[Federal Register Volume 88, Number 29 (Monday, February 13, 2023)]
[Rules and Regulations]
[Pages 9136-9162]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-02655]
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DEPARTMENT OF ENERGY
10 CFR Part 431
[EERE-2019-BT-STD-0035]
RIN 1904-AE66
Energy Conservation Program: Energy Conservation Standards for
Packaged Terminal Air Conditioners and Packaged Terminal Heat Pumps
AGENCY: Office of Energy Efficiency and Renewable Energy, Department of
Energy.
ACTION: Final determination.
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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 Packaged
Terminal Air Conditioners (``PTACs'') and Packaged Terminal Heat Pumps
(``PTHPs''). EPCA also requires the U.S. Department of Energy (``DOE'')
to periodically review standards. In this final determination, DOE has
determined that it lacks clear and convincing evidence that more-
stringent standards for PTACs and PTHPs would be economically
justified. As such, DOE has determined that energy conservation
standards for PTACs and PHTPs do not need to be amended.
DATES: The effective date of this determination is March 15, 2023.
ADDRESSES: The docket for this rulemaking, which includes Federal
Register notices, webinar attendee lists and transcripts, comments, and
other supporting documents/materials, is available for review at
www.regulations.gov. All documents in the docket are listed in the
www.regulations.gov index. However, not all documents listed in the
index may be publicly available, such as information that is exempt
from public disclosure.
The docket web page can be found at www.regulations.gov/docket/EERE-2019-BT-STD-0035. The docket web page contains instructions on how
to access all documents, including public comments, in the docket.
For further information on how to review the docket, contact the
Appliance and Equipment Standards Program staff at (202) 287-1445 or by
email: [email protected].
FOR FURTHER INFORMATION CONTACT: Mr. Lucas Adin, U.S. Department of
Energy, Office of Energy Efficiency and Renewable Energy, Building
Technologies Office, EE-5B, 1000 Independence Avenue SW, Washington, DC
20585-0121. Telephone: (202) 287-5904. Email:
[email protected].
Ms. Amelia Whiting, U.S. Department of Energy, Office of the
General Counsel, GC-33, 1000 Independence Avenue SW, Washington, DC
20585-0121. Telephone: (202) 586-2588. Email:
[email protected].
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Synopsis of the Final Determination
II. Introduction
A. Authority
B. Background
1. Current Standards
2. History of Standards Rulemakings for PTACs and PTHPs
III. General Discussion
A. Equipment Classes and Scope of Coverage
B. Test Procedure
C. Technological Feasibility
1. General
2. Maximum Technologically Feasible Levels
D. Energy Savings
1. Determination of Savings
2. Significance of Savings
E. Economic Justification
1. Economic Impact on Manufacturers and Consumers
[[Page 9137]]
2. Savings in Operating Costs Compared to Increase in Price
3. Energy Savings
4. Lessening of Utility or Performance of Products
5. Impact of Any Lessening of Competition
6. Need for National Energy Conservation
7. Other Factors
IV. Methodology and Discussion of Related Comments
A. Comments Received on the Proposed Determination
B. Market and Technology Assessment
1. Scope of Coverage
2. Equipment Classes
a. Make-Up Air PTACs and PTHPs
3. Technology Options
4. Screening Analysis
a. Screened-Out Technologies
b. Other Technologies Not Considered in the Engineering Analysis
c. Remaining Technologies
C. Engineering Analysis
1. Efficiency Analysis
2. Equipment Classes Analyzed
3. Baseline Efficiency Levels
4. Maximum Available and Maximum Technologically Feasible Levels
5. Incremental Efficiency Levels
6. Cost Analysis
7. Cost-Efficiency Results
D. Markups Analysis
E. Energy Use Analysis
F. Life-Cycle Cost and Payback Period Analysis
1. PTAC and PTHP Equipment Cost
2. Installation Cost
3. Annual Energy Consumption
4. Energy Prices
5. Maintenance and Repair Costs
6. Product Lifetime
7. Discount Rates
8. Energy Efficiency Distribution in the No-New-Standards Case
9. Payback Period Analysis
G. Shipments Analysis
H. National Impact Analysis
1. Equipment Efficiency Trends
2. National Energy Savings
3. Net Present Value Analysis
V. Analytical Results and Conclusions
A. Economic Impacts on PTAC and PTHP Consumers
B. National Impact Analysis
a. Net Present Value of Consumer Costs and Benefits
C. Final Determination
1. Technological Feasibility
2. Significant Conservation of Energy
3. Economic Justification
4. Summary
VI. Procedural Issues and Regulatory Review
A. Review Under Executive Order 12866 and 13563
B. Review Under the Regulatory Flexibility Act
C. Review Under the Paperwork Reduction Act
D. Review Under the National Environmental Policy Act of 1969
E. Review Under Executive Order 13132
F. Review Under Executive Order 12988
G. Review Under the Unfunded Mandates Reform Act of 1995
H. Review Under the Treasury and General Government
Appropriations Act, 1999
I. Review Under Executive Order 12630
J. Review Under the Treasury and General Government
Appropriations Act, 2001
K. Review Under Executive Order 13211
L. Information Quality
M. Congressional Notification
VII. Approval of the Office of the Secretary
I. Synopsis of the Final Determination
The Energy Policy and Conservation Act, Public Law 94-163, as
amended (``EPCA''),\1\ authorizes DOE to regulate the energy efficiency
of a number of consumer products and certain industrial equipment. (42
U.S.C. 6291-6317) Title III, Part C \2\ of EPCA,\3\ established the
Energy Conservation Program for Certain Industrial Equipment. (42
U.S.C. 6311-6317) Such equipment includes PTACs and PTHPs, the subject
of this rulemaking.
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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.
\3\ 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.
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For this determination, DOE analyzed PTACs and PTHPs subject to
standards specified in Code of Federal Regulations (``CFR'') at 10 CFR
431.97. DOE first analyzed the technological feasibility of more energy
efficient PTACs and PTHPs. For those PTACs and PTHPs for which DOE
determined higher standards to be technologically feasible, DOE
estimated energy savings that would result from potential energy
conservation standards by conducting a national impacts analysis
(``NIA''). DOE also considered whether potential energy conservation
standards would be economically justified. As discussed in the
following sections, DOE has determined that it lacks clear and
convincing evidence that amended energy conservation standards for
PTACs and PTHPs would be economically justified. DOE evaluated whether
higher standards would be cost effective by conducting life-cycle cost
(``LCC'') and payback period (``PBP'') analyses and estimated the net
present value (``NPV'') of the total costs and benefits experienced by
consumers.
Based on the results of the analyses, summarized in section V of
this document, DOE has determined that it lacks clear and convincing
evidence that more stringent standards would result in significant
additional energy savings and be technologically feasible and
economically justified.
II. Introduction
The following section briefly discusses the statutory authority
underlying this final determination, as well as some of the historical
background relevant to the establishment of standards for PTACs and
PTHPs.
A. Authority
EPCA authorizes DOE to regulate the energy efficiency of a number
of consumer products and certain industrial equipment. Title III, Part
C of EPCA (42 U.S.C. 6311-6317, as codified), added by Public Law 95-
619, Title IV, section 441(a), established the Energy Conservation
Program for Certain Industrial Equipment, which sets forth a variety of
provisions designed to improve energy efficiency. This equipment
includes PTACs and PTHPs, the subject of this document. (42 U.S.C.
6311(1)(I)) EPCA prescribed initial standards for this equipment. (42
U.S.C. 6313(a)(3))
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(b); 42 U.S.C. 6297(a)) DOE may, however, grant waivers of
Federal preemption in limited instances for particular State laws or
regulations, in accordance with the procedures and other provisions set
forth under EPCA. (See 42 U.S.C. 6316(b)(2)(D))
The energy conservation program under EPCA consists essentially of
four parts: (1) testing, (2) labeling, (3) the establishment of Federal
energy conservation standards, and (4) certification and enforcement
procedures. Relevant provisions of EPCA include definitions (42 U.S.C.
6311), test procedures (42 U.S.C. 6314), labeling provisions (42 U.S.C.
6315), energy conservation standards (42 U.S.C. 6313), and the
authority to require information and reports from manufacturers (42
U.S.C. 6316; 42 U.S.C. 6296(a), (b), and (d)).
Subject to certain criteria and conditions, DOE is required to
develop test procedures to measure the energy efficiency, energy use,
or estimated annual operating cost of covered equipment. (42 U.S.C.
6314(a)(2)) Manufacturers of covered equipment must use the Federal
test procedures as the basis for: (1) certifying to DOE that their
equipment complies with the applicable energy conservation standards
adopted pursuant to EPCA (42 U.S.C. 6316(b); 42 U.S.C. 6296), and (2)
making representations about the
[[Page 9138]]
efficiency of that equipment (42 U.S.C. 6314(d)) Similarly, DOE uses
these test procedures to determine whether the equipment complies with
relevant standards promulgated under EPCA. The DOE test procedures for
PTACs and PTHPs appear at 10 CFR 431.96(g).
The American Society of Heating, Refrigerating, and Air-
Conditioning Engineers (``ASHRAE'') Standard 90.1 (``ASHRAE Standard
90.1''), ``Energy Standard for Buildings Except Low-Rise Residential
Buildings,'' 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 ``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 PTACs and PTHPs 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 (``NOPR'') including new proposed
standards based on certain criteria and procedures in subparagraph (B).
(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
(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 the products subject to the standard;
(2) The savings in operating costs throughout the estimated average
life of the product in the type (or class) compared to any increase in
the price, initial charges, or maintenance expenses of the products
likely to result from the standard;
(3) The total projected quantity of energy savings likely to result
directly from the standard;
(4) Any lessening of the utility or the performance of the products
likely to result from the standard;
(5) The impact of any lessening of competition, as determined in
writing by the Attorney General, that is likely to result from the
standard;
(6) The need for national energy conservation; and
(7) Other factors the Secretary considers relevant.
(42 U.S.C. 6313(a)(6)(B)(ii))
EPCA, as codified, also contains what is known as an ``anti-
backsliding'' provision, which prevents the Secretary from prescribing
any amended standard that either increases the maximum allowable energy
use or decreases the minimum required energy efficiency of a covered
product. (42 U.S.C. 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))
EPCA further provides that, not later than three years after the
issuance of a final determination not to amend standards, DOE must
publish either a notice of determination that standards for the product
do not need to be amended, or a NOPR including new proposed energy
conservation standards (proceeding to a final rule, as appropriate).
(42 U.S.C. 6313(a)(6)(C)(iii)(II)) A determination that amended energy
conservation standards are not needed must be based on the same
considerations as if it were adopting a standard that is more stringent
than an amendment to ASHRAE Standard 90.1. (42 U.S.C.
6313(a)(6)(C)(i)(II); 42 U.S.C. 6313(a)(6)(A)) DOE must make the
analysis on which the determination is based publicly available and
provide an opportunity for written comment. (42 U.S.C.
6313(a)(6)(C)(ii))
DOE is publishing this final determination in satisfaction of the
6-year review requirement in EPCA, having determined that DOE lacks
clear and convincing evidence that amended standards for PTACs and
PTHPs would be economically justified.
B. Background
1. Current Standards
In a final rule published on July 21, 2015 (``July 2015 final
rule''), DOE prescribed the current energy conservation standards for
PTACs and PTHPs. 80 FR 43162. These levels are expressed in energy
efficiency ratio (``EER'') for the cooling mode for PTACs and PTHPs and
in coefficient of performance (``COP'') for the heating mode for PTHPs.
10 CFR 431.97(c). EER is defined as the ratio of the produced cooling
effect of an air conditioner or heat pump to its net work input,
expressed in British thermal units (``Btu'')/watt-hour. 10 CFR 431.92.
COP is defined as the ratio of the produced cooling effect of an air
conditioner or heat pump (or its produced heating effect, depending on
the mode of operation) to its net work input, when both the cooling (or
heating) effect and the net work input are expressed in identical units
of measurement. 10 CFR 431.92.
The current energy conservation standards are located at 10 CFR
431.97, Tables 7 and 8, and repeated in Table II-1.
Table II-1--Federal Energy Conservation Standards for PTACs and PTHPs
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Equipment class
------------------------------------------------------------------------- Compliance date:
Cooling capacity products
(British thermal Efficiency level * manufactured on or
Equipment type Category units per hour after
(``Btu/h'')
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PTAC............................ Standard Size **.. <7,000 Btu/h...... EER = 11.9........ January 1, 2017.
>=7,000 Btu/h and EER = 14.0 - January 1, 2017.
<=15,000 Btu/h. (0.300 x Cap
[dagger][dagger]).
>15,000 Btu/h..... EER = 9.5......... January 1, 2017.
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Non-Standard Size <7,000 Btu/h...... EER = 9.4......... October 7, 2010.
[dagger].
[[Page 9139]]
>=7,000 Btu/h and EER = 10.9 - October 7, 2010.
<=15,000 Btu/h. (0.213 x Cap
[dagger][dagger]).
>15,000 Btu/h..... EER = 7.7......... October 7, 2010.
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PTHP............................ Standard Size **.. <7,000 Btu/h...... EER = 11.9........ October 8, 2012.
COP = 3.3.........
>=7,000 Btu/h and EER = 14.0 - October 8, 2012.
<=15,000 Btu/h. (0.300 x Cap
[dagger][dagger]).
COP = 3.7 - (0.052
x Cap
[dagger][dagger])
..
>15,000 Btu/h..... EER = 9.5......... October 8, 2012.
COP = 2.9.........
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Non-Standard Size <7,000 Btu/h...... EER = 9.3......... October 7, 2010.
[dagger]. COP = 2.7.........
>=7,000 Btu/h and EER = 10.8 - October 7, 2010.
<=15,000 Btu/h. (0.213 x Cap
[dagger][dagger]).
COP = 2.9 - (0.026
x Cap
[dagger][dagger])
..
>15,000 Btu/h..... EER = 7.6......... October 7, 2010.
COP = 2.5.........
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* For equipment rated according to the DOE test procedure prescribed at 10 CFR 431.96(g).
** Standard size means a PTAC or PTHP with wall sleeve dimensions having an external wall opening of greater
than or equal to 16 inches high or greater than or equal to 42 inches wide, and a cross-sectional area greater
than or equal to 670 square inches. 10 CFR 431.92.
[dagger] Non-standard size means a PTAC or PTHP with existing wall sleeve dimensions having an external wall
opening of less than 16 inches high or less than 42 inches wide, and a cross-sectional area less than 670
square inches. Id.
[dagger][dagger] Cap means cooling capacity in thousand Btu/h at 95[deg] F outdoor dry-bulb temperature.
2. History of Standards Rulemakings for PTACs and PTHPs
In the July 2015 final rule, DOE published amendments to the PTAC
and PTHP standards in response to the 2013 update to ASHRAE Standard
90.1 (``ASHRAE Standard 90.1-2013''). 80 FR 43162. DOE determined that
ASHRAE Standard 90.1-2013 amended the standards for three of the 12
PTAC and PTHP equipment classes: PTAC standard size less than 7,000
Btu/h, PTAC standard size greater than or equal 7,000 Btu/h and less
than or equal to 15,000 Btu/h, and PTAC standard size greater than
15,000 Btu/h. 80 FR 43162, 43163. DOE adopted the standard levels for
these three equipment classes as updated by ASHRAE Standard 90.1-2013,
with compliance with the amended standards required for equipment
manufactured on or after January 1, 2017. Id. DOE did not amend the
energy conservation standards for the remaining nine equipment classes,
which were already aligned with the standards in ASHRAE Standard 90.1-
2013. 80 FR 43162, 43166. DOE was unable to show with clear and
convincing evidence that energy conservation standards at levels more
stringent than the minimum levels specified in the ASHRAE Standard
90.1-2013 for any of the 12 equipment classes would be economically
justified. 80 FR 43162, 43163.
Since ASHRAE Standard 90.1-2013 was published, ASHRAE Standard 90.1
has undergone three further revisions. A revision was published on
October 26, 2016 (``ASHRAE Standard 90.1-2016'') and a revision was
published on October 24, 2019 (``ASHRAE Standard 90.1-2019''). The most
recent revision was published in January, 2023 (``ASHRAE Standard 90.1-
2022''). None of these publications amended the minimum EER and COP
levels for PTACs and PTHPs.
In support of the present review of the PTACs and PTHPs energy
conservation standards, DOE published an early assessment review
request for information (``RFI'') on December 21, 2020 (``December 2020
ECS RFI''), which identified various issues on which DOE sought comment
to inform its determination of whether the standards need to be
amended. 85 FR 82952.
Subsequently, on June 24, 2022, DOE published a notice of proposed
determination (``NOPD'') where DOE tentatively determined that it lacks
clear and convincing evidence that more-stringent standards for PTACs
and PTHPs would result in significant additional energy savings and be
technologically feasible and economically justified (``June 2022
NOPD''). 87 FR 37934.
DOE received comments in response to the June 2022 NOPD from the
interested parties listed in Table II-2. These comments are discussed
in detail in section IV of this document.
Table II-2--June 2022 NOPD Written Comments
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Reference in this final
Commenter(s) determination Commenter No. Commenter type
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Air-Conditioning, Heating, and AHRI...................... 21 Trade Association.
Refrigeration Institute.
Northwest Energy Efficiency Alliance, Joint Advocates........... 20 Efficiency Organizations.
American Council for an Energy-
Efficient Economy, Appliance Standards
Awareness Project.
Pacific Gas and Electric Company, San CA IOUs................... 19 Utilities.
Diego Gas and Electric, and Southern
California Edison.
New York State Energy Research and NYSERDA................... 18 Efficiency Organizations.
Development Authority.
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[[Page 9140]]
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. (Docket No. EERE-2019-BT-STD-
0035, which is maintained at www.regulations.gov) The references are
arranged as follows: (commenter name, comment docket ID number, page
of that document).
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III. General Discussion
DOE developed this final determination 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. Equipment Classes and Scope of Coverage
When evaluating and establishing energy conservation standards, DOE
divides covered equipment into equipment classes by the type of energy
used or by capacity or other performance-related features that justify
differing standards. This determination covers PTACs and PTHPs.
PTAC is defined as a wall sleeve and a separate un-encased
combination of heating and cooling assemblies specified by the builder
and intended for mounting through the wall, and that is industrial
equipment. 10 CFR 431.92. It includes a prime source of refrigeration,
separable outdoor louvers, forced ventilation, and heating availability
by builder's choice of hot water, steam, or electricity. Id.
PTHP is defined as a PTAC that utilizes reverse cycle refrigeration
as its prime heat source, that has a supplementary heat source
available, with the choice of hot water, steam, or electric resistant
heat, and that is industrial equipment. Id.
The scope of coverage is discussed in further detail in section
IV.A.1 of this document. The PTAC and PTHP classes for this
determination are discussed in further detail in section IV.A.2 of this
document.
B. Test Procedure
EPCA sets forth generally applicable criteria and procedures for
DOE's adoption and amendment of test procedures. (42 U.S.C. 6314(a))
Manufacturers of covered equipment must use these test procedures to
certify to DOE that their product complies with energy conservation
standards and to quantify the efficiency of their product. (42 U.S.C.
6314(d)) As discussed, DOE's current energy conservation standards for
PTACs and PTHPs are expressed in terms of EER and COP. 10 CFR 431.97.
DOE's current test procedures for PTACs and PTHPs were last updated
in a test procedure final rule on June 30, 2015 (``June 2015 TP final
rule''). 80 FR 37136. The current test procedure for cooling mode
incorporates by reference AHRI Standard 310/380-2014, ``Standard for
Packaged Terminal Air-Conditioners and Heat Pumps'' (``AHRI Standard
310/380-2014'') with the following sections applicable to the DOE test
procedure: sections 3, 4.1, 4.2, 4.3, and 4.4; American National
Standards Institute (``ANSI'')/ASHRAE 16-1983 (RA 2014), ``Method of
Testing for Rating Room Air Conditioners and Packaged Terminal Air
Conditioners'' (``ANSI/ASHRAE Standard 16-1983'') and ANSI/ASHRAE 37-
2009, ``Methods of Testing for Rating Electrically Driven Unitary Air-
Conditioning and Heat Pump Equipment'' (``ANSI/ASHRAE Standard 37-
2009''). 10 CFR 431.96(g)(1). The current test procedure for heating
mode testing incorporates by reference AHRI Standard 310/380-2014, with
the following sections applicable to the DOE test procedure: sections
3, 4.1, 4.2 (except the section 4.2.1.2(b) reference to ANSI/ASHRAE
37), 4.3, and 4.4; and ANSI/ASHRAE Standard 58-1986 (RA 2014), ``Method
of Testing for Rating Room Air-Conditioner and Packaged Terminal Air-
Conditioner Heating Capacity'' (``ANSI/ASHRAE Standard 58-1986''). 10
CFR 431.96(g)(2). The currently applicable DOE test procedures for
PTACs and PTHPs appear at 10 CFR 431.96 (g).
The current test procedures also include additional provisions in
paragraphs (c) and (e) of 10 CFR 431.96. 10 CFR 431.96(b)(1). Paragraph
(c) of 10 CFR 431.96 specifies provisions for an optional compressor
break-in period, and paragraph (e) of 10 CFR 431.96 details what
information sources can be used for unit set-up and provides specific
set-up instructions for refrigerant parameters (e.g., superheat) and
air flow rate.\5\
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\5\ The amendatory instructions in the June 2015 TP final rule
for PTACs and PTHPs includes the reference to AHRI Standard 310/380-
2014 in paragraphs (c) and (e), indicating that the requirements do
apply to this equipment, even though the current CFR does not
include this reference. 80 FR 37136, 37149 (June 30, 2015).
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DOE's current test procedure for PTACs and PTHPs do not include a
seasonal metric that includes part-load performance. As part of an
ongoing test procedure rulemaking, DOE published a RFI on May 25, 2021
(``May 2021 TP RFI''), in which DOE requested information and data to
consider amendments to DOE's test procedure for PTACs and PTHPs. 86 FR
28005. Specifically, DOE requested comment on whether it should
consider adopting for PTACs and PTHPs a cooling-mode metric and a
heating-mode metric that integrates part-load performance to better
represent full-season efficiency. 86 FR 28005, 28010-28011. Were DOE to
amend the PTAC and PTHP test procedure to incorporate a part-load
metric, any analysis for future standards rulemakings would be based on
the amended test procedure.
DOE received general comments related to the test procedure in
response to the June 2022 NOPD. AHRI recommended that DOE incorporate
by reference AHRI Standard 310/280-2017 without modifications as it
includes provisions currently prescribed in 10 CFR 431.96, while also
including alternative energy determination method (AEDM) requirements,
instructions on refrigerant charge, standard rating requirements for
non-US and non-Canada climate regions, and ASHRAE 58 as the only
permissible standard to use as the heat rating test method. (AHRI, No.
21 at p. 2-3) AHRI noted that the AHRI Standard 310/380 committee
recently met to consider the development of test procedures for
variable speed operation, low temperature operation, and a test
procedure for determining the energy consumption associated with the
dehumidification function of make-up air PTACs/PTHPs as part of the
revision effort. Id. AHRI noted that DOE has a representative on this
committee and encouraged DOE's involvement in the review process. Id.
NYSERDA asserted that current PTHP standards do not sufficiently
address low temperature ambient conditions in equipment classes and
test procedures. (NYSERDA No. 18 at p. 1-2) NYSERDA stated the current
PTHP heating performance metric does not adequately represent a PTHP's
average use cycle during the heating season, and strongly urged the DOE
prioritize this element in the next round of test procedure and
standards updates. Id. NYSERDA highlighted their anticipation for
increasing demand for heat pump solutions with decarbonization policies
being implemented and requested future test procedures be more
representative of New York's climate zones 4A, 5A, and 6A as well as
cold climates in general. Id.
The CA IOUs asserted that the current PTAC and PTHP test procedures
can be significantly improved and commented that they are currently
testing PTACs and PTHPs and expect to provide DOE and stakeholders with
data on several test procedure topics, including energy consumption at
part-load conditions, heating performance at temperatures
[[Page 9141]]
lower than current standard heating mode rating conditions, and energy
consumption associated with the delivery of conditioned make-up air.
(CA IOUs, No. 19 at p. 1) The CA IOUs suggested that this data will be
helpful when considering test procedure revisions. Id.
Joint Advocates commented that an improved test procedure could
uncover opportunities for significant cost-effective energy savings and
encouraged DOE to update the test procedure to include a part-load
cooling metric and a heating metric that includes performance at low
ambient temperatures. (Joint Advocates, No. 20 at p. 1)
DOE will consider these comments in the ongoing test procedure
rulemaking. Discussion of part-load technologies as they relate to
standards is contained in section IV.A.3 of this document.
For the purpose of this final determination, DOE relied on the test
procedures for PTACs and PTHPs as currently established at 10 CFR
431.96(g), which does not include part-load metrics.
C. 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
determination. As the first step in such an analysis, DOE develops a
list of technology options for consideration in consultation with
manufacturers, design engineers, and other interested parties. These
technology options are discussed in detail in section IV.B.3 of this
document. DOE then determines which of those means for improving
efficiency are technologically feasible. DOE considers technologies
incorporated in commercially available products or in working
prototypes to be technologically feasible. See generally 10 CFR 431.4;
sections 6(b)(3)(i) and 7(b)(1) of appendix A to 10 CFR part 430
subpart C (``appendix A'').
After DOE has determined that particular technology options are
technologically feasible, it further evaluates each technology option
in light of the following additional screening criteria: (1)
practicability to manufacture, install, and service; (2) adverse
impacts on product utility or availability; (3) adverse impacts on
health or safety; and (4) unique-pathway proprietary technologies. See
generally 10 CFR 431.4; sections 6(b)(3)(ii)-(v) and 7(b)(2)-(5) of
appendix A. Section IV.B.4 of this document discusses the results of
the screening analysis for PTACs and PTHPs, particularly the designs
DOE considered, those it screened out, and those that are the basis for
the standards considered in this final determination. For further
details on the screening analysis for this final determination, see
section IV.B.4 of this document.
2. Maximum Technologically Feasible Levels
When DOE proposes to adopt an amended standard for a type or class
of covered equipment more stringent than the level in ASHRAE 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 PTACs and PTHPs, 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
analysis are described in section IV.C.4 of this final determination.
D. Energy Savings
1. Determination of Savings
For each efficiency level (``EL'') evaluated, DOE projected energy
savings from application of the EL to the PTACs and PTHPs purchased in
the 30-year period that begins in the assumed year of compliance with
the potential standards (2026-2055). The savings are measured over the
entire lifetime of the PTACs and PTHPs purchased in the aforementioned
30-year period. DOE quantified the energy savings attributable to each
EL as the difference in energy consumption between each standards case
and the no-new-standards case. The no-new-standards case represents a
projection of energy consumption that reflects how the market for a
product would likely evolve in the absence of amended energy
conservation standards.
DOE used its national impacts analysis (``NIA'') spreadsheet model
to estimate national energy savings (``NES'') from potential amended
standards for PTACs and PTHPs. The NIA spreadsheet model (described in
section V.B of this document) calculates energy savings in terms of
site energy, which is the energy directly consumed by products at the
locations where they are used. For electricity, DOE reports NES in
terms of primary energy savings, which is the savings in the energy
that is used to generate and transmit the site electricity. DOE also
calculates NES in terms of full-fuel-cycle (``FFC'') energy savings.
The FFC metric includes the energy consumed in extracting, processing,
and transporting primary fuels (i.e., coal, natural gas, petroleum
fuels), and thus presents a more complete picture of the impacts of
energy conservation standards.\6\ DOE's approach is based on the
calculation of an FFC multiplier for each of the energy types used by
covered products or equipment. For more information on FFC energy
savings, see section IV.H of this document.
---------------------------------------------------------------------------
\6\ The FFC metric is discussed in DOE's statement of policy and
notice of policy amendment. 76 FR 51282 (Aug. 18, 2011), as amended
at 77 FR 49701 (Aug. 17, 2012).
---------------------------------------------------------------------------
2. Significance of Savings
In determining whether amended standards are needed, DOE must
consider whether such standards will result in significant conservation
of energy.\7\ (42 U.S.C. 6313(a)(6)(C)(i)(I)); 42 U.S.C.
6313(a)(6)(A)(ii)(II)) The significance of energy savings offered by a
new or amended energy conservation standard cannot be determined
without knowledge of the specific circumstances surrounding a given
rulemaking.\8\ For example, some covered products and equipment have
most of their energy consumption occur during periods of peak energy
demand. The impacts of these products on the energy infrastructure can
be more pronounced than products with relatively constant demand.
Accordingly, DOE evaluates the significance of energy savings on a
case-by-case basis, taking into account the significance of cumulative
FFC
[[Page 9142]]
national energy savings, the cumulative FFC emissions reductions, and
the need to confront the global climate crisis, among other factors.
---------------------------------------------------------------------------
\7\ In setting a more stringent standard for ASHRAE equipment,
DOE must have ``clear and convincing evidence'' that doing so
``would result in significant additional conservation of energy'' in
addition to being technologically feasible and economically
justified. 42 U.S.C. 6313(a)(6)(A)(ii)(II). This language indicates
that Congress had intended for DOE to ensure that, in addition to
the savings from the ASHRAE standards, DOE's standards would yield
additional energy savings that are significant. In DOE's view, this
statutory provision shares the requirement with the statutory
provision applicable to covered products and non-ASHRAE equipment
that ``significant conservation of energy'' must be present (42
U.S.C. 6295(o)(3)(B))--and supported with ``clear and convincing
evidence''--to permit DOE to set a more stringent requirement than
ASHRAE.
\8\ See 86 FR 70892, 70901 (Dec. 13, 2021).
---------------------------------------------------------------------------
E. Economic Justification
As noted previously, EPCA provides seven factors to be evaluated in
determining whether a potential energy conservation standard is
economically justified. (42 U.S.C. 6313(a)(6)(B)(ii)(I)-(VII)) The
following sections discuss how DOE has addressed each of those seven
factors in this final determination.
1. Economic Impact on Manufacturers and Consumers
In determining the impacts of a potential amended standard on
manufacturers, DOE conducts a manufacturing impact analysis (``MIA'').
DOE first uses an annual cash-flow approach to determine the
quantitative impacts. This step includes both a short-term assessment--
based on the cost and capital requirements during the period between
when a regulation is issued and when entities must comply with the
regulation--and a long-term assessment over a 30-year period. The
industry-wide impacts analyzed include (1) industry net present value,
which values the industry on the basis of expected future cash flows,
(2) cash flows by year, (3) changes in revenue and income, and (4)
other measures of impact, as appropriate. However, DOE is not amending
standards for PTACs and PTHPs, and, therefore, this final determination
would have no cash-flow impacts on manufacturers. Accordingly, as
discussed further in section IV.H of this document, DOE did not conduct
an MIA for this final determination.
For individual consumers, measures of economic impact include the
changes in LCC and payback period (``PBP'') associated with new or
amended standards. These measures are discussed further in the
following section. For consumers in the aggregate, DOE also calculates
the national net present value (``NPV'') of the consumer costs and
benefits expected to result from particular standards. DOE also
evaluates the impacts of potential standards on identifiable subgroups
of consumers that may be affected disproportionately by a standard.
However, DOE is not amending standards for PTACs and PTHPs, and,
therefore, this final determination would have no disproportionate
impact on identifiable subgroups of consumers. Accordingly, DOE did not
conduct a subgroup analysis for this final determination.
2. Savings in Operating Costs Compared to Increase in Price
EPCA requires DOE to consider the savings in operating costs
throughout the estimated average life of the covered product in the
type (or class) compared to any increase in the price of, or in the
initial charges for, or maintenance expenses of, the covered product
that are likely to result from a standard. (42 U.S.C.
6313(a)(6)(B)(ii)(II)) DOE conducts this comparison in its LCC and PBP
analysis.
The LCC is the sum of the purchase price of a product (including
its installation) and the operating expense (including energy,
maintenance, and repair expenditures) discounted over the lifetime of
the product. The LCC analysis requires a variety of inputs, such as
product prices, product energy consumption, energy prices, maintenance
and repair costs, product lifetime, and discount rates appropriate for
consumers. To account for uncertainty and variability in specific
inputs, such as product lifetime and discount rate, DOE uses a
distribution of values, with probabilities attached to each value.
The PBP is the estimated amount of time (in years) it takes
consumers to recover the increased purchase cost (including
installation) of a more-efficient product through lower operating
costs. DOE calculates the PBP by dividing the change in purchase cost
due to a more-stringent standard by the change in annual operating cost
for the year that standards are assumed to take effect.
For its LCC and PBP analysis, DOE assumes that consumers will
purchase the covered products in the first year of compliance with new
or amended standards. The LCC savings for the considered efficiency
levels are calculated relative to the case that reflects projected
market trends in the absence of new or amended standards. DOE's LCC and
PBP analysis is discussed in further detail in section IV.F of this
document.
3. Energy Savings
Although significant conservation of energy is a separate statutory
requirement for adopting an energy conservation standard, EPCA requires
DOE, in determining the economic justification of a standard, to
consider the total projected energy savings that are expected to result
directly from the standard. (42 U.S.C. 6313(a)(6)(B)(ii)(III)) As
discussed in section IV.H of this document, DOE uses the NIA
spreadsheet models to project national energy savings.
4. Lessening of Utility or Performance of Products
In establishing product classes and in evaluating design options
and the impact of potential standard levels, DOE evaluates potential
standards that would not lessen the utility or performance of the
considered products. (42 U.S.C. 6313(a)(6)(B)(ii)(IV)) DOE is not
amending standards for PTACs and PTHPs, and, therefore, this final
determination would not impact the utility of such equipment.
5. Impact of Any Lessening of Competition
EPCA directs DOE to consider the impact of any lessening of
competition, as determined in writing by the Attorney General that is
likely to result from a standard. (42 U.S.C. 6313(a)(6)(B)(ii)(V))
Because DOE is not amending standards for PTACs and PTHPs, DOE did not
transmit a copy of its final 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)) The energy savings from
the standards are likely to provide improvements to the security and
reliability of the Nation's energy system. Reductions in the demand for
electricity also may result in reduced costs for maintaining the
reliability of the Nation's electricity system. DOE conducts a utility
impact analysis to estimate how standards may affect the Nation's
needed power generation capacity. However, DOE is not amending
standards for PTACs and PTHPs, and therefore, did not conduct this
analysis.
DOE maintains that environmental and public health benefits
associated with the more efficient use of energy are important to take
into account when considering the need for national energy
conservation. The standards are 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.
DOE conducts an emissions analysis to estimate how standards may affect
these emissions. DOE also estimates the economic value of emissions
reductions resulting from each trial standard level (``TSL'') (i.e.,
standards case above the base case).\9\
[[Page 9143]]
However, DOE is not amending standards for PTACs and PTHPs, and,
therefore, did not conduct this analysis.
---------------------------------------------------------------------------
\9\ On March 16, 2022, the Fifth Circuit Court of Appeals (No.
22-30087) granted the Federal Government's emergency motion for stay
pending appeal of the February 11, 2022, preliminary injunction
issued in Louisiana v. Biden, No. 21-cv-1074-JDC-KK (W.D. La.). As a
result of the Fifth Circuit's order, the preliminary injunction is
no longer in effect, pending resolution of the Federal Government's
appeal of that injunction or a further court order. The preliminary
injunction enjoined the Federal Government from relying on the
interim estimates of the social cost of greenhouse gases--which were
issued by the Interagency Working Group on the Social Cost of
Greenhouse Gases on February 26, 2021--to monetize the benefits of
reducing greenhouse gas emissions. In the absence of further
intervening court orders, DOE will revert to its approach prior to
the injunction and present monetized benefits in accordance with
applicable Executive orders.
---------------------------------------------------------------------------
7. Other Factors
In determining whether an energy conservation standard is
economically justified, DOE may consider any other factors that the
Secretary deems to be relevant. (42 U.S.C. 6313(a)(6)(B)(ii)(VII)) To
the extent DOE identifies any relevant information regarding economic
justification that does not fit into the other categories described
previously, DOE could consider such information under ``other
factors.''
IV. Methodology and Discussion of Related Comments
This section addresses the analyses DOE has performed for this
final determination with regard to PTACs and PTHPs. Separate
subsections address each component of DOE's analyses.
DOE used several analytical tools to estimate the impact of the
standards considered in this document. The first tool is a spreadsheet
that calculates the LCC savings and PBP of potential energy
conservation standards. The NIA uses a second spreadsheet set that
provides shipments projections and calculates NES and net present value
of total consumer costs and savings expected to result from potential
energy conservation standards. These spreadsheet tools are available on
the website for this rulemaking: www.regulations.gov/docket/EERE-2019-BT-STD-0035.
A. Comments Received on the Proposed Determination
The CA IOUs supported the DOE analysis presented in the NOPD and
agreed with DOE's determination that it lacks evidence that more
stringent standards for PTAC and PTHP equipment would be
technologically or economically justified. (CA IOUs, No. 19 at p. 1)
NYSERDA also acknowledged that based on current information, DOE has
insufficient information to update the standards for PTAC and PTHP
equipment, but strongly encouraged DOE to include cold climate
performance into the next rulemaking. (NYSERDA, No. 18 at p. 1)
The Joint Advocates encouraged DOE to establish energy conservation
standards for PTACs and PTHPs based on a part-load cooling performance
metric and a heating metric that incorporates low temperature
performance as soon as possible. Additionally, the Joint Advocates
commented that they understand that DOE's proposed determination
satisfies the EPCA 6-year lookback requirement, but noted that should
DOE issue a final determination not to amend standards, DOE would be
required to publish another NOPD or notice of proposed rulemaking
within three years of the publication of the determination. (Joint
Advocates, No. 20 at p. 1)
In response to NEEA and Joint Advocates respective suggestions of
including cold climate performance and part-load cooling and heating
performance in the next rulemaking, DOE notes that the current test
procedure does not account for cold climate performance or part-load
cooling and heating performance. At present, DOE is unable to consider
energy savings from a part-load metric or low temperature heating
performance. DOE will consider these comments in the ongoing test
procedure rulemaking. If DOE amends the PTAC and PTHP test procedure to
incorporate these changes, DOE will conduct an analysis for future
standards rulemakings, if any, based on the amended test procedure. DOE
concurs with the Joint Advocates that DOE would be required to publish
another NOPD or NOPR within three years of the publication of this
determination.
AHRI agreed with DOE's assessment that DOE lacked clear and
convincing evidence that more-stringent standards for PTACs and PTHPs
would be economically justified noting that the PTAC/PTHP efficiency
levels remain unchanged from ASHRAE 90.1-2013. AHRI stated agreement
with DOE's still codified belief, ``that ASHRAE not acting to amend
Standard 90.1 is tantamount to a decision that the existing standard
remain in place.'' AHRI urged DOE to apply this same statutorily
mandated process to the PTAC/PTHP test procedure and rulemaking
sequencing. (AHRI, No. 21 at p. 1-2) AHRI commented that DOE did not
follow the process specific to ASHRAE equipment, which, AHRI asserted,
requires that within 18 months (plus 180 days) of publication of ASHRAE
Standard 90.1, DOE is required to consider amending the existing test
procedures when ASHRAE Standard 90.1 is amended with respect to test
procedures. Id. AHRI stated that DOE has ignored these provisions and
has not provided any explanation regarding either the deviation from
the correct sequencing of rulemakings, or the disregard of the
promulgation. AHRI urged DOE to adopt AHRI 310/380-2017, which is the
standard cited in ASHRAE Standard 90.1, asserting that this test
procedure has been deemed representative in past rulemakings, including
in the analysis underpinning this energy conservation standard. AHRI
additionally stated that no manufacturer has submitted a waiver to
modify the current test procedure, which indicates that the results of
the existing test procedure remain representative of actual energy use
or efficiency, and that all products defined as PTACs and PTHPs are
able to be tested in accordance with AHRI 310/380. AHRI asserted that
DOE's failure to abide by its own regulations by timely adopting the
ASHRAE 90.1-2019 testing standards disingenuously triggered the
Department's 7-year lookback test procedure review. (AHRI, No. 21 at p.
3)
In response to AHRI's comment, DOE must first correct a fundamental
misunderstanding of the 7-yr lookback process reflected in AHRI's
comment that DOE ``disingenuously'' triggered this process. AHRI seems
to be under the mistaken impression that DOE can only review a test
procedure once every 7 years. DOE would direct AHRI to the statutory
provision in EPCA regarding the 7-yr lookback for test procedures,
which states that ``[a]t least once every 7 years'' DOE shall evaluate
the test procedure for each class of covered equipment. (42 U.S.C.
6314(a)(1)) This language clearly allows for multiple reviews within a
7-yr period. As a result, there is simply no need for DOE to wait 7
years to conduct a review under this process. As such, AHRI's assertion
that DOE ``disingenuously'' initiated a review under 42 U.S.C.
6314(a)(1) is entirely without merit.
Additionally, DOE acknowledges that appendix A currently contains
language that ``ASHRAE not acting to amend Standard 90.1 is tantamount
to a decision that existing standard remain in place.'' 10 CFR part
430, subpart C, appendix A, section 9(c). But DOE notes that this
statement does not have any effect on DOE's rulemaking obligations
under the ASHRAE provision in EPCA. These provisions require DOE to:
(1) initiate rulemakings when the relevant industry standard or test
procedure has been amended (see 42 U.S.C. 6313(a)(6)(A) and 42 U.S.C.
[[Page 9144]]
6314(a)(4)(B)); and (2) periodically review standards and test
procedures for ASHRAE equipment (see 42 U.S.C. 6313(a)(6)(C) and 42
U.S.C. 6314(a)(1)(A)). Neither of these situations would be affected by
a decision by ASHRAE to reaffirm an existing standard. As such, DOE
notes that is has proposed to remove this statement in a NOPR proposing
updates to appendix A. 86 FR 35668, 35676.
DOE would also like to clarify the timelines associated with
promulgating rulemaking documents. For energy conservation standards,
EPCA provides that no later than 18 months after the publication of an
amended version of ASHRAE/IES Standard, 90.1, DOE will establish an
amended standard at the level specified by ASHRAE. 42 U.S.C.
6313(a)(6)(A) Conversely, for test procedures, EPCA does not provide an
18-month window for adopting an amended ASHRAE test procedure. See 42
U.S.C. 6314(a)(4). DOE notes that the Process Rule erroneously applies
EPCA's timelines for energy conservation standards for ASHRAE equipment
to test procedures. 86 FR 35668, 35676; see also 10 CFR part 430,
subpart C, appendix A, section 9(a). Given this error and DOE's
proposal to address the error, DOE is following the statutory
requirements in EPCA.
Regarding the adoption of AHRI 310/380-2017, DOE notes that DOE's
current test procedure for PTACs and PTHPs incorporates by reference
AHRI 310/380-2014. The current test procedures also include additional
provisions in paragraphs (c) and (e) of 10 CFR 431.96. 10 CFR
431.96(b)(1). As noted in an early assessment RFI published on December
7, 2020, AHRI 310/380-2017 and AHRI 310/380-2014 differ only in that
AHRI 310/380-2017 incorporates DOE's additional PTAC and PTHP test
procedure specifications listed above. See 85 FR 78967, 78969. EPCA
states that if the AHRI or ASHRAE industry standard is updated, DOE
will amend the test procedure for the product as necessary to be
consistent with the amended industry test procedure. (42 U.S.C. 6314
(a)(4)(B)) As the DOE test procedures for PTACs and PTHPs were already
consistent with AHRI 310/380-2017, DOE did not see any need for action
arising from the publication of ASHRAE 90.1-2019. Therefore, DOE
proceeded with the test procedure rulemaking under the 7-year lookback
review and has not deviated from process as asserted by AHRI. Because
AHRI 310/380-2017 has not been officially incorporated in the DOE test
procedures for PTACs and PTHPs, DOE has not an explicit determined in
any past rulemaking whether the standard is representative or not.
Furthermore, DOE corrects AHRI that the analysis underpinning this
energy conservation standard determination is based on the current DOE
test procedures, which incorporate AHRI 310/380-2014.
Comments pertaining to the technology and screening analysis are
presented in sections IV.B.3and IV.B.4 of this document. DOE did not
receive any further comments regarding its proposed determination in
the June 2022 NOPD. Therefore, in this final determination, DOE relies
on the analysis presented in the June 2022 NOPD and as summarized in
sections IV.B to IV.H of this document.
B. Market and Technology Assessment
DOE develops information in the market and technology assessment
that provides an overall picture of the market for the products
concerned, including the purpose of the products, the industry
structure, manufacturers, market characteristics, and technologies used
in the products. This activity includes both quantitative and
qualitative assessments, based primarily on publicly available
information. The subjects addressed in the market and technology
assessment for this final determination include: (1) a determination of
the scope of the rulemaking and classes, (2) market and industry trends
and (3) technologies or design options that could improve the energy
efficiency of PTAC and PTHPs. The key findings of DOE's market
assessment are summarized in the following sections. See the
supplemental file DOE made available for comment (Document ID No. EERE-
2019-BT-STD-0035-0001) for a review of the current PTAC and PTHP market
and efficiency distributions.
1. Scope of Coverage
In this analysis, DOE relied on the definition of PTACs and PTHPs
in 10 CFR 431.92. Any equipment meeting the definition of PTAC or PTHP
is included in DOE's scope of coverage.
PTAC is defined as a wall sleeve and a separate un-encased
combination of heating and cooling assemblies specified by the builder
and intended for mounting through the wall, and that is industrial
equipment. 10 CFR 431.92. It includes a prime source of refrigeration,
separable outdoor louvers, forced ventilation, and heating availability
by builder's choice of hot water, steam, or electricity. Id.
PTHP is defined as a PTAC that utilizes reverse cycle refrigeration
as its prime heat source, that has a supplementary heat source
available, with the choice of hot water, steam, or electric resistant
heat, and that is industrial equipment. Id.
On October 7, 2008, DOE published a final rule (``October 2008
final rule'') amending the energy conservation standards for PTACs and
PTHPs in which DOE divided equipment classes based on whether a PTAC or
PTHP is a standard size or non-standard size. 73 FR 58772, 58783.
DOE defines ``standard size'' as a PTAC or PTHP with wall sleeve
dimensions having an external wall opening of greater than or equal to
16 inches high or greater than or equal to 42 inches wide, and a cross-
sectional area greater than or equal to 670 square inches. 10 CFR
431.92.
DOE defines ``non-standard size'' as a PTAC or PTHP with existing
wall sleeve dimensions having an external wall opening of less than 16
inches high or less than 42 inches wide, and a cross-sectional area
less than 670 square inches. Id.
2. Equipment Classes
For PTACs and PTHPs, the current energy conservation standards
specified in 10 CFR 431.97(c) are based on 12 equipment classes
determined according to the following: whether the equipment is an air
conditioner or a heat pump, whether the equipment is standard size or
non-standard size, and the cooling capacity in Btu/h. Table IV-1 lists
the current 12 equipment classes for PTACs and PTHPs specified in
Tables 7 and 8 to 10 CFR 431.97.
Table IV-1--Current PTAC and PTHP Equipment Classes
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
Equipment Class
----------------------------------------------------------------------------------------------------------------
1.................................... PTAC................... Standard Size.......... <7,000 Btu/h.
2.................................... PTAC................... Standard Size.......... >=7,000 Btu/h and
<=15,000 Btu/h.
3.................................... PTAC................... Standard Size.......... >15,000 Btu/h.
4.................................... PTAC................... Non-Standard Size...... <7,000 Btu/h.
5.................................... PTAC................... Non-Standard Size...... >=7,000 Btu/h and
<=15,000 Btu/h.
[[Page 9145]]
6.................................... PTAC................... Non-Standard Size...... >15,000 Btu/h.
7.................................... PTHP................... Standard Size.......... <7,000 Btu/h.
8.................................... PTHP................... Standard Size.......... >=7,000 Btu/h and
<=15,000 Btu/h.
9 *.................................. PTHP................... Standard Size.......... >15,000 Btu/h.
10................................... PTHP................... Non-Standard Size...... <7,000 Btu/h.
11................................... PTHP................... Non-Standard Size...... >=7,000 Btu/h and
<=15,000 Btu/h.
12................................... PTHP................... Non-Standard Size...... >15,000 Btu/h.
----------------------------------------------------------------------------------------------------------------
* Based on DOE's review of equipment currently available on the market, DOE did not identify any Standard Size
PTHP models with a cooling capacity greater than 15,000 Btu/h.
a. Make-Up Air PTACs and PTHPs
In the May 2021 TP RFI, DOE described ``make-up air'' PTACs and
their additional function of dehumidification. See 86 FR 28005, 28007-
28009. These PTAC and PTHP models are designed to draw outdoor air into
the unit, dehumidify the outdoor air, and introduce the dehumidified
air into the conditioned space. Id. As discussed in section II.B.1, for
PTACs and PTHPs, DOE currently specifies EER as the test metric for
cooling efficiency and COP as the metric for heating efficiency.
Neither the current test procedure, at 10 CFR 431.96(g), nor the
industry test procedure incorporated by reference, AHRI Standard 310/
380-2014, account for the energy associated with the conditioning of
make-up air introduced by the unit.
DOE is cognizant of the potential testing challenges associated
with the testing of make-up air PTACs and PTHPs and is considering
several issues pertaining to this testing in the ongoing test procedure
rulemaking. See 86 FR 28005, 28008-28009. Were DOE to amend the PTAC
and PTHP test procedure to incorporate measurement of dehumidification
energy for make-up air PTACs and PTHPs, a separate equipment class for
this type of units may be warranted. At such time, DOE would conduct
the analysis for future standards rulemakings, if any, based on the
amended test procedure. However, DOE will not establish separate
equipment classes for make-up air PTACs and PTHPs at this time.
3. Technology Options
In the June 2022 NOPD, DOE considered the technology options shown
in Table IV-2, which included options suggested by stakeholders in
response the December 2020 ECS RFI. See 87 FR 37934, 37943-37944.
Table IV-2--Potential Technology Options for Improving Energy Efficiency
of PTACs and PTHPs
------------------------------------------------------------------------
Technology options Source
------------------------------------------------------------------------
Heat Exchanger Improvements:
Increased Heat Exchanger Area....... July 2015 final rule.
Microchannel Heat Exchangers........ Screened out of July 2015
final rule; Suggested for
Inclusion by Commenter.
Indoor Blower and Outdoor Fan
Improvements:
Higher Efficiency Fan Motors........ July 2015 final rule.
Improved Air Flow and Fan Design July 2015 final rule.
(including more Efficient Fan
Geometries).
Variable speed condenser fan/motor.. New Technology Option.
Variable speed indoor blower/motor.. New Technology Option.
Separate indoor and outdoor motors New Technology Option
(to improve efficiency while Suggested by Commenter.
reducing noise).
Compressor Improvements:
Higher Efficiency Compressors....... July 2015 final rule.
Scroll Compressors.................. Screened out of July 2015
final rule.
Variable Speed Compressors.......... July 2015 final rule.*
Other Improvements:
Heat Pipes.......................... Screened out of July 2015
final rule.
Alternative Refrigerants............ Screened out of July 2015
final rule.
EEV................................. New Technology Option.
TEV................................. July 2015 final rule.*
Intake and Exhaust Ducts (to reduce New Technology Option
infiltration through and around the Suggested by Commenter.
unit).
Defrost Control Strategies & Demand- New Technology Option
based Defrost Controls (for Suggested by Commenters.
improved low ambient heating).
Electric resistance boost control New Technology Option
strategies (to limit the use of Suggested by Commenter.
electric resistance boost).
Compressor cut out control New Technology Option
strategies (to allow compressor Suggested by Commenter.
operation at lower temperatures).
------------------------------------------------------------------------
* Identified technology was not analyzed in the July 2015 final rule
because of no full-load benefit.\10\
NYSERDA commented that they supported the inclusion of technology
options that sought to address cold climate performance, including
compressor cut out control strategies and defrost control strategies.
(NYSERDA No. 18 at p. 2) Additionally, NYSERDA highlighted that heating
performance at 5 [deg]F was being promoted in the Northeast; citing the
Northeast Energy Efficiency Partnership's (NEEP) Cold Climate Heat Pump
list, which includes packaged terminal products capable of
demonstrating high performance down to 5 [deg]F. Id. NYSERDA encouraged
DOE to prioritize development of a single metric that captures at the
very least heating
[[Page 9146]]
performance at 47 [deg]F and 17 [deg]F, and further encouraged DOE to
include an optional tests at 5 [deg]F and the lowest catalogued outdoor
dry bulb temperature. Id.
---------------------------------------------------------------------------
\10\ Detailed descriptions of the technology options from the
July 2015 final rule can be found in chapters 3 and 4 of the July
2015 final rule technical support document (``TSD'') available at
www.regulations.gov/document/EERE-2012-BT-STD-0029-0040.
---------------------------------------------------------------------------
As discussed, DOE will consider NYSERDA's comments regarding the
development of the heating metric in the ongoing test procedure
rulemaking.
4. Screening Analysis
DOE uses the following five screening criteria to determine which
technology options are suitable for further consideration in an energy
conservation standards rulemaking:
(1) Technological feasibility. Technologies that are not
incorporated in commercial products or in working prototypes will not
be considered further.
(2) Practicability to manufacture, install, and service. If it is
determined that mass production and reliable installation and servicing
of a technology in commercial products could not be achieved on the
scale necessary to serve the relevant market at the time of the
projected compliance date of the standard, then that technology will
not be considered further.
(3) Impacts on product utility or product availability. If it is
determined that a technology would have significant adverse impact on
the utility of the product to significant subgroups of consumers or
would result in the unavailability of any covered product type with
performance characteristics (including reliability), features, sizes,
capacities, and volumes that are substantially the same as products
generally available in the United States at the time, it will not be
considered further.
(4) Adverse impacts on health or safety. If it is determined that a
technology would have significant adverse impacts on health or safety,
it will not be considered further.
(5) Unique-Pathway Proprietary Technologies. If a design option
utilizes proprietary technology that represents a unique pathway to
achieving a given efficiency level, that technology will not be
considered further due to the potential for monopolistic concerns.
See 10 CFR part 430, subpart C, appendix A, sections 6(c)(3) and
7(b). In summary, if DOE determines that a technology, or a combination
of technologies, fails to meet one or more of the listed five criteria,
it will be excluded from further consideration in the engineering
analysis
a. Screened-Out Technologies
In the June 2022 NOPD, DOE screened out three technology options
based on the applicable criteria discussed previously. See 87 FR 37934,
37945-37946. The screened-out technology options are presented below in
Table IV-3.
Table IV-3--Screened Out Technology Options in the June 2022 NOPD
--------------------------------------------------------------------------------------------------------------------------------------------------------
Screening criteria (X = basis for screening out)
-------------------------------------------------------------------------------------------------------------------
Screened technology option Practicability to Unique-pathway
Technological manufacture, install, Adverse impact on Adverse impacts on proprietary
feasibility and service equipment utility health and safety technologies
--------------------------------------------------------------------------------------------------------------------------------------------------------
Scroll Compressors.................. X ....................... ....................... ...................... .......................
Heat Pipes.......................... X ....................... ....................... ...................... .......................
Alternative Refrigerants............ X ....................... ....................... ...................... .......................
--------------------------------------------------------------------------------------------------------------------------------------------------------
In regard to alternate refrigerants, the Joint Advocates encouraged
DOE to conduct testing and research on the impact alternative
refrigerants can have with PTAC and PTHP equipment for future standards
rulemaking. Additionally, the Joint Advocates encouraged DOE to perform
its own testing, interviews, or research to better understand the
energy impact of alternative refrigerants. (Joint Advocates, No. 20 at
p. 2)
As discussed in the June 2022 NOPD, DOE reviewed several studies to
gauge the potential efficiency improvements alternative refrigerants
could provide in comparison to R-410a refrigerants. See 87 FR 37934,
37948. Most of these studies were conducted in drop-in applications and
were not performed on PTAC or PTHP equipment specifically. Id. DOE may
look to conduct physical testing with alternate refrigerants in the
future to better evaluate the efficiency benefits associated with them.
However, at this point, DOE does not have any physical test data and is
therefore keeping alternative refrigerants screened out.
b. Other Technologies Not Considered in the Engineering Analysis
Typically, energy-saving technologies that pass the screening
analysis are evaluated in the engineering analysis. However, in some
cases technologies are not included in the analysis for reasons other
than the screening criteria. These are discussed in the following
paragraphs.
Technologies Previously Eliminated From the July 2015 Final Rule
In the July 2015 final rule, DOE identified several technology
options that were not included in the engineering analysis because of
three additional considerations: (1) efficiency benefits of the
technologies were negligible; (2) data was not available to evaluate
the energy efficiency characteristics of the technology; and/or (3)
test procedure and EER and COP metrics did not measure the energy
impact of the technology. See 80 FR 43161, 43172; 79 FR 55538, 55555-
55556 (September 16, 2014). In the June 2022 NOPD, DOE maintained its
position that these technologies should remained eliminated. See 87 FR
37934, 37948. These technologies are listed below under each
consideration:
(1) Efficiency benefits of the technologies were negligible:
Re-circuiting heat exchanger coils;
Rifled interior tube walls;
(2) Data was not available to evaluate the energy efficiency
characteristics of the technology:
Microchannel heat exchangers;
(3) Test procedure and EER and COP metrics did not measure the
energy impact of the technology:
Variable speed compressors;
Complex control boards (fan motor controllers, digital
``energy management'' control interfaces, heat pump controllers);
Corrosion protection;
Hydrophobic material treatment of heat exchangers;
Clutched motor fans; and
TEVs.
Technology Options Benefiting Part-Load and Low Temperature Performance
In the June 2022 NOPD, noting that the current EER and COP metrics
do not
[[Page 9147]]
measure part-load performance and low temperature heating performance,
DOE proposed to exclude the following technologies from the engineering
analysis:
Variable speed condenser fan/motor;
Variable speed indoor blower/motor;
Variable speed compressors;
TEVs
EEVs
Defrost control strategies
Electric resistance boost control strategies
Compressor cut-out controls
87 FR 37934, 27949
As discussed, DOE stated it may consider adopting for PTACs and
PTHPs a cooling-mode metric that integrates part-load performance and a
heating metric that includes performance at low ambient temperatures in
the ongoing test procedure rulemaking. See 86 FR 28005, 28009-28011. If
DOE amends the PTAC and PTHP test procedure to incorporate these
changes, it will conduct any analysis for future standards rulemakings,
if any, based on the amended test procedure. DOE is still evaluating
potential amendments to the test procedure. At present, DOE is unable
to consider energy savings from a part-load metric or low temperature
heating performance.
c. Remaining Technologies
After reviewing each technology, DOE did not screen out the
following technology options and considers them as design options in
the engineering analysis. These technology options are the same as
those retained in the July 2015 final rule:
(1) Higher Efficiency Compressors
(2) Higher Efficiency Fan Motors
(3) Increased Heat Exchanger Area
(4) Improved Air Flow and Fan Design
DOE has determined that these technology options are
technologically feasible because they are being used or have previously
been used in commercially available products or working prototypes and
improve efficiency as determined by the DOE test procedure. For
additional details on the technologies included in the engineering
analysis, see chapter 4 of the July 2015 final rule TSD.
C. Engineering Analysis
The purpose of the engineering analysis is to establish the
relationship between the efficiency and cost of PTACs and PTHPs. There
are two elements to consider in the engineering analysis; the selection
of efficiency levels to analyze (i.e., the ``efficiency analysis'') and
the determination of product cost at each efficiency level (i.e., the
``cost analysis''). In determining the performance of higher-efficiency
equipment, DOE considers technologies and design option combinations
not eliminated by the screening analysis. For each equipment class
evaluated, DOE estimates the baseline cost, as well as the incremental
cost for the product/equipment at efficiency levels above the baseline.
The output of the engineering analysis is a set of cost-efficiency
``curves'' that are used in downstream analyses (i.e., the LCC and PBP
analyses and the NIA).
1. Efficiency Analysis
DOE typically uses one of two approaches to develop energy
efficiency levels for the engineering analysis: (1) relying on observed
efficiency levels in the market (i.e., the efficiency-level approach),
or (2) determining the incremental efficiency improvements associated
with incorporating specific design options to a baseline model (i.e.,
the design-option approach). Using the efficiency-level approach, the
efficiency levels established for the analysis are determined based on
the market distribution of existing products (in other words, based on
the range of efficiencies and efficiency level ``clusters'' that
already exist on the market). Using the design option approach, the
efficiency levels established for the analysis are determined through
detailed engineering calculations and/or computer simulations of the
efficiency improvements from implementing specific design options that
have been identified in the technology assessment. DOE may also rely on
a combination of these two approaches. For example, the efficiency-
level approach (based on actual products on the market) may be extended
using the design option approach to ``gap fill'' levels (to bridge
large gaps between other identified efficiency levels) and/or to
extrapolate to the max-tech level (particularly in cases where the max-
tech level exceeds the maximum efficiency level currently available on
the market).
In the July 2015 final rule, DOE adopted an efficiency-level
approach combined with a cost-assessment approach to determine the
cost-efficiency relationship. See 80 FR 43162, 43173. In the June 2022
NOPD, based on the technology options considered and a review of
available efficiencies in the market, DOE concluded that the available
efficiencies on the market have not significantly changed since the
2015 rulemaking. See 87 FR 37934, 37949. DOE's review of current PTAC
and PTHP designs also led to the conclusion that design options used to
achieve higher EER and/or COP have not changed since 2015. Id. In this
final determination, DOE utilized the same analysis as in the July 2015
final rule, but with updated costs to account for inflation and other
effects. As discussed in section IV.A, DOE's proposed determination was
generally supported by commenters and no alternative analysis
methodology was presented. Thus, DOE did not revise the NOPD analysis,
concluding that it is representative of the relationship between costs
and potential increase in efficiency.
The methodology used to perform the analysis and derive the cost-
efficiency relationship is described in chapter 5 of the July 2015
final rule TSD.
2. Equipment Classes Analyzed
In the July 2015 final rule, DOE developed its engineering analysis
for the six equipment classes associated with standard-size PTACs and
PTHPs. See 80 FR 43162, 43174-43177. DOE did not conduct an engineering
analysis for non-standard size equipment classes because of their low
and declining market share and because of a lack of adequate
information to analyze these units. See 80 FR 43162, 43174.
In the June 2022 NOPD, DOE proposed to analyze the same equipment
classes as in the July 2015 final rule. See 87 FR 37934, 27950. DOE did
not receive any comments in relation to this, and is analyzing the same
equipment classes in this final determination.
Table IV-4 sets out the equipment classes analyzed in this
rulemaking.
Table IV-4--Equipment Classes Analyzed in This Rulemaking
----------------------------------------------------------------------------------------------------------------
Equipment class
-----------------------------------------------------------------------------------------------------------------
Equipment Category Cooling capacity
----------------------------------------------------------------------------------------------------------------
PTAC................................ Standard Size......... <7,000 Btu/h.
[[Page 9148]]
>=7,000 Btu/h and <=15,000 Btu/h.
----------------------------------------------------------------------------------------------------------------
>15,000 Btu/h.
PTHP................................ Standard Size......... <7,000 Btu/h.
>=7,000 Btu/h and <=15,000 Btu/h.
>15,000 Btu/h.
----------------------------------------------------------------------------------------------------------------
3. Baseline Efficiency Levels
DOE considered the current minimum energy conservation standards to
establish the baseline efficiency levels for each standard size
equipment class, using the 9,000 btu/h and 15,000 Btu/h cooling
capacities as representative capacities for the standard size equipment
classes. The baseline efficiency levels for the analyzed representative
units are presented below in Table IV-5.
Table IV-5--Baseline Efficiency Levels
----------------------------------------------------------------------------------------------------------------
Baseline
Equipment type Equipment class efficiency Cooling capacity Baseline efficiency
equation level
----------------------------------------------------------------------------------------------------------------
PTAC................... Standard Size..... EER = 14.0-(0.300 9,000 Btu/h............ 11.3 EER.
x Cap[dagger]/ 15,000 Btu/h........... 9.5 EER.
1000).
PTHP................... Standard Size..... EER = 14.0-(0.300 9,000 Btu/h............ 11.3 EER.
x Cap[dagger]/ 3.2 COP.
1000).
COP = 3.7-(0.052 x 15,000 Btu/h........... 9.5 EER.
Cap[dagger]). 2.9 COP.
----------------------------------------------------------------------------------------------------------------
[dagger] Cap means cooling capacity in thousand Btu/h at 95 [deg]F outdoor dry-bulb temperature.
4. Maximum Available and Maximum Technologically Feasible Levels
As part of DOE's analysis, the maximum available efficiency level
is the highest efficiency unit currently available on the market. DOE
also considers the max-tech efficiency level, which it defines as the
level that represents the theoretical maximum possible efficiency if
all available design options are incorporated in a model. In many
cases, the max-tech efficiency level is not commercially available
because it is not economically feasible.
In the June 2022 NOPD, DOE noted that since the screened in design
options for the engineering analysis were the same as those considered
in the July 2015 final rule and the available efficiencies have not
significantly changed since the 2015 rulemaking, DOE saw no reason to
revise the max-tech levels. See 87 FR 37934, 37951.
DOE did not receive any comments pertaining to the max-tech levels
presented in the June 2022 NOPD. Therefore, in this final
determination, DOE maintains the same max-tech levels as those in the
2015 rulemaking. Table IV-6 shows the max-tech efficiency levels.
Table IV-6--Max-Tech and Maximum-Available Efficiency Levels
------------------------------------------------------------------------
Max-tech July 2015 Maximum-available
Equipment class final rule \a\ current market
------------------------------------------------------------------------
Standard Size PTAC <7,000 Btu/h. 13.8 EER \b\...... 13.0 EER.
Standard Size PTAC >=7,000 Btu/h EER = 16.3-(0.354 EER = 15.8-(0.308
and <=15,000 Btu/h. x Cap \c\). x Cap \c\).\d\
Standard Size PTAC >15,000 Btu/h 11.0 EER.......... 9.7 EER.
Standard Size PTHP <7,000 Btu/h. 13.8 EER\b\....... 13.1 EER
3.8 COP\b\........ 4.0 COP.
Standard Size PTHP >=7,000 Btu/h EER = 16.3-(0.354 EER = 15.8-(0.308
and <=15,000 Btu/h. x Cap \c\). x Cap \c\)\d\
COP = 4.3-(0.073 x COP = 4.6-(0.075 x
Cap \c\). Cap \c\).\d\
Standard Size PTHP >15,000 Btu/ 11.0 EER.......... N/A.\e\
h\3\. 3.2 COP...........
------------------------------------------------------------------------
a. See Table IV.4 at 80 FR 43162, 43175.
b. Based on Max Tech equation shown for Standard Size PTACs and PTHPs,
>=7,000 Btu/h and <=15,000 Btu/h at a value of 7,000 Btu/h.
c. Cap means cooling capacity in thousand Btu/h.
d. Based on method of creating a linear fit between the two models in
the Compliance Certification Database (``CCD'') Database that were the
highest absolute value above the baseline.
e. Based on DOE's review of equipment currently available on the market,
DOE did not identify any PTHP models with a cooling capacity greater
than 15,000 Btu/h.
[[Page 9149]]
5. Incremental Efficiency Levels
In the June 2022 NOPD, DOE analyzed several incremental efficiency
levels between the baseline and max-tech levels and obtained
incremental cost data at each of these levels. See 87 FR 37934, 37952.
DOE considered five efficiency levels beyond the baseline efficiency
level up to the max-tech level for each equipment class. These levels
were 2.2, 6.2, 10.2, 14.2 and 16.2 precents more efficient than the
amended PTAC and PTHP standards that became effective on July 21, 2015,
and are the same incremental efficiency levels evaluated in the July
2015 final rule. Id.
DOE is utilizing the same incremental efficiency levels in this
final determination. These levels are presented in Table IV-7.
Table IV-7--Incremental Efficiency Levels for Standard Size PTACs and PTHPs
--------------------------------------------------------------------------------------------------------------------------------------------------------
Efficiency levels (percentages relative to 2015 ECS)
--------------------------------------------------------------------------------------------------------
Equipment type Cooling capacity EL5, 16.2% (Max-
Baseline* EL1, 2.2% EL2, 6.2% EL3, 10.2% EL4, 14.2% Tech)
--------------------------------------------------------------------------------------------------------------------------------------------------------
PTAC......................... All,............ 14.0-(0.300 x 14.4-(0.312 x 14.9-(0.324 x 15.5-(0.336 x 16.0-(0.348 x 16.3-(0.354 x
EER............. Cap[dagger]). Cap[dagger]). Cap[dagger]). Cap[dagger]). Cap[dagger]). Cap[dagger]).
9,000 Btu/h..... 11.3 EER........ 11.5 EER........ 12.0 EER........ 12.4 EER....... 12.9 EER....... 13.1 EER.
15,000 Btu/h.... 9.5 EER......... 9.7 EER......... 10.0 EER........ 10.4 EER....... 10.8 EER....... 11.0 EER.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Equipment Type Cooling Capacity Baseline*....... EL1,............ EL2,............ EL3,........... EL4,........... EL5, 16.2%
2.2%............ 6.2%............ 10.2%.......... 14.2%.......... (Max-Tech).
--------------------------------------------------------------------------------------------------------------------------------------------------------
PTHP......................... All,............ 14.0-(0.300 x 14.4-(0.312 x 14.9-(0.324 x 15.5-(0.336 x 16.0-(0.348 x 16.3-(0.354 x
EER............. Cap[dagger]). Cap[dagger]). Cap[dagger]). Cap[dagger]). Cap[dagger]). Cap[dagger]).
All,............ 3.7-(0.052 x 3.8-(0.058 x 4.0-(0.064 x 4.1-(0.068 x 4.2-(0.070 x 4.3-(0.073 x
COP............. Cap[dagger]). Cap[dagger]). Cap[dagger]). Cap[dagger]). Cap[dagger]). Cap[dagger]).
9,000 Btu/h..... 11.3 EER........ 11.5 EER........ 12.0 EER........ 12.4 EER....... 12.9 EER....... 13.1 EER
3.2 COP......... 3.3 COP......... 3.4 COP......... 3.5 COP........ 3.6 COP........ 3.6 COP.
15,000 Btu/h.... 9.5 EER......... 9.7 EER......... 10.0 EER........ 10.4 EER....... 10.8 EER....... 11.0 EER
2.9 COP......... 2.9 COP......... 3.0 COP......... 3.1 COP........ 3.2 COP........ 3.2 COP.
--------------------------------------------------------------------------------------------------------------------------------------------------------
* This level represents the current Federal minimum standards for PTAC and PTHP equipment.
[dagger] Cap means cooling capacity in thousand Btu/h at 95[ordm]F outdoor dry-bulb temperature.
6. Cost Analysis
The cost analysis portion of the engineering analysis is conducted
using one or a combination of cost approaches. The selection of cost
approach depends on a suite of factors, including the availability and
reliability of public information, characteristics of the regulated
product, the availability and timeliness of purchasing the equipment on
the market. The cost approaches are summarized as follows:
Physical teardowns: Under this approach, DOE physically
dismantles a commercially available product, component-by-component, to
develop a detailed bill of materials for the product.
Catalog teardowns: In lieu of physically deconstructing a
product, DOE identifies each component using parts diagrams (available
from manufacturer websites or appliance repair websites, for example)
to develop the bill of materials for the product.
Price surveys: If neither a physical nor catalog teardown
is feasible (for example, for tightly integrated products such as
fluorescent lamps, which are infeasible to disassemble and for which
parts diagrams are unavailable) or cost-prohibitive and otherwise
impractical (e.g. large commercial boilers), DOE conducts price surveys
using publicly available pricing data published on major online
retailer websites and/or by soliciting prices from distributors and
other commercial channels.
In the July 2015 final rule, DOE performed a cost analysis that
involved testing and then conducting physical teardowns on several test
units to develop a manufacturing cost model and to evaluate key design
features (e.g., improved heat exchangers, compressors, fans/fan
motors). See 80 FR 43162, 43176. In the June 2022 NOPD, DOE noted that
the design options being considered in this rulemaking are the same as
in the 2015 rulemaking and the efficiency distributions for available
PTACs and PTHPs have not changed compared to the 2015 rulemaking. See
87 FR 37934, 37952-37953. Therefore, DOE utilized the same cost
analysis conducted for the July 2015 final rule, but adjusted the
analysis for inflation and other market effects. See 87 FR 37953. To
adjust the cost analysis, DOE used industry specific producer price
index (``PPI'') data published by the Bureau of Labor Statistics
(``BLS''). The PPI measures the average change over time in the selling
prices from the perspective of the seller. DOE evaluated the change in
PPI from the year 2013 (used in the previous rulemaking) to year 2021
(current rulemaking), and used the percent increase to scale the
manufacturer production costs (``MPCs'') from the previous rulemaking.
Id. In this final determination, DOE is using the same approach as in
the June 2022 NOPD.
7. Cost-Efficiency Results
The results of the engineering analysis are reported as a set of
cost-efficiency data (or ``curves'') in the form of MPC (in dollars)
versus EER, which form the basis for other analyses in the final
determination. DOE created cost-efficiency curves for the two
representative cooling capacities within the two standard-size
equipment classes of PTACs and PTHPs, as discussed in section IV.C.2
previously. DOE developed the incremental cost-efficiency results shown
in Table IV-8 for each representative cooling capacity. These cost
results are incremented from a baseline efficiency level equivalent to
the current Federal minimum standards.
[[Page 9150]]
Table IV-8--Incremental Manufacturing Production Costs (MPC) for Standard Size PTACs and PTHPs
--------------------------------------------------------------------------------------------------------------------------------------------------------
Efficiency levels
Equipment type Cooling capacity -----------------------------------------------------------------------------
Baseline* EL1 EL2 EL3 EL4 EL5
--------------------------------------------------------------------------------------------------------------------------------------------------------
PTAC....................................... 9,000 Btu/h.................. $0.00 $5.22 $15.36 $26.32 $38.11 $44.31
15,000 Btu/h................. 0.00 5.00 18.71 36.37 58.00 70.30
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline* EL1 EL2 EL3 EL4 EL5
--------------------------------------------------------------------------------------------------------------------------------------------------------
PTHP....................................... 9,000 Btu/h.................. 0.00 5.22 15.36 26.32 38.11 44.31
15,000 Btu/h................. 0.00 5.00 18.71 36.37 58.00 70.30
--------------------------------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------------------------------
* This level represents the current Federal minimum standards for PTAC and PTHP equipment.
To account for manufacturers' non-production costs and profit
margin, DOE applied a non-production cost multiplier (the manufacturer
markup) to the MPC. The resulting manufacturer selling price (``MSP'')
is the price at which the manufacturer distributes a unit into
commerce. In this final determination, DOE retained the manufacturer
markup of 1.27 from the June 2022 NOPD. See 87 FR 37934, 37954.
D. Markups Analysis
The markups analysis develops appropriate markups (e.g., retailer
markups, distributor markups, contractor markups) in the distribution
chain and sales taxes to convert the MSP estimates derived in the
engineering analysis to consumer prices, which are then used in the LCC
and PBP analysis and in the manufacturer impact analysis. At each step
in the distribution channel, companies mark up the price of the product
to cover business costs and profit margin.
In the July 2015 final rule, DOE identified four distribution
channels for PTACs and PTHPs to describe how the equipment passes from
the manufacturer to the consumer. See 80 FR 43162, 43177. The four
distribution channels are listed below:
The first distribution channel is only used in the new construction
market, and it represents sales directly from a manufacturer to the end
use customer through a national account.
Manufacturer [rarr] National Account [rarr] End user
The second distribution channel represents replacement markets,
where a manufacturer sells to a wholesaler, who sells to a mechanical
contractor, who in turn sells to the end user.
Manufacturer [rarr] Wholesaler [rarr] Mechanical Contractor [rarr] End
user
The third distribution channel, which is used in both new
construction and replacement markets, the manufacturer sells the
equipment to a wholesaler, who in turn sells it to a mechanical
contractor, who in turn sells its to a general contractor, who sells it
to the end user.
Manufacturer [rarr] Wholesaler [rarr] Mechanical Contractor [rarr]
General Contractor[rarr] End user
Finally, in the fourth distribution channel, which is also used in
both the new construction and replacement markets, a manufacturer sells
to a wholesaler, who in turn sells directly to the end user.
Manufacturer [rarr] Wholesaler [rarr] End User
80 FR 43162, 43177.
In the June 2022 NOPD, DOE did not update the distribution channels
from the July 2015 rule. DOE considered the four distribution channels
shown in Table IV-9 and estimated percentages of the total sales in the
new construction and replacement markets for each of the four
distribution channels as listed in Table IV-10. See 87 FR 37934, 37954.
Table IV-9--Distribution Channels for PTAC and PTHP Equipment
----------------------------------------------------------------------------------------------------------------
Channel 1 Channel 2 Channel 3 Channel 4
----------------------------------------------------------------------------------------------------------------
Manufacturer (through national Manufacturer........... Manufacturer........... Manufacturer
accounts).
Wholesaler............. Wholesaler............. Wholesaler
Mechanical Contractor.. Mechanical Contractor
General Contractor
Consumer............................. Consumer............... Consumer............... Consumer
----------------------------------------------------------------------------------------------------------------
Table IV-10--Share of Market by Distribution Channel for PTAC and PTHP
Equipment
------------------------------------------------------------------------
New
Distribution channel construction Replacement
(%) (%)
------------------------------------------------------------------------
Wholesaler-Consumer..................... 30 15
Wholesaler-Mech Contractor-Consumer..... 0 25
Wholesaler-Mech Contractor-General 38 60
Contractor-Consumer....................
National Account........................ 32 0
-------------------------------
Total............................... 100 100
------------------------------------------------------------------------
[[Page 9151]]
In the June 2022 NOPD, DOE updated the sources used in the July
2015 final rule to derive markups for each step of the distribution
channels with the following data sources: (1) the 2017 Annual Wholesale
Trade Survey,\11\ to develop wholesaler markups; (2) the Air
Conditioning Contractors of America's (``ACCA'') ``2005 Financial
Analysis for the HVACR Contracting Industry'' \12\ and 2017 U.S. Census
Bureau economic data \13\ to develop mechanical contractor markups; and
(3) 2017 U.S. Census Bureau economic data for the commercial and
institutional building construction industry to develop general
contractor markups.\14\ See 87 FR 37934, 37954. 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.
---------------------------------------------------------------------------
\11\ U.S. Census Bureau. 2017 Annual Wholesale Trade Report,
NAICS 4236: Household Appliances and Electrical and Electronic Goods
Merchant Wholesalers, 2017, Washington, DC www.census.gov/wholesale/index.html.
\12\ ``2005 Financial Analysis for the HVACR Contracting
Industry,'' Air Conditioning Contractors of America. 2005.
\13\ ``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.
\14\ ``2017 Economic Census, Construction Industry Series and
Wholesale Trade Subject Series,'' U.S. Census Bureau. Available
online at https://www.census.gov/data/tables/2017/econ/economic-census/naics-sector-23.html.
---------------------------------------------------------------------------
DOE received no comments in response to its markups analysis in the
NOPD and maintains this analysis in this final determination. Chapter 6
of the final determination TSD provides details on DOE's development of
the markups.
E. Energy Use Analysis
The purpose of the energy use analysis is to determine the annual
unit energy consumption (``UEC'') of PTACs and PTHPs at different
efficiencies in representative U.S. commercial buildings, and to assess
the energy savings potential of increased PTAC and PTHP efficiency. The
energy use analysis estimates the range of energy use of PTACs and
PTHPs in the field (i.e., as they are actually used by consumers). The
energy use analysis provides the basis for other analyses DOE
performed, particularly assessments of the energy savings and the
savings in consumer operating costs that could result from adoption of
amended or new standards.
In the June 2022 NOPD, in response to stakeholder comments on the
December 2020 ECS RFI, DOE developed a new energy use analysis compared
to the 2015 final rule. 87 FR 37934, 37954-56. To develop UECs, DOE
began with the cooling and heating loads from the new construction 2004
vintage, small hotel commercial reference building prototype.\15\ Id.
While more recent prototypes are available that reflect more current
building codes, DOE notes that its energy use analysis is meant to
represent the energy use in the current stock of buildings that use
PTACs and PTHPs and the 2004 prototype is more reflective of the stock
than a newer prototype.\16\ This prototype is a four floor, rectangular
building with 35 guest rooms, each of which uses a PTAC for cooling and
heating. The cooling and heating loads were developed in EnergyPlus
\17\ using Typical Meteorological Year 3 (``TMY3'') weather data along
with the default assumptions for building envelope, ventilation,
occupancy schedule, cooling and heating thermostat set points, and
square footage. A detailed description of the small hotel commercial
reference building can be found on the DOE commercial reference
building website.\18\ The UECs were developed only using the guestroom
load profiles and the PTHP UECs use the heat-pump to meet the heating
loads.
---------------------------------------------------------------------------
\15\ https://www.energy.gov/eere/buildings/new-construction-commercial-reference-buildings.
\16\ In Commercial Buildings Energy Consumption Survey
(``CBECS'') 2018, 80% of lodging buildings that use an individual
room air conditioner were constructed prior to the year 2000.
\17\ https://www.energy.gov/eere/buildings/downloads/energyplus-0.
\18\ https://www.energy.gov/eere/downloads/reference-buildings-building-type-small-hotel.
---------------------------------------------------------------------------
Of the 35 hotel rooms in the small hotel commercial reference
building prototype, 20 have a design day size below 10,000 Btu/h and
the others have design day sizes above 20,000 Btu/h. The largest
standard size PTACs and PTHPs in CCD \19\ are less than 17,000 Btu/h,
therefore, DOE did not consider the small hotel guestroom loads with
design days over 20,000 Btu/h. To create full load cooling and heating
hours, for each climate zone DOE took the sum of the cooling and
heating loads from the 20 guestrooms with a design day size below
10,000 Btu/h and divided them by the sum of the design day capacities
for the same hotel guestrooms. DOE then took the full-load cooling and
heating hours and multiplied them by the full-load cooling and heating
power for each efficiency level. The full-load cooling power was
derived by dividing the representative cooling capacity of either 9,000
Btu/h or 15,000 Btu/h by the EERs of the representative efficiency
levels. The heating power for PTHPs was derived by converting the 9,000
Btu/h and 15,000 Btu/h capacities into Watts, and dividing them by the
representative COPs.
---------------------------------------------------------------------------
\19\ Available at: www.regulations.doe.gov/certification-data/CCMS-4-Air_Conditioners_and_Heat_Pumps_-_Package_Terminal.html#q=Product_Group_s%3A%22Air%20Conditioners%20and%20Heat%20Pumps%20-%20Package%20Terminal%22 (last accessed, 3/25/
2022).
---------------------------------------------------------------------------
DOE created UECs for each of the 16 International Energy
Conservation Code (``IECC'') Climate Zones in the U.S. by simulating
the small hotel prototype in one representative city for each climate
zone. DOE used county level population data from the U.S. Census Bureau
\20\ along with a Pacific Northwest Laboratory report,\21\ which
assigned a climate zone to each county in the U.S. to develop
population weighting factors for each climate zone. Next, DOE used the
county level population data and climate zones to determine the
weighted average UEC for each Census Division, with Census Division 9
split into two, California and the remaining states of Census Division
9 (Washington, Oregon, Hawaii, and Alaska). The resulting UECs
represent the average small hotel guestroom cooling and heating energy
use for each Census Division (with Census Division 9 split into two
regions as explained previously).
---------------------------------------------------------------------------
\20\ Available at: www.census.gov/data/datasets/time-series/demo/popest/2010s-counties-total.html#par_textimage_70769902.
\21\ Available at: www.energy.gov/sites/prod/files/2015/10/f27/ba_climate_region_guide_7.3.pdf.
---------------------------------------------------------------------------
DOE made further adjustments to each UEC for each climate zone to
better account for the field energy use of PTACs and PTHPs. The Energy
Information Administration's (``EIA'') National Energy Modeling System
(``NEMS''), which is used to develop the Annual Energy Outlook
(``AEO''), develops a time series of scaling factors that capture the
improvements of building envelopes in new and existing buildings over
time.\22\ These building shell scalars are multiplied by the UEC to
demonstrate the reduction in cooling and heating energy use by improved
building envelopes by census division and building type between the
year of construction of the small hotel commercial reference building
(2004) and the compliance year (2026). DOE applied the scalars for the
lodging building type to the UECs developed using the cooling and
heating loads from the small hotel commercial reference building. DOE
calculated the
[[Page 9152]]
improvement between 2004, the year of the small hotel reference
building, and 2026, the compliance year, using the new construction
time series to create a new construction UEC and the existing building
time series to create an existing building UEC in 2026. DOE weighted
the results using shipments projections to new construction (12
percent) and existing buildings (88 percent) to create a weighted
average UEC in 2026.
---------------------------------------------------------------------------
\22\ Available at: www.eia.gov/analysis/studies/buildings/buildingshell/.
---------------------------------------------------------------------------
DOE received no comments on the energy use analysis in the NOPD,
and maintains this analysis for the final determination.
Chapter 7 of the final determination TSD provides details on DOE's
energy use analysis for PTACs and PTHPs.
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
PTACs and PTHPs. The effect of new or amended energy conservation
standards on individual consumers usually involves a reduction in
operating cost and an increase in purchase cost. DOE used the following
two metrics to measure consumer impacts:
The LCC is the total consumer expense of an appliance or
product over the life of that product, consisting of total installed
cost (manufacturer selling price, distribution chain markups, sales
tax, and installation costs) plus operating costs (expenses for energy
use, maintenance, and repair). To compute the operating costs, DOE
discounts future operating costs to the time of purchase and sums them
over the lifetime of the product.
The PBP is the estimated amount of time (in years) it
takes consumers to recover the increased purchase cost (including
installation) of a more-efficient product through lower operating
costs. DOE calculates the PBP by dividing the change in purchase cost
at higher efficiency levels by the change in annual operating cost for
the year that amended or new standards are assumed to take effect.
For any given efficiency level, DOE measures the change in LCC
relative to the LCC in the no-new-standards case, which reflects the
estimated efficiency distribution of PTACs and PTHPs in the absence of
new or amended energy conservation standards. In contrast, the PBP for
a given efficiency level is measured relative to the baseline product.
For each considered efficiency level in each product class, DOE
calculated the LCC and PBP for PTACs and PTHPs used in small hotel
guestrooms. As stated previously, DOE developed a sample of small hotel
guestroom PTAC and PTHP UECs by census division based on the DOE small
hotel reference building. For each census division, DOE determined the
average energy consumption for a PTAC or PTHP in a small hotel
guestroom and the appropriate electricity price. By developing a sample
of UECs by census division, the analysis captured the variability in
energy consumption and energy prices associated with the use of PTACs
and PTHPs.
Inputs to the calculation of total installed cost include the cost
of the product--which includes MPCs, manufacturer markups, retailer and
distributor markups, and sales taxes--and installation costs. Inputs to
the calculation of operating expenses include annual energy
consumption, energy prices and price projections, repair and
maintenance costs, product lifetimes, and discount rates. DOE created
distributions of values for equipment lifetime, discount rates, and
sales taxes, with probabilities attached to each value, to account for
their uncertainty and variability.
The computer model DOE used to calculate the LCC and PBP relies on
a Monte Carlo simulation to incorporate uncertainty and variability
into the analysis. The Monte Carlo simulations randomly sample input
values from the probability distributions and PTAC and PTHP user
samples. The model calculated the LCC and PBP for products at each
efficiency level for 10,000 scenarios per simulation run. The
analytical results include a distribution of 10,000 data points showing
the range of LCC savings for a given efficiency level relative to the
no-new-standards case efficiency distribution. In performing an
iteration of the Monte Carlo simulation for a given PTAC or PTHP owner,
product efficiency is chosen based on its probability. If the chosen
product efficiency is greater than or equal to the efficiency of the
standard level under consideration, the LCC and PBP calculation reveals
that the PTAC or PTHP owner is not impacted by the standard level. By
accounting for PTAC or PTHP owners who already purchase more-efficient
products, DOE avoids overstating the potential benefits from increasing
product efficiency.
DOE calculated the LCC and PBP for all consumers of PTACs and PTHPs
as if each were to purchase a new product in the expected year of
required compliance with new or amended standards. Any amended
standards would apply to PTACs and PTHPs manufactured 3 years after the
date on which any new or amended standard is published. (42 U.S.C.
6313(a)(6)(C)(iv)(I)) For purposes of its analysis, DOE used 2026 as
the first year of compliance with any amended standards for PTACs and
PTHPs.
Table IV-11 summarizes the approach and data DOE used to derive
inputs to the LCC and PBP calculations for the NOPD analysis. See 87 FR
37934, 37956-37957. DOE received no comments on its LCC and PBP
analysis in response to the NOPD, and has maintained the same
methodology in this final determination. The subsections that follow
provide further discussion. Details of the spreadsheet model, and of
all the inputs to the LCC and PBP analyses, are contained in chapter 8
of the final determination TSD and its appendices.
Table IV-11--Summary of Inputs and Methods for the LCC and PBP Analysis
*
------------------------------------------------------------------------
Inputs Source/method
------------------------------------------------------------------------
Product Cost................. Derived by multiplying MPCs by
manufacturer, contractor, and
distributor markups and sales tax, as
appropriate. A constant price trend was
used to project product costs.
Installation Costs........... Baseline installation cost determined
with data from RS Means for the 2015
final rule, updated to 2021 dollars.
Assumed no change with efficiency level.
Annual Energy Use............ The total full-load cooling and heating
hours multiplied by the full load
cooling and heating power at each
efficiency level.
Variability: Based on the 16 IECC climate
zones and representative cities from the
DOE commercial reference building then
mapped to census divisions (with census
division 9 split into California and the
rest of the census division).
[[Page 9153]]
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 the Annual Energy Outlook 2022
with Projections to 2050 (AEO 2022)
price projections.
Repair and Maintenance Costs. Maintenance costs do not change by
efficiency level.
The materials portion of repair costs
changes by efficiency level; the labor
costs are constant and based on RS
Means. Values from 2015 final rule were
converted to 2021 dollars.
Product Lifetime............. Average: 8 years.
Discount Rates............... Commercial Discount rates for lodging,
healthcare, and small office. The
approach involves estimating the cost of
capital of companies that purchase PTAC
and PTHP equipment.
Compliance Date.............. 2026.
------------------------------------------------------------------------
* References for the data sources mentioned in this table are provided
in the sections following the table or in chapter 8 of the final
determination TSD.
1. PTAC and PTHP Equipment Cost
To calculate consumer PTAC and PTHP costs, DOE multiplied the MPCs
developed in the engineering analysis by the markups described
previously (along with sales taxes). DOE used different markups for
baseline products and higher-efficiency products because DOE applies an
incremental markup to the increase in MSP associated with higher-
efficiency products.
DOE used a constant trend to project equipment prices between 2021
(the year for which MPCs were developed) and 2026. The constant trend
is based on a historical time series of the deflated PPI for all other
miscellaneous refrigeration and air conditioning equipment between 1990
and 2021.\23\ The deflated PPI does not indicate a long term upward or
downward trend, therefore DOE used a constant price trend for PTACs and
PTHPs. See 87 FR 37934, 37957.
---------------------------------------------------------------------------
\23\ Available at: https://www.bls.gov/ppi/.
---------------------------------------------------------------------------
2. Installation Cost
Installation cost includes labor, overhead, and any miscellaneous
materials and parts needed to install the product. DOE used the
installation costs developed from the 2015 final rule \24\ and
converted them to 2021 dollars using the gross domestic product
(``GDP'') implicit price deflator \25\ to estimate the labor costs
associated with baseline installation cost for PTACs and PTHPs. As
representative efficiency levels for PTACs and PTHPs in this analysis
are single-stage, packaged units that fit into a wall sleeve, DOE found
no evidence that installation costs would be impacted with increased
efficiency levels.
---------------------------------------------------------------------------
\24\ See chapter 8 of the 2015 final rule technical support
documents (available at: https://www.regulations.gov/document/EERE-2012-BT-STD-0029-0040).
\25\ https://fred.stlouisfed.org/series/GDPDEF.
---------------------------------------------------------------------------
3. Annual Energy Consumption
For each census division, DOE determined the energy consumption for
a PTAC or PTHP in a small hotel guestroom at different efficiency
levels using the approach described previously in section IV.E of this
document.
4. Energy Prices
Because marginal electricity price more accurately captures the
incremental savings associated with a change in energy use from higher
efficiency, it provides a better representation of incremental change
in consumer costs than average electricity prices. Therefore, DOE
applied average electricity prices for the energy use of the product
purchased in the no-new-standards case, and marginal electricity prices
for the incremental change in energy use associated with the other
efficiency levels considered.
DOE derived electricity prices in 2021 using data from Edison
Electric Institute (``EEI'') Typical Bills and Average Rates
reports.\26\ Based upon comprehensive, industry-wide surveys, this
semi-annual report presents typical monthly electric bills and average
kilowatt-hour costs to the customer as charged by investor-owned
utilities. For the commercial sector, DOE calculated electricity prices
using the methodology described in Coughlin and Beraki (2019).\27\
---------------------------------------------------------------------------
\26\ Available at: https://netforum.eei.org/eweb/DynamicPage.aspx?WebCode=COEPubSearch&pager=12.
\27\ Coughlin, K. and B. Beraki. 2019. Non-residential
Electricity Prices: A Review of Data Sources and Estimation Methods.
Lawrence Berkeley National Lab. Berkeley, CA. Report No. LBNL-
2001203. ees.lbl.gov/publications/non-residential-electricity-prices.
---------------------------------------------------------------------------
DOE's methodology allows electricity prices to vary by sector,
region, and season. In the analysis, variability in electricity prices
is chosen to be consistent with the way the consumer economic and
energy use characteristics are defined in the LCC analysis. For PTACs
and PTHPs, DOE developed UECs by census division for each equipment
class and efficiency level for the summer (May to September) and winter
(October to April) seasons. The average summer and winter electricity
price for large commercial buildings was used to measure the baseline
energy cost. The summer and winter marginal prices for large commercial
buildings, using a marginal load factor of 0.5 were used to measure the
operating cost savings from higher efficiency PTACs and PTHPs. See
chapter 8 of the final determination 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.\28\ To estimate price trends after 2050,
DOE kept the energy price constant at the 2050 value.
---------------------------------------------------------------------------
\28\ EIA. Annual Energy Outlook 2022 with Projections to 2050.
Washington, DC. Available at www.eia.gov/forecasts/aeo/ (last
accessed May 5, 2022).
---------------------------------------------------------------------------
5. Maintenance and Repair Costs
Repair costs are associated with repairing or replacing PTAC and
PTHP components that have failed in an appliance; maintenance costs are
associated with maintaining the operation of the PTAC or PTHP.
Typically, small incremental increases in product efficiency produce no
changes in maintenance costs compared to baseline efficiency products.
Repair costs consist of the cost of labor to perform the repair as well
as the cost of materials to replace the component that has failed. DOE
assumes that the labor costs stay constant and the material costs will
increase proportionally with the incremental increase of the MPC. In
the July 2015 final rule, DOE used the material and labor costs
associated with
[[Page 9154]]
repair of equipment components covered and not covered by a standard
manufacturer warranty. See 80 FR 43162, 43180. Based on a report of
component failure probability and warranty terms, and on component
material and labor costs from RS Means data,\29\ DOE determined the
expected value of the total cost of a repair and annualized it to
determine the annual repair cost. DOE scaled by cooling capacity and
MSP to determine repair costs for the equipment classes and considered
efficiency levels. Id. For this analysis, DOE updated the labor portion
of the annualized repair cost using the GDP implicit price deflator
\30\ and updated the material portion of baseline products by the PPI
for Air-conditioning, refrigeration, and forced air heating equipment
manufacturing.\31\ The material portion of the repair cost for higher
efficiency components was scaled with the MSPs.
---------------------------------------------------------------------------
\29\ RS Means Company, Inc. ``RSMeans Facilities Maintenance &
Repair Cost Data,'' 2013.
\30\ https://fred.stlouisfed.org/series/GDPDEF.
\31\ https://www.bls.gov/ppi/.
---------------------------------------------------------------------------
6. Product Lifetime
For PTACs and PTHPs, DOE used the same lifetime estimates from July
2015 final rule. See 80 FR 43162, 43180. DOE requested comment on this
approach to equipment lifetime in the December 2020 ECS RFI. 85 FR
82952, 82963.
The average lifetime is assumed to be eight years, and the
distribution allows for a range of lifetimes up to 16 years. DOE's
lifetime assumption with a mean of 8 years falls between the various
stakeholder comments on the December 2020 ECS RFI and considering no
additional data were identified to support a shorter or longer life,
DOE maintained the same lifetime assumptions as in the July 2015 final
rule.
7. Discount Rates
DOE's method views the purchase of a higher efficiency appliance as
an investment that yields a stream of energy cost savings. DOE derived
the discount rates for the LCC analysis by estimating the cost of
capital for companies or public entities that purchase PTACs and PTHPs.
For private firms, the weighted average cost of capital (``WACC'') is
commonly used to estimate the present value of cash flows to be derived
from a typical company project or investment. Most companies use both
debt and equity capital to fund investments, so their cost of capital
is the weighted average of the cost to the firm of equity and debt
financing, as estimated from financial data for publicly traded firms
in the sectors that purchase PTACs and PTHPs.\32\ 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.
---------------------------------------------------------------------------
\32\ Modigliani, F. and M. H. Miller. The Cost of Capital,
Corporations Finance and the Theory of Investment. American Economic
Review. 1958. 48(3): pp. 261-297.
---------------------------------------------------------------------------
In this analysis, DOE estimated the cost of capital of companies
that purchase PTAC and PTHP equipment. DOE used the same types of
companies that were used in the July 2015 final rule, large hotel/motel
chains, independent hotel/motel, assisted living/health care, and small
office. 80 FR 43162, 43181. More details regarding the DOE's estimates
of discount rates can be found in chapter 8 of the final determination
TSD.
8. Energy Efficiency Distribution in the No-New-Standards Case
To accurately estimate the share of consumers that would be
affected by a potential energy conservation standard at a particular
efficiency level, DOE's LCC analysis considered the projected
distribution (market shares) of equipment efficiencies under the no-
new-standards case (i.e., the case without amended or new energy
conservation standards).
To estimate the energy efficiency distribution of PTACs and PTHPs
for 2026, DOE used model counts from CCD \33\ and applied a growth rate
of 1 EER every 35 years, which was used in the July 2015 final rule and
is based on a growth trend in the absence of standards developed in the
2004 commercial unitary air conditioner advanced notice of proposed
rulemaking (``2004 ANOPR'').\34\ 80 FR 43162, 43183. The estimated
market shares for the no-new-standards case for PTACs and PTHPs are
shown in Table IV-12. DOE notes that there are currently units in CCD
that are at the baseline efficiency level, but given the small
difference between the baseline and EL 1, the growth rate of 1 EER
every 35 years leads to no products at the baseline in 2026. See
chapter 8 of the final determination TSD for further information on the
derivation of the efficiency distributions.
---------------------------------------------------------------------------
\33\ www.regulations.doe.gov/certification-data/#q=Product_Group_s%3A* (last accessed: March 9, 2022).
\34\ See chapter 10 of DOE's technical support document
underlying DOE's July 29, 2004 ANOPR. Available at: https://www.regulations.gov/document/EERE-2006-STD-0103-0078.
Table IV-12--Market Shares for the No-New-Standards Case
--------------------------------------------------------------------------------------------------------------------------------------------------------
Market share by EL
-----------------------------------------------------------------------------
Equipment type Cooling capacity Baseline *
(%) EL1 (%) EL2 (%) EL3 (%) EL4 (%) EL5 (%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
PTAC....................................... 9,000 Btu/h.................. 0 44 29 11 6 10
15,000 Btu/h................. 0 0 52 34 14 0
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline * EL1 EL2 EL3 EL4 EL5
(%) (%) (%) (%) (%) (%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
PTHP....................................... 9,000 Btu/h.................. 0 44 21 16 10 9
15,000 Btu/h................. 0 0 41 40 20 0
--------------------------------------------------------------------------------------------------------------------------------------------------------
9. Payback Period Analysis
The payback period is the amount of time it takes the consumer to
recover the additional installed cost of more-efficient PTACs and
PTHPs, compared to baseline PTACs and PTHPs, through energy cost
savings. Payback periods are expressed in years. Payback periods that
exceed the life of the PTACs and PTHPs mean that the increased total
installed cost is not recovered in reduced operating expenses.
The inputs to the PBP calculation for each efficiency level are the
change in total installed cost of the PTACs and
[[Page 9155]]
PTHPs and the change in the first-year annual operating expenditures
relative to the baseline. The PBP calculation uses the same inputs as
the LCC analysis, except that discount rates are not needed.
G. Shipments Analysis
DOE uses projections of annual shipments to calculate the national
impacts of potential amended or new energy conservation standards on
energy use, NPV, and future manufacturer cash flows.\35\ The shipments
model takes an accounting approach in tracking market shares of each
equipment class and the vintage of units in the stock. Stock accounting
uses product shipments as inputs to estimate the age distribution of
in-service equipment stocks for all years. The age distribution of in-
service equipment stocks is a key input to calculations of both the NES
and NPV, because operating costs for any year depend on the age
distribution of the stock.
---------------------------------------------------------------------------
\35\ DOE uses data on manufacturer shipments as a proxy for
national sales, as aggregate data on sales are lacking. In general,
one would expect a close correspondence between shipments and sales.
---------------------------------------------------------------------------
In the June 2022 NOPD, DOE developed shipment projections based on
historical data and an analysis of key market drivers for this
equipment. 87 FR 37934, 37959 (citing 80 FR 43162, 43182). Historical
shipments were used to build up an equipment stock and also to
calibrate the shipments model. DOE separately calculated shipments
intended for new construction and replacement applications. The sum of
new construction and replacement shipments was the total shipments. Id.
New construction shipments were calculated using projected floor
space of healthcare, lodging, and small office buildings from AEO 2022
and historical PTAC and PTHP saturation in new buildings, which was
estimated by dividing historical new shipments by new construction
floor space. Id. Replacement shipments were equal to the number of
units that fail in a given year. The failures were based on a
retirement function in the form of a Weibull distribution with inputs
based on lifetime values from the LCC analysis to estimate the number
of units of a given age that fail in each year. Id.
DOE received no comments on its shipments analysis in the NOPD and
has maintained the same methodology for this final determination.
For further information on the shipments analysis, see chapter 9 of
the final determination TSD.
H. National Impact Analysis
The NIA assesses the NES and the NPV from a national perspective of
total consumer costs and savings that would be expected to result from
new or amended standards at specific efficiency levels.\36\
(``Consumer'' in this context refers to consumers of the PTACs and
PTHPs being regulated.) DOE calculates the NES and NPV for the
potential standard levels considered based on projections of annual
product shipments, along with the annual energy consumption and total
installed cost data from the energy use and LCC analyses. For the
present analysis, DOE projected the energy savings, operating cost
savings, product costs, and NPV of consumer benefits over the lifetime
of PTACs and PTHPs sold from 2026 through 2055.
---------------------------------------------------------------------------
\36\ The NIA accounts for impacts in the 50 states and
Washington DC.
---------------------------------------------------------------------------
DOE evaluates the effects of new or amended standards by comparing
a case without such standards with standards-case projections. The no-
new-standards case characterizes energy use and consumer costs for each
PTAC and PTHP class in the absence of new or amended energy
conservation standards. For this projection, DOE considers historical
trends in efficiency and various forces that are likely to affect the
mix of efficiencies over time. DOE compares the no-new-standards case
with projections characterizing the market for each PTAC and PTHP class
if DOE adopted new or amended standards at specific energy efficiency
levels (i.e., the ELs or standards cases) for that class. For the
standards cases, DOE considers how a given standard would likely affect
the market shares of PTACs and PTHPs with efficiencies greater than the
standard.
DOE uses a spreadsheet model to calculate the energy savings and
the national consumer costs and savings from each EL. Interested
parties can review DOE's analyses by changing various input quantities
within the spreadsheet. The NIA spreadsheet model uses typical values
(as opposed to probability distributions) as inputs.
Table IV-13 summarizes the inputs and methods DOE used for the NIA
analysis for the NOPD. See 87 FR 37934, 37960-61. DOE received no
comments in response to its analysis, and maintains the same inputs and
methods in this final determination. Discussion of these inputs and
methods follows the table. See chapter 10 of the final determination
TSD for details.
Table IV-13--Summary of Inputs and Methods for the National Impact
Analysis
------------------------------------------------------------------------
Inputs Method
------------------------------------------------------------------------
Shipments.............................. Annual shipments from shipments
model.
Modeled Compliance Date of Standard.... 2026.
Efficiency Trends...................... No-new-standards case--1 EER
every 35 years.
Standards cases--1 EER every 35
years.
Annual Energy Consumption per Unit..... Annual weighted-average values
are a function of energy use
at each EL.
Total Installed Cost per Unit.......... Annual weighted-average values
are a function of cost at each
EL.
Future product prices are
constant.
Annual Energy Cost per Unit............ Annual weighted-average values
as a function of the annual
energy consumption per unit
and energy prices.
Repair and Maintenance Cost per Unit... The materials portion of annual
repair costs scale with MPCs,
maintenance costs do not
change by EL.
Energy Prices.......................... AEO 2022 projections (to 2050)
and constant 2050 value
through 2075.
Energy Site-to-Primary and FFC A time-series conversion factor
Conversion. based on AEO 2022.
Discount Rate.......................... 3 percent and 7 percent.
Present Year........................... 2021.
------------------------------------------------------------------------
[[Page 9156]]
1. Equipment Efficiency Trends
A key component of the NIA is the trend in energy efficiency
projected for the no-new-standards case and each of the standards
cases. Section IV.E.8 of this document describes how DOE developed an
energy efficiency distribution for the no-new-standards case (which
yields a shipment-weighted average efficiency) for each of the
considered product classes for the year of anticipated compliance with
an amended or new standard.
For the standards cases, DOE used a ``roll-up'' scenario to
establish the shipment-weighted efficiency for the year that standards
are assumed to become effective (2026). In this scenario, the market
shares of products in the no-new-standards case that do not meet the
standard under consideration would ``roll up'' to meet the new standard
level, and the market share of products above the standard would remain
unchanged.
To develop no-new-standards case and standards case efficiency
trends after 2026, DOE used the same approach as in the July 2015 final
rule, which grows the efficiency trend at a rate of 1 EER every 35
years for all product classes. 80 FR 43162, 43183.
2. National Energy Savings
The NES analysis involves a comparison of national energy
consumption of the considered products between each potential standards
case (EL) and the case with no new or amended energy conservation
standards. DOE calculated the national energy consumption by
multiplying the number of units (stock) of each product (by vintage or
age) by the unit energy consumption (also by vintage). DOE calculated
annual NES based on the difference in national energy consumption for
the no-new-standards case and for each higher efficiency standard case.
DOE estimated energy consumption and savings based on site energy and
converted the electricity consumption and savings to primary energy
(i.e., the energy consumed by power plants to generate site
electricity) using annual conversion factors derived from AEO 2022.
Cumulative energy savings are the sum of the NES for each year over the
timeframe of the analysis.
Use of higher-efficiency products is occasionally associated with a
direct rebound effect, which refers to an increase in utilization of
the product due to the increase in efficiency. For PTAC/PTHP, DOE did
not consider any rebound as the entities using the equipment are
typically not the ones paying the energy costs.
In 2011, in response to the recommendations of a committee on
``Point-of-Use and Full-Fuel-Cycle Measurement Approaches to Energy
Efficiency Standards'' appointed by the National Academy of Sciences,
DOE announced its intention to use FFC measures of energy use and
greenhouse gas and other emissions in the NIA and emissions analyses
included in future energy conservation standards rulemakings. 76 FR
51281 (Aug. 18, 2011). After evaluating the approaches discussed in the
August 18, 2011 notice, DOE published a statement of amended policy in
which DOE explained its determination that EIA's National Energy
Modeling System (``NEMS'') is the most appropriate tool for its FFC
analysis and its intention to use NEMS for that purpose. 77 FR 49701
(Aug. 17, 2012). NEMS is a public domain, multi-sector, partial
equilibrium model of the U.S. energy sector \37\ that EIA uses to
prepare its AEO. The FFC factors incorporate losses in production, and
delivery in the case of natural gas, (including fugitive emissions) and
additional energy used to produce and deliver the various fuels used by
power plants. The approach used for deriving FFC measures of energy use
and emissions is described in appendix 10B of the final determination
TSD.
---------------------------------------------------------------------------
\37\ For more information on NEMS, refer to The National Energy
Modeling System: An Overview 2009, DOE/EIA-0581(2009), October 2009.
Available at www.eia.gov/analysis/pdfpages/0581(2009)index.php (last
accessed 4/15/2022).
---------------------------------------------------------------------------
3. Net Present Value Analysis
The inputs for determining the NPV of the total costs and benefits
experienced by consumers are: (1) total annual installed cost, (2)
total annual operating costs (energy costs and repair and maintenance
costs), and (3) a discount factor to calculate the present value of
costs and savings. DOE calculates net savings each year as the
difference between the no-new-standards case and each standards case in
terms of total savings in operating costs versus total increases in
installed costs. DOE calculates operating cost savings over the
lifetime of each product shipped during the projection period.
As discussed in section IV.E.1 of this document, DOE assumed a
constant price trend for PTACs and PTHPs. DOE applied the same constant
price trend to project prices for each PTAC and PTHP class at each
considered efficiency level.
The operating cost savings are energy cost savings, which are
calculated using the estimated energy savings in each year and the
projected price of the appropriate form of energy, and repair costs,
which remain constant through the analysis period. To estimate energy
prices in future years, DOE multiplied the average regional energy
prices by the projection of annual national-average commercial
electricity price changes in the Reference case from AEO 2022, which
has an end year of 2050. To estimate price trends after 2050, DOE kept
the 2050 value constant through 2075.
In calculating the NPV, DOE multiplies the net savings in future
years by a discount factor to determine their present value. For the
NOPD, DOE estimated the NPV of consumer benefits using both a 3-percent
and a 7-percent real discount rate. DOE uses these discount rates in
accordance with guidance provided by the Office of Management and
Budget (``OMB'') to Federal agencies on the development of regulatory
analysis.\38\ The discount rates for the determination of NPV are in
contrast to the discount rates used in the LCC analysis, which are
designed to reflect a consumer's perspective. The 7-percent real value
is an estimate of the average before-tax rate of return to private
capital in the U.S. economy. The 3-percent real value represents the
``social rate of time preference,'' which is the rate at which society
discounts future consumption flows to their present value.
---------------------------------------------------------------------------
\38\ United States Office of Management and Budget. Circular A-
4: Regulatory Analysis. September 17, 2003. Section E. Available at
https://www.federalregister.gov/documents/2003/10/09/03-25606/circular-a-4-regulatory-analysis (last accessed April 15, 2022).
---------------------------------------------------------------------------
V. Analytical Results and Conclusions
The following section addresses the results from DOE's analyses
with respect to the considered energy conservation standards for PTACs
and PTHPs. It addresses the ELs examined by DOE and the projected
impacts of each of these levels. Additional details regarding DOE's
analyses are contained in the final determination TSD supporting this
document.
A. Economic Impacts on PTAC and PTHP Consumers
DOE analyzed the cost effectiveness (i.e., the savings in operating
costs throughout the estimated average life of PTACs and PTHPs)
compared to any increase in the price of, or in the initial charges
for, or maintenance expenses of, the PTACs and PTHPs, which are likely
to result from the imposition of a standard at an EL by considering the
LCC and PBP at each EL. These analyses are discussed in the following
sections.
In general, higher-efficiency products affect consumers in two
ways: (1) purchase price increases and (2) annual
[[Page 9157]]
operating costs decrease. Inputs used for calculating the LCC and PBP
include total installed costs (i.e., product price plus installation
costs), and operating costs (i.e., annual energy use, energy prices,
energy price trends, repair costs, and maintenance costs). The LCC
calculation also uses product lifetime and a discount rate. Chapter 8
of the final determination TSD provides detailed information on the LCC
and PBP analyses.
Tables V-1 through V-4 show the LCC and PBP results for the ELs
considered in this analysis. The simple payback is measured relative to
the efficiency distribution in the no-new-standards case in the
compliance year (see section IV.E.8 of this document). Because some
consumers purchase products with higher efficiency in the no-new-
standards case, the average savings are less than the difference
between the average LCC of the baseline product and the average LCC at
each EL. The savings refer only to consumers who are affected by a
standard at a given EL. Those who already purchase a product with
efficiency at or above a given EL are not affected. Consumers for whom
the LCC increases at a given EL experience a net cost.
Table V-1--Average LCC and PBP Results by Efficiency Level for Standard
Size PTACs With a Cooling Capacity of 9,000 Btu/h
------------------------------------------------------------------------
Simple
LCC savings payback
Efficiency level 2021$ period
years
------------------------------------------------------------------------
EL 1.......................................... $0.00 N/A
EL 2.......................................... 1.92 5.6
EL 3.......................................... -0.47 6.0
EL 4.......................................... -5.60 6.5
EL 5.......................................... -8.70 6.8
------------------------------------------------------------------------
Table V-2--Average LCC and PBP Results by Efficiency Level for Standard
Size PTACs With a Cooling Capacity of 15,000 Btu/h
------------------------------------------------------------------------
Simple
LCC savings payback
Efficiency level 2021$ period
years
------------------------------------------------------------------------
EL 1.......................................... $0.00 N/A
EL 2.......................................... 0.00 N/A
EL 3.......................................... 6.39 4.1
EL 4.......................................... -1.77 4.9
EL 5.......................................... -8.68 5.3
------------------------------------------------------------------------
Table V-3--Average LCC and PBP Results by Efficiency Level for Standard
Size PTHPs With a Cooling Capacity of 9,000 Btu/h
------------------------------------------------------------------------
Simple
LCC savings payback
Efficiency level 2021$ period
years
------------------------------------------------------------------------
EL 1.......................................... $0.00 N/A
EL 2.......................................... 2.42 5.3
EL 3.......................................... 0.72 5.7
EL 4.......................................... -3.75 6.2
EL 5.......................................... -6.48 6.4
------------------------------------------------------------------------
Table V-4--Average LCC and PBP Results by Efficiency Level for Standard
Size PTHPs With a Cooling Capacity of 15,000 Btu/h
------------------------------------------------------------------------
Simple
LCC savings payback
Efficiency level 2021$ period
years
------------------------------------------------------------------------
EL 1.......................................... $0.00 N/A
EL 2.......................................... 0.00 N/A
EL 3.......................................... 7.27 4.0
EL 4.......................................... -0.66 4.7
EL 5.......................................... -7.07 5.1
------------------------------------------------------------------------
B. National Impact Analysis
This section presents DOE's estimates of the NES and the NPV of
consumer benefits that would result from each of the ELs considered as
potential amended standards.
1. Significance of Energy Savings
To estimate the energy savings attributable to potential amended
standards for PTACs and PTHPs, DOE compared their energy consumption
under the no-new-standards case to their anticipated energy consumption
under each EL. The savings are measured over the entire lifetime of
products purchased in the 30-year period that begins in the year of
anticipated compliance with amended standards (2026-2055). Table V-5
presents DOE's projections of the NES for each EL considered for PTACs
and PTHPs. The savings were calculated using the approach described in
section IV.G of this document.
Table V-5--Cumulative National Energy Savings for PTACs and PTHPs; 30 Years of Shipments (2026-2055)
----------------------------------------------------------------------------------------------------------------
Efficiency level
-------------------------------------------------------------------------------
1 2 3 4 5
----------------------------------------------------------------------------------------------------------------
quads
-------------------------------------------------------------------------------
Primary energy.................. 0.000 0.002 0.014 0.045 0.068
FFC energy...................... 0.000 0.002 0.015 0.047 0.071
----------------------------------------------------------------------------------------------------------------
OMB Circular A-4 \39\ requires agencies to present analytical
results, including separate schedules of the monetized benefits and
costs that show the type and timing of benefits and costs. Circular A-4
also directs agencies to consider the variability of key elements
underlying the estimates of benefits and costs. For this final
determination, DOE undertook a sensitivity analysis using 9 years,
rather than 30 years, of product shipments. The choice of a 9-year
period is a proxy for the timeline in EPCA for the review of certain
energy conservation standards and potential revision of and compliance
with such revised standards.\40\ The review timeframe
[[Page 9158]]
established in EPCA is generally not synchronized with the product
lifetime, product manufacturing cycles, or other factors specific to
PTACs and PTHPs. Thus, such results are presented for informational
purposes only and are not indicative of any change in DOE's analytical
methodology. The NES sensitivity analysis results based on a 9-year
analytical period are presented in Table V-6. The impacts are counted
over the lifetime of PTACs and PTHPs purchased in 2026 to 2034.
---------------------------------------------------------------------------
\39\ U.S. Office of Management and Budget. Circular A-4:
Regulatory Analysis. September 17, 2003. Available at
obamawhitehouse.archives.gov/omb/circulars_a004_a-4/ (last accessed
April 15, 2022).
\40\ For ASHRAE products, section 342(a)(6)(C) of EPCA requires
DOE to review its standards every 6 years, and requires, for certain
products, a 3-year period after any new standard is promulgated
before compliance is required, except that in no case may any new
standards be required within 6 years of the compliance date of the
previous standards. If DOE makes a determination that amended
standards are not needed, it must conduct a subsequent review within
three years following such a determination. As DOE is evaluating the
need to amend the standards, the sensitivity analysis is based on
the review timeframe associated with amended standards. While adding
a 6-year review to the 3-year compliance period adds up to 9 years,
DOE notes that it may undertake reviews at any time within the 6-
year period and that the 3-year compliance date may yield to the 6-
year backstop. A 9-year analysis period may not be appropriate given
the variability that occurs in the timing of standards reviews and
the fact that for some products, the compliance period is 6 years
rather than 3 years.
Table V-6--Cumulative National Energy Savings for PTACs and PTHPs; 9 Years of Shipments (2026-2034)
----------------------------------------------------------------------------------------------------------------
Efficiency level
-------------------------------------------------------------------------------
1 2 3 4 5
----------------------------------------------------------------------------------------------------------------
quads
-------------------------------------------------------------------------------
Primary energy.................. 0.000 0.002 0.011 0.023 0.029
FFC energy...................... 0.000 0.002 0.011 0.023 0.030
----------------------------------------------------------------------------------------------------------------
a. Net Present Value of Consumer Costs and Benefits
DOE estimated the cumulative NPV of the total costs and savings for
consumers that would result from an amended standard at each of the
representative ELs considered for PTACs and PTHPs. In accordance with
OMB's guidelines on regulatory analysis,\41\ DOE calculated NPV using
both a 7-percent and a 3-percent real discount rate. Table V-7 shows
the consumer NPV results with impacts counted over the lifetime of
products purchased in 2026-2055.
---------------------------------------------------------------------------
\41\ U.S. Office of Management and Budget. Circular A-4:
Regulatory Analysis. September 17, 2003. Available at
obamawhitehouse.archives.gov/omb/circulars_a004_a-4/ (last accessed
April 15, 2022).
Table V-7--Cumulative Net Present Value of Consumer Benefits for PTACs and PTHPs; 30 Years of Shipments (2026-
2055)
----------------------------------------------------------------------------------------------------------------
Trial standard level (billion 2021$)
Discount rate -------------------------------------------------------------------------------
1 2 3 4 5
----------------------------------------------------------------------------------------------------------------
3 percent....................... 0.000 -0.004 -0.043 -0.167 -0.268
7 percent....................... 0.000 -0.004 -0.035 -0.116 -0.174
----------------------------------------------------------------------------------------------------------------
The NPV results based on the aforementioned 9-year analytical
period are presented in Table V-8. The impacts are counted over the
lifetime of PTACs and PTHPs purchased in 2026-2034. As mentioned
previously, such results are presented for informational purposes only
and are not indicative of any change in DOE's analytical methodology or
decision criteria.
Table V-8--Cumulative Net Present Value of Consumer Benefits for PTACs and PTHPs; 9 Years of Shipments (2026-
2034)
----------------------------------------------------------------------------------------------------------------
Trial standard level (billion 2021$)
Discount rate -------------------------------------------------------------------------------
1 2 3 4 5
----------------------------------------------------------------------------------------------------------------
3 percent....................... 0.000 -0.004 -0.033 -0.088 -0.124
7 percent....................... 0.000 -0.004 -0.029 -0.073 -0.102
----------------------------------------------------------------------------------------------------------------
C. Final Determination
EPCA specifies that for any commercial and industrial equipment
addressed under 42 U.S.C. 6313(a)(6)(A)(i), including PTACs and PTHPS,
DOE may prescribe an energy conservation standard more stringent than
the level for such equipment in ASHRAE Standard 90.1 only if ``clear
and convincing evidence'' shows that a more-stringent standard would
result in significant additional conservation of energy and is
technologically feasible and economically justified. (42 U.S.C.
6313(a)(6)(C)(i); 42 U.S.C. 6313(a)(6)(A)(ii)(II)) The ``clear and
convincing'' evidentiary threshold applies both when DOE is triggered
by ASHRAE action and when DOE conducts a six-year-lookback rulemaking,
with the latter being the basis for the current proceeding.
Because an analysis of potential cost-effectiveness and energy
savings first require an evaluation of the relevant technology, DOE
first discusses the technological feasibility of amended standards. DOE
then evaluates the energy savings potential and cost-effectiveness of
potential amended standards.
[[Page 9159]]
1. Technological Feasibility
EPCA mandates that DOE consider whether amended energy conservation
standards for PTACs and PTHPs would be technologically feasible. (42
U.S.C. 6313(a)(6)(A)(ii)(II))
DOE considers technologies incorporated in commercially available
products or in working prototypes and improve efficiency to be
technologically feasible. Per the technology options discussed in
section IV.B.3 of this document and the screened-in technologies in
section IV.B.4, DOE has determined, based on clear and convincing
evidence, that amended energy conservation standards for PTACs and
PTHPs would be technologically feasible.
2. Significant Conservation of Energy
EPCA also mandates that DOE consider whether amended energy
conservation standards for PTACs and PTHPS would result in result in
significant additional conservation of energy. (42 U.S.C.
6313(a)(6)(A)(ii)(II))
In the present case, DOE estimates that amended standards for PTACs
and PTHPs would result in energy savings of 0.002 quads at EL 2, 0.013
quads at EL 3, 0.014 quads at EL 4, and 0.062 quads at EL 5 (the max-
tech level) over a 30-year analysis period (2026-2055). However, as
discussed in the following section DOE lacks the clear and convincing
evidence necessary to determine that amended standards for PTACs and
PTHPs would be economically justified.
3. Economic Justification
In determining whether a standard is economically justified, the
Secretary must determine whether the benefits of the standard exceed
its burdens, considering to the greatest extent practicable the seven
statutory factors discussed previously (see section II.A of this
document). (42 U.S.C. 6313(a)(6)(A)(ii)(II); 42 U.S.C.
6313(a)(6)(B)(ii)(I)-(VII))
One of those seven factors is the savings in operating costs
throughout the estimated average life of the product in the type (or
class) compared to any increase in the price, initial charges, or
maintenance expenses of the products that are likely to result from the
standard. (42 U.S.C. 6313(a)(6)(B)(ii)(II)) This factor is typically
assessed using the LCC and PBP analysis, as well as the NPV.
DOE conducted an LCC analysis to estimate the net costs/benefits to
users from increased efficiency in the considered PTACs and PTHPs (see
results in Tables V-1 through V-4). DOE then aggregated the results
from the LCC analysis to estimate the NPV of the total costs and
benefits experienced by the Nation (see results in Tables V-7 and V-8).
As noted, the inputs for determining the NPV are: (1) total annual
installed cost, (2) total annual operating costs (energy costs and
repair and maintenance costs), and (3) a discount factor to calculate
the present value of costs and savings. A summary of the analytical
results can be found in Table V-9.
Table V-9--Summary of Analytical Results of PTAC and PTHP Equipment
----------------------------------------------------------------------------------------------------------------
Category EL1 EL 2 EL 3 EL 4 EL 5
----------------------------------------------------------------------------------------------------------------
Cumulative National FFC Energy 0.000 0.002 0.015 0.047 0.071
Savings quads..................
NPV of Consumer Costs and
Benefits *** 2021$ billion:
3% discount rate............ 0.000 -0.004 -0.043 -0.167 -0.268
7% discount rate............ 0.000 -0.004 -0.035 -0.116 -0.174
Consumer Mean LCC Savings 2021$:
Standard Size PTACs--9,000 0.00 1.92 -0.47 -5.60 -8.70
Btu/h......................
Standard Size PTACs--15,000 0.00 0.00 6.39 -1.77 -8.68
Btu/h......................
Standard Size PTHPs--9,000 0.00 2.42 0.72 -3.75 -6.48
Btu/h......................
Standard Size PTHPs--15,000 0.00 0.00 7.27 -0.66 -7.07
Btu/h......................
Consumer Mean Payback Period:
Standard Size PTACs--9,000 N/A 5.6 6.0 6.5 6.8
Btu/h......................
Standard Size PTACs--15,000 N/A N/A 4.1 4.9 5.3
Btu/h......................
Standard Size PTHPs--9,000 N/A 5.3 5.7 6.2 6.4
Btu/h......................
Standard Size PTHPs--15,000 N/A N/A 4.0 4.7 5.1
Btu/h......................
----------------------------------------------------------------------------------------------------------------
DOE estimates that amended standards for PTACs and PTHPs would
result in NPV of $0.000 at EL 1, of -$0.004 billion at a 3 percent
discount rate and -$0.004 billion at a 7 percent discount rate at EL 2,
of -$0.043 billion at a 3 percent discount rate and -$0.035 billion at
a 7 percent discount rate at EL 3, of -$0.167 billion at a 3 percent
discount rate and -$0.116 billion at a 7 percent discount rate at EL 4,
and of -$0.268 billion at a 3 percent discount rate and -$0.174 billion
at a 7 percent discount rate at EL 5. Because the NPV values are
negative and indicate no economic benefit, DOE has determined that it
lacks clear and convincing evidence that amended energy conservation
standards would be economically justified.
4. Summary
Based on the NPV being zero at EL 1 and negative at each higher EL,
DOE has determined that the energy conservation standards for PTACs and
PTHP do not need to be amended, having determined that it lacks ``clear
and convincing'' evidence that amended standards would be economically
justified.
VI. Procedural Issues and Regulatory Review
A. Review Under Executive Order 12866 and 13563
Executive Order (``E.O.'') 12866, ``Regulatory Planning and
Review,'' as supplemented and reaffirmed by E.O. 13563, ``Improving
Regulation and Regulatory Review,'' 76 FR 3821 (Jan. 21, 2011),
requires agencies, to the extent permitted by law, to: (1) propose or
adopt a regulation only upon a reasoned determination that its benefits
justify its costs (recognizing that some benefits and costs are
difficult to quantify); (2) tailor regulations to impose the least
burden on society, consistent with obtaining regulatory objectives,
taking into account, among other things, and to the extent practicable,
the costs of cumulative regulations; (3) select, in choosing among
alternative regulatory approaches, those approaches that 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
[[Page 9160]]
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 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 final regulatory action does not constitute a
``significant regulatory action'' under section 3(f) of E.O. 12866.
Accordingly, this action was not submitted to OIRA for review under
E.O. 12866.
B. Review Under the Regulatory Flexibility Act
The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires
preparation of an initial regulatory flexibility analysis (``IRFA'')
for any rule that by law must be proposed for public comment, unless
the agency certifies that the rule, if promulgated, will not have a
significant economic impact on a substantial number of small entities.
As required by E.O. 13272, ``Proper Consideration of Small Entities in
Agency Rulemaking,'' 67 FR 53461 (Aug. 16, 2002), DOE published
procedures and policies on February 19, 2003, to ensure that the
potential impacts of its rules on small entities are properly
considered during the rulemaking process. 68 FR 7990. DOE has made its
procedures and policies available on the Office of the General
Counsel's website (www.energy.gov/gc/office-general-counsel).
DOE reviewed this final determination under the provisions of the
Regulatory Flexibility Act and the policies and procedures published on
February 19, 2003. Because DOE is not amending standards for PTACs and
PTHPs this determination would not amend any energy conservation
standards. On the basis of the foregoing, DOE certifies that the
determination, will have no significant economic impact on a
substantial number of small entities. Accordingly, DOE has not prepared
an IRFA or a final regulatory flexibility analysis for this
determination. DOE has transmitted this certification and supporting
statement of factual basis to the Chief Counsel for Advocacy of the
Small Business Administration for review under 5 U.S.C. 605(b).
C. Review Under the Paperwork Reduction Act
This final determination, which determines that amended energy
conservation standards for PTACs and PTHPs are unneeded under the
applicable statutory criteria, imposes no new informational or
recordkeeping requirements. Accordingly, OMB clearance is not required
under the Paperwork Reduction Act. (44 U.S.C. 3501 et seq.)
D. Review Under the National Environmental Policy Act of 1969
DOE has analyzed this action in accordance with the National
Environmental Policy Act of 1969 (``NEPA'') and DOE's NEPA implementing
regulations (10 CFR part 1021). DOE's regulations include a categorical
exclusion for actions which are interpretations or rulings with respect
to existing regulations. 10 CFR part 1021, subpart D, appendix A4. DOE
anticipates that this action qualifies for categorical exclusion A4
because it is an interpretation or ruling in regard to an existing
regulation and otherwise meets the requirements for application of a
categorical exclusion. See 10 CFR 1021.410. DOE has completed its NEPA
review before issuing the final action.
E. Review Under Executive Order 13132
E.O. 13132, ``Federalism,'' 64 FR 43255 (Aug. 10, 1999), imposes
certain requirements on Federal agencies formulating and implementing
policies or regulations that preempt State law or that have federalism
implications. The E.O. requires agencies to examine the constitutional
and statutory authority supporting any action that would limit the
policymaking discretion of the States and to carefully assess the
necessity for such actions. The E.O. also requires agencies to have an
accountable process to ensure meaningful and timely input by State and
local officials in the development of regulatory policies that have
federalism implications. On March 14, 2000, DOE published a statement
of policy describing the intergovernmental consultation process it will
follow in the development of such regulations. 65 FR 13735. DOE has
examined this final determination and has 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
final 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(b); 42 U.S.C. 6297) As this final determination would not
amend the standards for PTAC and PTHPs, there is no impact on the
policymaking discretion of the States. Therefore, no further action is
required by E.O. 13132.
F. Review Under Executive Order 12988
With respect to the review of existing regulations and the
promulgation of new regulations, section 3(a) of E.O. 12988, ``Civil
Justice Reform,'' imposes on Federal agencies the general duty to
adhere to the following requirements: (1) eliminate drafting errors and
ambiguity, (2) write regulations to minimize litigation, (3) provide a
clear legal standard for affected conduct rather than a general
standard, and (4) promote simplification and burden reduction. 61 FR
4729 (Feb. 7, 1996). Regarding the review required by section 3(a),
section 3(b) of E.O. 12988 specifically requires that executive
agencies make every reasonable effort to ensure that the regulation:
(1) clearly specifies the preemptive effect, if any, (2) clearly
specifies any effect on existing Federal law or regulation, (3)
provides a clear legal standard for affected conduct while promoting
simplification and burden reduction, (4) specifies the retroactive
effect, if any, (5) adequately defines key terms, and (6) addresses
other important issues affecting clarity and general draftsmanship
under any guidelines issued by the Attorney General. Section 3(c) of
E.O. 12988 requires executive agencies to review regulations in light
of applicable standards in section 3(a) and section 3(b) to determine
whether they are met or it is unreasonable to meet one or more of them.
DOE has completed the required review and determined that, to the
extent permitted by law, this final 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,
[[Page 9161]]
local, and Tribal governments and the private sector. Public Law 104-4,
sec. 201 (codified at 2 U.S.C. 1531). For a regulatory action likely to
result in a rule that may cause the expenditure by State, local, and
Tribal governments, in the aggregate, or by the private sector of $100
million or more in any one year (adjusted annually for inflation),
section 202 of UMRA requires a Federal agency to publish a written
statement that estimates the resulting costs, benefits, and other
effects on the national economy. (2 U.S.C. 1532(a), (b)) The UMRA also
requires a Federal agency to develop an effective process to permit
timely input by elected officers of State, local, and Tribal
governments on a proposed ``significant intergovernmental mandate,''
and requires an agency plan for giving notice and opportunity for
timely input to potentially affected small governments before
establishing any requirements that might significantly or uniquely
affect them. On March 18, 1997, DOE published a statement of policy on
its process for intergovernmental consultation under UMRA. 62 FR 12820.
DOE's policy statement is also available at www.energy.gov/sites/prod/files/gcprod/documents/umra_97.pdf.
DOE examined this final determination according to UMRA and its
statement of policy and determined that this final determination does
not contain a Federal intergovernmental mandate, nor is it expected to
require expenditures of $100 million or more in any one year by State,
local, and Tribal governments, in the aggregate, or by the private
sector. As a result, the analytical requirements of UMRA do not apply.
H. Review Under the Treasury and General Government Appropriations Act,
1999
Section 654 of the Treasury and General Government Appropriations
Act, 1999 (Pub. L. 105-277) requires Federal agencies to issue a Family
Policymaking Assessment for any rule that may affect family well-being.
This determination would not have any impact on the autonomy or
integrity of the family as an institution. Accordingly, DOE has
concluded that it is not necessary to prepare a Family Policymaking
Assessment.
I. Review Under Executive Order 12630
Pursuant to E.O. 12630, ``Governmental Actions and Interference
with Constitutionally Protected Property Rights,'' 53 FR 8859 (Mar. 15,
1988), DOE has determined that this 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 final determination under the OMB and DOE guidelines and
has concluded that it is consistent with applicable policies in those
guidelines.
K. Review Under Executive Order 13211
E.O. 13211, ``Actions Concerning Regulations That Significantly
Affect Energy Supply, Distribution, or Use,'' 66 FR 28355 (May 22,
2001), requires Federal agencies to prepare and submit to the OIRA at
OMB, a Statement of Energy Effects for any significant energy action. A
``significant energy action'' is defined as any action by an agency
that promulgates or is expected to lead to promulgation of a final
rule, and that (1) is a significant regulatory action under E.O. 12866,
or any successor E.O.; and (2) is likely to have a significant adverse
effect on the supply, distribution, or use of energy, or (3) is
designated by the Administrator of OIRA as a significant energy action.
For any significant energy action, the agency must give a detailed
statement of any adverse effects on energy supply, distribution, or use
should the proposal be implemented, and of reasonable alternatives to
the action and their expected benefits on energy supply, distribution,
and use.
This final determination, which does not amend energy conservation
standards for PTACs and PTHPs, is not a significant regulatory action
under E.O. 12866. Moreover, it would not have a significant adverse
effect on the supply, distribution, or use of energy, nor has it been
designated as such by the Administrator at OIRA. Accordingly, DOE has
not prepared a Statement of Energy Effects on this final determination.
L. Information Quality
On December 16, 2004, OMB, in consultation with the Office of
Science and Technology Policy (``OSTP''), issued its Final Information
Quality Bulletin for Peer Review (``the Bulletin''). 70 FR 2664 (Jan.
14, 2005). The Bulletin establishes that certain scientific information
shall be peer reviewed by qualified specialists before it is
disseminated by the Federal Government, including influential
scientific information related to agency regulatory actions. The
purpose of the bulletin is to enhance the quality and credibility of
the Government's scientific information. Under the Bulletin, the energy
conservation standards rulemaking analyses are ``influential scientific
information,'' which the Bulletin defines as ``scientific information
the agency reasonably can determine will have, or does have, a clear
and substantial impact on important public policies or private sector
decisions.'' Id. at 70 FR 2667.
In response to OMB's Bulletin, DOE conducted formal peer reviews of
the energy conservation standards development process and the analyses
that are typically used and has prepared a report describing that peer
review.\42\ 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.\43\
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\42\ 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 (last accessed Jan 3, 2023).
\43\ The December 2021 NAS report is available at
www.nationalacademies.org/our-work/review-of-methods-for-setting-building-and-equipment-performance-standards.
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M. Congressional Notification
As required by 5 U.S.C. 801, DOE will report to Congress on the
promulgation of this determination prior to its effective date. The
report will state that
[[Page 9162]]
it has been determined that the determination is not a ``major rule''
as defined by 5 U.S.C. 804(2).
VII. Approval of the Office of the Secretary
The Secretary of Energy has approved publication of this final
determination.
Signing Authority
This document of the Department of Energy was signed on February 3,
2023, 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 February 3, 2023.
Treena V. Garrett,
Federal Register Liaison Officer, U.S. Department of Energy.
[FR Doc. 2023-02655 Filed 2-10-23; 8:45 am]
BILLING CODE 6450-01-P