[Federal Register Volume 87, Number 235 (Thursday, December 8, 2022)]
[Proposed Rules]
[Pages 75388-75421]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-26024]



[[Page 75387]]

Vol. 87

Thursday,

No. 235

December 8, 2022

Part III





Department of Energy





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10 CFR Part 431





Energy Conservation Program: Energy Conservation Standards for Single 
Package Vertical Units; Proposed Rule

  Federal Register / Vol. 87, No. 235 / Thursday, December 8, 2022 / 
Proposed Rules  

[[Page 75388]]


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DEPARTMENT OF ENERGY

10 CFR Part 431

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


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

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

ACTION: Notice of proposed rulemaking; notification of proposed 
determination and announcement of public meeting.

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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 single 
package vertical air conditioners (SPVACs) and single package vertical 
heat pumps (SPVHPs), collectively referred to as single package 
vertical units (SPVUs). EPCA also requires the U.S. Department of 
Energy (DOE) to periodically review standards. In this notice of 
proposed rulemaking (NOPR); notification of proposed determination 
(NOPD), DOE proposes to amend the current energy conservation standards 
for SPVUs such that the existing standard levels would be based on a 
new cooling efficiency metric of Integrated Energy Efficiency Ratio 
(IEER) for SPVACs and SPVHPs, and the current heating efficiency metric 
of Coefficient of Performance (COP) for SPVHPs (but without any 
increase in stringency), In addition, DOE has initially determined that 
more-stringent standards for SPVUs would not be economically justified 
and would not result in a significant conservation of energy. DOE also 
announces a public meeting to receive comment on these proposed 
standards and associated analyses and results.

DATES: Comments: DOE will accept comments, data, and information 
regarding this NOPR/NOPD no later than February 6, 2023.
    Meeting: DOE will hold a public meeting via webinar on Monday, 
January 9th, 2023, from 1:00 p.m. to 4:00 p.m. See section VIII, 
``Public Participation,'' for webinar registration information, 
participant instructions, and information about the capabilities 
available to webinar participants.
    Comments regarding the likely competitive impact of the proposed 
standard should be sent to the Department of Justice contact listed in 
the ADDRESSES section on or before January 9, 2023. DOE notes that the 
Department of Justice is required to transmit its determination 
regarding the competitive impact of the proposed standard to DOE no 
later than February 6, 2023. Commenters who want to have their comments 
considered by DOE as part of any further rulemaking resulting from this 
NOPR/NOPD also should submit such comments to DOE in accordance with 
the procedures detailed in this proposal.

ADDRESSES: Interested persons are encouraged to submit comments using 
the Federal eRulemaking Portal at www.regulations.gov, under docket 
number EERE-2019-BT-STD-0033. Follow the instructions for submitting 
comments. Alternatively, interested persons may submit comments, 
identified by docket number EERE-2019-BT-STD-0033 and/or RIN 1904-AE78, 
by any of the following methods:
    Email: [email protected]. Include the docket number EERE-2019-
BT-STD-0033 and/or RIN 1904-AE78 in the subject line of the message.
    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.
    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 VIII of this document (Public Participation).
    Docket: The docket for this activity, which includes Federal 
Register notices, 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 those 
containing information that is exempt from public disclosure.
    The docket web page can be found at: www.regulations.gov/search/docket?filter=EERE-2019-BT-STD-0033. The docket web page contains 
instructions on how to access all documents, including public comments, 
in the docket. See section VIII (Public Participation) of this document 
for information on how to submit comments through www.regulations.gov.
    EPCA requires the U.S. Attorney General to provide DOE a written 
determination of whether the proposed standard is likely to lessen 
competition. The U.S. Department of Justice (DOJ) Antitrust Division 
invites input from market participants and other interested persons 
with views on the likely competitive impact of the proposed standard. 
Interested persons may contact the Antitrust Division at 
[email protected] in advance of the date specified in the 
DATES section. Please indicate in the ``Subject'' line of your email 
the title and Docket Number of this rulemaking.

FOR FURTHER INFORMATION CONTACT: Ms. Catherine Rivest, U.S. Department 
of Energy, Office of Energy Efficiency and Renewable Energy, Building 
Technologies Office, EE-5B, 1000 Independence Avenue SW, Washington, 
DC, 20585-0121. Telephone: (202) 586-7335. Email: 
[email protected].
    Mr. Eric Stas, U.S. Department of Energy, Office of the General 
Counsel, GC-33, 1000 Independence Avenue SW, Washington, DC, 20585-
0121. Telephone: (202) 586-5827. Email: [email protected].
    For further information on how to submit a comment, review other 
public comments and the docket, or participate in the public meeting 
webinar, 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 Rule
II. Introduction
    A. Authority
    B. Background
    1. Current Standards
    2. History of the Current Energy Conservation Standards 
Rulemaking for SPVUs
    C. Deviation From Appendix A
III. General Discussion
    A. Scope of Coverage
    B. Equipment Classes
    C. Test Procedure and Efficiency Metrics
    D. Technological Feasibility
    1. General
    2. Maximum Technologically Feasible Levels
    E. Energy Savings
    F. Economic Justification

[[Page 75389]]

    1. Economic Impact on Consumers and Manufacturers
    2. Savings in Operating Costs Compared to Increase in Price (LCC 
and PBP)
    3. Energy Savings
    4. Lessening of Utility or Performance of Equipment
    5. Impact of Any Lessening of Competition
    6. Need for National Energy Conservation
    7. Other Factors
IV. Crosswalk Analysis
V. Methodology and Discussion of Related Comments
    A. Market and Technology Assessment
    1. Equipment Classes
    2. Technology Options
    B. Screening Analysis
    C. Engineering Analysis
    1. Efficiency Analysis
    a. Baseline Efficiency Levels
    b. Higher Efficiency Levels
    2. Cost Analysis
    3. Cost-Efficiency Results
    D. Markups Analysis
    E. Energy Use Analysis
    F. Life-Cycle Cost and Payback Period Analysis
    1. 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
VI. Analytical Results and Conclusions
    A. Economic Impacts on SPVU Consumers
    B. Proposed Determination
    1. Technological Feasibility
    2. Economic Justification
    3. Significant Additional Energy Savings
    4. Summary
VII. Procedural Issues and Regulatory Review
    A. Review Under Executive Orders 12866 and 13563
    B. Review Under the Regulatory Flexibility Act
    C. Review Under the Paperwork Reduction Act of 1995
    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
VIII. Public Participation
    A. Participation in the Public Meeting Webinar
    B. Procedure for Submitting Prepared General Statements for 
Distribution
    C. Conduct of the Public Meeting Webinar
    D. Submission of Comments
    E. Issues on Which DOE Seeks Comment
IX. Approval of the Office of the Secretary

I. Synopsis of the Proposed Rule

    The Energy Policy and Conservation Act,\1\ as amended, Public Law 
94-163 (42 U.S.C. 6291-6317, as codified) authorizes DOE to regulate 
the energy efficiency of a number of consumer products and certain 
industrial equipment. Title III, part C \2\ of EPCA, established the 
Energy Conservation Program for Certain Industrial Equipment. (42 
U.S.C. 6311-6317) This equipment includes single package vertical air 
conditioners (SPVACs) and single package vertical heat pumps (SPVHPs), 
collectively referred to as single package vertical units (SPVUs), the 
subject of this proposed rulemaking. SPVUs are a category of commercial 
package air conditioning and heating equipment. (42 U.S.C. 6311(1)(B)-
(D); 42 U.S.C. 6313(a)(10))
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    \1\ All references to EPCA in this document refer to the statute 
as amended through the Energy Act of 2020, Public Law 116-260 (Dec. 
27, 2020), which reflect the last statutory amendments that impact 
parts A and A-1 of EPCA.
    \2\ For editorial reasons, upon codification in the U.S. Code, 
part C was redesignated part A-1.
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    Pursuant to EPCA, DOE must consider amending the Federal energy 
efficiency standards for certain types of commercial and industrial 
equipment, including the equipment at issue in this document, whenever 
the Department is triggered by the American Society of Heating, 
Refrigerating, and Air-Conditioning Engineers (ASHRAE) acting to amend 
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). (42 U.S.C. 
6313(a)(6)(A)-(B)) In addition, EPCA contains an independent review 
requirement for this same equipment (the 6-year-lookback review), which 
requires DOE to consider the need for amended standards every six 
years. To adopt standard levels more stringent than those contained in 
ASHRAE Standard 90.1, DOE must have clear and convincing evidence to 
show that such standards would be technologically feasible and 
economically justified and would save a significant additional amount 
of energy. (42 U.S.C. 6313(a)(6)(C)) DOE is conducting this proposed 
rulemaking under EPCA's 6-year-lookback review authority.
    The current Federal energy conservation standards for SPVUs are set 
forth at title 10 of the Code of Federal Regulations (CFR), 10 CFR 
431.97(d) and, as specified in 10 CFR 431.96, those standards are 
denominated in terms of the cooling efficiency metric, Energy 
Efficiency Ratio (EER) and the heating efficiency metric, Coefficient 
of Performance (COP), and based on the rating conditions in American 
National Standards Institute (ANSI)/Air-Conditioning, Heating, and 
Refrigeration Institute (AHRI) Standard 390-2003, ``Performance Rating 
of Single Package Vertical Air-Conditioners and Heat Pumps'' (ANSI/AHRI 
390-2003). ASHRAE Standard 90.1-2019 references this same industry test 
standard.
    On June 24, 2021, AHRI published AHRI Standard 390-2021, 
``Performance Rating of Single Package Vertical Air-Conditioners and 
Heat Pumps'' (AHRI 390-2021), which supersedes ANSI/AHRI 390-2003. AHRI 
390-2021, which was developed as part of an industry consensus process, 
includes revisions that DOE determined improve the representativeness, 
repeatability, and reproducibility of the test methods. Among other 
things, AHRI 390-2021 maintains the existing efficiency metrics--EER 
for cooling mode and COP for heating mode--but it also added a seasonal 
efficiency metric that includes part-load cooling performance--the 
Integrated Energy Efficiency Ratio (IEER). In November 2022, DOE issued 
a Test Procedure Final Rule for SPVUs that amended the test procedures 
for SPVUs to incorporate by reference AHRI 390-2021. As discussed in 
section III.C of this document, DOE has determined that the IEER metric 
is more representative of the cooling efficiency for SPVUs on an annual 
basis than the current EER metric. As a result, DOE is proposing to 
amend the standards for SPVUs to be based on the seasonal cooling 
metric, IEER, and the existing heating metric, COP. As discussed in 
section IV of this document, DOE conducted a crosswalk analysis to 
develop IEER levels that are of equivalent stringency to the current 
EER standard levels.\3\
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    \3\ EPCA provides that in the case of any amended test procedure 
where DOE deviates from the industry test standard referenced in 
ASHRAE Standard 90.1, DOE must determine, to what extent, if any, 
the proposed test procedure would alter the measured energy 
efficiency, measured energy use, or measured water use of the 
subject ASHRAE equipment as determined under the existing test 
procedure. (See 42 U.S.C 6293(e); 42 U.S.C. 6314(a)(4)(C)) DOE 
refers to this as the ``crosswalk'' analysis.
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    To satisfy its review obligations under EPCA's 6-year-lookback 
provision, DOE analyzed the technological feasibility of more energy-
efficient SPVUs. For those SPVUs for which DOE determined higher 
standards to be technologically feasible, DOE evaluated whether higher 
standards would be economically justified by conducting life-cycle cost 
(LCC) and payback period (PBP)

[[Page 75390]]

analyses. As discussed in the following sections, DOE has tentatively 
determined that it lacks the clear and convincing evidence required 
under the statute to show that amended standards would be economically 
justified. DOE did not conduct a national impact analysis to measure 
the national energy savings of higher efficiency levels, because the 
weighted average LCC savings were strongly negative across the four 
equipment classes.
    Based on the results of the analyses conducted, summarized in 
section VI of this document, DOE has tentatively determined that it 
lacks clear and convincing evidence that amended standards for SPVUs, 
in terms of IEER and COP, that are more stringent than the current 
standards for SPVUs would be economically justified. The clear and 
convincing threshold is a heightened standard and would only be met 
where the Secretary has an abiding conviction, based on available 
facts, data, and DOE's own analyses, that it is highly probable an 
amended standard would result in a significant additional amount of 
energy savings, and is technologically feasible and economically 
justified. See American Public Gas Association v. U.S. Dep't of Energy, 
No. 20-1068, 2022 WL 151923, at *4 (D.C. Cir. Jan. 18, 2022) (citing 
Colorado v. New Mexico, 467 U.S. 310, 316, 104 S.Ct. 2433, 81 L.Ed.2d 
247 (1984)). DOE did not conduct the shipments analysis, manufacturer 
impact analysis, and other such analyses typically conducted at the 
NOPR stage due to the results of the initial analysis conducted 
(discussed in further detail elsewhere in this document).
    In this NOPR/NOPD, DOE is proposing to adopt standards based on 
IEER and COP that are of equivalent stringency as the current DOE 
energy conservation standard levels and the current standard levels 
specified in ASHRAE Standard 90.1-2019. The proposed standards are 
presented in Table I-1. These proposed standards, if adopted, would 
apply to all SPVUs listed in Table I-1 manufactured in, or imported 
into, the United States starting on the tentative compliance date of 
360 days after the publication in the Federal Register of the final 
rule for this rulemaking. See section VI.B of this NOPR/NOPD for a 
discussion on the applicable lead-times considered to determine this 
compliance date.

       Table I-1--Proposed Energy Conservation Standards for SPVUs
------------------------------------------------------------------------
             Equipment class                  Proposed standard level
------------------------------------------------------------------------
SPVAC <65,000 Btu/h......................  IEER = 12.5
SPVHP <65,000 Btu/h......................  IEER = 12.5
                                           COP = 3.3
SPVAC >=65,000 Btu/h and <135,000 Btu/h..  IEER = 10.3
SPVHP >=65,000 Btu/h and <135,000 Btu/h..  IEER = 10.3
                                           COP = 3.0
SPVAC >=135,000 Btu/h and <240,000 Btu/h.  IEER = 11.2
SPVHP >=135,000 Btu/h and <240,000 Btu/h.  IEER = 11.2
                                           COP = 3.0
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II. Introduction

    The following section briefly discusses the statutory authority 
underlying this proposal, as well as some of the relevant historical 
background related to the establishment of energy conservation 
standards for SPVUs.

A. Authority

    EPCA, Pub. L. 94-163, as amended, among other things, authorizes 
DOE to regulate the energy efficiency of a number of consumer products 
and certain industrial equipment. Title III, part C of EPCA, added by 
Public Law 95-619, title IV, section 441(a), (42 U.S.C. 6311-6317, as 
codified), established the Energy Conservation Program for Certain 
Industrial Equipment, which sets forth a variety of provisions designed 
to improve energy efficiency. This equipment includes SPVUs, which are 
a category of small, large, and very large commercial package air 
conditioning and heating equipment and the subject of this document. 
(42 U.S.C. 6311(1)(B)-(D); 42 U.S.C. 6313(a)(10)) EPCA prescribed 
initial standards for these products. (42 U.S.C. 6313(a)(1)-(2)) 
Congress updated the standards for SPVUs through amendments to EPCA 
contained in the Energy Independence and Security Act of 2007 (EISA 
2007), Public Law 110-140 (Dec. 19, 2007). (42 U.S.C. 6313(a)(10)) 
Additionally, DOE is triggered to consider amending the energy 
conservation standards for certain types of commercial and industrial 
equipment, including the equipment at issue in this document, whenever 
ASHRAE amends the standard levels or design requirements prescribed in 
ASHRAE/IES Standard 90.1, and independent of that requirement, a 
separate provision of EPCA requires DOE to consider amended standards 
for that equipment at a minimum, every six years. (42 U.S.C. 
6313(a)(6)(A)-(C))
    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), energy conservation standards (42 U.S.C. 6313), test procedures 
(42 U.S.C. 6314), labeling provisions (42 U.S.C. 6315), and the 
authority to require information and reports from manufacturers (42 
U.S.C. 6316; 42 U.S.C. 6296).
    Federal energy efficiency requirements for covered equipment 
established under EPCA generally supersede State laws and regulations 
concerning energy conservation testing, labeling, and standards. (42 
U.S.C. 6316(a) and (b); 42 U.S.C. 6297) DOE may, however, grant waivers 
of Federal preemption for particular State laws or regulations, in 
accordance with the procedures and other provisions set forth under 
EPCA. (42 U.S.C. 6316(b)(2)(D))
    Under 42 U.S.C. 6314, EPCA sets forth the criteria and procedures 
DOE is required to follow when prescribing or amending test procedures 
for covered equipment. EPCA requires that any test procedures 
prescribed or amended under this section must be reasonably designed to 
produce test results which reflect energy efficiency, energy use, or 
estimated annual operating cost of a given type of covered equipment 
during a representative average use cycle and requires that test 
procedures not be unduly burdensome to conduct. (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 SPVUs appear at 10 CFR part 
431, subpart F, appendices G and G1.
    ASHRAE Standard 90.1 sets industry energy efficiency levels for 
small, large, and very large commercial package air-conditioning and 
heating equipment, packaged terminal air conditioners, packaged 
terminal heat pumps, warm air furnaces, packaged boilers, storage water 
heaters, instantaneous water heaters, and unfired hot water storage 
tanks (collectively referred to as

[[Page 75391]]

``ASHRAE equipment''). For each type of listed equipment, EPCA directs 
that if ASHRAE amends Standard 90.1, DOE must adopt amended standards 
at the new ASHRAE efficiency level, unless DOE determines, supported by 
clear and convincing evidence, that adoption of a more-stringent level 
would produce significant additional conservation of energy and would 
be technologically feasible and economically justified. (42 U.S.C. 
6313(a)(6)(A)(ii)) Under EPCA, DOE must also review energy efficiency 
standards for SPVUs every six years and either: (1) issue a notice of 
determination that the standards do not need to be amended as adoption 
of a more-stringent level is not supported by clear and convincing 
evidence; or (2) issue a notice of proposed rulemaking including new 
proposed standards based on certain criteria and procedures in 
subparagraph (B) of 42 U.S.C. 6313(a)(6). (42 U.S.C. 6313(a)(6)(C))
    In deciding whether a more-stringent standard is economically 
justified, under either the provisions of 42 U.S.C. 6313(a)(6)(A) or 42 
U.S.C. 6313(a)(6)(C), DOE must determine whether the benefits of the 
standard exceed its burdens. DOE must make this determination after 
receiving comments on the proposed standard, and by considering, to the 
maximum extent practicable, the following seven factors:
    (1) The economic impact of the standard on manufacturers and 
consumers of equipment subject to the standard;
    (2) The savings in operating costs throughout the estimated average 
life of the covered equipment in the type (or class) compared to any 
increase in the price, initial charges, or maintenance expenses for the 
covered equipment that are likely to result from the standard;
    (3) The total projected amount of energy savings likely to result 
directly from the standard;
    (4) Any lessening of the utility or the performance of the covered 
equipment likely to result from the standard;
    (5) The impact of any lessening of competition, as determined in 
writing by the Attorney General, that is likely to result from the 
standard;
    (6) The need for national energy conservation; and
    (7) Other factors the Secretary of Energy considers relevant.
    (42 U.S.C. 6313(a)(6)(B)(ii)(I)-(VII))
    Further, EPCA establishes a rebuttable presumption that an energy 
conservation standard is economically justified if the Secretary finds 
that the additional cost to the consumer of purchasing a product that 
complies with the standard will be less than three times the value of 
the energy (and, as applicable, water) savings during the first year 
that the consumer will receive as a result of the standard, as 
calculated under the applicable test procedure. (42 U.S.C. 
6295(o)(2)(B)(iii)) However, while this rebuttable presumption analysis 
applies to most commercial and industrial equipment (42 U.S.C. 
6316(a)), it is not a required analysis for ASHRAE equipment (42 U.S.C. 
6316(b)(1)).
    EPCA also contains what is known as an ``anti-backsliding'' 
provision, which prevents the Secretary from prescribing any amended 
standard that either increases the maximum allowable energy use or 
decreases the minimum required energy efficiency of a covered product. 
(42 U.S.C. 6313(a)(6)(B)(iii)(I)) Also, the Secretary may not prescribe 
an amended or new standard if interested persons have established by a 
preponderance of the evidence that the standard is likely to result in 
the unavailability in the United States in any covered product type (or 
class) of performance characteristics (including reliability), 
features, sizes, capacities, and volumes that are substantially the 
same as those generally available in the United States. (42 U.S.C. 
6313(a)(6)(B)(iii)(II)(aa))

B. Background

1. Current Standards
    In a final rule published in the Federal Register on September 23, 
2015 (September 2015 Final Rule), DOE prescribed the current energy 
conservation standards for SPVUs in accordance with the 3-year review 
prescribed by EPCA and in response to the 2013 update to ASHRAE 
Standard 90.1 (ASHRAE Standard 90.1-2013). 80 FR 57438. As part of the 
September 2015 Final Rule, DOE evaluated whether more-stringent 
standards for SPVUs were economically justified consistent with the 
requirements in EPCA at 42 U.S.C. 6313(a)(6)(B)(ii)(I)-(VII). For four 
of the six SPVU equipment classes, DOE adopted the levels specified in 
ASHRAE Standard 90.1-2013. 80 FR 57438, 57439 (Sept. 23, 2015). For the 
remaining two equipment classes, DOE concluded that there was clear and 
convincing evidence that standards more stringent than the levels in 
ASHRAE Standard 90.1-2013 were technologically feasible and 
economically justified and would save a significant additional amount 
of energy. Id. The current energy conservation standards are codified 
at 10 CFR 431.97 and are set forth in Table II-1.

                           Table II-1--Federal Energy Conservation Standards for SPVUs
----------------------------------------------------------------------------------------------------------------
                                                                                               Compliance date:
                                                                                                   products
         Equipment type            Cooling capacity       Subcategory      Efficiency level    manufactured  on
                                                                                                and after . . .
----------------------------------------------------------------------------------------------------------------
Single package vertical air       <65,000 Btu/h.....  AC                  EER = 11.0........  September 23,
 conditioners and single package                                                               2019.
 vertical heat pumps, single-
 phase and three-phase.
                                                      HP                  EER = 11.0........  September 23,
                                                                                               2019.
                                                                          COP = 3.3.........
Single package vertical air       >=65,000 Btu/h and  AC                  EER = 10.0........  October 9, 2015.
 conditioners and single package   <135,000 Btu/h.
 vertical heat pumps.
                                                      HP                  EER = 10.0........  October 9, 2015.
                                                                          COP = 3.0.........
Single package vertical air       >=135,000 Btu/h     AC                  EER = 10.0........  October 9, 2016.
 conditioners and single package   and <240,000 Btu/
 vertical heat pumps.              h.
                                                      HP                  EER = 10.0........
                                                                          COP = 3.0.........  October 9, 2016.
----------------------------------------------------------------------------------------------------------------

    ASHRAE Standard 90.1 has been updated on several occasions since 
the 2013 version, the most recently being released on October 24, 2019 
(i.e., ASHRAE 90.1-2019). The standard levels for SPVUs were revised in 
ASHRAE 90.1-2019 to match the current DOE standard levels.

[[Page 75392]]

2. History of the Current Energy Conservation Standards Rulemaking for 
SPVUs
    On April 24, 2020, DOE published in the Federal Register a request 
for information regarding energy conservation standards for SPVUs 
(April 2020 RFI). 85 FR 22958. The April 2020 RFI solicited information 
from the public to help DOE determine whether amended standards for 
SPVUs would result in significant additional energy savings and whether 
such standards would be technologically feasible and economically 
justified. DOE received comments in response to the April 2020 RFI from 
the interested parties listed in Table II-2.

                                   Table II-2--April 2020 RFI Written Comments
----------------------------------------------------------------------------------------------------------------
              Commenter(s)                       Abbreviation           Docket No.          Commenter  type
----------------------------------------------------------------------------------------------------------------
Air-Conditioning, Heating, &              AHRI......................               9  Manufacturer Trade
 Refrigeration Institute.                                                              Association.
Appliance Standards Awareness Project,    ASAP/ACEEE................              11  Efficiency Advocacy
 American Council for an Energy-                                                       Organizations.
 Efficient Economy.
GE Appliances, a Haier company..........  GE........................               7  Manufacturer.
Institute for Policy Integrity at New     NYU.......................               5  Educational Institution.
 York University School of Law.
Lennox International Inc................  Lennox....................               8  Manufacturer.
Northwest Energy Efficiency Alliance....  NEEA......................               6  Efficiency Advocacy
                                                                                       Organization.
Pacific Gas and Electric Company (PG&E),  CA IOUs...................              10  Utilities.
 San Diego Gas and Electric (SDG&E), and
 Southern California Edison (SCE);
 collectively referred to as the
 California Investor-Owned Utilities.
----------------------------------------------------------------------------------------------------------------

    A parenthetical reference at the end of a comment quotation or 
paraphrase provides the location of the item in the public record.\4\
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    \4\ The parenthetical reference provides a reference for 
information located in the docket of DOE's rulemaking to develop 
energy conservation standards for SPVUs. (Docket Number: EERE-2019-
BT-STD-0033, which is maintained at www.regulations.gov). The 
references are arranged as follows: (commenter name, comment docket 
ID number, page of that document).
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    The following provides an overview of the public comments received 
on the April 2020 RFI. In general, AHRI recommended that DOE not amend 
the current minimum energy conservation standards for SPVUs. The 
commenter stated that DOE should wait until the revised edition of the 
industry test procedure for SPVUs has published and has been referenced 
in ASHRAE Standard 90.1. AHRI added that a crosswalk should be 
developed by testing and calculation using current baseline-efficiency 
SPVU equipment to establish the energy conservation standards using the 
new metric. (AHRI, No. 9 at p. 6)
    The CA IOUs recommended DOE investigate increasing the baseline 
efficiency levels for SPVUs in conjunction with establishing standards 
and test procedures that incorporate part-load performance. Based on 
their analysis of DOE's Compliance Certification Database (CCD), the CA 
IOUs noted that over 70 percent of products in each SPVU equipment 
class are at the minimum efficiency level, but many products have 
varied features and compressor configurations that are likely to 
translate into differences in part-load performance. Based on this, the 
CA IOUs encouraged DOE to consider shifting to a more-stringent, full-
load metric. (CA IOUs, No. 10 at p. 2)
    ASAP and ACEEE commented that greater energy savings are possible 
than those evaluated for the September 2015 Final Rule. ASAP and ACEEE 
argued that the most-efficient SPVU models currently available have 
either Energy Efficiency Ratio (EER) or COP ratings that are higher 
than the max-tech levels considered in the September 2015 Final Rule. 
(ASAP/ACEEE, No. 11 at pp. 1-2)
    As discussed in section III.C of this document, DOE has amended its 
test procedures for SPVUs to incorporate by reference the updated 
industry test procedure, AHRI Standard 390-2021, ``Performance Rating 
of Single Package Vertical Air-Conditioners and Heat Pumps'' (AHRI 390-
2021), which includes the existing efficiency metrics--EER for cooling 
mode and COP for heating mode--but it also adds a cooling-mode seasonal 
metric that includes part-load cooling performance--the IEER metric. 
Accordingly, DOE is proposing to amend the energy conservation 
standards for SPVUs to be based on the seasonal cooling metric, IEER, 
and the existing heating metric, COP. As discussed in section IV of 
this document, DOE conducted a crosswalk analysis in collaboration with 
AHRI and SPVU manufacturers to translate the current SPVU standard 
levels based on EER to the new metric, IEER, to establish baseline 
efficiency levels for the current analysis considering the potential 
for more-stringent SPVU standard levels.

C. Deviation From Appendix A

    In accordance with section 3(a) of 10 CFR part 430, subpart C, 
appendix A (appendix A), ``Procedures, Interpretations, and Policies 
for Consideration of New or Revised Energy Conservation Standards and 
Test Procedures for Consumer Products and Certain Commercial/Industrial 
Equipment,'' DOE notes that it is deviating from the provision in 
appendix A regarding the NOPR/NOPD stages for an energy conservation 
standards rulemaking. See 86 FR 70892 (Dec. 13, 2021).
    Section 8(d)(1) of appendix A states that the Department will 
finalize amended test procedures 180 days prior to the close of the 
comment period of a NOPR proposing new or amended standards or a notice 
of proposed determination that standards do not need to be amended. For 
the reasons that follow, DOE finds it necessary and appropriate to 
deviate from this step in appendix A by publishing this NOPR/NOPD such 
that the comment period will end before 180 days has elapsed from the 
publication of the test procedure final rule. As discussed in a final 
rule pertaining to Procedures, Interpretations, and Policies for 
Consideration in New or Revised Energy Conservation Standards and Test 
Procedures for Consumer Products and Commercial/Industrial Equipment, 
the 180-day period may not always be necessary. As an example, DOE 
noted

[[Page 75393]]

that it will typically use an industry test procedure as the basis for 
a new DOE test procedure. If DOE adopts the industry test procedure 
without modification, stakeholders should already be familiar with the 
test procedure. In such cases, requiring the new test procedure to be 
finalized 180 days prior to the close of the comment period for a NOPR 
proposing new energy conservation standards would offer little benefit 
to stakeholders while delaying DOE's promulgation of new energy 
conservation standards. 86 FR 70892, 70896 (Dec. 13, 2021). In this 
analogous case, DOE is deviating from the 180-day provision because it 
has incorporated by reference the industry consensus test procedure for 
SPVUs, AHRI 390-2021. DOE also notes that AHRI 390-2021 was published 
in June 2021, so DOE expects that manufacturers are already familiar 
with the test procedure.

III. General Discussion

    DOE developed this proposal after considering oral and written 
comments, data, and information from interested parties that represent 
a variety of interests. The following discussion addresses issues 
raised by these commenters.

A. Scope of Coverage

    EPCA, as amended by the EISA 2007 defines ``single package vertical 
air conditioner'' and ``single package vertical heat pump'' at 42 
U.S.C. 6311(22) and (23), respectively. In particular, single package 
vertical air conditioners can be single- or three-phase; must have 
major components arranged vertically; must be an encased combination of 
components; and must be intended for exterior mounting on, adjacent 
interior to, or through an outside wall. Single package vertical heat 
pumps are single package vertical air conditioners that use reverse 
cycle refrigeration as their primary heat source and may include 
secondary supplemental heating by means of electrical resistance, 
steam, hot water, or gas. DOE codified the statutory definitions into 
its regulations at 10 CFR 431.92. Additionally, EPCA established 
initial equipment classes and energy conservation standards for SPVUs 
based on cooling capacity, and for those SPVUs with a capacity less 
than 65,000 Btu/h, also based on phase. (42 U.S.C. 6313(a)(10)(A)(i)-
(ii) and (v)-(vi))
    DOE defines an SPVAC as air-cooled commercial package air 
conditioning and heating equipment that: (1) is factory-assembled as a 
single package that: (i) has major components that are arranged 
vertically; (ii) is an encased combination of cooling and optional 
heating components; and (iii) is intended for exterior mounting on, 
adjacent interior to, or through an outside wall; (2) is powered by a 
single-phase or three-phase current; (3) may contain one or more 
separate indoor grilles, outdoor louvers, various ventilation options, 
indoor free air discharges, ductwork, well plenum, or sleeves; and (4) 
has heating components that may include electrical resistance, steam, 
hot water, or gas, but may not include reverse cycle refrigeration as a 
heating means. 10 CFR 431.92. Additionally, DOE defines an SPVHP as a 
single package vertical air conditioner that: (1) uses reverse cycle 
refrigeration as its primary heat source; and (2) may include secondary 
supplemental heating by means of electrical resistance, steam, hot 
water, or gas. Id. The Federal test procedures are applicable to SPVUs 
with a cooling capacity less than 760,000 Btu/h. (42 U.S.C. 
6311(8)(D)(ii)) DOE currently only prescribes energy conservation 
standards for SPVUs less than 240,000 Btu/h (see section III.B of this 
document for details).
    As part of the April 2020 RFI, DOE requested commented on whether 
the definitions for SPVUs should be revised. 80 FR 22958, 22961 (April 
24, 2020). On that topic, AHRI commented that the definitions of SPVAC 
and SPVHP generally remain appropriate and did not suggest any 
modifications. (AHRI, No. 9 at p. 3)
    As part of the most recent energy conservation standards rulemaking 
for SPVUs, DOE published a notice of data availability in the Federal 
Register on April 11, 2014 (April 2014 NODA). 79 FR 20114. In the April 
2014 NODA, DOE noted that ASHRAE Standard 90.1-2013 created a new 
equipment class for SPVACs and SPVHPs used in space-constrained and 
replacement-only applications, with a definition for ``nonweatherized 
space constrained single-package vertical unit'' and efficiency 
standards for the associated equipment class. Id. at 79 FR 20121-20122. 
In the April 2014 NODA, DOE tentatively concluded that there was no 
need to establish a separate space-constrained class for SPVUs, given 
that certain models listed by manufacturers as SPVUs, most of which 
would meet the ASHRAE space-constrained definition, were being 
misclassified and should have been classified as central air 
conditioners (in most cases, space-constrained central air 
conditioners). Id. at 79 FR 20122-20123. DOE reaffirmed this position 
in the NOPR published in the Federal Register on December 30, 2014 NOPR 
(December 2014 NOPR). 79 FR 78614, 78625-78627. In response to the 
December 2014 NOPR, DOE received several comments from stakeholders 
related to the classification of products that these commenters are 
referring to as space-constrained SPVUs, the statutory definition of 
SPVU, how these products are applied in the field or specified for 
purchase, and whether the products warranted a separate equipment class 
within SPVU. In the final rule published in the Federal Register on 
September 23, 2015, DOE stated that it would consider those comments 
and take appropriate action in a separate rulemaking. 80 FR 57438, 
57448. In response to the April 2020 RFI, Lennox commented that this 
remains an important outstanding issue for resolution in order to 
ensure that current products and new entries to the market are treated 
equitably. (Lennox, No. 8 at pp. 1-2)
    In November 2022, DOE issued a final rule to amend the test 
procedure for SPVUs (the November 2022 Test Procedure Final Rule).\5\ 
As part of the November 2022 Test Procedure Final Rule, DOE added 
specific definitions for ``single-phase single package vertical air 
conditioner with cooling capacity less than 65,000 Btu/h'' and 
``single-phase single package vertical heat pump with cooling capacity 
less than 65,000 Btu/h'' to explicitly delineate such equipment from 
certain covered consumer products, such as central air conditioners, 
based on design characteristics. DOE defined this equipment as SPVACs 
and SPVHPs that are either: (1) weatherized, or (2) non-weatherized and 
have the ability to provide a minimum of 400 CFM of outdoor air. As 
discussed in the November 2022 Test Procedure Final Rule, single-phase 
single package products with cooling capacity less than 65,000 Btu/h 
not meeting these definitions would be properly classified as consumer 
central air conditioners, not commercial SPVUs.
---------------------------------------------------------------------------

    \5\ The November 2022 Test Procedure Final Rule is available at: 
https://www1.eere.energy.gov/buildings/appliance_standards/standards.aspx?productid=30.
---------------------------------------------------------------------------

B. Equipment Classes

    EISA 2007, Public Law 110-140, amended EPCA in relevant part by 
establishing equipment classes and minimum energy conservation 
standards for SPVUs. (42 U.S.C. 6313(a)(10)(A)) In doing so, the EISA 
2007 amendments established Federal energy conservation standards for 
SPVUs at levels that generally corresponded to the levels in the 2004 
edition of the American Society of Heating, Refrigerating and Air-

[[Page 75394]]

Conditioning Engineers (ASHRAE) Standard 90.1, Energy Standard for 
Buildings Except Low-Rise Residential Buildings (i.e., ASHRAE Standard 
90.1-2004). On March 23, 2009, DOE published a final rule technical 
amendment in the Federal Register that codified the statutory equipment 
classes and energy conservation standards for SPVUs into DOE's 
regulations in the Code of Federal Regulations (CFR) at 10 CFR 431.97. 
74 FR 12058, 12073-12074. EPCA generally directs DOE to adopt the 
equipment class structure for SPVUs from ASHRAE Standard 90.1. (See 42 
U.S.C. 6313(a)(6)(A)(i)) For SVPUs, the current energy conservation 
standards specified in 10 CFR 431.97 are based on six equipment classes 
\6\ determined according to the following: (1) cooling capacity and (2) 
whether the equipment is an air conditioner or a heat pump. These 
equipment classes are identical to those described in ASHRAE Standard 
90.1.
---------------------------------------------------------------------------

    \6\ Although EPCA divided SPVACs and SPVHPs with < 65,000 Btu/h 
cooling capacity into equipment classes based on the phase of the 
electrical power (see 42 U.S.C. 6313(a)(10)(A)), it set the same 
energy conservation standards for both single-phase and three-phase 
equipment. DOE's current standards, as codified in 10 CFR 431.97, 
divide SPVU equipment into six equipment classes based on the 
cooling capacity and whether the equipment is an air conditioner or 
a heat pump, a class structure consistent with ASHRAE Standard 90.1.

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

C. Test Procedure and Efficiency Metrics

    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 equipment complies with energy conservation 
standards and to quantify the efficiency of their equipment. DOE's 
current energy conservation standards for SPVUs are expressed in terms 
of the full-load cooling metric, EER, and the heating metric, COP. (See 
10 CFR 431.97(d)(3))
    ASHRAE 90.1-2019 references, as the test procedure for SPVUs, ANSI/
AHRI 390-2003, which does not include a seasonal efficiency metric for 
cooling mode. At the time of the April 2020 RFI, DOE's test procedure 
for SPVUs also incorporated by reference ANSI/AHRI 390-2003, omitting 
section 6.4. Hence, DOE's test procedure for SPVUs at that time 
likewise did not include a seasonal metric that accounted for part-load 
performance.
    In response to the April 2020 RFI, NEEA, the CA IOUs, and ASAP/
ACEEE commented that the existing SPVUs test procedure using the full-
load EER metric does not account for the energy savings from variable-
speed fans, multi-stage compressors, electronic expansion valves, and 
other technologies, and that there would likely be significant energy 
savings potential if a part-load metric were to be used. (NEEA, No. 6 
at p. 2; CA IOUs, No. 10 at p. 1; ASAP/ACEEE, No. 11 at pp. 1, 2) NEEA 
and the CA IOUs commented that nearly 25 percent of units in the AHRI 
Directory of Certified Product Performance are rated with the 
integrated part-load value (IPLV) metric (in addition to EER), which 
considers part-load efficiency. (NEEA, No. 6 at pp. 2-3; CA IOUs, No. 
10 at pp. 1-2) NEEA commented that there is a significant range in IPLV 
values for units available on the market (from approximately 13.5 to 17 
IPLV), whereas EER only ranges from 11 to 12.5, with most units at the 
minimum of 11 EER. (NEEA, No. 6 at pp. 2-3) NEEA, the CA IOUs, and 
ASAP/ACEEE recommended that DOE should amend the test procedure for 
SPVUs to consider part-load performance so as to better represent 
performance during an average use cycle. (NEEA, No. 6 at p. 3; CA IOUs, 
No. 10 at p. 2; ASAP/ACEEE, No. 11 at p. 1)
    The CA IOUs added that while part-load performance is key to 
representing an average use cycle, full-load performance is critical 
for enabling utilities to effectively manage grid services. The CA IOUs 
expressed support for a regulatory model in which both full-load EER 
and part-load efficiency are published in the AHRI database. (CA IOUs, 
No. 10 at p. 2)
    AHRI and GE commented at the time of the April 2020 RFI that the 
industry, in collaboration with DOE, was in the process of finalizing a 
revised test procedure for SPVUs that adopts a seasonal cooling mode 
metric, IEER. (AHRI, No. 9 at p. 2; GE, No. 7 at p. 2) AHRI stated that 
any proposal to change the SPVU efficiency metric should be developed 
through the ASHRAE Standard 90.1 process. (AHRI, No. 9 at p. 2; GE, No. 
7 at p. 2)
    In response to these comments, DOE notes that as part of the 
November 2022 Test Procedure Final Rule, the Department amended its 
test procedure for SPVUs to incorporate by reference AHRI 390-2021, the 
latest version of the relevant industry standard. Among other things, 
AHRI 390-2021 maintains the existing efficiency metrics--EER for 
cooling mode and COP for heating mode--but it also added a seasonal 
metric that includes part-load cooling performance--the IEER metric. As 
part of the November 2022 Test Procedure Final Rule, DOE added a new 
appendix G1 at 10 CFR part 431, subpart F, that includes the relevant 
test procedure requirements for SPVUs for measuring with updated 
cooling efficiency metric, IEER, and heating efficiency metric, COP. 
The relevant test procedure requirements for SPVUs for measuring the 
existing efficiency metrics, EER and COP were included in appendix G at 
10 CFR part 431, subpart F. Beginning 360 days on or after the date of 
publication of the test procedure final rule in the Federal Register, 
manufacturers must use appendix G for compliance, but if manufacturers 
make voluntary representations with respect to the integrated energy 
efficiency ratio (IEER), such representations must be based on testing 
conducted in accordance with appendix G1. All manufacturers must use 
appendix G1 on and after the compliance date of any amended standards 
for single packaged vertical air conditioners and single package 
vertical heat pumps denominated in terms of IEER, as set forth in 10 
CFR 431.97.

[[Page 75395]]

    DOE notes that SPVUs often operate at part-load (i.e., less than 
designed full-load capacity) in the field, depending on the application 
and location. The current Federal metric for cooling efficiency, EER, 
captures the system performance at a single, full-load operating point 
(i.e., single outdoor air temperature). As noted in section 6.2.2 of 
AHRI 390-2021, the full-load operating conditions (i.e., 95 [deg]F 
outdoor air dry-bulb temperature) accounts for only 1 percent of the 
time on average for SPVU applications. Hence, EER is not necessarily 
representative of energy efficiency over a full cooling season. In 
contrast, the IEER metric factors in the efficiency of operating at 
full-load conditions when outdoor temperature is high, as well as part-
load conditions of 75-percent, 50-percent, and 25-percent of full-load 
capacity at outdoor temperatures appropriate for these load levels. 
This is accomplished by weighting the full- and part-load efficiencies 
with a representative average amount of time operating at each loading 
point. Under part-load conditions, SPVUs may cycle off/on, may operate 
at lower compressor stage levels, or (if they have variable-capacity 
compressors) may modulate capacity to match the cooling load. The test 
conditions and weighting factors for this IEER metric in AHRI 390-2021 
were developed specifically for SPVUs based on an annual building load 
analysis and temperature data for buildings representative of SPVU 
installations, including modular classrooms, modular offices, and 
telecommunication shelters across 15 different climate zones.\7\ Based 
on the weighting factors specified in section 6.2.2 of AHRI 390-2021, 
SPVUs spend a significant amount of time operating at milder outdoor 
air conditions with lower cooling loads. DOE's analysis also indicates 
that the efficiency at the milder part-load operating conditions can be 
significantly different than at the full-load operating conditions, and 
efficiency also can be significantly different between single-stage and 
two-stage units. The test conditions and weighting factors for the four 
load levels representing 100, 75, 50, and 25 percent of full-load 
capacity for SPVUs under the IEER metric are different than those used 
in the IEER metric in AHRI 340/360-2019, which were developed based on 
CUAC building types. For these reasons, DOE considers the IEER metric 
to be representative of the cooling efficiency for SPVUs on an annual 
basis, and more representative than the current EER metric. 
Accordingly, DOE is proposing to amend the standards for SPVUs to be 
based on the seasonal cooling metric, IEER, and the existing heating 
metric, COP.
---------------------------------------------------------------------------

    \7\ Based on EnergyPlus analysis developed for the previous 
energy conservation standards rulemaking for SPVUs. 80 FR 57438, 
57462 (Sept. 23, 2015). EnergyPlus is a whole building energy 
simulation program (Available at: http://apps1.eere.energy.gov/buildings/energyplus/).
---------------------------------------------------------------------------

    DOE notes that the IPLV metric specified in AHRI 390-2003 
integrates unit performance at each capacity step provided by the 
refrigeration system. However, the IPLV tests at each capacity step are 
all conducted at constant outdoor air conditions of 80 [deg]F dry-bulb 
temperature and 67 [deg]F wet-bulb temperature. As discussed, the IEER 
metric was developed considering climate data to reflect the outdoor 
temperatures representative of different load levels. As a result, DOE 
considers the IEER metric specified in AHRI 390-2021 to be more 
representative of annual energy use than the IPLV metric specified in 
AHRI 390-2003. DOE has determined, by clear and convincing evidence, 
that AHRI 390-2021 is more representative on annual energy use than 
AHRI 390-2003. As discussed, SPVUs often operate at part-load 
conditions. DOE notes that the IPLV metric specified in AHRI 390-2003 
integrates unit performance at each capacity step provided by the 
refrigeration system. However, the IPLV tests at each capacity step are 
all conducted at constant outdoor air conditions of 80 [deg]F dry-bulb 
temperature and 67 [deg]F wet-bulb temperature. As discussed, the IEER 
metric was developed considering climate data to reflect the outdoor 
temperatures representative of different load levels. As a result, DOE 
considers the IEER metric specified in AHRI 390-2021 to be more 
representative of annual energy use than the IPLV metric specified in 
AHRI 390-2003.
    NEEA and ASAP/ACEEE commented that DOE should also amend the test 
procedure for SPVUs to fully account for embedded fan energy use and 
revise the external static pressure requirements to accurately reflect 
field conditions. (NEEA, No. 6 at p. 1; ASAP/ACEEE, No. 11 at p. 1) 
ASAP/ACEEE also commented that DOE should incorporate defrost and 
reflect heating performance at lower ambient temperatures in the 
heating efficiency metric. (ASAP/ACEEE, No. 11 at pp. 1, 2) DOE has 
addressed all of these comments related to test procedure issues in the 
November 2022 Test Procedure Final Rule.
    In the November 2022 Test Procedure Final Rule, DOE determined that 
it does not have sufficient information regarding the operation of fans 
outside of mechanical cooling and heating modes (e.g., economizing, 
ventilation), regarding the installations for SPVHPs and the frequency 
of operation of defrost cycles, or regarding representative low ambient 
conditions during field use that would be necessary to develop 
representative testing procedures for these operating modes. DOE also 
determined that that it does not have information indicating that the 
current minimum ESPs are unrepresentative of field conditions.

D. Technological Feasibility

1. General
    In each energy conservation standards rulemaking, 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 
rulemaking. 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. 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; 10 CFR part 430, 
subpart C, appendix A, sections 6(b)(3)(i) and 7(b)(1).
    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; 10 CFR part 430, subpart C, appendix A, 
sections 6(b)(3)(ii)-(v) and 7(b)(2)-(5). Section V.B of this document 
discusses the results of the screening analysis for SPVUs, particularly 
the designs DOE considered, those it screened out, and those that are 
the basis for the standards considered in this rulemaking. For further 
details on the screening analysis for this rulemaking, see chapter 4 of 
the NOPR/NOPD technical support document (TSD).
2. Maximum Technologically Feasible Levels
    When DOE proposes to adopt an amended energy conservation standard 
for a type or class of covered equipment

[[Page 75396]]

more stringent than the level in ASHRAE Standard 90.1, the Department 
must conduct the requisite analyses to show by clear and convincing 
evidence that such standard would result in significant additional 
conservation of energy and would be technologically feasible and 
economically justified. Under such analysis, DOE determines the maximum 
improvement in energy efficiency or maximum reduction in energy use 
that is technologically feasible for such equipment. (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 SPVUs, using the design parameters for the 
most-efficient products available on the market or in working 
prototypes. The max-tech levels that DOE determined for this rulemaking 
are described in section V.C.1.b of this proposed rule and in chapter 5 
of the NOPR/NOPD TSD.

E. Energy Savings

    In determining whether standards for the subject equipment should 
be amended, DOE would typically determine whether such standards would 
result in significant additional conservation of energy, as required by 
42 U.S.C. 6313(a)(6)(A)(ii)(II) and 42 U.S.C. 6313(a)(6)(C)(i). 
However, as discussed in section VI of this document, DOE has 
tentatively determined that amended standards for the subject equipment 
would not be economically justified. Because clear and convincing 
evidence of economic justification is necessary to adopt more-stringent 
standards for the subject equipment, DOE has tentatively concluded that 
quantification of energy savings from potential amended standards is 
not necessary in the case of this proposed rulemaking.

F. Economic Justification

    As noted, EPCA provides seven factors to be evaluated in 
determining whether a potential amended 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 NOPR/NOPD.
1. Economic Impact on Consumers and Manufacturers
    For individual consumers, DOE measures the economic impact by 
calculating the changes in LCC and PBP associated with new or amended 
energy conservation standards for the equipment in question. 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's analysis showed 
negative LCC savings for SPVUs for nearly all efficiency levels, and, 
therefore, DOE is not proposing to amend standards for SPVUs, because 
the Department anticipates that it would not have the clear and 
convincing evidence to support amended standards more stringent that 
those set forth in ASHRAE Standard 90.1. Accordingly, DOE did not 
conduct a consumer subgroup analysis or a national impact analysis for 
this NOPR/NOPD.
    In determining the impacts of a potential standard on 
manufacturers, DOE typically conducts a manufacturer impact analysis 
(MIA). However, because DOE is tentatively unable to determine via 
clear and convincing evidence that a more-stringent standard level 
would result in significant additional conservation of energy and is 
technologically feasible and economically justified, DOE decided not to 
conduct an MIA. Nonetheless, DOE did examine the potential impacts of 
amended energy conservation standards for SPVUs on small manufacturers 
in its Regulatory Flexibility Act analysis, which is presented in 
section VII.B of this NOPR/NOPD. The following section discusses 
additional comments received from the April 2020 RFI regarding 
manufacturer impacts and cumulative regulatory burden.
    In response to the April 2020 RFI, AHRI, Lennox, and GE urged DOE 
to consider the cumulative regulatory burden for heating, ventilation, 
air conditioning, and refrigeration (HVACR) manufacturers. (AHRI, No. 9 
at p. 2; GE, No. 7 at p. 3; Lennox, No. 8 at p. 2) AHRI, Lennox, and GE 
argued that requirements for new low-GWP refrigerants will have a 
significant impact on the HVAC industry, and these commenters stated 
that in certain States, these requirements will take effect prior to 
the compliance date of any amended standards that would be adopted by 
DOE in the course of this proposed rulemaking. (AHRI, No. 9 at p. 5; 
GE, No. 7 at p. 3; Lennox, No. 8 at p. 2) AHRI stated that because 
nearly all of these new refrigerants have been designated flammable 
(A2L), all new safety standards have been developed that address the 
application of these new flammable refrigerants and subsequent leak 
mitigation. (AHRI, No. 9 at p. 5) AHRI stated that DOE's analysis 
should account for the challenge that manufacturers will face due to 
the need to develop, test, and certify two product lines for models 
with current refrigerants and new, A2L refrigerants. (Id.) AHRI and 
Lennox also noted that all current equipment will need to be tested to 
the new safety standard, Underwriters Laboratories/Canadian Standards 
Association (UL/CSA) Standard 60335-2-40, ``Standard for Household and 
Similar Electrical Appliances--Safety--Part 2-40: Particular 
Requirements for Electrical Heat Pumps, Air-Conditioners and 
Dehumidifiers,'' prior to its effective date of January 1, 2023. (AHRI, 
No. 9 at p. 5; Lennox, No. 8 at p. 3)
    In addition to the cumulative burden concerns noted with 
refrigerants, AHRI stated that the industry is preparing for additional 
new efficiency metrics and standard levels for residential central air 
conditioners and heat pumps; small, large, and very large commercial 
package air conditioners and heat pump; and air-cooled, water-cooled, 
evaporatively-cooled; water-source unitary air conditioners and heat 
pumps; and variable refrigerant flow equipment. (AHRI, No. 9 at p. 2)
    DOE notes that a full consideration of more-stringent levels, if 
undertaken, would assess manufacturer impacts, including cumulative 
burden. However, in the absence of proposing more-stringent standards, 
DOE has tentatively determined that the proposals set forth in this 
NOPR/NOPD would not be unduly burdensome to manufacturers.
    For a more complete discussion of consumer impacts, see chapter 8 
of the NOPR/NOPD TSD.
2. Savings in Operating Costs Compared To Increase in Price (LCC and 
PBP)
    EPCA requires DOE to consider the savings in operating costs 
throughout the estimated average life of the covered equipment in the 
type (or class) compared to any increase in the price of, or in the 
initial charges for, or maintenance expenses of, the covered equipment 
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 
equipment prices (which includes manufacturer selling price, 
distribution channel markups, and sales tax), equipment energy 
consumption,

[[Page 75397]]

energy prices, maintenance and repair costs, equipment lifetime, 
discount rates appropriate for consumers, and the year that compliance 
with new or amended standards would be required. To account for 
uncertainty and variability in specific inputs, such as equipment 
lifetime and 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 more-efficient equipment through lower operating 
costs. DOE calculates the PBP by dividing the change in purchase cost 
due to a more-stringent energy conservation standard by the change in 
annual operating cost for the year that such standards are assumed to 
take effect.
    For its LCC and PBP analysis, DOE assumes that consumers will 
purchase the covered equipment in the first year of compliance with new 
or amended energy conservation 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 V.F. of this document.
    For a more complete discussion of the LCC and PBP analysis, see 
chapter 8 of the NOPR/NOPD TSD.
3. Energy Savings
    Although significant additional 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 quantity of energy 
savings that are expected to result directly from the standard. (42 
U.S.C. 6313(a)(6)(B)(ii)(III)) DOE is not proposing amended standards 
for SPVUs due to the negative LCC savings at nearly all efficiency 
levels, so, therefore, DOE did not project the total energy savings 
from higher efficiency levels.
4. Lessening of Utility or Performance of Equipment
    In evaluating design options and the impact of potential standard 
levels, DOE evaluates potential amended energy conservation standards 
that would not lessen the utility or performance of the subject 
equipment. (42 U.S.C. 6313(a)(6)(B)(ii)(IV)) Because DOE is not 
proposing amended standards for SPVUs, the Department has tentatively 
concluded that this NOPR/NOPD would not impact the utility or 
performance 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 SPVUs 
more stringent than the current Federal standards for that equipment, 
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 conservation in 
determining whether a new or amended standard is economically 
justified. (42 U.S.C. 6313(a)(6)(B)(ii)(VI)) Typically, energy savings 
from proposed standards would be likely to provide improvements to the 
security and reliability of the Nation's energy system, and 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 potential standards 
may affect the Nation's needed power generation capacity. However, 
because DOE is not proposing amended standards for SPVUs that increase 
stringency beyond the current Federal standard levels, the Department 
did not conduct this analysis for the present rulemaking.
    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. Typically, proposed standards would be likely to result 
in environmental benefits in the form of reduced emissions of air 
pollutants and greenhouse gases (GHGs) associated with energy 
production and use. Therefore, DOE routinely conducts an emissions 
analysis to estimate how potential standards might affect these 
emissions. DOE also estimates the economic value of emissions 
reductions resulting from the considered TSLs (i.e., standards above 
the base case). However, because DOE is not proposing amended standards 
for SPVUs at levels more stringent than the current Federal standard 
levels, the Department did not conduct this analysis for the present 
rulemaking.
7. Other Factors
    In determining whether a potential 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.'' DOE did not identify any other factors in this NOPR/NOPD.

IV. Crosswalk Analysis

    As discussed in section II.B.1 of this document, DOE's current 
energy conservation standards for SPVUs are based on the full-load 
cooling efficiency metric, EER, and the heating efficiency metric, COP. 
As further discussed in section III.C of this document, DOE has amended 
the Federal test procedures for SPVUs to incorporate by reference AHRI 
390-2021, including the seasonal cooling efficiency metric, IEER. 
Accordingly, DOE is proposing to amend the energy conservation 
standards for SPVUs to rely on the IEER metric for cooling efficiency 
(while retaining the COP metric for determining the heating efficiency 
of SPVHPs). As explained in section III.C of this document, DOE has 
tentatively determined that the IEER metric is representative of the 
cooling efficiency for SPVUs in terms of both an average use cycle and 
also on an annual basis, and that it is more representative than the 
current EER metric.
    EPCA provides that in the case of any amended test procedure for 
covered ASHRAE equipment for which there is clear and convincing 
evidence to support deviation from the test procedure for such 
equipment referenced in ASHRAE Standard 90.1, DOE must determine, to 
what extent, if any, the proposed test procedure would alter the 
measured energy efficiency, measured energy use, or measured water use 
of the subject ASHRAE equipment as determined under the existing test 
procedure. (See 42 U.S.C 6293(e); 42 U.S.C. 6314(a)(4)(C)) If the 
Secretary determines that the amended test procedure will alter the 
measured efficiency or measured use, the Secretary shall amend the 
applicable energy conservation standard during the rulemaking carried 
out with respect to such test procedure. In such case, under the 
process prescribed in EPCA, DOE is directed to measure, pursuant to the 
amended test procedure, the energy efficiency or energy use of a

[[Page 75398]]

representative sample of covered products that minimally comply with 
the existing standard. (See 42 U.S.C. 6293(e)(2); 42 U.S.C. 
6314(a)(4)(C)) The average of such energy efficiency or energy use 
determined under the amended test procedure constitutes the amended 
energy conservation standard for the applicable covered products. (Id.)
    Pursuant to these statutory directives, DOE conducted a 
``crosswalk'' analysis to translate the current SPVU standard levels 
based on EER to standard levels based on the new metric, IEER. DOE 
worked with AHRI and SPVU manufacturers (collectively referred to as 
the ``AHRI 390 Task Force'') to develop the crosswalk analysis, during 
which, both DOE and manufacturers conducted testing of minimally-
compliant units. Pursuant to the requirements of EPCA (42 U.S.C. 
6293(e)(2); 42 U.S.C. 6314(a)(4)(C)), the AHRI 390 Task Force conducted 
testing on a sample of minimally-compliant SPVUs. DOE observed 
instances where both single-stage and two-stage SPVUs are minimally 
compliant with the current EER standards because the full-load EER 
metric does not capture the benefits of part-load technologies. As 
discussed in section V.C of this document, two-stage units have higher 
efficiencies than single-stage units when using the seasonal IEER 
metric. As a result, the sample of minimally-compliant SPVUs selected 
for testing specifically focused on single-stage units, as these units 
are expected to be the least efficient under the amended SPVUs test 
procedure.
---------------------------------------------------------------------------

    \8\ The percentage change from EER to IEER was used to ensure 
that data was anonymized for presentation to the AHRI 390 Task 
Force.
---------------------------------------------------------------------------

    Collectively, the AHRI 390 Task Force conducted testing on 17 SPVUs 
with <65,000 Btu/h cooling capacity and 2 SPVUs with >=65,000 Btu/h 
cooling capacity to measure the percentage change in efficiency between 
EER and IEER for each unit.\8\ The test sample included a mix of both 
SPVACs and SPVHPs. Using these test data, the average percentage change 
was calculated for SPVUs <65,000 Btu/h cooling capacity and >=65,000 
Btu/h cooling capacity separately. Based on testing, SPVACs and SPVHPs 
showed the same percentage increase from EER to IEER. These test 
results are summarized in Table IV-1.

 Table IV-1--AHRI 390 Crosswalk Testing Results for Minimally-Compliant,
                           Single-Stage SPVUs
------------------------------------------------------------------------
                                                              Average
                                              Current       percentage
             Equipment class               minimum  EER     change from
                                                            EER to IEER
------------------------------------------------------------------------
SPVU <65,000 Btu/h......................              11          +13.4%
SPVU >=65,000 Btu/h.....................              10           +2.6%
------------------------------------------------------------------------

    Based on these test results, DOE is proposing baseline IEER levels 
that are 13.4 percent higher than current EER standard levels for SPVUs 
<65,000 Btu/h cooling capacity and 2.6 percent higher than the current 
EER standard levels for SPVUs >=65,000 and <135,000 Btu/h cooling 
capacity. For SPVUs >=135,000 and <240,000 Btu/h cooling capacity, DOE 
noted that there were only eight basic models currently available on 
the market. Based on review of product literature, all of these larger 
SPVU models operated with multiple compressor stages and staged 
airflow. The testing conducted as part of the AHRI 390 Task Force 
included only single stage units and, therefore, is not representative 
of the baseline IEER levels for these larger SPVU units currently 
available on the market. Consequently, in order to determine an 
appropriate baseline IEER level for these larger SPVU equipment 
classes, DOE applied the crosswalk of 2.6 percent, then applied the 
percent improvement in IEER associated with moving from single-stage 
compressor and airflow to multiple compressor stages and stage airflow, 
consistent with the improvement used for SPVUs <135,000 Btu/h cooling 
capacity (i.e., a 9.6 percent increase in IEER, see section V.C.1.b of 
this document).
    The proposed baseline efficiency levels for each equipment class, 
denominated in terms of IEER and COP (where appliable), are presented 
in Table IV-2. The methodology and results of the crosswalk analysis 
are presented in detail in the chapter 5 of the NOPR/NOPD TSD.

           Table IV-2--Crosswalked Baseline Efficiency Levels
------------------------------------------------------------------------
                                    Current minimum    Proposed baseline
           Subcategory              standard levels   efficiency levels*
------------------------------------------------------------------------
SPVAC <65,000...................  EER = 11.0........  IEER = 12.5.
SPVHP <65,000...................  EER = 11.0........  IEER = 12.5.
                                  COP = 3.3.........  COP = 3.3.
SPVAC >=65,000 and <135,000.....  EER = 10.0........  IEER = 10.3.
SPVHP >=65,000 and <135,000.....  EER = 10.0........  IEER = 10.3.
                                  COP = 3.0.........  COP = 3.0.
SPVAC >=135,000 and <240,000....  EER = 10.0........  IEER = 11.2.
SPVHP >=135,000 and <240,000....  EER = 10.0........  IEER = 11.2.
                                  COP = 3.0.........  COP = 3.0.
------------------------------------------------------------------------
* Reflects translation of existing energy conservation standards using a
  full-load EER cooling metric to a proposed equivalent energy
  conservation standard using a seasonal IEER metric.

    Issue-1: DOE requests comment on the proposed baseline IEER levels 
for SPVUs, as well as comment on any aspect of its crosswalk analysis. 
DOE continues to seek information which compares EER to IEER for the 
SPVUs

[[Page 75399]]

that are representative of the market baseline efficiency level for all 
equipment classes.

V. Methodology and Discussion of Related Comments

    This section addresses the analyses DOE has performed for this 
proposed rulemaking with regard to SPVUs. Separate subsections address 
each component of DOE's analyses.
    DOE used Python \9\-based analytical tools to estimate the impact 
of the potential energy conservation standards considered as part of 
this proposed rulemaking on consumers. These tools calculate the LCC 
savings and PBP of potential amended or new energy conservation 
standards for three consumer sectors: (1) schools, (2) offices, and (3) 
telecommunications structures. The LCC and PBP inputs, outputs, and 
summary tables are available for download in spreadsheet form at 
https://www1.eere.energy.gov/buildings/appliance_standards/standards.aspx?productid=30. DOE did not perform any analysis beyond 
the LCC, as the LCC results were negative for nearly all product 
classes, and, therefore, DOE tentatively determined that an increased 
standard level would not be economically justified.
---------------------------------------------------------------------------

    \9\ Python is an open-source programming language. For more 
information, see: www.python.org.
---------------------------------------------------------------------------

A. Market and Technology Assessment

    DOE develops information in the market and technology assessment 
that provides an overall picture of the market for the equipment 
concerned, including the purpose of the equipment, the industry 
structure, manufacturers, market characteristics, and technologies used 
in the equipment. 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 rulemaking include: (1) a determination of the 
scope of the rulemaking and product classes; (2) manufacturers and 
industry structure; (3) existing efficiency programs; (4) shipments 
information; (5) market and industry trends; and (6) technologies or 
design options that could improve the energy efficiency of SPVUs. The 
key findings of DOE's market assessment are summarized in the following 
sections. See chapter 3 of the NOPR/NOPD TSD for further discussion of 
the market and technology assessment.
1. Equipment Classes
    As discussed in section III.B of this document, the current energy 
conservation standards for SPVUs specified in 10 CFR 431.97 are based 
on six equipment classes determined by: (1) cooling capacity and (2) 
whether the equipment is an air conditioner or a heat pump.

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

    In response to the April 2020 RFI, AHRI commented that it does not 
recommend any changes to the existing equipment classes. (AHRI, No. 9 
at p. 3) DOE did not identify any performance-related features that 
would justify creating a new equipment class for SPVUs. Accordingly, 
DOE is proposing to maintain the existing equipment classes in this 
NOPR/NOPD.
    In the April 2020 RFI, DOE requested comment on the availability of 
units on the market in the following equipment classes: SPVHP >=65,000 
Btu/h and <135,000 Btu/h, SPVAC >=135,000 Btu/h and <240,000 Btu/h, and 
SPVHP >=135,000 Btu/h and <240,000 Btu/h. 85 FR 22958, 22962 (April 24, 
2020). At the time AHRI commented, that organization stated that the 
largest SPVHP in the AHRI Directory is 60,000 Btu/h and that the 
largest SPVAC is 146,000 Btu/h. (AHRI, No. 9 at p. 4) DOE conducted a 
more recent review of DOE's Compliance Certification Database,\10\ and 
Table V-2 shows the number of models listed within the DOE Compliance 
Certification Database that DOE has identified for each class of SPVUs. 
Based on DOE's review of equipment currently available on the market, 
DOE determined that there are SPVHPs available up to 67,000 Btu/h and 
SPVACs up to 180,000 Btu/h. As discussed in section I of this document, 
DOE is not proposing to increase the stringency of the energy 
conservation standards for any SPVUs, including SPVHP >=135,000 Btu/h 
and <240,000 Btu/h.
---------------------------------------------------------------------------

    \10\ DOE's Compliance Certification Database can be found at 
https://www.regulations.doe.gov/certification-data/products.html#q=Product_Group_s%3A* (Last accessed Feb. 16, 2022).

    Table V-2--Number of Models Under Current SPVU Equipment Classes
------------------------------------------------------------------------
                                                 Number of models
     Cooling capacity range  (Btu/h)     -------------------------------
                                              SPVACs          SPVHPs
------------------------------------------------------------------------
<65,000.................................             467             303
>=65,000 and <135,000...................              43               2
>=135,000 and <240,000..................               8               0
------------------------------------------------------------------------

2. Technology Options
    In the technology assessment, DOE identifies technology options and 
prototype designs that appear to be feasible mechanisms for improving 
equipment efficiency. This assessment provides the technical background 
and structure on which DOE bases its screening and engineering 
analyses.

[[Page 75400]]

    In the April 2020 RFI, DOE presented a preliminary list of 
technology options primarily based on the technologies identified in 
the most recent rulemaking for SPVUs (i.e., the September 2015 final 
rule). 85 FR 22958, 22962 (April 24, 2020). In the April 2020 RFI, DOE 
requested comment on the technology options listed in Table V-3 
regarding their applicability to the current market and how these 
technologies may impact the efficiency of SPVUs.

        Table V-3--Technology Options Presented in April 2020 RFI
------------------------------------------------------------------------
                                                Technology options
------------------------------------------------------------------------
Heat Exchanger Improvements............  Increased Frontal Coil Area.
                                         Increased Depth of Coil.
                                         Microchannel Heat Exchangers.
                                         Dual Condensing Heat
                                          Exchangers.
Indoor Blower and Outdoor Fan            Improved Fan Motor Efficiency.
 Improvements.
                                         Improved Fan Blades.
                                         Variable Speed Condenser Fan/
                                          Motor.
                                         Variable Speed Indoor Blower/
                                          Motor.
Compressor Improvements................  Improved Compressor Efficiency.
                                         Multi-Speed Compressors.
Other Improvements.....................  Thermostatic Expansion Valves.
                                         Electronic Expansion Valves.
                                         Thermostatic Cyclic Controls.
------------------------------------------------------------------------

    In response to the April 2020 RFI, AHRI and GE commented that since 
the last rulemaking, there are no new technology developments for SPVUs 
that are commercially available or that are not already accounted for 
in the existing EER metric. (AHRI, No. 9 at p. 4; GE, No. 7 at p. 2) 
AHRI added that all of the technology options presented in the April 
2020 RFI (now listed in Table V-3), with the exception of increased 
coil size, are incorporated in minimum-efficiency equipment and would 
not increase SPVU efficiencies beyond the current levels. (AHRI, No. 9 
at p. 7)
    AHRI commented that in many replacement applications, the physical 
size of the replacement equipment cabinet is constrained by the 
original equipment size, particularly for classroom applications. 
(AHRI, No. 9 at p. 4) According to AHRI, cabinets project out into the 
room and are typically installed under windows, and as a result, the 
dimensions are limited in height by the window, in depth by the 
allowable projection into the floor space, and in length by the 
footprint of the original cabinet. (AHRI, No. 9 at p. 4) Therefore, 
AHRI commented that increasing heat exchanger size significantly is not 
possible in these cases and that appropriate boundaries must be 
established when considering increasing component sizes in the 
analysis, considering ASHRAE Standard 90.1's definition for non-
weatherized space-constrained SPVU. (AHRI, No. 9 at pp. 4-5) AHRI added 
that SPVU manufacturers also need to be cognizant of product noise 
levels, particularly for classroom settings. AHRI stated that some 
SPVUs are installed within a cabinet in the room, which typically have 
sound limits, so all individual components and the combination of 
components in the final product are considered very carefully to 
achieve a quiet product. (AHRI, No. 9 at p. 8)
    AHRI noted that SPVU manufacturers face limitations in terms of 
available compressor options; scroll compressors are not available 
below 17,000 Btu/h, so rotary compressors are employed. (AHRI, No. 9 at 
p. 8)
    As discussed in section V.C.1 of this document, DOE conducted 
testing and physical teardowns on a sample of currently available SPVUs 
using the amended SPVU test procedure and based on the seasonal IEER 
metric. DOE supplemented this approach with a review of product 
literature for currently available models. Through such efforts, DOE 
identified technology options that are used in higher-efficiency 
equipment. Based on this review, DOE believes that the technology 
options identified for this NOPR/NOPD, as presented subsequently in 
Table V-5, are consistent with existing equipment on the market (e.g., 
heat exchanger sizes, fan and fan motor types, controls, air flow) with 
consideration of the installation constraints noted by AHRI. DOE notes 
that where certain design options may increase cabinet sizes, DOE 
considered any additional costs associated with the installation of the 
equipment (e.g., transition curbs to accommodate existing wall openings 
in replacement applications).
    In the April 2020 RFI, DOE also noted that it did not consider 
improved fin design, improved tube design, and hydrophilic coating on 
fins in the engineering analysis for the previous rulemaking because 
they were commonly found in most baseline and higher-efficiency SPVUs. 
85 FR 22958, 22963 (April 24, 2020). AHRI commented that SPVU 
manufacturers use the best commercially-available fin and tube designs 
in both baseline and higher-efficiency SPVUs. AHRI stated that 
hydrophilic film coating on fins are not used in SPVUs due to concern 
about degradation over time. (AHRI, No. 9 at p. 6) DOE maintains that 
improved fin and tube design are incorporated into baseline SPVUs and, 
as a result, DOE did not consider these as technology options in this 
NOPR/NOPD. DOE is unaware of publicly-available data quantifying the 
impact of hydrophilic film coating on fins or whether this is used in 
commercially-available equipment. As a result, DOE did not consider 
hydrophilic film coating as a technology option in this NOPR/NOPD.
Microchannel Heat Exchangers
    As discussed in the April 2020 RFI, DOE did not evaluate 
microchannel heat exchangers for the September 2015 Final Rule 
engineering analysis because there was insufficient information 
regarding improvements to the overall system's energy efficiency. 85 FR 
22958, 22962 (April 24, 2020); 80 FR 57438, 57455 (Sept. 23, 2015). On 
this topic, AHRI and GE agreed that there is insufficient information 
regarding microchannel heat exchangers impact on the overall system's 
energy efficiency, and, therefore, such technology should be excluded 
from the analysis. (AHRI, No. 9 at p . 5; GE, No. 7 at p. 2) GE added 
that microchannel heat exchangers are of limited usefulness as a 
technology option due to the constraints imposed by the architecture of 
the space in which they are installed (i.e., the size of the exterior 
wall and the wall openings). (GE, No. 7 at p. 2) In light of these 
reasons, DOE

[[Page 75401]]

maintains that there is insufficient information regarding improvements 
to the overall system's energy efficiency for microchannel heat 
exchangers, and as a result, DOE did not consider them as a technology 
option for further consideration.
Part-Load Technology Options
    In the April 2020 RFI, DOE noted that the test procedure for SPVUs 
at that time only measured efficiency at full-load steady-state 
conditions, while thermostatic expansion valves (TXVs), electronic 
expansion valves (EEVs), thermostatic cyclic controls, multi-speed 
compressors, variable speed condenser fan/motor and variable speed 
indoor blower/motor technologies only provide benefit at part-load 
conditions. 85 FR 22958, 22962-22963 (April 24, 2020).
    AHRI commented that changing the efficiency metric to reflect part-
load performance would change how these technology options impact the 
efficiency of SPVUs. AHRI stated that it does not support the inclusion 
of any technology option that does not impact efficiency using the 
current DOE test procedure. (AHRI, No. 9 at p. 5) AHRI commented that 
neither variable speed condenser fan/motors nor indoor blower/motors 
will impact efficiency using the existing EER metric and, therefore, 
should not be considered in this rulemaking. (AHRI, No. 9 at p. 5) The 
commenter argued that indoor blower/fan improvements will impact unit 
size, which can be problematic for space-constrained units. AHRI added 
that not all products have condenser fans to improve, specifically non-
weatherized units. (Id.)
    AHRI and GE commented that variable speed compressors, TXVs, and 
EEVs do not provide a benefit using the existing EER metric and, 
therefore, should not be considered in this rulemaking. (AHRI, No. 9 at 
pp. 5-6; GE, No. 7 at p. 2) AHRI commented that in the event that DOE 
amends the test procedure and efficiency metric for SPVUs to account 
for part-load performance, variable speed compressors still may not be 
a viable technology option due to cost and availability. AHRI and GE 
noted that SPVUs are designed to accommodate a wide variety of voltages 
but that currently available variable speed compressors that operate at 
lower capacities are designed for residential applications and 
voltages. Consequently, AHRI and GE argued that because variable speed 
compressors are not available that accommodate all commercial voltages, 
there is a limitation on the wide-scale adoption of variable speed 
equipment. (AHRI, No. 9 at p. 6; GE, No. 7 at p. 2) In addition, AHRI 
mentioned that compressor manufacturers are also working to develop 
full product lines to accommodate A2L refrigerants. AHRI commented that 
this effort requires significant research and design resources, so they 
do not expect timely availability of variable speed compressors for the 
full voltage range required for SPVUs. (AHRI, No. 9 at p. 6)
    In response, as discussed in section III.C of this document, DOE 
has amended its test procedure for SPVUs to include a seasonal cooling 
efficiency metric that includes part-load performance, and, therefore, 
the Department is proposing to consider amended energy conservation 
standards based on the IEER metric in this NOPR/NOPD. As a result, DOE 
considered multi-speed compressors, TXVs, EEVs, thermostatic cyclic 
controls, variable speed condenser fan/motors, and variable speed 
indoor blower/motors as technology options, because these technologies 
improve the performance of SPVUs during part-load operation. However, 
based on DOE's testing, DOE does not have sufficient test data showing 
that variable-speed compressors provide a measurable improvement over 
two-stage compressors. As a result, DOE only considered two-stage 
compressors as a technology option for this NOPR/NOPD. DOE understands 
that two-stage compressors are available for the full range of cooling 
capacities for SPVUs. With regards to AHRI's comment that indoor 
blower/fan improvements will impact unit size and that not all products 
have condenser fans to improve, DOE notes that it considered 
application of these technology options consistent with existing 
equipment on the market.
    Additionally, DOE is no longer considering improved compressor 
efficiency as a technology option, as the Department is not aware of 
any commercially-available compressors with improved efficiency that 
are used in SPVUs.
Refrigerants
    Nearly all SPVUs are currently 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.) \11\ The EPA SNAP Program currently includes 31 \12\ acceptable 
alternatives for refrigerants used in the new Residential and Light 
Commercial Air Conditioning class of equipment (which includes 
SPVUs),\13\ On May 6, 2021, the EPA published a final rule in the 
Federal Register allowing the use of R-32, R-452B, R-454A, R-454B, R-
454C, and R-457A, subject to use conditions. These refrigerants may now 
be used in commercial HVAC applications, but any listed available 
substitute for Residential and Light Commercial Air Conditioning may be 
used as a refrigerant in SPVU equipment. 86 FR 24444.
---------------------------------------------------------------------------

    \11\ Additional information regarding EPA's SNAP Program is 
available online at: www.epa.gov/ozone/snap/ (Last accessed July 22, 
2022).
    \12\ 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 
January 3, 2017; Refrigerants R-417C, R427-A and R-458A are only 
approved for retrofit applications.
    \13\ Information available at: www.epa.gov/snap/substitutes-residential-and-light-commercial-air-conditioning-and-heat-pumps 
(Last accessed July 22, 2022).
---------------------------------------------------------------------------

    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 also 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 published a notice in the Federal Register which 
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 SPVUs) to use refrigerants with GWP of 750 or less, with such 
requirement applying to these equipment manufactured after January

[[Page 75402]]

1, 2025, excluding variable refrigerant flow (VRF) equipment.\14\ 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 type of air-conditioning equipment, including 
SPVUs.\15\
---------------------------------------------------------------------------

    \14\ Available at: www.regulations.gov/document/EPA-HQ-OAR-2021-0289-0011 (Last accessed July 22, 2022).
    \15\ Available at: www.arb.ca.gov/rulemaking/2020/hfc2020 (Last 
accessed July 22, 2022).
---------------------------------------------------------------------------

    In commenting on the April 2020 RFI, ASAP/ACEEE argued that 
alternatives to R410A such as R32, R452B, and R454B can improve 
efficiency by at least 5 percent \16\ and that DOE should consider 
alternative refrigerants in its analysis. (ASAP/ACEEE, No. 11 at p. 2)
---------------------------------------------------------------------------

    \16\ See www.aceee.org/files/proceedings/2016/data/papers/3_406.pdf (Last accessed July 22, 2022).
---------------------------------------------------------------------------

    In response, DOE is aware of the changing landscape of refrigerants 
as they relate to SPVUs, 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) and that was granted by EPA on October 14, 2021. 86 FR 
57141 (Oct. 14, 2021).\17\ In light of this AHRI petition which would 
impact SPVUs, DOE reviewed certain SNAP-approved substitutes that met 
this criterion for use of a refrigerant with GWP of 750 or less.\18\ 
These are listed in Table V-4.
---------------------------------------------------------------------------

    \17\ After granting a petition, EPA must initiate a rulemaking 
and publish a final rule within two years of the petition grant date 
(i.e., by Oct. 15, 2023).
    \18\ On December 29, 2021, EPA published in the Federal Register 
a notification informing the public that they would not be using a 
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 typical notice-and-comment rulemaking process. 86 FR 74080.

  Table V-4--Potential Substitutes for HFCs in New Residential and Light Commercial Air Conditioning Equipment,
                                             With GWP of 750 or Less
----------------------------------------------------------------------------------------------------------------
                                                                                   ASHRAE safety  classification
          Approved substitute              GWP value        Approval date \1\                   \2\
----------------------------------------------------------------------------------------------------------------
R-457A................................             140  May 6, 2021..............  A2L
R-454C................................             150
R-454A................................             240
R-454B................................             470
R-32..................................             675
R-452B................................             700
----------------------------------------------------------------------------------------------------------------
\1\ Approved by EPA. 86 FR 24444.
\2\ ASHRAE assigns safety classifications 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.

    DOE reviewed several studies \19\ to gauge the potential efficiency 
improvements of the substitute refrigerants identified in Table V-4, as 
compared to R-410A. Most of these studies suggested comparable 
performance to R410A, with some studies showing slightly reduced 
efficiency and others showing improvement as high as six percent (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 SPVUs 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 with reasonable confidence that these 
refrigerants will result in a specific improvement in energy 
efficiency. Therefore, DOE has tentatively decided to not consider 
alternate refrigerants as a technology option for increasing SPVU 
efficiency. On the other hand, DOE does not expect that the anticipated 
refrigerant change will reduce SPVU efficiency. Also, as discussed in 
section III.F.1 of this NOPR, because DOE is not proposing amended 
standards for SPVUs that increase stringency beyond the current Federal 
standard levels, DOE did not assess the cumulative regulatory burden 
associated with potential refrigerant requirements.
---------------------------------------------------------------------------

    \19\ See: (1) https://www.aceee.org/files/proceedings/2016/data/papers/3_406.pdf;
    (2) https://core.ac.uk/download/pdf/4955522.pdf;
    (3) https://docs.lib.purdue.edu/iracc/1211/;
    (4) https://docs.lib.purdue.edu/iracc/1235/;
    (5) https://docs.lib.purdue.edu/cgi/viewcontent.cgi?article=3097&context=icec;
    (6) https://www.optimizedthermalsystems.com/images/pdf/about/An-Evaluation-of-R32-for-the-US-HVACR-Market.pdf;
    (7) https://www.nature.com/articles/ncomms14476;
    (8) https://docs.lib.purdue.edu/cgi/viewcontent.cgi?article=3089&context=iracc;
    (9) https://www.osti.gov/biblio/1823375; and
    (10) https://climate.emerson.com/documents/copeland-scroll-yp-compressors-designed-for-r32-en-gb-7125818.pdf.
    (All last accessed July 25, 2022).
---------------------------------------------------------------------------

NOPR/NOPD Technology Options
    Based on the previous discussion, DOE identified nine technology 
options for this NOPR/NOPD, presented in Table V-5, that would be 
expected to improve the efficiency of SPVUs, as measured by the amended 
DOE test procedure.

                 Table V-5--NOPR/NOPD Technology Options
------------------------------------------------------------------------
                                                Technology options
------------------------------------------------------------------------
Heat Exchanger Improvements............  Increased Frontal Coil Area.
                                         Increased Depth of Coil.
                                         Dual Condensing Heat
                                          Exchangers.
Indoor Blower and Outdoor Fan            Improved Fan Motor Efficiency.
 Improvements.

[[Page 75403]]

 
                                         Improved Fan Blades.
Compressor Improvements................  Two-Stage Compressors.
Other Improvements.....................  Thermostatic Expansion Valves.
                                         Electronic Expansion Valves.
                                         Thermostatic Cyclic Controls.
------------------------------------------------------------------------

    Issue-2: DOE requests comment on the proposed technology options 
for SPVUs. DOE also requests data on the potential improvement in IEER 
and COP associated with these technology options.

B. 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 a significant adverse impact on 
the utility of the product/equipment for 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.
    10 CFR 431.4; 10 CFR part 430, subpart C, appendix A, sections 
6(b)(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. The reasons for eliminating any technology are discussed in 
the following sections.
    After a review of each technology, DOE tentatively concludes that 
all of the other identified technologies listed in Table V-5 of section 
V.A.3 of this document meet all five screening criteria to be examined 
further as design options in DOE's NOPR/NOPD analysis. In summary, DOE 
did not screen out the following technology options:

     Table V-6--Technology Options Retained for Engineering Analysis
------------------------------------------------------------------------
                                                Technology options
------------------------------------------------------------------------
Heat Exchanger Improvements............  Increased Frontal Coil Area.
                                         Increased Depth of Coil.
                                         Dual Condensing Heat
                                          Exchangers.
Indoor Blower and Outdoor Fan            Improved Fan Motor Efficiency.
 Improvements.
                                         Improved Fan Blades.
Compressor Improvements................  Two-Stage Compressors.
Other Improvements.....................  Thermostatic Expansion Valves.
                                         Electronic Expansion Valves.
                                         Thermostatic Cyclic Controls.
------------------------------------------------------------------------

    DOE has initially 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. DOE 
also finds that all of these technology options meet the other 
screening criteria (i.e., practicable to manufacture, install, and 
service and do not result in adverse impacts on consumer utility, 
product availability, health, or safety, and are not unique-pathway 
proprietary technologies). For additional details on DOE's screening 
analysis, see chapter 4 of the NOPR/NOPD TSD.

C. Engineering Analysis

    The purpose of the engineering analysis is to establish the 
relationship between the efficiency and cost of SPVUs. There are two 
elements to consider in the engineering analysis: (1) the selection of 
efficiency levels to analyze (i.e., the ``efficiency analysis'') and 
(2) the determination of equipment 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, DOE estimates the baseline cost, as well as the 
incremental cost for the 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

[[Page 75404]]

efficiency-level approach, the efficiency levels established for the 
analysis are determined based on the market distribution of existing 
equipment (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 this rulemaking, DOE relies on a design-option approach. 
Consistent with its previous rulemaking analysis, DOE focused the 
analysis on representative capacities for each equipment class. Based 
on market data, DOE identified representative cooling capacities for 
SPVACs and SPVHPs as presented in Table V-7. More specifically, DOE 
identified 36,000 Btu/h, 72,000 Btu/h, and 180,000 Btu/h as the nominal 
cooling capacities representing the most models in DOE's CCD for each 
SPVU equipment class.

    Table V-7--SPVU Equipment Class Representative Cooling Capacities
------------------------------------------------------------------------
            Equipment class             Representative  cooling capacity
------------------------------------------------------------------------
SPVAC and SPVHP <65,000 Btu/h.........  36,000 Btu/h.
SPVAC and SPVHP >=65,000 Btu/h and      72,000 Btu/h.
 <135,000 Btu/h.
SPVAC and SPVHP >=135,000 Btu/h and     180,000 Btu/h.
 <240,000 Btu/h.
------------------------------------------------------------------------

    DOE initially considered the range of efficiencies available on the 
market based on the data provided in DOE's CCD for SPVUs for EER and 
COP, as shown in Figure V-1 and Figure V-2.
[GRAPHIC] [TIFF OMITTED] TP08DE22.000

Figure V-1 DOE SPVu EER Compliance Certification Data

[[Page 75405]]

[GRAPHIC] [TIFF OMITTED] TP08DE22.001

Figure V-2 DOE SPVu COP Compliance Certification Data

    However, as discussed in section III.C of this document, DOE is now 
proposing to amend the energy conservation standards for SPVUs so as to 
be based on the seasonal cooling metric, IEER, and the existing heating 
metric, COP. Because SPVU manufacturers currently do not report IEER, 
DOE conducted testing on a sample of units that included a variety of 
the design options presented in Table V-6. The results of DOE's testing 
are presented in Table V-8. DOE used these test results along with 
additional information gathered using reverse engineering (i.e., 
teardown) methodologies, information from manufacturer product 
literature, and consideration of the range of efficiencies based on EER 
in DOE's CCD, to evaluate the range of design options used for units 
available on the market at different efficiencies in support of 
developing efficiency levels for the NOPR/NOPD analysis. DOE 
anticipates that the test results are applicable to all equipment 
classes when considering the relative improvement in efficiency 
associated with various design options due to the similarity in 
platform design and cabinet construction for units across equipment 
classes.

                                           Table V-8--DOE Test Results
----------------------------------------------------------------------------------------------------------------
                                                   Rated cooling
        Test unit             Equipment class     capacity  (Btu/    Rated EER      Tested IEER   Cooling stages
                                                        h)
----------------------------------------------------------------------------------------------------------------
1                         AC <65,000 Btu/h......          35,600           11.25            12.5               1
2                         AC <65,000 Btu/h......          35,000              11            11.6               2
3                         HP <65,000 Btu/h......          36,000            11.1            12.2               1
4                         AC <65,000 Btu/h......          36,000            12.5            13.2               2
5                         AC <65,000 Btu/h......          35,000              12            17.7               2
6                         HP <65,000 Btu/h......          35,000              11            11.7               1
7                         HP <65,000 Btu/h......          33,800              11            13.7               2
8                         AC <65,000 Btu/h......          54,000              11            16.1               2
9                         HP <65,000 Btu/h......          54,000            11.2            16.8               2
10                        HP <65,000 Btu/h......          57,000              11            12.7               2
----------------------------------------------------------------------------------------------------------------

a. Baseline Efficiency Levels
    For each equipment class, DOE generally selects a baseline model as 
a reference point for each class, and measures any changes resulting 
from potential new or amended energy conservation standards against the 
baseline. The baseline model in each product/equipment class represents 
the characteristics of a product/equipment typical of that class (e.g., 
capacity, physical size). Generally, a baseline model is one that just 
meets current energy conservation standards and provides basic consumer 
utility. If no standards are in place, the baseline is typically the 
most common or least-efficient unit on the market.
    As part of the April 2020 RFI, DOE requested comment on appropriate 
baseline efficiency levels. 85 FR 22958, 22964 (April 24, 2020). On 
this topic, AHRI commented that DOE should use the current baseline 
efficiency levels for SPVACs >=135,000 and <240,000 Btu/h cooling 
capacity, noting that there are only two models on the market and that 
it is doubtful these two models account for significant sales volume. 
(AHRI, No. 9 at p. 6)
    As discussed in section IV of this document, DOE's current cooling 
mode efficiency standards for SPVUs are based on the full-load metric, 
EER. AHRI and DOE jointly developed a crosswalk from EER to IEER based 
on testing of a sample of minimally-compliant single-stage units. DOE 
considered these crosswalked IEER levels as the baseline cooling mode 
efficiency levels for this analysis. For

[[Page 75406]]

heating mode for SPVHPs, DOE considered the current COP standard levels 
as the baseline efficiency levels. The proposed baseline efficiency 
levels are shown in Table V-9.

                                      Table V-9--Baseline Efficiency Levels
----------------------------------------------------------------------------------------------------------------
                                                                    Current EER
                         Equipment class                             standard      Baseline IEER   Baseline COP
                                                                      levels          levels          levels
----------------------------------------------------------------------------------------------------------------
SPVAC <65,000 Btu/h.............................................            11.0            12.5  ..............
SPVHP <65,000 Btu/h.............................................            11.0            12.5             3.3
SPVAC >=65,000 Btu/h and <135,000 Btu/h.........................            10.0            10.3  ..............
SPVHP >=65,000 Btu/h and <135,000 Btu/h.........................            10.0            10.3             3.0
SPVAC >=135,000 Btu/h and <240,000 Btu/h........................            10.0            11.2  ..............
SPVHP >=135,000 Btu/h and <240,000 Btu/h........................            10.0            11.2             3.0
----------------------------------------------------------------------------------------------------------------

    Based on physical teardowns of units at the baseline efficiency 
levels, DOE noted that baseline units for the <65,000 Btu/h cooling 
capacity equipment classes and >=65,000 and <135,000 Btu/h cooling 
capacity equipment classes had a single stage of compressor operation 
and indoor/outdoor fan speeds. These units used single-speed 
compressors, permanent-split capacitor (PSC) outdoor fan motors with 
single-stage outdoor airflow, and electronically-commutated indoor 
blower motors (ECM) with single-stage indoor airflow. For the >=135,000 
and <240,000 Btu/h cooling capacity equipment classes, as discussed in 
section V.C.1.b of this document, DOE notes that all units available on 
the market operated with multiple compressor stages and staged airflow, 
using multiple compressors along with ECM indoor blowers and outdoor 
fans. Therefore, DOE expects that all units on the market in this 
equipment class can meet the efficiency level proposed.
    Issue-3: DOE requests comment on the proposed baseline efficiency 
levels and the design options associated with these levels.
b. Higher Efficiency Levels
    As part of DOE's analysis, the maximum available efficiency level 
is the highest-efficiency unit currently available on the market. DOE 
also defines a ``max-tech'' efficiency level to represent the maximum 
possible efficiency for a given product. In many cases, the max-tech 
efficiency level is not commercially available because it is not 
economically feasible.
    In the April 2020 RFI, DOE noted that in the previous energy 
conservation standards rulemaking for SPVUs for all equipment classes, 
DOE determined that the max-tech efficiency was the maximum available 
efficiency. Accordingly, DOE presented the maximum available efficiency 
levels using the full-load EER cooling efficiency metric and COP 
heating efficiency metric based on review of the DOE's CCD. DOE 
requested comment on appropriate max-tech efficiency levels based on 
EER and COP and the design options associated with these levels, as 
well as appropriate efficiency levels based on the seasonal efficiency 
metric. 85 FR 22958, 22964-22965 (April 24, 2020).
    On this topic, AHRI commented that DOE should only consider 
currently-available technologies based on DOE's CCD for SPVUs as max-
tech levels. AHRI stated that theoretical design-option approaches for 
max-tech levels should be avoided, as it precludes stakeholders from 
being able to accurately develop estimates for repair costs, predict 
failure modes associated with such design options, and predict costs 
associated with platform/design changes. (AHRI, No. 9 at p. 7) AHRI 
further commented that using the DOE test procedure (i.e., the one 
available at the time of the April 2020 RFI), the max-tech efficiency 
level would be no different now than it was in DOE's 2015 standards 
rulemaking analysis. AHRI asserted that one of the only design options 
that would increase EER is increasing coil size, but the commenter 
cautioned that there are limitations on this design option due to 
constraints for through-the-wall or classroom replacement 
installations. According to AHRI, the incremental and maximum available 
efficiency levels and associated design options for each equipment 
class using a part-load energy efficiency metric would be substantially 
different than using a full-load metric, but the commenter argued that 
those matters can only be evaluated properly after the revised AHRI 390 
has published. (AHRI, No. 9 at p. 7) DOE notes that as discussed in 
section III.C of this document, DOE is conducting this analysis with 
respect to the IEER metric published in AHRI 390-2021.
    The CA IOUs commented that more-efficient models (based on EER) 
were added to the DOE's CCD for SPVUs since DOE's review in preparation 
for the April 2020 RFI, so DOE should update the maximum available 
efficiency levels. (CA IOUs, No. 10 at p. 3)
    In response, for this NOPR/NOPD, DOE considered efficiency levels 
based on the seasonal cooling efficiency metric that includes part-load 
performance, IEER, and the heating efficiency metric, COP. For SPVUs 
<65,000 Btu/h cooling capacity, DOE developed incremental IEER and COP 
higher efficiency levels up to the max-tech level based on DOE's 
testing of a sample of units, review of manufacturer product 
literature, and consideration of the range of efficiencies observed in 
DOE's CCD for SPVUs based on EER. As discussed in section V.C.2 of this 
document, DOE conducted physical teardowns on the units in its test 
sample. This allowed DOE to identify the design options associated with 
units at different efficiencies. In selecting efficiency levels, DOE 
primarily focused on the representative cooling capacity for this 
equipment class of 36,000 Btu/h. DOE notes that this method does not 
rely on theoretical efficiencies, per AHRI's concern.
    DOE identified the first efficiency level of 13.7 IEER for SPVUs 
with <65,000 Btu/h cooling capacity based on units that incorporated 2-
speed compressors and 2-stage indoor airflow and control logic to 
provide staged compressor and airflow operation. In addition, DOE 
observed that units at this efficiency level incorporated an increase 
in indoor and outdoor heat exchanger total volume compared to baseline 
efficiency units. Based on DOE's test data and review of available 
product literature, DOE expects that 13.7 IEER represents the 
efficiency level that can be achieved without requiring a substantial 
increase in heat exchanger and cabinet redesign compared to baseline 
efficiency units. For the max-tech efficiency level, DOE found that 
units with tested cooling mode

[[Page 75407]]

efficiencies between 16.1 and 17.7 IEER covered both SPVACs and SPVHPs 
with cooling capacities at 35,000 Btu/h and 54,000 Btu/h. DOE noted 
that these units were built using the same platform/cabinet and similar 
design options. To ensure that all equipment across the range of 
cooling capacities within this equipment class can achieve the analyzed 
efficiency level, DOE selected 16.1 IEER as the max-tech efficiency 
level. DOE further noted that, in addition to the design changes to 
reach efficiency level 1, units at the max-tech efficiency level also 
incorporated substantially larger indoor and outdoor heat exchangers, 
along with higher horsepower indoor and outdoor blower/fan motors, 
which require an increase in cabinet size. DOE's findings on the 
increases in heat exchanger size align with AHRI's comments on the 
matter, in that at a certain point, increases in cabinet size would be 
necessary to accommodate increases in heat exchanger size. For heating 
mode, DOE used the rated COP values corresponding to the units in DOE's 
test sample at each IEER efficiency level.
    For SPVUs with >=65,000 and <135,000 Btu/h cooling capacity, DOE 
applied the same design changes and the equivalent percentage increase 
to reach efficiency level 1 as used for the <65,000 Btu/h cooling 
capacity equipment class (i.e., a 9.6 percent increase in IEER). DOE 
notes that baseline IEER units, which were units with nominal cooling 
capacities of 72,000 Btu/h or less, had similar platform design and 
cabinet construction as units less than 65,000 Btu/h. Based on this, 
DOE preliminarily concluded that the percentage increase used for less 
than 65,000 Btu/h units to reach efficiency level 1 is also applicable 
to this equipment class. DOE noted that larger capacity units in this 
equipment class already incorporated staged compressor and airflow 
operation. As a result, DOE believes these units would be capable of 
meeting efficiency level 1. Efficiency level 1 represents the max-tech 
level for these two equipment classes.
    For SPVUs with >=135,000 and <240,000 Btu/h cooling capacity, DOE 
found that there are only a small number of basic models, all of which 
were rated at the baseline EER of 10.0. Per the discussion in section 
IV of this document, all of these models operate with multiple 
compressor stages and staged airflow, and incorporate design options 
similar to efficiency level 1 for the equipment classes with cooling 
capacities less than 135,000 Btu/h. Therefore, the baseline efficiency 
was assumed to be the percent improvement in IEER associated with 
moving from baseline to efficiency level 1 for SPVUs <135,000 Btu/h 
cooling capacity (i.e., a 9.6 percent increase in IEER). Based on DOE's 
review of product literature, DOE did not have sufficient information 
to justify analyzing higher efficiency levels for this equipment class. 
Therefore, the baseline equipment are also the max-tech.
    Table V-10 presents the efficiency levels examined for each SPVU 
equipment class.

                                    Table V-10--Incremental Efficiency Levels
----------------------------------------------------------------------------------------------------------------
           Equipment class                     Baseline            Efficiency level 1       Efficiency level 2
----------------------------------------------------------------------------------------------------------------
Representative Design Options........  Single-speed             Baseline + 2-speed       Efficiency level 1 +
                                        compressor, single-      compressor, staged       larger indoor and
                                        stage indoor/outdoor     indoor airflow,          outdoor heat
                                        airflow, ECM indoor      improved control         exchangers, higher
                                        blower motor, PSC        logic, larger heat       horsepower (hp) indoor
                                        outdoor fan motor.       exchangers.              blower/outdoor fan
                                                                                          motors.
SPVAC <65,000 Btu/h..................  12.5 IEER..............  13.7 IEER..............  16.1 IEER (Max-Tech).
SPVHP <65,000 Btu/h..................  12.5 IEER/3.3 COP......  13.7 IEER/3.3 COP......  16.1 IEER/3.6 COP (Max-
                                                                                          Tech).
SPVAC >=65,000 Btu/h and <135,000 Btu/ 10.3 IEER..............  11.2 IEER (Max-Tech)...
 h.
SPVHP >=65,000 Btu/h and <135,000 Btu/ 10.3 IEER/3.0 COP......  11.2 IEER/3.0 COP (Max-
 h.                                                              Tech).
SPVAC >=135,000 Btu/h and <240,000     11.2 IEER * (Max-Tech).
 Btu/h.
SPVHP >=135,000 Btu/h and <240,000     11.2 IEER/3.0 COP *
 Btu/h.                                 (Max-Tech).
----------------------------------------------------------------------------------------------------------------
* Representative design options for baseline SPVU >=135,000 Btu/h and <240,000 Btu/h are equivalent to the
  design options observed at efficiency level 1 for SPVU >=65,000 Btu/h and <135,000 Btu/h.

    Issue-4: DOE requests comment on the proposed incremental higher 
efficiency levels for each equipment class. DOE requests data showing 
the range of efficiencies based on IEER and COP available for SPVUs on 
the market, as well as the design options associated with units at 
different efficiency levels for each equipment class.
2. 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 
equipment, and 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 commercially-available equipment, component-by-component, to 
develop a detailed bill of materials for that equipment.
     Catalog teardowns: In lieu of physically deconstructing 
equipment, DOE identifies each component using parts diagrams (e.g., 
available from manufacturer websites or appliance repair websites) to 
develop the bill of materials for that equipment.
     Price surveys: If neither a physical nor catalog teardown 
is feasible (e.g., 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 September 2015 final rule, DOE directly analyzed one 
equipment class (i.e., SPVACs <65,000 Btu/h cooling capacity), then 
performed a more limited analysis of the other equipment classes based 
on limited physical/virtual teardowns and scaling the results from the 
analysis conducted for SPVACs with a cooling capacity less than 65,000 
Btu/h. 80 FR 57438, 57459-57460 (Sept. 23, 2015). In the April 2020 
RFI, DOE requested comment on whether using this same approach for the 
current rulemaking is appropriate. DOE also requested comment on the 
increase in manufacturing production costs (MPCs) associated with each 
design option and how the costs estimated in the September 2015 final 
rule have changed. 85 FR 22958, 22965-22966 (April 24, 2020).
    In response to this issue raised in the April 2020 RFI, AHRI 
expressed support for once again directly analyzing the SPVACs <65,000 
Btu/h cooling capacity

[[Page 75408]]

equipment class and scaling the results to other equipment classes for 
a future SPVU energy conservation standards rulemaking. (AHRI, No. 9 at 
p. 8) The commenter suggested extending the cost-efficiency analyses 
for equipment classes with models to those equipment classes without 
models on the market, as was done in the previous standards rulemaking. 
(AHRI, No. 9 at p. 8) AHRI also commented that the costs estimated for 
each particular design options have not changed significantly since the 
September 2015 Final Rule analysis. In addition, AHRI cautioned that 
incorporating backward curve fans would require a total redesign of 
units and would likely be the last, most expensive improvement that 
manufacturers would implement. (AHRI, No. 9 at p. 7) As discussed in 
section V.A.2 of this document, DOE conducted the cost-efficiency 
analysis consistent with SPVU equipment available on the market. DOE 
notes that backward curve fans were not necessary to achieve SPVU 
performance up to the max-tech efficiency level, and as a result, DOE 
did not consider that technology in its analysis.
    In the present case, DOE conducted its cost analysis using physical 
teardowns on units in its test sample and catalog teardowns to expand 
the analysis to additional cooling capacities. Similar to the previous 
rulemaking, DOE conducted physical teardowns with a focus on SPVUs with 
<65,000 Btu/h cooling capacity. The resulting bill of materials 
provides the basis for the MPC estimates. As discussed in section V.C.1 
of this document, DOE selected a cooling capacity of 36,000 Btu/h as 
the representative cooling capacity for this equipment class. DOE 
developed MPC estimates for SPVACs with <65,000 Btu/h cooling capacity 
based on the physical teardowns of 36,000 Btu/h units at each 
efficiency level. Where necessary, DOE ensured that the MPC estimates 
were based on minimally-featured equipment design so that non-
efficiency related features (e.g., economizers, dust sensors) are not 
included in the cost estimates. For SPVHPs, DOE estimated the costs 
based on the design differences between baseline SPVACs and SPVHPs from 
the same model line. DOE assumed that this cost difference would be 
applied to the baseline efficiency level and would remain constant at 
incremental efficiency levels. For the remaining larger cooling 
capacity equipment classes, DOE estimated the MPCs based on catalog 
teardowns and information regarding the design options implemented at 
each efficiency level scaled from the <65,000 Btu/h cooling capacity 
equipment class, as discussed in section V.C.1.b of this document.
    To account for manufacturers' non-production costs and profit 
margin, DOE applies 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 April 2020 RFI, DOE requested comment on whether a manufacturer 
markup of 1.28, as used in September 2015 final rule, is appropriate 
for SPVUs. 85 FR 22958, 22966 (April 24, 2020). On this topic, AHRI 
commented that a manufacturer markup of 1.28 continues to be generally 
appropriate for SPVUs. (AHRI, No. 9 at p. 8) Accordingly, DOE has 
retained a manufacturer markup of 1.28 for this analysis.
    Because the design options associated with each incremental 
efficiency level involved increases in cabinet sizes, DOE also 
estimated the incremental shipping cost at each efficiency level 
separate from the MSP. More specifically, DOE estimated the per-unit 
shipping costs based on the outer dimensions (including shipping 
pallets) at each efficiency level, assuming the use of a typical 53-
foot straight-frame trailer with a storage volume of 4,240 cubic feet. 
DOE notes that SPVAC and SPVHP at the same cooling capacity used the 
same cabinet design and that the weight differential is typically small 
between otherwise identical SPVACs and SPVHPs. For shipping of HVAC 
equipment, the size threshold of a container is typically met before 
the weight threshold. Accordingly, because SPVACs and SPVHPs use the 
same cabinet size, DOE estimated the incremental shipping costs for 
SPVACs and SPVHPs would be equivalent.
3. Cost-Efficiency Results
    The results of the engineering analysis are reported as cost-
efficiency data (or ``curves'') in the form of IEER (and COP for 
SPVHPs) versus MSP (in dollars). DOE developed separate cost-efficiency 
curves for each equipment class. These results are presented in Table 
V-11 through Table V-14. As discussed in section V.C.1.b of this 
document, DOE did not analyze any higher efficiency levels for SPVUs 
>=135,000 and <240,000 Btu/h cooling capacity, because all units 
available on the market incorporate the same design features and have 
the same rated efficiency. As a result, DOE is not presenting any cost-
efficiency results for this equipment class. See Chapter 5 of the NOPR/
NOPD TSD for additional detail on the engineering analysis.

                            Table V-11--Cost-Efficiency Results SPVACs <65,000 Btu/h
----------------------------------------------------------------------------------------------------------------
                                                                Incremental cost ($2021)
           Efficiency level           --------------------------------------------------------------------------
                                                 MPC                      MSP                    Shipping
----------------------------------------------------------------------------------------------------------------
Baseline.............................  .......................  .......................  .......................
EL 1.................................                  $296.57                  $379.61                   $42.67
EL 2.................................                 1,261.63                 1,614.88                    57.01
----------------------------------------------------------------------------------------------------------------


                            Table V-12--Cost-Efficiency Results SPVHPs <65,000 Btu/h
----------------------------------------------------------------------------------------------------------------
                                                                             Incremental cost  ($2021)
                        Efficiency level                         -----------------------------------------------
                                                                        MPC             MSP          Shipping
----------------------------------------------------------------------------------------------------------------
Baseline........................................................  ..............  ..............  ..............
EL 1............................................................         $296.57         $379.61          $42.67
EL 2............................................................        1,261.63        1,614.88           57.01
----------------------------------------------------------------------------------------------------------------


[[Page 75409]]


                  Table V-13--Cost-Efficiency Results SPVACs >=65,000 Btu/h and <135,000 Btu/h
----------------------------------------------------------------------------------------------------------------
                                                                             Incremental cost  ($2021)
                        Efficiency level                         -----------------------------------------------
                                                                        MPC             MSP          Shipping
----------------------------------------------------------------------------------------------------------------
Baseline........................................................  ..............  ..............  ..............
EL 1............................................................         $360.18         $461.03         $161.94
----------------------------------------------------------------------------------------------------------------


                  Table V-14--Cost-Efficiency Results SPVHPs >=65,000 Btu/h and <135,000 Btu/h
----------------------------------------------------------------------------------------------------------------
                                                                             Incremental cost  ($2021)
                        Efficiency level                         -----------------------------------------------
                                                                        MPC             MSP          Shipping
----------------------------------------------------------------------------------------------------------------
Baseline........................................................  ..............  ..............  ..............
EL 1............................................................         $360.18         $461.03         $161.94
----------------------------------------------------------------------------------------------------------------

    Issue-5: DOE requests comment on the cost-efficiency results. In 
particular, DOE requests comment on the costs associated with the 
design options analyzed, as well as the shipping costs associated with 
each efficiency level.

D. Markups Analysis

    The markups analysis develops appropriate markups in the 
distribution chain (e.g., retailer markups, distributor markups, 
contractor markups) and sales taxes to convert the MSP estimates for 
the subject equipment 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 September 2015 final rule (and set forth once again here), 
DOE identified four distribution channels for SPVUs to describe how 
this equipment passes from the manufacturer to the consumer. 80 FR 
57438, 57461 (Sept. 23, 2015).
    The first two distribution channels are used in the new 
construction market:

Manufacturer [rarr] HVAC Distributor \20\[rarr] Modular Building 
Manufacturer [rarr] Modular Building Distributor [rarr] End User
---------------------------------------------------------------------------

    \20\ In the 2015 final rule, the second step in the distribution 
channel was designated as HVAC Distributor or Manufacturer 
Representative. Subsequently, DOE has determined that these markups 
are the same, so this step in the channel is now simply referred to 
as HVAC Distributor for consistency with the other HVAC product 
markups.
---------------------------------------------------------------------------

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

    The other two distribution channels are used in the replacement 
market:

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

    In the April 2020 RFI, DOE requested information on the existence 
of any distribution channels other than the four distribution channels 
identified in the September 2015 final rule. DOE also requested data on 
the fraction of SPVU sales that go through each of the four identified 
distribution channels, as well as the fraction of sales through any 
other identified channels. DOE also requested comment on its approach 
to estimating markups and any financial data available that would 
assist the Department in developing markups for the various segments of 
the SPVU distribution channels. 85 FR 22958, 22966 (April 24, 2020).
    On this topic, AHRI and NEEA commented that there are more SPVU 
distribution channels than the four identified in the September 2015 
final rule, although the four from the previous rule make up the 
majority of the market. AHRI and NEEA stated that SPVUs are also 
commonly installed in other non-modular applications such as multi-
family housing, residential care, lodging, and other applications, and, 
therefore, those distribution channels would differ from the four used 
in the September 2015 final rule. (AHRI, No. 9 at p. 8; NEEA, No. 6 at 
p. 3) For this reason, AHRI recommended that DOE should add the 
following three distribution channels for SPVUs. (AHRI, No. 9 at p. 8)

Manufacturer [rarr] Sales Representative [rarr] HVAC Distributor [rarr] 
End User
Manufacturer [rarr] End User (National Account)
Manufacturer [rarr] Sales Representative [rarr] General Contractor 
[rarr] End User

    AHRI did not provide the fraction of overall SPVU sales that travel 
through each of these new distribution channels.
    As discussed in section III.A of this document, DOE updated the 
definitions pertaining to SPVUs in the November 2022 Test Procedure 
Final Rule so as to distinguish between commercial SPVUs and consumer 
central air conditioners. DOE notes that many of the products currently 
certified as SPVUs that are marketed for multi-family and lodging 
applications are being misclassified and should be properly classified 
as central air conditioners. DOE understands that the distribution 
channels for this equipment would be different than that of SPVUs used 
in modular buildings, and the Department believes that the distribution 
channels suggested by AHRI and NEEA fall in this category. To 
reiterate, central air conditioners that are misclassified as SPVUs are 
not included in this NOPR/NOPD, so, therefore, DOE did not adopt any of 
the additional distribution channels suggested by commenters to its 
analysis for this NOPR.
    In summary, for this NOPR/NOPD, DOE considered the four 
distribution channels shown in Table V-15. The estimated percentages of 
the total sales in the new construction and replacement markets for 
each of the four distribution channels is listed in the bottom row of 
Table V-15.

[[Page 75410]]



                              Table V-15--Distribution Channels for SPVU Equipment
----------------------------------------------------------------------------------------------------------------
              Channel 1                       Channel 2                Channel 3                Channel 4
----------------------------------------------------------------------------------------------------------------
           New construction                New construction           Replacement              Replacement
----------------------------------------------------------------------------------------------------------------
Manufacturer.........................  Manufacturer...........  Manufacturer...........  Manufacturer.
HVAC Distributor.....................  HVAC Distributor.......  HVAC Distributor.......  HVAC Distributor.
Modular Building Manufacturer........  Modular Building         Modular Building         Mechanical Contractor.
                                        Manufacturer.            Distributor.
Modular Building Distributor.........  General Contractor.....
Consumer.............................  Consumer...............  Consumer...............  Consumer.
12.5%................................  12.5%..................  37.5%..................  37.5%.
----------------------------------------------------------------------------------------------------------------

    Once these distribution channels were developed, DOE developed 
baseline and incremental markups for each actor in the distribution 
chain. Baseline markups are applied to the price of equipment with 
baseline efficiency, while incremental markups are applied to the 
difference in price between baseline and higher-efficiency models (the 
incremental cost increase). The incremental markup is typically less 
than the baseline markup and is designed to maintain similar per-unit 
operating profit before and after new or amended standards.\21\
---------------------------------------------------------------------------

    \21\ Because the projected price of standards-compliant 
equipment is typically higher than the price of baseline equipment, 
using the same markup for the incremental cost and the baseline cost 
would result in higher per-unit operating profit. While such an 
outcome is possible, DOE maintains that in markets that are 
reasonably competitive, it is unlikely that standards would lead to 
a sustainable increase in profitability in the long run.
---------------------------------------------------------------------------

    DOE updated the sources used in the September 2015 final rule to 
derive markups for each step of the distribution channel with the 
following sources: (1) the 2017 Annual Wholesale Trade Survey \22\ to 
develop HVAC and Modular Building wholesaler markups; (2) the Air 
Conditioning Contractors of America's (ACCA) ``2005 Financial Analysis 
for the HVACR Contracting Industry'' \23\ and 2017 U.S. Census Bureau 
economic data \24\ to develop mechanical contractor markups; (3) 2017 
U.S. Census Bureau economic data for the commercial and institutional 
building construction industry to develop general contractor markups; 
\25\ and (4) the U.S. Census Bureau's Annual Survey of 
Manufacturers.\26\ 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\
---------------------------------------------------------------------------

    \22\ U.S. Census Bureau, 2017 Annual Wholesale Trade Report, 
NAICS 4236: Household Appliances and Electrical and Electronic Goods 
Merchant Wholesalers (2017) (Available at: www.census.gov/wholesale/index.html) (Last accessed June 9, 2022).
    \23\ ``2005 Financial Analysis for the HVACR Contracting 
Industry,'' Air Conditioning Contractors of America (2005) (Last 
accessed June 9, 2022).
    \24\ ``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: https://www.census.gov/data/tables/2017/econ/economic-census/naics-sector-23.html) (Last accessed June 9, 2022).
    \25\ ``2017 Economic Census, Construction Industry Series and 
Wholesale Trade Subject Series,'' U.S. Census Bureau (Available at: 
https://www.census.gov/data/tables/2017/econ/economic-census/naics-sector-23.html) (Last accessed June 9, 2022).
    \26\ U.S. Census Bureau's Annual Survey of Manufacturers 
(Available at: https://www.census.gov/programs-surveys/asm/data.html) (Last accessed: June 9, 2022).
    \27\ Sales Tax Clearinghouse (Available at: https://thestc.com/) 
(Last accessed June 9, 2022).
---------------------------------------------------------------------------

    Chapter 6 of the NOPR/NOPD TSD provides details on DOE's 
development of markups for SPVUs.

E. Energy Use Analysis

    The purpose of the energy use analysis is to determine the annual 
energy consumption of SPVUs at different efficiencies in representative 
commercial buildings, and to assess the energy savings potential of 
increased SPVU efficiency. The energy use analysis estimates the range 
of energy use of SPVUs (unit energy consumption (UEC)) in the field 
(i.e., as they are actually used by commercial 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 September 2015 final rule, DOE analyzed the energy 
consumption of SPVUs using a whole building energy simulation approach 
for three types of commercial buildings: modular offices, modular 
schools, and telecommunication structures. The annual energy use was 
simulated using Energy Plus.\28\ 80 FR 57438, 57462 (Sept. 23, 2015). 
For this analysis, DOE developed three prototypical building models to 
simulate modular offices, modular schools, and telecommunications 
structures. For offices and schools, a 1,568 ft\2\ wood-frame structure 
was developed with performance characteristics (lighting density, 
ventilation, envelope, economizer usage) meeting the requirements of 
ASHRAE Standard 90.1-2004. Schedules and load profiles were taken from 
the DOE commercial reference buildings \29\ for primary schools and 
small offices. For telecommunications shelters, a 240 ft\2\ precast 
concrete structure was developed. These shelters were assumed to 
operate with a constant thermal load of 6.86 kW (23,400 Btu/h) in all 
hours of the year, thus requiring year round cooling. 80 FR 57438, 
57462 (Sept. 23, 2015).
---------------------------------------------------------------------------

    \28\ EnergyPlus is a whole building simulation program used to 
model cooling and heating loads. (Available at: https://energyplus.net/) (Last accessed August 15, 2022).
    \29\ For more information, please refer to the DOE Commercial 
Reference Buildings web pages for small offices (https://www.energy.gov/eere/downloads/reference-buildings-building-type-small-office) and primary schools (https://www.energy.gov/eere/downloads/reference-buildings-building-type-primary-school).
---------------------------------------------------------------------------

    In the April 2020 RFI, DOE recounted the analytical process to 
determine energy use taken for the September 2015 SPVU final rule and 
requested comment on using that approach in the current rulemaking, as 
well as input on any necessary modifications to such approach.
    On that topic, AHRI suggested that after the draft AHRI Standard 
390 is adopted, DOE should conduct a simulation approach that aligns 
more with an IEER analysis, rather than following the analysis for the 
September 2015 final rule (based on the EER metric). AHRI supported 
DOE's assumption that telecom cooling loads are constant throughout the 
year, and the commenter agreed that the telecom cooling loads used in 
the September 2015 final rule were reasonable. Regarding economizer 
usage in telecommunications structures, AHRI commented that economizers 
were assumed to be present in 50 percent of the SPVU market in the IEER 
analysis, but the organization pointed out that ASHRAE Standard 90.1 
and California

[[Page 75411]]

title 24 have existing and proposed economizer requirements, some by 
climate zone. (AHRI, No. 9 at pp. 8-9)
    In response, DOE notes that it used the same building prototypes 
and loads that were used to establish the IEER metric when developing 
the annual unit energy consumption of SPVUs in this NOPR. Regarding 
economizers, DOE notes that the ASHRAE economizer requirements apply to 
systems with cooling capacities >54,000 Btu/h.\30\ The representative 
capacity for SPVUs <65,000 Btu/h in this NOPR/NOPD is 36,000 Btu/h, and 
units at this capacity make up over 95 percent of SPVU shipments; 
therefore, DOE did not make changes to the cooling loads (the same as 
those used to develop AHRI 390), as it would have had little to no 
impact on average unit energy consumption of SPVUs. California title 24 
imposes economizer requirements on covered equipment, and the 2022 
amendments to that law reduce the cooling capacity of the equipment 
subject to those provisions to 33,000 Btu/h.\31\ DOE notes that the 
cooling operating hours in southern California would be reduced by this 
new building code, leading to lower UECs. Given the already very 
negative LCC savings, DOE did not make adjustments to the cooling 
operating hours for southern California, as a reduction in the UEC 
would only reduce LCC savings further, and accordingly, it would not be 
likely to change DOE's tentative decision to proceed with a 
determination that more-stringent energy conservation standards for 
SPVUs are not warranted at this time.
---------------------------------------------------------------------------

    \30\ ANSI/ASHRAE Standard 90.1-2019, p 99.
    \31\ See https://title24stakeholders.com/measures/cycle-2022/hvac-controls/.
---------------------------------------------------------------------------

    NEEA commented that DOE should update its energy use analysis to 
include the deployment of SPVUs in other types of commercial buildings 
beyond modular buildings. In support of its recommendation, NEEA cites 
the 2019 Commercial Building Stock Assessment,\32\ a regional dataset 
of commercial buildings in the Pacific Northwest, which shows that 
SPVUs are used in residential care facilities, lodging facilities, and 
one warehouse. (NEEA, No. 6 at p. 3) Similarly, AHRI also suggested 
that DOE should add multi-family and lodging buildings in the energy 
use analysis. (AHRI, No. 9 at p. 8)
---------------------------------------------------------------------------

    \32\ Available at: https://neea.org/data/commercial-building-stock-assessments.
---------------------------------------------------------------------------

    As discussed in section III.A of this document, DOE updated the 
definitions of SPVUs in the November 2022 Test Procedure Final Rule to 
distinguish between commercial SPVUs and consumer central air 
conditioners. DOE notes that many of the products currently certified 
as SPVUs that are marketed for non-modular applications are being 
misclassified and should be classified as central air conditioners. 
Therefore, DOE did not add any further building types to the energy use 
analysis for SPVUs.
    In the 2015 final rule, DOE used hourly energy use simulations to 
model the energy use of SPVUs in modular offices, modular schools, and 
telecommunications structures.\33\ The IEER metric was developed by the 
AHRI-390 committee using the load profiles from DOE's 2015 final rule 
simulations in 15 cities, each representing an International Energy 
Conservation Code (IECC) climate zone. For telecommunications 
structures, the SPVUs were modeled both with and without economizers. 
As discussed previously, the IEER metric captures the cooling 
efficiency of SPVUs at four load conditions: A--100% load; B--75% load; 
C--50% load, and D--25% load. DOE calculated the percentage of full 
load by dividing the hourly cooling load by the design day cooling 
capacity of the SPVU by building type and climate zone. DOE then binned 
the hours into one of the four IEER load conditions based on the 
percentage of design day load as shown in Table V-16.
---------------------------------------------------------------------------

    \33\ For more detail on the hourly energy use simulations, 
please refer to chapter 7 of the 2015 final rule TSD (Available at: 
https://www.regulations.gov/document/EERE-2012-BT-STD-0041-0027).

                       Table V-16--IEER Load Bins
------------------------------------------------------------------------
            IEER load condition               Percentage of design day
------------------------------------------------------------------------
A--100%...................................  97% to 100%.
B--75%....................................  62.5% to 97%.
C--50%....................................  37.5% to 62.5%.
D--25%....................................  0 to 37.5%.
------------------------------------------------------------------------

    Cooling UECs were calculated by multiplying the hours in each bin 
by the estimated power and then summing the electricity use of the four 
bins for each building type, in each climate zone. The baseline Heating 
UECs for SPVHPs were taken from the September 2015 final rule, and from 
that baseline, heating UECs for higher efficiency levels were scaled by 
the change in COP.
    DOE used county-level population data from the U.S. Census 
Bureau,\34\ along with a Pacific Northwest Laboratory report,\35\ that 
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 regions: (1) California and (2) the remaining States of 
Census Division 9 (Washington, Oregon, Hawaii, and Alaska). The 
resulting UECs represent the average SPVU cooling and heating energy 
use, by building type and Census Division.
---------------------------------------------------------------------------

    \34\ Available at: www.census.gov/data/datasets/time-series/demo/popest/2010s-counties-total.html#par_textimage_70769902 (Last 
accessed April 1, 2022).
    \35\ Available at: www.energy.gov/sites/prod/files/2015/10/f27/ba_climate_region_guide_7.3.pdf.
---------------------------------------------------------------------------

    Chapter 7 of the NOPR/NOPD TSD provides details on DOE's energy use 
analysis for SPVUs.

F. 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 
SPVUs. 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, 
maintenance, and repair). To compute the operating costs, DOE discounts 
future operating costs to the time of purchase (i.e., the anticipated 
year of compliance with new or amended standards) 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 SPVUs 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.

[[Page 75412]]

    For each considered efficiency level in each SPVU equipment class, 
DOE calculated the LCC and PBP in modular schools, modular offices, and 
telecom structures and then combined to develop aggregate results. As 
stated previously, DOE developed a sample of SPVU users by Census 
Division based on simulation data that was used to develop the IEER 
metric. For each Census Division, DOE determined the average energy 
consumption for an SPVU in a modular school, modular office, and 
telecom structure and the appropriate electricity price. By developing 
a sample of UECs by building type and Census Division, the analysis 
captured the variability in energy consumption and energy prices 
associated with the use of SPVUs.
    Inputs to the calculation of total installed cost include the cost 
of the equipment--which includes MPCs, manufacturer markups, 
distributor markups, contractor markups, and sales taxes--and 
installation costs. Inputs to the calculation of operating expenses 
include annual energy consumption, energy prices and price projections, 
repair and maintenance costs, equipment lifetimes, discount rates, and 
the anticipated year that compliance with new or amended standards is 
required. 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 uses 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 SPVU user samples. The 
model calculated the LCC and PBP for equipment 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 consumer, equipment efficiency is chosen based 
on its probability. If the chosen equipment efficiency is greater than 
or equal to the efficiency of the standard level under consideration, 
the LCC and PBP calculation reveals that an SPVU owner is not impacted 
by that standard level. By accounting for SPVU owners who already 
purchase more-efficient equipment, DOE avoids overstating the potential 
benefits from increasing equipment efficiency.
    DOE calculated the LCC and PBP for all consumers of SPVUs as if 
each were to purchase a new SPVU in the expected year of required 
compliance with amended standards. Amended standards would apply to 
SPVUs manufactured on and after the date that is one year after the 
date of publication of any new or amended standard in the Federal 
Register. (See section VI.B.4 of this document for discussion of DOE's 
calculation of lead time for this rulemaking.) At this time, DOE 
estimates publication of a final rule for amended SPVU energy 
conservation standards in 2024. Therefore, for purposes of its 
analysis, DOE used 2025 as the first year of compliance with any 
amended standards for SPVUs.
    Table V-17 summarizes the approach and data DOE used to derive 
inputs to the LCC and PBP calculations. The subsections that follow 
provide further related discussion. Details of the spreadsheet model, 
as well as all the inputs to the LCC and PBP analyses, are contained in 
chapter 8 of the NOPR/NOPD TSD.

 Table V-17--Summary of Inputs and Methods for the LCC and PBP Analysis*
------------------------------------------------------------------------
              Inputs                            Source/method
------------------------------------------------------------------------
Equipment Cost....................  Derived by multiplying MPCs by
                                     manufacturer, contractor, and
                                     distributor markups and sales tax,
                                     as appropriate. A constant price
                                     trend was used to project equipment
                                     costs.
Installation Costs................  Typical installation costs are
                                     generally not expected to vary by
                                     efficiency level; therefore, DOE
                                     did not include installation costs
                                     in the LCC analysis. However,
                                     replacement installations at EL 2
                                     for SPVUs <65,000 Btu/h require a
                                     conversion curb, so this cost was
                                     included at EL 2 for replacement
                                     installations.
Annual Energy Use.................  The binned hours in each IEER load
                                     bin are multiplied by the power
                                     consumption at each of the four
                                     IEER load conditions.
                                    Variability: Census Division and
                                     Building Type
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.
                                    Annualized repair costs determined
                                     using RS Means in the 2015 final
                                     rule, costs updated to 2021 dollars
                                     using GDP deflator. The materials
                                     portion of annualized repair costs
                                     scale with the increase in MPC.
Product Lifetime..................  Average: 15 years
Discount Rates....................  Commercial discount rates for
                                     schools, industrial, offices and
                                     utilities (telecom). The approach
                                     involves estimating the cost of
                                     capital of companies that purchase
                                     SPVU equipment.
Compliance Date...................  2025
------------------------------------------------------------------------
* References for the data sources mentioned in this table are provided
  in the sections following the table or in chapter 8 of the NOPR/NOPD
  TSD.

1. Equipment Cost
    To calculate consumer equipment 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 equipment and higher-efficiency equipment, because DOE applies 
an incremental markup to the increase in MSP associated with higher-
efficiency equipment.
    In the September 2015 final rule, DOE explained its rationale for 
using a constant price trend to project the equipment prices in the 
compliance year. 80 FR 57438, 57466 (Sept. 23, 2015). DOE maintained 
this approach for this NOPR/NOPD and used a constant trend for 
equipment prices between 2021 (the year for which MPCs were developed) 
and 2025 (the anticipated compliance year of amended standards). The 
constant trend is based on a historical time series of the inflation-
adjusted (deflated) Producer Price Index (PPI) for all other 
miscellaneous refrigeration and air conditioning equipment between 1990

[[Page 75413]]

and 2021.\36\ The deflated PPI does not indicate a long term upward or 
downward trend, and, therefore, DOE maintained a constant price trend 
for SPVUs.
---------------------------------------------------------------------------

    \36\ Available at: https://www.bls.gov/ppi/ (Last accessed March 
25, 2022).
---------------------------------------------------------------------------

    For more information on equipment costs, please refer to chapter 8 
of the NOPR/NOPD TSD.
2. Installation Cost
    Installation cost includes labor, overhead, and any miscellaneous 
materials and parts needed to install the equipment. DOE determined 
that the labor required for typical installation would not change by 
EL, and, therefore, DOE did not include typical installation costs in 
this analysis. However, DOE notes that replacement installation at EL 2 
would require a conversion curb, so, therefore, an installation cost is 
included for replacement installation at EL 2 for SPVUs <65,000 Btu/h.
    For more information on installation costs, please refer to chapter 
8 of the NOPR/NOPD TSD.
3. Annual Energy Consumption
    For each Census Division and building type, DOE determined the 
annual energy consumption of an SPVU at different efficiency levels 
using the approach described previously in section V.E of this 
document.
    For more information on annual energy consumption, please refer to 
chapter 7 of the NOPR/NOPD TSD.
4. Energy Prices
    Because marginal electricity price reflects the cost to a consumer 
of a kilowatt-hour at the highest level of consumption, it provides a 
better representation than average electricity prices of the value of 
saving electricity via more efficient equipment. Therefore, DOE applied 
average electricity prices for the energy use of the equipment 
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.\37\ 
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. With 
these data, DOE calculated commercial-sector electricity prices using 
the methodology described in Coughlin and Beraki (2019).\38\
---------------------------------------------------------------------------

    \37\ Available at: https://netforum.eei.org/eweb/DynamicPage.aspx?WebCode=COEPubSearch&pager=12 (Last accessed April 
14, 2022).
    \38\ 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 (Available at: ees.lbl.gov/publications/non-residential-electricity-prices) (Last accessed Jan. 6, 2020).
---------------------------------------------------------------------------

    DOE's methodology allows electricity prices to vary by sector and 
region. For a given product, electricity prices are chosen to be 
consistent with the way the consumer economic and energy use 
characteristics are defined in the LCC analysis. To measure the 
baseline energy cost for SPVUs, DOE used the average annual electricity 
prices for large commercial customers for modular schools and offices, 
and DOE used average annual electricity prices for small commercial 
customers for telecommunications structures. Marginal annual 
electricity prices for large commercial and small commercial customers 
were used to measure the operating cost savings from higher-efficiency 
SPVUs. See chapter 8 of the NOPR/NOPD 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.\39\ Because extended long-term price 
trends are more uncertain, DOE kept the energy price constant at the 
2050 level for the years after 2050.
---------------------------------------------------------------------------

    \39\ EIA, Annual Energy Outlook 2022 with Projections to 2050 
(Available at: www.eia.gov/forecasts/aeo/) (Last accessed May 9, 
2022).
---------------------------------------------------------------------------

5. Maintenance and Repair Costs
    Repair costs are associated with repairing or replacing equipment 
components that have failed in an appliance; maintenance costs are 
associated with maintaining the proper operation of the equipment. In 
the September 2015 final rule, because data were not available to 
indicate how maintenance costs vary with equipment efficiency, DOE 
assumed maintenance costs are constant across each EL by equipment 
class. For repairs, DOE developed an annualized repair cost estimate, 
using repair cost data from RS Means,\40\ assuming that a repair takes 
place in year 10 and that the equipment lifetime is 15 years. DOE 
scaled the materials portion of repair costs with the increase in the 
average retail price to project repair costs of higher-efficiency 
SPVUs. 80 FR 57438, 57466-57467 (Sept. 23, 2015). DOE used average 
annualized repair costs of $173.50 for SPVUs <65,000 Btu/h and $212 for 
SPVUs >65,000 and < 135,000 Btu/h in the 2015 final rule.\41\ DOE 
requested comment on SPVU maintenance and repair costs in the April 
2020 RFI. 85 FR 22958, 22967 (April 24, 2020).
---------------------------------------------------------------------------

    \40\ RS Means CostWorks 2014, R.S. Means Company, Inc. (2013) 
(Available at: www.meanscostworks.com/) (Last accessed Feb. 27, 
2014).
    \41\ Technical Support Document: Energy Efficiency Program for 
Commercial and Industrial Equipment: Single Package Vertical Units, 
chapter 8 (Available at: https://www.regulations.gov/document/EERE-2012-BT-STD-0041-0027).
---------------------------------------------------------------------------

    On this topic, AHRI confirmed that maintenance costs are not likely 
to differ between baseline and higher-efficiency products, but the 
commenter stated that the cost for replacement parts will be higher for 
higher-efficiency products. AHRI did not have any information on 
failure rates and said that the repair/replace decision is usually 
based on installation location (e.g., SPVUs in telecommunications 
structures are more likely to be replaced, whereas SPVUs in school 
systems are more likely to be repaired). (AHRI, No. 9 at p. 9)
    As mentioned previously, because maintenance costs do not vary by 
EL, DOE did not consider maintenance costs in this analysis. DOE 
updated the annual repair cost in the September 2015 final rule to 2021 
dollars using the GDP implicit price deflator \42\ and scaled the 
materials portion of repair costs by the increase in MPC for higher ELs 
in this NOPR/NOPD. The annualized repair cost was applied to all SPVUs 
as an annual operating cost in the LCC and PBP analysis.
---------------------------------------------------------------------------

    \42\ Available at: https://fred.stlouisfed.org/series/GDPDEF 
(Last accessed May 9, 2022). A price deflator of 114.2 was used to 
adjust the previous costs (in 2014$) to 2021$.
---------------------------------------------------------------------------

    For more information on repair and maintenance costs, please refer 
to chapter 8 of the NOPR/NOPD TSD.
6. Product Lifetime
    In the September 2015 final rule, DOE used a distribution with a 
minimum lifetime of 10 years and a maximum of 25 years, which yielded 
an average SPVU life of 15 years. (DOE based these distribution 
estimates on a review of a range of packaged cooling equipment lifetime 
estimates found in published studies and online documents, because the 
data did not distinguish between classes of SPVU equipment.) 80 FR 
57438, 57467 (Sept. 23, 2015). DOE requested comment on this approach 
in the April 2020 RFI. 85 FR 22958, 22968 (April 24, 2020).
    In response, AHRI commented that the lifetime estimate from the 
September 2015 final rule is reasonable,

[[Page 75414]]

and the commenter stated that it does not expect SPVU lifetime to vary 
by equipment class, efficiency, or end use. (AHRI, No. 9 at p. 9)
    In this NOPR/NOPD, DOE used assumed that 14.6 percent of SPVUs 
would retire per year between years 11 and 15 and afterwards 2.7 
percent of SPVUs would retire through year 25.
    For more information on equipment lifetime, please refer to chapter 
8 of the NOPR/NOPD TSD.
7. Discount Rates
    DOE's method for deriving discount rates for commercial entities 
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 SPVUs. 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 SPVUs.\43\ 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.
---------------------------------------------------------------------------

    \43\ 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 SPVU equipment. DOE used the discount rates for 
healthcare and industrial sectors for the modular offices, education 
sector discount rates for modular schools, and the utility sector 
discount rates for telecommunications shelters.
    For more information on discount rates, please refer to chapter 8 
of the NOPR/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 considers 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).
    In the present case, DOE estimated the current energy efficiency 
distribution of SPVUs <65,000 Btu/h in terms of IEER, with 62 percent 
at the baseline, 27 percent at EL 1, and 11 percent at EL 2. For SPVUs 
>65,000 and <135,000 Btu/h, DOE estimates that 53 percent of the market 
is at the baseline and that 47 percent is at EL 1. The estimated market 
shares for the no-new-standards case for SPVUs are shown in chapter 8 
of the NOPR/NOPD TSD.
9. Payback Period Analysis
    The payback period is the amount of time (expressed in years) it 
takes the consumer to recover the additional installed cost of more-
efficient equipment, compared to baseline equipment, through operating 
cost savings. Payback periods that exceed the life of the equipment 
mean that the increased total installed cost is not recovered in 
reduced operating expenses.
    The PBP calculation for each efficiency level considers the change 
in total installed cost of the equipment and the change in the first-
year annual operating expenditures relative to the baseline equipment. 
DOE refers to this as a ``simple PBP'' because it does not consider 
changes over time in operating cost savings. The PBP calculation uses 
the same inputs as the LCC analysis, except that energy price trends, 
repair costs, and discount rates are not used.
    For more information on PBP, please refer to chapter 8 of the NOPR/
NOPD TSD.

VI. Analytical Results and Conclusions

    The following section addresses the results from DOE's analyses 
with respect to the considered energy conservation standards for SPVUs. 
Additional details regarding DOE's analyses are contained in the NOPR/
NOPD TSD supporting this document.

A. Economic Impacts on SPVU Consumers

    DOE analyzed the economic impacts of potential amended standards at 
more-stringent levels on SPVU consumers by calculating the LCC savings 
and the PBP at each considered EL. Inputs used for calculating the LCC 
and PBP include total installed costs (i.e., equipment price plus 
installation costs) and operating costs (calculated using 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/NOPD TSD provides detailed information on 
the LCC and PBP analyses.
    Table VI-1 through Table VI-4 show the LCC and PBP results for the 
ELs considered in this analysis. There are no results for SPVUs >= 
135,000 Btu/h and < 240,000 Btu/h because there are no efficiency 
levels above the baseline. Note that the simple payback is measured 
relative to the baseline product. The LCC savings are measured relative 
to the efficiency distribution in the no-new-standards case in the 
compliance year (see section V.F.8 of this document). The LCC 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 
(negative LCC savings) at a given EL experience a net cost.

              Table VI-1--Average LCC and PBP Results by Efficiency Level for SPVACs <65,000 Btu/h
----------------------------------------------------------------------------------------------------------------
                                                                                          Simple payback period
                       Efficiency level                           LCC savings  (2021$)           (years)
----------------------------------------------------------------------------------------------------------------
EL 1..........................................................                     -246                     12.3
EL 2..........................................................                   -2,179                     21.6
----------------------------------------------------------------------------------------------------------------


              Table VI-2--Average LCC and PBP Results by Efficiency Level for SPVHPs <65,000 Btu/h
----------------------------------------------------------------------------------------------------------------
                                                                                          Simple payback period
                       Efficiency level                           LCC savings  (2021$)           (years)
----------------------------------------------------------------------------------------------------------------
EL 1..........................................................                     -608                     30.1

[[Page 75415]]

 
EL 2..........................................................                   -1,939                     17.8
----------------------------------------------------------------------------------------------------------------


    Table VI-3--Average LCC and PBP Results by Efficiency Level for SPVACs >=65,000 Btu/h and <135,000 Btu/h
----------------------------------------------------------------------------------------------------------------
                                                                                          Simple payback period
                       Efficiency level                           LCC savings  (2021$)           (years)
----------------------------------------------------------------------------------------------------------------
EL 1..........................................................                       92                      8.3
----------------------------------------------------------------------------------------------------------------


    Table VI-4--Average LCC and PBP Results by Efficiency Level for SPVHPs >=65,000 Btu/h and <135,000 Btu/h
----------------------------------------------------------------------------------------------------------------
                                                                                          Simple payback period
                       Efficiency level                           LCC savings  (2021$)           (years)
----------------------------------------------------------------------------------------------------------------
EL 1..........................................................                     -703                     20.7
----------------------------------------------------------------------------------------------------------------

B. Proposed Determination

    EPCA specifies that for any commercial and industrial equipment 
addressed under 42 U.S.C. 6313(a)(6)(A)(i), which includes SPVUs, 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. In light of these statutory criteria, 
DOE conducted an assessment of whether the current energy conservation 
standards for SPVUs should be replaced with more-stringent standards. 
DOE's tentative conclusions are set forth in the paragraphs that 
follow.
1. Technological Feasibility
    DOE considers technologies incorporated in commercially-available 
products or in working prototypes to be technologically feasible. Per 
the technology options discussed in section V.A.2 of this document, DOE 
has tentatively determined, based on clear and convincing evidence, 
that more-stringent energy conservation standards for SPVUs would be 
technologically feasible.
2. Economic Justification
    In determining whether a potential energy conservation standard is 
economically justified, the Secretary must determine whether the 
benefits of the standard exceed its burdens by considering, to the 
greatest extent practicable, the seven statutory factors discussed in 
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.
    DOE conducted an LCC analysis to estimate the net costs and 
benefits to users from increased efficiency in the considered SPVUs. 
The LCC savings are negative at nearly all ELs considered in this 
analysis (see Table VI-1 through Table VI-4). The one EL with positive 
LCC savings is EL 1 for SPVACs >=65,000 Btu/h and <135,000 Btu/h, which 
represents less than 3 percent of total SPVU shipments. Given the 
highly negative results for all other product classes, which make up 
over 97 percent of SPVU shipments, the LCC savings across all SPVUs 
product classes would be negative on a weighted average basis. Based on 
these findings, DOE has tentatively determined that the economic impact 
of more-stringent standards on the consumers of the equipment subject 
to the standard, which is one the seven factors used to evaluate 
economic justification, would be strongly negative.
    Because of the importance DOE places on the economic impact of 
potential standards on consumers, DOE did not explicitly analyze the 
other factors that it typically considers in determining economic 
justification, including the projected quantity of energy savings 
likely to result directly from amended standards.
3. Significant Additional Energy Savings
    DOE has tentatively determined that quantification of energy 
savings from potential amended standards is not necessary if there is 
strong evidence that such standards would not be economically 
justified.
4. Summary
    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. Based on the 
negative LCC savings at all but one EL for each equipment class, and 
weighted average negative LCC savings across all SPVUs, DOE has 
tentatively determined that it lacks ``clear and convincing'' evidence 
that more-stringent standards would be economically justified for 
SPVUs. Therefore, DOE is proposing to determine that more-stringent 
energy conservation standards for SPVUs are not warranted. DOE will 
consider and respond to all comments received on this proposed 
determination when issuing any final determination or

[[Page 75416]]

supplemental notice of proposed rulemaking (SNOPR).
    As a separate matter, DOE is proposing to amend the energy 
conservation standards for SPVUs so as to be based on the IEER and COP 
metrics that are of equivalent stringency as the current Federal 
standard levels (and equivalent to the current standard levels 
specified in ASHRAE Standard 90.1-2019). The proposed standards are 
presented in Table VI-5. These proposed standards, if adopted, would 
apply to all SPVUs manufactured in, or imported into, the United States 
starting on the compliance date, as discussed in the following 
paragraphs.

      Table VI-5--Proposed Energy Conservation Standards for SPVUs
------------------------------------------------------------------------
             Equipment class                  Proposed standard level
------------------------------------------------------------------------
SPVAC <65,000 Btu/h......................  IEER = 12.5
SPVHP <65,000 Btu/h......................  IEER = 12.5
                                           COP = 3.3
SPVAC >=65,000 Btu/h and <135,000 Btu/h..  IEER = 10.3
SPVHP >=65,000 Btu/h and <135,000 Btu/h..  IEER = 10.3
                                           COP = 3.0
SPVAC >=135,000 Btu/h and <240,000 Btu/h.  IEER = 11.2
SPVHP >=135,000 Btu/h and <240,000 Btu/h.  IEER = 11.2
                                           COP = 3.0
------------------------------------------------------------------------

    In instances in which DOE adopts more-stringent standards under its 
6-year-lookback review authority, EPCA states that any such standard 
shall apply to equipment manufactured after a date that is the latter 
of the date three years after publication of the final rule 
establishing such standard or six years after the effective date for 
the current standard. (42 U.S.C. 6313(a)(6)(C)(iv)) As discussed, DOE 
has tentatively determined that it does not have clear and convincing 
evidence to justify adopting more-stringent standards for SPVUs, so, 
therefore, the three-year and/or six-year lead time period would not 
apply.
    Instead, the proposed energy conservation standards for SPVUs are 
of equivalent stringency but based on a new metric (i.e., IEER), and as 
discussed in section III.C of this document, DOE amended the SPVU test 
procedure to include provisions for measuring IEER in the November 2022 
Test Procedure Final Rule. As required by EPCA, beginning 360 days 
following the final test procedure rule, all representations of energy 
efficiency and energy use must be made in accordance with that amended 
test procedure. (42 U.S.C. 6314(d)(1)) In this case, DOE is proposing 
to apply a one-year lead time, similar to that provided for the test 
procedure update addressing IEER, such that the compliance date for the 
proposed amended energy conservation standards for SPVUs would be 360 
days after the publication in the Federal Register of the final rule 
for amended energy conservation standards based on the IEER metric, if 
adopted.

VII. Procedural Issues and Regulatory Review

A. Review Under Executive Orders 12866 and 13563

    Executive Order (E.O.) 12866, ``Regulatory Planning and Review,'' 
58 FR 51735 (Oct. 4, 1993), 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 
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 where the agency was first required by law to publish a 
proposed rule for public comment, unless the agency certifies that the 
rule, if promulgated, will not have a significant economic impact on a 
substantial number of small entities. As required by Executive Order 
13272, ``Proper Consideration of Small Entities in Agency Rulemaking,'' 
67 FR 53461 (August 16, 2002), DOE published procedures and policies on 
February 19, 2003 to ensure that the potential impacts of its rules on 
small entities are properly considered during the DOE rulemaking 
process. 68 FR 7990. DOE has made its procedures and policies available 
on the Office of the General Counsel's website: energy.gov/gc/office-general-counsel.
    DOE reviewed this document under the provisions of the Regulatory 
Flexibility Act and the policies and procedures published on February 
19, 2003. DOE has tentatively concluded that this proposed rule/
proposed determination will not have a significant impact on a 
substantial number of small entities. The factual basis for this 
determination is as follows:
    For manufacturers of SPVU equipment, the Small Business 
Administration (SBA) considers a business entity to be a ``small 
business'' if, together with its affiliates, it employs less than a 
threshold number of workers specified in 13 CFR part 121. SPVU 
manufacturers, who produce the equipment covered by this document, are 
classified under NAICS code 333415, ``Air-Conditioning and Warm Air 
Heating Equipment and Commercial and Industrial Refrigeration Equipment 
Manufacturing.'' In 13 CFR 121.201, the SBA sets a threshold of 1,250 
employees or fewer for an entity to be considered as a small business 
for this category. This employee threshold includes all employees in a 
business's parent company and any other subsidiaries.
    DOE identified manufacturers using DOE's Compliance Certification

[[Page 75417]]

Database (CCD),\44\ manufacturer interviews, the California Energy 
Commission's Modernized Appliance Efficiency Database System 
(MAEDbS),\45\ and information from prior DOE rulemakings. Additionally, 
DOE used publicly-available information and subscription-based market 
research tools (e.g., reports from Dun & Bradstreet) \46\ to determine 
headcount, revenue, and geographic presence of the small businesses. 
DOE has initially identified a total of five companies that manufacture 
SPVUs in the United States. DOE screened out companies that do not meet 
the definition of ``small business'' or are foreign-owned and operated. 
Of these five companies, DOE identified one as a domestic small 
business.
---------------------------------------------------------------------------

    \44\ DOE's Compliance Certification Database is available at: 
www.regulations.doe.gov/ccms (Last accessed May 2, 2022).
    \45\ California Energy Commission's MAEDbS is available at: 
cacertappliances.energy.ca.gov/Pages/ApplianceSearch.aspx (Last 
accessed May 2, 2022).
    \46\ Dun & Bradstreet reports are available at: 
app.dnbhoovers.com (Last access May 2, 2022).
---------------------------------------------------------------------------

    In this document, DOE proposes to adopt energy conservation 
standards for SPVUs based on the Integrated Energy Efficiency Ratio 
(IEER) metric for SPVACs and SPVHPs, and the Coefficient of Performance 
(COP) metric for SPVHPs. In the November 2022 Test Procedure Final 
Rule, DOE amended the test procedures for SPVUs to incorporate by 
reference AHRI 390-2021, which added a seasonal metric that includes 
part-load cooling performance--the IEER metric. DOE has determined that 
the IEER metric is more representative of the cooling efficiency for 
SPVUs on an annual basis than the current EER market. DOE conducted a 
crosswalk analysis to develop IEER levels that are of equivalent 
stringency to the current EER standard levels. DOE has tentatively 
determined that it lacks clear and convincing evidence to support 
adoption of amended standards for SPVUs (in terms of IEER and COP) that 
are more stringent than the current standards for SPVUs, because the 
Department has tentatively concluded that such standards would not be 
economically justified.
    Therefore, DOE determined that manufacturers would only incur costs 
as result of this NOPR/NOPD if a manufacturer were not already testing 
to AHRI 390-2021.\47\ However, in the November 2022 Test Procedure 
Final Rule, DOE determined that it would be unlikely for manufacturers 
to incur testing costs given that most SPVU manufacturers are AHRI 
members, and that DOE is referencing the prevailing industry test 
procedure that was established for use in AHRI's certification program. 
Furthermore, DOE notes that the sole identified small business that 
manufacturers SPVUs is an AHRI member.
---------------------------------------------------------------------------

    \47\ DOE estimated the cost for this small business to re-rate 
all models to be $30,200 while making use of an alternative 
efficiency determination method (AEDM). DOE determined this cost to 
represent less than 1 percent of annual revenue for the small, 
domestic manufacturer of SPVUs.
---------------------------------------------------------------------------

    As discussed in the 2022 Test Procedure Final Rule, DOE determined 
that the test procedure impacts to manufacturers would not have a 
significant economic impact on a substantial number of small 
businesses. Therefore, on the basis of limited small entities affected 
and the de minimis compliance burden, DOE certifies that this proposed 
rule would not have a ``significant economic impact on a substantial 
number of small entities,'' and that the preparation of a IRFA is not 
warranted. DOE will transmit a 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).
    Issue-6: DOE requests comment on its assessment of impacts on 
domestic, small manufacturers of SPVUs. Specifically, DOE requests 
comment on its understanding that this proposed rule/proposed 
determination will not have a significant economic impact on a 
substantial number of small businesses.

C. Review Under the Paperwork Reduction Act of 1995

    DOE's regulations pertaining to certification and compliance 
activities ensure accurate and comprehensive information about the 
energy and water use characteristics of covered products and covered 
equipment sold in the United States. (See generally 10 CFR part 429.) 
Manufacturers of all covered products and covered equipment, including 
SPVUs, must submit a certification report before a basic model is 
distributed in commerce, annually thereafter, and if the basic model is 
redesigned in such a manner to increase the consumption or decrease the 
efficiency of the basic model such that the certified rating is no 
longer supported by the test data. Additionally, manufacturers must 
report when production of a basic model has ceased and is no longer 
offered for sale as part of the next annual certification report 
following such cessation. DOE requires the manufacturer of any covered 
product or covered equipment to establish, maintain, and retain the 
records of certification reports, of the underlying test data for all 
certification testing, and of any other testing conducted to satisfy 
the requirements of part 429, part 430, and/or part 431. Certification 
reports provide DOE and consumers with comprehensive, up-to date 
efficiency information and support effective enforcement.
    The collection-of-information requirement for certification and 
recordkeeping is subject to review and approval by OMB under the 
Paperwork Reduction Act (PRA). OMB Control Number 1910-1400, Compliance 
Statement Energy/Water Conservation Standards for Appliances, is 
currently valid and assigned to the certification reporting 
requirements applicable to covered equipment, including SPVUs. Public 
reporting burden for the certification is estimated to average 35 hours 
per response, including the time for reviewing instructions, searching 
existing data sources, gathering and maintaining the data needed, and 
completing and reviewing the collection of information.
    Revised certification data would be required for SPVU were this 
NOPR/NOPD to be finalized as proposed; however, DOE is not proposing 
amended certification or reporting requirements for SPVUs in this NOPR. 
Instead, DOE may consider proposals to establish certification 
requirements and reporting for SPVUs under a separate rulemaking 
regarding appliance and equipment certification. DOE will address 
changes to OMB Control Number 1910-1400 at that time, as necessary.
    Notwithstanding any other provision of the law, no person is 
required to respond to, nor shall any person be subject to a penalty 
for failure to comply with, a collection of information subject to the 
requirements of the PRA, unless that collection of information displays 
a currently valid OMB Control Number.

D. Review Under the National Environmental Policy Act of 1969

    In this NOPR/NOPD, DOE is proposing amended energy conservation 
standards for SPVUs that would utilize a new cooling efficiency metric 
(IEER); however, the amended standards, if adopted, would be of 
equivalent stringency to the current Federal standards for SPVUs. DOE 
is analyzing this proposed regulation in accordance with the National 
Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.; ``NEPA'') and 
DOE's NEPA implementing regulations at 10 CFR part 1021. DOE's 
regulations include a categorical exclusion for rulemakings that 
establish energy conservation standards for consumer products or 
industrial equipment. 10 CFR part 1021,

[[Page 75418]]

subpart D, appendix B5.1. DOE anticipates that this rulemaking 
qualifies for categorical exclusion B5.1 because it is a rulemaking 
that establishes energy conservation standards for consumer products or 
industrial equipment, none of the exceptions identified in categorical 
exclusion B5.1(b) apply, no extraordinary circumstances exist that 
require further environmental analysis, and it 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 
rule.

E. Review Under Executive Order 13132

    E.O. 13132, ``Federalism,'' 64 FR 43255 (August 10, 1999), imposes 
certain requirements on Federal agencies formulating and implementing 
policies or regulations that preempt State law or that have federalism 
implications. The Executive order requires agencies to examine the 
constitutional and statutory authority supporting any action that would 
limit the policymaking discretion of the States and to carefully assess 
the necessity for such actions. The Executive order also requires 
agencies to have an accountable process to ensure meaningful and timely 
input by State and local officials in the development of regulatory 
policies that have federalism implications. On March 14, 2000, DOE 
published a statement of policy describing the intergovernmental 
consultation process it will follow in the development of such 
regulations. 65 FR 13735. DOE has examined this proposed rule/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/proposed determination. 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(a) and (b); 42 U.S.C. 6297(d)) 
Therefore, no further action is required by Executive Order 13132.

F. Review Under Executive Order 12988

    With respect to the review of existing regulations and the 
promulgation of new regulations, section 3(a) of E.O. 12988, ``Civil 
Justice Reform,'' 61 FR 4729 (Feb. 7, 1996), 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. 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 
Executive Order 12988 requires executive agencies to review regulations 
in light of applicable standards in section 3(a) and section 3(b) to 
determine whether they are met or it is unreasonable to meet one or 
more of them. DOE has completed the required review and determined 
that, to the extent permitted by law, this proposed rule/proposed 
determination meets the relevant standards of E.O. 12988.

G. Review Under the Unfunded Mandates Reform Act of 1995

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) 
requires each Federal agency to assess the effects of Federal 
regulatory actions on State, local, and Tribal governments and the 
private sector. Public Law 104-4, section 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 energy.gov/sites/prod/files/gcprod/documents/umra_97.pdf.
    DOE examined this proposed rule/proposed determination according to 
UMRA and its statement of policy and determined that it contains 
neither a Federal intergovernmental mandate, nor a mandate expected to 
require expenditures of $100 million or more in any one year. 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 rule would not have any impact on the autonomy or 
integrity of the family as an institution. Accordingly, DOE has 
concluded that it is not necessary to prepare a Family Policymaking 
Assessment.

I. Review Under Executive Order 12630

    Pursuant to E.O. 12630, ``Governmental Actions and Interference 
with Constitutionally Protected Property Rights,'' 53 FR 8859 (March 
18, 1988), DOE has determined that this proposed rule/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 proposed rule/proposed determination under the OMB and 
DOE guidelines and has concluded

[[Page 75419]]

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 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 
Executive Order 12866, or any successor order; and (2) is likely to 
have a significant adverse effect on the supply, distribution, or use 
of energy, or (3) is designated by the Administrator of OIRA as a 
significant energy action. For any 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.
    DOE has tentatively concluded that this regulatory action, which 
does not propose to increase stringency beyond the current Federal 
standard levels for SPVUs, is not a significant energy action because 
it 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.'' 70 FR 2664, 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 a report describing that peer 
review.\48\ 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. DOE is 
in the process of evaluating the resulting report.\49\
---------------------------------------------------------------------------

    \48\ The 2007 ``Energy Conservation Standards Rulemaking Peer 
Review Report'' is available at the following website: energy.gov/eere/buildings/downloads/energy-conservation-standards-rulemaking-peer-review-report-0.
    \49\ The report is available at www.nationalacademies.org/our-work/review-of-methods-for-setting-building-and-equipment-performance-standards (Last accessed August 5, 2022).
---------------------------------------------------------------------------

VIII. Public Participation

A. Participation in the Public Meeting Webinar

    The time and date of the webinar meeting 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: www.energy.gov/eere/buildings/public-meetings-and-comment-deadlines 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 
NOPR/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 public meeting webinar. Such persons may 
submit requests to speak via email to the Appliance and Equipment 
Standards Program at: [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 rulemaking and 
the topics they wish to discuss. Such persons should also provide a 
daytime telephone number where they can be reached.
    DOE requests persons selected to make an oral presentation to 
submit an advance copy of their statements at least two weeks before 
the webinar. At its discretion, DOE may permit persons who cannot 
supply an advance copy of their statement to participate, if those 
persons have made advance alternative arrangements with the Building 
Technologies Office. As necessary, requests to give an oral 
presentation should ask for such alternative arrangements.

C. Conduct of the Public Meeting Webinar

    DOE will designate a DOE official to preside at the public meeting 
webinar 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 public meeting webinar. 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 public meeting webinar and until the end of the comment period, 
interested parties may submit further comments on the proceedings and 
any aspect of the rulemaking.
    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 rulemaking. Each participant will be allowed to make a 
general statement (within time limits determined by DOE), before the 
discussion of specific topics. DOE will allow, 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 and comment on 
statements made by others.

[[Page 75420]]

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 
rulemaking. The official conducting the webinar 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 procedures that may be needed for the proper 
conduct of the public meeting webinar.
    A transcript of the public meeting webinar will be included in the 
docket, which can be viewed as described in the Docket section at the 
beginning of this document. 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 rule/proposed determination before or after the public 
meeting, but no later than the date provided in the DATES section at 
the beginning of this document. 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. With this instruction followed, the cover 
letter will not be publicly viewable as long as it does not include any 
comments.
    Include contact information each time you submit comments, data, 
documents, and other information to DOE. If you submit via postal mail 
or hand delivery/courier, please provide all items on a CD, if 
feasible, in which case it is not necessary to submit printed copies. 
No telefacsimiles (faxes) will be accepted.
    Comments, data, and other information submitted to DOE 
electronically should be provided in PDF (preferred), Microsoft Word or 
Excel, WordPerfect, or text (ASCII) file format. Provide documents that 
are not secured, 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 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).

E. Issues on Which DOE Seeks Comment

    Although DOE welcomes comments on any aspect of this proposal, DOE 
is particularly interested in receiving comments and views of 
interested parties concerning the following issues:
    Issue-1: DOE requests comment on the proposed baseline IEER levels 
for SPVUs, as well as comment on any aspect of its crosswalk analysis. 
DOE continues to seek information which compares EER to IEER for the 
SPVUs that are representative of the market baseline efficiency level 
for all equipment classes.
    Issue-2: DOE requests comment on the proposed technology options 
for SPVUs. DOE also requests data on the potential improvement in IEER 
and COP associated with these technology options.
    Issue-3: DOE requests comment on the proposed baseline efficiency 
levels and the design options associated with these levels.
    Issue-4: DOE requests comment on the proposed incremental higher 
efficiency levels for each equipment class. DOE requests data showing 
the range of efficiencies based on IEER and COP available for SPVUs on 
the market, as well as the design options associated with units at 
different efficiency levels for each equipment class.
    Issue-5: DOE requests comment on the cost-efficiency results. In 
particular, DOE requests comment on the costs associated with the 
design options analyzed, as well as the shipping costs associated with 
each efficiency level.
    Issue-6: DOE requests comment on its assessment of impacts on 
domestic, small manufacturers of SPVUs.

[[Page 75421]]

Specifically, DOE requests comment on its understanding that this 
proposed rule/proposed determination will not have a significant 
economic impact on a substantial number of small businesses.
    Additionally, DOE welcomes comments on other issues relevant to the 
conduct of this proposed rulemaking that may not specifically be 
identified in this document.

IX. Approval of the Office of the Secretary

    The Secretary of Energy has approved publication of this notice of 
proposed rulemaking; notification of proposed determination.

List of Subjects in 10 CFR Part 431

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

Signing Authority

    This document of the Department of Energy was signed on November 
22, 2022, by Francisco Alejandro Moreno, Acting 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 Monday November 23, 2022.
Treena V. Garrett,
Federal Register Liaison Officer, U.S. Department of Energy.

    For the reasons set forth in the preamble, DOE proposes to amend 
part 431 of Chapter II, Subchapter D, of Title 10 of the Code of 
Federal Regulations, as set forth below:

PART 431--ENERGY EFFICIENCY CONSERVATION PROGRAM FOR CERTAIN 
COMMERCIAL AND INDUSTRIAL EQUIPMENT

0
1. The authority citation for part 431 continues to read as follows:

    Authority:  42 U.S.C 6291-6317; 28 U.S.C 2461 note.

0
2. Section 431.97 is amended by revising paragraph (d) to read as 
follows:


Sec.  431.97   Energy efficiency standards and their compliance dates.

* * * * *
    (d) (1) Each single package vertical air conditioner and single 
package vertical heat pump manufactured on and after October 9, 2015 
(for models >=65,000 Btu/h and <135,000 Btu/h) or October 9, 2016 (for 
models >=135,000 Btu/h and <240,000 Btu/h), or September 23, 2019 (for 
models <65,000 Btu/h), but before (compliance date of final rule) must 
meet the applicable minimum energy conservation standard level(s) set 
forth in Table 9 of this section.

 Table 9 to Sec.   431.97--Minimum Efficiency Standards for Single Package Vertical Air Conditioners and Single
                                           Package Vertical Heat Pumps
----------------------------------------------------------------------------------------------------------------
                                                                                               Compliance date:
                                                                                                   products
          Equipment type             Cooling capacity    Sub- category    Efficiency level   manufactured on and
                                                                                                 after . . .
----------------------------------------------------------------------------------------------------------------
Single package vertical air        <65,000 Btu/h......  AC              EER = 11.0.........  September 23, 2019.
 conditioners and single package                        HP              EER = 11.0.........  September 23, 2019.
 vertical heat pumps, single-                                           COP = 3.3..........
 phase and three-phase.
Single package vertical air        >=65,000 Btu/h and   AC              EER = 10.0.........  October 9, 2015.
 conditioners and single package    <135,000 Btu/h.     HP              EER = 10.0.........  October 9, 2015.
 vertical heat pumps.                                                   COP = 3.0..........
Single package vertical air        >=135,000 Btu/h and  AC              EER = 10.0.........  October 9, 2016.
 conditioners and single package    <240,000 Btu/h.     HP              EER = 10.0.........  October 9, 2016.
 vertical heat pumps.                                                   COP = 3.0..........
----------------------------------------------------------------------------------------------------------------

    (2) Each single package vertical air conditioner and single package 
vertical heat pump manufactured on or after (compliance date of final 
rule) must meet the applicable minimum energy efficiency standard 
level(s) set forth in Table 10 of this section.

 Table 10 to Sec.   431.97--Minimum Efficiency Standards for Single Package Vertical Air Conditioners and Single
                                           Package Vertical Heat Pumps
----------------------------------------------------------------------------------------------------------------
                                                                                               Compliance date:
                                                                                                   products
          Equipment type             Cooling capacity    Sub- category    Efficiency level   manufactured on and
                                                                                                 after . . .
----------------------------------------------------------------------------------------------------------------
Single package vertical air        <65,000 Btu/h......  AC              IEER = 12.5........  (compliance date of
 conditioners and single package                        HP              IEER = 12.5........   final rule).
 vertical heat pumps, single-                                           COP = 3.3..........
 phase and three-phase.
Single package vertical air        >=65,000 Btu/h and   AC              IEER = 10.3........  (compliance date of
 conditioners and single package    <135,000 Btu/h.     HP              IEER = 10.3........   final rule).
 vertical heat pumps.                                                   COP = 3.0..........
Single package vertical air        >=135,000 Btu/h and  AC              IEER = 11.2........  (compliance date of
 conditioners and single package    <240,000 Btu/h.     HP              IEER = 11.2........   final rule).
 vertical heat pumps.                                                   COP = 3.0..........
----------------------------------------------------------------------------------------------------------------

* * * * *
[FR Doc. 2022-26024 Filed 12-7-22; 8:45 am]
BILLING CODE 6450-01-P