[Federal Register Volume 85, Number 80 (Friday, April 24, 2020)]
[Proposed Rules]
[Pages 22958-22970]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-08318]


 ========================================================================
 Proposed Rules
                                                 Federal Register
 ________________________________________________________________________
 
 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.
 
 ========================================================================
 

  Federal Register / Vol. 85, No. 80 / Friday, April 24, 2020 / 
Proposed Rules  

[[Page 22958]]



DEPARTMENT OF ENERGY

10 CFR Part 431

[EERE-2019-BT-STD-0033]
RIN 1904-AE78


Energy Conservation Program: Energy Conservation Standards for 
Single Package Vertical Units

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

ACTION: Request for information.

-----------------------------------------------------------------------

SUMMARY: The U.S. Department of Energy (DOE) is initiating an effort to 
determine whether to amend the current energy conservation standards 
for single package vertical air conditioners (SPVACs) and single 
package vertical heat pumps (SPVHPs), collectively referred to as 
single package vertical units (SPVUs). This request for information 
(RFI) solicits information from the public to help DOE determine 
whether amended standards for SPVUs, a category of covered commercial 
equipment, would result in significant additional energy savings and 
whether such standards would be technologically feasible and 
economically justified. DOE welcomes written comments from the public 
on any subject within the scope of this document (including those 
topics not specifically raised in this RFI), as well as the submission 
of data and other relevant information.

DATES: Written comments and information are requested and will be 
accepted on or before June 23, 2020.

ADDRESSES: Interested persons are encouraged to submit comments using 
the Federal eRulemaking Portal at http://www.regulations.gov. Follow 
the instructions for submitting comments. Alternatively, interested 
persons may submit comments, identified by docket number EERE-2019-BT-
STD-0033 and/or RIN 1904-AE78, by any of the following methods:
    1. Federal eRulemaking Portal: http://www.regulations.gov. Follow 
the instructions for submitting comments.
    2. Email: [email protected]. Include the docket number EERE-
2019-BT-STD-0033 and/or RIN 1904-AE78 in the subject line of the 
message.
    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. Telephone: 
(202) 287-1445. 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) 
287-1445. 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 this 
process, see section III of this document.
    Docket: The docket for this activity, which includes Federal 
Register notices, comments, and other supporting documents/materials, 
is available for review at http://www.regulations.gov. All documents in 
the docket are listed in the http://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.
    The docket web page can be found at: http://www.regulations.gov/#!docketDetail;D=EERE-2019-BT-STD-0033. The docket web page contains 
instructions on how to access all documents, including public comments, 
in the docket. See section III for information on how to submit 
comments through http://www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Ms. Catherine Rivest, 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) 586-7335. Email: 
[email protected].
    Mr. Eric Stas, U.S. Department of Energy, Office of the General 
Counsel, GC-33, 1000 Independence Avenue SW, Washington, DC 20585-0121. 
Telephone: (202) 586-5827. Email: [email protected].
    For further information on how to submit a comment or review other 
public comments and the docket, contact the Appliance and Equipment 
Standards Program staff at (202) 287-1445 or by email: 
[email protected].

SUPPLEMENTARY INFORMATION: 

Table of Contents

I. Introduction
    A. Authority and Background
    B. Rulemaking Process
II. Request for Information and Comments
    A. Equipment Covered by This Process
    B. Market and Technology Assessment
    1. Energy Efficiency Descriptor
    2. Equipment Classes
    3. Model Counts
    4. Technology Assessment
    C. Screening Analysis
    D. Engineering Analysis
    1. Baseline Efficiency Levels
    2. Maximum Available and Maximum Technologically Feasible Levels
    3. Manufacturer Production Costs and Manufacturing Selling Price
    E. Mark-ups Analysis and Distribution Channels
    F. Energy Use Analysis
    1. Model Buildings
    G. Life-Cycle Cost and Payback Period Analysis
    1. Repair and Maintenance Costs
    H. Shipments Analysis
    I. Manufacturer Impact Analysis
    J. Other Energy Conservation Standards Topics
    1. Market Failures
    2. Emerging Smart Technology Market
    3. Other Issues
III. Submission of Comments

I. Introduction

A. Authority and Background

    The Energy Policy and Conservation Act, as amended (EPCA),\1\ 
Public Law 94-163 (42 U.S.C. 6291-6317, as codified), among other 
things, authorizes DOE to regulate the energy efficiency of a number of 
consumer products and certain industrial

[[Page 22959]]

equipment. Title III, Part C \2\ of EPCA (42 U.S.C. 6311-6317, as 
codified), added by Public Law 95-619, Title IV, section 441(a), 
established the Energy Conservation Program for Certain Industrial 
Equipment, which sets forth a variety of provisions designed to improve 
energy efficiency. This equipment includes SPVUs, which are a category 
of small, large, and very large commercial package air conditioning and 
heating equipment and the subject of this RFI. (42 U.S.C. 6311(1)(B)-
(D)) EPCA prescribed initial standards for this equipment. (42 U.S.C. 
6313(a)(1)-(2))
---------------------------------------------------------------------------

    \1\ All references to EPCA in this document refer to the statute 
as amended through America's Water Infrastructure Act of 2018, 
Public Law 115-270 (Oct. 23, 2018).
    \2\ For editorial reasons, upon codification in the U.S. Code, 
Part C was redesignated Part A-1.
---------------------------------------------------------------------------

    Under EPCA, DOE's energy conservation program consists essentially 
of four parts: (1) Testing, (2) labeling, (3) Federal energy 
conservation standards, and (4) certification and enforcement 
procedures. Relevant provisions of EPCA specifically include 
definitions (42 U.S.C. 6311), energy conservation standards (42 U.S.C. 
6313), test procedures (42 U.S.C. 6314), labeling provisions (42 U.S.C. 
6315), and the authority to require information and reports from 
manufacturers (42 U.S.C. 6316).
    Federal energy efficiency requirements for covered equipment 
established under EPCA generally supersede State laws and regulations 
concerning energy conservation testing, labeling, and standards. (42 
U.S.C. 6316(a) and (b); 42 U.S.C. 6297) 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 
EPCA. (42 U.S.C. 6316(b)(2)(D))
    The Energy Independence and Security Act of 2007 (EISA 2007), 
Public Law 110-140, amended EPCA in relevant part to establish 
equipment classes and minimum energy conservation standards for SPVUs. 
(42 U.S.C. 6313(a)(10)(A)) In doing so, the EISA 2007 amendments 
established Federal energy conservation standards for SPVUs at levels 
that generally corresponded to the levels in the 2004 edition of the 
American Society of Heating, Refrigerating and Air-Conditioning 
Engineers (ASHRAE) Standard 90.1, Energy Standard for Buildings Except 
Low-Rise Residential Buildings (i.e., ASHRAE Standard 90.1-2004). On 
March 23, 2009, DOE published a final rule that codified the statutory 
equipment classes and energy conservation standards for SPVUs into 
DOE's regulations in the Code of Federal Regulations (CFR) at 10 CFR 
431.97. 74 FR 12058, 12073-12074 (March 2009 final rule).
    EPCA further required that, not later than 3 years after the date 
of enactment of EISA 2007, DOE must review ASHRAE Standard 90.1, with 
respect to SPVACs and SPVHPs in accordance with the procedures 
established under 42 U.S.C. 6313(a)(6). (42 U.S.C. 6313(a)(10)(B)) 
Additionally, in acknowledgement of technological changes that yield 
energy efficiency benefits, Congress further directed DOE through EPCA 
to consider amending the existing Federal energy conservation standards 
for SPVUs, each time ASHRAE amends Standard 90.1 with respect to such 
equipment. (42 U.S.C. 6313(a)(6)(A)) When triggered in this manner, DOE 
must undertake and publish an analysis of the energy savings potential 
of amended energy efficiency standards, and amend the Federal standards 
to establish a uniform national standard at the minimum level specified 
in the amended ASHRAE Standard 90.1, unless DOE determines that there 
is clear and convincing evidence to support a determination that a 
more-stringent standard level as a national standard would produce 
significant additional energy savings and be technologically feasible 
and economically justified. (42 U.S.C. 6313(a)(6)(A)(i)-(ii))
    On September 23, 2015, DOE published amendments to the SPVU 
standards in accordance with the 3-year review prescribed by EPCA as 
amended by EISA 2007 and in response to the 2013 update to ASHARE 
Standard 90.1 (i.e., ASHRAE Standard 90.1-2013). 80 FR 57438 (September 
2015 final rule). For four of the six SPVU equipment classes, DOE 
adopted the levels specified ASHRAE Standard 90.1-2013. 80 FR 57438, 
57439 (Sept. 23, 2015). For the remaining two equipment classes, DOE 
concluded that there is clear and convincing evidence to support more 
stringent standards than the levels in ASHRAE Standard 90.1-2013. Id. 
Compliance dates for the amended standards were as follows: SPVACs and 
SPVHPs <65,000 Btu/h cooling capacity beginning September 23, 2019; 
SPVACs and SPVHPs >=65,000 and <135,000 Btu/h cooling capacity, 
beginning October 9, 2015; and SPVACs and SPVHPs >=135,000 and <240,000 
Btu/h cooling capacity, beginning October 9, 2016. 80 FR 57438, 57438 
(Sept. 23, 2015). The current energy conservation standards are 
codified at 10 CFR 431.97.
    The currently applicable DOE test procedure for SPVUs is set forth 
at 10 CFR 431.96. DOE's test procedures for SPVUs were established in a 
final rule for commercial heating, air-conditioning, and water-heating 
equipment published on May 16, 2012. 77 FR 28928. The current test 
procedure incorporates by reference American National Standards 
Institute (ANSI)/Air-Conditioning, Heating, and Refrigeration Institute 
(AHRI) Standard 390-2003, Performance Rating of Single Package Vertical 
Air-Conditioners and Heat Pumps (ANSI/AHRI 390-2003), omitting section 
6.4. The current test procedure also requires that manufacturers adhere 
to additional provisions in paragraphs (c) and (e) of 10 CFR 431.96. 
Paragraph (c) of 10 CFR 431.96 provides the method for an optional 
compressor break-in period, while paragraph (e) of 10 CFR 431.96 
provides specifications for addressing key information typically found 
in the installation and operation manuals.
    ASHRAE Standard 90.1 has been updated on several occasions since 
the 2013 version, the most recently being released on October 26, 2016 
(i.e., ASHRAE Standard 90.1-2016). However, the standard levels for 
SPVUs remain unchanged from the 2013 version.
    In those situations where ASHRAE has not acted to amend the levels 
in Standard 90.1 for the equipment types enumerated in the statute, 
EPCA also provides for a 6-year-lookback to consider the potential for 
amending the uniform national standards. (42 U.S.C. 6313(a)(6)(C)) 
Specifically, pursuant to EPCA, DOE is required to conduct an 
evaluation of each class of covered equipment in the ASHRAE Standard 
90.1 ``every 6 years'' to determine whether the applicable energy 
conservation standards need to be amended. (42 U.S.C. 6313(a)(6)(C)(i)) 
DOE must publish either a notice of proposed rulemaking (NOPR) to 
propose amended standards or a notice of determination that existing 
standards do not need to be amended. (42 U.S.C. 6313(a)(6)(C)(i)(I)-
(II)) In making a determination, DOE must evaluate whether amended 
standards would result in significant additional conservation of energy 
and are technologically feasible and economically justified. (42 U.S.C. 
6313(a)(6)(C)(i)(I); 42 U.S.C. 6313(a)(6)(A)) In proposing new 
standards under the 6-year-lookback review, DOE must undertake the same 
considerations as if it were adopting a standard that is more stringent 
than an amendment to ASHRAE Standard 90.1. (42 U.S.C. 
6313(a)(6)(C)(i)(II); 42 U.S.C. 6313(a)(6)(B)) This is a separate 
statutory review obligation, as differentiated from the obligation 
triggered by an ASHRAE Standard 90.1 amendment, as previously 
discussed.

[[Page 22960]]

    While the statute continues to defer to ASHRAE's lead on covered 
equipment subject to Standard 90.1, it does allow for a comprehensive 
review of all such equipment and the potential for adopting more-
stringent standards, where supported by the requisite clear and 
convincing evidence. That is, DOE interprets ASHRAE's not amending 
Standard 90.1 with respect to a product or equipment type as ASHRAE's 
determination that the standard applicable to that product or equipment 
type is already at an appropriate level of stringency, and DOE will not 
amend that standard unless there is clear and convincing evidence that 
a more-stringent level is justified. In those instances where DOE makes 
a determination that the standards for the equipment in question do not 
need to be amended, the statute requires the Department to revisit that 
decision within three years to either make a new determination or 
propose amended standards. (42 U.S.C. 6313(a)(6)(C)(iii)(II))
    DOE is publishing this RFI to collect data and information to 
inform its decision consistent with its obligations under EPCA.

B. Rulemaking Process

    As discussed, DOE is required to conduct an evaluation of each 
class of covered equipment in ASHRAE Standard 90.1 every 6 years. (42 
U.S.C. 6313(a)(6)(C)(i)) In making a determination of whether standards 
for such equipment need to be amended, DOE must follow specific 
statutory criteria. DOE must evaluate whether amended Federal standards 
would result in significant additional conservation of energy and are 
technologically feasible and economically justified. (42 U.S.C. 
6313(a)(6)(C)(i) (referencing 42 U.S.C. 6313(a)(6)(A)(ii)(II)) To 
determine whether a potential proposed standard is economically 
justified, EPCA requires that DOE determine whether the benefits of the 
standard exceed its burdens by considering, to the greatest extent 
practicable, the following seven factors:

    (1) The economic impact of the standard on manufacturers and 
consumers of the equipment subject to the standard;
    (2) The savings in operating costs throughout the estimated 
average life of the covered equipment in the type (or class) 
compared to any increase in the price of, initial charges for, or 
maintenance expenses of the covered equipment that are likely to 
result from the standard;
    (3) The total projected amount of energy savings likely to 
result directly from the standard;
    (4) Any lessening of the utility or the performance of the 
covered equipment 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 conservation; and
    (7) Other factors the Secretary of Energy (Secretary) considers 
relevant.

(42 U.S.C. 6313(a)(6)(C)(i)(II) (referencing 42 U.S.C. 
6313(a)(6)(B)(ii)(I)-(VII)))
    DOE fulfills these and other applicable requirements by conducting 
a series of analyses throughout the rulemaking process. Table I.1 shows 
the individual analyses that are performed to satisfy each of the 
requirements within EPCA.

       Table I.1--EPCA Requirements and Corresponding DOE Analysis
------------------------------------------------------------------------
          EPCA requirement                Corresponding DOE analysis
------------------------------------------------------------------------
Significant Energy Savings.........   Shipments Analysis.
                                      National Impact Analysis.
                                      Energy and Water Use
                                      Determination.
Technological Feasibility..........   Market and Technology
                                      Assessment.
                                      Screening Analysis.
                                      Engineering Analysis.
Economic Justification:
    1. Economic impact on             Manufacturer Impact
     manufacturers and consumers.     Analysis.
                                      Life-Cycle Cost and
                                      Payback Period Analysis.
                                      Life-Cycle Cost Subgroup
                                      Analysis.
                                      Shipments Analysis.
    2. Lifetime operating cost        Mark-ups for Product Price
     savings compared to increased    Determination.
     cost for the product.            Energy and Water Use
                                      Determination.
                                      Life-Cycle Cost and
                                      Payback Period Analysis.
    3. Total projected energy         Shipments Analysis.
     savings.                         National Impact Analysis.
    4. Impact on utility or           Screening Analysis.
     performance.                     Engineering Analysis.
    5. Impact of any lessening of     Manufacturer Impact
     competition.                     Analysis.
    6. Need for national energy and   Shipments Analysis.
     water conservation.              National Impact Analysis.
    7. Other factors the Secretary    Employment Impact
     considers relevant.              Analysis.
                                      Utility Impact Analysis.
                                      Emissions Analysis.
                                      Monetization of Emission
                                      Reductions Benefits.
                                      Regulatory Impact
                                      Analysis.
------------------------------------------------------------------------

    As detailed throughout this RFI, DOE is publishing this document 
seeking input and data from interested parties to aid in the 
development of the technical analyses on which DOE will ultimately rely 
to determine whether (and if so, how) to amend the energy conservation 
standards for SPVUs.

II. Request for Information and Comments

    In the following sections, DOE has identified a variety of issues 
on which it seeks input to aid in the development of the technical and 
economic analyses regarding whether amended standards for SPVUs may be 
warranted. DOE also welcomes comments on other issues relevant to this 
data-gathering process that may not specifically be identified in this 
document.
    In addition, as an initial matter, DOE seeks comment on whether 
there have been sufficient technological or market changes since the 
most recent standards

[[Page 22961]]

update that may justify a new rulemaking to consider more-stringent 
standards. Specifically, DOE seeks data and information that could 
enable the agency to determine whether DOE should propose a ``no new 
standard'' determination because a more-stringent standard: (1) Would 
not result in a significant additional savings of energy; (2) is not 
technologically feasible; (3) is not economically justified; or (4) any 
combination of foregoing.

A. Equipment Covered by This Process

    This RFI covers equipment that meet the definitions of SPVACs and 
SPVHPs, as codified at 10 CFR 431.92. The definitions for SPVACs and 
SPVHPs were established under EPCA, as amended by EISA 2007 (see 42 
U.S.C. 6311(22) and (23)), and codified in the March 2009 final rule. 
74 FR 12058, 12061, 12073 (March 23, 2009).
    DOE defines a ``single package vertical air conditioner'' as air-
cooled commercial package air conditioning and heating equipment that:

    (1) Is factory assembled as a single package that:
    (i) Has major components that are arranged vertically;
    (ii) Is an encased combination of cooling and optional heating 
components; and
    (iii) Is intended for exterior mounting on, adjacent interior 
to, or through an outside wall;
    (2) Is powered by single- or three-phase current;
    (3) May contain one or more separate indoor grilles, outdoor 
louvers, various ventilation options, indoor free air discharges, 
ductwork, well plenum, or sleeves; and
    (4) Has heating components that may include electrical 
resistance, steam, hot water, or gas, but may not include reverse 
cycle refrigeration as a heating means.

10 CFR 431.92

    DOE defines ``single package vertical heat pumps'' as a single 
package vertical air conditioner that: (1) Uses reverse cycle 
refrigeration as its primary heating source and (2) may include 
secondary supplemental heating by means of electrical resistance, 
steam, hot water, or gas. Id.
    Issue A.1 DOE requests comment on whether the definitions for SPVUs 
require any revisions--and if so, how those definitions should be 
revised. Please provide the rationale for any suggested change.
    Issue A.2 DOE requests comment on whether additional equipment 
definitions are necessary to close any potential gaps in existing 
coverage between equipment types. If there are such gaps, DOE also 
seeks input on whether equipment currently exists in the market that 
are in such a gap or whether they are being planned for introduction.

B. Market and Technology Assessment

    The market and technology assessment that DOE routinely conducts 
when analyzing the impacts of a potential new or amended energy 
conservation standard provides information about the SPVUs industry 
that will be used in DOE's analysis throughout the rulemaking process. 
DOE uses qualitative and quantitative information to characterize the 
structure of the industry and market. DOE identifies manufacturers, 
estimates market shares and trends, addresses regulatory and non-
regulatory initiatives intended to improve energy efficiency or reduce 
energy consumption, and explores the potential for efficiency 
improvements in the design and manufacturing of SPVUs. DOE also reviews 
product literature, industry publications, and company websites. 
Additionally, DOE considers conducting interviews with manufacturers to 
improve its assessment of the market and available technologies for 
SPVUs.
1. Energy Efficiency Descriptor
    For SPVUs, DOE currently prescribes energy efficiency ratio (EER) 
as the cooling mode metric and coefficient of performance (COP) as the 
heating mode metric. 10 CFR 431.96. These energy efficiency descriptors 
are the same as those included in ASHRAE 90.1-2016 for SPVUs. EER is 
the ratio of the produced cooling effect of the SPVU to its net work 
input, expressed in Btu/watt-hour, and measured at standard rating 
conditions. COP is the ratio of the produced heating effect of the SPVU 
to its net work input, when both are expressed in identical units of 
measurement, and measured at standard rating conditions. DOE's test 
procedure for SPVUs does not include a seasonal metric that accounts 
for part-load performance.
    On July 20, 2018, DOE published an RFI (July 2018 TP RFI) to 
collect information and data to consider amendments to DOE's test 
procedure for SPVUs. 83 FR 34499. As part of the July 2018 TP RFI, DOE 
requested comment on whether adoption of a cooling-mode metric that 
integrates part-load performance would better represent full-season 
efficiency for SPVUs. 83 FR 34499, 34503 (July 20, 2018). If DOE amends 
the SPVU test procedure to incorporate a part-load metric, it would 
conduct any analysis for future standards rulemakings, if any, based on 
the amended test procedure.
2. Equipment Classes
    For SVPUs, the current energy conservation standards specified in 
10 CFR 431.97 are based on six equipment classes determined according 
to the following performance-related features that provide utility to 
the consumer: Cooling capacity and whether the equipment is an air 
conditioner or a heat pump. Table II.1 lists the current six equipment 
classes for SPVUs:

               Table II.1--Current SPVU Equipment Classes
------------------------------------------------------------------------
                                           Equipment class
------------------------------------------------------------------------
1..........................  SPVAC <65,000 Btu/h.
2..........................  SPVHP <65,000 Btu/h.
3..........................  SPVAC >=65,000 Btu/h and <135,000 Btu/h.
4..........................  SPVHP >=65,000 Btu/h and <135,000 Btu/h.
5..........................  SPVAC >=135,000 Btu/h and <240,000 Btu/h.
6..........................  SPVHP >=135,000 Btu/h and <240,000 Btu/h.
------------------------------------------------------------------------

    Issue B.1 DOE requests feedback on the current SPVU equipment 
classes and whether changes to these individual equipment classes and 
their descriptions should be made or whether certain classes should be 
merged or separated. Specifically, DOE requests comment on 
opportunities to combine equipment classes that could reduce regulatory 
burden. DOE further requests feedback on whether combining certain 
classes could impact product utility by eliminating any performance-
related features or impact the stringency of the current energy 
conservation standard for these equipment. DOE also requests comment on 
separating any of the existing equipment classes and whether it would 
reduce any compliance burdens.
3. Model Counts
    For this RFI, DOE conducted a review of the current market for 
SPVUs based on models included in DOE's Compliance Certification 
Database.\3\ Table II.2 shows the number of models listed within the 
DOE Compliance Certification Database that DOE has identified for each 
class of SPVUs. Based on DOE's review of equipment currently available 
on the market, DOE did not identify any SPVAC models with a cooling 
capacity greater than

[[Page 22962]]

135,000 Btu/h or SPVHP models with cooling capacities greater than 
65,000 Btu/h.
---------------------------------------------------------------------------

    \3\ DOE's Compliance Certification Database can be found at 
https://www.regulations.doe.gov/certification-data/products.html#q=Product_Group_s%3A* (Last accessed Jan. 29, 2020).

    Table II.2--Number of Models Under Current SPVU Equipment Classes
------------------------------------------------------------------------
                                                 Number of models
     Cooling capacity range (Btu/h)      -------------------------------
                                              SPVACs          SPVHPs
------------------------------------------------------------------------
<65,000.................................             411             221
>=65,000 and <135,000...................              58               0
>=135,000 and <240,000..................               0               0
------------------------------------------------------------------------

    Issue B.2 DOE requests comment on whether there are units currently 
available on the market in the following equipment classes: SPVHP 
>=65,000 Btu/h and <135,000 Btu/h, SPVAC >=135,000 Btu/h and <240,000 
Btu/h, and SPVHP >=135,000 Btu/h and <240,000 Btu/h.
4. Technology Assessment
    In analyzing the feasibility of potential new or amended energy 
conservation standards, DOE uses information about existing and past 
technology options and prototype designs to help identify technologies 
that manufacturers could use to meet and/or exceed a given set of 
energy conservation standards under consideration. In consultation with 
interested parties, DOE intends to develop a list of technologies to 
consider in its analysis. That analysis will likely include a number of 
the technology options DOE previously considered during its most recent 
rulemaking for SPVUs (i.e., the September 2015 final rule). 80 FR 57438 
(Sept. 23, 2015). A complete list of those prior options appears in 
Table II.3.

 Table II.3--Technology Options for SPVUs Considered in the Development
                    of the September 2015 Final Rule
------------------------------------------------------------------------
 
------------------------------------------------------------------------
                           Technology Options
------------------------------------------------------------------------
Heat Exchanger Improvements...............  Increased frontal coil area.
                                            Increased depth of coil.
                                            Microchannel heat
                                             exchangers.
                                            Dual condenser heat
                                             exchangers.
Indoor Blower and Outdoor Fan Improvements  Improved fan motor
                                             efficiency.
                                            Improved fan blades.
Compressor Improvements...................  Improved compressor
                                             efficiency.
                                            Multi-speed compressors.
Other Improvements........................  Thermostatic expansion
                                             valves.
                                            Electronic expansion valves.
                                            Thermostatic cyclic
                                             controls.
------------------------------------------------------------------------

    In addition, DOE conducted preliminary market research by examining 
manufacturer product literature and published technical literature 
(e.g., reports, journal articles, or presentations) which identified 
specific technologies and design options, and DOE will consider these 
along with others identified during the rulemaking process, should it 
determine that a rulemaking is necessary. Table II.4 lists additional 
technology options that DOE may consider in a future SPVU energy 
conservation standards rulemaking.

             Table II.4--Other Technology Options for SPVUs
------------------------------------------------------------------------
 
------------------------------------------------------------------------
                           Technology Options
------------------------------------------------------------------------
Indoor Blower and Outdoor Fan Improvements  Variable speed condenser fan/
                                             motor.
                                            Variable speed indoor blower/
                                             motor.
------------------------------------------------------------------------

    Issue B.4 DOE seeks information on the technologies listed in Table 
II.3 regarding their applicability to the current market and how these 
technologies may impact the efficiency of SPVUs, as measured according 
to the DOE test procedure. DOE also seeks information on how these 
technologies may have changed since they were considered in the 
September 2015 final rule analysis. Specifically, DOE seeks information 
on the range of efficiencies or performance characteristics that are 
currently available for each technology option.
    Issue B.5 DOE seeks information on the technologies listed in Table 
II.4 regarding their market adoption, costs, and any concerns with 
incorporating them into equipment (e.g., impacts on consumer utility, 
potential safety concerns, manufacturing/production/implementation 
issues).
    Issue B.6 DOE seeks comment on other technology options that it 
should consider for inclusion in its analysis and if these technologies 
may impact equipment features or consumer utility.
    DOE did not evaluate several technology options in the September 
2015 final rule for the following reasons:
     Data were not available to evaluate the energy efficiency 
characteristics;
     The test procedure would not measure the energy impact of 
these technologies; and
     Available data suggest that the efficiency benefits of the 
technology are negligible.

80 FR 57438, 57454-57455 (Sept. 23, 2015)

    DOE did not evaluate microchannel heat exchangers for the September 
2015 final rule engineering analysis because there was insufficient 
information regarding improvements to the overall system's energy 
efficiency. 80 FR 57438, 57455 (Sept. 23, 2015).
    Issue B.7 DOE requests information and data on how microchannel 
heat exchangers may impact overall system energy efficiency for SPVUs.
    In addition, DOE did not consider the following technologies for 
the engineering analysis because they were determined not to have a 
measured impact on energy consumption based on the DOE test procedure:
     Thermostatic Expansion Valves (TXVs) and Electronic 
Expansion Valves (EEVs);
     Thermostatic Cyclic Controls, and
     Multi-Speed Compressors, Id.
    As discussed in section II.B.1 of this RFI, the current DOE test 
procedure for SPVUs measures efficiency at full-load steady-state 
conditions, while TXV, EEV, thermostatic cyclic controls, and multi-
speed compressor technologies only provide benefit at part-load 
conditions. TXVs and EEVs regulate the

[[Page 22963]]

flow of liquid refrigerant entering the evaporator and can adapt to 
changes in operating conditions, such as variations in temperature, 
humidity, and compressor staging. As a result, TXVs and EEVs can 
control for optimum system operating parameters over a wide range of 
operating conditions, and are a consideration in evaluating improved 
seasonal efficiency. Thermostatic cyclic controls more accurately 
monitor room temperature and allow for modulation of performance to 
match room conditions, which impacts seasonal energy savings. Multi-
speed compressors (e.g., two-speed, variable-capacity, and variable-
speed compressors) enable modulation of the refrigeration system 
cooling capacity, allowing the unit to match the cooling load. This 
modulation can improve efficiency by reducing off-cycle losses and can 
improve heat exchanger effectiveness at part-load conditions by 
operating at a lower mass flow rate.
    DOE notes that the technologies identified in Table II.4 (i.e., 
variable speed condenser fan motors and variable speed indoor blower 
motors) would likewise not have a measured impact on energy consumption 
based on the current test procedure. These technologies allow for 
varying fan speed to reduce airflow rate at part-load operation, which 
is not accounted for under the current metric.
    As discussed in section II.B.1 of this RFI, DOE may consider 
adopting for SPVUs a cooling-mode metric that integrates part-load 
performance.
    Issue B.8 DOE requests comment and data on how the following 
technology options would impact the measured energy consumption for 
SPVUs based on the current DOE test procedure: TXVs and EEVs, 
thermostatic cyclic controls, multi-speed compressors, variable speed 
condenser fan motors, and variable speed indoor blower motors. In the 
event DOE were to amend the metric for the SPVU standards to account 
for part-load performance, DOE requests data on the efficiency 
improvement associated with these technology options when considering 
part-load operation. In addition, DOE requests data on any other 
technology options not listed above that would improve the efficiency 
of equipment under part-load conditions.
    Finally, DOE did not consider the following technologies for the 
engineering analysis because they were commonly found in most baseline 
and higher-efficiency SPVUs:
     Improved Fin Design,
     Improved Tube Design, and
     Hydrophilic Film Coating on Fins.
    Id.
    Issue B.9 DOE requests comment on whether the above technology 
options are still commonly found in both baseline and higher-efficiency 
SPVUs.

C. Screening Analysis

    The purpose of the screening analysis is to evaluate the 
technologies that improve equipment efficiency to determine which 
technologies will be eliminated from further consideration and which 
will be passed to the engineering analysis for further consideration.
    DOE determines whether to eliminate certain technology options from 
further consideration based on the following criteria:

    (1) Technological feasibility. Technologies that are not 
incorporated in commercial equipment or in working prototypes will 
not be considered further.
    (2) Practicability to manufacture, install, and service. If it 
is determined that mass production of a technology in commercial 
products and reliable installation and servicing of the technology 
could not be achieved on the scale necessary to serve the relevant 
market at the time of the compliance date of the standard, then that 
technology will not be considered further.
    (3) Impacts on equipment utility or equipment availability. If a 
technology is determined to have significant adverse impact on the 
utility of the equipment to significant subgroups of consumers, or 
result in the unavailability of any covered equipment type or class 
with performance characteristics (including reliability), features, 
sizes, capacities, and volumes that are substantially the same as 
equipment generally available in the United States at the time, it 
will not be considered further.
    (4) Adverse impacts on health or safety. If it is determined 
that a technology will have significant adverse impacts on health or 
safety, it will not be considered further.
    (5) Unique-Pathway Proprietary Technologies. If a design option 
utilizes proprietary technology that represents a unique pathway to 
achieving a given efficiency level, that technology will not be 
considered further.

    See 10 CFR part 430, subpart C, appendix A, 6(c)(3) and 7(b).
    Technology options identified in the technology assessment are 
evaluated against these criteria using DOE analyses and inputs from 
interested parties (e.g., manufacturers, trade organizations, and 
energy efficiency advocates). Technologies that pass through the 
screening analysis are referred to as ``design options'' in the 
engineering analysis. Technology options that fail to meet one or more 
of the five criteria are eliminated from consideration.
    Issue C.1 DOE requests feedback on what impact, if any, the five 
screening criteria described in this section would have on each of the 
technology options listed in Table II.3 and Table II.4 with respect to 
SPVUs. Similarly, DOE seeks information regarding how these same 
criteria would affect consideration of any other technology options not 
already identified in this document with respect to their potential use 
in SPVUs.
    DOE did not screen out any technology options in the September 2015 
final rule based on any of the screening criteria. Table II.5 
summarizes the preliminary technology options which DOE intends to 
examine further as part of the engineering analysis.

          Table II.5--Preliminary Technology Options for SPVUs
------------------------------------------------------------------------
 
------------------------------------------------------------------------
                           Technology Options
------------------------------------------------------------------------
Heat Exchanger Improvements...............  Increased frontal coil area.
                                            Increased depth of coil.
                                            Microchannel heat
                                             exchangers.
                                            Dual condenser heat
                                             exchangers.
Indoor Blower and Outdoor Fan Improvements  Improved fan motor
                                             efficiency.
                                            Improved fan blades.
                                            Variable speed condenser fan/
                                             motor.
                                            Variable speed indoor blower/
                                             motor.
Compressor Improvements...................  Improved compressor
                                             efficiency.
                                            Multi-speed compressors.
Other Improvements........................  Thermostatic expansion
                                             valves.
                                            Electronic expansion valves.
                                            Thermostatic cyclic
                                             controls.
------------------------------------------------------------------------

D. Engineering Analysis

    The engineering analysis estimates the cost-efficiency relationship 
of equipment at different levels of increased energy efficiency 
(efficiency levels). This relationship serves as the basis for the 
cost-benefit calculations for consumers, manufacturers, and the Nation. 
In determining the cost-efficiency relationship, DOE estimates the 
increase in manufacturer production cost (MPC) associated with 
increasing the efficiency of equipment above the baseline (i.e., the 
current minimum energy conservation standards), up to the maximum 
technologically feasible (max-tech) efficiency level for each equipment 
class.
    DOE historically has used the following three methodologies to 
generate incremental manufacturing costs and establish efficiency 
levels (ELs) for analysis: (1) The design-option

[[Page 22964]]

approach, which provides the incremental costs of adding to a baseline 
model design options that will improve its efficiency; (2) the 
efficiency-level approach, which provides the relative costs of 
achieving increases in energy efficiency levels, without regard to the 
particular design options used to achieve such increases; and (3) the 
cost-assessment (or reverse engineering) approach, which provides 
``bottom-up'' manufacturing cost assessments for achieving various 
levels of increased efficiency, based on detailed cost data for parts 
and materials, labor, shipping/packaging, and investment for models 
that operate at particular efficiency levels.
1. Baseline Efficiency Levels
    For each established equipment class, DOE selects a baseline model 
as a reference point against which any changes resulting from new or 
amended energy conservation standards can be measured. The baseline 
model in each equipment class represents the characteristics of common 
or typical equipment in that class. Typically, a baseline model is one 
that just meets the current minimum energy conservation standards and 
provides basic consumer utility.
    If it determines that a rulemaking is necessary, consistent with 
this analytical approach, DOE tentatively plans to consider the current 
minimum energy conservation standards \4\ to establish the baseline 
efficiency levels for each equipment class. As discussed in section 
II.B.1 of this document, the current standards for SPVUs are based on 
the full-load metrics (i.e., EER and COP). The current standards for 
SPVUs are found at 10 CFR 431.97 and are presented in Table II.6 of 
this document. As discussed, the majority of equipment currently 
available on the market are at the minimum energy conservation standard 
levels.
---------------------------------------------------------------------------

    \4\ The current standards for SPVUs with cooling capacities 
<65,000 Btu/h are applicable to equipment manufactured on or after 
September 23, 2019. The current standards for SPVUs with cooling 
capacities >=65,000 Btu/h and <135,000 Btu/h are applicable to 
equipment manufactured on or after October 9, 2015. The current 
standards for SPVUs with cooling capacities >=135,000 Btu/h and 
<240,000 Btu/h are applicable to equipment manufactured on or after 
October 9, 2016.

      Table II.6--Current SPVU Energy Conservation Standard Levels
------------------------------------------------------------------------
                                                   Minimum  energy
              Equipment class                conservation standard level
------------------------------------------------------------------------
SPVAC <65,000 Btu/h.......................  EER = 11.0.
SPVHP <65,000 Btu/h.......................  EER = 11.0.
                                            COP = 3.3.
SPVAC >=65,000 Btu/h and <135,000 Btu/h...  EER = 10.0.
SPVHP >=65,000 Btu/h and <135,000 Btu/h...  EER = 10.0.
                                            COP = 3.0.
SPVAC >=135,000 Btu/h and <240,000 Btu/h..  EER = 10.0.
SPVHP >=135,000 Btu/h and <240,000 Btu/h..  EER = 10.0.
                                            COP = 3.0.
------------------------------------------------------------------------

    To inform its data collection in this RFI, DOE initially reviewed 
data in DOE's Compliance Certification Database to characterize the 
distribution of efficiencies for SPVU equipment currently available on 
the market, analyzing cooling and heating efficiency separately. DOE is 
making available for comment a document that provides the distributions 
of EER and COP for SPVUs in all three equipment classes for which DOE 
has identified units: SPVAC <65,000, SPVAC >=65,000 Btu/h and <135,000 
Btu/h, and SPVHP <65,000 Btu/h.\5\
---------------------------------------------------------------------------

    \5\ The supplemental file be found in docket EERE-2019-BT-STD-
0033 at https://www.regulations.gov/document?D=EERE-2019-BT-STD-0033-0001.
---------------------------------------------------------------------------

    Issue D.1 DOE requests feedback on whether using the current 
established minimum energy conservation standards for SPVUs are 
appropriate baseline efficiency levels for DOE to apply to each 
equipment class in evaluating whether to amend the current energy 
conservation standards for this equipment, or if there are different 
efficiency levels DOE should consider to evaluate the baseline 
efficiency levels in order to better evaluate amending energy 
conservation standards for this equipment.
    Issue D.2 DOE requests feedback on the appropriate baseline 
efficiency levels for any newly analyzed equipment classes that are not 
currently in place or for any contemplated combined equipment classes, 
as discussed in section II.B.2 of this document. For newly analyzed 
equipment classes, DOE requests energy use data to develop a baseline 
relationship between energy use and adjusted volume.
    As discussed in section II.B.1 of this document, if DOE were to 
amend the SPVU test procedure to incorporate a part-load metric, it 
would conduct any analysis for the energy conservation standards 
rulemaking based on the amended test procedure, including considering 
baseline efficiency levels based on a part-load metric.
    Issue D.3 To the extent that it is available, DOE seeks data and 
information regarding part-load performance for SPVUs currently on the 
market, in the event that DOE amends the SPVU test procedure to include 
a part-load energy efficiency metric.
2. Maximum Available and Maximum Technologically Feasible Levels
    As part of DOE's analysis, DOE considers the maximum available 
efficiency level, which is the highest-efficiency unit currently 
available on the market. DOE also considers the max-tech efficiency 
level, which it defines as the level that represents the theoretical 
maximum possible efficiency if all available design options are 
incorporated in a model. In many cases, the max-tech efficiency level 
is not commercially available because it is not economically feasible.
    For the September 2015 final rule, DOE surveyed the AHRI Directory, 
manufacturers' websites, and technical literature to determine the 
highest efficiency that SPVU equipment could attain. DOE also discussed 
what an appropriate max-tech level would be with manufacturers. For all 
six equipment classes, DOE determined that the maximum technologically 
feasible efficiency was the maximum available efficiency. For the 
September 2015 final rule analysis, DOE did not develop COP efficiency 
levels independent of EER efficiency levels. Rather, DOE developed the 
COP efficiency levels using a relationship between EER and COP from 
AHRI Database market data, thus determining a ``median'' COP level for 
each EER efficiency level. Therefore, DOE did not separately analyze 
maximum available COP levels as part of the September 2015 final rule. 
See section II.B.4 of this document for further discussion on heating 
efficiency levels. See chapter 5 of the 2015 final rule technical 
support document (TSD).\6\
---------------------------------------------------------------------------

    \6\ The 2015 final rule TSD can be found in docket EERE-2012-BT-
STD-0041-0027 at https://www.regulations.gov/document?D=EERE-2012-BT-STD-0041-0027.
---------------------------------------------------------------------------

    Table II.7 shows the maximum-available efficiency levels considered 
for the September 2015 final rule and based on the current market for 
each equipment classes, as identified in DOE's Compliance Certification 
Database.

[[Page 22965]]



        Table II.7--Maximum-Available Efficiency Levels for SPVUs
------------------------------------------------------------------------
        Equipment class            2015 Final rule     Current  market
------------------------------------------------------------------------
SPVAC <65,000 Btu/h............  12.3 EER..........  12.5 EER.
SPVHP <65,000 Btu/h............  12.3 EER..........  12.0 EER.
                                 3.9 COP...........  4.1 COP
SPVAC >=65,000 Btu/h and         10.0 EER..........  11.2 EER.
 <135,000 Btu/h.
SPVHP >=65,000 Btu/h and         10.0 EER..........  N/A.
 <135,000 Btu/h *.               3.0 COP...........
SPVAC >=135,000 Btu/h and        N/A...............  N/A.
 <240,000 Btu/h *.
SPVHP >=135,000 Btu/h and        N/A...............  N/A.
 <240,000 Btu/h *.
------------------------------------------------------------------------
* Based on DOE's review of equipment currently available on the market,
  DOE did not identify any SPVAC models with a cooling capacity greater
  than 135,000 Btu/h or SPVHP models with cooling capacities greater
  than 65,000 Btu/h.

    Issue D.4 DOE seeks input on whether the current maximum available 
efficiency levels are appropriate and technologically feasible for 
potential consideration as possible energy conservation standards for 
the equipment at issue. Although the Department has tentatively 
concluded that the maximum available efficiency level for SPVUs would 
be the max-tech level, DOE also seeks input as to what efficiency 
levels should be considered max-tech.
    Issue D.5 DOE seeks feedback on what design options would be 
incorporated at a max-tech efficiency level. DOE also seeks information 
as to whether there are limitations on the use of certain combinations 
of design options.
    As discussed in section II.B.1 of this document, if DOE were to 
amend the SPVU test procedure to incorporate a part-load metric, it 
would conduct any analysis for an energy conservation standards 
rulemaking based on the amended test procedure, including considering 
efficiency levels based on a part-load metric.
    Issue D.6 DOE seeks data and information regarding incremental and 
maximum-available efficiency levels for each equipment class in the 
event that the SPVU test procedure includes a part-load energy 
efficiency metric. In particular, DOE seeks energy use data for 
equipment operating at part-load capacities, for example, at the part-
load test conditions specified in AHRI Standard 340/360 (I/P)-2019, 
``2019 Standard for Performance Rating of Commercial and Industrial 
Unitary Air-Conditioning and Heat Pump Equipment.'' In addition, DOE 
requests information on the technologies for improving part-load 
operation, including the order in which manufacturers would likely add 
such technologies.
3. Manufacturer Production Costs and Manufacturing Selling Price
    As described at the beginning of this section, the main outputs of 
the engineering analysis are cost-efficiency relationships that 
describe the estimated increases in manufacturer production cost 
associated with higher-efficiency equipment for the analyzed equipment 
classes. For the September 2015 final rule, DOE developed the cost-
efficiency relationships using a combination of the efficiency level 
and reverse-engineering approaches, performing teardowns of equipment 
available on the market at different efficiency levels to estimate the 
efficiency improvements and costs associated with incorporating 
specific design options into the assumed baseline model for each 
analyzed equipment class. 80 FR 57438, 57456-57459 (Sept. 23, 2015).
    Issue D.7 DOE requests feedback on how manufacturers would 
incorporate the technology options listed in Table II.3 and Table II.4 
to increase energy efficiency in SPVU efficiencies beyond the current 
levels. This includes information on the order in which manufacturers 
would incorporate the different technologies to incrementally improve 
the efficiencies of equipment. DOE also requests feedback on whether 
the increased energy efficiency would lead to other design changes that 
would not occur otherwise. DOE is also interested in information 
regarding any potential impact of design options on a manufacturer's 
ability to incorporate additional functions or attributes in response 
to consumer demand.
    Issue D.8 DOE also seeks input on the increase in MPC associated 
with incorporating each particular design option. Specifically, DOE is 
interested in whether and how the costs estimated for design options in 
the September 2015 final rule have changed since the time of that 
analysis. DOE also requests information on the investments necessary to 
incorporate specific design options, including, but not limited to, 
costs related to new or modified tooling (if any), materials, 
engineering and development efforts to implement each design option, 
and manufacturing/production impacts.
    Issue D.9 DOE requests comment on whether certain design options 
may not be applicable to (or incompatible with) specific equipment 
classes.
    DOE directly analyzed one equipment class in the September 2015 
final rule (i.e., SPVACs with a cooling capacity <65,000 Btu/h). DOE 
then performed a more limited analysis of the other equipment classes 
based on limited physical/virtual teardowns and scaling the results 
from the analysis conducted for SPVACs with a cooling capacity <65,000 
Btu/h. See chapter 5 of the September 2015 final rule TSD for the cost-
efficiency curves developed in that rulemaking. 80 FR 57438, 57459-
57460 (Sept. 23, 2015).
    Issue D.10 DOE seeks feedback on whether the approach of directly 
analyzing the SPVACs <65,000 Btu/h equipment class and scaling the 
results to other equipment classes is appropriate for a future SPVU 
energy conservation standards rulemaking, should one be undertaken. DOE 
requests comment on whether it is necessary to individually analyze all 
or some of the available equipment classes.
    As discussed in the September 2015 final rule, for SPVACs >=65,000 
and <135,000 Btu/h, there were no models on the market above the ASHRAE 
level, and for SPVHPs >=65,000 and >=135,000 Btu/h and SPVUs >=135,000 
Btu/h and <240,000 Btu/h, there were no models on the market at all. As 
a result, DOE had no basis with which to develop higher efficiency 
levels or conduct analyses for those equipment classes. As a result, 
DOE adopted amended standards for those equipment classes equivalent to 
levels specified in ASHRAE Standard 90.1-2013, as required by EPCA. 80 
FR 57438, 57456 (Sept. 23, 2015).
    Issue D.11 DOE requests information on how to conduct the cost-
efficiency

[[Page 22966]]

analyses for equipment classes without models on the market and for 
which DOE does not have data, and whether the approach used in the 2015 
final rule is appropriate.
    To account for manufacturers' non-production costs and profit 
margin, DOE applies a non-production cost multiplier (the manufacturer 
mark-up) to the MPC. The resulting manufacturer selling price (MSP) is 
the price at which the manufacturer distributes a unit into commerce. 
For the September 2015 final rule, DOE used a manufacturer mark-up of 
1.28 for all SPVUs. See chapter 5 of the September 2015 final rule TSD.
    Issue D.12 DOE requests feedback on whether manufacturer mark-up of 
1.28 is appropriate for SPVUs, or if a different value would be more 
appropriate.

E. Mark-Ups Analysis and Distribution Channels

    In generating end-user price inputs for the life-cycle cost (LCC) 
analysis and the national impact analysis (NIA), DOE must identify 
distribution channels (i.e., how the products are moved from the 
manufacturer to the consumer), and estimate relative sales volumes 
through each channel. Additionally, DOE needs to determine the cost to 
the commercial consumer of a baseline piece of equipment that satisfies 
the currently applicable standards, and the cost of the more-efficient 
piece of equipment the consumer would purchase under potential new and/
or amended standards. By applying a multiplier called a ``mark-up'' to 
the MSP, DOE estimates the commercial consumer's price. The appropriate 
mark-ups for determining the end-user equipment price depend on the 
distribution channels (i.e., how equipment is distributed from the 
manufacturer to the consumer), and estimated relative sales volumes 
through each channel.
    In the September 2015 final rule, DOE identified four distribution 
channels based on a literature review and interviews with SPVU 
manufacturers, two distribution channels representing the sale of new 
equipment, and two representing the sale of replacement equipment. A 
recent literature review indicates that the end users of SPVUs have not 
changed since the September 2015 final rule. 80 FR 57438, 57460-57461 
(Sept. 23, 2015).
    In the first new equipment distribution channel, an SPVU 
manufacturer sells the product to a heating, ventilation, and air 
conditioning (HVAC) distributor, who sells to a modular building 
manufacturer, who sells to the end user.

Manufacturer [rarr] HVAC Distributor [rarr] Modular Building 
Manufacturer [rarr] End User

    In the second new equipment distribution channel, an SPVU 
manufacturer sells the product to an HVAC distributor, who sells to a 
modular building manufacturer, who sells to the end user, via a general 
contractor.

Manufacturer [rarr] HVAC Distributor [rarr] Modular Building 
Manufacturer [rarr] General Contractor [rarr] End User

    In the first replacement distribution channel, an SPVU manufacturer 
sells the product to an HVAC distributor, who sells it to a modular 
building distributor, who sells it to the end user.

Manufacturer [rarr] HVAC Distributor [rarr] Modular Building 
Distributor [rarr] End user

    Finally, in the second replacement distribution channel, an SPVU 
manufacturer sells the product to an HVAC distributor, who sells it to 
a mechanical contractor, who sells it to the end user.

Manufacturer [rarr] HVAC Distributor [rarr] Mechanical Contractor 
[rarr] End user

    Were DOE to undertake an energy conservation standards rulemaking, 
DOE would determine the mark-ups for wholesalers, modular building 
manufacturers, and contractors by examining the updated versions of the 
sources of information used in the previous energy conservation 
standards rulemaking for SPVUs. In the September 2015 final rule, DOE 
developed baseline and incremental mark-ups based on available 
financial data. More specifically, DOE based the air-conditioning 
wholesaler/distributor mark-ups on data from the Heating, Air 
Conditioning, and Refrigeration Distributors International (HARDI) 2013 
Profit Report.\7\ DOE also used financial data from the U.S. Census 
Bureau \8\ to estimate mark-ups for modular building manufacturers, 
modular building distributors, mechanical contractors, and general 
contractors. See Chapter 6 of the September 2015 final rule TSD for 
more details on mark-ups and distribution channels.
---------------------------------------------------------------------------

    \7\ Heating, Air-conditioning & Refrigeration Distributors 
International (HARDI), 2013 Profit Report (2012 Data) (Available at: 
http://www.hardinet.org/Profit-Report).
    \8\ Available at: https://www.census.gov/programs-surveys/economic-census.html.
---------------------------------------------------------------------------

    Issue E.1 DOE requests information on the existence of any 
distribution channels other than the four distribution channels 
identified in the September 2015 final rule that are used to distribute 
the SPVU equipment at issue into the market. DOE also requests data on 
the fraction of SPVUs that go through each of the four identified 
distribution channels, as well as the fraction of sales that go through 
any other identified channels. DOE also welcomes comment on its 
approach to estimating mark-ups and any financial data available that 
would assist DOE in developing mark-ups for the various segments in the 
above-mentioned distribution channels.

F. Energy Use Analysis

    As part of a typical rulemaking process, DOE conducts an energy use 
analysis to identify how equipment is used by consumers, and thereby 
determine the energy savings potential of energy efficiency 
improvements. To determine the energy savings potential, DOE develops 
estimates of the annual unit energy consumption (UEC) for each 
efficiency level developed in the engineering analysis. The energy 
savings are calculated by comparing the UEC of a baseline product to 
the UECs of higher-efficiency products. In the September 2015 final 
rule, DOE used Energy Plus,\9\ a whole building energy simulation 
program, to develop estimates of the UECs for SPVUs. SPVUs are most 
commonly used in modular buildings, such as classrooms, 
telecommunications shelters, and modular offices for a variety of other 
industries. In the September 2015 final rule, DOE simulated the energy 
use in three types of buildings: Modular offices, modular schools, and 
telecommunications structures. DOE developed State-specific unit energy 
consumption estimates in order to account for the variability of energy 
use by climate. 80 FR 57438, 57462 (Sept. 23, 2015).
---------------------------------------------------------------------------

    \9\ Available at: http://apps1.eere.energy.gov/buildings/energyplus/.
---------------------------------------------------------------------------

1. Model Buildings
    DOE developed three prototypical building models to simulate 
modular offices, modular schools, and telecommunications structures. 
For offices and schools, a 1,568 sq. ft. wood-frame structure was 
developed that had performance characteristics (lighting density, 
ventilation, envelope, economizer usage) meeting the requirements of 
ASHRAE 90.1-2004. Schedules and load profiles were taken from the DOE 
commercial reference buildings for primary schools and small offices. 
For telecommunications shelters, a 240 sq. ft. precast concrete 
structure was developed. These shelters were assumed to operate with a 
constant thermal load of 6.86 kW (23,400 Btu/h)

[[Page 22967]]

during all hours of the year, thus requiring year-round cooling. DOE 
plans to continue to use the model building approach as it provides DOE 
with the capability to measure the diverse loads conditions that SPVUs 
encounter in the field. For a detailed discussion of the building 
models see Chapter 7 of the 2015 final rule TSD.
    Issue F.1 DOE requests comment on the simulation approach that was 
used in the analysis for the September 2015 final rule. Specifically, 
should any other types of commercial buildings be included in the 
energy use analysis?
    Issue F.2 DOE seeks input on the assumption that the internal 
cooling load of telecommunications structures is constant. As part of 
the energy use analysis for the September 2015 final rule, DOE could 
not identify a source for the typical load profiles of 
telecommunications structures, as it did for schools and offices. 
Instead, DOE based its cooling load assumptions on computer server room 
environments, which maintain a constant cooling load. DOE requests 
input on whether this was a valid basis for comparison and how cooling 
loads may vary as telecommunications traffic changes throughout the 
day.
    Issue F.3 DOE requests feedback on the use of economizers in 
telecommunications structures. As part of the energy use analysis for 
the September 2015 final rule, DOE assigned economizers to offices and 
schools in all climate zones except for the hot-humid regions (zones 
1A, 2A, 3A, and 4A), in line with ASHRAE guidelines for economizer use. 
There are no ASHRAE guidelines for economizers in telecommunications 
structures, and discussions with manufacturers indicated that 
economizer use is driven by individual corporate user specifications, 
not climate zone. Manufacturers estimated that 45 percent of 
telecommunications structures have economizers and that 55 percent do 
not. Therefore, in the energy use analysis, DOE simulated all 
telecommunications buildings with and without economizers and weighted 
the results using the 45 percent and 55 percent market share breakdown. 
DOE seeks input on this approach and requests input about whether 
economizers should be assigned by climate zone.

G. Life-Cycle Cost and Payback Period Analysis

    DOE conducts the LCC and PBP analysis to evaluate the economic 
effects of potential energy conservation standards for SPVUs on 
individual customers. For any given efficiency level, DOE measures the 
PBP and the change in LCC relative to an estimated baseline level. The 
LCC is the total customer expense over the life of the equipment, 
consisting of purchase, installation, and operating costs (expenses for 
energy use, maintenance, and repair). Inputs to the calculation of 
total installed cost include the cost of the equipment--which includes 
MSPs, distribution channel markups, and sales taxes--and installation 
costs. Inputs to the calculation of operating expenses include annual 
energy consumption, energy prices and price projections, repair and 
maintenance costs, equipment lifetimes, discount rates, and the year 
that compliance with new and amended standards is required.
1. Repair and Maintenance Costs
    In order to develop annual operating costs and savings for the 
life-cycle cost analysis, DOE must estimate repair and maintenance 
costs over the lifetime of the SPVU. In the September 2015 final rule, 
DOE used RS Means \10\ in order to develop annualized repair and 
maintenance costs. The repair costs represent the expenses associated 
with repairing or replacing a damaged component of an SPVU that has 
failed, and the first instance of a significant repair typically occurs 
about 10 years after purchase. The materials portion of the repair cost 
scales with the manufacturer selling price, although the labor portion 
stays constant, so higher-efficiency units will typically have higher 
repair costs. The annual maintenance cost represents expenses 
associated with ensuring continued operation of the covered equipment 
over time, something which remained constant across all efficiency 
levels. For a detailed discussion of the repair and maintenance cost 
estimates, see Chapter 8 of the 2015 final rule TSD. RS Means is a 
leading source for facility repair and maintenance data for space 
conditioning equipment, and, as such, DOE intends to continue to use RS 
Means for any future rulemakings for SPVUs.
---------------------------------------------------------------------------

    \10\ RS Means, CostWorks 2014 (2014) (Available at: http://www.rsmeansonline.com) (Last accessed Feb. 27, 2014).
---------------------------------------------------------------------------

    Issue G.1 DOE requests feedback and data on whether maintenance 
costs differ in comparison to the baseline maintenance costs for any of 
the specific technology options listed in Table II.3 and Table II.4. To 
the extent that these costs differ, DOE seeks supporting data and an 
explanation of the reasons for those differences.
    Issue G.2 DOE requests information and data on the frequency of 
repair and repair costs by equipment class for the technology options 
listed in Table II.3 and Table II.4. While DOE is interested in 
information regarding each of the listed technology options, DOE is 
also interested in the extent to which consumers simply replace, as 
opposed to repair, failed equipment.

H. Shipments Analysis

    DOE develops shipments forecasts of SPVUs to calculate the national 
impacts of potential amended energy conservation standards on energy 
consumption, net present value (NPV), and future manufacturer cash 
flows. DOE shipments projections are based on available historical data 
broken out by equipment class, capacity, and efficiency. Current sales 
estimates allow for a more accurate model that captures recent trends 
in the market. In the September 2015 final rule, DOE used three data 
sources to develop its shipments model: (1) Actual shipments of SPVUs 
in 2005 provided by AHRI; (2) a graph displaying the shipments trend 
from 2006-2014 provided by AHRI, and (3) floor space production data 
from the modular building institute from 1994-2005. 80 FR 57438, 57469-
57470 (Sept. 23, 2015). The modular building floor space production 
data was used to develop shipments prior to 2005, which is necessary to 
account for replacement shipments in future years once the older stock 
of SPVUs reach the end of their useful life. Future new construction 
shipments for offices and schools were based on floor space projections 
from the 2015 Energy Information Administration's Annual Energy Outlook 
(AEO).\11\ New construction shipments for the telecommunication sector 
were based on data of power and communication line construction from 
the U.S. Census.\12\ DOE intends to project future shipments using the 
most current AEO and Census data, as new shipments of SPVUs should 
track floor space of the industries that use SPVUs.
---------------------------------------------------------------------------

    \11\ Available at: https://www.eia.gov/outlooks/aeo/pdf/0383(2015).pdf (Last accessed April 18, 2015).
    \12\ Available at: U.S. Census Bureau. County Business Patterns. 
www.census.gov/econ/cbp/index.html (Last accessed April 15, 2014).
---------------------------------------------------------------------------

    Issue H.1 DOE requests the most recent annual sales data for SPVUs 
(i.e., number of shipments), as well as historical annual sales data 
going back to 2015. DOE also requests the shipments by equipment class 
and efficiency level for the most recent year available and if 
possible, for each year going back to 2015.
    Table II.8 presents the shipments and market shares from the year 
2015 in the

[[Page 22968]]

National Impact Analysis \13\ spreadsheet for the September 2015 final 
rule. As requested in Issue H.1 DOE seeks to update this table with 
shipments and market shares by EER bin for the most recent year 
available. Interested parties are also encouraged to provide additional 
shipments data as may be relevant.
---------------------------------------------------------------------------

    \13\ Available at: https://www.regulations.gov/document?D=EERE-2012-BT-STD-0041-0029 (Last accessed Sept 2, 2019).

                     Table II.8--Summary Table of Shipments-Related Data Requests for SPVUs
----------------------------------------------------------------------------------------------------------------
                                                                   Fraction of annual sales (%)
         Equipment class           Annual sales  ---------------------------------------------------------------
                                      (2015)         9-10 EER        10-11 EER       11-12 EER        >12 EER
----------------------------------------------------------------------------------------------------------------
SPVAC <65,000 Btu/h.............          41,741            80.8            18.1             1.1               0
SPVHP <65,000 Btu/h.............          17,343            80.8            18.1             1.1               0
SPVAC >=65,000 Btu/h and                   1,868            80.8            18.1             1.1               0
 <135,000 Btu/h.................
SPVHP >=65,000 Btu/h and                       0             N/A             N/A             N/A             N/A
 <135,000 Btu/h *...............
SPVAC >=135,000 Btu/h and                      0             N/A             N/A             N/A             N/A
 <240,000 Btu/h *...............
SPVHP >=135,000 Btu/h and                      0             N/A             N/A             N/A             N/A
 <240,000 Btu/h *...............
----------------------------------------------------------------------------------------------------------------
* DOE did not identify any SPVAC models with a cooling capacity greater than 135,000 Btu/h or SPVHP models with
  cooling capacities greater than 65,000 Btu/h.

    If disaggregated fractions of annual sales are not available at the 
equipment class or efficiency level, DOE requests more aggregated 
fractions of annual sales at the equipment category level.
    Issue H.2 In the September 2015 final rule, DOE determined that 
SPVU lifetimes range from 10 to 25 years, with an average lifetime of 
15 years. 80 FR 57438, 57467 (Sept. 23, 2015). DOE requests comment on 
the estimated average lifetime of 15 years, as well as any new data or 
information about the lifetimes of SPVUs. DOE also requests input on 
whether the lifetimes changes by equipment class, efficiency, or end 
use.

I. Manufacturer Impact Analysis

    The purpose of the manufacturer impact analysis (MIA) is to 
estimate the financial impact of amended energy conservation standards 
on manufacturers of SPVUs, and to evaluate the potential impact of such 
standards on direct employment and manufacturing capacity. The MIA 
includes both quantitative and qualitative aspects. The quantitative 
part of the MIA primarily relies on the Government Regulatory Impact 
Model (GRIM), an industry cash-flow model adapted for each product in 
this analysis, with the key output being industry net present value 
(INPV). The qualitative part of the MIA addresses the potential impacts 
of energy conservation standards on manufacturing capacity and 
manufacturing employment, as well as factors such as product 
characteristics, impacts on particular subgroups of firms, and 
important market and product trends.
    As part of the MIA, DOE intends to analyze impacts of amended 
energy conservation standards on subgroups of manufacturers of covered 
equipment, including small business manufacturers. DOE uses the Small 
Business Administration's (SBA) small business size standards to 
determine whether manufacturers qualify as small businesses, which are 
listed by the applicable North American Industry Classification System 
(NAICS) code.\14\ Manufacturing of SPVUs is classified under NAICS 
333415, ``Air-Conditioning and Warm Air Heating Equipment and 
Commercial and Industrial Refrigeration Equipment Manufacturing,'' and 
the SBA sets a threshold of 1,250 employees or less for a domestic 
entity to be considered as a small business. This employee threshold 
includes all employees in a business' parent company and any other 
subsidiaries.
---------------------------------------------------------------------------

    \14\ Available online at https://www.sba.gov/document/support--table-size-standards.
---------------------------------------------------------------------------

    One aspect of assessing manufacturer burden involves examining the 
cumulative impact of multiple DOE standards and the product-specific 
regulatory actions of other Federal agencies that affect the 
manufacturers of a covered product or equipment. While any one 
regulation may not impose a significant burden on manufacturers, the 
combined effects of several existing or impending regulations may have 
serious consequences for some manufacturers, groups of manufacturers, 
or an entire industry. Assessing the impact of a single regulation may 
overlook this cumulative regulatory burden. In addition to energy 
conservation standards, other regulations can significantly affect 
manufacturers' financial operations. Multiple regulations affecting the 
same manufacturer can strain profits and lead companies to abandon 
product lines or markets with lower expected future returns than 
competing products. For these reasons, DOE conducts an analysis of 
cumulative regulatory burden as part of its rulemakings pertaining to 
appliance efficiency.
    Issue I.1 To the extent feasible, DOE seeks the names and contact 
information of any domestic or foreign-based manufacturers that 
distribute SPVUs in commerce in the United States.
    Issue I.2 DOE identified small businesses as a subgroup of 
manufacturers that could be disproportionally impacted by amended 
energy conservation standards. DOE requests the names and contact 
information of small business manufacturers (as defined by the SBA's 
size threshold) of SPVUs that distribute products in commerce in the 
United States. In addition, DOE requests comment on any other 
manufacturer subgroups that could be disproportionally impacted by 
amended energy conservation standards. DOE requests feedback on any 
potential approaches that could be considered to address impacts on 
manufacturers, including small businesses.
    Issue I.3 DOE requests information regarding the cumulative 
regulatory burden impacts on manufacturers of SPVUs associated with: 
(1) Other DOE standards applying to different equipment that these 
manufacturers may also make and (2) equipment-specific regulatory 
actions of other Federal agencies. DOE also requests comment on its 
methodology for computing cumulative regulatory burden and whether 
there are any flexibilities it can consider that would reduce this 
burden while remaining consistent with the requirements of EPCA.

[[Page 22969]]

J. Other Energy Conservation Standards Topics

1. Market Failures
    In the field of economics, a market failure is a situation in which 
the market outcome does not maximize societal welfare. Such an outcome 
would result in unrealized potential welfare. DOE welcomes comment on 
any aspect of market failures, especially those in the context of 
amended energy conservation standards for SPVUs.
2. Emerging Smart Technology Market
    DOE published an RFI on the emerging smart technology appliance and 
equipment market. 83 FR 46886 (Sept. 17, 2018). In that RFI, DOE sought 
information to better understand market trends and issues in the 
emerging market for appliances and commercial equipment that 
incorporate smart technology. DOE's intent in issuing the RFI was to 
ensure that DOE did not inadvertently impede such innovation in 
fulfilling its statutory obligations in setting efficiency standards 
for covered products and equipment. DOE seeks comments, data, and 
information on the issues presented in that RFI as they may be 
applicable to energy conservation standards for SPVUs.
3. Other Issues
    Additionally, DOE welcomes comments on any other aspects of energy 
conservation standards for SPVUs that may not specifically be 
identified in this document. In particular, DOE notes that under 
Executive Order 13771, ``Reducing Regulation and Controlling Regulatory 
Costs,'' Executive Branch agencies such as DOE are directed to manage 
the costs associated with the imposition of expenditures required to 
comply with Federal regulations. See 82 FR 9339 (Feb. 3, 2017). 
Consistent with that Executive Order, DOE encourages the public to 
provide input on measures DOE could take to lower the cost of its 
energy conservation standards rulemakings, recordkeeping and reporting 
requirements, and compliance and certification requirements applicable 
to SPVUs while remaining consistent with the requirements of EPCA.

III. Submission of Comments

    DOE invites all interested parties to submit in writing by the date 
specified previously in the DATES section of this document, comments 
and information on matters addressed in this document and on other 
matters relevant to DOE's consideration of amended energy conservations 
standards for SPVUs. After the close of the comment period, DOE will 
review the public comments received and may begin collecting data and 
conducting the analyses discussed in this RFI.
    Submitting comments via http://www.regulations.gov. The http://www.regulations.gov web page requires you to provide your name and 
contact information. Your contact information will be viewable to DOE 
Building Technologies Office 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 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 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. Following such instructions, 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 http://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 
http://www.regulations.gov cannot be claimed as CBI. Comments received 
through the website 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 http://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 http://www.regulations.gov provides after you have successfully uploaded your 
comment.
    Submitting comments via email, hand delivery/courier, or postal 
mail. Comments and documents submitted via email, hand delivery/
courier, or postal mail also will be posted to http://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 on 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 postal 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, written in English, and 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.
    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).
    DOE considers public participation to be a very important part of 
the process

[[Page 22970]]

for developing energy conservation standards. DOE actively encourages 
the participation and interaction of the public during the comment 
period in each stage of the rulemaking process. Interactions with and 
between members of the public provide a balanced discussion of the 
issues and assist DOE in the process. Anyone who wishes to be added to 
the DOE mailing list to receive future notices and information about 
this process should contact Appliance and Equipment Standards Program 
staff at (202) 287-1445 or via email at 
[email protected].

    Signed in Washington, DC, on February 21, 2020.
Alexander N. Fitzsimmons,
Deputy Assistant Secretary for Energy Efficiency, Energy Efficiency and 
Renewable Energy.
[FR Doc. 2020-08318 Filed 4-23-20; 8:45 am]
 BILLING CODE 6450-01-P