[Federal Register Volume 85, Number 92 (Tuesday, May 12, 2020)]
[Proposed Rules]
[Pages 27929-27941]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-09415]


 ========================================================================
 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. 85, No. 92 / Tuesday, May 12, 2020 / Proposed 
Rules  

[[Page 27929]]



DEPARTMENT OF ENERGY

10 CFR Part 431

[EERE-2019-BT-STD-0031]
RIN 1904-AE74


Energy Conservation Program: Energy Conservation Standards for 
Water-Source Heat Pumps

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 water-source heat pumps (WSHPs). This request for information (RFI) 
solicits information from the public to help DOE determine whether 
amended standards for WSHPs, 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 11, 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-0031 and/or RIN 1904-AE74, 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-0031 and/or RIN 1904-AE74 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/docket?D=EERE-2019-BT-STD-0031. 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. Review of Current Market
    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
    4. Other Engineering Topics
    E. Mark-ups and Distribution Channels
    F. Energy Use Analysis
    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. Network Mode/``Smart'' Equipment
    3. Other
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), authorizes DOE to 
regulate the energy efficiency of a number of consumer products and 
certain industrial 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

[[Page 27930]]

sets forth a variety of provisions designed to improve energy 
efficiency. This covered equipment includes small, large, and very 
large commercial package air conditioning and heating equipment. WSHPs, 
the subject of this RFI, are a category of ``commercial package air 
conditioning and heating equipment''. (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)-(b); 42 U.S.C. 6297) DOE may, however, grant waivers of 
Federal preemption in limited circumstances 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))
    Under EPCA, Congress initially set mandatory energy conservation 
standards for certain types of commercial heating, air-conditioning, 
and water-heating equipment. (42 U.S.C. 6313(a)) Specifically, the 
statute sets standards for small, large, and very large commercial 
package air conditioning and heating equipment, packaged terminal air 
conditioners and packaged terminal heat pumps, warm-air furnaces, 
packaged boilers, storage water heaters, instantaneous water heaters, 
and unfired hot water storage tanks. Id. In doing so, EPCA established 
Federal energy conservation standards at levels that generally 
corresponded to the levels in the American Society of Heating, 
Refrigerating, and Air-Conditioning Engineers (ASHRAE) Standard 90.1, 
Energy Standard for Buildings Except Low-Rise Residential Buildings, as 
in effect on October 24, 1992 (i.e., ASHRAE Standard 90.1-1989), for 
each type of covered equipment listed in 42 U.S.C. 6313(a). In 
acknowledgement of technological changes that yield energy efficiency 
benefits, Congress further directed DOE through EPCA to consider 
amending the existing Federal energy conservation standard for each 
type of covered equipment listed, 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)) If DOE decides to adopt as a national standard 
the minimum efficiency levels specified in the amended ASHRAE Standard 
90.1, DOE must establish such standard not later than 18 months after 
publication of the amended industry standard. (42 U.S.C. 
6313(a)(6)(A)(ii)(I)) However, if DOE determines, supported by clear 
and convincing evidence, that a more-stringent uniform national 
standard would result in significant additional conservation of energy 
and is technologically feasible and economically justified, then DOE 
must establish such more-stringent uniform national standard not later 
than 30 months after publication of the amended ASHRAE Standard 
90.1.\3\ (42 U.S.C. 6313(a)(6)(A)(ii)(II) and (B))
---------------------------------------------------------------------------

    \3\ In determining whether a more-stringent standard is 
economically justified, EPCA directs DOE to determine, after 
receiving views and comments from the public, whether the benefits 
of the proposed standard exceed the burdens of the proposed standard 
by, to the maximum extent practicable, considering the following:
    (1) The economic impact of the standard on the manufacturers and 
consumers of the products subject to the standard;
    (2) The savings in operating costs throughout the estimated 
average life of the product in the type (or class) compared to any 
increases in the initial price of, initial charges for, or 
maintenance expenses of the products 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 
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 conservation; and
    (7) Other factors the Secretary of Energy (Secretary) considers 
relevant.
    (42 U.S.C. 6313(a)(6)(B)(ii))
---------------------------------------------------------------------------

    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.
    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. Consistent with that statutory duality, 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))
    On July 17, 2015, DOE published a final rule in the Federal 
Register amending the energy conservation standards for WSHPs in 
response to the

[[Page 27931]]

2013 update to ASHRAE Standard 90.1 (i.e., ASHRAE Standard 90.1-2013). 
80 FR 42614 (July 2015 final rule). ASHRAE Standard 90.1-2013 set more-
stringent standards for WSHPs. In the July 2015 final rule, DOE adopted 
the standard levels for WSHPS specified in ASHRAE Standard 90.1-2013. 
Id. Compliance with the amended energy conservation standards for WSHPs 
was required beginning on October 9, 2015. Id. The current energy 
conservation standards are codified in the Code of Federal Regulations 
(CFR) at 10 CFR 431.97.
    The DOE test procedures for WSHPs are codified at 10 CFR 431.96. 
The current test procedure incorporates by reference International 
Organization for Standardization (ISO) Standard 13256-1:1998, Water-
source heat pumps-Testing and rating for performance-Part 1: Water-to-
air and brine-to-air heat pumps'' (ISO 13256-1:1998), and includes 
additional provisions for equipment set-up at 10 CFR 431.96(e). 
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 since the 2013 version, most 
recently with the release of the 2019 version (i.e., ASHRAE Standard 
90.1-2019) on October 24, 2019. However, the standard levels for WSHPs 
remain unchanged from the 2013 version.
    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 six 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)(I) (referencing 42 U.S.C. 6313(a)(6)(A)(ii)(II))
    On February 14, 2020, DOE published in the Federal Register a final 
rule which updated the procedures, interpretations, and policies that 
DOE will follow in the consideration and promulgation of new or revised 
appliance energy conservation standards and test procedures under EPCA. 
85 FR 8626; see also 10 CFR part 430, subpart C, appendix A (i.e., 
``Process Rule''). The Process Rule requires DOE to conduct an early 
assessment, which includes publishing a notice in the Federal Register 
announcing that DOE is considering a rulemaking proceeding and 
soliciting the submission of related comments, including data and 
information on whether DOE should proceed with the rulemaking, 
including whether any new or amended rule would be cost-effective, 
economically justified, technologically feasible, or would result in a 
significant savings of energy. Section 6(a)(1) of the Process Rule. 
Based on the responses received to the early assessment and DOE's own 
analysis, DOE will then determine whether to proceed with a rulemaking 
for a new or amended energy conservation standard or an amended test 
procedure. Id. If DOE determines that a new or amended standard would 
not satisfy all of the applicable statutory criteria, DOE would engage 
in a notice and comment rulemaking to issue a determination that a new 
or amended standard is not warranted. Id. If DOE receives sufficient 
information suggesting it could justify a new or amended standard or 
the information received is inconclusive with regard to the statutory 
criteria, DOE would undertake the preliminary stages of a rulemaking to 
issue or amend an energy conservation standard. Section 6(a)(2) of the 
Process Rule. In those instances where the early assessment either 
suggested that a new or amended energy conservation standard might be 
justified or in which the information was inconclusive on this, DOE 
will examine the potential costs and benefits and energy savings 
potential of a new or amended energy conservation standard. Section 
6(a)(3) of the Process Rule.
    Because ASHRAE equipment is subject to its own unique statutory 
requirements and timelines, those provisions will generally govern. For 
example, when triggered by ASHRAE action in amending Standard 90.1, an 
early assessment is generally not necessary for the triggered equipment 
classes, because DOE is statutorily bound to adopt those standard 
levels, unless the agency has clear and convincing evidence to adopt 
more-stringent levels. However, in other circumstances where the 
rulemaking for ASHRAE equipment more closely mirrors a typical DOE 
rulemaking (such as where DOE is considering more-stringent standards 
or conducting a 6-year-lookback rulemaking), the Department would apply 
all relevant provisions of the Process Rule. See section 9 of the 
Process Rule; see also 85 FR 8626, 8637 (Feb. 14, 2020).
    Given that this is an ASHRAE 6-year-lookback rulemaking, DOE will 
first look to the projected energy savings that are likely to result in 
``significant energy savings,'' as required under 42 U.S.C. 
6295(o)(3)(B) to ensure that DOE avoids setting a standard that ``will 
not result in significant conservation of energy.'' \4\ Section 6(b)(1) 
of the Process Rule. To determine whether energy savings could be 
significant, the projected energy savings from a potential maximum 
technologically feasible (max-tech) standard will be evaluated against 
a threshold of 0.3 quadrillion Btus (quads) of site energy saved over a 
30-year period. Section 6(b)(2) of the Process Rule. If the projected 
max-tech energy savings do not meet or exceed this threshold, those 
max-tech savings would then be compared to the total energy usage of 
the covered product to calculate a potential percentage reduction in 
energy usage. Section 6(b)(3) of the Process Rule. If this comparison 
does not yield a reduction in site energy use of at least 10 percent 
over a 30-year period, the analysis will end, and DOE will propose to 
determine that no significant energy savings would likely result from 
setting new or amended standards. Section 6(b)(4) of the Process Rule. 
If either one of the thresholds is reached, DOE will conduct analyses 
to ascertain whether a standard can be prescribed that produces the 
maximum improvement in energy efficiency that is both technologically 
feasible and economically justified and still constitutes significant 
energy savings at the level determined to be economically justified. 
Section 6(b)(5) of the Process Rule.
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    \4\ EPCA defines ``energy efficiency'' as the ratio of the 
useful output of services from an article of industrial equipment to 
the energy use of such article, measured according to the Federal 
test procedures. (42 U.S.C. 6311(3)) EPCA defines ``energy use'' as 
the quantity of energy directly consumed by an article of industrial 
equipment at the point of use, as measured by the Federal test 
procedures. (42 U.S.C. 6311(4)) Given this context, DOE relies on 
site energy as the appropriate metric for evaluating the 
significance of energy savings.
---------------------------------------------------------------------------

    Because this rulemaking was already in progress at the time the 
revised Process Rule was published, DOE will apply those provisions 
moving forward (i.e., rather than reinitiating the entire rulemaking 
process). However, DOE welcomes comment, information, and data bearing 
on the issues that would be raised in an early assessment for WSHPs.
    To determine whether a potential proposed standard is economically 
justified, EPCA requires that DOE determine whether the benefits of the

[[Page 27932]]

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 savings   Mark-ups for Product Price
 compared to increased cost for      Determination.
 the product.                        Energy and Water Use
                                     Determination.
                                     Life-Cycle Cost and Payback
                                     Period Analysis.
3. Total projected energy savings.   Shipments Analysis.
                                     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 Analysis.
 considers relevant.                 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 WSHPs.

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 WSHPs 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 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 WSHPs, as 
codified at 10 CFR 431.92. The current definition for WSHPs was 
established in the July 2015 Final Rule. 80 FR 42614, 42632, 42664 
(July 17, 2015).
    DOE defines ``water-source heat pump'' as a single-phase or three-
phase reverse-cycle heat pump that uses a circulating water loop as the 
heat source for heating and as the heat sink for cooling. The main 
components are a compressor, refrigerant-to-water heat exchanger, 
refrigerant-to-air heat exchanger, refrigerant expansion devices, 
refrigerant reversing valve, and indoor fan. Such equipment includes, 
but is not limited to, water-to-air water-loop heat pumps. 10 CFR 
431.92. EPCA excludes from the definition of ``commercial package air 
conditioning and heating equipment'' ground-water-source units. (42 
U.S.C. 6311(8)(A)) As such, ``water-source heat pump'' does not include 
ground-water-source units.
    Issue A.1 DOE requests comment on whether the definition for WSHPs 
requires any revisions--and if so, how the definition should be 
revised. Please provide the rationale for any suggested change.
    Issue A.2 DOE requests comment on whether additional equipment

[[Page 27933]]

definitions are necessary to close any potential gaps in coverage 
between equipment categories. If there are such gaps, DOE also seeks 
input on whether WSHP models currently exist 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 WSHP 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 WSHPs. 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 
WSHPs.
1. Energy Efficiency Descriptor
    For WSHPs, 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 90.1-2019 for WSHPs. EER is 
the ratio of the produced cooling effect of the WSHP 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 WSHP 
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 WSHPs does not include a seasonal metric or part-load 
performance.
    On June 22, 2018, DOE published an RFI (June 2018 TP RFI) to 
collect information and data to consider amendments to DOE's test 
procedure for WSHPs. 83 FR 29048. As part of the June 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. 83 FR 29048, 29051 (June 22, 2018). If DOE amends the WSHP 
test procedure to incorporate a part-load metric, DOE would consider 
conducting analyses for future standards rulemakings, if any, based on 
the amended test procedure, including an added part-load metric.
2. Equipment Classes
    For WSHPs, the current energy conservation standards specified in 
10 CFR 431.97 are based on three equipment classes delineated by 
cooling capacity. Table II.1 lists the current three equipment classes 
for WSHPs.

               Table II.1--Current WSHP Equipment Classes
------------------------------------------------------------------------
   Equipment class (by cooling
         capacity range)
------------------------------------------------------------------------
1................................  <17,000 Btu/h
2................................  >=17,000 Btu/h and <65,000 Btu/h
3................................  >=65,000 Btu/h and <135,000 Btu/h
------------------------------------------------------------------------

    The current Federal test procedure and energy conservation 
standards at 10 CFR 431.96 and 10 CFR 431.97 apply only to WSHPs with a 
rated cooling capacity below 135,000 Btu/h. This limit of coverage is 
consistent with the standards and test procedures specified for WSHPs 
in ASHRAE 90.1-2019.

3. Review of Current Market

    To inform its evaluation of WSHPs, DOE initially reviewed data in 
DOE's Compliance Certification Database (CCMS Database) \5\ to 
characterize the distribution of efficiencies for WSHP 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 WSHPs in all three 
equipment classes: <17,000 Btu/h, >=17,000 Btu/h and <65,000 Btu/h, and 
>=65,000 Btu/h and <135,000 Btu/h. In addition, the document shows the 
relationship between EER and COP for units in all three equipment 
classes, including scatterplots and linear regression trendlines (see 
Docket No. EERE-2019-BT-STD-0031-0001). Table II.2 shows the number of 
models listed within the DOE Compliance Certification Database that DOE 
has identified for each class of WSHPs.
---------------------------------------------------------------------------

    \5\ DOE's Compliance Certification Database is available at: 
https://www.regulations.doe.gov/certification-data/products.html#q=Product_Group_s%3A* (Last accessed Sept. 26, 2019).

    Table II.2--Number of Models Under Current WSHP Equipment Classes
------------------------------------------------------------------------
                                                             Number of
             Cooling capacity range (Btu/h)                   models
------------------------------------------------------------------------
<17,000.................................................           1,041
>=17,000 and <65,000....................................           5,263
>=65,000 and <135,000...................................             735
------------------------------------------------------------------------

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 complete list of 
technologies to consider in its analysis. In the interim, DOE conducted 
preliminary market research by examining manufacturer product 
literature 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. 
Accordingly, DOE has put together a preliminary list of options in 
Table II.3 of this document.

          Table II.3--Preliminary Technology Options for WSHPs
------------------------------------------------------------------------
 
------------------------------------------------------------------------
                           Technology Options
------------------------------------------------------------------------
Heat Exchanger Improvements.......  Increased evaporator coil face area.
                                    Increased evaporator coil depth.
                                    Increased condenser coil surface
                                     area.
Indoor Blower Improvements........  Improved fan motor efficiency (e.g.,
                                     electrically commutated motors
                                     (ECMs)).
                                    More-efficient fan geometries.

[[Page 27934]]

 
Compressor Improvements...........  Improved compressor efficiency.
Other Improvements................  Improved onboard pump efficiency
                                     (for units with onboard pumps).
------------------------------------------------------------------------

    Issue B.2 DOE seeks information on the technologies listed in Table 
II.3 of this document regarding their applicability to the current 
market and how these technologies may impact the efficiency of WSHPs as 
measured according to the DOE test procedure. Specifically, DOE seeks 
information on the range of efficiencies or performance characteristics 
that are currently available for each technology option.
    Issue B.3 DOE seeks information on the technologies listed in Table 
II.3 of this document 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.4 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 does not consider technologies that do not have an impact on 
the energy consumption as measured according to the DOE test procedure. 
For WSHPs, technologies excluded on this basis include electronic 
expansion valves (EEVs) and multi-speed compressors. As discussed in 
section II.B.1 of this document, the current DOE test procedure for 
WSHPs measures efficiency at full-load conditions, while EEVs and 
multi-speed compressor technologies provide benefit at part-load 
conditions. EEVs regulate the 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, EEVs can control for optimum system operating parameters over a 
wide range of operating conditions, which would be a consideration in 
an evaluation of seasonal and/or part-load efficiency. 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: (1) Reducing off-cycle losses; and (2) 
improving heat exchanger effectiveness at part-load conditions by 
operating at a lower refrigerant mass flow rate.
    Issue B.5 DOE seeks comment on whether it is appropriate to exclude 
EEVs and multi-speed compressors from DOE's analysis because these 
features do not impact energy consumption as measured according to the 
current DOE test procedure.

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 products 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 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.

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 listed criteria are eliminated from consideration.
    DOE did not screen out any technology options in the July 2015 
final rule based on any of the screening criteria.
    Issue C.1 DOE requests feedback on what impact, if any, the four 
screening criteria described in this section would have on 
consideration of each of the technology options listed in Table II.3 of 
this document with respect to WSHPs. 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 WSHPs.

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 Federal minimum level 
(i.e., the baseline), 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 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

[[Page 27935]]

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 to establish the baseline 
efficiency levels for each equipment class. As discussed in section 
II.B.1 of this document, the current standards for WSHPs are based on 
the full-load metrics (i.e., EER and COP). The current standards for 
WSHPs are found at 10 CFR 431.97 and are presented in Table II.4 of 
this document.

      Table II.4--Current WSHP Energy Conservation Standard Levels
------------------------------------------------------------------------
    Equipment class (by cooling            Current minimum  energy
          capacity range)               conservation  standard levels
------------------------------------------------------------------------
<17,000 Btu/h......................  EER = 12.2
                                     COP = 4.3
>=17,000 Btu/h and <65,000 Btu/h...  EER = 13.0
                                     COP = 4.3
>=65,000 Btu/h and <135,000 Btu/h..  EER = 13.0
                                     COP = 4.3
------------------------------------------------------------------------

    Issue D.1 DOE requests feedback on whether the current established 
minimum energy conservation standards for WSHPs 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. DOE requests data and suggestions to evaluate the 
baseline efficiency levels in order to better evaluate the potential 
for 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 the basis for the new class (e.g., 
cooling capacity).
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 July 2015 final rule, DOE surveyed the AHRI Directory of 
Certified Product Performance \6\ (AHRI Database) to determine the 
highest efficiency that commercially-available WSHP equipment could 
attain. 80 FR 42614, 42632 (July 17, 2015).
---------------------------------------------------------------------------

    \6\ The AHRI Directory of Certified Product Performance is 
available at: http://www.ahridirectory.org (Last accessed Nov. 11, 
2013).
---------------------------------------------------------------------------

    Table II.5 shows the maximum-available efficiency levels considered 
for the July 2015 final rule and based on the current market for each 
equipment classes. 80 FR 42614, 42634 (July 17, 2015). DOE reviewed the 
CCMS Database to determine the maximum-available units on the current 
market for each equipment class. For the July 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 an ``average'' COP level for each EER efficiency level. See 
chapter 4 of the July 2015 final rule technical support document (TSD); 
(Docket No.: EERE-2014-BT-STD-0015-0043 at p. 53). Therefore, DOE did 
not separately analyze maximum-available COP levels as part of the July 
2015 final rule. See section II.D.4 of this notice for further 
discussion on heating efficiency levels.

        Table II.5--Maximum-Available Efficiency Levels for WSHPs
------------------------------------------------------------------------
  Equipment class (by cooling     July 2015 final
        capacity range)                 rule            Current market
------------------------------------------------------------------------
<17,000 Btu/h.................  18.1 EER...........  18.8 EER
                                                     6.4 COP
>=17,000 Btu/h and <65,000 Btu/ 21.6 EER...........  19.6 EER
 h.                                                  6.7 COP
>=65,000 Btu/h and <135,000     17.2 EER...........  18.2 EER
 Btu/h.                                              6.0 COP
------------------------------------------------------------------------


[[Page 27936]]

    Issue D.3 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--and if not, why not?
    Issue D.4 DOE seeks feedback on which 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.
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 July 2015 final rule, DOE developed the cost-
efficiency relationships by identifying incremental improvements in 
efficiency for each equipment class and developing a cost for each 
efficiency level, based on a catalog teardown (or ``virtual teardown'') 
analysis, in which published manufacturer catalog data and 
supplementary component data were used to estimate the major physical 
differences between WSHPs and commercial heating and cooling products 
with similar components that were previously disassembled. 80 FR 42614, 
42633 (July 17, 2015); see also chapter 3 of the July 2015 final rule 
TSD (EERE-2014-BT-STD-0015-0043 at p. 35).
    Issue D.5 DOE requests feedback on how manufacturers would 
incorporate the technology options listed in Table II.3 of this 
document to increase energy efficiency in WSHPs 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.6 DOE also seeks input on the increase in MPC associated 
with incorporating each particular design option and/or with reaching 
efficiency levels above the baseline. Specifically, DOE is interested 
in whether and how the costs estimated in the July 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.7 DOE requests comment on whether certain design options 
may not be applicable to (or incompatible with) specific equipment 
classes.
    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 July 2015 final rule, DOE used a manufacturer mark-up of 1.30 
for all WSHPs. See chapter 3 of the July 2015 final rule TSD (EERE-
2014-BT-STD-0015-0043 at p. 39).
    Issue D.8 DOE requests feedback on whether a manufacturer mark-up 
of 1.30 is appropriate for WSHPs.
4. Other Engineering Topics
    As previously discussed, for the July 2015 final rule analysis, DOE 
developed COP efficiency levels using a relationship between EER and 
COP from AHRI Database market data, thus determining an ``average'' COP 
level for each EER efficiency level. As mentioned in section II.B.3 of 
this RFI, DOE is making available for comment a document that shows 
relationships between EER and COP through linear regression, based on 
current market data from the CCMS database (see Docket No. EERE-2019-
BT-STD-0031-0001 at pp. 5-7).
    Issue D.9 DOE requests feedback on whether the approach used in the 
July 2015 final rule of developing COP levels based on a correlated 
relationship between EER and COP for WSHPs is appropriate for this 
rulemaking, or whether cooling and heating efficiency levels should be 
analyzed separately. Specifically, DOE requests comment on whether the 
relationships between EER and COP presented for each WSHP equipment 
class (see Docket No. EERE-2019-BT-STD-0031-0001 at pp. 5-7) would be 
appropriate to use for developing COP efficiency levels based on EER 
efficiency levels. Additionally, DOE seeks feedback on whether WSHPs 
are typically designed to prioritize efficiency in cooling mode over 
heating mode.
    DOE is aware of several different configurations of WSHPs currently 
on the market. Specifically, DOE understands that the most common WSHP 
configuration is a single-package unit, typically in a horizontal or 
vertical configuration. DOE has also identified WSHPs in the following 
configurations: split system, console (e.g., installed on a wall below 
a window), and vertical stack units (e.g., taller and narrower than 
typical single package WSHPs, in order to minimize footprint). DOE is 
considering whether the different WSHP configurations should be treated 
similarly in the rulemaking analyses, or whether separate analyses/
inputs are warranted for each configuration.
    Issue D.10 DOE requests comment on whether alternate configurations 
of WSHPs (e.g., split systems, console units, vertical stack units) 
have different design options, achievable efficiency levels, or cost-
efficiency relationships than typical single-package units. DOE also 
requests comment on whether there are any other types of WSHP 
configurations that may have different design options, efficiency 
levels, or cost-efficiency relationships. Further, DOE requests data 
and comment on the market share of alternate WSHP configurations.

E. Mark-ups 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.
    In the July 2015 final rule, DOE identified four distribution 
channels based on the analysis conducted for commercial unitary air 
conditioners and heat pumps, as WSHPs are also commercial equipment and 
move to the market through the same channels. Two distribution channels 
represent the sale of new equipment, and two represent the sale of 
replacement equipment. In the new equipment distribution channel, a 
WSHP manufacturer sells the equipment to a heating, ventilation, and 
air conditioning (HVAC) distributor,

[[Page 27937]]

who sells to either a small or large mechanical contractor, who in turn 
sells it to a general contractor, who sells it to the customer. 80 FR 
42614, 42625 (July 17, 2015).
New Distribution Channels
Manufacturer [rarr] HVAC Distributor [rarr] Large Mechanical Contractor 
[rarr] General Contractor [rarr] End User
Manufacturer [rarr] HVAC Distributor [rarr] Small Mechanical Contractor 
[rarr] General Contractor [rarr] End User

    In the replacement distribution channel, a WSHP manufacturer sells 
the product to an HVAC distributor, who then sells it to either a small 
or large mechanical contractor, who sells it to the customer and 
performs the installation. 80 FR 42614, 42625 (July 17, 2015).
Replacement Distribution Channels
Manufacturer [rarr] HVAC Distributor [rarr] Large Mechanical Contractor 
[rarr] End User
Manufacturer [rarr] HVAC Distributor [rarr] Small Mechanical Contractor 
[rarr] End User

    A recent literature review indicates that the end users of WSHPs 
have not changed since the July 2015 final rule, and, therefore, DOE is 
using the same distribution channels in this RFI. 80 FR 42614, 42625 
(July 17, 2015).
    Were DOE to undertake an energy conservation standards rulemaking, 
DOE would determine the mark-ups for HVAC distributors and contractors 
by examining the updated versions of the sources of information used in 
the previous energy conservation standards rulemaking for WSHPs. In the 
July 2015 final rule, DOE developed baseline and incremental mark-ups 
based on available financial data. More specifically, DOE based the 
HVAC distributor mark-ups on data from the Heating, Air Conditioning, 
and Refrigeration Distributors International (HARDI) 2010 Profit 
Report. DOE also used financial data from the U.S. Census Bureau \7\ to 
estimate mark-ups for mechanical contractors and general contractors. 
See Chapter 6 of the July 2015 final rule TSD for more details on mark-
ups and distribution channels.
---------------------------------------------------------------------------

    \7\ Available at: https://www.census.gov/programs-surveys/economic-census.html (Last accessed March 12, 2020).
---------------------------------------------------------------------------

    Issue E.1 DOE requests information on the existence of any 
distribution channels other than the four distribution channels 
identified in the July 2015 final rule that are used to distribute the 
WSHP equipment at issue into the market. DOE also requests data on the 
fraction of WSHPs 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 July 2015 final rule, 
DOE developed estimates of the UEC in kilowatt hours (kWh) by equipment 
type and efficiency level (EL). Energy savings from higher-efficiency 
equipment was measured by comparing the UECs of higher ELs to the UEC 
of the ASHRAE baseline EL.\8\ 80 FR 42614, 42625 (July 17, 2015). 
However, because this current rulemaking is being conducted under 
EPCA's 6-year-lookback authority, energy savings for higher-efficiency 
equipment was measured by comparing the UECs of higher ELs to UECs of 
the baseline EL (i.e., the current Federal standards).
---------------------------------------------------------------------------

    \8\ As stated in section I.A, EPCA directs DOE to adopt the 
ASHRAE standard unless there is clear and convincing evidence to 
support a higher standard level. (42 U.S.C. 6313(a)(6)(A)(ii)(I)-
(II)) The July 2015 final rule was an ASHRAE trigger rulemaking, and 
as DOE is obligated to adopt ASHRAE as the minimum standard level, 
the energy use analysis uses the UEC of the ASHRAE level as the 
baseline.
---------------------------------------------------------------------------

    The cooling UECs came from Appendix D of the 2000 Screening 
Analysis for EPACT-Covered Commercial HVAC and Water-Heating Equipment 
(2000 Screening Analysis).9 10 If the efficiency levels in 
the 2000 Screening Analysis were identical to the levels developed in 
the engineering analysis for WSHPs, DOE used that UEC. For other 
efficiency levels, DOE scaled the UEC based on the ratio of EER. 
Heating UECs were developed using the 2003 Commercial Building Energy 
Consumption Survey \11\ (CBECS 2003). DOE analyzed the heating energy 
use of buildings in CBECS 2003 that use heat pumps for heating and 
developed a national-average annual energy use per square foot value. 
DOE converted that into an energy use per ton value using a ton per 
square foot relationship derived from the energy use analysis in the 
2014 Commercial Unitary Air Conditioner (CUAC) NOPR. 80 FR 1172, 1202 
(Jan. 8, 2015). DOE determined that the average COP of a commercial 
heat pump was 2.9 and developed a heating UEC for a WSHP with a COP of 
2.9 by multiplying energy use per ton by the representative capacity 
for each equipment class. DOE then developed corresponding COPs for 
each efficiency level by correlating COP to EER based on the AHRI 
Certified Equipment Database. To determine the heating UECs for all 
efficiency levels, DOE scaled the UEC based on the COP level relative 
to a COP of 2.9. 80 FR 42614, 42635 (July 17, 2015). DOE noted that 
this approach to heating energy use represented air-source heat pumps, 
not WSHP, and asked for comment from stakeholders on the validity of 
this approach in the January 2015 NOPR. 80 FR 42614, 42635 (July 17, 
2015). However, no comments were received from stakeholders. Therefore, 
DOE maintained this approach to estimate the heating UEC.
---------------------------------------------------------------------------

    \9\ Pacific Northwest National Laboratory, ``Screening Analysis 
for EPACT-Covered Commercial HVAC and Water-Heating Equipment, 
Report number 13232 (April 2000) (Available at: https://www.pnnl.gov/main/publications/external/technical_reports/PNNL-13232.pdf).
    \10\ The 2000 Screening Analysis was conducted by Pacific 
Northwest National Laboratory on behalf of DOE to determine the 
energy savings potential of the efficiency levels in ASHRAE Standard 
90.1-1999.
    \11\ Energy Information Administration, 2003 Commercial Building 
Energy Consumption Survey (2006) (Available at: https://www.eia.gov/consumption/commercial/data/2003/index.php?view=microdata).
---------------------------------------------------------------------------

    DOE also adjusted the UECs to account for improvements in building 
shell characteristics and changes in internal loads, using scalars from 
the Energy Information Administration's National Energy Modeling System 
(NEMS).\12\ In order to incorporate variability by region and building 
type into the energy use analysis, DOE created distributions of UECs 
using estimates of Full-Load Equivalent Operating Hours for cooling and 
heating developed in the 2000 Screening Analysis. DOE developed UECs 
for five building types: offices, lodging, education, multi-family 
housing, and healthcare across the nine Census divisions. 80 FR 42614, 
42635 (July 17, 2015).
---------------------------------------------------------------------------

    \12\ Available at: https://www.eia.gov/outlooks/aeo/nems/documentation/.
---------------------------------------------------------------------------

    Issue F.1 DOE requests comment on the approach that was used to 
develop UECs in the energy use analysis for the

[[Page 27938]]

July 2015 final rule, as well as any potential improvements that might 
impact UECs, or data indicating actual UECs for this equipment.
    Issue F.2 DOE requests comment on the building types used in the 
energy use analysis for the July 2015 final rule. Specifically, should 
any other types of commercial buildings be included in the energy use 
analysis?
    Issue F.3 DOE requests comment on a new approach to the energy use 
analysis which would use the DOE commercial reference buildings to 
develop annual building loads for cooling and heating. The building 
loads would be matched with WSHP performance data in order to develop a 
UEC. DOE also requests performance data, as well as any data that 
measures the energy use of WSHPs in the field.

G. Life-Cycle Cost and Payback Period Analysis

    DOE conducts the life-cycle cost (LCC) and payback period (PBP) 
analysis to evaluate the economic effects of potential energy 
conservation standards for WSHPs 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 (including 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 
mark-ups, 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 estimates repair and maintenance costs 
over the lifetime of the WSHP. In the July 2015 final rule, DOE used RS 
Means \13\ in order to develop annualized repair and maintenance costs. 
The repair costs represent the expenses associated with repairing or 
replacing a damaged component of a WSHP that has failed, and the first 
instance of a significant repair is on average about 10 years after the 
initial purchase of the WSHP. 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 description of the repair and maintenance cost 
methodology, please refer to chapter 6 of the July 2015 final rule TSD 
(EERE-2014-BT-STD-0015-0043). RS Means is a leading source for facility 
repair and maintenance data for space conditioning equipment; as such, 
DOE intends to use the most current version of RS Means for any future 
rulemakings for WSHPs.
---------------------------------------------------------------------------

    \13\ RS Means, Facilities Maintenance & Repair Cost Data 2013, 
Reed Construction Data, LLC. (2012).
---------------------------------------------------------------------------

    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 of this document. 
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 of this document. While DOE is interested in 
information regarding each of the listed technology options, DOE is 
also interested in the extent to which and at what point, consumers 
simply replace, as opposed to repair, failed WSHPs.

H. Shipments Analysis

    DOE develops shipments projections of WSHPs 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 of total annual WSHP shipments. In the July 2015 final rule, DOE 
used data published by the U.S. Census in the years 1980, 1983-1994, 
1997-2006, and 2008-2010 to develop a time series of historical 
shipments. DOE projected future shipments using a linear trend 
developed from the historical time series. To distribute the total 
shipments into the three equipment classes, DOE used the shipments data 
provided by AHRI in 1999 and published in the 2000 Screening Analysis 
for EPACT-Covered Commercial HVAC and Water-Heating Equipment. 80 FR 
42614, 42638 (July 17, 2015). DOE intends to update the shipments trend 
and equipment class breakdown with new data, if available.
    Issue H.1 DOE requests DOE requests the most recent annual sales 
data for WSHPs (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.6 which presents the number of WSHP models listed in the 
DOE CCMS database \14\ by equipment class, along with the fraction of 
models by EER bins, is an example of the types of shipments and market 
share data that DOE seeks in Issue H.1. DOE requests that interested 
parties supplement this table with shipments data from 2018. Interested 
parties are also encouraged to provide additional shipments data as may 
be relevant.
---------------------------------------------------------------------------

    \14\ DOE's Compliance Certification Database is available at: 
https://www.regulations.doe.gov/certification-data/products.html#q=Product_Group_s%3A* (Last accessed Sept. 26, 2019).

                                        Table II.6--Summary Table of WSHP Model Counts in the DOE CCMS Database *
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                           Fraction of models by EER bin (%)
                                                 CCMS model   ------------------------------------------------------------------------------------------
               Equipment class                  count (2018)    12.2-13.2    13.3-14.2    14.3-15.2    15.3-16.2    16.3-17.2    17.3-18.2
                                                                   EER          EER          EER          EER          EER          EER       > 18.3 EER
--------------------------------------------------------------------------------------------------------------------------------------------------------
WSHP <17,000 Btu/h...........................           1,009        39.2%        26.6%        16.7%        10.1%         3.8%         2.9%         0.8%
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                 13-14 EER  14.1-15 EER  15.1-16 EER  16.1-17 EER  17.1-18 EER  18.1-19 EER     > 19 EER
--------------------------------------------------------------------------------------------------------------------------------------------------------
WSHP >=17,000 Btu/h and <65,000 Btu/h........           5,199        25.2%        28.0%        21.6%        16.0%         5.5%         3.4%         0.1%

[[Page 27939]]

 
WSHP >=65,000 Btu/h and <135,000 Btu/h.......             739        37.2%        32.3%        25.2%         4.1%         0.8%         0.4%         0.0%
--------------------------------------------------------------------------------------------------------------------------------------------------------
* See supplemental document for plots of cooling and heating efficiency distributions of WSHPs for all three equipment classes. (Docket No. EERE-2019-BT-
  STD-0031-0001).

    If disaggregated fractions of annual sales are not available at the 
equipment class or efficiency level, DOE request more aggregated annual 
sales at the equipment category level.
    In the July 2015 final rule, DOE based equipment lifetime on a 
retirement function in the form of a Weibull probability distribution, 
with a mean of 19 years. 80 FR 42614, 42637 (July 17, 2015). A Weibull 
distribution is a probability distribution function that is commonly 
used to measure failure rates, and, therefore, DOE intends to use the 
same approach in this RFI with updated information on lifetimes and 
failure rates. Its form is similar to an exponential distribution, 
which would model a fixed failure rate, except that it allows for a 
failure rate that changes over time. For more detail on the lifetime 
measurement, please refer to Chapter 6 of the July 2015 final rule TSD 
(EERE-2014-BT-STD-0015-0043).
    Issue H.2 DOE requests comment on the estimated average lifetime of 
19 years and the Weibull approach, as well as any new data that is 
available regarding the lifetime or annual failure rates of WSHPs. 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 WSHPs, 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.\15\ Manufacturing of WSHPs 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's parent company and any other 
subsidiaries.
---------------------------------------------------------------------------

    \15\ 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 WSHPs 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 WSHPs 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 WSHPs 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.

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

[[Page 27940]]

any aspect of market failures, especially those in the context of 
amended energy conservation standards for WSHPs.
2. Network Mode/``Smart'' Equipment
    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 WSHPs.
3. Other
    Additionally, DOE welcomes comments on any other aspect of energy 
conservation standards for WSHPs 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 WSHPs 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 WSHPs. 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 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 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 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

[[Page 27941]]

about this process should contact Appliance and Equipment Standards 
Program staff at (202) 287-1445 or via email at 
[email protected].
Signing Authority
    This document of the Department of Energy was signed on April 2, 
2020, by Alexander N. Fitzsimmons, Deputy Assistant Secretary for 
Energy Efficiency Energy Efficiency and Renewable Energy, pursuant to 
delegated authority from the Secretary of Energy. That document with 
the original signature and date is maintained by DOE. For 
administrative purposes only, and in compliance with requirements of 
the Office of the Federal Register, the undersigned DOE Federal 
Register Liaison Officer has been authorized to sign and submit the 
document in electronic format for publication, as an official document 
of the Department of Energy. This administrative process in no way 
alters the legal effect of this document upon publication in the 
Federal Register.

    Signed in Washington, DC, on April 29, 2020.
Treena V. Garrett,
Federal Register Liaison Officer, U.S. Department of Energy.
[FR Doc. 2020-09415 Filed 5-11-20; 8:45 am]
 BILLING CODE 6450-01-P