost as well as installation costs. The CO2 reduction benefits are global benefits due to actions that occur nationally. The Primary, Low
  Net Benefits, and High Net Benefits Estimates utilize projections of energy prices from the AEO 2015 Reference case, Low Estimate, and High Estimate,
  respectively. In addition, incremental product costs reflect a modest decline rate for projected product prices in the Primary Estimate, a constant
  rate in the Low Net Benefits Estimate, and a higher decline rate in the High Net Benefits Estimate. Note that the Benefits and Costs may not sum to
  the Net Benefits due to rounding.
** The CO2 reduction benefits are calculated using 4 different sets of SCC values. The first three use the average SCC calculated using 5%, 3%, and 2.5%
  discount rates, respectively. The fourth represents the 95th percentile of the SCC distribution calculated using a 3% discount rate. The SCC values
  are emission year specific.
[dagger] DOE estimated the monetized value of NOX emissions reductions using benefit per ton estimates from the Regulatory Impact Analysis for the Clean
  Power Plan Final Rule, published in August 2015 by EPA's Office of Air Quality Planning and Standards. (Available at: http://www.epa.gov/cleanpowerplan/clean-power-plan-final-rule-regulatory-impact-analysis.) For the Primary Estimate and Low Net Benefits Estimate, DOE used a national
  benefit-per-ton estimate for NOX emitted from the Electric Generating Unit sector based on an estimate of premature mortality derived from the ACS
  study (Krewski et al., 2009). For the High Net Benefits Estimate, the benefit-per-ton estimates were based on the Six Cities study (Lepuele et al.,
  2011); these are nearly two-and-a-half times larger than those from the ACS study.
[dagger][dagger] Total Benefits for both the 3% and 7% cases are presented using only the average SCC with 3-percent discount rate. In the rows labeled
  ``7% plus CO2 range'' and ``3% plus CO2 range,'' the operating cost and NOX benefits are calculated using the labeled discount rate, and those values
  are added to the full range of CO2 values.

III. Public Participation

A. Submission of Comments

    DOE will accept comments, data, and information regarding this 
proposed rule no later than the date provided in the DATES section at 
the beginning of this proposed rule. Interested parties may submit 
comments, data, and other information using any of the methods 
described in the ADDRESSES section at the beginning of this proposed 
rule.
    Submitting comments via www.regulations.gov. The 
www.regulations.gov Web page will require you to provide your name and 
contact information. Your contact information will be viewable to DOE 
Building Technologies staff only. Your contact information will not be 
publicly viewable except for your first and last names, organization 
name (if any), and submitter representative name (if any). If your 
comment is not processed properly because of technical difficulties, 
DOE will use this information to contact you. If DOE cannot read your 
comment due to technical difficulties and cannot contact

[[Page 1619]]

you for clarification, DOE may not be able to consider your comment.
    However, your contact information will be publicly viewable if you 
include it in the comment itself or in any documents attached to your 
comment. Any information that you do not want to be publicly viewable 
should not be included in your comment, nor in any document attached to 
your comment. Otherwise, persons viewing comments will see only first 
and last names, organization names, correspondence containing comments, 
and any documents submitted with the comments.
    Do not submit to www.regulations.gov information for which 
disclosure is restricted by statute, such as trade secrets and 
commercial or financial information (hereinafter referred to as 
Confidential Business Information (``CBI'')). Comments submitted 
through www.regulations.gov cannot be claimed as CBI. Comments received 
through the Web site will waive any CBI claims for the information 
submitted. For information on submitting CBI, see the Confidential 
Business Information section.
    DOE processes submissions made through www.regulations.gov before 
posting. Normally, comments will be posted within a few days of being 
submitted. However, if large volumes of comments are being processed 
simultaneously, your comment may not be viewable for up to several 
weeks. Please keep the comment tracking number that www.regulations.gov 
provides after you have successfully uploaded your comment.
    Submitting comments via email, hand delivery/courier, or mail. 
Comments and documents submitted via email, hand delivery/courier, or 
mail also will be posted to www.regulations.gov. If you do not want 
your personal contact information to be publicly viewable, do not 
include it in your comment or any accompanying documents. Instead, 
provide your contact information in a cover letter. Include your first 
and last names, email address, telephone number, and optional mailing 
address. The cover letter will not be publicly viewable as long as it 
does not include any comments.
    Include contact information each time you submit comments, data, 
documents, and other information to DOE. If you submit via mail or hand 
delivery/courier, please provide all items on a CD, if feasible, in 
which case it is not necessary to submit printed copies. No 
telefacsimiles (faxes) will be accepted.
    Comments, data, and other information submitted to DOE 
electronically should be provided in PDF (preferred), Microsoft Word or 
Excel, WordPerfect, or text (ASCII) file format. Provide documents that 
are not secured, that are written in English, and that are free of any 
defects or viruses. Documents should not contain special characters or 
any form of encryption and, if possible, they should carry the 
electronic signature of the author.
    Campaign form letters. Please submit campaign form letters by the 
originating organization in batches of between 50 to 500 form letters 
per PDF or as one form letter with a list of supporters' names compiled 
into one or more PDFs. This reduces comment processing and posting 
time.
    Confidential Business Information. Pursuant to 10 CFR 1004.11, any 
person submitting information that he or she believes to be 
confidential and exempt by law from public disclosure should submit via 
email, postal mail, or hand delivery/courier two well-marked copies: 
one copy of the document marked ``confidential'' including all the 
information believed to be confidential, and one copy of the document 
marked ``non-confidential'' with the information believed to be 
confidential deleted. Submit these documents via email or on a CD, if 
feasible. DOE will make its own determination about the confidential 
status of the information and treat it according to its determination.
    Factors of interest to DOE when evaluating requests to treat 
submitted information as confidential include: (1) A description of the 
items; (2) whether and why such items are customarily treated as 
confidential within the industry; (3) whether the information is 
generally known by or available from other sources; (4) whether the 
information has previously been made available to others without 
obligation concerning its confidentiality; (5) an explanation of the 
competitive injury to the submitting person that would result from 
public disclosure; (6) when such information might lose its 
confidential character due to the passage of time; and (7) why 
disclosure of the information would be contrary to the public interest.
    It is DOE's policy that all comments may be included in the public 
docket, without change and as received, including any personal 
information provided in the comments (except information deemed to be 
exempt from public disclosure).

IV. Procedural Issues and Regulatory Review

    The regulatory reviews conducted for this proposed rule are 
identical to those conducted for the direct final rule published 
elsewhere in this Federal Register. Please see the direct final rule 
for further details.

V. Approval of the Office of the Secretary

    The Secretary of Energy has approved publication of this proposed 
rule.

List of Subjects in 10 CFR Part 431

    Administrative practice and procedure, Confidential business 
information, Energy conservation, Household appliances, Imports, 
Intergovernmental relations, Reporting and recordkeeping requirements, 
Small businesses.

    Issued in Washington, DC, on December 5, 2016.
David J. Friedman,
Acting Assistant Secretary, Energy Efficiency and Renewable Energy.

    For the reasons set forth in the preamble, DOE proposes to amend 
part 430 of chapter II, subchapter D, of title 10 of the Code of 
Federal Regulations, as set forth below:

PART 430--ENERGY CONSERVATION PROGRAM FOR CONSUMER PRODUCTS

0
1. The authority citation for part 430 continues to read as follows:

    Authority: 42 U.S.C. 6291-6309; 28 U.S.C. 2461 note.

0
2. Section 430.32 is amended by revising paragraphs (c) introductory 
text, (c) through (3), and adding paragraphs (c)(5) and (6) to read as 
follows:


430.32  Energy and water conservation standards and their compliance 
dates.

* * * * *
    (c) Central air conditioners and heat pumps. The energy 
conservation standards defined in terms of the heating seasonal 
performance factor are based on Region IV, the minimum standardized 
design heating requirement, and the provisions of 10 CFR 429.16. (1) 
Central air conditioners and central air conditioning heat pumps 
manufactured on or after January 1, 2015, and before January 1, 2023, 
must have Seasonal Energy Efficiency Ratio and Heating Seasonal 
Performance Factor not less than:

[[Page 1620]]



------------------------------------------------------------------------
                                             Seasonal         Heating
                                              energy         seasonal
              Product class                 efficiency      performance
                                           ratio (SEER)    factor (HSPF)
------------------------------------------------------------------------
(i) Split systems--air conditioners.....              13  ..............
(ii) Split systems--heat pumps..........              14             8.2
(iii) Single package units--air                       14  ..............
 conditioners...........................
(iv) Single package units--heat pumps...              14             8.0
(v) Small-duct, high-velocity systems...              12             7.2
(vi)(A) Space-constrained products--air               12  ..............
 conditioners...........................
(vi)(B) Space-constrained products--heat              12             7.4
 pumps..................................
------------------------------------------------------------------------

    (2) In addition to meeting the applicable requirements in paragraph 
(c)(1) of this section, products in product class (i) of paragraph 
(c)(1) of this section (i.e., split-systems--air conditioners) that are 
installed on or after January 1, 2015, and before January 1, 2023, in 
the States of Alabama, Arkansas, Delaware, Florida, Georgia, Hawaii, 
Kentucky, Louisiana, Maryland, Mississippi, North Carolina, Oklahoma, 
South Carolina, Tennessee, Texas, or Virginia, or in the District of 
Columbia, must have a Seasonal Energy Efficiency Ratio (SEER) of 14 or 
higher. Any outdoor unit model that has a certified combination with a 
rating below 14 SEER cannot be installed in these States. The least 
efficient combination of each basic model must comply with this 
standard.
    (3)(i) In addition to meeting the applicable requirements in 
paragraph (c)(1) of this section, products in product classes (i) and 
(iii) of paragraph (c)(1) of this section (i.e., split systems--air 
conditioners and single-package units--air conditioners) that are 
installed on or after January 1, 2015, and before January 1, 2023, in 
the States of Arizona, California, Nevada, or New Mexico must have a 
Seasonal Energy Efficiency Ratio (SEER) of 14 or higher and have an 
Energy Efficiency Ratio (EER) (at a standard rating of 95[emsp14][deg]F 
dry bulb outdoor temperature) not less than the following:

------------------------------------------------------------------------
                                                              Energy
                      Product class                         efficiency
                                                            ratio (EER)
------------------------------------------------------------------------
(A) Split systems--air conditioners with rated cooling              12.2
 capacity less than 45,000 Btu/hr.......................
(B) Split systems--air conditioners with rated cooling              11.7
 capacity equal to or greater than 45,000 Btu/hr........
(C) Single-package units--air conditioners..............            11.0
------------------------------------------------------------------------

    (ii) Any outdoor unit model that has a certified combination with a 
rating below 14 SEER or the applicable EER cannot be installed in this 
region. The least-efficient combination of each basic model must comply 
with this standard.
* * * * *
    (5) Central air conditioners and central air conditioning heat 
pumps manufactured on or after January 1, 2023, must have Seasonal 
Energy Efficiency Ratio 2 and Heating Seasonal Performance Factor 2 not 
less than:

------------------------------------------------------------------------
                                             Seasonal         Heating
                                              energy         seasonal
              Product class                 efficiency      performance
                                              ratio 2        factor 2
                                              (SEER2)         (HSPF2)
------------------------------------------------------------------------
(i)(A) Split systems--air conditioners              13.4  ..............
 with a certified cooling capacity less
 than 45,000 Btu/hr.....................
(i)(B) Split systems--air conditioners              13.4  ..............
 with a certified cooling capacity equal
 to or greater than 45,000 Btu/hr.......
(ii) Split systems--heat pumps..........            14.3             7.5
(iii) Single-package units--air                     13.4  ..............
 conditioners...........................
(iv) Single-package units--heat pumps...            13.4             6.7
(v) Small-duct, high-velocity systems...              12             6.1
(vi)(A) Space-constrained products--air             11.7  ..............
 conditioners...........................
(vi)(B) Space-constrained products--heat            11.9             6.3
 pumps..................................
------------------------------------------------------------------------

    (6)(i) In addition to meeting the applicable requirements in 
paragraph (c)(5) of this section, products in product classes (i) and 
(iii) of paragraph (c)(5) of this section (i.e., split systems--air 
conditioners and single-package units--air conditioners) that are 
installed on or after January 1, 2023, in the southeast or southwest 
must have Seasonal Energy Efficiency Ratio 2 and Energy Efficiency 
Ratio 2 not less than:

----------------------------------------------------------------------------------------------------------------
                                                                    Southeast *            Southwest **
                          Product class                          -----------------------------------------------
                                                                       SEER2           SEER2         EER2 ***
----------------------------------------------------------------------------------------------------------------
(A) Split-systems--air conditioners with a certified cooling                14.3            14.3  [dagger] 11.7/
 capacity less than 45,000 Btu/hr...............................                                             9.8
(B) Split-systems--air conditioners with a certified cooling                13.8            13.8  [dagger][dagge
 capacity equal to or greater than 45,000 Btu/hr................                                     r] 11.2/9.8
(C) Single-package units--air conditioners......................  ..............  ..............            10.6
----------------------------------------------------------------------------------------------------------------
* ``Southeast'' includes the States of Alabama, Arkansas, Delaware, Florida, Georgia, Hawaii, Kentucky,
  Louisiana, Maryland, Mississippi, North Carolina, Oklahoma, Puerto Rico, South Carolina, Tennessee, Texas,
  Virginia, the District of Columbia, and the U.S. Territories.
** ``Southwest'' includes the States of Arizona, California, Nevada, and New Mexico.
*** EER refers to the energy efficiency ratio at a standard rating of 95 [deg]F dry bulb outdoor temperature.
[dagger] The 11.7 EER2 standard applies to products with a certified SEER2 less than 15.2. The 9.8 EER2 standard
  applies to products with a certified SEER2 greater than or equal to 15.2.
[dagger][dagger] The 11.2 EER2 standard applies to products with a certified SEER2 less than 15.2. The 9.8 EER2
  standard applies to products with a certified SEER2 greater than or equal to 15.2.


[[Page 1621]]

    (ii) Any outdoor unit model that has a certified combination with a 
rating below the applicable standard level(s) for a region cannot be 
installed in that region. The least-efficient combination of each basic 
model must comply with this standard.
* * * * *
[FR Doc. 2016-29990 Filed 1-5-17; 8:45 am]
 BILLING CODE P