[Federal Register Volume 87, Number 121 (Friday, June 24, 2022)]
[Proposed Rules]
[Pages 37934-37968]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-13224]



[[Page 37933]]

Vol. 87

Friday,

No. 121

June 24, 2022

Part II





 Department of Energy





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





10 CFR Part 431





Energy Conservation Program: Energy Conservation Standards for Packaged 
Terminal Air Conditioners and Packaged Terminal Heat Pumps; Proposed 
Rule

  Federal Register / Vol. 87 , No. 121 / Friday, June 24, 2022 / 
Proposed Rules  

[[Page 37934]]


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

DEPARTMENT OF ENERGY

10 CFR Part 431

[EERE-2019-BT-STD-0035]
RIN 1904-AE66


Energy Conservation Program: Energy Conservation Standards for 
Packaged Terminal Air Conditioners and Packaged Terminal Heat Pumps

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

ACTION: Notification of proposed determination and request for comment.

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

SUMMARY: The Energy Policy and Conservation Act, as amended (``EPCA''), 
prescribes energy conservation standards for various consumer products 
and certain commercial and industrial equipment, including Packaged 
Terminal Air Conditioners (``PTACs'') and Packaged Terminal Heat Pumps 
(``PTHPs''). EPCA also requires the U.S. Department of Energy (``DOE'') 
to periodically review standards. In this notification of proposed 
determination (``NOPD''), DOE has preliminarily determined that it 
lacks clear and convincing evidence that more-stringent standards for 
PTACs and PTHPs would be economically justified. As such, DOE has 
preliminarily determined that energy conservation standards for PTACs 
and PHTPs do not need to be amended. DOE requests comment on this 
proposed determination and the associated analyses and results.

DATES: Meeting: DOE will hold a public meeting via webinar on 
Wednesday, July 20, 2022, from 1:00 p.m. to 4:00 p.m. See section VII, 
``Public Participation,'' for webinar registration information, 
participant instructions, and information about the capabilities 
available to webinar participants.
    Comments: Written comments and information are requested and will 
be accepted on or before August 23, 2022.

ADDRESSES: Interested persons are encouraged to submit comments using 
the Federal eRulemaking Portal at www.regulations.gov under docket 
number EERE-2019-BT-STD-0035. Follow the instructions for submitting 
comments.
    Alternatively, interested persons may submit comments, identified 
by docket number EERE-2019-BT-STD-0035, by any of the following 
methods:
    (1) Email: [email protected]. Include the docket number 
EERE-2019-BT-STD-0035in the subject line of the message.
    (2) 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.
    (3) 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 telefacsimiles (``faxes'') will be accepted. For detailed 
instructions on submitting comments and additional information on this 
process, see section VII of this document.
    Docket: The docket, which includes Federal Register notices, 
webinar attendee lists and transcripts, comments, and other supporting 
documents/materials, is available for review at www.regulations.gov. 
All documents in the docket are listed in the www.regulations.gov 
index. However, not all documents listed in the index may be publicly 
available, such as information that is exempt from public disclosure.
    The docket web page can be found at www.regulations.gov/docket/EERE-2019-BT-STD-0035. The docket web page contains instructions on how 
to access all documents, including public comments, in the docket. See 
section VII, ``Public Participation,'' for further information on how 
to submit comments through www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: 
    Mr. Lucas Adin, 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) 287-5904. Email: [email protected].
    Ms. Amelia Whiting, U.S. Department of Energy, Office of the 
General Counsel, GC-33, 1000 Independence Avenue SW, Washington, DC, 
20585-0121. Telephone: (202) 586-2588. 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. Synopsis of the Proposed Determination
II. Introduction
    A. Authority
    B. Background
    1. Current Standards
    2. History of Standards Rulemakings for PTACs and PTHPs
    C. Deviation From Appendix A
III. General Discussion
    A. Equipment Classes and Scope of Coverage
    B. Test Procedure
    C. Technological Feasibility
    1. General
    2. Maximum Technologically Feasible Levels
    D. Energy Savings
    1. Determination of Savings
    2. Significance of Savings
    E. Economic Justification
    1. Economic Impact on Manufacturers and Consumers
    2. Savings in Operating Costs Compared To Increase in Price
    3. Energy Savings
    4. Lessening of Utility or Performance of Products
    5. Impact of Any Lessening of Competition
    6. Need for National Energy Conservation
    7. Other Factors
IV. Methodology and Discussion of Related Comments
    A. Market and Technology Assessment
    1. Scope of Coverage
    2. Equipment Classes
    a. Make-Up Air PTACs and PTHPs
    3. Technology Options
    4. Screening Analysis
    a. Screened-Out Technologies
    b. Other Technologies Not Considered in the Engineering Analysis
    c. Remaining Technologies
    B. Engineering Analysis
    1. Efficiency Analysis
    2. Equipment Classes Analyzed
    3. Baseline Efficiency Levels
    4. Maximum Available and Maximum Technologically Feasible Levels
    5. Incremental Efficiency levels
    6. Cost Analysis
    7. Cost-Efficiency Results
    C. Markups Analysis
    D. Energy Use Analysis
    E. Life-Cycle Cost and Payback Period Analysis
    1. PTAC and PTHP Equipment Cost
    2. Installation Cost
    3. Annual Energy Consumption
    4. Energy Prices
    5. Maintenance and Repair Costs
    6. Product Lifetime
    7. Discount Rates
    8. Energy Efficiency Distribution in the No-New-Standards Case
    9. Payback Period Analysis
    F. Shipments Analysis
    G. National Impact Analysis
    1. Equipment Efficiency Trends
    2. National Energy Savings
    3. Net Present Value Analysis

[[Page 37935]]

V. Analytical Results and Conclusions
    A. Economic Impacts on PTAC and PTHP Consumers
    B. National Impact Analysis
    a. Net Present Value of Consumer Costs and Benefits
    C. Proposed Determination
    1. Technological Feasibility
    2. Significant Conservation of Energy
    3. Economic Justification
    4. Summary
VI. Procedural Issues and Regulatory Review
    A. Review Under Executive Order 12866 and 13563
    B. Review Under the Regulatory Flexibility Act
    C. Review Under the Paperwork Reduction Act
    D. Review Under the National Environmental Policy Act of 1969
    E. Review Under Executive Order 13132
    F. Review Under Executive Order 12988
    G. Review Under the Unfunded Mandates Reform Act of 1995
    H. Review Under the Treasury and General Government 
Appropriations Act, 1999
    I. Review Under Executive Order 12630
    J. Review Under the Treasury and General Government 
Appropriations Act, 2001
    K. Review Under Executive Order 13211
    L. Review Under the Information Quality Bulletin for Peer Review
VII. Public Participation
    A. Participation in the Webinar
    D. Submission of Comments
VIII. Approval of the Office of the Secretary

I. Synopsis of the Proposed Determination

    Title III, Part C \1\ of EPCA,\2\ established the Energy 
Conservation Program for Certain Industrial Equipment. (42 U.S.C. 6311-
6317) Such equipment includes PTACs and PTHPs, the subject of this 
rulemaking. Pursuant to EPCA, DOE is to consider amending the energy 
efficiency standards for certain types of commercial and industrial 
equipment, including the equipment at issue in this document, whenever 
the American Society of Heating, Refrigerating, and Air-Conditioning 
Engineers (``ASHRAE'') amends the standard levels or design 
requirements prescribed in ASHRAE Standard 90.1, ``Energy Standard for 
Buildings Except Low-Rise Residential Buildings,'' (``ASHRAE Standard 
90.1''). Under a separate provision of EPCA, DOE is required to review 
the existing energy conservation standards for those types of covered 
equipment subject to ASHRAE Standard 90.1 every six 6 years to 
determine whether those standards need to be amended. (42 U.S.C. 
6313(a)(6)(A)-(C)) DOE is conducting this review of the energy 
conservation standards for PTACs and PTHPs under EPCA's six-year-
lookback authority. (42 U.S.C. 6313(a)(6)(C))
---------------------------------------------------------------------------

    \1\ For editorial reasons, upon codification in the U.S. Code, 
Part C was redesignated Part A-1.
    \2\ All references to EPCA in this document refer to the statute 
as amended through the Energy Act of 2020, Pub. L. 116-260 (Dec. 27, 
2020), which reflect the last statutory amendments that impact Parts 
A and A-1 of EPCA.
---------------------------------------------------------------------------

    For this proposed determination, DOE analyzed PTACs and PTHPs 
subject to standards specified in Title 10 of the Code of Federal 
Regulations (``CFR'') part 431.97. DOE first analyzed the technological 
feasibility of more energy efficient PTACs and PTHPs. For those PTACs 
and PTHPs for which DOE determined higher standards to be 
technologically feasible, DOE estimated energy savings that would 
result from potential energy conservation standards by conducting a 
national impacts analysis (``NIA''). DOE also considered whether 
potential energy conservation standards would be economically 
justified. As discussed in the following sections, DOE has tentatively 
determined that it lacks clear and convincing evidence that amended 
energy conservation standards for PTACs and PTHPs would be economically 
justified. DOE evaluated whether higher standards would be cost 
effective by conducting life-cycle cost (``LCC'') and payback period 
(``PBP'') analyses, and estimated the net present value (``NPV'') of 
the total costs and benefits experienced by consumers.
    Based on the results of the analyses, summarized in section V of 
this document, DOE has tentatively determined that it lacks clear and 
convincing evidence that more-stringent standards would result in 
significant additional energy savings and be technologically feasible 
and economically justified.

II. Introduction

    The following section briefly discusses the statutory authority 
underlying this proposed determination, as well as some of the 
historical background relevant to the establishment of standards for 
PTACs and PTHPs.

A. Authority

    EPCA authorizes DOE to regulate the energy efficiency of a number 
of consumer products and certain industrial equipment. Title III, Part 
C 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 PTACs and PTHPs, the subject of this document. (42 U.S.C. 
6311(1)(I)) EPCA prescribed initial standards for this equipment. (42 
U.S.C. 6313(a)(3))
    The energy conservation program under EPCA consists essentially of 
four parts: (1) testing, (2) labeling, (3) the establishment of Federal 
energy conservation standards, and (4) certification and enforcement 
procedures. Relevant provisions of EPCA include definitions (42 U.S.C. 
6311), test procedures (42 U.S.C. 6314), labeling provisions (42 U.S.C. 
6315), energy conservation standards (42 U.S.C. 6313), and the 
authority to require information and reports from manufacturers (42 
U.S.C. 6316; 42 U.S.C. 6296).
    Subject to certain criteria and conditions, DOE is required to 
develop test procedures to measure the energy efficiency, energy use, 
or estimated annual operating cost of covered equipment. (42 U.S.C. 
6314(a)(2)) Manufacturers of covered equipment must use the Federal 
test procedures as the basis for: (1) certifying to DOE that their 
equipment complies with the applicable energy conservation standards 
adopted pursuant to EPCA (42 U.S.C. 6316(b); 42 U.S.C. 6296), and (2) 
making representations about the efficiency of that equipment (42 
U.S.C. 6314(d)) Similarly, DOE uses these test procedures to determine 
whether the equipment complies with relevant standards promulgated 
under EPCA. The DOE test procedures for PTACs and PTHPs appear at title 
10 of the CFR part 431 section 96(g).
    EPCA contains mandatory energy conservation standards for 
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 
that generally corresponded to the levels in the ASHRAE Standard 90.1 
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)
    If ASHRAE Standard 90.1 is amended with respect to the standard 
levels or design requirements applicable under that standard for 
certain commercial equipment, including PTACs and PTHPs, not later than 
180 days after the amendment of the standard, DOE must publish in the 
Federal Register for public comment an analysis of the energy savings 
potential of amended energy efficiency standards. (42 U.S.C.

[[Page 37936]]

6313(a)(6)(A)(i)) DOE must adopt amended energy conservation standards 
at the new efficiency level in ASHRAE Standard 90.1, unless clear and 
convincing evidence supports a determination that adoption of a more-
stringent efficiency 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)(ii))
    To determine whether a 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 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 
increase in the price, initial charges, or maintenance expenses of 
the products 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 considers relevant.

(42 U.S.C. 6313(a)(6)(B)(ii))

    If DOE adopts as a national standard the efficiency levels 
specified in the amended ASHRAE Standard 90.1, DOE must establish such 
a standard not later than 18 months after publication of the amended 
industry standard. (42 U.S.C. 6313(a)(6)(A)(ii)(I)) If DOE determines 
that a more-stringent standard is appropriate under the statutory 
criteria, DOE must establish the more-stringent standard not later than 
30 months after publication of the revised ASHRAE Standard 90.1. (42 
U.S.C. 6313(a)(6)(B)(i))
    EPCA also requires that every six years DOE shall evaluate the 
energy conservation standards for each class of certain covered 
commercial equipment, including PTACs and PTHPs, and publish either a 
notice of determination that the standards do not need to be amended, 
or a notice of proposed rulemaking (``NOPR'') that includes new 
proposed energy conservation standards (proceeding to a final rule, as 
appropriate). (42 U.S.C. 6313(a)(6)(C)(i)) EPCA further provides that, 
not later than three years after the issuance of a final determination 
not to amend standards, DOE must publish either a notice of 
determination that standards for the product do not need to be amended, 
or a NOPR including new proposed energy conservation standards 
(proceeding to a final rule, as appropriate). (42 U.S.C. 
6313(a)(6)(C)(iii)(II)) DOE must make the analysis on which the 
determination is based publicly available and provide an opportunity 
for written comment. (42 U.S.C. 6313(a)(6)(C)(ii))
    DOE is publishing this NOPD in satisfaction of the 6-year review 
requirement in EPCA, having initially determined that DOE lacks clear 
and convincing evidence that amended standards for PTACs and PTHPs 
would be economically justified.

B. Background

1. Current Standards
    In a final rule published on July 21, 2015 (``July 2015 final 
rule''), DOE prescribed the current energy conservation standards for 
PTACs and PTHPs. 80 FR 43162. These levels are expressed in energy 
efficiency ratio (``EER'') for the cooling mode and in coefficient of 
performance (``COP'') for the heating mode for PTHPs. EER is defined as 
the ratio of the produced cooling effect of an air conditioner or heat 
pump to its net work input, expressed in British thermal units 
(``Btu'')/watt-hour. 10 CFR 431.92. COP is defined as the ratio of the 
produced cooling effect of an air conditioner or heat pump (or its 
produced heating effect, depending on the mode of operation) to its net 
work input, when both the cooling (or heating) effect and the net work 
input are expressed in identical units of measurement. 10 CFR 431.92.
    The current energy conservation standards are located at 10 CFR 
431.97, Table 7 and Table 8 and repeated in Table II-1.

                      Table II-1--Federal Energy Conservation Standards for PTACs and PTHPs
----------------------------------------------------------------------------------------------------------------
                             Equipment Class
-------------------------------------------------------------------------                      Compliance date:
                                                       Cooling capacity    Efficiency level        products
                                                       (British thermal           \*\         manufactured on or
         Equipment type                Category         units per hour                               after
                                                         (``Btu/h''))
----------------------------------------------------------------------------------------------------------------
PTAC............................  Standard Size \**\  <7,000 Btu/h......  EER - 11.9........  January 1, 2017.
                                  ..................  >=7,000 Btu/h and   EER-14.0--(0.300 x  January 1, 2017.
                                                       <=15,000 Btu/h.     Cap[Dagger]).
                                  ..................  >15,000 Btu/h.....  EER-9.5...........  January 1, 2017.
 \                                Non-Standard Size   <7,000 Btu/h......  EER-9.4...........  October 7, 2010.
                                   [dagger].
                                  ..................  >=7,000 Btu/h and   EER-10.9--(0.213 x  October 7, 2010.
                                                       <=15,000 Btu/h.     Cap [dagger]).
                                  ..................  >15,000 Btu/h.....  EER-7.7...........  October 7, 2010.
PTHP............................  Standard Size **..  <7,000 Btu/h......  EER-11.9..........  October 8, 2012.
                                                                          COP = 3.3.........
                                  ..................  >=7,000 Btu/h and   EER-14.0--(0.300 x  October 8, 2012.
                                                       <=15,000 Btu/h.     Cap[Dagger]).
                                                                          COP = 3.7--(0.052
                                                                           x Cap [Dagger]).
                                  ..................  >15,000 Btu/h.....  EER-9.5...........  October 8, 2012.
                                                                          COP-2.9...........
                                  Non-Standard Size   <7,000 Btu/h......  EER-9.3...........  October 7, 2010.
                                   [dagger].                              COP-2.7...........
                                  ..................  >=7,000 Btu/h and   EER-10.8--(0.213 x  October 7, 2010.
                                                       <=15,000 Btu/h.     Cap [Dagger]).
                                                                          COP = 2.9--(0.026
                                                                           x Cap [Dagger]).

[[Page 37937]]

 
                                  ..................  >15,000 Btu/h.....  EER-7.6...........  October 7, 2010.
                                                                          COP-2.5...........
----------------------------------------------------------------------------------------------------------------
* For equipment rated according to the DOE test procedure prescribed at 10 CFR 431.96(g).
** Standard size means a PTAC or PTHP with wall sleeve dimensions having an external wall opening of greater
  than or equal to 16 inches high or greater than or equal to 42 inches wide, and a cross-sectional area greater
  than or equal to 670 square inches. 10 CFR 431.92.
[dagger] Non-standard size means a PTAC or PTHP with existing wall sleeve dimensions having an external wall
  opening of less than 16 inches high or less than 42 inches wide, and a cross-sectional area less than 670
  square inches. Id.
[dagger][dagger] Cap means cooling capacity in thousand Btu/h at 95[ordm]F outdoor dry-bulb temperature.

2. History of Standards Rulemakings for PTACs and PTHPs
    In the July 2015 final rule, DOE published amendments to the PTAC 
and PTHP standards in response to the 2013 update to ASHRAE Standard 
90.1 (``ASHRAE Standard 90.1-2013''). 80 FR 43162. DOE determined that 
ASHRAE Standard 90.1-2013 amended the standards for three of the 12 
PTAC and PTHP equipment classes: PTAC standard size less than 7,000 
Btu/h, PTAC standard size greater than or equal 7,000 Btu/h and less 
than or equal to 15,000 Btu/h, and PTAC standard size greater than 
15,000 Btu/h. 80 FR 43162, 43163. DOE adopted the standard levels for 
these three equipment classes as updated by ASHRAE Standard 90.1-2013, 
with compliance with the amended standards required for equipment 
manufactured on or after January 1, 2017. Id. DOE did not amend the 
energy conservation standards for the remaining nine equipment classes 
which were already aligned with the standards in ASHRAE Standard 90.1-
2013. 80 FR 43162, 43166. DOE was unable to show with clear and 
convincing evidence that energy conservation standards at levels more 
stringent than the minimum levels specified in the ASHRAE Standard 
90.1-2013 for any of the 12 equipment classes would be economically 
justified. 80 FR 43162, 43163.
    Since ASHRAE Standard 90.1-2013 was published, ASHRAE Standard 90.1 
has undergone two further revisions. A revision was published on 
October 26, 2016 (``ASHRAE Standard 90.1-2016'') and a revision was 
published on October 24, 2019 (``ASHRAE Standard 90.1-2019''). Neither 
of these publications amended the minimum EER and COP levels for PTACs 
and PTHPs.
    In support of the present review of the PTACs and PTHPs energy 
conservation standards, DOE published an early assessment review 
request for information (``RFI'') on December 21, 2020 (``December 2020 
ECS RFI''), which identified various issues on which DOE sought comment 
to inform its determination of whether the standards need to be 
amended. 85 FR 82952.
    DOE received comments in response to the December 2020 ECS RFI from 
the interested parties listed in Table II-2 of this document. These 
comments are discussed in detail in section IV of this document.

           Table II-2--December 2020 ECS RFI Written Comments
------------------------------------------------------------------------
                                   Reference in this
          Commenter(s)                   NOPD           Commenter type
------------------------------------------------------------------------
Air-Conditioning, Heating, and    AHRI..............  Trade Association.
 Refrigeration Institute.
Appliance Standards Awareness     ASAP..............  Efficiency
 Project.                                              Organizations.
GE Appliances...................  GEA...............  Manufacturer.
Northwest Energy Efficiency       NEEA..............  Efficiency
 Alliance.                                             Organizations.
Pacific Gas and Electric          CA IOUs...........  Utilities.
 Company, San Diego Gas and
 Electric, and Southern
 California Edison.
------------------------------------------------------------------------

    A parenthetical reference at the end of a comment quotation or 
paraphrase provides the location of the item in the public record.\3\
---------------------------------------------------------------------------

    \3\ The parenthetical reference provides a reference for 
information located in the docket. (Docket No. EERE-2019-BT-STD-
0035, which is maintained at www.regulations.gov). The references 
are arranged as follows: (commenter name, comment docket ID number, 
page of that document).
---------------------------------------------------------------------------

C. Deviation From Appendix A

    In accordance with section 3(a) of 10 CFR part 430 subpart C, 
appendix A (``appendix A''), applicable to covered equipment under 10 
CFR 431.4, DOE notes that it is deviating from the provision in 
appendix A regarding the comment period for a NOPR. Section 6(f)(2) of 
appendix A specifies that the length of the public comment period for a 
NOPR will not be less than 75 days. For this proposed determination, 
DOE has opted to instead provide a 60-day comment period. As stated 
previously, DOE requested comment in the December 2020 ECS RFI on the 
technical and economic analyses that would be used to determine whether 
a more stringent standard would result in significant conservation of 
energy and is technologically feasible and economically justified. DOE 
has determined that a 60-day comment period, in conjunction with the 
prior December 2020 ECS RFI, provides sufficient time for interested 
parties to review the proposed rule and develop comments.

III. General Discussion

    DOE developed this proposed determination after considering 
comments, data, and information from interested parties that represent 
a variety of interests. This proposed determination addresses issues 
raised by these commenters.

A. Equipment Classes and Scope of Coverage

    When evaluating and establishing energy conservation standards, DOE 
divides covered equipment into

[[Page 37938]]

equipment classes by the type of energy used or by capacity or other 
performance-related features that justify differing standards. This 
proposed determination covers PTACs and PTHPs.
    PTAC is defined as a wall sleeve and a separate un-encased 
combination of heating and cooling assemblies specified by the builder 
and intended for mounting through the wall, and that is industrial 
equipment. 10 CFR 431.92. It includes a prime source of refrigeration, 
separable outdoor louvers, forced ventilation, and heating availability 
by builder's choice of hot water, steam, or electricity. Id.
    PTHP is defined as a PTAC that utilizes reverse cycle refrigeration 
as its prime heat source, that has a supplementary heat source 
available, with the choice of hot water, steam, or electric resistant 
heat, and that is industrial equipment. Id.
    The scope of coverage is discussed in further detail in section 
IV.A.1 of this document. The PTAC and PTHP classes for this proposed 
determination are discussed in further detail in section IV.A.2 of this 
document.

B. Test Procedure

    EPCA sets forth generally applicable criteria and procedures for 
DOE's adoption and amendment of test procedures. (42 U.S.C. 6314(a)) 
Manufacturers of covered equipment must use these test procedures to 
certify to DOE that their product complies with energy conservation 
standards and to quantify the efficiency of their product. (42 U.S.C. 
6314(d)) As discussed, DOE's current energy conservation standards for 
PTACs and PTHPs are expressed in terms of EER and COP. 10 CFR 431.97.
    DOE's current test procedures for PTACs and PTHPs were last updated 
in a test procedure final rule on June 30, 2015 (``June 2015 TP final 
rule''). 80 FR 37136. The current test procedure for cooling mode 
incorporates by reference AHRI Standard 310/380-2014, ``Standard for 
Packaged Terminal Air-Conditioners and Heat Pumps'' (``AHRI Standard 
310/380-2014'') with the following sections applicable to the DOE test 
procedure: sections 3, 4.1, 4.2, 4.3, and 4.4; American National 
Standards Institute (``ANSI'')/ASHRAE 16-1983 (RA 2014), ``Method of 
Testing for Rating Room Air Conditioners and Packaged Terminal Air 
Conditioners'' (``ANSI/ASHRAE Standard 16-1983'') and ANSI/ASHRAE 37-
2009, ``Methods of Testing for Rating Electrically Driven Unitary Air-
Conditioning and Heat Pump Equipment'' (``ANSI/ASHRAE Standard 37-
2009''). 10 CFR 431.96(g)(1) The current test procedure for heating 
mode testing incorporates by reference AHRI Standard 310/380-2014, with 
the following sections applicable to the DOE test procedure: sections 
3, 4.1, 4.2 (except section 4.2.1.2(b)), 4.3, and 4.4; and ANSI/ASHRAE 
Standard 58-1986 (RA 2014), ``Method of Testing for Rating Room Air-
Conditioner and Packaged Terminal Air-Conditioner Heating Capacity'' 
(``ANSI/ASHRAE Standard 58-1986''). 10 CFR 431.96(g)(2). The currently 
applicable DOE test procedures for PTACs and PTHPs appear at 10 CFR 
431.96 (g).
    The current test procedures also include additional provisions in 
paragraphs (c) and (e) of 10 CFR 431.96. 10 CFR 431.96(b)(1). Paragraph 
(c) of 10 CFR 431.96 specifies provisions for an optional compressor 
break-in period, and paragraph (e) of 10 CFR 431.96 details what 
information sources can be used for unit set-up and provides specific 
set-up instructions for refrigerant parameters (e.g., superheat) and 
air flow rate.\4\
---------------------------------------------------------------------------

    \4\ The amendatory instructions in the June 2015 TP final rule 
for PTACs and PTHPs includes the reference to AHRI Standard 310/380-
2014 in paragraphs (c) and (e), indicating that the requirements do 
apply to this equipment, even though the current CFR does not 
include this reference. 80 FR 37136, 37149 (June 30, 2015).
---------------------------------------------------------------------------

    DOE's current test procedure for PTACs and PTHPs do not include a 
seasonal metric that includes part-load performance. As part of an 
ongoing test procedure rulemaking, DOE published a RFI on May 25, 2021 
(``May 2021 TP RFI''), in which DOE requested information and data to 
consider amendments to DOE's test procedure for PTACs and PTHPs. 86 FR 
28005. Specifically, DOE requested comment on whether it should 
consider adopting for PTACs and PTHPs a cooling-mode metric and a 
heating-mode metric that integrates part-load performance to better 
represent full-season efficiency. 86 FR 28005, 28010-28011. Were DOE to 
amend the PTAC and PTHP 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.
    DOE received general comments related to the test procedure in 
response to the December 2020 ECS RFI. DOE will consider such comments 
in the ongoing test procedure rulemaking. Discussion of part-load 
technologies as they relate to standards is contained in section IV.A.3 
of this document.
    For the purpose of this NOPD, DOE relied on the test procedures for 
PTACs and PTHPs as currently established at 10 CFR 431.96(g).

C. Technological Feasibility

1. General
    In evaluating potential amendments to energy conservation 
standards, DOE conducts a screening analysis based on information 
gathered on all current technology options and prototype designs that 
could improve the efficiency of the products or equipment that are the 
subject of the determination. As the first step in such an analysis, 
DOE develops a list of technology options for consideration in 
consultation with manufacturers, design engineers, and other interested 
parties. These technology options are discussed in detail in section 
IV.A.3 of this document. DOE then determines which of those means for 
improving efficiency are technologically feasible. DOE considers 
technologies incorporated in commercially available products or in 
working prototypes to be technologically feasible. See generally 10 CFR 
431.4; sections 6(b)(3)(i) and 7(b)(1) of appendix A to 10 CFR part 430 
subpart C (``Process Rule'').
    After DOE has determined that particular technology options are 
technologically feasible, it further evaluates each technology option 
in light of the following additional screening criteria: (1) 
practicability to manufacture, install, and service; (2) adverse 
impacts on product utility or availability; (3) adverse impacts on 
health or safety; and (4) unique-pathway proprietary technologies. See 
generally 10 CFR 431.4; sections 6(b)(3)(ii)-(v) and 7(b)(2)-(5) of the 
Process Rule. Section IV.A.4 of this document discusses the results of 
the screening analysis for PTACs and PTHPs, particularly the designs 
DOE considered, those it screened out, and those that are the basis for 
the standards considered in this proposed determination. For further 
details on the screening analysis for this proposed determination, see 
section IV.A.4 of this document.
2. Maximum Technologically Feasible Levels
    As when DOE proposes to adopt an amended standard for a type or 
class of covered equipment, in this analysis it would result in 
significant conservation of energy and is technologically feasible and 
economically justified. (See 42 U.S.C. 6313(a)(6)(A)(ii)(II)) 
Accordingly, in the engineering analysis, DOE determined the maximum 
technologically feasible (``max-tech'') improvements in energy 
efficiency for PTACs and PTHPs, using the design parameters for the 
most efficient products available on the market or in

[[Page 37939]]

working prototypes. The max-tech levels that DOE determined for this 
analysis are described in section IV.B.4 of this proposed 
determination.

D. Energy Savings

1. Determination of Savings
    For each efficiency level (``EL'') evaluated, DOE projected energy 
savings from application of the EL to the PTACs and PTHPs purchased in 
the 30-year period that begins in the assumed year of compliance with 
the potential standards (2026-2055). The savings are measured over the 
entire lifetime of the PTACs and PTHPs purchased in the previous 30-
year period. DOE quantified the energy savings attributable to each EL 
as the difference in energy consumption between each standards case and 
the no-new-standards case. The no-new-standards case represents a 
projection of energy consumption that reflects how the market for a 
product would likely evolve in the absence of amended energy 
conservation standards. DOE used its NIA spreadsheet model to estimate 
national energy savings (``NES'') from potential amended or new 
standards for PTACs and PTHPs. The NIA spreadsheet model (described in 
section V.B of this document) calculates energy savings in terms of 
site energy, which is the energy directly consumed by products at the 
locations where they are used. For electricity, DOE reports NES in 
terms of primary energy savings, which is the savings in the energy 
that is used to generate and transmit the site electricity. DOE also 
calculates NES in terms of full-fuel-cycle (``FFC'') energy savings. 
The FFC metric includes the energy consumed in extracting, processing, 
and transporting primary fuels (i.e., coal, natural gas, petroleum 
fuels), and thus presents a more complete picture of the impacts of 
energy conservation standards.\5\ DOE's approach is based on the 
calculation of an FFC multiplier for each of the energy types used by 
covered products or equipment. For more information on FFC energy 
savings, see section IV.G of this document.
---------------------------------------------------------------------------

    \5\ The FFC metric is discussed in DOE's statement of policy and 
notice of policy amendment. 76 FR 51282 (Aug. 18, 2011), as amended 
at 77 FR 49701 (Aug. 17, 2012).
---------------------------------------------------------------------------

2. Significance of Savings
    In determining whether amended standards are needed, DOE must 
consider whether such standards will result in significant conservation 
of energy.\6\ (42 U.S.C. 6313(a)(6)(C)(i)(I)); (42 U.S.C. 
6313(a)(6)(A)(ii)(II)) The significance of energy savings offered by a 
new or amended energy conservation standard cannot be determined 
without knowledge of the specific circumstances surrounding a given 
rulemaking.\7\ For example, the United States has now rejoined the 
Paris Agreement on February 19, 2021. As part of that agreement, the 
United States has committed to reducing GHG emissions in order to limit 
the rise in mean global temperature.\8\ As such, energy savings that 
reduce GHG emission have taken on greater importance. Additionally, 
some covered products and equipment have most of their energy 
consumption occur during periods of peak energy demand. The impacts of 
these products on the energy infrastructure can be more pronounced than 
products with relatively constant demand. In evaluating the 
significance of energy savings, DOE considers differences in primary 
energy and FFC effects for different covered products and equipment 
when determining whether energy savings are significant. Accordingly, 
DOE evaluates the significance of energy savings on a case-by-case 
basis.
---------------------------------------------------------------------------

    \6\ In setting a more stringent standard for ASHRAE equipment, 
DOE must have ``clear and convincing evidence'' that doing so 
``would result in significant additional conservation of energy'' in 
addition to being technologically feasible and economically 
justified. 42 U.S.C. 6313(a)(6)(A)(ii)(II). This language indicates 
that Congress had intended for DOE to ensure that, in addition to 
the savings from the ASHRAE standards, DOE's standards would yield 
additional energy savings that are significant. In DOE's view, this 
statutory provision shares the requirement with the statutory 
provision applicable to covered products and non-ASHRAE equipment 
that ``significant conservation of energy'' must be present (42 
U.S.C. 6295(o)(3)(B)) --and supported with ``clear and convincing 
evidence''--to permit DOE to set a more stringent requirement than 
ASHRAE.
    \7\ See 86 FR 70892, 70901 (Dec. 13, 2021).
    \8\ See Executive Order 14008, 86 FR 7619 (Feb. 1, 2021) 
(``Tackling the Climate Crisis at Home and Abroad'').
---------------------------------------------------------------------------

E. Economic Justification

    As noted, EPCA provides seven factors to be evaluated in 
determining whether a potential energy conservation standard is 
economically justified. (42 U.S.C. 6313(a)(6)(B)(ii)(I)-(VII)) The 
following sections discuss how DOE has addressed each of those seven 
factors in this proposed determination.
1. Economic Impact on Manufacturers and Consumers
    In determining the impacts of a potential amended standard on 
manufacturers, DOE conducts a manufacturing impact analysis (``MIA''). 
DOE first uses an annual cash-flow approach to determine the 
quantitative impacts. This step includes both a short-term assessment--
based on the cost and capital requirements during the period between 
when a regulation is issued and when entities must comply with the 
regulation--and a long-term assessment over a 30-year period. The 
industry-wide impacts analyzed include (1) industry net present value, 
which values the industry on the basis of expected future cash flows, 
(2) cash flows by year, (3) changes in revenue and income, and (4) 
other measures of impact, as appropriate. However, DOE is not proposing 
amended standards for PTACs and PTHPs, and, therefore, this proposed 
determination would have no cash-flow impacts on manufacturers. 
Accordingly, as discussed further in section IV.G of this document, DOE 
did not conduct an MIA for this NOPD.
    For individual consumers, measures of economic impact include the 
changes in LCC and PBP associated with new or amended standards. These 
measures are discussed further in the following section. For consumers 
in the aggregate, DOE also calculates the national net present value 
(``NPV'') of the consumer costs and benefits expected to result from 
particular standards. DOE also evaluates the impacts of potential 
standards on identifiable subgroups of consumers that may be affected 
disproportionately by a standard. However, DOE is not proposing amended 
standards for PTACs and PTHPs, and, therefore, this proposed 
determination would have no disproportionate impact on identifiable 
subgroups of consumers. Accordingly, DOE did not conduct a subgroup 
analysis for this NOPD.
2. Savings in Operating Costs Compared to Increase in Price
    EPCA requires DOE to consider the savings in operating costs 
throughout the estimated average life of the covered product in the 
type (or class) compared to any increase in the price of, or in the 
initial charges for, or maintenance expenses of, the covered product 
that are likely to result from a standard. (42 U.S.C. 
6313(a)(6)(B)(ii)(II)) DOE conducts this comparison in its LCC and PBP 
analysis.
    The LCC is the sum of the purchase price of a product (including 
its installation) and the operating expense (including energy, 
maintenance, and repair expenditures) discounted over the lifetime of 
the product. The LCC analysis requires a variety of inputs, such as 
product prices, product energy consumption, energy prices, maintenance 
and repair costs, product lifetime, and discount rates appropriate for 
consumers. To account for uncertainty and variability in specific 
inputs, such as product lifetime and

[[Page 37940]]

discount rate, DOE uses a distribution of values, with probabilities 
attached to each value.
    The PBP is the estimated amount of time (in years) it takes 
consumers to recover the increased purchase cost (including 
installation) of a more-efficient product through lower operating 
costs. DOE calculates the PBP by dividing the change in purchase cost 
due to a more-stringent standard by the change in annual operating cost 
for the year that standards are assumed to take effect.
    For its LCC and PBP analysis, DOE assumes that consumers will 
purchase the covered products in the first year of compliance with new 
or amended standards. The LCC savings for the considered efficiency 
levels are calculated relative to the case that reflects projected 
market trends in the absence of new or amended standards. DOE's LCC and 
PBP analysis is discussed in further detail in section IV.E of this 
document.
3. Energy Savings
    Although significant conservation of energy is a separate statutory 
requirement for adopting an energy conservation standard, EPCA requires 
DOE, in determining the economic justification of a standard, to 
consider the total projected energy savings that are expected to result 
directly from the standard. (42 U.S.C. 6313(a)(6)(B)(ii)(III)) As 
discussed in section IV.G of this document, DOE uses the NIA 
spreadsheet models to project national energy savings.
4. Lessening of Utility or Performance of Products
    In establishing product classes and in evaluating design options 
and the impact of potential standard levels, DOE evaluates potential 
standards that would not lessen the utility or performance of the 
considered products. (42 U.S.C. 6313(a)(6)(B)(ii)(IV)) DOE is not 
proposing amended standards for PTACs and PTHPs, and, therefore, this 
proposed determination would not impact the utility of such equipment.
5. Impact of Any Lessening of Competition
    EPCA directs DOE to consider the impact of any lessening of 
competition, as determined in writing by the Attorney General that is 
likely to result from a proposed standard. (42 U.S.C. 
6313(a)(6)(B)(ii)(V)) Because DOE is not proposing standards for PTACs 
and PTHPs, DOE did not transmit a copy of its proposed determination to 
the Attorney General for anti-competitive review.
6. Need for National Energy Conservation
    DOE also considers the need for national energy and water 
conservation in determining whether a new or amended standard is 
economically justified. (42 U.S.C. 6313(a)(6)(B)(ii)(VI)) The energy 
savings from the proposed standards are likely to provide improvements 
to the security and reliability of the Nation's energy system. 
Reductions in the demand for electricity also may result in reduced 
costs for maintaining the reliability of the Nation's electricity 
system. DOE conducts a utility impact analysis to estimate how 
standards may affect the Nation's needed power generation capacity. 
However, DOE is not proposing amended standards for PTACs and PTHPs, 
and therefore, did not conduct this analysis.
    DOE maintains that environmental and public health benefits 
associated with the more efficient use of energy are important to take 
into account when considering the need for national energy 
conservation. For example, energy conservation standards result in 
environmental benefits in the form of reduced emissions of air 
pollutants and greenhouse gases (``GHGs'') associated with energy 
production and use. DOE conducts an emissions analysis to estimate how 
potential standards may affect these emissions. DOE also estimates the 
economic value of emissions reductions resulting from each trial 
standard level (``TSL'') (i.e., standards case above the base case).\9\ 
However, DOE is not proposing amended standards for PTACs and PTHPs, 
and, therefore, did not conduct this analysis.
---------------------------------------------------------------------------

    \9\ On March 16, 2022, the Fifth Circuit Court of Appeals (No. 
22-30087) granted the federal government's emergency motion for stay 
pending appeal of the February 11, 2022, preliminary injunction 
issued in Louisiana v. Biden, No. 21-cv-1074-JDC-KK (W.D. La.). As a 
result of the Fifth Circuit's order, the preliminary injunction is 
no longer in effect, pending resolution of the federal government's 
appeal of that injunction or a further court order. The preliminary 
injunction enjoined the federal government from relying on the 
interim estimates of the social cost of greenhouse gases--which were 
issued by the Interagency Working Group on the Social Cost of 
Greenhouse Gases on February 26, 2021--to monetize the benefits of 
reducing greenhouse gas emissions. In the absence of further 
intervening court orders, DOE will revert to its approach prior to 
the injunction and present monetized benefits in accordance with 
applicable Executive orders.
---------------------------------------------------------------------------

7. Other Factors
    In determining whether an energy conservation standard is 
economically justified, DOE may consider any other factors that the 
Secretary deems to be relevant. (42 U.S.C. 6313(a)(6)(B)(ii)(VII)) To 
the extent DOE identifies any relevant information regarding economic 
justification that does not fit into the other categories described 
previously, DOE could consider such information under ``other 
factors.''

IV. Methodology and Discussion of Related Comments

    This section addresses the analyses DOE has performed for this 
proposed determination with regard to PTACs and PTHPs. Separate 
subsections address each component of DOE's analyses. DOE used several 
analytical tools to estimate the impact of potential energy 
conservation standards. The first tool is a spreadsheet that calculates 
the LCC savings and PBP of potential energy conservation standards. The 
NIA uses a second spreadsheet set that provides shipments projections 
and calculates NES and net present value of total consumer costs and 
savings expected to result from potential energy conservation 
standards. These spreadsheet tools are available on the website: 
www.regulations.gov/docket/EERE-2019-BT-STD-0035.

A. Market and Technology Assessment

    DOE develops information in the market and technology assessment 
that provides an overall picture of the market for the products 
concerned, including the purpose of the products, the industry 
structure, manufacturers, market characteristics, and technologies used 
in the products. This activity includes both quantitative and 
qualitative assessments, based primarily on publicly available 
information. The subjects addressed in the market and technology 
assessment for this proposed determination include: (1) a determination 
of the scope and classes, (2) market and industry trends and (3) 
technologies or design options that could improve the energy efficiency 
of PTAC and PTHPs. The key findings of DOE's market assessment are 
summarized in the following sections. See the supplemental file DOE 
made available for comment (Document ID No. EERE-2019-BT-STD-0035-0001) 
for a review of the current PTAC and PTHP market and efficiency 
distributions.
1. Scope of Coverage
    In this analysis, DOE relied on the definition of PTACs and PTHPs 
in 10 CFR 431.92. Any equipment meeting the definition of PTAC or PTHP 
is included in DOE's scope of coverage.
    PTAC is defined as a wall sleeve and a separate un-encased 
combination of heating and cooling assemblies

[[Page 37941]]

specified by the builder and intended for mounting through the wall, 
and that is industrial equipment. 10 CFR 431.92. It includes a prime 
source of refrigeration, separable outdoor louvers, forced ventilation, 
and heating availability by builder's choice of hot water, steam, or 
electricity. Id.
    PTHP is defined as a PTAC that utilizes reverse cycle refrigeration 
as its prime heat source, that has a supplementary heat source 
available, with the choice of hot water, steam, or electric resistant 
heat, and that is industrial equipment. Id.
    On October 7, 2008, DOE published a final rule (``October 2008 
final rule'') amending the energy conservation standards for PTACs and 
PTHPs in which DOE divided equipment classes based on whether a PTAC or 
PTHP is a standard size or non-standard size. 73 FR 58772.
    DOE defines ``standard size'' as a PTAC or PTHP with wall sleeve 
dimensions having an external wall opening of greater than or equal to 
16 inches high or greater than or equal to 42 inches wide, and a cross-
sectional area greater than or equal to 670 square inches. 10 CFR 
431.92.
    DOE defines ``non-standard size'' as a PTAC or PTHP with existing 
wall sleeve dimensions having an external wall opening of less than 16 
inches high or less than 42 inches wide, and a cross-sectional area 
less than 670 square inches. Id.
    In the December 2020 ECS RFI, DOE requested comment on whether the 
definitions for PTACs, PTHPs, standard size and non-standard size 
require any revisions--and if so, what revisions are needed and how 
those definitions should be revised. 82 FR 82952, 82956. DOE also 
requested comment on whether additional equipment definitions are 
necessary to close any potential gaps in coverage between equipment 
types and whether there were opportunities to combine equipment classes 
that could reduce regulatory burden. Id.
    In response, AHRI stated that the current definitions for PTACs and 
PTHPs do not require revisions at this time and the subcategory 
definitions currently in place for ``standard size'' and ``non-standard 
size'' are also appropriate and require no modifications. AHRI also 
explained that the current equipment classes are appropriate and that 
any modifications should be first made through ASHRAE Standard 90.1 
process. AHRI further commented that DOE is required to consider 
amending its standards for PTACs and PTHPs when ASHRAE Standard 90.1 is 
amended, which includes equipment definitions and classes, and as no 
amendment has occurred the existing scheme is appropriate (AHRI, No. 8 
at p. 4) DOE did not receive any further comments pertaining to these 
issues of coverage.
    For this NOPD DOE maintains the current definitions for PTACs, 
PTHPs, standard size and non-standard size.
2. Equipment Classes
    For PTACs and PTHPs, the current energy conservation standards 
specified in 10 CFR 431.97(c) are based on 12 equipment classes 
determined according to the following: whether the equipment is an air 
conditioner or a heat pump, whether the equipment is standard size or 
non-standard size, and the cooling capacity in Btu/h. Table IV-1 lists 
the current 12 equipment classes for PTACs and PTHPs specified in Table 
7 and Table 8 to 10 CFR 431.97.

                               Table IV-1--Current PTAC and PTHP Equipment Classes
----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
                                                 Equipment Class
----------------------------------------------------------------------------------------------------------------
1....................................  PTAC...................  Standard Size..........  <7,000 Btu/h.
2....................................  PTAC...................  Standard Size..........  >=7,000 Btu/h and
                                                                                          <=15,000 Btu/h.
3....................................  PTAC...................  Standard Size..........  >15,000 Btu/h.
4....................................  PTAC...................  Non-Standard Size......  <7,000 Btu/h.
5....................................  PTAC...................  Non-Standard Size......  >=7,000 Btu/h and
                                                                                          <=15,000 Btu/h.
6....................................  PTAC...................  Non-Standard Size......  >15,000 Btu/h.
7....................................  PTHP...................  Standard Size..........  <7,000 Btu/h.
8....................................  PTHP...................  Standard Size..........  >=7,000 Btu/h and
                                                                                          <=15,000 Btu/h.
9 *..................................  PTHP...................  Standard Size..........  >15,000 Btu/h.
10...................................  PTHP...................  Non-Standard Size......  <7,000 Btu/h.
11...................................  PTHP...................  Non-Standard Size......  >=7,000 Btu/h and
                                                                                          <=15,000 Btu/h.
12...................................  PTHP...................  Non-Standard Size......  >15,000 Btu/h.
----------------------------------------------------------------------------------------------------------------
* Based on DOE's review of equipment currently available on the market, DOE did not identify any Standard Size
  PTHP models with a cooling capacity greater than 15,000 Btu/h.

    In the December 2020 ECS RFI, DOE requested feedback on the current 
PTAC and PTHP equipment classes and whether any changes to these 
individual equipment classes and their descriptions should be made or 
whether certain classes should be merged or separated. 85 FR 82952, 
82957. Specifically, DOE requested comment on opportunities to combine 
equipment classes that could reduce regulatory burden. Id. DOE further 
requested feedback on whether combining certain classes could impact 
equipment utility by eliminating any performance-related features or 
impact the stringency of the current energy conservation standard for 
this equipment. Id. DOE also requested comment on separating any of the 
existing equipment classes and whether it would impact equipment 
utility by eliminating any performance-related features or reduce any 
compliance burdens. Id.
    In response, AHRI commented that they do not recommend changes at 
this time (AHRI, No. 8 at p. 4) DOE did not receive any further 
comments on this issue.
    DOE also sought information regarding any other new product classes 
it should consider for inclusion in its analysis. 85 FR 82952, 82957. 
Specifically, DOE requested information on the performance-related 
features that provide unique consumer utility and data detailing the 
corresponding impacts on energy use that would justify separate product 
classes (i.e., explanation for why the presence of these performance-
related features would increase energy consumption). Id.
    In response, AHRI stated that they support the current equipment 
classes and that they should not be expanded. (AHRI, No. 8 at p. 5) DOE 
did not receive any further comments on this issue.
    For this NOPD, DOE maintains the current equipment classes.

[[Page 37942]]

a. Make-Up Air PTACs and PTHPs
    In the May 2021 TP RFI, DOE described ``make-up air'' PTACs and 
their additional function of dehumidification. 86 FR 28005, 28007-
28009. As discussed in section II.B.1 of this document, for PTACs and 
PTHPs, DOE currently specifies EER as the test metric for cooling 
efficiency and COP as the metric for heating efficiency. Neither the 
current test procedure, at 10 CFR 431.96(g), nor the industry test 
procedure incorporated by reference, AHRI Standard 310/380-2014, 
account for the energy associated with the conditioning of make-up air 
introduced by the unit.
    In the December 2020 ECS RFI, DOE requested comment on appropriate 
definitions for ``make-up air PTAC'' and ``make-up air PTHP'' and what 
characteristics could be used to distinguish make-up air PTACs and 
PTHPs from other PTACs and PTHPs. 85 FR 82952, 82957. DOE requested 
information on the consumer utility and the energy use associated with 
the function of providing ``make-up air.'' Id. DOE also requested 
comment on whether the same capacity ranges used for non- ``make-up 
air'' PTACs and PTHPs would be appropriate to use for equipment classes 
for possible ``make-up air'' PTAC and PTHP equipment classes (i.e., 
less than 7,000 Btu/h, greater than or equal to 7,000 Btu/h and less 
than or equal to 15,000 Btu/h, and greater than 15,000 Btu/h). Id. 
Finally, DOE requested comment on if there are both Standard Size and 
Non-Standard Size ``make-up air'' PTACs and PTHPs. Id.
    AHRI commented that make-up air PTACs and make-up air PTHPs are not 
included as equipment categories in ASHRAE Standard 90.1 and therefore 
should not be considered as separate equipment categories in this DOE 
rulemaking. (AHRI, No. 8 at p. 5) AHRI further commented that their 
research did not indicate that a sufficient number of products would 
benefit from a separate class to include the energy for either a 
specialized feature for outdoor air conditioning or dehumidification. 
Id. AHRI stated that no manufacturer has submitted a waiver to modify 
the current test procedure indicating that the results of the test 
procedure remain representative of actual energy use or efficiency and 
all products defined as PTACs and PTHPs and are able to be tested in 
accordance with AHRI Standard 310/380. Id. AHRI also asserted that 
there is a significant testing barrier to accurately measuring 
dehumidification, stating that psychrometric chambers are not enabled 
to test dehumidification of outside air and any changes to incorporate 
dehumidification would therefore require research to determine an 
appropriate procedure. Id.
    GEA also commented that PTACs \10\ with make-up air capabilities do 
not require separate product classes, stating that: these units do not 
make a sufficient segment of the market to justify a separate class; 
they are not included as equipment classes in ASHRAE Standard 90.1; all 
equipment defined as PTACs and PTHPs are able to be tested in 
accordance with AHRI Standard 310/380 and that there are significant 
issues with testing of make-up air units related to the design of 
existing test rooms, particularly with respect to dehumidification, 
which would require substantial investment to modify test facilities. 
(GEA, No. 10 at p. 2)
---------------------------------------------------------------------------

    \10\ In their comments, GEA referred generally to ``PTACs.'' 
However, based on the context of their comments, DOE understands 
GEA's comments to apply to both PTACs and PTHPs.
---------------------------------------------------------------------------

    The CA IOUs stated that more research is needed before a 
determination can be made with respect to whether units that provide 
make-up air warrant separate equipment classes, including testing the 
equipment and market analysis. (CA IOUs, No. 7 at p. 4) The commenters 
recommended that DOE investigate the size and potential market growth 
for this feature. Id. Additionally, they also stated that appendix M1 
(to subpart B of 10 CFR part 430), which the CA IOUs recommended that 
DOE adopt for PTACs and PTHPs, does not have provisions for testing 
units while they provide make-up air. Id. The commenters urged DOE to 
use caution in creating a separate product class for units that provide 
make-up air, asserting it will likely make compliance, enforcement, and 
product comparison difficult. Id.
    DOE notes that while the market for make-up air PTACs and PTHPs may 
be small currently, new building code requirements may lead to 
increased demand for these units. As discussed in the May 2021 TP RFI, 
building designs that supply make-up air via corridors are generally no 
longer permissible under the building codes adopted in most U.S. 
states. 86 FR 28005, 28008. Chapter 10, Section 1018.5 of the 2009 
International Building Code (``IBC'') states that, with some 
exceptions, ``corridors shall not serve as supply, return, exhaust, 
relief or ventilation air ducts.'' \11\ The International Code Council 
(``ICC'') tracks the adoption of the IBC by state. The ICC reports 
that, as of February 2022, only seven states had not fully adopted the 
2009 version or a more recent version of the IBC.\12\
---------------------------------------------------------------------------

    \11\ International Code Council. 2009 International Building 
Code. Available at: https://codes.iccsafe.org/content/chapter/4641/.
    \12\ International Code Council (2022). ``International Codes--
Adoption by State.'' Available at: https://www.iccsafe.org/wp-content/uploads/Master-I-Code-Adoption-Chart-FEB-22.pdf.
---------------------------------------------------------------------------

    DOE is cognizant of the potential testing challenges associated 
with the testing of make-up air PTACs and PTHPs and is considering this 
in the ongoing test procedure rulemaking. 86 FR 28005, 28008-28009. 
Were DOE to amend the PTAC and PTHP test procedure to incorporate 
measurement of dehumidification energy for make-up air PTACs and PTHPs, 
a separate equipment class for this type of units may be warranted. At 
such time, DOE would conduct the analysis for future standards 
rulemakings, if any, based on the amended test procedure. However, DOE 
is not proposing to establish separate equipment classes for make-up 
air PTACs and PTHPs at this time.
3. Technology Options
    In the December 2020 ECS RFI, DOE identified several technology 
options that would be expected to improve the efficiency of PTACs and 
PTHPs, as measured by the DOE test procedure. 85 FR 82952, 82957-82958. 
Based on the technologies identified in the analysis for the July 2015 
final rule and a preliminary survey of the current market using the DOE 
Compliance Certification Database (``CCD''),\13\ DOE separately 
provided potential technology options in two categories: technologies 
that may increase efficiency at both full-load and part-load conditions 
(designated as Table II.2 in the December 2020 ECS RFI and re-listed as 
Table IV-2 in this document); and technologies that may only increase 
efficiency at part-load conditions (designated as Table II.3 in the 
December 2020 ECS RFI and re-listed as Table IV-3 in this document). 
Id.
---------------------------------------------------------------------------

    \13\ DOE's Compliance Certification Database can be found at: 
www.regulations.doe.gov/certification-data/#q=Product_Group_s%3A* 
(accessed March 9th, 2022).

[[Page 37943]]



   Table IV-2--Technology Options for PTACs and PTHPs Presented in the
December 2020 ECS RFI That May Increase Efficiency at Both Full-Load and
                          Part-Load Conditions
------------------------------------------------------------------------
             Technology options                         Source
------------------------------------------------------------------------
Heat Exchanger Improvements:
    Increased Heat Exchanger Area..........  July 2015 Final Rule.
------------------------------------------------------------------------
Indoor Blower and Outdoor Fan Improvements:
    Higher Efficiency Fan Motors...........  July 2015 Final Rule.
    Improved Air Flow and Fan Design.......  July 2015 Final Rule.
    More Efficient Fan Geometries..........  New Technology Option.
------------------------------------------------------------------------
Compressor Improvements:
    Higher Efficiency Compressors..........  July 2015 Final Rule.
    Scroll Compressors.....................  Screened out of July 2015
                                              Final Rule.
------------------------------------------------------------------------
Other Improvements:
    Heat Pipes.............................  Screened out of July 2015
                                              Final Rule.
    Alternative Refrigerants...............  Screened out of July 2015
                                              Final Rule.
------------------------------------------------------------------------


   Table IV-3--Technology Options for PTACs and PTHPs Presented in the
  December 2020 ECS RFI That May Increase Efficiency at Only Part-Load
                               Conditions
------------------------------------------------------------------------
             Technology options                         Source
------------------------------------------------------------------------
Indoor Blower and Outdoor Fan Improvements:
    Variable speed condenser fan/motor.....  * New Technology Option.
    Variable speed indoor blower/motor.....  New Technology Option.
Compressor Improvements:
    Variable Speed Compressors.............  July 2015 Final Rule. *
Other Improvements:
    Electronic Expansion Valves (``EEV'')..  New Technology Option.
    Thermal Expansion Valves (``TEV'').....  July 2015 Final Rule.*
------------------------------------------------------------------------
* Identified technology was not analyzed in the July 2015 because of no
  full-load benefit.

    In the December 2020 ECS RFI, DOE requested information on the 
technologies listed in Table IV-2 regarding their applicability to the 
current market, how these technologies may impact the efficiency of 
PTACs and PTHPs, how these technologies have changed since the July 
2015 final rule and the range of efficiencies or performance 
characteristics that are currently available for each technology 
option. 85 FR 82952, 82958. DOE also sought comment on whether the new 
technologies mentioned would affect a determination as to whether DOE 
could propose a ``no new standard'' determination because a more 
stringent standard: would not result in a significant savings of 
energy; is not technologically feasible; is not economically justified; 
or any combination of the foregoing. Id. Specifically, DOE sought 
information on the new technologies 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, etc.), particularly as to changes 
that may have occurred since the July 2015 final rule. Id. DOE also 
sought 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. Id.
    AHRI suggested that DOE contact manufacturers independently to 
provide feedback on the technologies listed in in the December 2020 ECS 
RFI regarding their applicability to the current market and how these 
technologies may impact the efficiency of PTACs and PTHPs as measured 
according to the DOE test procedure. (AHRI, No. 4 at p. 6) 
Additionally, AHRI stated that it was not aware of any advanced 
development of technologies screened out in the July 2015 final rule, 
with the exception of variable speed compressors. Id. AHRI stated that 
two manufacturers offer PTACs and PTHPs with variable speed 
compressors; however, the current test procedure referencing AHRI 
Standard 310/380-2014 provides only a full load performance rating. 
AHRI further stated that in its review of the certification database, 
AHRI found only a handful of products that may benefit from the 
additional test burden that would be imposed by moving to a part-load 
metric. Id. AHRI commented that determining performance at multiple 
load points, rather than one, and the additional calculations to 
determine a seasonal efficiency adds considerable time to testing and a 
change in metric requires all existing products to be retested, which 
will benefit few products on the market. Id. AHRI commented that no 
manufacturer had submitted a waiver to modify the current test 
procedure indicating that the results of a test procedure remain 
representative of actual energy use or efficiency and all products 
defined as PTACs and PTHPs are able to be tested in accordance with 
AHRI Standard 310/380. AHRI also commented that to their knowledge, no 
manufacturer is currently using the new technology options captured in 
Table IV-3. Id. AHRI stated that they had no suggestions on additional 
technology options that DOE should consider for inclusion in its 
analysis. Id.
    NEEA agreed with the list of technology options included in the 
2015 ECS final rule and recommended that DOE continue to include those 
technologies in this rulemaking. In addition to the listed technology 
options, NEEA suggested the following technology options for 
consideration: use of intake and exhaust ducts to reduce infiltration, 
alternative refrigerants, microchannel heat

[[Page 37944]]

exchangers and separate indoor and outdoor blower motors. (NEEA, No. 9 
at pp. 4-5) NEEA noted that separate indoor and outdoor blower motors 
are used as a strategy to improve efficiency while also reducing unit 
noise by at least one manufacturer. Id.
    ASAP encouraged DOE to evaluate the range of technology options 
identified in the RFI, stating that many of these technology options 
were not analyzed in the July 2015 final rule, which, per ASAP, 
suggests that significantly greater energy savings may be possible than 
the max-tech levels in the previous rule. (ASAP, No. 6 at p. 1) ASAP 
commented that the technology options that can increase part-load 
efficiency such as variable-speed compressors, variable-speed fans, and 
electronic expansion valves have the potential to provide large 
savings. Id. ASAP also encouraged DOE to consider improvements to 
heating performance at low temperatures as technology options--stating 
that design changes such as added defrost capability can allow a PTHP 
to continue to use the heat pump cycle at lower ambient temperatures to 
provide significant energy savings. (ASAP, No. 6 at p. 2) ASAP 
suggested that improved defrost control strategies be added as a 
technology option. Id.
    The CA IOUs recommended that DOE include low global warming 
potential (``GWP'') refrigerants, such as R-32, in its engineering 
analysis. (CA IOUs, No. 7 at p. 3) The CA IOUs asserted that PTAC and 
PTHPs manufactured after an updated standard takes effect will likely 
use low-GWP refrigerants. Id.
    As discussed earlier in section III.B of this document, DOE may 
consider adopting for PTACs and PTHPs a cooling-mode metric and a 
heating-mode metric that integrates part-load performance. In the 
December 2020 ECS RFI, DOE requested data on the market penetration and 
efficiency improvement associated with the technology options that may 
increase efficiency at part-load conditions, as listed in Table IV-3 of 
this document. 85 FR 82952, 82958. In addition, DOE requested data on 
any other technology options not listed above that would improve the 
efficiency of equipment under part-load conditions. Id.
    AHRI and GEA did not support moving to a part-load metric. (AHRI, 
No. 8 at p.7; GEA, No. 10 at p.2) AHRI commented that very few products 
use advanced compressors, but all products would be required to be 
retested if a part-load metric was adopted. (AHRI, No. 8 at p. 7) AHRI 
asserted that industry burdens would make a switch to a new metric 
untimely. Id. GEA stated that moving the entire industry to a part load 
metric would have little benefit to consumers and would have little to 
no effect on energy efficiency, while creating substantial cost and 
testing burden. (GEA, No. 10 at p. 2) GEA suggested that instead DOE 
should allow the industry to follow the test procedure waiver process 
which allows for adding appropriate provisions for variable speed 
compressor products while maintaining stability in the vast majority of 
the market that does not include variable speed compressors. Id. GEA 
stated that once the technology is sufficiently mature, moving the test 
procedure and standards to a part load metric may make sense--however, 
this product category has not yet reached that stage. Id.
    ASAP, NEEA and CA IOUs expressed support for moving to a part-load 
metric. (ASPA, No. 6 at p. 1; NEEA, No.9 at p. 1-2; CA IOUs, No.7 at p. 
1) ASAP recommended that DOE evaluate potential amended standard levels 
based on metrics that reflect annual energy consumption and capture 
low-temperature heating performance. (ASAP, No. 6 at p. 1) NEEA 
recommended that DOE update energy conservation standard efficiency 
levels for PTACs and PTHPs, even if it does not proceed with a test 
procedure update, asserting that a range of efficiencies exist today 
with many models exceeding the current federal standards by 
approximately 10-30 percent, depending on the product category. (NEEA, 
No. 9 at p. 3) Additionally, NEEA stated that their market research 
suggested an increasing number of inverter-driven variable speed units 
have been introduced, and asserted that the Federal test procedure 
captures some of the efficiency impact of this technology, as evidenced 
by the higher EER and COP values shown for inverter-driven units. Id. 
at p. 4. NEEA suggested inclusion of technology options that can 
improve part-load and low temperature performance including electronic 
expansion valves, variable speed fans, multistage or variable speed 
compressors, demand-based defrost controls, electric resistance boost 
control strategies and compressor cut out controls. (NEEA, No. 9 at p. 
2) NEEA stated that demand-based defrost controls (as compared to time-
based defrost) can reduce energy use by defrosting only when needed, 
rather than at set time intervals. Id. They also stated that electric 
resistance boost features can result in significant increased energy 
use and that DOE should consider control strategies that limit the use 
of electric resistance boost usage in technology options. Id. NEEA also 
suggested that DOE should consider compressor cut out controls, which 
control the temperature below which the compressor will not operate and 
the temperature at which it resumes operation, and include compressor 
cut out control strategies as a technology option. Id.
    CA IOUs stated that under the 2015 ECS final rule, several 
technologies, such as variable-speed compressors and thermal expansion 
valves, were not included in the engineering analysis despite their 
potential improvements to part-load performance, commenting that DOE 
did not consider these technologies because it was believed that PTAC 
and PTHPs operate at full-load conditions more often than at part-load 
conditions. (CA IOUs, No. 7 at p. 2) CA IOUs referenced product 
marketing literature from compressor manufacturers that claimed 
efficiency improvements of 25 to 35 percent when replacing single-speed 
compressors with variable-speed compressor. Id. CA IOUs also commented 
that at least five manufacturers now sell variable-speed compressor 
products, and that it is expected this technology will increase in 
prevalence. Id.
    For this analysis, DOE considered the technology options shown in 
Table IV-4 of this document, including options listed in the December 
2020 ECS RFI and options suggested in stakeholder comments, for 
improving energy efficiency of PTACs and PTHPs.

Table IV-4--Potential Technology Options for Improving Energy Efficiency
                           of PTACs and PTHPs
------------------------------------------------------------------------
             Technology options                         Source
------------------------------------------------------------------------
Heat Exchanger Improvements:
    Increased Heat Exchanger Area..........  July 2015 Final Rule.
    Microchannel Heat Exchangers...........  Screened out of July 2015
                                              final rule; Suggested for
                                              Inclusion by Commenter.
------------------------------------------------------------------------

[[Page 37945]]

 
Indoor Blower and Outdoor Fan Improvements:
    Higher Efficiency Fan Motors...........  July 2015 Final Rule.
    Improved Air Flow and Fan Design         July 2015 Final Rule.
     (including more Efficient Fan
     Geometries).
    Variable speed condenser fan/motor.....  New Technology Option.
    Variable speed indoor blower/motor.....  New Technology Option.
    Separate indoor and outdoor motors (to   New Technology Option
     improve efficiency while reducing        Suggested by Commenter.
     noise).
------------------------------------------------------------------------
Compressor Improvements:
    Higher Efficiency Compressors..........  July 2015 Final Rule.
    Scroll Compressors.....................  Screened out of July 2015
                                              Final Rule.
    Variable Speed Compressors.............  July 2015 Final Rule.*
------------------------------------------------------------------------
Other Improvements:
    Heat Pipes.............................  Screened out of July 2015
                                              Final Rule.
    Alternative Refrigerants...............  Screened out of July 2015
                                              Final Rule.
    EEV....................................  New Technology Option.
    TEV....................................  July 2015 Final Rule.*
    Intake and Exhaust Ducts (to reduce      New Technology Option
     infiltration through and around the      Suggested by Commenter.
     unit).
    Defrost Control Strategies & Demand-     New Technology Option
     based Defrost Controls (for improved     Suggested by Commenter.
     low ambient heating).
    Electric resistance boost control        New Technology Option
     strategies (to limit the use of          Suggested by Commenters.
     electric resistance boost).
    Compressor cut out control strategies    New Technology Option
     (to allow compressor operation at        Suggested by Commenter.
     lower temperatures).
------------------------------------------------------------------------
* Identified technology was not analyzed in the July 2015 final rule
  because of no full-load benefit.

    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 and are a consideration in 
evaluating improved seasonal efficiency. Variable-speed compressors 
enable modulation of the refrigeration system capacity, allowing the 
unit to adjust capacity to match the cooling or heating 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. Variable speed condenser fan 
motors and variable speed indoor blower allow for varying fan speed to 
reduce airflow rate at part-load operation.
    Detailed descriptions of the technology options from the July 2015 
final rule can be found in chapters 3 and 4 of the July 2015 final rule 
technical support document (``TSD'').\14\
---------------------------------------------------------------------------

    \14\ Available at: www.regulations.gov/document/EERE-2012-BT-STD-0029-0040.
---------------------------------------------------------------------------

4. Screening Analysis
    DOE uses the following five screening criteria to determine which 
technology options are suitable for further consideration in an energy 
conservation standards rulemaking:
    (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 and reliable installation and servicing 
of a technology in commercial products could not be achieved on the 
scale necessary to serve the relevant market at the time of the 
projected compliance date of the standard, then that technology will 
not be considered further.
    (3) Impacts on product utility or product availability. If it is 
determined that a technology would have significant adverse impact on 
the utility of the product to significant subgroups of consumers or 
would result in the unavailability of any covered product type with 
performance characteristics (including reliability), features, sizes, 
capacities, and volumes that are substantially the same as products 
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 would 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 due to the potential for monopolistic concerns.
    See 10 CFR part 430, subpart C, appendix A, sections 6(c)(3) and 
7(b). In summary, if DOE determines that a technology, or a combination 
of technologies, fails to meet one or more of the listed five criteria, 
it will be excluded from further consideration in the engineering 
analysis.
a. Screened-Out Technologies
    In the July 2015 final rule, DOE screened out three technology 
options based on the applicable criteria discussed previously. The 
screened-out technology options are presented below in Table IV-5.

[[Page 37946]]



                                  Table IV-5--Previously Screened Out Technology Options From the July 2015 Final Rule
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                           Screening criteria  (X = basis for screening out)
                                                                             ---------------------------------------------------------------------------
                                                             Technological      Practicability
                Screened technology option                    feasibility      to manufacture,     Adverse impact    Adverse impacts     Unique-pathway
                                                                                 install, and       on equipment      on health and       proprietary
                                                                                   service            utility             safety          technologies
--------------------------------------------------------------------------------------------------------------------------------------------------------
Scroll Compressors.......................................                 X   .................  .................  .................  .................
Heat Pipes...............................................                 X   .................  .................  .................  .................
Alternative Refrigerants.................................                 X   .................  .................  .................  .................
--------------------------------------------------------------------------------------------------------------------------------------------------------

    In the December 2020 ECS RFI, DOE requested comment on these 
technology options previously screened out in the July 2015 final rule. 
85 FR 82952, 82959. Specifically, DOE requested information as to 
whether these options would, based on current and projected assessments 
regarding each of them, remain screened out under the four screening 
criteria \15\ described in this section and what steps, if any, could 
be (or have already been) taken to facilitate the introduction of each 
option as a means to improve the energy performance of PTACs and PTHPs 
and the potential to impact consumer utility of the PTACs and PTHPs. 
Id.
---------------------------------------------------------------------------

    \15\ While the December 2020 ECS RFI referenced four screening 
criteria, DOE notes that there are five screening criteria under 
Appendix A. 86 FR 70924. See 10 CFR part 430, subpart C, appendix A, 
sections 6(c)(3) and 7(b).
---------------------------------------------------------------------------

Heat Pipes, Scroll Compressors
    AHRI commented that there had been no technical advances in heat 
pipes and thus no reason to include the technology option in the 
analysis. (AHRI, No. 8 at p. 7) AHRI commented that scroll compressors 
should remain screened out stating that compressor manufacturers are 
currently working to develop full product lines to accommodate A2L \16\ 
refrigerants. Since this effort requires significant research and 
design resources, PTAC and PTHP manufacturers must prioritize obtaining 
compliant components for a single complete product line using new 
refrigerants for jurisdictions limiting GWP. Id. AHRI asserted that 
because of this additional product options, such as scroll compressors, 
will likely take time to bring to market and conduct all of the product 
research, design, and testing. Id.
---------------------------------------------------------------------------

    \16\ A2L is an ASHRAE safety group classification for 
refrigerants denoting lower toxicity and lower flammability. More 
information regarding ASHRAE refrigerant safety classification can 
be found here: www.ashrae.org/file%20library/technical%20resources/refrigeration/factsheet_ashrae_english_20200424.pdf.
---------------------------------------------------------------------------

    DOE did not receive any further comments for heat pipes or scroll 
compressors. DOE is not aware of any PTACs or PTHPs that are currently 
using heat pipes or PTHPs using scroll compressors. Regarding scroll 
compressors, DOE is not aware of any scroll compressors of suitable 
capacity and size with better efficiency than available rotary 
compressors. DOE has therefore tentatively concluded to keep heat pipes 
and scroll compressors screened out of the engineering analysis.
Alternate Refrigerants
    Nearly all PTAC and PTHP equipment is designed with R-410A as the 
refrigerant. The U.S. Environmental Protection Agency (``EPA'') 
Significant New Alternatives Policy (``SNAP'') Program evaluates and 
regulates substitutes for the ozone-depleting chemicals (such as air 
conditioning refrigerants) that are being phased out under the 
stratospheric ozone protection provisions of the Clean Air Act 
(``CAA''). (42 U.S.C. 7401 et seq.) \17\ The EPA SNAP Program currently 
includes 31 \18\ acceptable alternatives for refrigerant used in the 
new Residential and Light Commercial Air Conditioning class of 
equipment (which includes PTAC and PTHP equipment).\19\ On May 6, 2021, 
the EPA published a final rule allowing the use of R-32, R-452B, R-
454A, R-454B, R-454C and R-457A, subject to use conditions. 86 FR 
24444.
---------------------------------------------------------------------------

    \17\ Additional information regarding EPA's SNAP Program is 
available online at: www.epa.gov/ozone/snap/.
    \18\ Refrigerant THR-03 is not included in this count because it 
is acceptable for use only in residential window air conditioners; 
Refrigerants R-1270 and R-443A were deemed unacceptable as of Jan 3, 
2017; Refrigerants R-417C, R-427A and R-458A are only approved for 
retrofit applications.
    \19\ Information available at: www.epa.gov/snap/substitutes-residential-and-light-commercial-air-conditioning-and-heat-pumps.
---------------------------------------------------------------------------

    On December 27, 2020, the American Innovation and Manufacturing Act 
of 2020 was enacted in section 103 in Division S, Innovation for the 
Environment, of the Consolidated Appropriations Act, 2021 (Pub. L. 116-
260; codified at 42 U.S.C. 7675). The American Innovation and 
Manufacturing Act of 2020 provides EPA specific authority to address 
hydrofluorocarbons (``HFC''), including to: (1) phase down HFC 
production and consumption of listed HFCs through an allowance 
allocation and trading program, (2) establish requirements for the 
management of HFCs and HFC substitutes in equipment (e.g., air 
conditioners); and (3) facilitate sector-based transitions away from 
HFCs. 42 U.S.C. 7675(e), (h), (i) Under the American Innovation and 
Manufacturing Act of 2020, EPA is authorized to issue rules in response 
to petitions to establish sector-based HFC restrictions. 42 U.S.C. 
7675(i)(3) On October 14, 2021, EPA granted ten petitions in full, 
including one petition by AHRI et al., titled, ``Restrict the Use of 
HFCs in Residential and Light Commercial Air Conditioners'' (``AHRI 
petition''), in which the petitioners requested EPA to require 
residential and light commercial air conditioners (which includes PTAC 
and PTHP equipment) to use refrigerants with GWP of 750 or less, with 
such requirement applying to these equipment manufactured after January 
1, 2025, excluding variable refrigerant flow (``VRF'') equipment.\20\ 
86 FR 57141. DOE is also aware that the California Air Resources Board 
(``CARB'') finalized a rulemaking effective January 1, 2022, which 
prohibits the use of refrigerants with a GWP of 750 or greater starting 
January 1, 2023, in several new air-conditioning equipment, including 
PTACs and PTHPs.\21\
---------------------------------------------------------------------------

    \20\ Available at: www.regulations.gov/document/EPA-HQ-OAR-2021-0289-0011.
    \21\ Available at: ww2.arb.ca.gov/rulemaking/2020/hfc2020.
---------------------------------------------------------------------------

    In response to the December 2020 ECS RFI, DOE received several 
comments regarding the consideration of alternate refrigerants as a 
technology option. AHRI suggested that alternative refrigerants should 
remain a screened-out technology. (AHRI, No. 8 at p. 7) AHRI stated 
that California is seeking to establish a January 1, 2023, effective 
date to limit the GWP of refrigerants in PTACs and PTHPs to 750,\22\

[[Page 37947]]

commenting that only R-32 is available currently, but six other options 
are pending EPA approval as part of SNAP Rule 23.\23\ Id. AHRI 
commented that sourcing components for new refrigerants in a complete 
product line will be challenging, particularly to meet a deadline less 
than two years away, without a full range of refrigerant options 
approved. Additionally, for any new refrigerant, AHRI asserted that 
manufacturers will need to retest products for both efficiency and to 
meet relevant safety standards. Id. GEA requested that DOE consider the 
substantial regulatory burden created by the complex refrigeration 
transition from both state-led low-GWP refrigerant requirements and by 
shifting federal requirements for refrigerant use and restrictions in 
municipal building codes. (GEA, No. 10 at pp. 2-3)
---------------------------------------------------------------------------

    \22\ As discussed previously, the CARB finalized this regulation 
order effective January 1, 2022.
    \23\ EPA finalized a rule on May 6, 2021, allowing R-452B, R-
454A, R-454B, R-454C, R-457A and R-32 for new residential and light 
commercial air conditioning and heat pumps. 86 FR 24444.
---------------------------------------------------------------------------

    NEEA, ASAP and CA IOUs recommended that DOE consider alternate 
refrigerants in the analysis. NEEA stated that additional refrigerants 
have been proposed by the EPA for SNAP since standards were last 
considered for PTACs and PTHPs and that given the likelihood that the 
new SNAP rules will be finalized in advance of an updated standard, DOE 
should consider efficiency improvements from alternative refrigerants, 
such as hydrocarbons. (NEEA, No. 9 at p. 5) The CA IOUs asserted that 
PTAC and PTHPs manufactured after an updated standard takes effect will 
likely use low-GWP refrigerants. (CA IOUs, No. 7 at p. 3) The CA IOUs 
stated that the passage of the American Innovation and Manufacturing 
Act of 2020 effectively mandates a phase-out of HFCs and therefore, 
urged DOE to consider the potential benefits of these low-GWP 
refrigerants. Id. The CA IOUs additionally commented that California 
and other states are also pursuing regulations to require low-GWP 
refrigerants in residential air conditioners and heat pumps starting 
January 1, 2025. Id.
    DOE is aware of the changing landscape of refrigerants as they 
relate to PTACs and PTHPs, particularly the AHRI petition that 
requested the EPA to require residential and light commercial air 
conditioners to use refrigerants with GWP of 750 or less, with such 
requirement applying to this equipment manufactured after January 1, 
2025, excluding VRF,\24\ and that was granted on October 14, 2021. 86 
FR 57141.\25\ On December 29, 2021, EPA published a notification 
informing the public that they would not be using the negotiated 
rulemaking procedure to develop a proposed rule or rules associated 
with the eleven American Innovation and Manufacturing Act of 2020 
petitions (including the AHRI petition), but will instead use the 
traditional regular notice-and-comment rulemaking process. 86 FR 74080.
---------------------------------------------------------------------------

    \24\ Available at: www.regulations.gov/document/EPA-HQ-OAR-2021-0289-0011.
    \25\ After granting a petition, EPA must initiate a rulemaking 
and publish a final rule within 2 years of the petition grant date 
i.e. Oct 15, 2023.
---------------------------------------------------------------------------

    In light of the petition to require use of with GWP of 750 or less 
in PTAC and PTHP equipment, DOE reviewed certain SNAP approved 
substitutes that met this criterion. These are listed in Table IV-6.
---------------------------------------------------------------------------

    \26\ ASHRAE assigns safety classification to the refrigerants 
based on toxicity and flammability data. The capital letter 
designates a toxicity class based on allowable exposure and the 
numeral denotes flammability. For toxicity, Class A denotes 
refrigerants of lower toxicity, and Class B denotes refrigerants of 
higher toxicity. For flammability, class 1 denotes refrigerants that 
do not propagate a flame when tested as per the standard; class 2 
and 2L denotes refrigerants of lower flammability; and class 3, for 
highly flammable refrigerants such as the hydrocarbons.

 Table IV-6--Potential Substitutes for HFCs in New Residential and Light Commercial Air Conditioning Equipment,
                                             With GWP of 750 or Less
----------------------------------------------------------------------------------------------------------------
                                                                                             ASHRAE safety
           Approved substitute               GWP value           Approval date            classification \26\
----------------------------------------------------------------------------------------------------------------
R-290 (Propane).........................               3  April 10, 2015............  A3.
R-441A..................................              <5  April 10, 2015............  A3.
R-457A..................................             140  May 6, 2021...............  A2L.
R-454C..................................             150  May 6, 2021...............  A2L.
R-454A..................................             240  May 6, 2021...............  A2L.
R-454B..................................             470  May 6, 2021...............  A2L.
HFC-32 (R-32)...........................             675  May 6, 2021...............  A2L.
R-452B..................................             700  May 6, 2021...............  A2L.
----------------------------------------------------------------------------------------------------------------

    DOE had previously considered the feasibility of including R-290 
and R-441A as alternative refrigerants in the July 2015 final rule, in 
which DOE noted that the EPA's final rule published on April 10, 2015 
(``EPA April 2015 final rule'') limited the maximum design charge 
amount of these refrigerants in PTAC and PTHP applications. 80 FR 
43162, 43171. For instance, for a PTAC or PTHP with cooling capacity of 
9,000 Btu/h, the EPA April 2015 final rule imposes a maximum design 
charge of 140 grams of R-290 or 160 grams of R-441A. 80 FR 19454, 
19500. In comparison, DOE reverse engineered eleven units with cooling 
capacities around 9,000 Btu/h and found that these units had 
refrigerant charges ranging from 600 grams to 950 grams and all units 
used refrigerant R-410A. 80 FR 43162, 43171. The refrigerant charges 
currently used in current PTAC and PTHP designs far exceed the maximum 
charges that are allowed for these alternative refrigerants under the 
EPA April 2015 final rule. Additionally, in response to the December 
2020 ECS RFI, CA IOUs commented that R-290 will likely not be used in 
PTAC and PTHPs because the model safety code that most states will 
likely adopt, Board of Standards Review (``BSR'')/ASHRAE Standard 
15.2P, ``Safety Standard for Refrigeration Systems in Residential 
Applications'' (``BSR/ASHRAE Standard 15.2P''), does not allow the use 
of A3 refrigerants in residential air conditioners and heat pumps. (CA 
IOUs, No. 7 at p. 3) PTACs and PTHPs are commercial equipment under 
DOE's regulations, but DOE is aware of their use in certain 
applications that are treated as ``residential'' under BSR/ASHRAE 
Standard 15.2P (e.g., multi-family housing). Therefore, DOE did not 
further consider R-290 and R-441A as alternate refrigerants in this 
analysis.
    For the remaining substitute refrigerants, DOE considered comments 
received and conducted a literature review to evaluate whether these 
alternate refrigerants could enable better

[[Page 37948]]

energy efficiency than R-410A for PTAC and PTHP equipment. ASAP stated 
that it was their understanding that typical PTACs and PTHPs use R-410A 
as the refrigerant and that alternatives to R-410A such as R-32, R-
452B, and R-454B can improve efficiency by at least 5%. (ASAP, No. 6 at 
p. 1) The CA IOUs also stated that R-32 is the likely replacement for 
R-410A in air conditioners and heat pumps, and recommended that DOE 
consider R-32 as a design option in this standards analysis, citing 
initial studies showing that R-32 improved the COP for VRF systems by 
five percent. (CA IOUs, No. 7 at p. 3)
    DOE reviewed several studies to gauge the efficiency improvements 
of the substitute refrigerants as compared to R-410A. Most of these 
studies suggested comparable performance to R410A, with some studies 
showing slightly below-par performance and others showing improvement 
as high as 6% (for R-32). DOE notes that most of these studies were 
performed with drop-in applications (where an alternate refrigerant 
replaces the existing refrigerant in a system that is optimized for the 
existing refrigerant) and were not performed on PTAC or PTHP equipment 
specifically. It is possible that these substitute refrigerants might 
show efficiencies higher than R-410A in specific applications that have 
been optimized for such refrigerants. However, given the uncertainty 
associated with the studies reviewed, DOE was unable to conclude 
whether these refrigerants will improve energy efficiency and by how 
much. Therefore, DOE has tentatively decided to keep alternate 
refrigerants as a screened-out technology.
Intake and Exhaust Ducts To Reduce Infiltration
    DOE has tentatively determined to screen out intake and exhaust 
ducts as a technology option. NEEA suggested that infiltration through 
and around a PTAC or PTHP can result in significant wasted energy and 
that DOE should consider technology options that reduce infiltration 
such as the use of air intake and exhaust ducts. (NEEA, No. 9 at p. 5) 
NEEA provided information pertaining to a unit that uses intake and 
exhaust air ducts. Id.
    DOE notes that the use of intake and exhaust air ducts would be 
inconsistent with the definition of a PTAC and PTHP. PTAC and PTHP are 
equipment that are intended for mounting through the wall as opposed to 
using ductwork to bring in or exhaust air. See 10 CFR 431.92. 
Therefore, DOE has screened out this technology option.
    In summary, DOE screened out four technology options based on the 
applicable criteria discussed previously. The screened-out technology 
options are presented below in Table IV-7.

                                                       Table IV-7--Screened Out Technology Options
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                          Screening  criteria  (X = basis for  screening out)
                                                                             ---------------------------------------------------------------------------
                                                             Technological      Practicability
                Screened technology option                    feasibility      to manufacture,     Adverse impact    Adverse impacts     Unique-pathway
                                                                                 install, and       on equipment      on health and       proprietary
                                                                                   service            utility             safety          technologies
--------------------------------------------------------------------------------------------------------------------------------------------------------
Scroll Compressors.......................................                 X
Heat Pipes...............................................                 X
Alternative Refrigerants.................................                 X
Intake and Exhaust Ducts.................................                 X
--------------------------------------------------------------------------------------------------------------------------------------------------------

b. Other Technologies Not Considered in the Engineering Analysis
    Typically, energy-saving technologies that pass the screening 
analysis are evaluated in the engineering analysis. However, in some 
cases technologies are not included in the analysis for reasons other 
than the screening criteria. These are discussed in the following 
paragraphs.
Technologies Previously Eliminated From the July 2015 Final Rule
    In the July 2015 final rule, DOE identified several technology 
options that were not included in the engineering analysis because of 
three additional considerations: (1) efficiency benefits of the 
technologies were negligible; (2) data was not available to evaluate 
the energy efficiency characteristics of the technology; and/or (3) 
test procedure and EER and COP metrics did not measure the energy 
impact of the technology. 80 FR 43161, 43172; see 79 FR 55538, 55555-
55556 (September 16, 2014). These technologies are listed below under 
each consideration:
    (1) Efficiency benefits of the technologies were negligible:
     Re-circuiting heat exchanger coils;
     Rifled interior tube walls;
    (2) Data was not available to evaluate the energy efficiency 
characteristics of the technology:
     Microchannel heat exchangers;
    (3) Test procedure and EER and COP metrics did not measure the 
energy impact of the technology:
     Variable speed compressors;
     Complex control boards (fan motor controllers, digital 
``energy management'' control interfaces, heat pump controllers);
     Corrosion protection;
     Hydrophobic material treatment of heat exchangers;
     Clutched motor fans; and
     TEVs.
    In the December 2020 ECS RFI, DOE requested comment on its prior 
exclusion of these technologies and whether there have been changes 
that would warrant further consideration. 85 FR 82952, 82959.
    In response, AHRI said they supported the DOE's conclusions 
regarding the additional technologies identified in development of the 
July 2015 final rule, but not included in the engineering analysis. 
(AHRI, No. 8 at p. 8).
    DOE maintains its position expressed in the July 2015 final rule 
that re-circuiting heat exchanger coils and rifled interior tube walls 
are used in baseline products, so no additional energy savings would be 
expected from their use. 80 FR 43162, 43172 and 79 FR 55538, 55555. 
Regarding microchannel heat exchangers, NEEA stated that the technology 
can improve heat transfer efficiency by up to 40 percent compared to 
traditional fin and tube heat exchangers. (NEEA, No. 9 at p. 4) 
However, NEEA did not provide any information indicating efficiency 
improvement potential in terms of EER or COP for PTACs and PTHPs and 
DOE

[[Page 37949]]

is not aware of any substantiated performance data for PTAC or PTHP 
operation with microchannels.
    Any potential energy savings of complex controls boards, corrosion 
protection, hydrophobic material treatment of heat exchangers and 
clutched motor fans cannot be measured with the established energy 
efficiency metrics (EER and COP) because those technologies are 
associated with performance, which is not captured in the EER or COP 
metrics used for rating PTACs and PTHPs. Therefore, DOE is proposing to 
keep these previously eliminated technologies excluded from the 
engineering analysis.
    Consideration of variable speed compressors and TEVs is presented 
under the next header.
Technology Options Benefiting Part-Load and Low Temperature Performance
    As the current EER and COP metrics do not measure part-load 
performance and low temperature heating performance, DOE is proposing 
to exclude the following technologies from the engineering analysis:
     Variable speed condenser fan/motor;
     Variable speed indoor blower/motor;
     Variable speed compressors;
     TEVs
     EEVs
     Defrost control strategies
     Electric resistance boost control strategies
     Compressor cut-out controls
    As discussed, DOE may consider adopting for PTACs and PTHPs a 
cooling-mode metric that integrates part-load performance and a heating 
metric that includes performance at low ambient temperatures in the 
ongoing test procedure rulemaking. 86 FR 28005, 28009-28011. If DOE 
amends the PTAC and PTHP test procedure to incorporate these changes, 
it will conduct any analysis for future standards rulemakings, if any, 
based on the amended test procedure. DOE is still evaluating potential 
amendments to the test procedure. At present, DOE is unable to consider 
energy savings from a part-load metric or low temperature heating 
performance.
    DOE also considered any benefit that these technologies may provide 
for the existing full-load metrics (EER and COP), particularly 
variable-speed technology. DOE conducted a review of the CCD and has 
tentatively concluded that while an increased number of PTACs and PTHPs 
are employing variable-speed compressors and fans as compared to the 
market at the time of the 2015 rulemaking, the efficiency distributions 
of PTACs and PTHPs have not changed significantly. This suggests that 
the full-load efficiency benefit of these variable-speed technologies 
is minimal.
    DOE is also excluding separate indoor and outdoor blower motors as 
a technology option from the engineering analysis because this 
technology option is already incorporated in most baseline models, and 
therefore, no additional energy savings would be expected from their 
use. NEEA stated that one manufacturer is using separate indoor and 
outdoor blower motors as a strategy to improve efficiency, while also 
reducing unit noise. (NEEA, No. 9 at p. 5) DOE's past and recent 
physical teardowns of PTACs and PTHPs suggest that this technology 
option is already incorporated in most baseline models and therefore 
little to no additional energy savings would result in consideration of 
this technology option.
c. Remaining Technologies
    After reviewing each technology, DOE did not screen out the 
following technology options and considers them as design options in 
the engineering analysis. These technology options are the same as 
those retained in the July 2015 final rule:

(1) Higher Efficiency Compressors
(2) Higher Efficiency Fan Motors
(3) Increased Heat Exchanger Area
(4) Improved Air Flow and Fan Design

    DOE has tentatively determined that these technology options are 
technologically feasible because they are being used or have previously 
been used in commercially available products or working prototypes and 
improve efficiency as determined by the DOE test procedure. For 
additional details on the technologies included in the engineering 
analysis, see chapter 4 of the July 2015 final rule TSD.

B. Engineering Analysis

    The purpose of the engineering analysis is to establish the 
relationship between the efficiency and cost of PTACs and PTHPs. There 
are two elements to consider in the engineering analysis; the selection 
of efficiency levels to analyze (i.e., the ``efficiency analysis'') and 
the determination of product cost at each efficiency level (i.e., the 
``cost analysis''). In determining the performance of higher-efficiency 
equipment, DOE considers technologies and design option combinations 
not eliminated by the screening analysis. For each equipment class 
evaluated, DOE estimates the baseline cost, as well as the incremental 
cost for the product/equipment at efficiency levels above the baseline. 
The output of the engineering analysis is a set of cost-efficiency 
``curves'' that are used in downstream analyses (i.e., the LCC and PBP 
analyses and the NIA).
1. Efficiency Analysis
    DOE typically uses one of two approaches to develop energy 
efficiency levels for the engineering analysis: (1) relying on observed 
efficiency levels in the market (i.e., the efficiency-level approach), 
or (2) determining the incremental efficiency improvements associated 
with incorporating specific design options to a baseline model (i.e., 
the design-option approach). Using the efficiency-level approach, the 
efficiency levels established for the analysis are determined based on 
the market distribution of existing products (in other words, based on 
the range of efficiencies and efficiency level ``clusters'' that 
already exist on the market). Using the design option approach, the 
efficiency levels established for the analysis are determined through 
detailed engineering calculations and/or computer simulations of the 
efficiency improvements from implementing specific design options that 
have been identified in the technology assessment. DOE may also rely on 
a combination of these two approaches. For example, the efficiency-
level approach (based on actual products on the market) may be extended 
using the design option approach to ``gap fill'' levels (to bridge 
large gaps between other identified efficiency levels) and/or to 
extrapolate to the max-tech level (particularly in cases where the max-
tech level exceeds the maximum efficiency level currently available on 
the market).
    In the July 2015 final rule, DOE adopted an efficiency-level 
approach combined with a cost-assessment approach to determine the 
cost-efficiency relationship. 80 FR 43162, 43173. Based on the 
technology options considered in section IV.A.3 of this document and a 
review of available efficiencies in the market, DOE has tentatively 
concluded that the available efficiencies on the market have not 
significantly changed since the 2015 rulemaking. DOE's review of 
current PTAC and PTHP designs also leads to the tentative conclusion 
that design options used to achieve higher EER and/or COP have not 
changed since 2015. Therefore, in this proposed determination, DOE 
utilized the same analysis as in the July 2015 final rule, but with 
updated costs to account for inflation and other effects.

[[Page 37950]]

    The methodology used to perform the analysis and derive the cost-
efficiency relationship is described in chapter 5 of the July 2015 
final rule TSD.
2. Equipment Classes Analyzed
    In the July 2015 final rule, DOE developed its engineering analysis 
for the six equipment classes associated with standard-size PTACs and 
PTHPs. 80 FR 43162, 43174-43177. DOE did not conduct an engineering 
analysis for non-standard size equipment classes because of their low 
and declining market share and because of a lack of adequate 
information to analyze these units. 80 FR 43162, 43174. To assess 
whether to develop an analysis for non-standard size equipment classes, 
DOE requested comment in the December 2020 ECS RFI as to whether the 
technology improvements discussed in IV.A.3 are applicable to both 
standard size and non-standard size units and if they have similar 
impacts on efficiency. 85 FR 82952, 82960. DOE also requested comment 
on whether it is necessary to individually analyze all or some of the 
available equipment classes. Id.
    In response, AHRI commented that the non-standard size market was 
never large and has contracted over the years, and in a shrinking 
market new product development is unlikely as it is not economically 
justified for the manufacturers. (AHRI, No. 8 at p. 8) AHRI stated that 
there have been no significant technology improvements for these 
equipment classes to their knowledge. Id. AHRI said that DOE should 
employ best efforts to develop a robust and complete analysis and 
analyze all six standard-size equipment classes individually, but 
recognized this may not be possible. Id. AHRI stated that if DOE does 
not analyze all products, then the 9,000 and 12,000 Btu/h, nominal 
cooling capacities should be prioritized, followed by the 7,000 Btu/h 
and 15,000 Btu/h categories. Id.
    In light of AHRI's comment regarding the non-standard size market 
contracting, and given the lack of market data pertaining to the non-
standard size equipment classes, DOE has tentatively decided to not 
analyze amended standards for the non-standard size equipment classes. 
For the six standard size equipment classes, DOE has tentatively 
decided to use the analysis from the July 2015 final rule, in which DOE 
selected two cooling capacities for analysis: 9,000 Btu/h and 15,000 
Btu/h. See 80 FR 43162, 43174. Inclusion of the 9,000 Btu/h category as 
in the July 2015 final rule is consistent with AHRI's suggestion to 
prioritize that category. DOE also retained the 15,000 Btu/h category 
to stay consistent with the analysis in the July 2015 final rule, in 
which DOE selected 15,000 Btu/h as a representative capacity in 
response to manufacturer comments stating that it is technically 
challenging to achieve high efficiency in 15,000 Btu/h models and the 
analysis should explicitly analyze the 15,000 Btu/h capacity. See 80 FR 
43162, 43174.
    Table IV-8 sets out the equipment classes analyzed in this 
rulemaking.

        Table IV-8--Equipment Classes Analyzed in this Rulemaking
------------------------------------------------------------------------
                             Equipment class
-------------------------------------------------------------------------
            Equipment                  Category        Cooling capacity
------------------------------------------------------------------------
PTAC............................  Standard Size.....  <7,000 Btu/h.
                                                      >=7,000 Btu/h and
                                                       <=15,000 Btu/h.
                                                      >15,000 Btu/h.
PTHP............................  Standard Size.....  <7,000 Btu/h.
                                                      >=7,000 Btu/h and
                                                       <=15,000 Btu/h.
                                                      >15,000 Btu/h.
------------------------------------------------------------------------

3. Baseline Efficiency Levels
    DOE considered the current minimum energy conservation standards to 
establish the baseline efficiency levels for each standard size 
equipment class, using the 9,000 btu/h and 15,000 Btu/h cooling 
capacities as representative capacities for the standard size equipment 
classes. The baseline efficiency levels for the analyzed representative 
units are presented below in Table IV-9.

                                     Table IV-9--Baseline Efficiency Levels
----------------------------------------------------------------------------------------------------------------
                                                      Baseline efficiency                           Baseline
         Equipment type           Equipment class          equation          Cooling capacity   efficiency level
----------------------------------------------------------------------------------------------------------------
PTAC...........................  Standard Size....  EER = 14.0-(0.300 x     9,000 Btu/h......  11.3 EER.
                                                     Cap [dagger]/1000).
                                                                            15,000 Btu/h.....  9.5 EER.
PTHP...........................  Standard Size....  EER = 14.0-(0.300 x     9,000 Btu/h......  11.3 EER.
                                                     Cap [dagger]/1000).                       3.2 COP.
                                                    COP = 3.7-(0.052 x Cap  15,000 Btu/h.....  9.5 EER.
                                                     [dagger]).                                2.9 COP.
----------------------------------------------------------------------------------------------------------------
[dagger] Cap means cooling capacity in thousand Btu/h at 95[deg]F outdoor dry-bulb temperature.

4. Maximum Available and Maximum Technologically Feasible Levels
    As part of DOE's analysis, the maximum available efficiency level 
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.
    As mentioned earlier, the technology options that were screened in 
for this analysis are the same as those considered for the July 2015 
final rule. In the July 2015 final rule, DOE determined the max-tech 
improvements in energy efficiency for PTACs and PTHPs in the 
engineering analysis using the design parameters that passed the 
screening analysis, a combination of the efficiency-level approach, and 
the

[[Page 37951]]

reverse engineering analysis. 80 FR 43162, 43168.
    Table IV-10 shows the max-tech efficiency levels presented in the 
December 2020 ECS RFI, which were those from the July 2015 Final rule 
and set to be 16.2 percent above the baseline, and the maximum-
available efficiency levels based on the current market for each 
equipment class. 85 FR 82952, 82960-82961. DOE has test data to verify 
that one standard size PTHP unit belonging to the equipment class of 
cooling capacity greater than 7,000 Btu/h and less than 15,000 Btu/h, 
demonstrated a cooling efficiency at this ``max tech'' level. 79 FR 
55538, 55558.

      Table IV-10--Max-Tech and Maximum-Available Efficiency Levels
------------------------------------------------------------------------
                                    Max-tech  July     Maximum-available
         Equipment class            2015 final rule     current market
------------------------------------------------------------------------
Standard Size PTAC <7,000 Btu/h.  13.8 EER \a\......  13.0 EER.
Standard Size PTAC >=7,000 Btu/h  EER = 16.3-(0.354   EER = 15.8-(0.308
 and <=15,000 Btu/h.               x Cap \b\).         x Cap \b\) \c\.
Standard Size PTAC >15,000 Btu/h  11.0 EER..........  9.7 EER.
Standard Size PTHP <7,000 Btu/h.  13.8 EER \a\......  13.1 EER.
                                  3.8 COP \a\.......  4.0 COP.
Standard Size PTHP >=7,000 Btu/h  EER = 16.3-(0.354   EER = 15.8-(0.308
 and <=15,000 Btu/h.               x Cap \b\).         x Cap \b\) \c\.
                                  COP = 4.3-(0.073 x  COP = 4.6-(0.075 x
                                   Cap \b\).           Cap \b\) \c\.
Standard Size PTHP >15,000 Btu/h  11.0 EER..........  N/A \d\.
 \3\.                             3.2 COP...........
------------------------------------------------------------------------
\a\ Based on Max Tech equation shown for Standard Size PTACs and PTHPs,
  >=7,000 Btu/h and <=15,000 Btu/h at a value of 7,000 Btu/h.
\b\ Cap means cooling capacity in thousand Btu/h.
\c\ Based on method of creating a linear fit between the two models in
  the CCD Database that were the highest absolute value above the
  baseline.
\d\ Based on DOE's review of equipment currently available on the
  market, DOE did not identify any PTHP models with a cooling capacity
  greater than 15,000 Btu/h.

    In the December 2020 ECS RFI, DOE sought input on whether these 
maximum available efficiency levels are appropriate as the max-tech for 
potential consideration as possible energy conservation standards for 
the equipment at issue--and if not, what efficiency levels should be 
considered max-tech. 85 FR 82952, 82961. DOE also requested feedback on 
what design options to incorporate at the max-tech efficiency level and 
whether there are any limitations on the use of certain combinations. 
Id. DOE also requested comment on whether certain design options may 
not be applicable to specific equipment classes. Id.
    AHRI stated that based on their analysis per the AHRI Directory, 
the ranges of efficiencies available for PTACs and PTHPs are very 
limited and that there are no significant advances or changes in 
technology. (AHRI, No. 8 at p. 9) AHRI provided tables showing 
efficiency ranges of PTACs and PTHPs that it stated identifies several 
instances where the max tech identified in the July 2015 final rule is 
above the current market. Id. AHRI also stated that there are issues 
with implementing bent heat exchangers and improved air flow and fan 
design as concurrent design options, stating that bent heat exchangers 
may impose an additional pressure drop that the indoor fan must 
overcome, thus not improving EER of the equipment. (AHRI, No. 8 at p. 
9) AHRI stated that if both bent heat exchangers and improved air flow 
and fan design are implemented as design options, DOE should account 
for the significant additional design, evaluation and testing that 
would be required to optimize the system to achieve the desired 
efficiency. Id. at 11. AHRI stated that in the 2015 rulemaking DOE did 
not account for this interaction, nor the cost associated to resolve it 
in the analysis. Id. AHRI also commented that higher efficiency 
compressors, particularly at smaller capacities, are still in 
development, and cautioned DOE to consider state and federal 
regulations impacting the equipment (such as requiring to use low-GWP 
refrigerants) accordingly so that new efficiency standards do not 
precede market developments. (AHRI No. 8 at pp. 11-12)
    AHRI also commented that the efficiency ranges available for PTACs 
and PTHPs are limited, which is consistent with with DOE's findings 
based on its own market research. (AHRI No. 8 at p. 9) DOE was unable 
to identify significant advances since the July 2015 final rule, based 
on a review of the CCD. DOE is aware that in some instances, the max-
tech levels identified in the July 2015 final rule are higher than the 
current maximum available efficiencies in the market per CCD and the 
AHRI directory--however, DOE has tentatively determined that the max-
tech levels from 2015 are still suitable for this analysis because 
these levels were achieved by models that were commercially available. 
Since the screened in design options for this engineering analysis are 
the same as those considered in the July 2015 final rule and the 
available efficiencies have not significantly changed since the 2015 
rulemaking, DOE sees no reason to revise the max-tech levels. Regarding 
the design interaction described by AHRI, DOE notes that the analysis 
presented in the July 2015 final rule did consider pressure drop 
impacts associated with bent heat exchangers. See 80 FR 43162, 43173. 
In its analysis, DOE considered at least three units that contained a 
bent heat exchanger. DOE based its analysis on the measured performance 
of these units (one of which performed at the max-tech efficiency 
level). The measured performance of these units includes the impact of 
additional pressure drop associated with the bent heat exchangers. Id. 
Regarding AHRI's comment on higher efficiency compressors, DOE is 
cognizant of the changing landscape of state and federal regulations, 
especially as they relate to alternate refrigerants and how they affect 
the development of higher efficiency compressors. As discussed in 
Section IV.A.4.a of this document, DOE has tentatively decided to keep 
alternate refrigerants as a screened-out technology.
    The CA IOUs stated that they identified 30 PTHP models that meet or 
exceed the heating max-tech COP level from DOE's 2015 final rule TSD 
and encouraged DOE to investigate the technologies used in these 
products to improve their efficiencies and update the engineering 
analysis accordingly. (CA IOUs, No. 7 at p. 2)
    DOE is aware that there are PTHP models on the market that exceed 
the

[[Page 37952]]

max-tech COP levels in the July 2015 final rule. DOE notes that a 
PTHP's EER and COP are related and cannot be independently analyzed, 
therefore the COP max-tech levels in the July 2015 final rule were 
developed by correlating the COP associated with each efficiency level 
with the efficiency level's EER based on COP and EER ratings from the 
AHRI database. 80 FR 43162, 43175. DOE then established a 
representative curve based on this data to obtain a relationship for 
COP in terms of EER and used this relationship to select COP values 
corresponding to each efficiency level. Id. Therefore, the COP max-tech 
values correspond to the max-tech EER values. DOE is aware that these 
COP max-tech values may not align with the highest COP values currently 
available in the market, but DOE considers them to be more 
representative of a max-tech unit at the highest EER.
    In summary, because the design options retained for this rulemaking 
are the same as those considered for the July 2015 final rule, and a 
review of the CCD suggests that that the available efficiencies have 
not significantly changed since the 2015 rulemaking, DOE is proposing 
to maintain the same max-tech levels for this rulemaking.
5. Incremental Efficiency Levels
    DOE analyzed several incremental efficiency levels between the 
baseline and max-tech levels and obtained incremental cost data at each 
of these levels. DOE considered five efficiency levels beyond the 
baseline efficiency level up to the max-tech level for each equipment 
class. These levels are 2.2%, 6.2%, 10.2%, 14.2% and 16.2% more 
efficient than the amended PTAC and PTHP standards that became 
effective on July 21, 2015 and are the same incremental efficiency 
levels evaluated in the July 2015 final rule. These levels are 
presented in Table IV-11.

                                                          Table IV-11--Incremental Efficiency Levels for Standard Size PTACs and PTHPs
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                               Efficiency levels  (percentages relative to 2015 ECS)
                                                  ----------------------------------------------------------------------------------------------------------------------------------------------
        Equipment type          Cooling  capacity                                                                                                                            EL5, 16.2%  (max-
                                                         Baseline *               EL1, 2.2%               EL2, 6.2%              EL3, 10.2%              EL4, 14.2%                tech)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
PTAC..........................  All, EER.........  14.0-(0.300 x Cap       14.4-(0.312 x Cap       14.9-(0.324 x Cap       15.5-(0.336 x Cap       16.0-(0.348 x Cap       16.3-(0.354 x Cap
                                                    [dagger]).              [dagger]).              [dagger]).              [dagger]).              [dagger]).              [dagger])
                                9,000 Btu/h......  11.3 EER..............  11.5 EER..............  12.0 EER..............  12.4 EER..............  12.9 EER..............  13.1 EER
                                15,000 Btu/h.....  9.5 EER...............  9.7 EER...............  10.0 EER..............  10.4 EER..............  10.8 EER..............  11.0 EER
PTHP..........................  All, EER.........  14.0-(0.300 x Cap       14.4-(0.312 x Cap       14.9-(0.324 x Cap       15.5-(0.336 x Cap       16.0-(0.348 x Cap       16.3-(0.354 x Cap
                                                    [dagger]).              [dagger]).              [dagger]).              [dagger]).              [dagger]).              [dagger])
                                All, COP.........  3.7-(0.052 x Cap        3.8-(0.058 x Cap        4.0-(0.064 x Cap        4.1-(0.068 x Cap        4.2-(0.070 x Cap        4.3-(0.073 x Cap
                                                    [dagger]).              [dagger]).              [dagger]).              [dagger]).              [dagger]).              [dagger])
                                9,000 Btu/h......  11.3 EER..............  11.5 EER..............  12.0 EER..............  12.4 EER..............  12.9 EER..............  13.1 EER
                                                   3.2 COP...............  3.3 COP...............  3.4 COP...............  3.5 COP...............  3.6 COP...............  3.6 COP
                                15,000 Btu/h.....  9.5 EER...............  9.7 EER...............  10.0 EER..............  10.4 EER..............  10.8 EER..............  11.0 EER
                                                   2.9 COP...............  2.9 COP...............  3.0 COP...............  3.1 COP...............  3.2 COP...............  3.2 COP
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
* This level represents the current Federal minimum standards for PTAC and PTHP equipment.
[dagger] Cap means cooling capacity in thousand Btu/h at 95[deg]F outdoor dry-bulb temperature.

    In response to the December 2020 ECS RFI, AHRI commented that in 
the July 2015 rulemaking DOE assumed that PTACs and PTHPs are 
fundamentally the same and should be able to meet the same efficiency 
levels with the same technology options. (AHRI, No. 8 at p. 10) AHRI 
asserted that this is not the case and there are certain intrinsic 
characteristics which allow PTHPs to operate more efficiently than 
PTACs. Id. AHRI stated that if the construction between a given PTAC 
and PTHP is essentially the same (i.e., same coils, refrigerant 
circuiting, components, etc.), and differs only by the presence of a 
reversing valve, then for a given design target superheat at the 
compressor inlet, there is an opportunity for the PTHP to operate the 
evaporator at a lower outlet superheat, thereby allowing for more 
evaporative capacity for a tradeoff of little to no more total power 
input. Id. AHRI stated this allows PTHPs to operate at higher EER than 
a similar PTAC. Id. at 11.
    DOE's review of CCD listings of standard size PTACs and PTHPs with 
cooling capacities greater than 7,000 btu/h and less than 15,000 btu/h 
indicates that the cooling efficiency distributions of the two classes 
are comparable. This suggests that using the same incremental 
efficiency levels are appropriate for PTACs and PTHPs. DOE notes that 
AHRI did not recommend a distinction between the PTAC and PTHP 
incremental efficiency levels and considers it a clarification. As 
such, DOE proposes to maintain the same incremental efficiency levels 
for PTACs and PTHPs in this rulemaking.
6. Cost Analysis
    The cost analysis portion of the engineering analysis is conducted 
using one or a combination of cost approaches. The selection of cost 
approach depends on a suite of factors, including the availability and 
reliability of public information, characteristics of the regulated 
product, the availability and timeliness of purchasing the equipment on 
the market. The cost approaches are summarized as follows:
     Physical teardowns: Under this approach, DOE physically 
dismantles a commercially available product, component-by-component, to 
develop a detailed bill of materials for the product.
     Catalog teardowns: In lieu of physically deconstructing a 
product, DOE identifies each component using parts diagrams (available 
from manufacturer websites or appliance repair websites, for example) 
to develop the bill of materials for the product.
     Price surveys: If neither a physical nor catalog teardown 
is feasible (for example, for tightly integrated products such as 
fluorescent lamps, which are infeasible to disassemble and for which 
parts diagrams are unavailable) or cost-prohibitive and otherwise 
impractical (e.g. large commercial boilers), DOE conducts price surveys 
using publicly available pricing data published on major online 
retailer websites and/or by soliciting prices from distributors and 
other commercial channels.
    In the July 2015 final rule, DOE performed a cost analysis that 
involved testing and then conducting physical teardowns on several test 
units to develop a manufacturing cost model and to evaluate key design 
features (e.g., improved heat exchangers, compressors, fans/fan 
motors). 80 FR 43162, 43176. The design options being considered in 
this rulemaking are the same as in the

[[Page 37953]]

2015 rulemaking. Furthermore, DOE's review of CCD and comments received 
from AHRI, suggest that the efficiency distributions for available 
PTACs and PTHPs have not changed compared to the 2015 rulemaking. 
Therefore, DOE considers that the cost analysis conducted for the July 
2015 final rule is still relevant for this rulemaking. Details of the 
cost-efficiency analysis conducted for the July 2015 final rule can be 
found in chapter 5 of the July 2015 final rule TSD. Because of the time 
that has passed since the July 2015 final rule, DOE adjusted the cost 
analysis for inflation and other market effects. To adjust the cost 
analysis, DOE used industry specific producer price index (``PPI'') 
data published by the Bureau of Labor Statistics (``BLS''). The PPI 
measures the average change over time in the selling prices from the 
perspective of the seller. DOE evaluated the change in PPI from the 
year 2013 (used in the previous rulemaking) to year 2021 (current 
rulemaking), and used the percent increase to scale the manufacturer 
production costs (``MPCs'') from the previous rulemaking.
7. Cost-Efficiency Results
    The results of the engineering analysis are reported as a set of 
cost-efficiency data (or ``curves'') in the form of MPC (in dollars) 
versus EER, which form the basis for other analyses in the NOPD. DOE 
created cost-efficiency curves for the two representative cooling 
capacities within the two standard-size equipment classes of PTACs and 
PTHPs, as discussed in section IV.B.2 previously. DOE developed the 
incremental cost-efficiency results shown in Table IV-12 for each 
representative cooling capacity. These cost results are incremented 
from a baseline efficiency level equivalent to the current federal 
minimum standards.

                             Table IV-12--Incremental Manufacturing Production Costs (MPC) for Standard Size PTACs and PTHPs
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                 Efficiency levels
          Equipment type              Cooling capacity   -----------------------------------------------------------------------------------------------
                                                            Baseline *          EL1             EL2             EL3             EL4             EL5
--------------------------------------------------------------------------------------------------------------------------------------------------------
PTAC..............................  9,000 Btu/h.........           $0.00           $5.22          $15.36          $26.32          $38.11          $44.31
                                    15,000 Btu/h........            0.00            5.00           18.71           36.37           58.00           70.30
PTHP..............................  9,000 Btu/h.........            0.00            5.22           15.36           26.32           38.11           44.31
                                    15,000 Btu/h........            0.00            5.00           18.71           36.37           58.00           70.30
--------------------------------------------------------------------------------------------------------------------------------------------------------
* This level represents the current federal minimum standards for PTAC and PTHP equipment.

    In the December 2020 ECS RFI, DOE requested information on how it 
could conduct the cost-efficiency analyses for PTHPs greater than 
15,000 Btu/h, for which there are no models on the market and for which 
DOE does not have data. 85 FR 82952, 82961.
    In response, AHRI noted that they had identified six model listings 
for PTACs with cooling capacities greater than 15,000 Btu/h and that it 
would be reasonable to expect a PTHP of similar size to be slightly 
more efficient, based on reasoning discussed earlier. (AHRI, No. 8 at 
p. 12) For heating, AHRI stated that it is reasonable to consider the 
efficiency of PTHP with cooling capacity greater than 15,000 Btu/h to 
be equivalent to PTHP with cooling capacity equal to 15,000 Btu/h. Id.
    For this analysis, DOE considered the cooling efficiency of PTHP 
greater than 15,000 Btu/h to be equivalent to PTACs greater than 15,000 
Btu/h. As discussed earlier in Section IV.B.5, the overall cooling 
efficiency distributions of standard size PTACs and PTHPs with cooling 
capacities greater than 7,000 Btu/h and less than 15,000 Btu/h are very 
similar, suggesting that using an equivalent cooling efficiency for 
PTHP greater than 15,000 btu/h to that of PTACs greater than 15,000 
Btu/h is appropriate.
    To account for manufacturers' non-production costs and profit 
margin, DOE applied a non-production cost multiplier (the manufacturer 
markup) to the MPC. The resulting manufacturer selling price (``MSP'') 
is the price at which the manufacturer distributes a unit into 
commerce. In the December 2020 ECS RFI, DOE requested comment on 
whether a manufacturer markup of 1.27, as used in July 2015 final rule, 
is appropriate for PTACs and PTHPs. 85 FR 82952, 82961. DOE did not 
receive any comments pertaining to this, and therefore DOE retained the 
manufacturer markup of 1.27 for this analysis.

C. Markups Analysis

    The markups analysis develops appropriate markups (e.g., retailer 
markups, distributor markups, contractor markups) in the distribution 
chain and sales taxes to convert the MSP estimates derived in the 
engineering analysis to consumer prices, which are then used in the LCC 
and PBP analysis and in the manufacturer impact analysis. At each step 
in the distribution channel, companies mark up the price of the product 
to cover business costs and profit margin.
    In the July 2015 final rule, DOE identified four distribution 
channels for PTACs and PTHPs to describe how the equipment passes from 
the manufacturer to the consumer. 80 FR 43162, 43177. The four 
distribution channels are listed:
    The first distribution channel is only used in the new construction 
market, and it represents sales directly from a manufacturer to the end 
use customer through a national account.

Manufacturer [rarr] National Account [rarr] End user

    The second distribution channel represents replacement markets, 
where a manufacturer sells to a wholesaler, who sells to a mechanical 
contractor, who in turn sells to the end user.

Manufacturer [rarr] Wholesaler [rarr] Mechanical Contractor [rarr] End 
user

    The third distribution channel, which is used in both new 
construction and replacement markets, the manufacturer sells the 
equipment to a wholesaler, who in turn sells it to a mechanical 
contractor, who in turn sells its to a general contractor, who sells it 
to the end user.

Manufacturer [rarr] Wholesaler [rarr] Mechanical Contractor [rarr] 
General Contractor[rarr] End user

    Finally, in the fourth distribution channel, which is also used in 
both the new construction and replacement markets, a manufacturer sells 
to a wholesaler, who in turn sells directly to the end user.

Manufacturer [rarr] Wholesaler [rarr] End User

80 FR 43162, 43177.

[[Page 37954]]

    In the December 2020 ECS RFI, DOE requested information on the 
existence of any distribution channels other than these four 
distribution channels identified in the July 2015 Final Rule and also 
requested data on the fraction of PTAC and PTHP sales that go through 
each of the four identified distribution channels as well as the 
fraction of sales through any other identified channels. 85 FR 82952, 
82962.
    AHRI commented that DOE's assumption that no replacements are made 
through direct sales from the manufacturer to the customer was 
incorrect in the July 2015 final rule. (AHRI, No. 8 at p. 12) AHRI 
stated that certain national accounts purchase replacements through 
direct sales. Id. DOE did not receive any comments about the fraction 
of PTAC and PTHP sales through each distribution channel.
    DOE did not find any data to indicate the magnitude of PTAC/PTHP 
replacement sales through national accounts and AHRI did not provide 
any estimates of the national account replacement channel. However, DOE 
understands that while certain PTAC and PTHP owners may purchase 
replacement units through a national accounts channel, DOE does not 
expect the replacement volume to be very large. Thus, DOE believes that 
this channel is likely to be a minimal part of the market and has not 
added it to the analysis.
    In summary, DOE considered the four distribution channels shown in 
Table IV-13 and estimated percentages of the total sales in the new 
construction and replacement markets for each of the four distribution 
channels as listed in Table IV-14.

                          Table IV-3--Distribution Channels for PTAC and PTHP Equipment
----------------------------------------------------------------------------------------------------------------
              Channel 1                       Channel 2                Channel 3                Channel 4
----------------------------------------------------------------------------------------------------------------
Manufacturer (through national         Manufacturer...........  Manufacturer...........  Manufacturer.
 accounts).
                                       Wholesaler.............  Wholesaler.............  Wholesaler.
                                                                Mechanical Contractor..  Mechanical Contractor.
                                                                                         General Contractor.
Consumer.............................  Consumer...............  Consumer...............  Consumer.
----------------------------------------------------------------------------------------------------------------


 Table IV-14--Share of Market by Distribution Channel for PTAC and PTHP
                                Equipment
------------------------------------------------------------------------
                                      New construction     Replacement
        Distribution channel              (percent)         (percent)
------------------------------------------------------------------------
Wholesaler-Consumer.................                30                15
Wholesaler-Mech Contractor-Consumer.                 0                25
Wholesaler-Mech Contractor-General                  38                60
 Contractor-Consumer................
National Account....................                32                 0
                                     -----------------------------------
    Total...........................               100               100
------------------------------------------------------------------------

    DOE updated the sources used in the July 2015 final rule to derive 
markups for each step of the distribution channels with the following 
data sources: (1) the 2017 Annual Wholesale Trade Survey,\27\ to 
develop wholesaler markups; (2) the Air Conditioning Contractors of 
America's (``ACCA'') ``2005 Financial Analysis for the HVACR 
Contracting Industry'' \28\ and 2017 U.S. Census Bureau economic data 
\29\ to develop mechanical contractor markups; and (3) 2017 U.S. Census 
Bureau economic data for the commercial and institutional building 
construction industry to develop general contractor markups.\30\ The 
overall markup is the product of all the markups (baseline or 
incremental markups) for the different steps within a distribution 
channel. Replacement channels include sales taxes, which were 
calculated based on State sales tax data reported by the Sales Tax 
Clearinghouse.
---------------------------------------------------------------------------

    \27\ U.S. Census Bureau. 2017 Annual Wholesale Trade Report, 
NAICS 4236: Household Appliances and Electrical and Electronic Goods 
Merchant Wholesalers. 2017. Washington, DC www.census.gov/wholesale/index.html.
    \28\ ``2005 Financial Analysis for the HVACR Contracting 
Industry,'' Air Conditioning Contractors of America. 2005.
    \29\ ``Plumbing, Heating, and Air-Conditioning Contractors. 
Sector 23: 238220. Construction: Industry Series, Preliminary 
Detailed Statistics for Establishments, 2017,'' U.S. Census Bureau. 
2017. Available at: www.census.gov/data/tables/2017/econ/economic-census/naics-sector-23.html.
    \30\ ``2017 Economic Census, Construction Industry Series and 
Wholesale Trade Subject Series,'' U.S. Census Bureau. Available 
online at www.census.gov/data/tables/2017/econ/economic-census/naics-sector-23.html.
---------------------------------------------------------------------------

    Chapter 6 of the NOPD TSD provides details on DOE's development of 
the markups.

D. Energy Use Analysis

    The purpose of the energy use analysis is to determine the annual 
unit energy consumption (``UEC'') of PTACs and PTHPs at different 
efficiencies in representative U.S. commercial buildings, and to assess 
the energy savings potential of increased PTAC and PTHP efficiency. The 
energy use analysis estimates the range of energy use of PTACs and 
PTHPs in the field (i.e., as they are actually used by consumers). The 
energy use analysis provides the basis for other analyses DOE 
performed, particularly assessments of the energy savings and the 
savings in consumer operating costs that could result from adoption of 
amended or new standards.
    In the July 2015 final rule, DOE adjusted the UECs that were used 
in the October 2008 final rule to account for the different efficiency 
levels and equipment classes. 80 FR 43162, 43178; see 73 FR 58772. DOE 
began with the cooling UECs for PTACs and the cooling and heating UECs 
for PTHPs from the October 2008 final rule. Where identical efficiency 
levels and cooling capacities were available, DOE used the cooling and 
heating UEC directly from the October 2008 final rule. For additional 
efficiency levels, DOE scaled the cooling UECs based on interpolations 
between EERs and scaled the heating UECs based on interpolations of 
COPs, both at a constant cooling capacity. For additional cooling 
capacities, DOE scaled the UECs based on interpolations between cooling 
capacities and a constant EER. Once DOE determined the UECs by EL and 
product class, DOE adjusted the base-year UEC to account

[[Page 37955]]

for changes in climate between 2008 and 2013 based on a typical 
meteorological year (``TMY'') hourly weather data set (referred to as 
TMY2) and an updated data set (referred to as TMY 3). 80 FR 43162, 
43178.
    In the December 2020 ECS RFI, DOE requested comment on the approach 
used in the July 2015 final rule to develop UECs along with a request 
for comment on the approach to measure energy use of make-up air PTACs 
and PTHPs. 85 FR 82952, 82962.
    AHRI commented that it has concerns regarding the approach used to 
develop UECs in the energy use analysis for the July 2015 final rule. 
AHRI stated that DOE should account for the following changes in ASHRAE 
Standard 90.1 at a minimum: (1) section 6.3.2g mandates that the system 
be controlled by a manual changeover or dual set point thermostat, (2) 
section 6.3.2h applicable to PTHPs with auxiliary internal electric 
resistance heaters, mandates that controls must be provided to prevent 
supplemental heater operation when the heating load can be met by the 
heat pump alone, and (3) section 6.4.3.1 requires thermostatic controls 
to include off-hour controls, automatic shutdown and setback controls. 
(AHRI, No. 8 at p. 13).
    AHRI also commented that the 2008 analysis assumed that PTACs and 
PTHPs would be used to cool the lobby and lounge space of a small hotel 
and that this space is typically not conditioned by PTACs/PTHPs. Id. 
AHRI also commented that the UECs were higher in the July 2015 final 
rule than in the September 2014 Notice of Data Availability and does 
not understand how the UECs at identical efficiency levels could 
increase in that time period. (AHRI, No. 8 at p. 14).
    Regarding make-up air units, AHRI stated that DOE should focus on 
making the changes to the energy use analysis mentioned above before it 
expends resources on a small market segment. (AHRI, No. 8 at p. 14) 
NEEA suggested that DOE include the ability to provide ventilation and 
make-up air to a space and measure the energy use associated with 
cooling, heating, and dehumidifying ventilation air. (NEEA, No. 9 at p. 
5)
    NEEA also suggested that DOE's energy use analysis should capture a 
range of operating conditions for PTACs and PTHPs. (NEEA, No. 9 at p. 
6) NEEA suggested that DOE model the energy use in lodging applications 
as well as residential care and multifamily buildings. Id.
    In response to the comments from AHRI and NEEA, DOE updated its 
energy use analysis for this NOPD. To develop UECs, DOE began with the 
cooling and heating loads from the new construction 2004 vintage, small 
hotel commercial reference building prototype.\31\ While more recent 
prototypes are available that reflect more current building codes, DOE 
notes that its energy use analysis is meant to represent the energy use 
in the current stock of buildings that use PTACs and PTHPs and the 2004 
prototype is more reflective of the stock than a newer prototype.\32\ 
This prototype is a four floor, rectangular building with 35 guest 
rooms, each of which uses a PTAC for cooling and heating. The cooling 
and heating loads were developed in EnergyPlus \33\ using TMY3 weather 
data along with the default assumptions for building envelope, 
ventilation, occupancy schedule, cooling and heating thermostat set 
points, and square footage. A detailed description of the small hotel 
commercial reference building can be found on the DOE commercial 
reference building website.\34\ The UECs were developed only using the 
guestroom load profiles and the PTHP UECs use the heat-pump to meet the 
heating loads. DOE notes that it provided an explanation for the higher 
UECs in the July 2015 final rule, as DOE added a multiplier to account 
for the change in weather data (the 2008 analysis was run using TMY2 
and in 2015 TMY3 data was available), which led to higher UECs. 80 FR 
43162, 43178-9.
---------------------------------------------------------------------------

    \31\ www.energy.gov/eere/buildings/new-construction-commercial-reference-buildings.
    \32\ In Commercial Buildings Energy Consumption Survey 
(``CBECS'') 2018, 80% of lodging buildings that use an individual 
room air conditioner were constructed prior to the year 2000.
    \33\ www.energy.gov/eere/buildings/downloads/energyplus-0.
    \34\ www.energy.gov/eere/downloads/reference-buildings-building-type-small-hotel.
---------------------------------------------------------------------------

    DOE understands NEEA's suggestion to model variability by building 
type, however, DOE notes that small hotels make up the large majority 
of PTAC and PTHP shipments (approximately 80 percent) and the internal 
loads of residential care guestrooms and apartments in multifamily 
buildings that would use a PTAC or PTHP should not be significantly 
different than those of small hotel guestrooms, therefore DOE only 
modeled the energy use in small hotels. DOE also notes that the 
building cooling and heating loads include ventilation, therefore the 
UEC includes the energy required to cool, heat, and dehumidify outside 
air.
    Of the 35 hotel rooms in the small hotel commercial reference 
building prototype, 20 have a design day size below 10,000 Btu/h and 
the others have design day sizes above 20,000 Btu/h. The largest 
standard size PTACs and PTHPs in CCD \35\ are less than 17,000 Btu/h, 
therefore, DOE did not consider the small hotel guestroom loads with 
design days over 20,000 Btu/h. To create full load cooling and heating 
hours, for each climate zone DOE took the sum of the cooling and 
heating loads from the 20 guestrooms with a design day size below 
10,000 Btu/h and divided them by the sum of the design day capacities 
for the same hotel guestrooms. DOE then took the full-load cooling and 
heating hours and multiplied them by the full-load cooling and heating 
power for each efficiency level. The full-load cooling power was 
derived by dividing the representative cooling capacity of either 9,000 
Btu/h or 15,000 Btu/h by the EERs of the representative efficiency 
levels. The heating power for PTHPs was derived by converting the 9,000 
Btu/h and 15,000 Btu/h capacities into Watts, and dividing them by the 
representative COPs.
---------------------------------------------------------------------------

    \35\ Available at: www.regulations.doe.gov/certification-data/CCMS-4-Air_Conditioners_and_Heat_Pumps_-_Package_Terminal.html#q=Product_Group_s%3A%22Air%20Conditioners%20and%20Heat%20Pumps%20-%20Package%20Terminal%22 (last accessed, 3/25/
2022).
---------------------------------------------------------------------------

    DOE created UECs for each of the 16 International Energy 
Conservation Code (``IECC'') Climate Zones in the U.S. by simulating 
the small hotel prototype in one representative city for each climate 
zone. DOE used county level population data from the U.S. Census Bureau 
\36\ along with a Pacific Northwest Laboratory report,\37\ which 
assigned a climate zone to each county in the U.S. to develop 
population weighting factors for each climate zone. Next, DOE used the 
county level population data and climate zones to determine the 
weighted average UEC for each Census Division, with Census Division 9 
split into two, California and the remaining states of Census Division 
9 (Washington, Oregon, Hawaii, and Alaska). The resulting UECs 
represent the average small hotel guestroom cooling and heating energy 
use for each Census Division (with Census Division 9 split into two 
regions as explained previously).
---------------------------------------------------------------------------

    \36\ Available at: www.census.gov/data/datasets/time-series/demo/popest/2010s-counties-total.html#par_textimage_70769902.
    \37\ Available at: www.energy.gov/sites/prod/files/2015/10/f27/ba_climate_region_guide_7.3.pdf.
---------------------------------------------------------------------------

    DOE made further adjustments to each UEC for each climate zone to 
better account for the field energy use of PTACs and PTHPs. The Energy 
Information Administration's (``EIA'') National Energy Modeling System 
(``NEMS''), which is used to develop the Annual Energy Outlook 
(``AEO''),

[[Page 37956]]

develops a time series of scaling factors that capture the improvements 
of building envelopes in new and existing buildings over time.\38\ 
These building shell scalars are multiplied by the UEC to demonstrate 
the reduction in cooling and heating energy use by improved building 
envelopes by census division and building type between the year of 
construction of the small hotel commercial reference building (2004) 
and the compliance year (2026). DOE applied the scalars for the lodging 
building type to the UECs developed using the cooling and heating loads 
from the small hotel commercial reference building. DOE calculated the 
improvement between 2004, the year of the small hotel reference 
building, and 2026, the compliance year, using the new construction 
time series to create a new construction UEC and the existing building 
time series to create an existing building UEC in 2026. DOE weighted 
the results using shipments projections to new construction (12%) and 
existing buildings (88%) to create a weighted average UEC in 2026.
---------------------------------------------------------------------------

    \38\ Available at: www.eia.gov/analysis/studies/buildings/buildingshell/.
---------------------------------------------------------------------------

    Chapter 7 of the NOPD TSD provides details on DOE's energy use 
analysis for PTACs and PTHPs.

E. Life-Cycle Cost and Payback Period Analysis

    DOE conducted LCC and PBP analyses to evaluate the economic impacts 
on individual consumers of potential energy conservation standards for 
PTACs and PTHPs. The effect of new or amended energy conservation 
standards on individual consumers usually involves a reduction in 
operating cost and an increase in purchase cost. DOE used the following 
two metrics to measure consumer impacts:
     The LCC is the total consumer expense of an appliance or 
product over the life of that product, consisting of total installed 
cost (manufacturer selling price, distribution chain markups, sales 
tax, and installation costs) plus operating costs (expenses for energy 
use, maintenance, and repair). To compute the operating costs, DOE 
discounts future operating costs to the time of purchase and sums them 
over the lifetime of the product.
     The PBP is the estimated amount of time (in years) it 
takes consumers to recover the increased purchase cost (including 
installation) of a more-efficient product through lower operating 
costs. DOE calculates the PBP by dividing the change in purchase cost 
at higher efficiency levels by the change in annual operating cost for 
the year that amended or new standards are assumed to take effect.
    For any given efficiency level, DOE measures the change in LCC 
relative to the LCC in the no-new-standards case, which reflects the 
estimated efficiency distribution of PTACs and PTHPs in the absence of 
new or amended energy conservation standards. In contrast, the PBP for 
a given efficiency level is measured relative to the baseline product.
    For each considered efficiency level in each product class, DOE 
calculated the LCC and PBP for PTACs and PTHPs used in small hotel 
guestrooms. As stated previously, DOE developed a sample of small hotel 
guestroom PTAC and PTHP UECs by census division based on the DOE small 
hotel reference building. For each census division, DOE determined the 
average energy consumption for a PTAC or PTHP in a small hotel 
guestroom and the appropriate electricity price. By developing a sample 
of UECs by census division, the analysis captured the variability in 
energy consumption and energy prices associated with the use of PTACs 
and PTHPs.
    Inputs to the calculation of total installed cost include the cost 
of the product--which includes MPCs, manufacturer markups, retailer and 
distributor 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, product lifetimes, and discount rates. DOE created 
distributions of values for equipment lifetime, discount rates, and 
sales taxes, with probabilities attached to each value, to account for 
their uncertainty and variability.
    The computer model DOE used to calculate the LCC and PBP relies on 
a Monte Carlo simulation to incorporate uncertainty and variability 
into the analysis. The Monte Carlo simulations randomly sample input 
values from the probability distributions and PTAC and PTHP user 
samples. The model calculated the LCC and PBP for products at each 
efficiency level for 10,000 scenarios per simulation run. The 
analytical results include a distribution of 10,000 data points showing 
the range of LCC savings for a given efficiency level relative to the 
no-new-standards case efficiency distribution. In performing an 
iteration of the Monte Carlo simulation for a given PTAC or PTHP owner, 
product efficiency is chosen based on its probability. If the chosen 
product efficiency is greater than or equal to the efficiency of the 
standard level under consideration, the LCC and PBP calculation reveals 
that the PTAC or PTHP owner is not impacted by the standard level. By 
accounting for PTAC or PTHP owners who already purchase more-efficient 
products, DOE avoids overstating the potential benefits from increasing 
product efficiency.
    DOE calculated the LCC and PBP for all consumers of PTACs and PTHPs 
as if each were to purchase a new product in the expected year of 
required compliance with new or amended standards. Any amended 
standards would apply to PTACs and PTHPs manufactured 3 years after the 
date on which any new or amended standard is published. (42 U.S.C. 
6313(a)(6)(C)(iv)(I)) For purposes of its analysis, DOE used 2026 as 
the first year of compliance with any amended standards for PTACs and 
PTHPs.
    Table IV-15 summarizes the approach and data DOE used to derive 
inputs to the LCC and PBP calculations. The subsections that follow 
provide further discussion. Details of the spreadsheet model, and of 
all the inputs to the LCC and PBP analyses, are contained in chapter 8 
of the NOPD TSD and its appendices.

 Table IV-15--Summary of Inputs and Methods for the LCC and PBP Analysis
                                    *
------------------------------------------------------------------------
            Inputs                           Source/method
------------------------------------------------------------------------
Product Cost.................  Derived by multiplying MPCs by
                                manufacturer, contractor, and
                                distributor markups and sales tax, as
                                appropriate. A constant price trend was
                                used to project product costs.
Installation Costs...........  Baseline installation cost determined
                                with data from RS Means for the 2015
                                final rule, updated to 2021 dollars.
                                Assumed no change with efficiency level.

[[Page 37957]]

 
Annual Energy Use............  The total full-load cooling and heating
                                hours multiplied by the full load
                                cooling and heating power at each
                                efficiency level.
                               Variability: Based on the 16 IECC climate
                                zones and representative cities from the
                                DOE commercial reference building then
                                mapped to census divisions (with census
                                division 9 split into California and the
                                rest of the census division).
Energy Prices................  Electricity: Based on Edison Electric
                                Institute data of average and marginal
                                prices.
                               Variability: Regional energy prices by
                                census division, with census division 9
                                separated into California and the rest
                                of the census division.
Energy Price Trends..........  Based on AEO 2022 price projections.
Repair and Maintenance Costs.  Maintenance costs do not change by
                                efficiency level.
                               The materials portion of repair costs
                                changes by efficiency level; the labor
                                costs are constant and based on RS
                                Means. Values from 2015 final rule were
                                converted to 2021 dollars.
Product Lifetime.............  Average: 8 years.
Discount Rates...............  Commercial Discount rates for lodging,
                                healthcare, and small office. The
                                approach involves estimating the cost of
                                capital of companies that purchase PTAC
                                and PTHP equipment.
Compliance Date..............  2026.
------------------------------------------------------------------------
* References for the data sources mentioned in this table are provided
  in the sections following the table or in chapter 8 of the NOPD TSD.

1. PTAC and PTHP Equipment Cost
    To calculate consumer PTAC and PTHP costs, DOE multiplied the MPCs 
developed in the engineering analysis by the markups described 
previously (along with sales taxes). DOE used different markups for 
baseline products and higher-efficiency products because DOE applies an 
incremental markup to the increase in MSP associated with higher-
efficiency products.
    In the July 2015 final rule, DOE used a constant price trend to 
project the equipment prices in the compliance year. 80 FR 43162, 
43179. DOE maintained this approach in this NOPD and used a constant 
trend for equipment prices between 2021 (the year for which MPCs were 
developed) and 2026. The constant trend is based on a historical time 
series of the deflated PPI for all other miscellaneous refrigeration 
and air conditioning equipment between 1990 and 2021.\39\ The deflated 
PPI does not indicate a long term upward or downward trend, therefore 
DOE maintained a constant price trend for PTACs and PTHPs.
---------------------------------------------------------------------------

    \39\ Available at: www.bls.gov/ppi/.
---------------------------------------------------------------------------

2. Installation Cost
    Installation cost includes labor, overhead, and any miscellaneous 
materials and parts needed to install the product. DOE used the 
installation costs developed from the 2015 final rule \40\ and 
converted them to 2021 dollars using the GDP implicit price deflator 
\41\ to estimate the labor costs associated with baseline installation 
cost for PTACs and PTHPs. As representative efficiency levels for PTACs 
and PTHPs in this analysis are single-stage, packaged units that fit 
into a wall sleeve, DOE found no evidence that installation costs would 
be impacted with increased efficiency levels.
---------------------------------------------------------------------------

    \40\ See Chapter 8 of the 2015 Final Rule Technical Support 
Documents (Available at: www.regulations.gov/document/EERE-2012-BT-STD-0029-0040).
    \41\ https://fred.stlouisfed.org/series/GDPDEF.
---------------------------------------------------------------------------

3. Annual Energy Consumption
    For each census division, DOE determined the energy consumption for 
a PTAC or PTHP in a small hotel guestroom at different efficiency 
levels using the approach described previously in section IV.D of this 
document.
4. Energy Prices
    Because marginal electricity price more accurately captures the 
incremental savings associated with a change in energy use from higher 
efficiency, it provides a better representation of incremental change 
in consumer costs than average electricity prices. Therefore, DOE 
applied average electricity prices for the energy use of the product 
purchased in the no-new-standards case, and marginal electricity prices 
for the incremental change in energy use associated with the other 
efficiency levels considered.
    DOE derived electricity prices in 2021 using data from Edison 
Electric Institute (``EEI'') Typical Bills and Average Rates 
reports.\42\ Based upon comprehensive, industry-wide surveys, this 
semi-annual report presents typical monthly electric bills and average 
kilowatt-hour costs to the customer as charged by investor-owned 
utilities. For the commercial sector, DOE calculated electricity prices 
using the methodology described in Coughlin and Beraki (2019).\43\
---------------------------------------------------------------------------

    \42\ Available at: https://netforum.eei.org/eweb/DynamicPage.aspx?WebCode=COEPubSearch&pager=12.
    \43\ Coughlin, K. and B. Beraki. 2019. Non-residential 
Electricity Prices: A Review of Data Sources and Estimation Methods. 
Lawrence Berkeley National Lab. Berkeley, CA. Report No. LBNL-
2001203. ees.lbl.gov/publications/non-residential-electricity-prices.
---------------------------------------------------------------------------

    DOE's methodology allows electricity prices to vary by sector, 
region, and season. In the analysis, variability in electricity prices 
is chosen to be consistent with the way the consumer economic and 
energy use characteristics are defined in the LCC analysis. For PTACs 
and PTHPs, DOE developed UECs by census division for each equipment 
class and efficiency level for the summer (May to September) and winter 
(October to April) seasons. The average summer and winter electricity 
price for large commercial buildings was used to measure the baseline 
energy cost. The summer and winter marginal prices for large commercial 
buildings, using a marginal load factor of 0.5 were used to measure the 
operating cost savings from higher efficiency PTACs and PTHPs. See 
chapter 8 of the final rule TSD for details.
    To estimate energy prices in future years, DOE multiplied the 2021 
energy prices by the projection of annual average price changes for 
each of the nine census divisions from the Reference case in AEO 2022, 
which has an end year of 2050.\44\ To estimate price trends after 2050, 
DOE kept the energy price constant at the 2050 value.
---------------------------------------------------------------------------

    \44\ EIA. Annual Energy Outlook 2022 with Projections to 2050. 
Washington, DC. Available at www.eia.gov/forecasts/aeo/ (last 
accessed May 5, 2022).
---------------------------------------------------------------------------

5. Maintenance and Repair Costs
    Repair costs are associated with repairing or replacing PTAC and 
PTHP components that have failed in an appliance; maintenance costs are 
associated with maintaining the operation of the PTAC or PTHP. 
Typically, small incremental increases

[[Page 37958]]

in product efficiency produce no changes in maintenance costs compared 
to baseline efficiency products. Repair costs consist of the cost of 
labor to perform the repair as well as the cost of materials to replace 
the component that has failed. DOE assumes that the labor costs stay 
constant and the material costs will increase proportionally with the 
incremental increase of the MPC. In the July 2015 final rule, DOE used 
the material and labor costs associated with repair of equipment 
components covered and not covered by a standard manufacturer warranty. 
80 FR 43162, 43180. Based on a report of component failure probability 
and warranty terms, and on component material and labor costs from RS 
Means data,\45\ DOE determined the expected value of the total cost of 
a repair and annualized it to determine the annual repair cost. DOE 
scaled by cooling capacity and MSP to determine repair costs for the 
equipment classes and considered efficiency levels. Id. For this NOPD, 
DOE updated the labor portion of the annualized repair cost using the 
GDP implicit price deflator \46\ and updated the material portion of 
baseline products by the PPI for Air-conditioning, refrigeration, and 
forced air heating equipment manufacturing.\47\ The material portion of 
the repair cost for higher efficiency components was scaled with the 
MSPs.
---------------------------------------------------------------------------

    \45\ RS Means Company, Inc. ``RSMeans Facilities Maintenance & 
Repair Cost Data,'' 2013.
    \46\ https://fred.stlouisfed.org/series/GDPDEF.
    \47\ www.bls.gov/ppi/.
---------------------------------------------------------------------------

    DOE requested comment on its approach to modeling repair costs in 
the December 2020 RFI. 85 FR 82952, 82963. AHRI commented that DOE 
should ensure that out-of-warranty costs are used to measure repairs 
that occur after the warranty has expired and that costs are much 
higher after the warranty period. (AHRI, No. 8 at p. 15).
    In response, DOE notes that the methodology used in the July 2015 
final rule considered the cost of repairs after the warranty period. 80 
FR 43162, 43180. The current annualized repair costs reflect the cost 
of a repair after the warranty, therefore DOE did not make any further 
updates to the repair costs.
6. Product Lifetime
    For PTACs and PTHPs, DOE used the same lifetime estimates from July 
2015 final rule. See 80 FR 43162, 43180. DOE requested comment on this 
approach to equipment lifetime in the December 2020 ECS RFI. 85 FR 
82952, 82963
    AHRI commented that DOE has no justification to increase equipment 
lifetimes for any PTAC or PTHP application. AHRI suggested that DOE 
should focus on time to replacement, rather than time to failure and 
that a distribution with a mean lifetime of 5 years should be used in 
the analysis. (AHRI, No. 8 at pp. 16-17) The CA IOUs encouraged DOE to 
revisit its lifetime assumptions from the July 2015 final rule and 
requested that DOE determine if PTACs or PTHPs that are removed from 
lodging applications before they fail are sold in secondary markets. 
(CA IOUs, No. 7 at pp. 3-4) ASAP expressed concern that the assumption 
that PTAC or PTHP's lifetime in lodging applications is aligned with 
hotel renovation cycles may underestimate the average lifetime of a 
PTAC or PTHP. (ASAP, No. 6 at p. 2)
    In response, DOE maintained the same lifetime assumptions as in the 
July 2015 final rule. DOE has not been provided, nor has it identified, 
any data to suggest that the average PTAC time to replacement is 
shorter than that of the typical hotel renovation cycle. In response to 
comments from AHRI, CA IOUs and ASAP, DOE notes that while the average 
lifetime is assumed to be eight years, the distribution allows for a 
range of lifetimes up to 16 years. Given that DOE used a lifetime 
distribution, the analysis captures segments of the market which 
replace prior to the 7-year renovation cycle and after the 7-year 
renovation cycle. Finally, DOE's lifetime assumption with a mean of 8 
years falls between the various stakeholder comments and considering no 
additional data were identified to support a shorter or longer life, 
DOE is maintaining the same lifetime assumptions as in the July 2015 
final rule.
    Regarding the comment from the CA IOUs on the secondary market for 
PTACs and PTHPs, DOE was unable to find any data sources that provide 
the total size of the secondary market. Furthermore, DOE understands 
that secondary market sales are often composed of units that fail early 
on in their lifetimes and go through a refurbishment and certification 
process, as opposed to older units that are directly resold to users 
after a renovation. Therefore, DOE did not include secondary market 
sales in this NOPD.
7. Discount Rates
    DOE's method views the purchase of a higher efficiency appliance as 
an investment that yields a stream of energy cost savings. DOE derived 
the discount rates for the LCC analysis by estimating the cost of 
capital for companies or public entities that purchase PTACs and PTHPs. 
For private firms, the weighted average cost of capital (``WACC'') is 
commonly used to estimate the present value of cash flows to be derived 
from a typical company project or investment. Most companies use both 
debt and equity capital to fund investments, so their cost of capital 
is the weighted average of the cost to the firm of equity and debt 
financing, as estimated from financial data for publicly traded firms 
in the sectors that purchase PTACs and PTHPs.\48\ As discount rates can 
differ across industries, DOE estimates separate discount rate 
distributions for a number of aggregate sectors with which elements of 
the LCC building sample can be associated.
---------------------------------------------------------------------------

    \48\ Modigliani, F. and M.H. Miller. The Cost of Capital, 
Corporations Finance and the Theory of Investment. American Economic 
Review. 1958. 48(3): pp. 261-297.
---------------------------------------------------------------------------

    In this analysis, DOE estimated the cost of capital of companies 
that purchase PTAC and PTHP equipment. DOE used the same types of 
companies that were used in the July 2015 final rule, large hotel/motel 
chains, independent hotel/motel, assisted living/health care, and small 
office. 80 FR 43162, 43181. More details regarding the DOE's estimates 
of discount rates can be found in Chapter 8 of the NOPD TSD.
8. Energy Efficiency Distribution in the No-New-Standards Case
    To accurately estimate the share of consumers that would be 
affected by a potential energy conservation standard at a particular 
efficiency level, DOE's LCC analysis considered the projected 
distribution (market shares) of equipment efficiencies under the no-
new-standards case (i.e., the case without amended or new energy 
conservation standards).
    To estimate the energy efficiency distribution of PTACs and PTHPs 
for 2026, DOE used model counts from CCD \49\ and applied a growth rate 
of 1 EER every 35 years, which was used in the July 2015 final rule and 
is based on a growth trend in the absence of standards developed in the 
2004 commercial unitary air conditioner advanced notice of proposed 
rulemaking (``2004 ANOPR'').\50\
---------------------------------------------------------------------------

    \49\ www.regulations.doe.gov/certification-data/#q=Product_Group_s%3A* (last accessed: March 9, 2022).
    \50\ See Chapter 10 of DOE's technical support document 
underlying DOE's July 29, 2004 ANOPR. (Available at: 
www.regulations.gov/document/EERE-2006-STD-0103-0078).

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

[[Page 37959]]

80 FR 43162, 43183. The estimated market shares for the no-new-
standards case for PTACs and PTHPs are shown in Table IV-16 of this 
document. DOE notes that there are currently units in CCD that are at 
the baseline efficiency level, but given the small difference between 
the baseline and EL 1, the growth rate of 1 EER every 35 years leads to 
no products at the baseline in 2026. See chapter 8 of the NOPD TSD for 
further information on the derivation of the efficiency distributions.

                                                Table IV-16--Market Shares for the No-New-Standards Case
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                Market share by EL
          Equipment type              Cooling capacity   -----------------------------------------------------------------------------------------------
                                                            Baseline *          EL1             EL2             EL3             EL4             EL5
--------------------------------------------------------------------------------------------------------------------------------------------------------
PTAC..............................  9,000 Btu/h.........              0%             44%             29%             11%              6%             10%
                                    15,000 Btu/h........               0               0              52              34              14               0
PTHP..............................  9,000 Btu/h.........               0              44              21              16              10               9
                                    15,000 Btu/h........               0               0              41              40              20               0
--------------------------------------------------------------------------------------------------------------------------------------------------------

9. Payback Period Analysis
    The payback period is the amount of time it takes the consumer to 
recover the additional installed cost of more-efficient PTACs and 
PTHPs, compared to baseline PTACs and PTHPs, through energy cost 
savings. Payback periods are expressed in years. Payback periods that 
exceed the life of the PTACs and PTHPs mean that the increased total 
installed cost is not recovered in reduced operating expenses.
    The inputs to the PBP calculation for each efficiency level are the 
change in total installed cost of the PTACs and PTHPs and the change in 
the first-year annual operating expenditures relative to the baseline. 
The PBP calculation uses the same inputs as the LCC analysis, except 
that discount rates are not needed.

F. Shipments Analysis

    DOE uses projections of annual shipments to calculate the national 
impacts of potential amended or new energy conservation standards on 
energy use, NPV, and future manufacturer cash flows.\51\ The shipments 
model takes an accounting approach in tracking market shares of each 
equipment class and the vintage of units in the stock. Stock accounting 
uses product shipments as inputs to estimate the age distribution of 
in-service equipment stocks for all years. The age distribution of in-
service equipment stocks is a key input to calculations of both the NES 
and NPV, because operating costs for any year depend on the age 
distribution of the stock.
---------------------------------------------------------------------------

    \51\ DOE uses data on manufacturer shipments as a proxy for 
national sales, as aggregate data on sales are lacking. In general, 
one would expect a close correspondence between shipments and sales.
---------------------------------------------------------------------------

    In the July 2015 final rule, DOE developed shipment projections 
based on historical data and an analysis of key market drivers for this 
equipment. 80 FR 43162, 43182. Historical shipments were used to build 
up an equipment stock and also to calibrate the shipments model. DOE 
separately calculated shipments intended for new construction and 
replacement applications. The sum of new construction and replacement 
shipments was the total shipments. Id.
    New construction shipments were calculated using projected floor 
space of healthcare, lodging, and small office buildings from AEO 2014 
and historical PTAC and PTHP saturation in new buildings, which was 
estimated by dividing historical new shipments by new construction 
floor space. 80 FR 43162, 43182. Replacement shipments were equal to 
the number of units that fail in a given year. The failures were based 
on a retirement function in the form of a Weibull distribution with 
inputs based on lifetime values from the LCC analysis to estimate the 
number of units of a given age that fail in each year. Id.
    In the December 2020 RFI, DOE requested the most recent annual 
sales data but did not receive any comments or data on recent sales in 
response to the RFI. 85 FR 82952, 82963.
    In this NOPD, DOE updated the previous shipments model using the 
new construction floor space projections from AEO 2022 for healthcare, 
lodging, and small offices. DOE maintained the same saturation for new 
buildings to estimate the new shipments and the same distribution of 
shipments by equipment class that were used in the previous analysis.
    For further information on the shipments analysis, see chapter 9 of 
the NOPD TSD.

G. National Impact Analysis

    The NIA assesses the NES and the NPV from a national perspective of 
total consumer costs and savings that would be expected to result from 
new or amended standards at specific efficiency levels.\52\ 
(``Consumer'' in this context refers to consumers of the PTACs and 
PTHPs being regulated.) DOE calculates the NES and NPV for the 
potential standard levels considered based on projections of annual 
product shipments, along with the annual energy consumption and total 
installed cost data from the energy use and LCC analyses. For the 
present analysis, DOE projected the energy savings, operating cost 
savings, product costs, and NPV of consumer benefits over the lifetime 
of PTACs and PTHPs sold from 2026 through 2055.
---------------------------------------------------------------------------

    \52\ The NIA accounts for impacts in the 50 states and 
Washington, DC.
---------------------------------------------------------------------------

    DOE evaluates the effects of new or amended standards by comparing 
a case without such standards with standards-case projections. The no-
new-standards case characterizes energy use and consumer costs for each 
PTAC and PTHP class in the absence of new or amended energy 
conservation standards. For this projection, DOE considers historical 
trends in efficiency and various forces that are likely to affect the 
mix of efficiencies over time. DOE compares the no-new-standards case 
with projections characterizing the market for each PTAC and PTHP class 
if DOE adopted new or amended standards at specific energy efficiency 
levels (i.e., the ELs or standards cases) for that class. For the 
standards cases, DOE considers how a given standard would likely affect 
the market shares of PTACs and PTHPs with efficiencies greater than the 
standard.
    DOE uses a spreadsheet model to calculate the energy savings and 
the national consumer costs and savings from each EL. Interested 
parties can review DOE's analyses by changing various input quantities 
within the spreadsheet. The NIA spreadsheet model uses typical values 
(as opposed to probability distributions) as inputs.
    Table IV-17 summarizes the inputs and methods DOE used for the NIA

[[Page 37960]]

analysis for the NOPD. Discussion of these inputs and methods follows 
the table. See chapter 10 of the NOPD TSD for details.

   Table IV-17--Summary of Inputs and Methods for the National Impact
                                Analysis
------------------------------------------------------------------------
            Inputs                               Method
------------------------------------------------------------------------
Shipments....................  Annual shipments from shipments model.
Modeled Compliance Date of     2026.
 Standard.
Efficiency Trends............  No-new-standards case--1 EER every 35
                                years.
                               Standards cases--1 EER every 35 years.
Annual Energy Consumption per  Annual weighted-average values are a
 Unit.                          function of energy use at each EL.
Total Installed Cost per Unit  Annual weighted-average values are a
                                function of cost at each EL.
                               Future product prices are constant.
Annual Energy Cost per Unit..  Annual weighted-average values as a
                                function of the annual energy
                                consumption per unit and energy prices.
Repair and Maintenance Cost    The materials portion of annual repair
 per Unit.                      costs scale with MPCs, maintenance costs
                                do not change by EL.
Energy Prices................  AEO 2022 projections (to 2050) and
                                constant 2050 value through 2075.
Energy Site-to-Primary and     A time-series conversion factor based on
 FFC Conversion.                AEO 2022.
Discount Rate................  3 percent and 7 percent.
Present Year.................  2021.
------------------------------------------------------------------------

1. Equipment Efficiency Trends
    A key component of the NIA is the trend in energy efficiency 
projected for the no-new-standards case and each of the standards 
cases. Section IV.E.8 of this document describes how DOE developed an 
energy efficiency distribution for the no-new-standards case (which 
yields a shipment-weighted average efficiency) for each of the 
considered product classes for the year of anticipated compliance with 
an amended or new standard.
    For the standards cases, DOE used a ``roll-up'' scenario to 
establish the shipment-weighted efficiency for the year that standards 
are assumed to become effective (2026). In this scenario, the market 
shares of products in the no-new-standards case that do not meet the 
standard under consideration would ``roll up'' to meet the new standard 
level, and the market share of products above the standard would remain 
unchanged.
    To develop no-new-standards case and standards case efficiency 
trends after 2026, DOE used the same approach as in the July 2015 final 
rule, which grows the efficiency trend at a rate of 1 EER every 35 
years for all product classes. 80 FR 43162, 43183.
2. National Energy Savings
    The NES analysis involves a comparison of national energy 
consumption of the considered products between each potential standards 
case (EL) and the case with no new or amended energy conservation 
standards. DOE calculated the national energy consumption by 
multiplying the number of units (stock) of each product (by vintage or 
age) by the unit energy consumption (also by vintage). DOE calculated 
annual NES based on the difference in national energy consumption for 
the no-new-standards case and for each higher efficiency standard case. 
DOE estimated energy consumption and savings based on site energy and 
converted the electricity consumption and savings to primary energy 
(i.e., the energy consumed by power plants to generate site 
electricity) using annual conversion factors derived from AEO 2022. 
Cumulative energy savings are the sum of the NES for each year over the 
timeframe of the analysis.
    Use of higher-efficiency products is occasionally associated with a 
direct rebound effect, which refers to an increase in utilization of 
the product due to the increase in efficiency. For PTAC/PTHP, DOE did 
not consider any rebound as the entities using the equipment are 
typically not the ones paying the energy costs.
    In 2011, in response to the recommendations of a committee on 
``Point-of-Use and Full-Fuel-Cycle Measurement Approaches to Energy 
Efficiency Standards'' appointed by the National Academy of Sciences, 
DOE announced its intention to use FFC measures of energy use and 
greenhouse gas and other emissions in the NIA and emissions analyses 
included in future energy conservation standards rulemakings. 76 FR 
51281 (Aug. 18, 2011). After evaluating the approaches discussed in the 
August 18, 2011 notice, DOE published a statement of amended policy in 
which DOE explained its determination that EIA's National Energy 
Modeling System (``NEMS'') is the most appropriate tool for its FFC 
analysis and its intention to use NEMS for that purpose. 77 FR 49701 
(Aug. 17, 2012). NEMS is a public domain, multi-sector, partial 
equilibrium model of the U.S. energy sector \53\ that EIA uses to 
prepare its AEO. The FFC factors incorporate losses in production, and 
delivery in the case of natural gas, (including fugitive emissions) and 
additional energy used to produce and deliver the various fuels used by 
power plants. The approach used for deriving FFC measures of energy use 
and emissions is described in appendix 10B of the NOPD TSD.
---------------------------------------------------------------------------

    \53\ For more information on NEMS, refer to The National Energy 
Modeling System: An Overview 2009, DOE/EIA-0581(2009), October 2009. 
Available at www.eia.gov/analysis/pdfpages/0581(2009)index.php (last 
accessed 4/15/2022).
---------------------------------------------------------------------------

3. Net Present Value Analysis
    The inputs for determining the NPV of the total costs and benefits 
experienced by consumers are: (1) total annual installed cost, (2) 
total annual operating costs (energy costs and repair and maintenance 
costs), and (3) a discount factor to calculate the present value of 
costs and savings. DOE calculates net savings each year as the 
difference between the no-new-standards case and each standards case in 
terms of total savings in operating costs versus total increases in 
installed costs. DOE calculates operating cost savings over the 
lifetime of each product shipped during the projection period.
    As discussed in section IV.E.1 of this document, DOE assumed a 
constant price trend for PTACs and PTHPs. DOE applied the same constant 
price trend to project prices for each PTAC and PTHP class at each 
considered efficiency level.
    The operating cost savings are energy cost savings, which are 
calculated using the estimated energy savings in each year and the 
projected price of the appropriate form of energy, and repair costs, 
which remain constant through

[[Page 37961]]

the analysis period. To estimate energy prices in future years, DOE 
multiplied the average regional energy prices by the projection of 
annual national-average commercial electricity price changes in the 
Reference case from AEO 2022, which has an end year of 2050. To 
estimate price trends after 2050, DOE kept the 2050 value constant 
through 2075.
    In calculating the NPV, DOE multiplies the net savings in future 
years by a discount factor to determine their present value. For this 
NOPD, DOE estimated the NPV of consumer benefits using both a 3-percent 
and a 7-percent real discount rate. DOE uses these discount rates in 
accordance with guidance provided by the Office of Management and 
Budget (``OMB'') to Federal agencies on the development of regulatory 
analysis.\54\ The discount rates for the determination of NPV are in 
contrast to the discount rates used in the LCC analysis, which are 
designed to reflect a consumer's perspective. The 7-percent real value 
is an estimate of the average before-tax rate of return to private 
capital in the U.S. economy. The 3-percent real value represents the 
``social rate of time preference,'' which is the rate at which society 
discounts future consumption flows to their present value.
---------------------------------------------------------------------------

    \54\ United States Office of Management and Budget. Circular A-
4: Regulatory Analysis. September 17, 2003. Section E. Available at 
www.federalregister.gov/documents/2003/10/09/03-25606/circular-a-4-regulatory-analysis (last accessed April 15, 2022).
---------------------------------------------------------------------------

V. Analytical Results and Conclusions

    The following section addresses the results from DOE's analyses 
with respect to the considered energy conservation standards for PTACs 
and PTHPs. It addresses the ELs examined by DOE and the projected 
impacts of each of these levels. Additional details regarding DOE's 
analyses are contained in the NOPD TSD supporting this document.

A. Economic Impacts on PTAC and PTHP Consumers

    DOE analyzed the cost effectiveness (i.e., the savings in operating 
costs throughout the estimated average life of PTACs and PTHPs) 
compared to any increase in the price of, or in the initial charges 
for, or maintenance expenses of, the PTACs and PTHPs, which are likely 
to result from the imposition of a standard at an EL by considering the 
LCC and PBP at each EL. These analyses are discussed in the following 
sections.
    In general, higher-efficiency products affect consumers in two 
ways: (1) purchase price increases and (2) annual operating costs 
decrease. Inputs used for calculating the LCC and PBP include total 
installed costs (i.e., product price plus installation costs), and 
operating costs (i.e., annual energy use, energy prices, energy price 
trends, repair costs, and maintenance costs). The LCC calculation also 
uses product lifetime and a discount rate. Chapter 8 of the NOPR TSD 
provides detailed information on the LCC and PBP analyses.
    Table V-1 through Table V-4 show the LCC and PBP results for the 
ELs considered in this analysis. The simple payback is measured 
relative to the efficiency distribution in the no-new-standards case in 
the compliance year (see section IV.E.8 of this document). Because some 
consumers purchase products with higher efficiency in the no-new-
standards case, the average savings are less than the difference 
between the average LCC of the baseline product and the average LCC at 
each EL. The savings refer only to consumers who are affected by a 
standard at a given EL. Those who already purchase a product with 
efficiency at or above a given EL are not affected. Consumers for whom 
the LCC increases at a given EL experience a net cost.

 Table V-1--Average LCC and PBP Results by Efficiency Level for Standard
            Size PTACs With a Cooling Capacity of 9,000 Btu/h
------------------------------------------------------------------------
                                                          Simple payback
            Efficiency level                LCC savings       period
                                              (2021$)         (years)
------------------------------------------------------------------------
EL 1....................................           $0.00             N/A
EL 2....................................            1.92             5.6
EL 3....................................           -0.47             6.0
EL 4....................................           -5.60             6.5
EL 5....................................           -8.70             6.8
------------------------------------------------------------------------


 Table V-2--Average LCC and PBP Results by Efficiency Level for Standard
           Size PTACs With a Cooling Capacity of 15,000 Btu/h
------------------------------------------------------------------------
                                                          Simple payback
            Efficiency level                LCC savings       period
                                              (2021$)         (years)
------------------------------------------------------------------------
EL 1....................................           $0.00             N/A
EL 2....................................            0.00             N/A
EL 3....................................            6.39             4.1
EL 4....................................           -1.77             4.9
EL 5....................................           -8.68             5.3
------------------------------------------------------------------------


[[Page 37962]]


 Table V-3--Average LCC and PBP Results by Efficiency Level for Standard
            Size PTHPs With a Cooling Capacity of 9,000 Btu/h
------------------------------------------------------------------------
                                                          Simple payback
            Efficiency level                LCC savings       period
                                              (2021$)         (years)
------------------------------------------------------------------------
EL 1....................................           $0.00             N/A
EL 2....................................            2.42             5.3
EL 3....................................            0.72             5.7
EL 4....................................           -3.75             6.2
EL 5....................................           -6.48             6.4
------------------------------------------------------------------------


 Table V-4--Average LCC and PBP Results by Efficiency Level for Standard
           Size PTHPs With a Cooling Capacity of 15,000 Btu/h
------------------------------------------------------------------------
                                                          Simple payback
            Efficiency level                LCC savings       period
                                              (2021$)         (years)
------------------------------------------------------------------------
EL 1....................................           $0.00             N/A
EL 2....................................            0.00             N/A
EL 3....................................            7.27             4.0
EL 4....................................           -0.66             4.7
EL 5....................................           -7.07             5.1
------------------------------------------------------------------------

B. National Impact Analysis

    This section presents DOE's estimates of the NES and the NPV of 
consumer benefits that would result from each of the ELs considered as 
potential amended standards.
1. Significance of Energy Savings
    To estimate the energy savings attributable to potential amended 
standards for PTACs and PTHPs, DOE compared their energy consumption 
under the no-new-standards case to their anticipated energy consumption 
under each EL. The savings are measured over the entire lifetime of 
products purchased in the 30-year period that begins in the year of 
anticipated compliance with amended standards (2026-2055). Table V-5 
presents DOE's projections of the NES for each EL considered for PTACs 
and PTHPs. The savings were calculated using the approach described in 
section IV.G of this document.

            Table V-5--Cumulative National Energy Savings for PTACs and PTHPs; 30 Years of Shipments
                                                   [2026-2055]
----------------------------------------------------------------------------------------------------------------
                                                             Efficiency level (quads)
                                 -------------------------------------------------------------------------------
                                         1               2               3               4               5
----------------------------------------------------------------------------------------------------------------
Primary energy..................           0.000           0.002           0.014           0.045           0.068
FFC energy......................           0.000           0.002           0.015           0.047           0.071
----------------------------------------------------------------------------------------------------------------

    OMB Circular A-4 \55\ requires agencies to present analytical 
results, including separate schedules of the monetized benefits and 
costs that show the type and timing of benefits and costs. Circular A-4 
also directs agencies to consider the variability of key elements 
underlying the estimates of benefits and costs. For this proposed 
determination, DOE undertook a sensitivity analysis using 9 years, 
rather than 30 years, of product shipments. The choice of a 9-year 
period is a proxy for the timeline in EPCA for the review of certain 
energy conservation standards and potential revision of and compliance 
with such revised standards.\56\ The review timeframe established in 
EPCA is generally not synchronized with the product lifetime, product 
manufacturing cycles, or other factors specific to PTACs and PTHPs. 
Thus, such results are presented for informational purposes only and 
are not indicative of any change in DOE's analytical methodology. The 
NES sensitivity analysis results based on a 9-year analytical period 
are presented in Table V-6. The impacts are counted over the lifetime 
of PTACs and PTHPs purchased in 2026 to 2034.
---------------------------------------------------------------------------

    \55\ U.S. Office of Management and Budget. Circular A-4: 
Regulatory Analysis. September 17, 2003. Available at 
obamawhitehouse.archives.gov/omb/circulars_a004_a-4/ (last accessed 
April 15, 2022).
    \56\ Section 325(m) of EPCA requires DOE to review its standards 
at least once every 6 years, and requires, for certain products, a 
3-year period after any new standard is promulgated before 
compliance is required, except that in no case may any new standards 
be required within 6 years of the compliance date of the previous 
standards. If DOE makes a determination that amended standards are 
not needed, it must conduct a subsequent review within three years 
following such a determination. As DOE is evaluating the need to 
amend the standards, the sensitivity analysis is based on the review 
timeframe associated with amended standards. While adding a 6-year 
review to the 3-year compliance period adds up to 9 years, DOE notes 
that it may undertake reviews at any time within the 6-year period 
and that the 3-year compliance date may yield to the 6-year 
backstop. A 9-year analysis period may not be appropriate given the 
variability that occurs in the timing of standards reviews and the 
fact that for some products, the compliance period is 5 years rather 
than 3 years.

[[Page 37963]]



             Table V-6--Cumulative National Energy Savings for PTACs and PTHPs; 9 Years of Shipments
                                                   [2026-2034]
----------------------------------------------------------------------------------------------------------------
                                                             Efficiency level (quads)
                                 -------------------------------------------------------------------------------
                                         1               2               3               4               5
----------------------------------------------------------------------------------------------------------------
Primary energy..................           0.000           0.002           0.011           0.023           0.029
FFC energy......................           0.000           0.002           0.011           0.023           0.030
----------------------------------------------------------------------------------------------------------------

a. Net Present Value of Consumer Costs and Benefits
    DOE estimated the cumulative NPV of the total costs and savings for 
consumers that would result from an amended standard at each of the 
representative ELs considered for PTACs and PTHPs. In accordance with 
OMB's guidelines on regulatory analysis,\57\ DOE calculated NPV using 
both a 7-percent and a 3-percent real discount rate. Table V-7 shows 
the consumer NPV results with impacts counted over the lifetime of 
products purchased in 2026-2055.
---------------------------------------------------------------------------

    \57\ U.S. Office of Management and Budget. Circular A-4: 
Regulatory Analysis. September 17, 2003. Available at 
obamawhitehouse.archives.gov/omb/circulars_a004_a-4/ (last accessed 
April 15, 2022).

     Table V-7--Cumulative Net Present Value of Consumer Benefits for PTACs and PTHPs; 30 Years of Shipments
                                                   [2026-2055]
----------------------------------------------------------------------------------------------------------------
                                                       Trial standard level (billion 2021$)
          Discount rate          -------------------------------------------------------------------------------
                                         1               2               3               4               5
----------------------------------------------------------------------------------------------------------------
3 percent.......................           0.000          -0.004          -0.043          -0.167          -0.268
7 percent.......................           0.000          -0.004          -0.035          -0.116          -0.174
----------------------------------------------------------------------------------------------------------------

    The NPV results based on the aforementioned 9-year analytical 
period are presented in Table V-8. The impacts are counted over the 
lifetime of PTACs and PTHPs purchased in 2026-2034. As mentioned 
previously, such results are presented for informational purposes only 
and are not indicative of any change in DOE's analytical methodology or 
decision criteria.

     Table V-8--Cumulative Net Present Value of Consumer Benefits for PTACs and PTHPs; 9 Years of Shipments
                                                   [2026-2034]
----------------------------------------------------------------------------------------------------------------
                                                       Trial standard level (billion 2021$)
          Discount rate          -------------------------------------------------------------------------------
                                         1               2               3               4               5
----------------------------------------------------------------------------------------------------------------
3 percent.......................           0.000          -0.004          -0.033          -0.088          -0.124
7 percent.......................           0.000          -0.004          -0.029          -0.073          -0.102
----------------------------------------------------------------------------------------------------------------

C. Proposed Determination

    EPCA specifies that for any commercial and industrial equipment 
addressed under 42 U.S.C. 6313(a)(6)(A)(i), including PTACs and PTHPS, 
DOE may prescribe an energy conservation standard more stringent than 
the level for such equipment in ASHRAE Standard 90.1 only if ``clear 
and convincing evidence'' shows that a more-stringent standard would 
result in significant additional conservation of energy and is 
technologically feasible and economically justified. (42 U.S.C. 
6313(a)(6)(C)(i); 42 U.S.C. 6313(a)(6)(A)(ii)(II)) The ``clear and 
convincing'' evidentiary threshold applies both when DOE is triggered 
by ASHRAE action and when DOE conducts a six-year-lookback rulemaking, 
with the latter being the basis for the current proceeding.
    Because an analysis of potential cost-effectiveness and energy 
savings first require an evaluation of the relevant technology, DOE 
first discusses the technological feasibility of amended standards. DOE 
then evaluates the energy savings potential and whether potential 
amended standards are economically justified.
1. Technological Feasibility
    EPCA mandates that DOE consider whether amended energy conservation 
standards for PTACs and PTHPs would be technologically feasible. (42 
U.S.C. 6313(a)(6)(A)(ii)(II))
    DOE considers technologies incorporated in commercially available 
products or in working prototypes to be technologically feasible. Per 
the technology options discussed in section IV.A.3 of this document, 
DOE has tentatively determined, based on clear and convincing evidence, 
that amended energy conservation standards for PTACs and PTHPs would be 
technologically feasible.
2. Significant Conservation of Energy
    EPCA also mandates that DOE consider whether amended energy 
conservation standards for PTACs and PTHPS would result in result in 
significant additional conservation of energy. (42 U.S.C. 
6313(a)(6)(A)(ii)(II))
    In the present case, DOE estimates that amended standards for PTACs 
and PTHPs would result in energy savings of

[[Page 37964]]

0.002 quads at EL 2, 0.013 quads at EL 3, 0.014 quads at EL 4, and 
0.062 quads at EL 5 (the max-tech level) over a 30-year analysis period 
(2026-2055). However, as discussed in the following section DOE lacks 
the clear and convincing evidence necessary to determine that amended 
standards for PTACs and PTHPs would be economically justified.
3. Economic Justification
    In determining whether a standard is economically justified, the 
Secretary must determine whether the benefits of the standard exceed 
its burdens, considering to the greatest extent practicable the seven 
statutory factors discussed previously (see section II.A of this 
document). (42 U.S.C. 6313(a)(6)(A)(ii)(II); 42 U.S.C. 
6313(a)(6)(B)(ii)(I)-(VII))
    One of those seven factors is the savings in operating costs 
throughout the estimated average life of the product in the type (or 
class) compared to any increase in the price, initial charges, or 
maintenance expenses of the products that are likely to result from the 
standard. (42 U.S.C. 6313(a)(6)(B)(ii)(II)) This factor is typically 
assessed using the LCC and PBP analysis, as well as the NPV.
    DOE conducted an LCC analysis to estimate the net costs/benefits to 
users from increased efficiency in the considered PTACs and PTHPs (See 
results in Table V-1 to Table V-4). DOE then aggregated the results 
from the LCC analysis to estimate the NPV of the total costs and 
benefits experienced by the Nation (See results in Table V-7 and Table 
V-8). As noted, the inputs for determining the NPV are: (1) total 
annual installed cost, (2) total annual operating costs (energy costs 
and repair and maintenance costs), and (3) a discount factor to 
calculate the present value of costs and savings. A summary of the 
analytical results can be found in Table V-9.

                       Table V-9--Summary of Analytical Results of PTAC and PTHP Equipment
----------------------------------------------------------------------------------------------------------------
            Category                   EL 1            EL 2            EL 3            EL 4            EL 5
----------------------------------------------------------------------------------------------------------------
                                 Cumulative National FFC Energy Savings (quads)
----------------------------------------------------------------------------------------------------------------
                                           0.000           0.002           0.015           0.047           0.071
----------------------------------------------------------------------------------------------------------------
                            NPV of Consumer Costs and Benefits * * * (2021$ billion)
----------------------------------------------------------------------------------------------------------------
3% discount rate................           0.000          -0.004          -0.043          -0.167          -0.268
7% discount rate................           0.000          -0.004          -0.035          -0.116          -0.174
----------------------------------------------------------------------------------------------------------------
                                         Consumer Mean LCC Savings 2021$
----------------------------------------------------------------------------------------------------------------
Standard Size PTACs--9,000 Btu/h            0.00            1.92           -0.47           -5.60           -8.70
Standard Size PTACs--15,000 Btu/            0.00            0.00            6.39           -1.77           -8.68
 h..............................
Standard Size PTHPs--9,000 Btu/h            0.00            2.42            0.72           -3.75           -6.48
Standard Size PTHPs--15,000 Btu/            0.00            0.00            7.27           -0.66           -7.07
 h..............................
----------------------------------------------------------------------------------------------------------------
                                          Consumer Mean Payback Period
----------------------------------------------------------------------------------------------------------------
Standard Size PTACs--9,000 Btu/h             N/A             5.6             6.0             6.5             6.8
Standard Size PTACs--15,000 Btu/             N/A             N/A             4.1             4.9             5.3
 h..............................
Standard Size PTHPs--9,000 Btu/h             N/A             5.3             5.7             6.2             6.4
Standard Size PTHPs--15,000 Btu/             N/A             N/A             4.0             4.7             5.1
 h..............................
----------------------------------------------------------------------------------------------------------------

    DOE estimates that amended standards for PTACs and PTHPs would 
result in NPV of $0.000 at EL 1, of -$0.004 billion at a 3 percent 
discount rate and -$0.004 billion at a 7 percent discount rate at EL 2, 
of -$0.043 billion at a 3 percent discount rate and -$0.035 billion at 
a 7 percent discount rate at EL 3, of -$0.167 billion at a 3 percent 
discount rate and -$0.116 billion at a 7 percent discount rate at EL 4, 
and of -$0.268 billion at a 3 percent discount rate and -$0.174 billion 
at a 7 percent discount rate at EL 5. Based on the NPV being zero at EL 
1 and negative at each higher EL, DOE's analysis indicates that 
consumers are unlikely to experience a net economic benefit from any 
efficiency level above the current baseline. Consequently, DOE has 
tentatively determined that it lacks clear and convincing evidence that 
amended energy conservation standards would be economically justified.
4. Summary
    Having considered the factors that would serve as the justification 
for an amended standard, including national energy savings, DOE has 
tentatively found based on its analysis that the benefits of amended 
standards would not outweigh the estimated net economic burden to 
consumers. Therefore, DOE is proposing to determine that the energy 
conservation standards for PTACs and PTHP do not need to be amended, 
having initially determined that it lacks ``clear and convincing'' 
evidence that amended standards would be economically justified. DOE 
will consider and respond to all comments received on this proposed 
determination in issuing any final determination.

VI. Procedural Issues and Regulatory Review

A. Review Under Executive Order 12866 and 13563

    Executive Order (``E.O.'') 12866, ``Regulatory Planning and 
Review,'' as supplemented and reaffirmed by E.O. 13563, ``Improving 
Regulation and Regulatory Review, 76 FR 3821 (Jan. 21, 2011), requires 
agencies, to the extent permitted by law, to: (1) propose or adopt a 
regulation only upon a reasoned determination that its benefits justify 
its costs (recognizing that some benefits and costs are difficult to 
quantify); (2) tailor regulations to impose the least burden on 
society, consistent with obtaining regulatory objectives, taking into 
account, among other things, and to the extent practicable, the costs 
of cumulative regulations; (3) select, in choosing among alternative 
regulatory approaches, those approaches that

[[Page 37965]]

maximize net benefits (including potential economic, environmental, 
public health and safety, and other advantages; distributive impacts; 
and equity); (4) to the extent feasible, specify performance 
objectives, rather than specifying the behavior or manner of compliance 
that regulated entities must adopt; and (5) identify and assess 
available alternatives to direct regulation, including providing 
economic incentives to encourage the desired behavior, such as user 
fees or marketable permits, or providing information upon which choices 
can be made by the public. DOE emphasizes as well that E.O. 13563 
requires agencies to use the best available techniques to quantify 
anticipated present and future benefits and costs as accurately as 
possible. In its guidance, the Office of Information and Regulatory 
Affairs (``OIRA'') in the Office of Management and Budget (``OMB'') has 
emphasized that such techniques may include identifying changing future 
compliance costs that might result from technological innovation or 
anticipated behavioral changes. For the reasons stated in the preamble, 
this proposed regulatory action is consistent with these principles.
    Section 6(a) of E.O. 12866 also requires agencies to submit 
``significant regulatory actions'' to OIRA for review. OIRA has 
determined that this proposed regulatory action does not constitute a 
``significant regulatory action'' under section 3(f) of E.O. 12866. 
Accordingly, this action was not submitted to OIRA for review under 
E.O. 12866.

B. Review Under the Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires 
preparation of an initial regulatory flexibility analysis (``IRFA'') 
for any rule that by law must be proposed for public comment, unless 
the agency certifies that the rule, if promulgated, will not have a 
significant economic impact on a substantial number of small entities. 
As required by E.O. 13272, ``Proper Consideration of Small Entities in 
Agency Rulemaking,'' 67 FR 53461 (Aug. 16, 2002), DOE published 
procedures and policies on February 19, 2003, to ensure that the 
potential impacts of its rules on small entities are properly 
considered during the rulemaking process. 68 FR 7990. DOE has made its 
procedures and policies available on the Office of the General 
Counsel's website (www.energy.gov/gc/office-general-counsel).
    DOE reviewed this proposed determination under the provisions of 
the Regulatory Flexibility Act and the policies and procedures 
published on February 19, 2003. DOE has tentatively determined that 
current standards for PTACs and PTHPs do not need to be amended. 
Because DOE is proposing not to amend standards for PTACs and PTHPs, if 
adopted, this determination would not amend any energy conservation 
standards. On the basis of the foregoing, DOE certifies that the 
proposed determination, if adopted, would have no significant economic 
impact on a substantial number of small entities. Accordingly, DOE has 
not prepared an IRFA for this proposed determination. DOE will transmit 
this certification and supporting statement of factual basis to the 
Chief Counsel for Advocacy of the Small Business Administration for 
review under 5 U.S.C. 605(b).

C. Review Under the Paperwork Reduction Act

    This proposed determination, which proposes to determine that 
amended energy conservation standards for PTACs and PTHPs are unneeded 
under the applicable statutory criteria, would impose no new 
informational or recordkeeping requirements. Accordingly, OMB clearance 
is not required under the Paperwork Reduction Act. (44 U.S.C. 3501 et 
seq.)

D. Review Under the National Environmental Policy Act of 1969

    DOE is analyzing this proposed action in accordance with the 
National Environmental Policy Act of 1969 (``NEPA'') and DOE's NEPA 
implementing regulations (10 CFR part 1021). DOE's regulations include 
a categorical exclusion for actions which are interpretations or 
rulings with respect to existing regulations. 10 CFR part 1021, subpart 
D, appendix A4. DOE anticipates that this action qualifies for 
categorical exclusion A4 because it is an interpretation or ruling in 
regard to an existing regulation and otherwise meets the requirements 
for application of a categorical exclusion. See 10 CFR 1021.410. DOE 
will complete its NEPA review before issuing the final action.

E. Review Under Executive Order 13132

    E.O. 13132, ``Federalism,'' 64 FR 43255 (Aug. 10, 1999), imposes 
certain requirements on Federal agencies formulating and implementing 
policies or regulations that preempt State law or that have federalism 
implications. The E.O. requires agencies to examine the constitutional 
and statutory authority supporting any action that would limit the 
policymaking discretion of the States and to carefully assess the 
necessity for such actions. The E.O. also requires agencies to have an 
accountable process to ensure meaningful and timely input by State and 
local officials in the development of regulatory policies that have 
federalism implications. On March 14, 2000, DOE published a statement 
of policy describing the intergovernmental consultation process it will 
follow in the development of such regulations. 65 FR 13735. DOE has 
examined this proposed determination and has tentatively determined 
that it would not have a substantial direct effect on the States, on 
the relationship between the national government and the States, or on 
the distribution of power and responsibilities among the various levels 
of government. EPCA governs and prescribes Federal preemption of State 
regulations as to energy conservation for the equipment that are the 
subject of this proposed rule. States can petition DOE for exemption 
from such preemption to the extent, and based on criteria, set forth in 
EPCA. (42 U.S.C. 6316 (b); 42 U.S.C. 6297) Therefore, no further action 
is required by E.O. 13132.

F. Review Under Executive Order 12988

    With respect to the review of existing regulations and the 
promulgation of new regulations, section 3(a) of E.O. 12988, ``Civil 
Justice Reform,'' imposes on Federal agencies the general duty to 
adhere to the following requirements: (1) eliminate drafting errors and 
ambiguity, (2) write regulations to minimize litigation, (3) provide a 
clear legal standard for affected conduct rather than a general 
standard, and (4) promote simplification and burden reduction. 61 FR 
4729 (Feb. 7, 1996). Regarding the review required by section 3(a), 
section 3(b) of E.O. 12988 specifically requires that executive 
agencies make every reasonable effort to ensure that the regulation: 
(1) clearly specifies the preemptive effect, if any, (2) clearly 
specifies any effect on existing Federal law or regulation, (3) 
provides a clear legal standard for affected conduct while promoting 
simplification and burden reduction, (4) specifies the retroactive 
effect, if any, (5) adequately defines key terms, and (6) addresses 
other important issues affecting clarity and general draftsmanship 
under any guidelines issued by the Attorney General. Section 3(c) of 
E.O. 12988 requires executive agencies to review regulations in light 
of applicable standards in section 3(a) and section 3(b) to determine 
whether they are met or it is unreasonable to meet one or more of them. 
DOE has completed the required review and determined that, to the 
extent permitted by law, this proposed determination meets the relevant 
standards of E.O. 12988.

[[Page 37966]]

G. Review Under the Unfunded Mandates Reform Act of 1995

    Title II of the Unfunded Mandates Reform Act of 1995 (``UMRA'') 
requires each Federal agency to assess the effects of Federal 
regulatory actions on State, local, and Tribal governments and the 
private sector. Public Law 104-4, sec. 201 (codified at 2 U.S.C. 1531). 
For a proposed regulatory action likely to result in a rule that may 
cause the expenditure by State, local, and Tribal governments, in the 
aggregate, or by the private sector of $100 million or more in any one 
year (adjusted annually for inflation), section 202 of UMRA requires a 
Federal agency to publish a written statement that estimates the 
resulting costs, benefits, and other effects on the national economy. 
(2 U.S.C. 1532(a), (b)) The UMRA also requires a Federal agency to 
develop an effective process to permit timely input by elected officers 
of State, local, and Tribal governments on a proposed ``significant 
intergovernmental mandate,'' and requires an agency plan for giving 
notice and opportunity for timely input to potentially affected small 
governments before establishing any requirements that might 
significantly or uniquely affect them. On March 18, 1997, DOE published 
a statement of policy on its process for intergovernmental consultation 
under UMRA. 62 FR 12820. DOE's policy statement is also available at 
www.energy.gov/sites/prod/files/gcprod/documents/umra_97.pdf.
    DOE examined this proposed determination according to UMRA and its 
statement of policy and determined that the proposed determination does 
not contain a Federal intergovernmental mandate, nor is it expected to 
require expenditures of $100 million or more in any one year by State, 
local, and Tribal governments, in the aggregate, or by the private 
sector. As a result, the analytical requirements of UMRA do not apply.

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

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

I. Review Under Executive Order 12630

    Pursuant to E.O. 12630, ``Governmental Actions and Interference 
with Constitutionally Protected Property Rights,'' 53 FR 8859 (Mar. 15, 
1988), DOE has determined that this proposed determination would not 
result in any takings that might require compensation under the Fifth 
Amendment to the U.S. Constitution.

J. Review Under the Treasury and General Government Appropriations Act, 
2001

    Section 515 of the Treasury and General Government Appropriations 
Act, 2001 (44 U.S.C. 3516 note) provides for Federal agencies to review 
most disseminations of information to the public under information 
quality guidelines established by each agency pursuant to general 
guidelines issued by OMB. OMB's guidelines were published at 67 FR 8452 
(Feb. 22, 2002), and DOE's guidelines were published at 67 FR 62446 
(Oct. 7, 2002). Pursuant to OMB Memorandum M-19-15, Improving 
Implementation of the Information Quality Act (April 24, 2019), DOE 
published updated guidelines which are available at www.energy.gov/sites/prod/files/2019/12/f70/DOE%20Final%20Updated%20IQA%20Guidelines%20Dec%202019.pdf. DOE has 
reviewed this NOPD under the OMB and DOE guidelines and has concluded 
that it is consistent with applicable policies in those guidelines.

K. Review Under Executive Order 13211

    E.O. 13211, ``Actions Concerning Regulations That Significantly 
Affect Energy Supply, Distribution, or Use,'' 66 FR 28355 (May 22, 
2001), requires Federal agencies to prepare and submit to the OIRA at 
OMB, a Statement of Energy Effects for any proposed significant energy 
action. A ``significant energy action'' is defined as any action by an 
agency that promulgates or is expected to lead to promulgation of a 
final rule, and that (1) is a significant regulatory action under E.O. 
12866, or any successor E.O.; and (2) is likely to have a significant 
adverse effect on the supply, distribution, or use of energy, or (3) is 
designated by the Administrator of OIRA as a significant energy action. 
For any proposed significant energy action, the agency must give a 
detailed statement of any adverse effects on energy supply, 
distribution, or use should the proposal be implemented, and of 
reasonable alternatives to the action and their expected benefits on 
energy supply, distribution, and use.
    This proposed determination, which does not propose to amend energy 
conservation standards for PTACs and PTHPs, is not a significant 
regulatory action under E.O. 12866. Moreover, it would not have a 
significant adverse effect on the supply, distribution, or use of 
energy, nor has it been designated as such by the Administrator at 
OIRA. Accordingly, DOE has not prepared a Statement of Energy Effects.

L. Review Under the Information Quality Bulletin for Peer Review

    On December 16, 2004, OMB, in consultation with the Office of 
Science and Technology Policy (``OSTP''), issued its Final Information 
Quality Bulletin for Peer Review (``the Bulletin''). 70 FR 2664 (Jan. 
14, 2005). The Bulletin establishes that certain scientific information 
shall be peer reviewed by qualified specialists before it is 
disseminated by the Federal Government, including influential 
scientific information related to agency regulatory actions. The 
purpose of the bulletin is to enhance the quality and credibility of 
the Government's scientific information. Under the Bulletin, the energy 
conservation standards rulemaking analyses are ``influential scientific 
information,'' which the Bulletin defines as ``scientific information 
the agency reasonably can determine will have, or does have, a clear 
and substantial impact on important public policies or private sector 
decisions.'' Id. at 70 FR 2667.
    In response to OMB's Bulletin, DOE conducted formal peer reviews of 
the energy conservation standards development process and the analyses 
that are typically used and has prepared Peer Review report pertaining 
to the energy conservation standards rulemaking analyses.\58\ 
Generation of this report involved a rigorous, formal, and documented 
evaluation using objective criteria and qualified and independent 
reviewers to make a judgment as to the technical/scientific/business 
merit, the actual or anticipated results, and the productivity and 
management effectiveness of programs and/or projects. Because available 
data, models, and technological understanding have changed since 2007, 
DOE has engaged with the National Academy of Sciences to review DOE's 
analytical methodologies to ascertain whether modifications are needed 
to improve the Department's analyses.

[[Page 37967]]

DOE is in the process of evaluating the resulting report.\59\
---------------------------------------------------------------------------

    \58\ ``Energy Conservation Standards Rulemaking Peer Review 
Report.'' 2007. Available at www.energy.gov/eere/buildings/downloads/energy-conservation-standards-rulemaking-peer-review-report-0 (last accessed April 15, 2022).
    \59\ The report is available at www.nationalacademies.org/our-work/review-of-methods-for-setting-building-and-equipment-performance-standards.
---------------------------------------------------------------------------

VII. Public Participation

A. Participation in the Webinar

    The time and date of the webinar are listed in the DATES section at 
the beginning of this document. Webinar registration information, 
participant instructions, and information about the capabilities 
available to webinar participants will be published on DOE's website: 
www1.eere.energy.gov/buildings/appliance_standards/standards.aspx?productid=46&action=viewcurrent. Participants are 
responsible for ensuring their systems are compatible with the webinar 
software.

B. Procedure for Submitting Prepared General Statements for 
Distribution

    Any person who has an interest in the topics addressed in this 
NOPD, or who is representative of a group or class of persons that has 
an interest in these issues, may request an opportunity to make an oral 
presentation at the webinar. Such persons may submit requests to speak 
to [email protected]. Persons who wish to speak 
should include with their request a computer file in WordPerfect, 
Microsoft Word, PDF, or text (ASCII) file format that briefly describes 
the nature of their interest in this proposed determination and the 
topics they wish to discuss. Such persons should also provide a daytime 
telephone number where they can be reached.

C. Conduct of the Webinar

    DOE will designate a DOE official to preside at the webinar/public 
meeting and may also use a professional facilitator to aid discussion. 
The meeting will not be a judicial or evidentiary-type public hearing, 
but DOE will conduct it in accordance with section 336 of EPCA (42 
U.S.C. 6306). A court reporter will be present to record the 
proceedings and prepare a transcript. DOE reserves the right to 
schedule the order of presentations and to establish the procedures 
governing the conduct of the webinar/public meeting. There shall not be 
discussion of proprietary information, costs or prices, market share, 
or other commercial matters regulated by U.S. anti-trust laws. After 
the webinar/public meeting and until the end of the comment period, 
interested parties may submit further comments on the proceedings and 
any aspect of the proposed determination.
    The webinar will be conducted in an informal, conference style. DOE 
will present a general overview of the topics addressed in this 
rulemaking, allow time for prepared general statements by participants, 
and encourage all interested parties to share their views on issues 
affecting this proposed determination. Each participant will be allowed 
to make a general statement (within time limits determined by DOE), 
before the discussion of specific topics. DOE will permit, as time 
permits, other participants to comment briefly on any general 
statements.
    At the end of all prepared statements on a topic, DOE will permit 
participants to clarify their statements briefly. Participants should 
be prepared to answer questions by DOE and by other participants 
concerning these issues. DOE representatives may also ask questions of 
participants concerning other matters relevant to this proposed 
determination. The official conducting the webinar/public meeting will 
accept additional comments or questions from those attending, as time 
permits. The presiding official will announce any further procedural 
rules or modification of the above procedures that may be needed for 
the proper conduct of the webinar/public meeting.
    A transcript of the webinar/public meeting will be included in the 
docket, which can be viewed as described in the Docket section at the 
beginning of this NOPD. In addition, any person may buy a copy of the 
transcript from the transcribing reporter.

D. Submission of Comments

    DOE will accept comments, data, and information regarding this 
proposed determination no later than the date provided in the DATES 
section at the beginning of this proposed rule. Interested parties may 
submit comments, data, and other information using any of the methods 
described in the ADDRESSES section at the beginning of this document.
    Submitting comments via www.regulations.gov. The 
www.regulations.gov web page will require you to provide your name and 
contact information. Your contact information will be viewable to DOE 
Building Technologies staff only. Your contact information will not be 
publicly viewable except for your first and last names, organization 
name (if any), and submitter representative name (if any). If your 
comment is not processed properly because of technical difficulties, 
DOE will use this information to contact you. If DOE cannot read your 
comment due to technical difficulties and cannot contact you for 
clarification, DOE may not be able to consider your comment.
    However, your contact information will be publicly viewable if you 
include it in the comment itself or in any documents attached to your 
comment. Any information that you do not want to be publicly viewable 
should not be included in your comment, nor in any document attached to 
your comment. Otherwise, persons viewing comments will see only first 
and last names, organization names, correspondence containing comments, 
and any documents submitted with the comments.
    Do not submit to www.regulations.gov information for which 
disclosure is restricted by statute, such as trade secrets and 
commercial or financial information (hereinafter referred to as 
Confidential Business Information (``CBI'')). Comments submitted 
through www.regulations.gov cannot be claimed as CBI. Comments received 
through the 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 www.regulations.gov before 
posting. Normally, comments will be posted within a few days of being 
submitted. However, if large volumes of comments are being processed 
simultaneously, your comment may not be viewable for up to several 
weeks. Please keep the comment tracking number that www.regulations.gov 
provides after you have successfully uploaded your comment.
    Submitting comments via email, hand delivery/courier, or postal 
mail. Comments and documents submitted via email, hand delivery/
courier, or postal mail also will be posted to www.regulations.gov. If 
you do not want your personal contact information to be publicly 
viewable, do not include it in your comment or any accompanying 
documents. Instead, provide your contact information in a cover letter. 
Include your first and last names, email address, telephone number, and 
optional mailing address. The cover letter will not be publicly 
viewable as long as it does not include any comments. Include contact 
information each time you submit comments, data, documents, and other 
information to DOE. If you submit via postal mail or hand delivery/
courier, please provide all items on a CD, if feasible, in which case 
it is not necessary to submit

[[Page 37968]]

printed copies. No faxes will be accepted.
    Comments, data, and other information submitted to DOE 
electronically should be provided in PDF (preferred), Microsoft Word or 
Excel, WordPerfect, or text (ASCII) file format. Provide documents that 
are not secured, that are written in English, and that are free of any 
defects or viruses. Documents should not contain special characters or 
any form of encryption and, if possible, they should carry the 
electronic signature of the author.
    Campaign form letters. Please submit campaign form letters by the 
originating organization in batches of between 50 to 500 form letters 
per PDF or as one form letter with a list of supporters' names compiled 
into one or more PDFs. This reduces comment processing and posting 
time.
    Confidential Business Information. Pursuant to 10 CFR 1004.11, any 
person submitting information that he or she believes to be 
confidential and exempt by law from public disclosure should submit via 
email to [email protected] 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. 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).

VIII. Approval of the Office of the Secretary

    The Secretary of Energy has approved publication of this 
notification of proposed determination and request for comment.

Signing Authority

    This document of the Department of Energy was signed on June 15, 
2022, by Kelly J. Speakes-Backman, Principal Deputy Assistant Secretary 
for 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 June 15, 2022.
Treena V. Garrett,
Federal Register Liaison Officer, U.S. Department of Energy.
[FR Doc. 2022-13224 Filed 6-23-22; 8:45 am]
BILLING CODE 6450-01-P