[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
----------------------------------------------------------------------------------------------------------------
                             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.
                                 -------------------------------------------------------------------------------
                                  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.
----------------------------------------------------------------------------------------------------------------
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.........
                                 -------------------------------------------------------------------------------
                                  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
----------------------------------------------------------------------------------------------------------------
                                            Reference in this final
              Commenter(s)                       determination         Commenter No.        Commenter type
----------------------------------------------------------------------------------------------------------------
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\
---------------------------------------------------------------------------

    \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).
---------------------------------------------------------------------------

    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\
---------------------------------------------------------------------------

    \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