[Federal Register Volume 88, Number 38 (Monday, February 27, 2023)]
[Proposed Rules]
[Pages 12452-12536]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-03436]



[[Page 12451]]

Vol. 88

Monday,

No. 38

February 27, 2023

Part II





Department of Energy





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10 CFR Part 430





Energy Conservation Program: Energy Conservation Standards for 
Refrigerators, Refrigerator-Freezers, and Freezers; Proposed Rule

  Federal Register / Vol. 88, No. 38 / Monday, February 27, 2023 / 
Proposed Rules  

[[Page 12452]]


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DEPARTMENT OF ENERGY

10 CFR Part 430

[EERE-2017-BT-STD-0003]
RIN 1904-AD80


Energy Conservation Program: Energy Conservation Standards for 
Refrigerators, Refrigerator-Freezers, and Freezers

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

ACTION: Notice of proposed rulemaking and announcement of public 
meeting.

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SUMMARY: The Energy Policy and Conservation Act, as amended (``EPCA''), 
prescribes energy conservation standards for various consumer products 
and certain commercial and industrial equipment, including 
refrigerators, refrigerator-freezers, and freezers. EPCA also requires 
the U.S. Department of Energy (``DOE'' or ``the Department'') to 
periodically determine whether more stringent standards would be 
technologically feasible and economically justified, and would result 
in significant energy savings. In this notice of proposed rulemaking 
(``NOPR''), DOE proposes amended energy conservation standards for 
refrigerators, refrigerator-freezers, and freezers, and also announces 
a public meeting to receive comment on these proposed standards and 
associated analyses and results.

DATES: 
    Comments: DOE will accept comments, data, and information regarding 
this NOPR no later than April 28, 2023.
    Meeting: DOE will hold a public meeting via webinar on Tuesday, 
April 11, 2023, from 1:00 p.m. to 4:00 p.m., in Washington, DC. See 
section VII, ``Public Participation,'' for webinar registration 
information, participant instructions and information about the 
capabilities available to webinar participants. Comments regarding the 
likely competitive impact of the proposed standard should be sent to 
the Department of Justice contact listed in the ADDRESSES section on or 
before March 29, 2023.

ADDRESSES: Interested persons are encouraged to submit comments using 
the Federal eRulemaking Portal at www.regulations.gov, under by docket 
number EERE-2017-BT-STD-0003. Follow the instructions for submitting 
comments. Alternatively, interested persons may submit comments, 
identified by docket number EERE-2017-BT-STD-0003, by any of the 
following methods:
    Email: [email protected]. Include the 
docket number EERE-2017-BT-STD-0003 in the subject line of the message.
    Postal Mail: Appliance and Equipment Standards Program, U.S. 
Department of Energy, Building Technologies Office, Mailstop EE-5B, 
1000 Independence Avenue SW, Washington, DC 20585-0121. Telephone: 
(202) 287-1445. If possible, please submit all items on a compact disc 
(``CD''), in which case it is not necessary to include printed copies.
    Hand Delivery/Courier: Appliance and Equipment Standards Program, 
U.S. Department of Energy, Building Technologies Office, 950 L'Enfant 
Plaza SW, 6th Floor, Washington, DC 20024. Telephone: (202) 287-1445. 
If possible, please submit all items on a CD, in which case it is not 
necessary to include printed copies.
    No telefacsimiles (``faxes'') will be accepted. For detailed 
instructions on submitting comments and additional information on this 
process, see section VII of this document.
    Docket: The docket for this activity, which includes Federal 
Register notices, comments, and other supporting documents/materials, 
is available for review at 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-2017-BT-STD-0003. The docket web page contains instructions on how 
to access all documents, including public comments, in the docket. See 
section VII of this document for information on how to submit comments 
through www.regulations.gov.
    EPCA requires the Attorney General to provide DOE a written 
determination of whether the proposed standard is likely to lessen 
competition. The U.S. Department of Justice Antitrust Division invites 
input from market participants and other interested persons with views 
on the likely competitive impact of the proposed standard. Interested 
persons may contact the Division at [email protected] on or 
before the date specified in the DATES section. Please indicate in the 
``Subject'' line of your email the title and Docket Number of this 
proposed rule.

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].
    Mr. Matthew Schneider, U.S. Department of Energy, Office of the 
General Counsel, GC-33, 1000 Independence Avenue SW, Washington, DC 
20585-0121. Telephone: (240) 597-6265. Email: 
[email protected].
    For further information on how to submit a comment, review other 
public comments and the docket, or participate in the public meeting, 
contact the Appliance and Equipment Standards Program staff at (202) 
287-1445 or by email: [email protected].

SUPPLEMENTARY INFORMATION: 

Table of Contents

I. Synopsis of the Proposed Rule
    1. Benefits and Costs to Consumers
    2. Impact on Manufacturers
    3. National Benefits and Costs
    4. Conclusion
II. Introduction
    A. Authority
    B. Background
    1. Current Standards
    2. History of Standards Rulemaking for Consumer Refrigerators, 
Refrigerator-Freezers, and Freezers
    3. Test Procedure
    C. Deviation From Appendix A
III. General Discussion
    A. Product 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. Specific Criteria
    a. Economic Impact on Manufacturers and Consumers
    b. Savings in Operating Costs Compared To Increase in Price (LCC 
and PBP)
    c. Energy Savings
    d. Lessening of Utility or Performance of Products
    e. Impact of Any Lessening of Competition
    f. Need for National Energy Conservation
    g. Other Factors
    2. Rebuttable Presumption
IV. Methodology and Discussion of Related Comments
    A. Market and Technology Assessment
    1. Scope of Coverage and Product Classes
    2. Technology Options
    B. Screening Analysis
    1. Screened-Out Technologies
    2. Remaining Technologies
    C. Engineering Analysis
    1. Efficiency Analysis
    a. Built-In Products
    b. Representativeness of Reverse-Engineered and Analyzed 
Products

[[Page 12453]]

    c. Baseline Efficiency/Energy Use
    d. Higher Efficiency Levels
    e. VIP Analysis and Max-Tech Levels
    2. Cost Analysis
    3. Cost-Efficiency Results
    4. Manufacturer Selling Price
    D. Markups Analysis
    E. Energy Use Analysis
    F. Life-Cycle Cost and Payback Period Analysis
    1. Adjusted Volume Distribution
    2. Product Cost
    3. Installation Cost
    4. Annual Energy Consumption
    5. Energy Prices
    6. Maintenance and Repair Costs
    7. Product Lifetime
    8. Discount Rates
    9. Energy Efficiency Distribution in the No-New-Standards Case
    10. Payback Period Analysis
    G. Shipments Analysis
    H. National Impact Analysis
    1. Product Efficiency Trends
    2. National Energy Savings
    3. Net Present Value Analysis
    I. Consumer Subgroup Analysis
    J. Manufacturer Impact Analysis
    1. Overview
    2. Government Regulatory Impact Model and Key Inputs
    a. Manufacturer Production Costs
    b. Shipments Projections
    c. Product and Capital Conversion Costs
    d. Manufacturer Markup Scenarios
    3. Manufacturer Interviews
    a. Specialty Doors and Multiple Door Designs
    b. Viability of Low-Cost Standard-Size Refrigerator-Freezers
    c. Built-In Product Classes
    d. Supply Chain Constraints
    4. Discussion of MIA Comments
    K. Emissions Analysis
    1. Air Quality Regulations Incorporated in DOE's Analysis
    L. Monetizing Emissions Impacts
    1. Monetization of Greenhouse Gas Emissions
    a. Social Cost of Carbon
    b. Social Cost of Methane and Nitrous Oxide
    2. Monetization of Other Emissions Impacts
    M. Utility Impact Analysis
    N. Employment Impact Analysis
V. Analytical Results and Conclusions
    A. Trial Standard Levels
    B. Economic Justification and Energy Savings
    1. Economic Impacts on Individual Consumers
    a. Life-Cycle Cost and Payback Period
    b. Consumer Subgroup Analysis
    c. Rebuttable Presumption Payback
    2. Economic Impacts on Manufacturers
    a. Industry Cash Flow Analysis Results
    b. Direct Impacts on Employment
    c. Impacts on Manufacturing Capacity
    d. Impacts on Subgroups of Manufacturers
    e. Cumulative Regulatory Burden
    3. National Impact Analysis
    a. Significance of Energy Savings
    b. Net Present Value of Consumer Costs and Benefits
    c. Indirect Impacts on Employment
    4. Impact on Utility or Performance of Products
    5. Impact of Any Lessening of Competition
    6. Need of the Nation To Conserve Energy
    7. Other Factors
    8. Summary of Economic Impacts
    C. Conclusion
    1. Benefits and Burdens of TSLs Considered for Refrigerator, 
Refrigerator-Freezer, and Freezer Standards
    2. Annualized Benefits and Costs of the Proposed Standards
    D. Reporting, Certification, and Sampling Plan
VI. Procedural Issues and Regulatory Review
    A. Review Under Executive Orders 12866 and 13563
    B. Review Under the Regulatory Flexibility Act
    1. Description of Reasons Why Action Is Being Considered
    2. Objectives of, and Legal Basis for, Rule
    3. Description on Estimated Number of Small Entities Regulated
    4. Description and Estimate of Compliance Requirements Including 
Differences in Cost, if Any, for Different Groups of Small Entities
    5. Duplication, Overlap, and Conflict With Other Rules and 
Regulations
    6. Significant Alternatives to the Rule
    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
VII. Public Participation
    A. Attendance at the Public Meeting
    B. Procedure for Submitting Prepared General Statements for 
Distribution
    C. Conduct of the Public Meeting
    D. Submission of Comments
    E. Issues on Which DOE Seeks Comment
VIII. Approval of the Office of the Secretary

I. Synopsis of the Proposed Rule

    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 B of EPCA \2\ 
established the Energy Conservation Program for Consumer Products Other 
Than Automobiles. (42 U.S.C. 6291-6309) These products include 
refrigerators, refrigerator-freezers, and freezers, the subject of this 
proposed 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 B was redesignated Part A.
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    Pursuant to EPCA, any new or amended energy conservation standard 
must be designed to achieve the maximum improvement in energy 
efficiency that DOE determines is technologically feasible and 
economically justified. (42 U.S.C. 6295(o)(2)(A)) Furthermore, the new 
or amended standard must result in a significant conservation of 
energy. (42 U.S.C. 6295(o)(3)(B)) EPCA also provides that not later 
than 6 years after issuance of any final rule establishing or amending 
a standard, DOE must publish either a notice of determination that 
standards for the product do not need to be amended, or a notice of 
proposed rulemaking including new proposed energy conservation 
standards (proceeding to a final rule, as appropriate). (42 U.S.C. 
6295(m))
    In accordance with these and other statutory provisions discussed 
in this document, DOE proposes amended energy conservation standards 
for refrigerators, refrigerator-freezers, and freezers. The proposed 
standards, which are expressed in kWh/yr, are shown in Table I.1. These 
proposed standards, if adopted, would apply to all refrigerators, 
refrigerator-freezers, and freezers listed in Table I.1 manufactured 
in, or imported into, the United States starting on the date 3 years 
after the publication of the final rule for this proposed rule.

[[Page 12454]]



    Table I.1--Proposed Energy Conservation Standards for Refrigerators, Refrigerator-Freezers, and Freezers
----------------------------------------------------------------------------------------------------------------
                                                        Equations for maximum energy use  (kWh/yr)
             Product class              ------------------------------------------------------------------------
                                            Based on AV  (ft\3\)                   Based on av  (L)
----------------------------------------------------------------------------------------------------------------
1. Refrigerator-freezers and             6.79AV + 191.3............  0.240av + 191.3.
 refrigerators other than all-
 refrigerators with manual defrost.
1A. All-refrigerators--manual defrost..  5.77AV + 164.6............  0.204av + 164.6.
2. Refrigerator-freezers--partial        (6.79AV + 191.3)*K2.......  (0.240av + 191.3)*K2.
 automatic defrost.
3. Refrigerator-freezers--automatic      6.86AV + 198.6 + 28I......  0.242av + 198.6 + 28I.
 defrost with top-mounted freezer.
3-BI. Built-in refrigerator-freezer--    8.24AV + 238.4 + 28I......  0.291av + 238.4 + 28I.
 automatic defrost with top-mounted
 freezer.
3A. All-refrigerators--automatic         (6.01AV + 171.4)*K3A......  (0.212av + 171.4)*K3A.
 defrost.
3A-BI. Built-in All-refrigerators--      (7.22AV + 205.7)*K3ABI....  (0.255av + 205.7)*K3ABI.
 automatic defrost.
4. Refrigerator-freezers--automatic      6.89AV + 241.2 + 28I......  0.243av + 241.2 + 28I.
 defrost with side-mounted freezer.
4-BI. Built-In Refrigerator-freezers--   8.79AV + 307.4 + 28I......  0.310av + 307.4 + 28I.
 automatic defrost with side-mounted
 freezer.
5. Refrigerator-freezers--automatic      (7.61AV + 272.6)*K5 + 28I.  (0.269av + 272.6)*K5 + 28I.
 defrost with bottom-mounted freezer.
5-BI. Built-In Refrigerator-freezers--   (8.65AV + 309.9)*K5BI +     (0.305av + 309.9)*K5BI + 28I.
 automatic defrost with bottom-mounted    28I.
 freezer.
5A. Refrigerator-freezer--automatic      (7.26AV + 329.2)*K5A......  (0.256av + 329.2)*K5A.
 defrost with bottom-mounted freezer
 with through-the-door ice service.
5A-BI. Built-in refrigerator-freezer--   (8.21AV + 370.7)*K5ABI....  (0.290av + 370.7)*K5ABI.
 automatic defrost with bottom-mounted
 freezer with through-the-door ice
 service.
6. Refrigerator-freezers--automatic      7.14AV + 280.0............  0.252av + 280.0.
 defrost with top-mounted freezer with
 through-the-door ice service.
7. Refrigerator-freezers--automatic      (6.92AV + 305.2)*K7.......  (0.244av + 305.2)*K7.
 defrost with side-mounted freezer with
 through-the-door ice service.
7-BI. Built-In Refrigerator-freezers--   (8.82AV + 384.1)*K7BI.....  (0.311av + 384.1)*K7BI.
 automatic defrost with side-mounted
 freezer.
8. Upright freezers with manual defrost  5.57AV + 193.7............  0.197av + 193.7.
9. Upright freezers with automatic       7.76AV + 205.5 + 28I......  0.274av + 205.5 + 28I.
 defrost.
9-BI. Built-In Upright freezers with     9.37AV + 247.9 + 28I......  0.331av + 247.9 + 28I.
 automatic defrost.
10. Chest freezers and all other         7.29AV + 107.8............  0.257av + 107.8.
 freezers except compact freezers.
10A. Chest freezers with automatic       10.24AV + 148.1...........  0.362av + 148.1.
 defrost.
11. Compact refrigerator-freezers and    7.68AV + 214.5............  0.271av + 214.5.
 refrigerators other than all-
 refrigerators with manual defrost.
11A. Compact all-refrigerators--manual   6.66AV + 186.2............  0.235av + 186.2.
 defrost.
12. Compact refrigerator-freezers--      (7.68AV + 214.5)*K12......  (0.271av + 214.5)*K12.
 partial automatic defrost.
13. Compact refrigerator-freezers--      10.62AV + 305.3 + 28I.....  0.375av + 305.3 + 28I.
 automatic defrost with top-mounted
 freezer.
13A. Compact all-refrigerators--         (8.25AV + 233.4)*K13A.....  (0.291av + 233.4)*K13A.
 automatic defrost.
14. Compact refrigerator-freezers--      6.14AV + 411.2 + 28I......  0.217av + 411.2 + 28I.
 automatic defrost with side-mounted
 freezer.
15. Compact refrigerator-freezers--      10.62AV + 305.3 + 28I.....  0.375av + 305.3 + 28I.
 automatic defrost with bottom-mounted
 freezer.
16. Compact upright freezers with        7.35AV + 191.8............  0.260av + 191.8.
 manual defrost.
17. Compact upright freezers with        9.15AV + 316.7............  0.323av + 316.7.
 automatic defrost.
18. Compact chest freezers.............  7.86AV + 107.8............  0.278av + 107.8.
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AV = Total adjusted volume, expressed in ft \3\, as determined in appendices A and B of subpart B of 10 CFR part
  430.
av = Total adjusted volume, expressed in Liters.
I = 1 for a product with an automatic icemaker and = 0 for a product without an automatic icemaker.
Door Coefficients (e.g., K3A) are as defined in Table I.2.


    Table I.2--Description of Door Coefficients for Proposed Maximum Energy Use Equations for Refrigerators,
                                       Refrigerator-Freezers, and Freezers
----------------------------------------------------------------------------------------------------------------
                                                                                            Products without a
                                           Products with a         Products without  a     transparent  door or
          Door coefficient                transparent door      transparent door  with a    door-in-door  with
                                                                      door-in-door         added external doors
----------------------------------------------------------------------------------------------------------------
K2..................................                      N/A                       N/A   1 + 0.02 * (Nd-1).
----------------------------------------------------------------------------------------------------------------
K3A.................................                     1.10                       N/A   N/A.
K3ABI...............................
K13A................................
----------------------------------------------------------------------------------------------------------------
K5..................................                                               1.06   1 + 0.02 * (Nd-2).
K5BI................................
K5A.................................                                                      1 + 0.02 * (Nd-3).
K5ABI...............................
K7..................................                                                      1 + 0.02 * (Nd-2).
K7BI................................
----------------------------------------------------------------------------------------------------------------
K12.................................                      N/A                       N/A   1 + 0.02 * (Nd-1).
----------------------------------------------------------------------------------------------------------------
Nd is the number of external doors.

1. Benefits and Costs to Consumers

    Table I.3 presents DOE's evaluation of the economic impacts of the 
proposed standards on consumers of refrigerators, refrigerator-
freezers, and freezers, as measured by the average life-cycle cost 
(``LCC'') savings and the simple payback period (``PBP'').\3\ The 
average LCC

[[Page 12455]]

savings are positive for all product classes for which a standard is 
proposed, and the PBP is less than the average lifetime of 
refrigerators, refrigerator-freezers, and freezers, which varies by 
product class (see section IV.F.7 of this document).
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    \3\ The average LCC savings refer to consumers that are affected 
by a standard and are measured relative to the efficiency 
distribution in the no-new-standards case, which depicts the market 
in the compliance year in the absence of new or amended standards 
(see section IV.F.9 of this document). The simple PBP, which is 
designed to compare specific efficiency levels, is measured relative 
to the baseline product (see section IV.C of this document).

     Table I.3--Impacts of Proposed Energy Conservation Standards on
     Consumers of Refrigerators, Refrigerator-Freezers, and Freezers
                                 [TSL 5]
------------------------------------------------------------------------
                                          Average LCC
             Product class                  savings      Simple  payback
                                            (2021$)      period  (years)
------------------------------------------------------------------------
PC 3..................................           36.04               5.3
PC 5..................................           49.73               4.8
PC 5BI................................           39.94               5.7
PC 5A.................................          115.76               5.7
PC 7..................................          101.33               5.0
PC 9..................................           69.26               3.9
PC 10.................................             N/A               N/A
PC 11A (residential)..................            9.97               2.1
PC 11A (commercial)...................            3.42               3.2
PC 17.................................           21.90               5.0
PC 18.................................           17.59               4.2
------------------------------------------------------------------------

    DOE's analysis of the impacts of the proposed standards on 
consumers is described in section IV.F of this document.

2. Impact on Manufacturers \4\
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    \4\ All monetary values in this document are expressed in 2021 
dollars.
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    The industry net present value (``INPV'') is the sum of the 
discounted cash flows to the industry from the NOPR publication year 
through the end of the analysis period (2023-2056). Using a real 
discount rate of 9.1 percent, DOE estimates that the INPV for 
manufacturers of refrigerators, refrigerator-freezers, and freezers, in 
the case without amended standards is $4.97 billion. Under the proposed 
standards, the change in INPV is estimated to range from -20.2 percent 
to -16.0 percent, which is approximately -$1.0 billion to -$792.8 
million. In order to bring products into compliance with amended 
standards, it is estimated that the industry would incur total 
conversion costs of $1.32 billion.
    DOE's analysis of the impacts of the proposed standards on 
manufacturers is described in section IV.J of this document. The 
analytic results of the manufacturer impact analysis (``MIA'') are 
presented in section V.B.2 of this document.

3. National Benefits and Costs

    DOE's analyses indicate that the proposed energy conservation 
standards for refrigerators, refrigerator-freezers, and freezers would 
save a significant amount of energy. Relative to the case without 
amended standards, the lifetime energy savings for refrigerators, 
refrigerator-freezers, and freezers purchased in the 30-year period 
that begins in the anticipated year of compliance with the amended 
standards (2027-2056) amount to 5.3 quadrillion British thermal units 
(``Btu''), or quads.\5\ This represents a savings of 12 percent 
relative to the energy use of these products in the case without 
amended standards (referred to as the ``no-new-standards case'').
---------------------------------------------------------------------------

    \5\ The quantity refers to full-fuel-cycle (``FFC'') energy 
savings. FFC energy savings 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 efficiency standards. For more 
information on the FFC metric, see section IV.H.2 of this document.
---------------------------------------------------------------------------

    The cumulative net present value (``NPV'') of total consumer 
benefits of the proposed standards for refrigerators, refrigerator-
freezers, and freezers ranges from $6.6 billion (at a 7-percent 
discount rate) to $20.4 billion (at a 3-percent discount rate). This 
NPV expresses the estimated total value of future operating-cost 
savings minus the estimated increased product costs for refrigerators, 
refrigerator-freezers, and freezers purchased in 2027-2056.
    In addition, the proposed standards for refrigerators, 
refrigerator-freezers, and freezers are projected to yield significant 
environmental benefits. DOE estimates that the proposed standards would 
result in cumulative emission reductions (over the same period as for 
energy savings) of 179.2 million metric tons (``Mt'') \6\ of carbon 
dioxide (``CO2''), 83.1 thousand tons of sulfur dioxide 
(``SO2''), 274.4 thousand tons of nitrogen oxides 
(``NOX''), 1,204.7 thousand tons of methane 
(``CH4''), 1.9 thousand tons of nitrous oxide 
(``N2O''), and 0.5 tons of mercury (``Hg'').\7\
---------------------------------------------------------------------------

    \6\ A metric ton is equivalent to 1.1 short tons. Results for 
emissions other than CO2 are presented in short tons.
    \7\ DOE calculated emissions reductions relative to the no-new-
standards case, which reflects key assumptions in the Annual Energy 
Outlook 2022 (``AEO2022''). AEO2022 represents current federal and 
state legislation and final implementation of regulations as of the 
time of its preparation. See section IV.K of this document for 
further discussion of AEO2022 assumptions that effect air pollutant 
emissions.
---------------------------------------------------------------------------

    DOE estimates the value of climate benefits from a reduction in 
greenhouse gases (GHG) using four different estimates of the social 
cost of CO2 (``SC-CO2''), the social cost of 
methane (``SC-CH4''), and the social cost of nitrous oxide 
(``SC-N2O''). Together these represent the social cost of 
GHG (SC-GHG).\8\ DOE used interim SC-GHG values developed by an 
Interagency

[[Page 12456]]

Working Group on the Social Cost of Greenhouse Gases (IWG).\9\ The 
derivation of these values is discussed in section IV.L of this 
document. For presentational purposes, the climate benefits associated 
with the average SC-GHG at a 3-percent discount rate are estimated to 
be $8.1 billion. DOE does not have a single central SC-GHG point 
estimate and it emphasizes the importance and value of considering the 
benefits calculated using all four SC-GHG estimates.
---------------------------------------------------------------------------

    \8\ 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. Among other 
things, the preliminary injunction enjoined the defendants in that 
case from ``adopting, employing, treating as binding, or relying 
upon'' 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. As reflected in 
this rule, DOE has reverted to its approach prior to the injunction 
and presents monetized greenhouse gas abatement benefits where 
appropriate and permissible under law.
    \9\ See Interagency Working Group on Social Cost of Greenhouse 
Gases, Technical Support Document: Social Cost of Carbon, Methane, 
and Nitrous Oxide. Interim Estimates Under Executive Order 13990, 
Washington, DC, February 2021 (``February 2021 SC-GHG TSD''). 
www.whitehouse.gov/wp-content/uploads/2021/02/TechnicalSupportDocument_SocialCostofCarbonMethaneNitrousOxide.pdf.
---------------------------------------------------------------------------

    DOE estimated the monetary health benefits of SO2 and 
NOX emissions reductions, also discussed in section IV.L of 
this document. DOE estimated the present value of the health benefits 
would be $5.3 billion using a 7-percent discount rate, and $14.2 
billion using a 3-percent discount rate.\10\ DOE is currently only 
monetizing (for SO2 and NOX) PM2.5 
precursor health benefits and (for NOX) ozone precursor 
health benefits, but will continue to assess the ability to monetize 
other effects such as health benefits from reductions in direct 
PM2.5 emissions.
---------------------------------------------------------------------------

    \10\ DOE estimates the economic value of these emissions 
reductions resulting from the considered TSLs for the purpose of 
complying with the requirements of Executive Order 12866.
---------------------------------------------------------------------------

    Table I.4 summarizes the economic benefits and costs expected to 
result from the proposed standards for refrigerators, refrigerator-
freezers, and freezers. There are other important unquantified effects, 
including certain unquantified climate benefits, unquantified public 
health benefits from the reduction of toxic air pollutants and other 
emissions, unquantified energy security benefits, and distributional 
effects, among others.

  Table I.4--Summary of Monetized Benefits and Costs of Proposed Energy
  Conservation Standards for Refrigerators, Refrigerator-Freezers, and
                                Freezers
                                 [TSL 5]
------------------------------------------------------------------------
                                                           Billion 2021$
------------------------------------------------------------------------
                            3% discount rate
------------------------------------------------------------------------
Consumer Operating Cost Savings.........................            32.7
Climate Benefits *......................................             8.1
Health Benefits **......................................            14.2
                                                         ---------------
    Total Benefits [dagger].............................            55.1
Consumer Incremental Product Costs [Dagger].............            12.3
                                                         ---------------
    Net Benefits........................................            42.7
------------------------------------------------------------------------
                            7% discount rate
------------------------------------------------------------------------
Consumer Operating Cost Savings.........................            13.6
Climate Benefits * (3% discount rate)...................             8.1
Health Benefits **......................................             5.3
                                                         ---------------
    Total Benefits [dagger].............................            27.0
Consumer Incremental Product Costs......................             6.9
                                                         ---------------
    Net Benefits........................................            20.1
------------------------------------------------------------------------
Note: This table presents the costs and benefits associated with product
  name shipped in 2027-2056. These results include benefits to consumers
  which accrue after 2056 from the products shipped in 2027-2056.
* Climate benefits are calculated using four different estimates of the
  social cost of carbon (SC-CO2), methane (SC-CH4), and nitrous oxide
  (SC-N2O) (model average at 2.5 percent, 3 percent, and 5 percent
  discount rates; 95th percentile at 3 percent discount rate) (see
  section IV.L of this document). Together these represent the global SC-
  GHG. For presentational purposes of this table, the climate benefits
  associated with the average SC-GHG at a 3 percent discount rate are
  shown, but the Department does not have a single central SC-GHG point
  estimate. 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. Among other things, the
  preliminary injunction enjoined the defendants in that case from
  ``adopting, employing, treating as binding, or relying upon'' 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. As reflected in this rule, DOE has
  reverted to its approach prior to the injunction and presents
  monetized greenhouse gas abatement benefits where appropriate and
  permissible under law.
** Health benefits are calculated using benefit-per-ton values for NOX
  and SO2. DOE is currently only monetizing (for SO2 and NOX) PM2.5
  precursor health benefits and (for NOX) ozone precursor health
  benefits, but will continue to assess the ability to monetize other
  effects such as health benefits from reductions in direct PM2.5
  emissions. See section IV.L of this document for more details.
[dagger] Total and net benefits include those consumer, climate, and
  health benefits that can be quantified and monetized. For presentation
  purposes, total and net benefits for both the 3-percent and 7-percent
  cases are presented using the average SC-GHG with a 3-percent discount
  rate, but the Department does not have a single central SC-GHG point
  estimate. DOE emphasizes the importance and value of considering the
  benefits calculated using all four SC-GHG estimates.


[[Page 12457]]

    The benefits and costs of the proposed standards can also be 
expressed in terms of annualized values. The monetary values for the 
total annualized net benefits are (1) the reduced consumer operating 
costs, minus (2) the increase in product purchase prices and 
installation costs, plus (3) the value of climate and health benefits 
of emission reductions, all annualized.\11\
---------------------------------------------------------------------------

    \11\ To convert the time-series of costs and benefits into 
annualized values, DOE calculated a present value in 2022, the year 
used for discounting the NPV of total consumer costs and savings. 
For the benefits, DOE calculated a present value associated with 
each year's shipments in the year in which the shipments occur 
(e.g., 2030), and then discounted the present value from each year 
to 2022. Using the present value, DOE then calculated the fixed 
annual payment over a 30-year period, starting in the compliance 
year, that yields the same present value.
---------------------------------------------------------------------------

    The national operating savings are domestic private U.S. consumer 
monetary savings that occur as a result of purchasing the covered 
products and are measured for the lifetime of refrigerators, 
refrigerator-freezers, and freezers shipped in 2027-2056. The benefits 
associated with reduced emissions achieved as a result of the proposed 
standards are also calculated based on the lifetime of refrigerators, 
refrigerator-freezers, and freezers shipped in 2027-2056. Total 
benefits for both the 3-percent and 7-percent cases are presented using 
the average GHG social costs with a 3-percent discount rate. Estimates 
of SC-GHG values are presented for all four discount rates in section 
IV.L of this document.
    Table I.5 presents the total estimated monetized benefits and costs 
associated with the proposed standard, expressed in terms of annualized 
values. The results under the primary estimate are as follows.
    Using a 7-percent discount rate for consumer benefits and costs and 
health benefits from reduced NOX and SO2 
emissions, and the 3-percent discount rate case for climate benefits 
from reduced GHG emissions, the estimated cost of the standards 
proposed in this rule is $730.0 million per year in increased equipment 
costs, while the estimated annual monetized benefits are $1.4 billion 
in reduced equipment operating costs, $467.9 million in climate 
benefits, and $563.3 million in health benefits. In this case, the net 
monetized benefit would amount to $1.7 billion per year.
    Using a 3-percent discount rate for all benefits and costs, the 
estimated cost of the proposed standards is $707.4 million per year in 
increased equipment costs, while the estimated annual monetized 
benefits are $1.9 billion in reduced operating costs, $467.9 million in 
climate benefits, and $815.2 million in health benefits. In this case, 
the net monetized benefit would amount to $2.5 billion per year.

 Table I.5--Annualized Monetized Benefits and Costs of Proposed Energy Conservation Standards for Refrigerators,
                                       Refrigerator-Freezers, and Freezers
                                                     [TSL 5]
----------------------------------------------------------------------------------------------------------------
                                                                           Million 2021$/year
                                                       ---------------------------------------------------------
                                                            Primary       Low-net-benefits    High-net-benefits
                                                           estimate           estimate             estimate
----------------------------------------------------------------------------------------------------------------
                                                3% discount rate
----------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings.......................         1,878.6              1,745.5              2,030.6
Climate Benefits *....................................           467.9                453.4                482.4
Health Benefits **....................................           815.2                790.3                840.1
                                                       ---------------------------------------------------------
    Total Benefits [dagger]...........................         3,161.7              2,989.3              3,353.1
Consumer Incremental Product Costs [Dagger]...........           707.4                774.3                681.3
                                                       ---------------------------------------------------------
    Net Benefits......................................         2,454.3              2,215.0              2,671.9
----------------------------------------------------------------------------------------------------------------
                                                7% discount rate
----------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings.......................         1,431.7              1,339.6              1,534.2
Climate Benefits * (3% discount rate).................           467.9                453.4                482.4
Health Benefits **....................................           563.3                547.4                579.1
                                                       ---------------------------------------------------------
    Total Benefits [dagger]...........................         2,462.9              2,340.4              2,595.7
Consumer Incremental Product Costs....................           730.0                788.4                706.3
                                                       ---------------------------------------------------------
    Net Benefits......................................         1,732.9              1,552.0              1,889.4
----------------------------------------------------------------------------------------------------------------
Note: This table presents the costs and benefits associated with refrigerators, refrigerator-freezers, and
  freezers shipped in 2027-2056. These results include benefits to consumers which accrue after 2056 from the
  products shipped in 2027-2056. The Primary, Low Net Benefits, and High Net Benefits Estimates utilize
  projections of energy prices from the AEO 2022 Reference case, Low Economic Growth case, and High Economic
  Growth case, respectively. In addition, incremental equipment costs reflect a medium decline rate in the
  Primary Estimate, a low decline rate in the Low Net Benefits Estimate, and a high decline rate in the High Net
  Benefits Estimate. The methods used to derive projected price trends are explained in section IV.H.3 of this
  document. Note that the Benefits and Costs may not sum to the Net Benefits due to rounding.
* Climate benefits are calculated using four different estimates of the global SC-GHG (see section IV.L of this
  document). For presentational purposes of this table, the climate benefits associated with the average SC-GHG
  at a 3 percent discount rate are shown, but the Department does not have a single central SC-GHG point
  estimate, and it emphasizes the importance and value of considering the benefits calculated using all four SC-
  GHG estimates. 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. Among other things, the preliminary injunction enjoined the defendants in
  that case from ``adopting, employing, treating as binding, or relying upon'' 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. As
  reflected in this rule, DOE has reverted to its approach prior to the injunction and presents monetized
  greenhouse gas abatement benefits where appropriate and permissible under law.

[[Page 12458]]

 
** Health benefits are calculated using benefit-per-ton values for NOX and SO2. DOE is currently only monetizing
  (for SO2 and NOX) PM2.5 precursor health benefits and (for NOX) ozone precursor health benefits, but will
  continue to assess the ability to monetize other effects such as health benefits from reductions in direct
  PM2.5 emissions. The health benefits are presented at real discount rates of 3 and 7 percent. See section IV.L
  of this document for more details.
[dagger] Total benefits for both the 3-percent and 7-percent cases are presented using the average SC-GHG with a
  3-percent discount rate, but the Department does not have a single central SC-GHG point estimate.

    DOE's analysis of the national impacts of the proposed standards is 
described in sections IV.H, IV.K, and IV.L of this document.

4. Conclusion

    DOE has tentatively concluded that the proposed standards represent 
the maximum improvement in energy efficiency that is technologically 
feasible and economically justified, and would result in the 
significant conservation of energy. Specifically, with regard to 
technological feasibility, products achieving these proposed standard 
levels are already commercially available for all covered product 
classes. As for economic justification, DOE's analysis shows that the 
benefits of the proposed standard exceed, to a great extent, the 
burdens of the proposed standards.
    Using a 7-percent discount rate for consumer benefits and costs and 
NOX and SO2 reduction benefits, and a 3-percent 
discount rate case for GHG social costs, the estimated cost of the 
proposed standards for refrigerators, refrigerator-freezers, and 
freezers is $730.0 million per year in increased product costs, while 
the estimated annual monetized benefits are $1.4317 billion in reduced 
product operating costs, $467.9 million in climate benefits and $563.3 
million in health benefits. The net monetized benefit amounts to 
$1.7329 billion per year.
    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.\12\ For 
example, some covered products and equipment have substantial 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.
---------------------------------------------------------------------------

    \12\ Procedures, Interpretations, and Policies for Consideration 
in New or Revised Energy Conservation Standards and Test Procedures 
for Consumer Products and Commercial/Industrial Equipment, 86 FR 
70892, 70901 (Dec. 13, 2021).
---------------------------------------------------------------------------

    As previously mentioned, the proposed standards are projected to 
result in estimated national energy savings of 5.3 quads (FFC), the 
equivalent of the electricity use of 57 million homes in one year. In 
addition, they are projected to reduce GHG emissions. Based on these 
findings, DOE has initially determined the energy savings from the 
proposed standard levels are ``significant'' within the meaning of 42 
U.S.C. 6295(o)(3)(B). A more detailed discussion of the basis for this 
tentative conclusion is contained in the remainder of this document and 
the accompanying technical support document (``TSD'').
    DOE also considered more stringent energy efficiency levels as 
potential standards and is still considering them in this rulemaking. 
However, DOE has tentatively concluded that the potential burdens of 
the more stringent energy efficiency levels would outweigh the 
projected benefits.
    Based on consideration of the public comments DOE receives in 
response to this document and related information collected and 
analyzed during the course of this rulemaking effort, DOE may adopt 
energy efficiency levels presented in this document that are either 
higher or lower than the proposed standards, or some combination of 
level(s) that incorporate the proposed standards in part.

II. Introduction

    The following section briefly discusses the statutory authority 
underlying this proposed rule, as well as some of the relevant 
historical background related to the establishment of standards for 
refrigerators, refrigerator-freezers, and freezers.

A. Authority

    EPCA authorizes DOE to regulate the energy efficiency of a number 
of consumer products and certain industrial equipment. Title III, Part 
B of EPCA established the Energy Conservation Program for Consumer 
Products Other Than Automobiles. These products include refrigerators, 
refrigerator-freezers, and freezers, the subject of this document. (42 
U.S.C. 6292(a)(1)) EPCA prescribed initial energy conservation 
standards for these products (42 U.S.C. 6295(b)(1)-(2)), and directed 
DOE to conduct three cycles of future rulemakings during which the 
Department was tasked with determining whether to amend these 
standards. (42 U.S.C. 6295(b)(3)(A)(i), (b)(3)(B), and (b)(4)). DOE has 
completed these rulemakings. EPCA further provides that, not later than 
six years after the issuance of any final rule establishing or amending 
a standard, 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. 6295(m)(1))
    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 specifically include 
definitions (42 U.S.C. 6291), test procedures (42 U.S.C. 6293), 
labeling provisions (42 U.S.C. 6294), energy conservation standards (42 
U.S.C. 6295), and the authority to require information and reports from 
manufacturers (42 U.S.C. 6296).
    Federal energy efficiency requirements for covered products 
established under EPCA generally supersede State laws and regulations 
concerning energy conservation testing, labeling, and standards. (42 
U.S.C. 6297(a)-(c)) DOE may, however, grant waivers of Federal 
preemption for particular State laws or regulations, in accordance with 
the procedures and other provisions set forth under EPCA. (See 42 
U.S.C. 6297(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 each covered product. (42 U.S.C. 
6295(o)(3)(A) and 42 U.S.C. 6295(r)) Manufacturers of covered products 
must use the prescribed DOE test procedure as the basis for certifying 
to DOE that their products comply with the applicable energy 
conservation standards adopted under EPCA and when making 
representations to the public regarding the energy use or efficiency of 
those products. (42 U.S.C. 6293(c) and 42 U.S.C. 6295(s)) Similarly, 
DOE must use these test procedures to determine whether the products 
comply with standards adopted pursuant to EPCA. (42 U.S.C. 6295(s)). 
The DOE test procedures for consumer refrigerators, refrigerator-
freezers, and freezers appear at 10 CFR part 430, subpart B, appendix

[[Page 12459]]

A, Uniform Test Method for Measuring the Energy Consumption of 
Refrigerators, Refrigerator-Freezers, and Miscellaneous Refrigeration 
Products (``appendix A'') and 10 CFR part 430, subpart B, appendix B, 
Uniform Test Method for Measuring the Energy Consumption of Freezers 
(``appendix B'').
    DOE must follow specific statutory criteria for prescribing new or 
amended standards for covered products, including refrigerators, 
refrigerator-freezers, and freezers. Any new or amended standard for a 
covered product must be designed to achieve the maximum improvement in 
energy efficiency that the Secretary of Energy (``Secretary'') 
determines is technologically feasible and economically justified. (42 
U.S.C. 6295(o)(2)(A) and 42 U.S.C. 6295(o)(3)(B)) Furthermore, DOE may 
not adopt any standard that would not result in the significant 
conservation of energy. (42 U.S.C. 6295(o)(3))
    Moreover, DOE may not prescribe a standard: (1) for certain 
products, including refrigerators, refrigerator-freezers, and freezers, 
if no test procedure has been established for the product, or (2) if 
DOE determines by rule that the standard is not technologically 
feasible or economically justified. (42 U.S.C. 6295(o)(3)(A)-(B)) In 
deciding whether a proposed standard is economically justified, DOE 
must determine whether the benefits of the standard exceed its burdens. 
(42 U.S.C. 6295(o)(2)(B)(i)) DOE must make this determination after 
receiving comments on the proposed standard, and by considering, to the 
greatest extent practicable, the following seven statutory 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 covered products in the type (or class) compared 
to any increase in the price, initial charges, or maintenance 
expenses for the covered products that are likely to result from the 
standard;
    (3) The total projected amount of energy (or as applicable, 
water) savings likely to result directly from the standard;
    (4) Any lessening of the utility or the performance of the 
covered 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 and water conservation; and
    (7) Other factors the Secretary of Energy (``Secretary'') 
considers relevant.

    (42 U.S.C. 6295(o)(2)(B)(i)(I)-(VII))
    Further, EPCA establishes a rebuttable presumption that a standard 
is economically justified if the Secretary finds that the additional 
cost to the consumer of purchasing a product complying with an energy 
conservation standard level will be less than three times the value of 
the energy savings during the first year that the consumer will receive 
as a result of the standard, as calculated under the applicable test 
procedure. (42 U.S.C. 6295(o)(2)(B)(iii))
    EPCA also contains what is known as an ``anti-backsliding'' 
provision, which prevents the Secretary from prescribing any amended 
standard that either increases the maximum allowable energy use or 
decreases the minimum required energy efficiency of a covered product. 
(42 U.S.C. 6295(o)(1)) 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. 
6295(o)(4))
    Additionally, EPCA specifies requirements when promulgating an 
energy conservation standard for a covered product that has two or more 
subcategories. DOE must specify a different standard level for a type 
or class of product that has the same function or intended use, if DOE 
determines that products within such group: (A) consume a different 
kind of energy from that consumed by other covered products within such 
type (or class); or (B) have a capacity or other performance-related 
feature which other products within such type (or class) do not have 
and such feature justifies a higher or lower standard. (42 U.S.C. 
6295(q)(1)) In determining whether a performance-related feature 
justifies a different standard for a group of products, DOE must 
consider such factors as the utility to the consumer of the feature and 
other factors DOE deems appropriate. Id. Any rule prescribing such a 
standard must include an explanation of the basis on which such higher 
or lower level was established. (42 U.S.C. 6295(q)(2))
    Finally, pursuant to the amendments contained in the Energy 
Independence and Security Act of 2007 (``EISA 2007''), Public Law 110-
140, any final rule for new or amended energy conservation standards 
promulgated after July 1, 2010, is required to address standby mode and 
off mode energy use. (42 U.S.C. 6295(gg)(3)) Specifically, when DOE 
adopts a standard for a covered product after that date, it must, if 
justified by the criteria for adoption of standards under EPCA (42 
U.S.C. 6295(o)), incorporate standby mode and off mode energy use into 
a single standard, or, if that is not feasible, adopt a separate 
standard for such energy use for that product. (42 U.S.C. 
6295(gg)(3)(A)-(B)) DOE's current test procedures for refrigerators, 
refrigerator-freezers, and freezers address standby mode and off mode 
energy use. In this proposed rule, DOE intends to incorporate such 
energy use into any amended energy conservation standards that it may 
adopt.

B. Background

1. Current Standards
    In a final rule published on September 15, 2011 (``September 2011 
Final Rule''), DOE prescribed the current energy conservation standards 
for consumer refrigerators, refrigerator-freezers, and freezers 
manufactured on and after September 15, 2014. 76 FR 57516. These 
standards are set forth in DOE's regulations at 10 CFR 430.32(a) and 
are repeated in Table I.2 of this document.

Table II.1--Current Federal Energy Conservation Standards for Consumer Refrigerators, Refrigerator-Freezers, and
                                                    Freezers
----------------------------------------------------------------------------------------------------------------
                                                                              Equations for  maximum energy use
                                                                                          (kWh/yr)
                               Product class                               -------------------------------------
                                                                               Based on AV
                                                                                 (ft\3\)        Based on av  (L)
----------------------------------------------------------------------------------------------------------------
1. Refrigerator-freezers and refrigerators other than all-refrigerators        7.99AV + 225.0    0.282av + 225.0
 with manual defrost......................................................
1A. All-refrigerators--manual defrost.....................................     6.79AV + 193.6    0.240av + 193.6

[[Page 12460]]

 
2. Refrigerator-freezers--partial automatic defrost.......................     7.99AV + 225.0    0.282av + 225.0
3. Refrigerator-freezers--automatic defrost with top-mounted freezer           8.07AV + 233.7    0.285av + 233.7
 without an automatic icemaker............................................
3-BI. Built-in refrigerator-freezer--automatic defrost with top-mounted        9.15AV + 264.9    0.323av + 264.9
 freezer without an automatic icemaker....................................
3I. Refrigerator-freezers--automatic defrost with top-mounted freezer with     8.07AV + 317.7    0.285av + 317.7
 an automatic icemaker without through-the-door ice service...............
3I-BI. Built-in refrigerator-freezers--automatic defrost with top-mounted      9.15AV + 348.9    0.323av + 348.9
 freezer with an automatic icemaker without through-the-door ice service..
3A. All-refrigerators--automatic defrost..................................     7.07AV + 201.6    0.250av + 201.6
3A-BI. Built-in All-refrigerators--automatic defrost......................     8.02AV + 228.5    0.283av + 228.5
4. Refrigerator-freezers--automatic defrost with side-mounted freezer          8.51AV + 297.8    0.301av + 297.8
 without an automatic icemaker............................................
4-BI. Built-In Refrigerator-freezers--automatic defrost with side-mounted     10.22AV + 357.4    0.361av + 357.4
 freezer without an automatic icemaker....................................
4I. Refrigerator-freezers--automatic defrost with side-mounted freezer         8.51AV + 381.8    0.301av + 381.8
 with an automatic icemaker without through-the-door ice service..........
4I-BI. Built-In Refrigerator-freezers--automatic defrost with side-mounted    10.22AV + 441.4    0.361av + 441.4
 freezer with an automatic icemaker without through-the-door ice service..
5. Refrigerator-freezers--automatic defrost with bottom-mounted freezer        8.85AV + 317.0    0.312av + 317.0
 without an automatic icemaker............................................
5-BI. Built-In Refrigerator-freezers--automatic defrost with bottom-           9.40AV + 336.9    0.332av + 336.9
 mounted freezer without an automatic icemaker............................
5I. Refrigerator-freezers--automatic defrost with bottom-mounted freezer       8.85AV + 401.0    0.312av + 401.0
 with an automatic icemaker without through-the-door ice service..........
5I-BI. Built-In Refrigerator-freezers--automatic defrost with bottom-          9.40AV + 420.9    0.332av + 420.9
 mounted freezer with an automatic icemaker without through-the-door ice
 service..................................................................
5A. Refrigerator-freezer--automatic defrost with bottom-mounted freezer        9.25AV + 475.4    0.327av + 475.4
 with through-the-door ice service........................................
5A-BI. Built-in refrigerator-freezer--automatic defrost with bottom-           9.83AV + 499.9    0.347av + 499.9
 mounted freezer with through-the-door ice service........................
6. Refrigerator-freezers--automatic defrost with top-mounted freezer with      8.40AV + 385.4    0.297av + 385.4
 through-the-door ice service.............................................
7. Refrigerator-freezers--automatic defrost with side-mounted freezer with     8.54AV + 432.8    0.302av + 432.8
 through-the-door ice service.............................................
7-BI. Built-In Refrigerator-freezers--automatic defrost with side-mounted     10.25AV + 502.6    0.362av + 502.6
 freezer with through-the-door ice service................................
8. Upright freezers with manual defrost...................................     5.57AV + 193.7    0.197av + 193.7
9. Upright freezers with automatic defrost without an automatic icemaker..     8.62AV + 228.3    0.305av + 228.3
9I. Upright freezers with automatic defrost with an automatic icemaker....     8.62AV + 312.3    0.305av + 312.3
9-BI. Built-In Upright freezers with automatic defrost without an              9.86AV + 260.9    0.348av + 260.9
 automatic icemaker.......................................................
9I-BI. Built-in upright freezers with automatic defrost with an automatic      9.86AV + 344.9    0.348av + 344.9
 icemaker.................................................................
10. Chest freezers and all other freezers except compact freezers.........     7.29AV + 107.8    0.257av + 107.8
10A. Chest freezers with automatic defrost................................    10.24AV + 148.1    0.362av + 148.1
11. Compact refrigerator-freezers and refrigerators other than all-            9.03AV + 252.3    0.319av + 252.3
 refrigerators with manual defrost........................................
11A. Compact all-refrigerators--manual defrost............................     7.84AV + 219.1    0.277av + 219.1
12. Compact refrigerator-freezers--partial automatic defrost..............     5.91AV + 335.8    0.209av + 335.8
13. Compact refrigerator-freezers--automatic defrost with top-mounted         11.80AV + 339.2    0.417av + 339.2
 freezer..................................................................
13I. Compact refrigerator-freezers--automatic defrost with top-mounted        11.80AV + 423.2    0.417av + 423.2
 freezer with an automatic icemaker.......................................
13A. Compact all-refrigerators--automatic defrost.........................     9.17AV + 259.3    0.324av + 259.3
14. Compact refrigerator-freezers--automatic defrost with side-mounted         6.82AV + 456.9    0.241av + 456.9
 freezer..................................................................
14I. Compact refrigerator-freezers--automatic defrost with side-mounted        6.82AV + 540.9    0.241av + 540.9
 freezer with an automatic icemaker.......................................
15. Compact refrigerator-freezers--automatic defrost with bottom-mounted      11.80AV + 339.2    0.417av + 339.2
 freezer..................................................................
15I. Compact refrigerator-freezers--automatic defrost with bottom-mounted     11.80AV + 423.2    0.417av + 423.2
 freezer with an automatic icemaker.......................................
16. Compact upright freezers with manual defrost..........................     8.65AV + 225.7    0.306av + 225.7
17. Compact upright freezers with automatic defrost.......................    10.17AV + 351.9    0.359av + 351.9
18. Compact chest freezers................................................     9.25AV + 136.8    0.327av + 136.8
----------------------------------------------------------------------------------------------------------------
AV = Total adjusted volume, expressed in ft\3\, as determined in appendices A and B of subpart B of this part.
av = Total adjusted volume, expressed in Liters.

2. History of Standards Rulemaking for Consumer Refrigerators, 
Refrigerator-Freezers, and Freezers
    On November 15, 2019, DOE published a request for information 
(``RFI'') to collect data and information to help DOE determine whether 
any new or amended standards for consumer refrigerators, refrigerator-
freezers, and freezers would result in a significant amount of 
additional energy savings and whether those standards would be 
technologically feasible and economically justified. 84 FR 62470 
(``November 2019 RFI'').

[[Page 12461]]

    Comments received following the publication of the November 2019 
RFI helped DOE identify and resolve issues related to the subsequent 
preliminary analysis.\13\ DOE published a notice of public meeting and 
availability of the preliminary TSD on October 15, 2021 (``October 2021 
Preliminary Analysis''). 86 FR 57378. DOE subsequently held a public 
meeting on December 1, 2021, to discuss and receive comments on the 
preliminary TSD. The preliminary TSD that presented the methodology and 
results of the preliminary analysis is available at: 
www.regulations.gov/document/EERE-2017-BT-STD-0003-0021.
---------------------------------------------------------------------------

    \13\ Comments submitted in response to the RFI are available at 
www.regulations.gov/document/EERE-2017-BT-STD-0003-0021/comment.
---------------------------------------------------------------------------

    DOE received nine docket comments in response to the October 2021 
Preliminary Analysis from the interested parties listed in Table II.2.

                         Table II.2--October 2021 Preliminary Analysis Written Comments
----------------------------------------------------------------------------------------------------------------
                   Organization(s)                        Reference in this NOPR          Organization type
----------------------------------------------------------------------------------------------------------------
Association of Home Appliance Manufacturers..........  AHAM........................  Trade Organization.
Appliance Standards Awareness Project, American        Joint Advocates.............  Efficiency Organization.
 Council for an Energy-Efficient Economy, National
 Consumer Law Center (On behalf of its low-income
 clients).
California Investor-Owned Utilities..................  CA IOUs.....................  Utility Supplier.
Shorey Consulting....................................  Shorey......................  Consultant.
ComEd Energy Solutions Center, Northwest Energy        ComEd and NEEA..............  Joint Commenters.
 Efficiency Alliance.
GE Appliances, a Haier company.......................  GEA.........................  Manufacturer.
Samsung Electronics America, Inc.....................  Samsung.....................  Manufacturer.
Sub-Zero Group, Inc..................................  Sub-Zero....................  Manufacturer.
Whirlpool Corporation................................  Whirlpool...................  Manufacturer.
Anonymous............................................  Anonymous...................  Individual.
----------------------------------------------------------------------------------------------------------------

    A parenthetical reference at the end of a comment quotation or 
paraphrase provides the location of the item in the public record.\14\
---------------------------------------------------------------------------

    \14\ The parenthetical reference provides a reference for 
information located in the docket of DOE's rulemaking to develop 
energy conservation standards for refrigerators, refrigerator-
freezers, and freezers. (Docket No. EERE-2017-BT-STD-0003, which is 
maintained at https://www.regulations.gov/document/EERE-2017-BT-STD-0003). The references are arranged as follows: (commenter name, 
comment docket ID number, page of that document).
---------------------------------------------------------------------------

3. Test Procedure
    EPCA sets forth generally applicable criteria and procedures for 
DOE's adoption and amendment of test procedures. (42 U.S.C. 6293) 
Manufacturers of covered products 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. DOE must 
finalize new or amended test procedures that impact measured energy use 
or efficiency at least 180 days prior to publication of a NOPR 
proposing new or amended energy conservation standards. (Section 8(d) 
of 10 CFR part 430, subpart C, appendix A (``Process Rule''))
    DOE's current energy conservation standards for consumer 
refrigerators, refrigerator-freezers, and freezers are expressed in 
terms of annual energy use (``AEU'') in kilowatt-hours per year (``kWh/
yr'') as measured by the current test procedures at appendix A and 
appendix B, as applicable. (10 CFR 430.32(a)) The current test 
procedure incorporates by reference the Association of Home Appliance 
Manufacturers (``AHAM'') industry test procedure updated in 2019, AHAM 
Standard HRF-1, ``Energy and Internal Volume of Refrigerating 
Appliances,'' (``HRF-1-2019''). 10 CFR 430.3(i)(4). The current test 
procedure was finalized in a final rule published on October 12, 2021 
(``October 2021 TP Final Rule''). 86 FR 56790. The October 2021 TP 
Final Rule amended the test procedure by incorporating the latest 
industry test standard (HRF-1-2019). However, DOE did not adopt the 
change in icemaker energy use included in the 2019 revision of HRF-1. 
86 FR 56793. While DOE had proposed to implement this change in the in 
the proposed test procedure rulemaking (84 FR 70842, 70848-70850 
(December 23, 2019)), DOE indicated in the October 2021 TP Final Rule 
that it would not require the calculations until the compliance dates 
of any amended energy conservation standards for these products, which 
incorporated the amended automatic icemaker energy consumption. 86 FR 
56793. DOE concluded that the test procedure would not alter the 
measured energy use of consumer refrigeration products. Id.
    The analysis presented in this NOPR is based on the test procedure 
as finalized in the October 2021 TP Final Rule, except for the 
calculation of the change in energy use attributed to icemaker energy 
use. The change in icemaker energy use is discussed further in section 
III.B of this document. DOE is proposing implementation of the revised 
icemaker energy use calculation in this NOPR. The value of the revised 
icemaker energy use and the plans to implement this change coincident 
with the date of future energy conservation standards were discussed at 
length and included in the most recent test procedure final rule, 
consistent with the Process Rule.
    AS/NZ 4474.1:2007 is referenced in the amendatory text of this 
document but has already been approved for appendix A. No changes are 
proposed.
4. Off Mode and Standby Mode
    Pursuant to the amendments contained in the Energy Independence and 
Security Act of 2007 (``EISA 2007''), Public Law 110-140, any final 
rule for new or amended energy conservation standards promulgated after 
July 1, 2010, is required to address standby mode and off mode energy 
use. (42 U.S.C. 6295(gg)(3)) Specifically, when DOE adopts a standard 
for a covered product after that date, it must, if justified by the 
criteria for adoption of standards under EPCA (42 U.S.C. 6295(o)), 
incorporate standby mode and off mode energy use into a single 
standard, or, if that is not feasible, adopt a separate standard for 
such energy use for that product. (42 U.S.C. 6295(gg)(3)(A)-(B)) DOE's 
current test procedures for consumer refrigerators, refrigerator-
freezers, and freezers measure the energy use of these products during 
extended time periods that include periods when the compressor and 
other key components are cycled off. All of the energy these products 
use during the ``off cycles'' is already included in the measurements.

[[Page 12462]]

A given refrigeration product being tested could include auxiliary 
features that draw power in a standby or off mode. In such instances, 
the DOE test procedures generally instruct manufacturers to set certain 
auxiliary features to the lowest power position during testing. See 
section 5.5.2(e) of AHAM Standard HRF-1-2008. In this lowest power 
position, any standby or off mode energy use of such auxiliary features 
would be included in the energy measurement. As a result, DOE's current 
energy conservation standards, and any amended energy conservation 
standards would account for standby mode and off mode energy use in the 
AEU metric.

C. Deviation From Appendix A

    In accordance with section 3(a) of 10 CFR part 430, subpart C, 
appendix A (``appendix A''), DOE notes that it is deviating from the 
provision in appendix A regarding the pre-NOPR stages for an energy 
conservation standards rulemaking. Section 6(a)(2) of appendix A states 
that if the Department determines it is appropriate to proceed with a 
rulemaking, the preliminary stages of a rulemaking to issue or amend an 
energy conservation standard that DOE will undertake will be a 
framework document and preliminary analysis, or an advance notice of 
proposed rulemaking. For the reasons that follow, DOE finds it 
necessary and appropriate to deviate from this step in appendix A and 
to instead publish this NOPR without conducting these preliminary 
stages. DOE finds that there would be little benefit in repeating the 
preliminary stages of this proposed rule. The earlier stages of a 
rulemaking are intended to introduce the various analyses DOE conducts 
during the rulemaking process, present preliminary results, and request 
initial feedback from interested parties to seek early input. As DOE is 
using similar analytical methods in this NOPR to previous amendments to 
the standard for refrigerators, refrigerator-freezers and freezers, 
publication of a framework document, preliminary analysis, or ANOPR 
would be largely redundant of previously published documents. 
Stakeholders have previously provided numerous rounds of input on these 
methodologies in the most recent rulemaking. However, as discussed in 
section IV of this NOPR, DOE has updated analytical inputs in its 
analyses where appropriate and welcomes submission of additional data, 
information, and comments.
    Section 6(f)(2) of appendix A provides that the length of the 
public comment period for the NOPR will be at least 75 days. For this 
NOPR, DOE finds it necessary and appropriate to provide a 60-day 
comment period. As stated previously, the analytical methods used for 
this NOPR are similar to those used in previous rulemaking notices. 
Consequently, DOE has determined it is necessary and appropriate to 
provide a 60-day comment period, which the Department has determined 
provides sufficient time for interested parties to review the NOPR and 
develop comments.

III. General Discussion

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

A. Product Classes and Scope of Coverage

    When evaluating and establishing energy conservation standards, DOE 
divides covered products into product classes by the type of energy 
used or by capacity or other performance-related features that justify 
differing standards. In making a determination whether a performance-
related feature justifies a different standard, DOE must consider such 
factors as the utility of the feature to the consumer and other factors 
DOE determines are appropriate. (42 U.S.C. 6295(q))
    When establishing the product classes, DOE is proposing to revise 
the class structure by eliminating the classes that add icemakers and 
through-the-door ice dispensers while maintaining the same AEU 
calculations. The product class discussion in section IV of this 
document explores this issue further.

B. Test Procedure

    EPCA sets forth generally applicable criteria and procedures for 
DOE's adoption and amendment of test procedures. (42 U.S.C. 6293) 
Manufacturers of covered products 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. DOE's 
current energy conservation standards for refrigerators, refrigerator-
freezers, and freezers are expressed in terms of AEU, expressed in kWh/
year. (See 10 CFR 430.32(a).)
    AHAM stated it would have been preferable for DOE to conduct its 
analysis with the final test procedure that DOE published before the 
preliminary analysis and that will be used to demonstrate compliance 
with a possible amended standard and that, in this case, the revised 
test procedure does not change measured efficiency so much that they 
would expect that the entire analysis would need to be redone as a 
result of the new test procedure. (AHAM, Public Meeting Transcript, No. 
30 at p. 1) \15\
---------------------------------------------------------------------------

    \15\ A notation in the form ``AHAM, No. 31 at pp. 6-7'' 
identifies a written comment: (1) Made by the Association of Home 
Appliance Manufacturers; (2) recorded in document number 27 that is 
filed in the docket of this test procedure rulemaking (Docket No. 
EERE-2014-BT-STD-0003) and available for review at 
www.regulations.gov; and (3) which appears on pages 6 and 7 of 
document number 31.
---------------------------------------------------------------------------

    DOE responds that it conducted the preliminary analysis consistent 
with the test procedure currently used to demonstrate compliance with 
standards. Specifically, the icemaker energy use adder used in the 
preliminary analysis was 84 kWh/yr. For the NOPR analysis, DOE adopted 
the revised test procedure finalized in the October 2021 TP final rule 
(to be used to demonstrate compliance with a possible amended standard) 
which included a revised icemaker energy use adder of 28 kWh/yr, that 
is more closely aligned with AHAM's HRF-1-2019--which represents the 
industry standard. As discussed in the October 2021 TP final rule, DOE 
determined it would not require testing with the amended icemaking 
energy use adder until the compliance dates of the next amended energy 
conservation standards for refrigeration products. This NOPR proposes 
that product class representations made on or after the compliance date 
of revised standards would require use of the 28 kWh/year value.
    The California IOUs stated the existing test procedures in 
appendices A and B do a poor job predicting efficiency at ambient 
conditions below 90 [deg]F and that they would benefit significantly by 
including an additional ambient test condition to properly inform 
consumers about what products work well in a real-world use cycle. From 
their testing, the California IOUs stated that not testing at both 90 
[deg]F and 60 [deg]F leaves a significant gap in representative 
performance evaluation of an average use cycle based on the significant 
unit-to-unit variation and rank order impact changes shown by the DOE 
and CA IOU product testing. They therefore asked DOE to reconsider 
their conclusion in the October 2021 Test Procedure Final Rule to not 
require testing at two ambient conditions, per IEC 62552, in the DOE 
consumer refrigeration test procedure. (California IOUs, No. 33, pp. 6-
9)

[[Page 12463]]

    ComEd and NEEA agreed with the sentiment from California IOUs that 
testing should require a set of lower ambient temperatures along with 
the 90-degree temperature mark and recommended that DOE consider 
adopting the IEC Refrigerator Test Procedure, which their analysis 
suggests will permit more representative energy values to be calculated 
than the current DOE test procedure of user interactions with 
refrigerators. Along with Samsung, they also recommended that DOE 
collect more field data on refrigerator energy use to understand how to 
improve the representativeness of the test procedure. (ComEd Energy 
Solutions Center & Northwest Energy Efficiency Alliance, No. 37, pp. 9-
10; Samsung, No. 32, p. 3)
    In another comment, ComEd and NEEA cited average usage of models in 
ambient temperatures lower than 90 degrees and cited how requiring a 
lower test point would create an incentive for manufacturers to focus 
on the broad range of ambient temperatures. (ComEd Energy Solutions 
Center & Northwest Energy Efficiency Alliance, No. 37, pp. 2-4) ComEd 
and NEEA also pointed to energy savings that could result from testing 
products at a lower ambient temperature. (ComEd Energy Solutions Center 
& Northwest Energy Efficiency Alliance, No. 37, pp. 4-7)
    DOE responds that it has already finalized the test procedure 
without requiring additional lower ambient testing based both on data 
provided by a manufacturer and on its own test data, which indicated 
that the current test procedure conducted in a 90 [deg]F ambient 
temperature does not underestimate the benefit of variable-speed 
technology. 86 FR 56790, 56790-56825 (October 12, 2021) DOE appreciates 
the additional data, which DOE will consider when considering revisions 
to the test procedure as required by the 7-year lookback provision. (42 
U.S.C. 6314(a)(1)(A))
    ComEd and NEEA further recommended that DOE adopt an optional 
method of testing for ice makers and undertake further testing and 
analysis. They stated they also believe that considerable variation 
exists in the efficiency of the ice making process itself and that the 
test method should include a way to quantify this aspect. They strongly 
urged DOE to reword the test method regarding the setup of ice makers 
to specify the base method as one in which the appliance makes ice and 
deactivates the icemaking process itself when the ice bucket is full 
(or an equivalent set of actions to achieve this) to reduce 
circumvention. (ComEd Energy Solutions Center & Northwest Energy 
Efficiency Alliance, No. 37, pp. 8-9)
    In response, DOE notes that it has considered the test burden 
associated with measurement of the energy use associated with icemaking 
(rather than using the fixed icemaking energy use adder) as part of the 
most recent concluded test procedure rulemaking. DOE concluded that the 
benefits of a direct measurement of icemaking energy use would not 
outweigh the additional test burden associated with making the 
measurement, due in part to the updated understanding that the 
magnitude of ice usage is significantly less than initially thought. 84 
FR 70842, 70848-70849 (December 23, 2019). DOE did not adopt an 
icemaking energy use test, either mandatory or optional, in the 
recently concluded test procedure rulemaking cycle and has finalized 
the test procedure on that basis. 86 FR 56790 (October 12, 2021). 
Regarding the potential for circumvention by making the icemaker 
inoperative during the test, DOE notes that the wording of section 
5.5.2(j) of HRF-1-2019, which is incorporated by reference by the DOE 
test procedure, has clear instructions that only the harvesting of ice 
shall be interrupted when an icemaker is made inoperative during an 
energy test and that the inoperative state should simulate the state 
when the icemaker senses that the bin is filled. Any tests that reduce 
the power of additional components when the icemaker is inoperative 
during an energy test would be invalid. DOE believes that these 
requirements are sufficiently clear and that it would not be justified 
to impose the additional burden of connecting a water supply to a test 
unit to allow the ice bin to be filled and the bin sensor to make the 
icemaker inoperative.

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 
proposed rule. As the first step in such an analysis, DOE develops a 
list of technology options for consideration in consultation with 
manufacturers, design engineers, and other interested parties. DOE then 
determines which of those means for improving efficiency are 
technologically feasible. DOE considers technologies incorporated in 
commercially available products or in working prototypes to be 
technologically feasible. Sections 6(b)(3)(i) and 7(b)(1) of appendix A 
to 10 CFR part 430, subpart C.
    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. 
Sections 6(b)(3)(ii)-(v) and 7(b)(2)-(5) of the Process Rule. Section 
IV.B of this document discusses the results of the screening analysis 
for refrigerators, refrigerator-freezers, and freezers, particularly 
the designs DOE considered, those it screened out, and those that are 
the basis for the standards considered in this rulemaking. For further 
details on the screening analysis for this rulemaking, see chapter 4 of 
the NOPR TSD.
2. Maximum Technologically Feasible Levels
    When DOE proposes to adopt an amended standard for a type or class 
of covered product, it must determine the maximum improvement in energy 
efficiency or maximum reduction in energy use that is technologically 
feasible for such product. (42 U.S.C. 6295(p)(1)) Accordingly, in the 
engineering analysis, DOE determined the maximum technologically 
feasible (``max-tech'') improvements in energy efficiency for 
refrigerators, refrigerator-freezers, and freezers, 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 
proposed rulemaking are described in section IV.C.1.e of this proposed 
rule and in chapter 5 of the NOPR TSD.

D. Energy Savings

1. Determination of Savings
    For each trial standard level (``TSL''), DOE projected energy 
savings from application of the TSL to refrigerators, refrigerator-
freezers, and freezers purchased in the 30-year period that begins in 
the year of compliance with the proposed standards (2027-2056).\16\ The 
savings are measured over the entire lifetime of refrigerators, 
refrigerator-freezers, and freezers purchased in the previous 30-year

[[Page 12464]]

period. DOE quantified the energy savings attributable to each TSL 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.
---------------------------------------------------------------------------

    \16\ Each TSL is composed of specific efficiency levels for each 
product class. The TSLs considered for this NOPR are described in 
section V.A of this document. DOE conducted a sensitivity analysis 
that considers impacts for products shipped in a 9-year period.
---------------------------------------------------------------------------

    DOE used its national impact analysis (``NIA'') spreadsheet model 
to estimate national energy savings (``NES'') from potential amended or 
new standards for refrigerators, refrigerator-freezers, and freezers. 
The NIA spreadsheet model (described in section IV.H 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 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.\17\ 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.2 of this document.
---------------------------------------------------------------------------

    \17\ 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
    To adopt any new or amended standards for a covered product, DOE 
must determine that such action would result in significant energy 
savings. (42 U.S.C. 6295(o)(3)(B))
    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.\18\ Certain 
covered products and equipment may have most of their energy 
consumption occur during periods of peak energy demand. The impacts of 
such products on the energy infrastructure can be more pronounced than 
products with relatively constant demand. However, residential 
refrigerators, freezers, and refrigerator-freezers have loads that are 
more consistent throughout the year. Accordingly, DOE evaluates the 
significance of energy savings on a case-by-case basis, taking into 
account the significance of cumulative FFC national energy savings, the 
cumulative FFC emissions reductions, and the need to confront the 
global climate crisis, among other factors. DOE has initially 
determined the energy savings from the proposed standard levels are 
``significant'' within the meaning of 42 U.S.C. 6295(o)(3)(B).
---------------------------------------------------------------------------

    \18\ The numeric threshold for determining the significance of 
energy savings established in a final rule published on February 14, 
2020 (85 FR 8626, 8670), was subsequently eliminated in a final rule 
published on December 13, 2021 (86 FR 70892).
---------------------------------------------------------------------------

E. Economic Justification

1. Specific Criteria
    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. 6295(o)(2)(B)(i)(I)-(VII)) The 
following sections discuss how DOE has addressed each of those seven 
factors in this rulemaking.
a. Economic Impact on Manufacturers and Consumers
    In determining the impacts of a potential amended standard on 
manufacturers, DOE conducts an MIA, as discussed in section IV.J of 
this document. 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) INPV, 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. Second, DOE analyzes and reports 
the impacts on different types of manufacturers, including impacts on 
small manufacturers. Third, DOE considers the impact of standards on 
domestic manufacturer employment and manufacturing capacity, as well as 
the potential for standards to result in plant closures and loss of 
capital investment. Finally, DOE takes into account cumulative impacts 
of various DOE regulations and other regulatory requirements on 
manufacturers.
    For individual consumers, measures of economic impact include the 
changes in LCC and PBP associated with new or amended standards. These 
measures are discussed further in the following section. For consumers 
in the aggregate, DOE also calculates the national net present value 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.
b. Savings in Operating Costs Compared to Increase in Price (LCC and 
PBP)
    EPCA requires DOE to consider the savings in operating costs 
throughout the estimated average life of the covered 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. 
6295(o)(2)(B)(i)(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 who follow 
existing purchase patterns will purchase the covered products in the 
first year of compliance with new or amended standards. Consumer 
response to higher costs associated with the rule may reduce sales 
below the levels that otherwise would have been expected in the absence 
of a new standard. 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.
c. Energy Savings
    Although significant conservation of energy is a separate statutory

[[Page 12465]]

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. 6295(o)(2)(B)(i)(III)) As 
discussed in section III.D of this document, DOE uses the NIA 
spreadsheet models to project national energy savings.
d. 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. 6295(o)(2)(B)(i)(IV)) Based on data 
available to DOE, the standards proposed in this document would not 
reduce the utility or performance of the products under consideration 
in this rulemaking.
e. Impact of Any Lessening of Competition
    EPCA directs DOE to consider the impact of any lessening of 
competition, as determined in writing by the Attorney General, that is 
likely to result from a proposed standard. (42 U.S.C. 
6295(o)(2)(B)(i)(V)) It also directs the Attorney General to determine 
the impact, if any, of any lessening of competition likely to result 
from a proposed standard and to transmit such determination to the 
Secretary within 60 days of the publication of a proposed rule, 
together with an analysis of the nature and extent of the impact. (42 
U.S.C. 6295(o)(2)(B)(ii)) DOE will transmit a copy of this proposed 
rule to the Attorney General with a request that the Department of 
Justice (``DOJ'') provide its determination on this issue. DOE will 
publish and respond to the Attorney General's determination in the 
final rule. DOE invites comment from the public regarding the 
competitive impacts that are likely to result from this proposed rule. 
In addition, stakeholders may also provide comments separately to DOJ 
regarding these potential impacts. See the ADDRESSES section for 
information to send comments to DOJ.
f. Need for National Energy Conservation
    DOE also considers the need for national energy and water 
conservation in determining whether a new or amended standard is 
economically justified. (42 U.S.C. 6295(o)(2)(B)(i)(VI)) The energy 
savings from the proposed standards are likely to provide improvements 
to the security and reliability of the Nation's energy system. 
Reductions in the demand for electricity also may result in reduced 
costs for maintaining the reliability of the Nation's electricity 
system. DOE conducts a utility impact analysis to estimate how 
standards may affect the Nation's needed power generation capacity, as 
discussed in section IV.M of this document.
    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 proposed 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 
potential standards may affect these emissions, as discussed in section 
IV.K of this document; the estimated emissions impacts are reported in 
section V.B.6 of this document. DOE also estimates the economic value 
of emissions reductions resulting from the considered TSLs, as 
discussed in section IV.L of this document.
g. 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. 6295(o)(2)(B)(i)(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.''
2. Rebuttable Presumption
    As set forth in 42 U.S.C. 6295(o)(2)(B)(iii), EPCA creates a 
rebuttable presumption that an energy conservation standard is 
economically justified if the additional cost to the consumer of a 
product that meets the standard is less than three times the value of 
the first year's energy savings resulting from the standard, as 
calculated under the applicable DOE test procedure. DOE's LCC and PBP 
analyses generate values used to calculate the effects that proposed 
energy conservation standards would have on the payback period for 
consumers. These analyses include, but are not limited to, the 3-year 
payback period contemplated under the rebuttable-presumption test. In 
addition, DOE routinely conducts an economic analysis that considers 
the full range of impacts to consumers, manufacturers, the Nation, and 
the environment, as required under 42 U.S.C. 6295(o)(2)(B)(i). The 
results of this analysis serve as the basis for DOE's evaluation of the 
economic justification for a potential standard level (thereby 
supporting or rebutting the results of any preliminary determination of 
economic justification). The rebuttable presumption payback calculation 
is discussed in section IV.F.10 of this proposed rule.

IV. Methodology and Discussion of Related Comments

    This section addresses the analyses DOE has performed for this 
proposed rulemaking with regard to refrigerators, refrigerator-
freezers, and freezers. Separate subsections address each component of 
DOE's analyses.
    DOE used several analytical tools to estimate the impact of the 
standards proposed in this document. The first tool is a spreadsheet 
that calculates the LCC savings and PBP of potential amended or new 
energy conservation standards. The national impacts analysis uses a 
second spreadsheet set that provides shipments projections and 
calculates national energy savings and net present value of total 
consumer costs and savings expected to result from potential energy 
conservation standards. DOE uses the third spreadsheet tool, the 
Government Regulatory Impact Model (``GRIM''), to assess manufacturer 
impacts of potential standards. These three spreadsheet tools are 
available on the DOE website for this proposed rulemaking: 
www.regulations.gov/docket/EERE-2017-BT-STD-0003. Additionally, DOE 
used output from the latest version of the Energy Information 
Administration's (``EIA's'') Annual Energy Outlook (``AEO''), a widely 
known energy projection for the United States, for the emissions and 
utility impact analyses.
    DOE received some comments that, rather than addressing specific 
aspects of the analysis, are general statements regarding the 
appropriateness of amending energy conservation standards and/or the 
efficiency levels that might be appropriate.
    AHAM stated that the preliminary analysis relied heavily on the use 
of technologies that can affect reliability, longevity, and 
affordability of products. Accordingly, they claimed that DOE had 
placed too much emphasis on the implementation of variable-speed 
compressors later in the EL progression, and that DOE was 
overestimating the impact of vacuum insulated panels (``VIPs'') in 
reducing energy consumption. (AHAM, No. 31, pp. 8-11)

[[Page 12466]]

    Sub-Zero fully supported and affirmed the comments that were 
submitted by AHAM, which emphasized that there are significant 
limitations to further energy regulation if products are to remain 
reliable, long-lived and affordable. Sub-Zero also stated that further 
increases in efficiency for the built-in \19\ products they manufacture 
are not justified and will save minimal energy worldwide and pose a 
significant and unnecessary burden on manufacturers and noted that 
built-ins comprise only 1.3 percent of total U.S. refrigerator and 
freezer shipments according to AHAM 2019 shipment data. (Sub-Zero, No. 
34, p. 1; Sub-Zero, No. 34, p. 2)
---------------------------------------------------------------------------

    \19\ DOE defines a built-in consumer refrigeration product as 
one that is no more than 24 inches in depth, excluding doors, 
handles, and custom front panels; that is designed, intended, and 
marketed exclusively to be (1) Installed totally encased by 
cabinetry or panels that are attached during installation; (2) 
Securely fastened to adjacent cabinetry, walls or floor; (3) 
Equipped with unfinished sides that are not visible after 
installation; and (4) Equipped with an integral factory-finished 
face or built to accept a custom front panel (see 10 CFR 430.2).
---------------------------------------------------------------------------

    AHAM and Sub-Zero comments suggesting that amending standards might 
reduce reliability and product life are addressed in section IV.F.6 of 
this document. AHAM's comments and those of other stakeholders 
regarding the impact of VIPs are discussed in section IV.A.2 of this 
document. In response to Sub-Zero regarding built-in products, DOE 
revised the analysis in the NOPR phase to more specifically address 
built-in classes--this is discussed in more detail in section IV.C.1.a 
of this document.
    Samsung noted the freestanding top-mount product classes (3, 3A, 
and 3I) serves as a great example of increased energy savings given it 
has significant market share of 42 percent and it has the ability to 
adapt to a tightening of standards given the room for innovation with 
energy efficiency technologies compared to other freestanding products. 
They stated that improving on the EL for these classes can provide 
nearly double the energy savings. (Samsung, No. 32, p. 2)
    When considering the information provided in the preliminary 
analysis TSD published in October 2021, DOE found that in 2020 top-
mount refrigerator-freezers and classes for which they are a proxy (PC 
1, 2, 3, 6) constituted 36.7% of the market, while bottom-mounts alone 
constituted 40.2 percent (PC 5, 5A). These data indicate that, in 
contrast to the Samsung claim, focusing on the bottom-mount product 
classes could actually lead to greater energy savings due to its larger 
market share. In any case, DOE agrees that increasing stringency for 
classes that have large market shares could be very effective in 
achieving national energy savings.
    The California IOUs stated they generally support DOE analyzing the 
updated energy conservation standards levels for this equipment and the 
finding that there are significantly higher efficiency levels with 
positive net present value (NPV) for consumers. (California IOUs, No. 
33, p. 1)
    The California IOUs included two tables, which identified the 
highest EL that DOE presented in the preliminary analysis for which DOE 
found a positive NPV for freestanding and built-in product classes. 
Barring updates to the preliminary analysis that incorporate other 
comments, they asked that DOE adopt the efficiency level for each 
product class with the highest savings while still having a positive 
NPV. (California IOUs, No. 33, p. 5-6) DOE notes that EPCA requires 
consideration of seven factors when setting standard levels including 
total projected energy savings, among others (see the discussion in 
section III.E.1 of this document).

A. Market and Technology Assessment

    DOE develops information in the market and technology assessment 
that provides an overall picture of the market for the products 
concerned, including the purpose of the products, the industry 
structure, manufacturers, market characteristics, and technologies used 
in the products. This activity includes both quantitative and 
qualitative assessments, based primarily on publicly available 
information. The subjects addressed in the market and technology 
assessment for this proposed rule include (1) a determination of the 
scope of the rulemaking and product classes, (2) manufacturers and 
industry structure, (3) existing efficiency programs, (4) shipments 
information, (5) market and industry trends; and (6) technologies or 
design options that could improve the energy efficiency of consumer 
refrigerators, refrigerator-freezers, and freezers. The key findings of 
DOE's market assessment are summarized in the following sections. See 
chapter 3 of the NOPR TSD for further discussion of the market and 
technology assessment.
1. Scope of Coverage and Product Classes
    In the October 2021 Preliminary Analysis, DOE identified two 
potential product class modifications, products with icemakers, and 
products with multiple doors or specialty doors. The following two 
subsections address these topics.
Product Classes With Automatic Icemakers
    As discussed later in this section, DOE has identified an 
opportunity to simplify and consolidate the presentation of maximum 
allowable energy use for products within product classes that may or 
may not have an automatic icemaker, and in doing so DOE expects the 
product class representations to be more streamlined and simplified.
    To represent the annual energy consumed by automatic icemakers in 
refrigerators, refrigerator-freezers, and freezers, DOE's test 
procedures specify a constant energy-use adder of 84 kWh/year (by use 
of a 0.23 kWh/day adder; see section 5.3(a)(i) of 10 CFR part 430, 
subpart B, appendix A and section 5.3.(a) of appendix B). With this 
constant adder, the standard levels for product classes with an 
automatic icemaker are equal to the standards of their counterparts 
without an icemaker plus the 84 kWh/year. Consistent with prior 
discussions in the test procedure rulemaking, this NOPR proposes to 
amend this equation such that for representations made on or after the 
compliance date of any potential new energy conservation standards, the 
adder to be used shall change from 84 kWh/yr to 28 kWh/yr. DOE 
determined as part of the October 2021 TP Final Rule that the revised 
adder would more accurately reflect energy use during a representative 
average use cycle. 86 FR 56811. However, DOE indicated that it would 
not adopt this change in the test procedure until the date of potential 
future energy conservation standard amendments. Id. at 86 FR 56793. 
Thus, this change is being proposed in this document, with an 
implementation date to coincide with the compliance date of the 
standards proposed in this document.
    AHAM reiterated their support for merging product classes for 
products with and without automatic icemakers due to use of the 
icemaker adder rather than a measured value but stated DOE must ensure 
that the icemaking classes do not end up with a more stringent standard 
as a result. (AHAM, No. 31, pp. 6-7; AHAM, Public Meeting Transcript, 
No. 30, pp. 13-14)
    DOE has concluded that because the standards for the product 
classes with and without automatic icemakers are effectively the same, 
except for the constant adder, there is an opportunity to express the 
maximum allowable energy use for both icemaking and non-icemaking 
classes in the same equation,

[[Page 12467]]

thus consolidating the presentation of classes and their energy 
conservation standards. The equation would, for those classes that may 
or may not have an icemaker, include a term equal to the icemaking 
energy use adder multiplied by a factor that is defined to equal 1 for 
products with icemakers and to equal zero for products without 
icemakers. This approach would consolidate the product class structure, 
and while products with and without ice makers would be represented by 
a single product class descriptor and maximum energy use equation, they 
would continue to have different maximum energy use values, due to the 
ice maker coefficient in the equations.
    DOE requests comments on its proposal to consolidate the 
presentation of maximum allowable energy use for products of classes 
that may or may not have an automatic icemaker.
Special Door and Multi-Door Designs
    In the October 2021 Preliminary Analysis, DOE considered certain 
refrigerators, refrigerator-freezers, and freezers available on the 
market that offer special door types that allow consumers to access or 
view the internal storage compartment without a typical door opening. 
Some products available on the market offer glass doors to allow a view 
inside the cabinet. Potential changes to product class structure to 
address changes to energy consumption as a result of these features 
were considered, and more information was requested from interested 
parties.
    Door-in-door design is a relatively new setup offered in certain 
standard-size refrigerator-freezers. Typically, manufacturers add a 
second smaller door between the fresh food compartment's outer door and 
the inner cabinet. This design allows the consumer to access items 
loaded in the door shelves without opening an interior door that 
encloses the inner cabinet. Some door-in-door designs have an outer 
glass door, providing the user a transparent view of the inner cabinet. 
Some refrigerators, refrigerator-freezers, and freezers, available on 
the market also offer multi-door setups which deviate from the popular 
French-door design. Some designs include one or more ``drawers'' which 
can be pulled out of the main compartment and allow for more fresh food 
storage than more traditional designs. Other designs may include a 
``quadrant'' design in which four doors are placed in a two-by-two 
configuration with two doors for the freezer compartment, and two for 
the fresh food.
    AHAM commented that in its preliminary analysis DOE declined to 
adopt a separate product class or an energy use allowance for products 
with glass door or door-in-door type features. They stated that other 
jurisdictions have a constant multiplier used in the development of 
standards to account for the number of doors on a product, and there 
are separate product classes for glass door products in commercial 
refrigerators. (AHAM, No. 31, p. 7) GEA supported AHAM's position on 
multidoor products and suggested using gasket area as a basis for a 
multidoor multiplier. (GEA, No. 38, p. 3) Whirlpool also noted that 
there is justification for applying a multiplier for multidoor 
products. (Whirlpool, No. 35, pp. 8-10) Sub-Zero asked DOE to consider 
adding a product class for built-ins with specialty doors and urged DOE 
to define additional product classes for analyses and set separate 
standards levels for built-ins with specialty doors. (Sub-Zero, No. 34, 
p. 2)
    DOE reviewed the prevalence of products with multiple or specialty 
doors and conducted analysis to assess the energy use impact of such 
design features. More detail regarding this assessment is provided in 
Chapters 3 and 5 of the NOPR TSD. As a result, DOE concluded that some 
allowance for multiple doors and specialty doors would be appropriate 
for classes where such features are offered. Specifically, DOE is 
proposing the following allowances for classes for which the specific 
features are relevant.
     Two percent energy use allowance for each externally-
opening door in excess of the typical minimum for the class (i.e., more 
than 2 doors for refrigerator-freezer classes 5 and 7, and more than 3 
doors for class 5A). This would be applicable for current product 
classes 5, 5A, and 7, with a limits of six percent for product classes 
5 and 7, representing a product with five doors (three in excess of the 
typical minimum), and four percent for product class 5A, also 
representing a product with five doors (in this case two in excess of 
the typical minimum). For the purposes of this provision, a drawer with 
an externally-exposed face would be considered an externally-opening 
door.
     Six percent total energy use allowance for a product with 
a door-in-door feature implemented in one or more of its doors. This 
would apply instead of any multiple-door allowance for product classes 
5, 5A, and 7.
     Ten percent total energy use allowances for a product with 
a transparent door or doors. This would apply instead of any multiple-
door or door-in-door allowance for product classes 3A, 5, 5A, 7, and 
13A.
    With this proposed approach, the maximum energy use allowance would 
be ten percent, for a glass door. However, if the standard level for 
any of the eligible classes is set at a level for which this allowance 
would represent backsliding, i.e., allow such a product to have more 
energy use than the current standard (adjusted for the change in 
icemaker energy use adder), the allowance would be reduced to eliminate 
such backsliding. The proposal uses the number of doors in excess of 
the typical minimum number of doors, rather than using an adjustment 
based on gasket size, as suggested by GEA, in an attempt to maintain 
better simplicity of the adjustment and determination of the maximum 
allowable energy use. In response to Sub-Zero, DOE notes that this 
provision would apply to built-in classes as well as freestanding 
classes.
    DOE requests comment on its proposal for establishing energy use 
allowances for multiple doors and/or specialty doors. Should such an 
energy use allowance structure be established, and, if so, are the 
proposed energy use allowance levels appropriate? If they are not 
appropriate, DOE requests input on what the energy use allowance values 
should be, with supporting data to demonstrate that the alternative 
levels suggested are justified.
    DOE also considered whether any definitions would be required to 
clarify what products the door allowances would apply to. As described 
previously, the allowances for multiple doors would apply for 
externally-opening doors or drawers. DOE believes that these 
descriptions provide sufficient clarity such that additional 
definitions regarding multiple doors would not be required.
    For transparent doors, DOE proposes to add a definition that aligns 
with the definition of display doors for walk-in coolers and freezers, 
which defines a display door as a door that either is designed for 
product display or has 75 percent or more of its surface area composed 
of glass or another transparent material. (See 10 CFR 431.302). 
Specifically, DOE proposes to define transparent door as a door for 
which 75 percent or more of the surface area is glass or another 
transparent material.
    For door-in-door features, DOE proposes to add a clarifying 
definition indicating that a door-in-door is a set of doors or an outer 
door and inner drawer for which (a) both doors (or both the door and 
the drawer) must be opened to provide access to the interior through a 
single opening, (b) gaskets for both doors (or both the door and the 
drawer)

[[Page 12468]]

are exposed to external ambient conditions on the outside around the 
full perimeter of the respective openings, and (c) the space between 
the two doors (or between the door and the drawer) achieves temperature 
levels consistent with the temperature requirements of the interior 
compartment to which the door-in-door provides access.
    DOE requests comments on the proposed definitions to clarify 
transparent door and door-in-door features. If the proposed definitions 
are not appropriate, DOE requests comment on what specific changes 
should be made to the definitions, or what other definitions are 
necessary, so that they would appropriately describe the intended 
specialized doors.
2. Technology Options
    In the preliminary market analysis and technology assessment, DOE 
identified 37 technology options that would be expected to improve the 
efficiency of refrigerators, refrigerator-freezers, and freezers, as 
measured by the DOE test procedure:

  Table IV.1--Technology Options Identified in the Preliminary Analysis
------------------------------------------------------------------------
 
-------------------------------------------------------------------------
Insulation:
    1. Improved resistivity of insulation (insulation type).
    2. Inert blowing fluid CO2.
    3. Increased insulation thickness.
    4. Gas-filled insulation panels.
    5. Vacuum-insulated panels (``VIP'').
Gasket and Door Design:
    6. Improved gaskets.
    7. Double door gaskets.
    8. Improved door face frame.
    9. Reduced heat load for through-the-door (``TTD'') feature.
Anti-Sweat Heater:
    10. Condenser hot gas (Refrigerant anti-sweat heating).
    11. Electric anti-sweat heater sizing.
    12. Electric heater controls.
Compressor:
    13. Improved compressor efficiency.
    14. Variable-speed compressors.
    15. Linear compressors.
Evaporator:
    16. Increased surface area.
    17. Improved heat exchange.
Condenser:
    18. Increased surface area.
    19. Microchannel condenser.
    20. Improved heat exchange.
    21. Force convection condenser.
Defrost System:
    22. Reduced energy for automatic defrost.
    23. Adaptive defrost.
    24. Condenser hot gas defrost.
Control System:
    25. Electronic Temperature control.
    26. Anti-Distribution control.
Other Technologies:
    27. Fan and fan motor improvements.
    28. Improved expansion valve.
    29. Fluid control or solenoid off-cycle valve.
    30. Alternative refrigerants.
    31. Component location.
    32. Phase change materials.
Alternative Refrigeration Cycles:
    33. Ejector refrigerator.
    34. Dual evaporator systems.
    35. Two-stage system.
    36. Dual-loop system.
    37. Lorenz-Meutzner cycle.
------------------------------------------------------------------------

    Several commenters provided feedback on some of these technology 
options. These comments are summarized, along with DOE's responses.
    Samsung agreed with the DOE's various technology options, 
specifically DOE's identification of variable-speed compressors and R-
600a as means to improve energy efficiency. (Samsung, No. 32, pp. 2-3)
    AHAM clarified that when considering ``alternate refrigerants'' as 
a technology option, DOE recognize that the use of R-600a should not be 
considered an option to account for a decrease in energy consumption if 
DOE's analysis accounts for a full transition from HFCs by January 1, 
2023. AHAM also stated DOE's analysis regarding refrigerant for product 
classes 5, 5I, and 5A are flawed as the alternative refrigerants 
considered may not be accurate of the current or transitioning market. 
AHAM further stated the R-600a compressors only at ELs 3 and 4 is not 
reflective of the market; AHAM shipment data indicate a significant 
number of units are already using Isobutane (R-600a) refrigerant and/or 
variable-speed compressors to meet the current DOE standard or ENERGY 
STAR[supreg] levels. AHAM stated DOE needs to redo its analysis of 
product classes 5, 5I and 5A to incorporate market representative 
models and adjust the projected technology paths to account for options 
already in use. (AHAM, No. 31, pp. 4, 8-9)
    In response, DOE reassessed its treatment of R-600a as a design 
option in the October 2021 Preliminary Analysis. It is DOE's 
understanding, confirmed through discussions with manufacturers, that 
following the removal of HFC-134a as a viable refrigerant for consumer 
refrigeration product in the U.S., manufacturers are primarily using R-
600a as a replacement.\20\ Hence, DOE assumed for its NOPR analysis 
that all consumer refrigeration products, even those at baseline 
efficiency levels, now use R-600a. DOE is aware that other alternative 
refrigerant choices are allowed to be used and further would not be 
banned by a recent EPA proposal restricting refrigerants.\21\ However, 
based on all available information, DOE is not aware of any instances 
in which these alternatives are being considered by manufacturers as 
viable approaches for increases in efficiency in these products. 87 FR 
76738, 76785 (December 15, 2022). Hence, refrigerant change has not 
been included as a technology option in this NOPR.
---------------------------------------------------------------------------

    \20\ In a final rule published December 1, 2016, the 
Environmental Protection Agency (``EPA''), as part of its 
Significant New Alternatives Policy (``SNAP'') program covering 
ozone-depleting refrigerants and related substances, changed the 
status of HFC-134a, the refrigerant to ``unacceptable'' for consumer 
refrigeration products starting January 1, 2021. 81 FR 86778, 86893.
    \21\ On December 15, 2022, EPA published a proposed rule 
restricting the use of refrigerants with GWP of 150 or greater. 87 
FR 76738. Refrigerants including R-290, R-441A, R-600a, and HFC-152a 
meet this GWP requirement and are listed as acceptable under EPA's 
SNAP rules (see https://www.epa.gov/snap/substitutes-household-refrigerators-and-freezers).
---------------------------------------------------------------------------

    Darren Rains stated that the current design of many homes, 
commercial, and industrial refrigeration units allow cooling fans to 
pull air directly over a unit's condenser coils, resulting in dust and 
debris clogging the coils. As a result of this Rains states that 
accumulation of dust, hair, and lint on the condenser coils lowers the 
unit's ability to dissipate heat. Rains suggests that all incoming 
airflow openings must be covered by filtering materials sufficient to 
keep out the vast majority of debris, lint, and hair away from the 
condenser coils, and that filtering materials be easy to remove, 
replace, and are resistant to cleaning with a vacuum. Rains also 
suggests that gaps underneath refrigeration units have closed cell foam 
to address suction of debris into the unit. (Rains, No. 27, pp. 1-2)
    DOE responds that consumer refrigeration products are tested before 
installation in homes and therefore before there is the potential to 
clog the condenser coil. Hence, even though air filters and/or other 
protection of the coils from dust or other debris may provide an 
efficiency benefit during home use, they would not be expected to 
affect the measurement of efficiency in the DOE test procedure. This is 
a factor that AHAM could potentially consider in development of a 
future revision of the HRF-1 test standard, and is also a factor that 
DOE may consider in a future test procedure rulemaking.

[[Page 12469]]

    The Joint Commenters stated they believe DOE may be underestimating 
VIP performance by relying on outdated information and/or otherwise 
inappropriate assumptions. The Joint Commenters noted DOE did not 
provide ample explanation for the 50 percent degradation factor/scaling 
factor and urged DOE to investigate an appropriate, updated scaling 
factor informed by recent interviews with manufacturers rather than 
relying on the previous rulemaking. They also stated the energy savings 
from VIPs presented in the preliminary analysis appear to be notably 
smaller than those found in a 2018 study and therefore urged DOE to 
reevaluate its modeling to ensure that the energy savings from VIPs are 
appropriately being captured. (Joint Commenters, No. 36, pp. 3-4)
    DOE notes that, while the use of VIPs has become more common, it is 
not yet a technology that is used in a majority of products. DOE found 
few VIPs in the products that it purchased, and reverse engineered 
using destructive teardowns. The use of VIPs is not advertised in 
manufacturer product literature; thus, it is difficult to conduct 
statistical analysis to correlate efficiency levels with use of the 
technology. Manufacturers have reported varied levels of success using 
the technology. The information that DOE has been able to obtain on 
this topic through manufacturer interviews is by no means exhaustive, 
but it doesn't suggest that energy use reduction associated with use of 
VIPs is significantly different than would be estimated by the approach 
derivative of the previous rulemaking that was adopted in the 
preliminary analysis. DOE has used this approach also for the NOPR 
analysis. The details of the VIP analysis are described further in 
Chapter 5 of the NOPR TSD.
    Based on the comments received, DOE has not identified any new 
technologies to add to the list provided as part of the preliminary 
analysis, and has removed alternative refrigerants as a technology 
option, since it would already be used in products at any efficiency 
level.
    For Product Class 11A, ASAP recognized that many of the most 
efficient models are powered coolers that have small, adjusted volumes. 
However, they encouraged DOE to investigate the design features present 
in these very high-efficiency models to determine if such design 
features are more broadly applicable to the product class. (ASAP, 
Public Meeting Transcript, No. 30, p. 22)
    In response, DOE notes that several of the most efficient products 
certified under product class 11A are DC-input models marketed for use 
in cars or boats. For example, the Alpicool TS50 is rated as a 1.8 cuft 
model with energy use 40% less than the maximum allowable annual energy 
use for products in its class. Product information shows that it is 
intended for car or boat service, and thus, it cannot be considered 
representative of the market. (``Alpicool TS Series'', No. XXXX)

B. Screening Analysis

    DOE uses the following five screening criteria to determine which 
technology options are suitable for further consideration in an energy 
conservation standards rulemaking: \22\
---------------------------------------------------------------------------

    \22\ 10 CFR part 430, subpart C, appendix A, sections 6(b)(3) 
and 7(b).
---------------------------------------------------------------------------

    (1) Technological feasibility. Technologies that are not 
incorporated in commercial products or in working prototypes will not 
be considered further.
    (2) Practicability to manufacture, install, and service. If it is 
determined that mass production and reliable installation and servicing 
of a technology in commercial products could not be achieved on the 
scale necessary to serve the relevant market at the time of the 
projected compliance date of the standard, then that technology will 
not be considered further.
    (3) Impacts on product utility or product availability. If it is 
determined that a technology would have a significant adverse impact on 
the utility of the product for significant subgroups of consumers or 
would result in the unavailability of any covered product type with 
performance characteristics (including reliability), features, sizes, 
capacities, and volumes that are substantially the same as products 
generally available in the United States at the time, it will not be 
considered further.
    (4) Adverse impacts on health or safety. If it is determined that a 
technology would have significant adverse impacts on health or safety, 
it will not be considered further.
    (5) Unique-Pathway Proprietary Technologies. If a design option 
utilizes proprietary technology that represents a unique pathway to 
achieving a given efficiency level, that technology will not be 
considered further due to the potential for monopolistic concerns.
    In summary, if DOE determines that a technology, or a combination 
of technologies, fails to meet one or more of the listed five criteria, 
it will be excluded from further consideration in the engineering 
analysis. The reasons for eliminating any technology are discussed in 
the following sections.
    The subsequent sections include comments from interested parties 
pertinent to the screening criteria, DOE's evaluation of each 
technology option against the screening analysis criteria, and whether 
DOE determined that a technology option should be excluded (``screened 
out'') based on the screening criteria.
1. Screened-Out Technologies
    In the October 2021 preliminary analysis, DOE screened out the 
technologies presented in Table IV.2 on the basis of technological 
feasibility, practicability to manufacture, install, and service, 
adverse impacts on utility or availability, adverse impacts on health 
and safety, and/or unique-pathway proprietary technologies.
    AHAM stated DOE's analysis relies heavily on the use of variable-
speed compressors (``VSCs'') to achieve efficiency gains, indicating 
that (a) for some product classes, achieving even EL1 would require the 
use of VSCs, (b) there is additional design work and related costs 
required to implement VSCs, and (c) there are potential concerns about 
harmonic and interference issues. (AHAM, No. 31, p. 10) GEA stated 
DOE's analysis of the potential use of VSCs to reach certain energy 
levels fails to account for several costs associated with the use of 
VSCs. (GEA, No. 38 at p. 10)
    DOE notes that it is clear from AHAM's statements, review of 
product literature, and discussions with manufacturers, that VSCs are a 
common design option used in a large percentage of currently-shipped 
consumer refrigeration products, with around one third of the U.S. 
refrigerator market adapting to VSCs and increasing implementation. 
(Samsung, No. 32, pp. 2-3) Furthermore, while AHAM suggested that DOE 
consider harmonics and possible electric grid interference from VSCs, 
DOE is not aware of any issues related to VSCs and harmonics to date, 
nor any requirements in place at this time. DOE is aware that Natural 
Resources Canada (NRCan) has released a comprehensive energy efficiency 
guide regarding variable frequency drives for informative purposes, 
with discussion of harmonics.\23\ DOE notes, however, that the stated 
primary focus of the NRCan publication is for 'off-the-shelf', low-
voltage variable frequency drives typically used in conjunction

[[Page 12470]]

with AC, polyphase, and induction motors, which does not include drives 
for consumer refrigeration VSCs. Hence, because VSCs are currently 
implemented in a substantive number of products and DOE is not aware of 
harmonic interference at this time, DOE believes it is inappropriate to 
screen out this technology.
---------------------------------------------------------------------------

    \23\ The NRCan publication regarding variable frequency drives 
can be found at https://www.nrcan.gc.ca/sites/www.nrcan.gc.ca/files/energy/pdf/energystar/variable-frequency-drives-eng.pdf.

    Table IV.2--Technologies Screened-Out in the Preliminary Analysis
------------------------------------------------------------------------
 
-------------------------------------------------------------------------
Improved Gaskets, Double Gaskets, and Improved Door Face Frame.
Linear Compressors.
Fluid Control or Solenoid Off-Cycle Valves.
Improved Evaporator Heat Exchange.
Improved Condenser Heat Exchange.
Forced Convection Condenser.
Condenser Hot Gas Defrost.
Compressor Location at Top.
Evaporator Fan Motor Location Outside Cabinet.
Air Distribution Control.
Phase Change Materials.
Lorenz-Meutzner Cycle.
Dual-Loop Systems.
Two-Stage System.
Ejector Refrigerator.
Improved VIPs.
Inert Blowing Fluid CO2.
------------------------------------------------------------------------

2. Remaining Technologies
    Through a review of each technology, DOE concluded in the 
preliminary analysis that all of the other identified technologies 
listed in section IV.A.2 of this document met all five screening 
criteria to be examined further as design options in DOE's NOPR 
analysis. In summary, DOE did not screen out the following technology 
options:

     Table IV.3--Technologies Remaining in the Preliminary Analysis
------------------------------------------------------------------------
 
-------------------------------------------------------------------------
Insulation:
    1. Improved resistivity of insulation (insulation type).
    2. Increased insulation thickness.
    3. Gas-filled insulation panels.
    4. Vacuum-insulated panels.
Gasket and Door Design:
    5. Reduced heat load for TTD feature.
Anti-Sweat Heater:
    6. Refrigerant anti-sweat heating.
    7. Electric anti-sweat heater sizing.
    8. Electric heater controls.
Compressor:
    9. Improved compressor efficiency.
    10. Variable-speed compressors.
Evaporator:
    11. Improved expansion valve.
    12. Increased surface area.
    13. Dual evaporator systems.
Condenser:
    14. Increased surface area.
    15. Microchannel condenser.
Defrost System:
    16. Reduced energy for automatic defrost.
    17. Adaptive defrost.
Control System:
    18. Electronic Temperature control.
Other Technologies:
    19. Fan and fan motor improvements.
    20. Alternative refrigerants.
------------------------------------------------------------------------

    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. DOE 
also finds that all of the remaining technology options meet the other 
screening criteria (i.e., practicable to manufacture, install, and 
service and do not result in adverse impacts on consumer utility, 
product availability, health, or safety, unique-pathway proprietary 
technologies). For additional details, see chapter 4 of the NOPR TSD.
    DOE did not receive any comments specifically about screening 
technologies that have not already been mentioned previously. DOE's 
assessment of screening technologies has not changed for the NOPR 
analysis, and thus DOE has screened out that same group of technologies 
in the NOPR phase. Hence, the technologies remaining, that are 
considered as design options for the engineering analysis, are the same 
as those in the preliminary analysis, except for alternative 
refrigerants, which DOE has removed from the technology option list for 
the reasons mentioned in section IV.A.2 of this document.

C. Engineering Analysis

    The purpose of the engineering analysis is to establish the 
relationship between the efficiency and cost of consumer refrigerators, 
refrigerator-freezers, and freezers. 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 products, DOE 
considers technologies and design option combinations not eliminated by 
the screening analysis. For each product class, DOE estimates the 
baseline cost, as well as the incremental cost for the product 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).
    For the preliminary analysis, DOE used a combined efficiency-level 
and design-option approach. First, an efficiency-level approach was 
used to establish an analysis tied to existing products on the market. 
A design option approach was used to extend the analysis through 
``built-down'' efficiency levels and ``built-up'' efficiency levels 
where there were gaps in the range of efficiencies of products that 
were reverse engineered. Products from the product classes 3, 5, 5A, 7, 
9, 10, 11A, & 18 were tested and torn down to provide information to 
lay the groundwork for the analysis. Design option analysis techniques 
were used to extend the analysis to higher efficiency levels and to 
fill any efficiency level gaps. Due to limitations in acquiring models 
from every product class for testing, DOE did not acquire for test and 
teardown, nor construct analysis for, all product classes. DOE focused 
the analysis on products with the highest market share. Regarding 
built-in product classes, certification data collected in DOE's 
Compliance Certification Database (``CCD'') indicated that the

[[Page 12471]]

potential for efficiency improvement was comparable for built-in 
classes and their corresponding freestanding classes. (See Section 
5.2.1 of the Preliminary Analysis TSD) Thus, DOE concluded that the 
freestanding classes could act as proxies for the built-in classes. 
Section 10.4 of the preliminary analysis TSD discusses use of the 
engineering analysis for the analyzed classes to represent the cost-
efficiency relationship for the classes for which engineering analysis 
was not conducted.
    AHAM raised two general comments regarding representativeness of 
the classes and products analyzed for the preliminary analysis. First, 
AHAM claimed that DOE used product classes as proxy for other classes 
which were not sufficiently representative--this comment primarily 
addressed built-in classes. (AHAM, No. 31, pp. 5-6) Second, AHAM 
asserted that DOE selected models for teardown that were not 
representative of the specific classes analyzed--this comment primarily 
addressed the increase in multi-door product configurations, mainly for 
product classes 5, 5I, and 5A. (AHAM, No. 31, p. 2) These general 
comments are discussed in detail below.
a. Built-In Products
    AHAM agreed that, given the significant number of product classes, 
it is appropriate for DOE to evaluate some classes in detail and use 
that analysis as a proxy for other similar product classes. However, 
AHAM stated DOE consolidated its analysis too much. (AHAM, Public 
Meeting Transcript, No. 30, p. 7-8 \24\) Specifically, AHAM stated 
freestanding product classes are not a proxy for built-in product 
classes and DOE should evaluate them separately. (AHAM, No. 31, 5-6) In 
addition to AHAM, GEA also objected to the use of freestanding products 
as analogues for built-in products in DOE's analysis and requested a 
separate analysis for built-in product classes. GEA stated built-in 
products are fundamentally different than freestanding products in that 
built-in products have different physical constraints as to size and 
shape, different configurations for their mechanical systems, and 
different markets and customer segments. Sub-Zero also noted that 
built-ins now utilize combinations of every practical energy saving 
design option identified by DOE and therefore urged DOE to seriously 
address the reality that a more stringent standard is not justified for 
some product classes, such as built-ins. (GEA, No. 38, p. 2; Sub-Zero, 
No. 34, p. 2)
---------------------------------------------------------------------------

    \24\ A notation in the form ``AHAM, Public Meeting Transcript, 
No. 30 at p. 3'' identifies an oral comment that DOE received on 
December 1, 2021, during the public meeting, and was recorded in the 
public meeting transcript posted in the docket for this test 
procedure rulemaking (Docket No. EERE-2014-BT-STD-0003). This 
particular notation refers to a comment (1) made by the Association 
of Home Appliance Manufacturer during the public meeting; (2) 
recorded in document number 30, which is the public meeting 
transcript that is filed in the docket of this test procedure 
rulemaking; and (3) which appears on page 3 of document number 30.
---------------------------------------------------------------------------

    On the other hand, the Joint Commenters stated they support DOE's 
approach of analyzing the same potential efficiency increases for 
built-in product classes as those for corresponding freestanding 
product classes. (Joint Commenters, No. 36, p. 5)
    In response to these comments, DOE revised its analysis to address 
built-in products more directly. Specifically, DOE conducted additional 
analysis for class 5-BI, based on information from the 5-BI analysis 
conducted to support the September 2011 Final Rule, CCD and product 
literature data, and information provided by built-in product 
manufacturers during interviews. DOE has used the differences in the 
analyses between class 5 and 5-BI to approximate the differences 
between freestanding and built-in class pairs for other relevant built-
in classes (e.g., classes 3A, 7, and 9).
b. Representativeness of Reverse-Engineered and Analyzed Products
    AHAM expressed concern that in some cases the features present in 
the teardown products were not representative of the market. (AHAM, 
Public Meeting Transcript, No. 30, pp. 7, 14-17) According to AHAM, 
DOE's analysis of product classes 5 and 5A in the preliminary analysis 
did not appear to be representative of the market in terms of volume, 
features, and number of doors; specifically, DOE's analysis focused on 
bottom-mount refrigerator/freezers with only two doors--one for the 
refrigerator and one for the freezer. AHAM stated it is unclear whether 
the analysis accounts for the differences between classes 5 and 5A and 
urged DOE to conduct further consultation with manufacturers in order 
to better account for these distinctions. (AHAM, No. 31, p. 2-3) 
Whirlpool agreed with these AHAM comments. (No. 35, pp. 2-3)
    The California IOUs expressed similar concerns about whether all of 
the models selected to represent specific classes and efficiency levels 
were fully representative. They specifically pointed to the high cost 
of dual-evaporator systems, used in the DOE analysis for product 
classes 5A and 7 to reach EL2, as being non-representative. (California 
IOUs, Public Meeting Transcript, No. 30, p. 30) ASAP also noted that, 
when going from efficiency level 1 to 2 in the preliminary analysis, 
there is an incremental cost increase of more than $300 for Product 
Class 5A and more than $250 for Product Class 7 and that the technology 
options added at EL-2 are a higher-efficiency compressor and a single 
VIP for Product Class 5A and then dual evaporators in a single VIP for 
Product Class 7. ASAP requested an explanation of what is driving that 
incremental cost in both cases of going from EL-1 to EL-2. (ASAP, 
Public Meeting Transcript, No. 30, p. 27-28)
    In response to these comments regarding the representativeness of 
the models analyzed, DOE investigated and came to similar conclusions. 
Thus, DOE revised the analysis for this NOPR such that (a) analyses for 
both product classes 5 and 5A are based on three-door designs, (b) the 
capacities of the product class 5 representative units are larger, (c) 
the capacities of the product class 5A units are smaller, and (d) the 
analyses for product classes 5A and 7 do not consider use of dual 
evaporators as a design option, remaining more consistent with a more 
representative single-evaporator design. DOE believes the analyses 
conducted for this NOPR are representative of the product classes in 
the market.
c. Baseline Efficiency/Energy Use
    For each product/equipment class, DOE generally selects a baseline 
model as a reference point for each class, and measures changes 
resulting from potential energy conservation standards against the 
baseline. The baseline model in each product/equipment class represents 
the characteristics of a product/equipment typical of that class (e.g., 
capacity, physical size). Generally, a baseline model is one that just 
meets current energy conservation standards, or, if no standards are in 
place, the baseline is typically the most common or least efficient 
unit on the market.
    For the preliminary analysis, DOE chose baseline efficiency levels 
represented by the current Federal energy conservation standards, 
expressed as maximum annual energy consumption as a function of the 
product's adjusted volume, with the exclusion of the automatic icemaker 
energy contribution for product classes that include this feature. The 
current standards incorporate allowance of a constant 84 kWh/yr 
icemaker adder for product classes with automatic icemakers, consistent 
with the current test procedure, which requires adding

[[Page 12472]]

this amount of annual energy use to the product's tested performance if 
the product has an automatic icemaker.
    For the analysis in this NOPR, DOE adjusted the baseline energy 
usage levels for each class to account for the planned revision in the 
test procedure of the icemaker energy use adder to 28 kWh/year. From 
this baseline DOE conducted direct analyses for 9 product classes, with 
some classes including two representative adjusted volumes. In 
conducting these analyses, 13 baseline units were used in construction 
of cost curves, and had their characteristics determined in large part 
by purchased, tested, and reverse engineered tear-down models. Further 
information on the design characteristics of specific analyzed baseline 
models is summarized in the NOPR TSD.
d. Higher Efficiency Levels
    AHAM commented that DOE should examine a gap-fill EL between the 
current DOE standard and the previously analyzed EL 1 for freestanding 
bottom-mount refrigerator-freezers (product classes 5, 5I, and 5A). 
Whirlpool agreed, but expanded on this, indicating that DOE should 
examine a gap-fill EL between the current DOE standard and the analyzed 
EL 1 for freestanding top-mount and side-by-side refrigerator-freezers 
(product classes 3, 3I, 4, 6, and 7). (AHAM, No. 31, p. 4; Whirlpool, 
No. 35, p. 4-5)
    Whirlpool also noted that in the last refrigerator, refrigerator-
freezer, and freezer energy conservation standards rulemaking, DOE 
considered (in the corresponding TSD) gap-fill efficiency levels 
between baseline and ESTAR Version 4.0 levels, which at the time were 
20% more efficient than the DOE federal minimum for most product 
classes. Whirlpool stated DOE should analyze gap fill levels like those 
considered in the last rulemaking due to their own precedent and to at 
least consider them at this state and due to distinct technology 
options, product cost, and customer impacts of refrigerators, 
refrigerator-freezers, and freezers produced at these levels compared 
to refrigerators, refrigerator-freezers, and freezers at baseline and 
EL1. Whirlpool further stated it is extremely important that DOE 
consider these gap fill levels for the non-built-in top mount and side-
by-side product classes. They stated the product costs needed to 
improve even a 5% gap fill level for those PCs will be substantially 
lower than their estimated costs of meeting EL1 and that savings would 
still be delivered to consumers, but at a much lower product cost 
increase, which would minimize the impact from amended standards to 
low-income consumers often from disadvantaged communities. (Whirlpool, 
No. 35, p. 4-8)
    In interviews, manufacturers reiterated that gap-fill ELs should be 
evaluated, particularly for top-mount and side-by-side refrigerator-
freezers.
    In response, in this NOPR analysis DOE analyzed a 5% EL for product 
classes 3 and 7 (the top-mount refrigerators-freezers, and side-by-side 
refrigerator-freezers, respectively).
    For the NOPR analysis, DOE analyzed up to five incremental 
efficiency levels beyond the baseline for each of the analyzed product 
classes. For products classes 3 and 7, this included an efficiency 
level roughly 5% more efficient than the current energy conservation 
standard. For other classes, the efficiency levels start at EL2, near 
10% more efficiency than the current energy conservation standard, 
equivalent to the current ENERGY STAR[supreg] level for refrigerators, 
refrigerator-freezers, and freezers. For the NOPR analysis, DOE 
extended the efficiency levels in steps of close to 5% of the current 
energy conservation standard up to EL 4. Finally, EL 5 represents 
``max-tech'', using design option analysis to extend the analysis 
beyond EL 4 using all applicable design options, including max 
efficiency variable-speed compressors, and considerable use of VIPs.
    For Product Classes 5A, 7, and 11A, ASAP, California IOUs, and 
Joint Commenters stated they found that there are models listed in 
DOE's Compliance Certification Database that are more efficient than 
DOE's max-tech levels. They further stated that DOE presented a figure 
in the PTSD that showed available models that are more efficient than 
the max-tech efficiency level for Product Class 7. They therefore 
encouraged DOE to reevaluate the max-tech efficiency levels for Product 
Classes 5A, 7, and 11A so that they represent true max-tech levels. 
(ASAP, Public Meeting Transcript, No. 30, p. 22; California IOUs, No. 
30; pp. 24-26; Joint Commenters, No. 36, p. 1-2) As indicated in 
section IV.A.2, DOE notes that some of the most efficient products of 
product class 11A are DC-input products and thus not generally 
representative of the refrigerator market. As for product classes 5A 
and 7, the max-tech efficiency levels analyzed in this NOPR were 21.5% 
and 22%, respectively. These max-tech levels are consistent with the 
maximum available efficiency levels of representative products sold by 
major manufacturers with which DOE conducted interviews.
    The Joint Commenters noted that the TSD states that the energy 
efficiency ratios (``EER'') for VSCs are typically consistent with 
those of the highest available efficiency single-speed compressors 
(``SSC'') at the same capacity but stated that low-capacity compressors 
(generally models less than \1/4\ hp or 500 BTU/hr) would typically be 
present in compact product classes. They included a figure which 
showed, for both R-134a and R-600a compressors, the EER of a VSC can be 
1 to 2 points higher than that of the most efficient SSC at the same 
capacity (<500 BTU/hr) and, therefore, DOE may be underestimating the 
savings from VSC for compact products by failing to capture the 
improved full-load efficiency in addition to the part-load savings. 
(Joint Commenters, No. 36, p. 4-5)
    While published EER levels for VSCs may be much higher than 
published EERs for single-speed compressors in the capacity range 
suitable for compact products, DOE has not found many such products 
that use such compressors, and thus has little evidence that the 
suggested efficiency improvements could be guaranteed. DOE believes 
that its engineering analysis for compact products is representative of 
likely performance using VSCs.
    The efficiency levels analyzed beyond the baseline are shown in 
Table IV.4.

[[Page 12473]]



                                                                 Table IV.4--Incremental Efficiency Levels for Analyzed Products
                                                                                [% Energy Use Less Than Baseline]
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                            Standard-size refrigerator                              Standard-size         Compact refrigerators and freezers
                                                  -----------------------------------------------------------------------------       freezers       -------------------------------------------
              Product class (AV, ft)                                        5 **       5 **      5A **     5-BI **             ----------------------
                                                    3 (11.9)   3 (20.6)    (23.0)     (30.0)     (35.0)     (26.0)    7 (31.5)   9 (29.3)  10 (26.0)  11A (1.7)  11A (4.4)   17 (9.0)   18 (8.9)
                                                      (%)        (%)        (%)        (%)        (%)        (%)        (%)        (%)        (%)        (%)        (%)        (%)        (%)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
EL 1 *...........................................          5          5          8          7         11          8          5         10         10         10         10         10         10
EL 2 *...........................................         10         10         13         11         16         13        9.5         15         15         15         15         15         15
EL 3.............................................         15         15         18         15       21.5         14       14.5         20         20         20         20         20         20
EL 4.............................................         20         20         20         17  .........  .........         19         25         23         32         30  .........         30
EL 5.............................................         27         28  .........  .........  .........  .........         22  .........  .........  .........  .........  .........  .........
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
* ENERGY STAR[supreg] % level varies based on specific teardown units analyzed.
** Percentages are based on a 3-door configuration.


[[Page 12474]]

e. VIP Analysis and Max-Tech Levels
    ASAP noted that a 2018 study \25\ found that the installation of 
vacuum insulated panels (``VIPs'') in the rear cabinet wall reduced 
energy consumption by 5 percent and when VIPs were added to the doors, 
the total reduction was almost 12 percent. ASAP further noted that, 
with VIPs added to the side walls and top wall (where VIPs cover 
approximately half of the cabinet area), the total reduction energy 
consumption was about 20 percent. ASAP therefore stated DOE's 
conclusion of a 4 to 6 percent energy savings from the installation of 
VIPs covering half of the cabinet area seems lower than expected and 
questioned this discrepancy. California IOUs also reiterated energy 
savings from using VIPs was being undercounted. (ASAP, Public Meeting 
Transcript, No. 30, pp. 22-23; California IOUs, No. 33, pp. 2-3)
---------------------------------------------------------------------------

    \25\ Thiessen, S., Knabben, F.T., Melo, C., & Gon[ccedil]alves, 
J.M. (2018). A study on the effectiveness of applying vacuum 
insulation panels in domestic refrigerators. International Journal 
of Refrigeration, 96, p. 10-16. https://doi.org/10.1016/j.ijrefrig.2018.09.006.
---------------------------------------------------------------------------

    The California IOUs recommended that DOE increase the maximum ELs 
in the PTSD by reviewing design options for commercialized products 
that meet or exceed the max-tech levels. The California IOUs stated 
that it is likely that DOE is underestimating the energy savings that 
can be achieved at max-tech level because there is no indication that 
any of the products analyzed have VIPs, which is the additional design 
option for most product classes at max-tech. They therefore requested 
that DOE revise EL 3 and EL 4 to either incorporate additional design 
options or revise the energy savings attributed to the included design 
options if they are the only ones used in these commercialized 
products. (California IOUs, No. 33, p. 3-4)
    ASAP requested specific information, particularly dimensions, of 
the single VIP referenced in table 5.5.1 of the preliminary analysis 
which shows the design options by efficiency level for each product 
class. ASAP also noted there is a reference to the VIPs covering half 
of the cabinet area and requested clarification on whether the full 
cabinet area is referring to all five sides being the top, bottom, two 
sides, and rear (excluding the doors) or if it was something else. 
(ASAP, Public Meeting Transcript, No. 30, pp. 15-17 & 21-22)
    ASAP noted that DOE assumed a mid-panel thermal conductivity for 
the VIPs but then used a scaling factor of 50 percent to account for 
the actual versus expected performance of VIPs and requested 
clarification regarding what the 50 percent factor is capturing. (ASAP, 
Public Meeting Transcript, No. 30, p. 23)
    On the other hand, AHAM stated DOE does not account for the 
limitations of VIPs and does not apply it as it would likely be used in 
actual products and, as a result, overestimates the use and impact of 
VIPs in its analysis. AHAM noted DOE's emphasis on VIPs appears to 
result from the teardown of a single unit, which is likely not 
representative of how VIPs are generally deployed on a larger scale. 
GEA stated DOE must also account for the technical limitations of VIPs 
including edge effects, which is particularly important when analyzing 
their use in smaller products. GEA also noted that DOE's analysis 
indicates manufactures will implement VIPs to achieve higher energy 
levels, but stated that many manufacturers, including GEA, already use 
VIPs to meet existing standards minimums and EL 1. (AHAM, No. 31, pp. 
10-11; GEA, No. 38, p. 2)
    In response to the ASAP and California IOUs comments regarding a 
study involving use of VIPs, DOE notes that the Department's analysis 
was generally consistent with the study in terms of how and where VIPs 
would be applied into the products. DOE further notes that its analysis 
also was consistent with information provided by manufacturers in 
interviews on VIP placement--specifically, that VIPs would primarily be 
used on the door(s), the walls, and the tops of cabinets, 
preferentially for the freezer compartments. In response to ASAP's 
question about the 50 percent factor, this was an adjustment that DOE 
used in the analysis leading up to the September 2011 Final Rule based 
on information regarding VIP experiences by manufacturers at that time. 
Based on discussions with manufacturers in the current rulemaking, it 
is not clear that success using VIPs in production settings has 
significantly increased. While the cited study provides some indication 
that VIPs can provide significant energy savings, DOE is now aware of 
evidence showing commercialized products are consistently achieving 
such levels of improvement.
    Regarding table 5.5.1 of the preliminary analysis TSD and Product 
Classes 5A and 7, the California IOUs acknowledged that the breakdown 
for different ELs was determined by the units that were selected for a 
direct analysis that were purchased by DOE. The California IOUs 
requested clarification regarding whether there were other design 
options, like the dual evaporators, that were not necessarily used 
primarily to improve efficiency. They pointed to the transition to the 
R600A refrigerant in the new variable-speed compressor which has its 
own added costs at EL-3. (California IOUs, Public Meeting Transcript 
No. 30, p. 28-29)
    The Joint Commenters stated DOE is significantly overestimating the 
incremental cost to meet intermediate efficiency levels for Product 
Classes 5A and 7 in the preliminary analysis. They stated that DOE 
included dual evaporators as a design option at EL2, but it is not 
reasonable to assume that dual evaporators would be employed to meet 
intermediate ELs (i.e., EL2 and EL3) given their high cost if they 
became the minimum standard. (Joint Commenters, No. 36, p. 2-3)
    In response, DOE notes that while dual evaporators were considered 
for product classes 5A and 7 in the preliminary analysis, DOE did not 
include dual evaporators in its engineering analysis for the NOPR, due 
to its high cost compared to efficiency gains.
    The Joint Commenters stated that, since recent state laws and the 
American Innovation and Manufacturing (``AIM'') Act of 2020 have caused 
manufacturers to already transition to R-600a and since they expect a 
full transition to occur well before any amended DOE standards would 
take effect, DOE should not attribute conversion costs associated with 
the refrigerant transition to updated efficiency standards. (Joint 
Commenters, No. 36, p. 5-6) The California IOUs requested that Iso-
Butane (R-600a) be included as a refrigerant design option for all 
products and be incorporated into efficiency levels with positive NPV 
for Product Classes 5A and 7, before other less cost-effective design 
options. (California IOUs, No. 33, p. 1-2)
    DOE agrees that all manufacturers will have transitioned to R-600a 
by the time of the compliance date for any new energy conservation 
standards. Hence, the NOPR analysis assumes that all products will use 
R-600a at all efficiency levels.
2. Cost Analysis
    The cost analysis portion of the engineering analysis is conducted 
using one or a combination of cost approaches. The selection of cost 
approach depends on a suite of factors, including the availability and 
reliability of public information, characteristics of the regulated 
product, the availability and timeliness of purchasing the

[[Page 12475]]

product 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 present case, DOE conducted the analysis using a combination 
of physical teardowns, catalog teardowns, and price surveys. Where 
possible, physical teardowns were used to provide a baseline of 
technology options and pricing for a specific product class at a 
specific EL level. Then with technology option information, DOE 
estimated the cost of various design options including compressors, 
VIPs, and insulation, by extrapolating the costs from price surveys. 
With specific costs for technology options, DOE was then able to 
``build-up'' or ``build-down'' from the various teardown models to 
finish the cost-efficiency curves. DOE used this approach primarily 
because it allowed the comparison of different technologies and design 
options.
3. Cost-Efficiency Results
    The results of the engineering analysis are presented as cost-
efficiency data for each of the efficiency levels for each of the 
product classes that were analyzed. DOE developed estimates of MPCs for 
each unit in the teardown sample, and also performed additional 
modeling based on representative teardown samples, to extend the 
analysis to cover the range of efficiency levels appropriate for a 
representative product. In this way, DOE estimated key design details 
for this range of efficiency levels. The manufacturer interviews 
provided input for these design details--DOE selected design options 
that were, to the extent possible, representative of manufacturer input 
regarding what design options would be required to attain specific 
efficiency levels for the analyzed product classes. DOE then calculated 
differential MPCs based on design option differences across the 
efficiency levels--using the calculated MPCs of the teardown units and 
the differential MPCs, DOE calculated MPCs for each considered 
efficiency level. The efficiency levels and design option progression 
for the analyzed standard-size refrigerator-freezers are presented in 
Table IV.5 and Table IV.6 of this document. The cells in the table list 
the design options that would be applied at each higher efficiency 
level as compared with the next-lower efficiency level. Similarly, the 
efficiency levels and design options for the other analyzed classes are 
presented in Table IV.7 of this document. The resulting MPCs for the 
analyzed classes across the considered efficiency levels are presented 
in Tables IV.8 and IV.9 of this document. See chapter 5 of the NOPR TSD 
for additional detail on the engineering analysis.
    DOE seeks comment on the method for estimating manufacturing 
production costs and on the resulting cost-efficiency curves.
    See section VII.E of this document for a list of issues on which 
DOE seeks comment.

                            Table IV.5--Efficiency Levels and Design Options for Analyzed Standard-Size Refrigerator-Freezers
--------------------------------------------------------------------------------------------------------------------------------------------------------
      Product class  (AV \5\)                  EL1                     EL2                    EL3                    EL4                    EL5
--------------------------------------------------------------------------------------------------------------------------------------------------------
3 (11.9)
    EL Percent \1\.................  5%....................  10%...................  15%..................  20%..................  27%.
    Design Options Added...........  Variable Defrost;       Higher-EER Compressor.  Highest-EER            VIP side walls and     Variable-speed
                                      Higher-EER Compressor.                          Compressor.            doors.                 compressor
                                                                                                                                    system.\3\
3 (21.0)
    EL Percent \1\.................  5%....................  10%...................  15%..................  20%..................  28%.
    Design Options Added...........  Higher-EER Compressor.  Variable Defrost;       Variable-speed         40% of Max-tech VIP    VIP side walls and
                                                              Higher-EER Compressor.  compressor system      \4\.                   doors.
                                                                                      \3\.
5 (23.0) \2\
    EL Percent \1\.................  8%....................  13%...................  18%..................  20%..................
    Design Options Added...........  BLDC Evaporator Fan     Highest-EER Variable-   71% of Max-tech VIP    VIP side walls and
                                      Motor; Variable-speed   speed Compressor.       \4\.                   doors.
                                      compressor system \3\.
5 (30.0) \2\
    EL Percent \1\.................  7%....................  11%...................  15%..................  17%..................
                                    --------------------------------------------------------------------------------------------------------------------
    Design Options Added...........       Efficiency levels were shifted such that the number of EL's matches that of the 23 AV analysis. MPCs were
                                       interpolated to these new EL numbers. See Table IV.6IV.6 for design options for the efficiency levels analyzed in
                                                                                   the engineering analysis.
                                    --------------------------------------------------------------------------------------------------------------------
5-BI \2\ (26.0)
    EL Percent \1\.................  8%....................  13%...................  14%..................
    Design Options Added...........  Variable-speed          90% of Max-tech VIP     VIP side walls and
                                      compressor system;      \4\.                    doors.
                                      \3\ 43% of Max-tech
                                      VIP.
5A (35.0) \2\
    EL Percent \1\.................  11%...................  16%...................  21.5%................
    Design Options Added...........  Variable-speed          Highest-EER Variable-   VIP side walls and
                                      compressor system \3\.  speed Compressor; 42%   doors.
                                                              of Max-tech VIP \4\.
7 (31.5)
    EL Percent \1\.................  5%....................  9.5%..................  14.5%................  19%..................  22%.
    Design Options Added...........  Highest-EER Compressor  BLDC Evaporator Fan     38% of Max-tech VIP    Highest-EER Variable-  VIP side walls and
                                                              Motor; Variable-speed   \4\.                   speed Compressor;      doors.
                                                              compressor system \3\.                         75% of Max-tech VIP
                                                                                                             \4\.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Notes:
\1\ Percent energy use less than baseline.
\2\ For three-door configuration.

[[Page 12476]]

 
\3\ Includes two-speed fan control.
\4\ The percentage of surface area of VIP as compared with the VIP surface area used in the maximum-technology design, for which VIP would be installed
  for full coverage of the side walls and doors.
\5\ Adjusted Volume in cubic feet.


           Table IV.6--Product Class 5, 30 AV, 3-Door Design Options and Manufacturing Production Cost
----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
Percent Energy use below Baseline              0%  8%.................  13%................  17%.
Design Options Added.............                  Highest-EER          Variable-speed       VIP side walls and
                                                    Compressor; BLDC     compressor system;   doors.
                                                    Evaporator Fan       \3\ 50% of Max-
                                                    Motor.               tech VIP.
MPC..............................            $748  $776...............  $809...............  $845.
Incremental MPC..................                  $28................  $62................  $97.
----------------------------------------------------------------------------------------------------------------
Note: This information is the initial engineering analysis output. LCC, PBP, and other downstream analyses used
  the EL's and MPC's in Table IV.8.


 Table IV.7--Efficiency Levels and Design Options for Analyzed Standard-Size Freezers and Compact Refrigerators,
                                       Refrigerator-Freezers, and Freezers
----------------------------------------------------------------------------------------------------------------
     Product class  (AV \4\)              EL1                 EL2                 EL3                 EL4
----------------------------------------------------------------------------------------------------------------
9 (29.3)
    EL Percent \1\..............  10%...............  15%...............  20%...............  25%.
    Design Options Added........  Highest-EER         Highest-EER         38% of Max-tech     VIP side walls and
                                   Compressor;         Variable-speed      VIP \3\.            door.
                                   Switch to forced-   compressor system
                                   convection          \2\.
                                   condenser; BLDC
                                   fans.
10 (26.0)
    EL Percent \1\..............  10%...............  15%...............  20%...............  23%.
    Design Options Added........  Variable-speed      Wall thickness      Highest-EER         VIP door.
                                   compressor system   increase.           Variable-speed
                                   \2\.                                    Compressor.
11A (1.7)
    EL Percent \1\..............  10%...............  15%...............  20%...............  32%.
    Design Options Added........  Wall thickness      Higher-EER          Higher-EER          Highest-EER
                                   increase.           Compressor.         Compressor; VIP     Compressor.
                                                                           sides and door.
11A (4.4)
    EL Percent \1\..............  10%...............  15%...............  20%...............  30%.
    Design Options Added........  Higher-EER          Wall thickness      Higher-EER          Variable Speed
                                   Compressor.         increase.           Compressor.         Compressor
                                                                                               System; \2\ VIP
                                                                                               sides walls and
                                                                                               door.
17 (9.0)
    EL Percent \1\..............  10%...............  15%...............  20%...............
    Design Options Added........  Highest-EER         50% of Max-tech     VIP side walls and
                                   Variable Speed      VIP \3\.            door panels..
                                   Compressor
                                   System; \2\
                                   Variable Defrost.
18 (8.9)
    EL Percent \1\..............  10%...............  15%...............  20%...............  30%.
    Design Options Added........  Higher-EER          Wall thickness      Higher-EER          Variable Speed
                                   Compressor;         increase.           Compressor; VIP     Compressor
                                   Variable Defrost.                       door.               System.\2\
----------------------------------------------------------------------------------------------------------------
Notes:
\1\ Percent energy use less than baseline.
\2\ Includes two-speed fan control.
\3\ The percentage of surface area of VIP as compared with the VIP surface area used in the maximum-technology
  design, for which VIP would be installed for full coverage of the side walls and doors.
\4\ Adjusted Volume in cubic feet.


                                       Table IV.8--Cost-Efficiency Curves for Standard-Size Refrigerator-Freezers
--------------------------------------------------------------------------------------------------------------------------------------------------------
                 Product class (AV \3\)                         EL0             EL1             EL2             EL3             EL4             EL5
--------------------------------------------------------------------------------------------------------------------------------------------------------
3 (11.9)
    EL Percent \1\......................................              0%              5%             10%             15%             20%             27%
    MPC.................................................            $419            $426            $427            $429            $478            $507
    Incremental MPC.....................................              $0           $7.14           $8.60             $10             $59             $88
3 (21.0)
    EL Percent \1\......................................              0%              5%             10%             15%             20%             28%
    MPC.................................................            $511            $513            $530            $554            $580            $618
    Incremental MPC.....................................              $0           $1.59             $19             $43             $69            $107
5 (23.0) \2\
    EL Percent \1\......................................              0%              8%             13%             18%             20%  ..............
    MPC.................................................            $666            $691            $693            $736            $753  ..............
    Incremental MPC.....................................              $0             $25             $27             $70             $87  ..............
5 (30.0) \2\
    EL Percent \1\......................................              0%              7%             11%             15%             17%  ..............
    MPC.................................................            $748            $773            $796            $827            $845  ..............
    Incremental MPC.....................................              $0             $26             $48             $79             $97  ..............
5-BI \3\ (26.0)
    EL Percent \1\......................................              0%             10%             15%             16%  ..............  ..............

[[Page 12477]]

 
    MPC.................................................            $947            $983          $1,015          $1,020  ..............  ..............
    Incremental MPC.....................................              $0             $35             $68             $72  ..............  ..............
5A (35.0) \2\
    EL Percent \1\......................................              0%             11%             16%           21.5%  ..............  ..............
    MPC.................................................            $818            $839            $872            $914  ..............  ..............
    Incremental MPC.....................................              $0             $21             $55             $96  ..............  ..............
7 (31.5)
    EL Percent \1\......................................              0%              5%            9.5%           14.5%             19%             22%
    MPC.................................................            $706            $708            $728            $748            $775            $791
    Incremental MPC.....................................              $0           $2.26             $22             $42             $69             $85
--------------------------------------------------------------------------------------------------------------------------------------------------------
Notes:
\1\ Percent energy use less than baseline.
\2\ For three-door configuration.
\3\ Adjusted volume in cubic feet.


 Table IV.9--Cost-Efficiency Curves for Standard-Size Freezers and Compact Refrigerators, Refrigerator-Freezers,
                                                  and Freezers
----------------------------------------------------------------------------------------------------------------
     Product class  (AV \2\)            EL0             EL1             EL2             EL3             EL4
----------------------------------------------------------------------------------------------------------------
9 (29.3)
    EL Percent \1\..............              0%             10%             15%             20%             25%
    MPC \2\.....................            $519            $536            $568            $592            $620
    Incremental MPC.............              $0             $17             $49             $73            $101
10 (26.0)
    EL Percent \1\..............              0%             10%             15%             20%             23%
    MPC.........................            $549            $580            $604            $606            $629
    Incremental MPC.............              $0             $31             $55             $57             $81
11A (1.7)
    EL Percent \1\..............              0%             10%             15%             20%             32%
    MPC.........................            $170            $175            $176            $197            $201
    Incremental MPC.............              $0           $5.00           $6.22          $26.78             $31
11A (4.4)
    EL Percent \1\..............              0%             10%             15%             20%             30%
    MPC.........................            $255            $257            $263            $274            $322
    Incremental MPC.............              $0           $2.19           $8.12             $19             $67
17 (9.0)
    EL Percent \1\..............              0%             10%             15%             20%  ..............
    MPC.........................            $226            $252            $272            $293  ..............
    Incremental MPC.............              $0             $26             $47             $67  ..............
18 (8.9)
    EL Percent \1\..............              0%             10%             15%             20%             30%
    MPC.........................            $213            $215            $225            $238            $269
    Incremental MPC.............              $0           $2.54             $12             $25             $56
----------------------------------------------------------------------------------------------------------------
Notes:
\1\ Percent energy use less than baseline.
\2\ Adjusted volume in cubic feet.

4. Manufacturer Selling Price
    To account for manufacturers' non-production costs and revenue 
attributable to the product, DOE applies a multiplier (the manufacturer 
markup) to the MPC. The resulting manufacturer selling price (``MSP'') 
is the price at which the manufacturer charges its direct customer 
(e.g., a retailer). DOE developed an average manufacturer markup by 
examining the annual Securities and Exchange Commission (``SEC'') 10-K 
reports \26\ filed by publicly traded manufacturers primarily engaged 
in appliance manufacturing and whose combined product range includes 
refrigerators, refrigerator-freezers, and freezers. See chapter 12 of 
the NOPR TSD for additional detail on the manufacturer markup.
---------------------------------------------------------------------------

    \26\ U.S. Securities and Exchange Commission, Electronic Data 
Gathering, Analysis, and Retrieval (EDGAR) system. Available at 
www.sec.gov/edgar/search/ (last accessed July 1, 2022).
---------------------------------------------------------------------------

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. At each step in the distribution channel, companies 
mark up the price of the product to cover business costs and profit 
margin.
    For refrigerators, refrigerator-freezers, and freezers, the main 
parties in the distribution chain are retailers, wholesalers and 
general contractors.
    DOE developed baseline and incremental markups for each actor in 
the distribution chain. Baseline markups are applied to the price of 
products with baseline efficiency, while incremental markups are 
applied to the difference in price between baseline and higher-
efficiency models (the incremental cost increase). The

[[Page 12478]]

incremental markup is typically less than the baseline markup and is 
designed to maintain similar per-unit operating profit before and after 
new or amended standards.\27\
---------------------------------------------------------------------------

    \27\ Because the projected price of standards-compliant products 
is typically higher than the price of baseline products, using the 
same markup for the incremental cost and the baseline cost would 
result in higher per-unit operating profit. While such an outcome is 
possible, DOE maintains that in markets that are reasonably 
competitive it is unlikely that standards would lead to a 
sustainable increase in profitability in the long run.
---------------------------------------------------------------------------

    Based on microeconomic theory, the degree to which firms can pass 
along a cost increase depends on the level of market competition, as 
well as sensitivity to price changes on both the supply and demand 
sides (e.g., supply and demand elasticity). DOE examined industry data 
from IBISWorld and the results suggest that the competition level among 
each industry group and between industry groups involved in appliance 
retail is medium to high.\28\ In addition, consumer demand for 
household appliances is relatively inelastic with respect to price 
(i.e., demand is not expected to decrease substantially with an 
increase in the price of product). Given the medium to high level of 
competition, it may be tenable for retailers to maintain a fixed markup 
for a short period of time after an input price increase, but the 
market competition should eventually force them to readjust their 
markups to reach a medium-term equilibrium in which per-unit margin is 
relatively unchanged before and after standards are implemented. DOE 
developed the incremental markup approach based on the effect of energy 
efficiency standards under second-degree price discrimination.\29\ 
Initially, firms supply products with a wide range of energy 
efficiencies with the ``premium'' models significantly more energy 
efficient than ``basic'' models. The firm earns low margins on the 
basic models, and high margins on the premium models, based on customer 
willingness to pay for relative energy efficiency. An energy efficiency 
standard temporarily narrows the quality gap between the basic and 
premium models. To prevent premium product customers shifting to basic 
products that have lower margins, firms maintain their margins on 
premium products by reducing their markups.
---------------------------------------------------------------------------

    \28\ IBISWorld. US Industry Reports (NAICS): 45211--Department 
Stores; 44311--Consumer Electronics Stores; 44411--Home Improvement 
Stores; 42362 TV & Appliance Retailers in the US. 2022. IBISWorld. 
(Last accessed February 1, 2022.) www.ibisworld.com.
    \29\ Spurlock, C.A., and Fujita, K.S. (2022). Equity 
implications of market structure and appliance energy efficiency 
regulation. Energy Policy, vol. 165, 112943, 1-12.
---------------------------------------------------------------------------

    To estimate the markup under standards, DOE derived an incremental 
markup that is applied to the incremental product costs of higher 
efficiency products. The overall markup on the products meeting 
standards is an average of the markup on the component of the cost that 
is equal to the baseline product and the markup on the incremental cost 
accrued due to standards, weighted by the share of each in the total 
cost of the standards-compliant product.
    DOE relied on economic data from the U.S. Census Bureau to estimate 
average baseline and incremental markups. Specifically, DOE used the 
2017 Annual Retail Trade Survey for the ``electronics and appliance 
stores'' sector to develop retailer markups,\30\ the 2017 Annual 
Wholesale Trade Survey for the ``household appliances, and electrical 
and electronic goods merchant wholesalers'' sector to estimate 
wholesaler markups,\31\ and the industry series for the ``residential 
building construction'' sector published by the 2017 Economic Census to 
derive general contractor markups.\32\
---------------------------------------------------------------------------

    \30\ U.S. Census Bureau, Annual Retail Trade Survey. 2017. 
www.census.gov/programs-surveys/arts.html.
    \31\ U.S. Census Bureau, Annual Wholesale Trade Survey. 2017. 
www.census.gov/awts.
    \32\ U.S. Census Bureau. 2017 Economic Census. https://www.census.gov/newsroom/press-kits/2020/2017-economic-census.html.
---------------------------------------------------------------------------

    Chapter 6 of the NOPR TSD provides details on DOE's development of 
markups for refrigerators, refrigerator-freezers, and freezers.
    DOE requests comment on its markups analysis and the underlying 
assumptions, including price elasticities specific to the market for 
new refrigeration products and any potential effects from a market for 
second refrigerators or second-hand products.

E. Energy Use Analysis

    The purpose of the energy use analysis is to determine the annual 
energy consumption of refrigerators, refrigerator-freezers, and 
freezers at different efficiencies in representative U.S. single-family 
homes, multi-family residences, and commercial buildings, and to assess 
the energy savings potential of increased product efficiency. The 
energy use analysis estimates the range of energy use of refrigerators, 
refrigerator-freezers, and freezers 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.
    The DOE test procedure produces standardized results that can be 
used to assess or compare the performance of products operating under 
specified conditions. Actual energy usage in the field often differs 
from that estimated by the test procedure because of variation in 
operating conditions, the behavior of users, and other factors. In the 
case of refrigerators, refrigerator-freezers, and freezers, DOE used 
usage adjustment factors (UAFs) in the October 2021 Preliminary 
Analysis to address the difference in field-metered energy consumption 
and the DOE test results due to household-specific characteristics. 80 
FR 57378-57385.
    Specifically, DOE combined field-metered energy use data for full-
size refrigeration products from the September 2011 Final Rule, the 
Northwest Energy Efficiency Alliance (``NEEA''), and the Florida Solar 
Energy Center (``FSEC'') with estimates of the test energy use of each 
field-metered unit. Then, DOE calculated a unit's UAF by dividing the 
annual field-metered energy use by the annual energy consumption from 
the DOE test procedure. DOE then used maximum likelihood estimation to 
fit log-normal distributions to the empirical distributions of UAFs for 
primary refrigerators and refrigerator-freezers, secondary 
refrigerators and refrigerator-freezers, and freezers. DOE sampled UAFs 
from these fitted log-normal distributions to estimate the actual 
energy use of refrigeration products for the consumer sample. DOE did 
not have adequate field-metering data to derive UAFs for compact 
refrigeration products; therefore, DOE assumed the UAF of compact 
refrigeration products was 1.0.
    In response to the October 2021 Preliminary Analysis energy use 
methodology, the CA IOUs noted that the UAFs are based on refrigeration 
products that were installed prior to the September 2011 Final Rule 
standard coming into effect and questioned whether the usage patterns 
of these older refrigeration products are reflective of current usage 
patterns. (CA IOUs, No. 16 at p.34) While DOE acknowledges that the 
available field-metering data for generating UAF distributions are from 
refrigeration products installed prior to the September 2011 Final Rule 
standard coming into effect, DOE is unaware of more recent data to 
inform the estimation of UAFs or to examine how usage patterns may have 
changed since the effective date. Moreover, because

[[Page 12479]]

most field-metering studies are confined to a single geographic 
location, using all available field-metering data for the derivation of 
UAFs allows for a more representative analysis. DOE also believes it is 
unlikely that the UAFs derived from the field-metering data--which are 
used to account for differences in energy use due to things like the 
number of occupants and outdoor temperature--would differ substantially 
with data vintage. As a result, DOE has continued to use the same data 
and methodology for this NOPR analysis as was used in the October 2021 
Preliminary Analysis. Chapter 7 of the NOPR TSD provides details on 
DOE's energy use analysis for refrigerators, refrigerator-freezers, and 
freezers.
    DOE requests comment on its methodology to develop UAFs and also 
requests data on actual energy use for standard-size consumer 
refrigerators, refrigerator-freezers, and freezers in the field to 
further inform the UAF development for subsequent rounds of this 
rulemaking.

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 
refrigerators, refrigerator-freezers, and freezers. 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:

    [square] 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.
    [square] 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 refrigerators, refrigerator-
freezers, and freezers 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 a nationally-representative set of 
housing units (all product classes) and commercial buildings (product 
class 11A only). DOE included commercial applications in the analysis 
of compact refrigerators and refrigerator-freezers (product class 11A) 
because they are used in both the residential and commercial sectors 
(e.g., hotel rooms and higher-education dormitories). DOE developed 
household samples from the 2015 Residential Energy Consumption Survey 
(``RECS'') and commercial building samples from the 2018 Commercial 
Buildings Energy Consumption Survey (``CBECS''). For each sample 
household or building, DOE determined the energy consumption for the 
refrigerator, refrigerator-freezer, or freezer and the appropriate 
electricity price and discount rate. By developing a representative 
sample of households and buildings, the analysis captured the 
variability in energy consumption, energy prices, and discount rates 
associated with the use of refrigerators, refrigerator-freezers, and 
freezers.
    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 product lifetime, discount rates, and sales 
taxes, with probabilities attached to each value, to account for their 
uncertainty and variability.
    The computer model DOE uses to calculate the LCC and PBP relies on 
a Monte Carlo simulation to incorporate uncertainty and variability 
into the analysis. The Monte Carlo simulations randomly sample input 
values from the probability distributions and refrigerators, 
refrigerator-freezers, and freezers user samples. For this rulemaking, 
the Monte Carlo approach is implemented in Python. The model calculated 
the LCC and PBP for products at each efficiency level for 10,000 
housing units or commercial buildings per simulation run. The 
analytical results include a distribution of 10,000 data points showing 
the range of LCC savings for a given efficiency level relative to the 
no-new-standards case efficiency distribution. In performing an 
iteration of the Monte Carlo simulation for a given consumer, 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 calculation reveals that a consumer 
is not impacted by the standard level. By accounting for consumers 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 refrigerators, 
refrigerator-freezers, and freezers 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 refrigerators, 
refrigerator-freezers, and freezers manufactured 3 years after the date 
on which any new or amended standard is published. (42 U.S.C. 
6295(m)(4)(A)(i)) At this time, DOE estimates issuance of a final rule 
by the end of 2023. Therefore, for purposes of its analysis, DOE used 
2027 as the first year of compliance with any amended standards for 
refrigerators, refrigerator-freezers, and freezers.
    Table IV.10 summarizes the approach and data DOE used to derive 
inputs to the LCC and PBP calculations. The subsections that follow 
provide further discussion. Details of the spreadsheet model, and of 
all the inputs to the LCC and PBP analyses, are contained in chapter 8 
of the NOPR TSD and its appendices.

 Table IV.10--Summary of Inputs and Methods for the LCC and PBP Analysis
                                    *
------------------------------------------------------------------------
            Inputs                           Source/method
------------------------------------------------------------------------
Product Cost.................  Derived by multiplying MPCs by
                                manufacturer and retailer markups and
                                sales tax, as appropriate. Applied price
                                learning based on historical price index
                                data to project product costs. Applied
                                price trend to electronic controls used
                                on products with VSDs.
Installation Costs...........  Assumed no change with efficiency level;
                                therefore, not included.

[[Page 12480]]

 
Annual Energy Use............  The total annual energy use multiplied by
                                a usage adjustment factor, which is
                                derived using field data.
                               Variability: Based on product class and
                                field data.
Energy Prices................  Electricity: Based on Edison Electric
                                Institute data for 2021.
                               Variability: Regional energy prices
                                determined for each Census Division.
Energy Price Trends..........  Based on AEO2022 price projections.
Repair and Maintenance Costs.  Assumed no change with efficiency level
                                for maintenance costs. Repair costs
                                estimated for each product class and
                                efficiency level.
Product Lifetime.............  Weibull distributions based on historical
                                shipments and age distribution of
                                installed stock.
Discount Rates...............  Approach involves identifying all
                                possible debt or asset classes that
                                might be used to purchase the considered
                                appliances, or might be affected
                                indirectly. Primary data source was the
                                Federal Reserve Board's Survey of
                                Consumer Finances.
Compliance Date..............  2027.
------------------------------------------------------------------------
* References for the data sources mentioned in this table are provided
  in the sections following the table or in chapter 8 of the NOPR TSD.

    DOE requests comment on the overall methodology and results of the 
LCC and PBP analyses.
    AHAM stated that the method DOE used to report the fraction of 
consumers with a net cost in the preliminary analysis does not indicate 
the proportion of households that were forced to change their purchase 
decision (due to an assumed standard) and also had a negative impact. 
As a result, AHAM argues the analysis is incomplete and misleading. 
AHAM stated the correct interpretation of these results is that the 
market is working and the households who will benefit from a higher 
standard are already receiving that benefit. AHAM stated DOE needs to 
take this more nuanced interpretation into account when selecting a 
standard level. (AHAM, No. 31 at pp. 15) DOE maintains that showing the 
share of all consumers who would experience a net LCC cost is useful 
information, as EPCA requires DOE to consider the impact of standards 
on all ``consumers,'' not only those who might make a different 
purchasing decision. Moreover, DOE takes into consideration the results 
of multiple analyses, not just the LCC savings, when considering if and 
at what level to set an efficiency standard.
    AHAM and Shorey Consulting commented that DOE only provided a 
summary of results from the LCC model, rather than the full LCC model. 
(AHAM, Public Meeting Transcript, No. 30 at pp. 41-42; Shorey 
Consulting, Public Meeting Transcript, No. 30 at pp. 42-43) In 
comparison to the Crystal Ball-based LCC models that DOE has 
historically used, AHAM and Shorey Consulting commented that the 
preliminary analysis LCC spreadsheet is less transparent, making it 
difficult for stakeholders to make informed comments. (AHAM, No. 31 at 
p. 15; Shorey Consulting, Public Meeting Transcript, No. 30 at pp. 42-
43) In response, DOE notes that the complexity of the LCC analysis is 
such that using Crystal Ball to perform the analysis is overly 
burdensome and time intensive. For this reason, DOE performed the 
analysis using the Python programming language instead. While the 
current LCC spreadsheet therefore does not rely on the Crystal Ball 
software that LCC spreadsheets in the past have used, DOE notes that 
the current LCC spreadsheet continues to provide full consumer samples 
and essential LCC calculations on a consumer-by-consumer basis. In this 
framework, stakeholders are able to adjust key input values to observe 
how such changes would affect LCC and LCC savings at the consumer 
level. Moreover, this functionality is available to stakeholders 
without requiring the purchase of software (e.g., Crystal Ball) other 
than Microsoft Excel, which is widely available. DOE believes this 
approach allows for a rigorous LCC analysis while still providing an 
appropriate level of transparency to stakeholders.
1. Adjusted Volume Distribution
    DOE developed adjusted volume distributions within each PC 
containing more than one representative unit to determine the 
likelihood that a given purchaser would select each of the 
representative units for a given PC from the engineering analysis. DOE 
estimated the distribution of adjusted volumes for PC 3 and PC 5 based 
on the capacity distribution reported in the TraQline[supreg] 
refrigerator data spanning from Q1 2018 to Q1 2019.\33\ DOE estimated 
the distribution of adjusted volumes for PC 11A based on the 
distribution of models from DOE's Compliance Certification Management 
System Database. Table IV.11 presents the adjusted volume distribution 
of each of the PCs having more than one representative unit. DOE 
assumed that the adjusted volume distribution remains constant over the 
years considered in the analysis.
---------------------------------------------------------------------------

    \33\ TraQline[supreg] is a quarterly market share tracker of 
150,000+ consumers.

 Table IV.11--Adjusted Volume Probability for each Product Class Having
                    More Than One Representative Unit
------------------------------------------------------------------------
                                                            Probability
                Adjusted volume (cu. ft.)                       (%)
------------------------------------------------------------------------
                                  PC 3
------------------------------------------------------------------------
11.9....................................................            22.3
20.6....................................................            77.7
------------------------------------------------------------------------
                                  PC 5
------------------------------------------------------------------------
23......................................................            34.7
------------------------------------------------------------------------
30......................................................            65.3
------------------------------------------------------------------------
                                 PC 11A
------------------------------------------------------------------------
1.7.....................................................            77.8
4.4.....................................................            22.2
------------------------------------------------------------------------

    DOE requests comment on its methodology to develop market share 
distributions by adjusted volume in the compliance year for each PC 
with two representative volumes, as well as data to further inform 
these distributions in subsequent rounds of this proposed rulemaking.

2. Product Cost

    To calculate consumer product 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.
    Economic literature and historical data suggest that the real costs 
of many products may trend downward over time according to ``learning'' 
or

[[Page 12481]]

``experience'' curves. Experience curve analysis implicitly includes 
factors such as efficiencies in labor, capital investment, automation, 
materials prices, distribution, and economies of scale at an industry-
wide level.\34\ In the experience curve method, the real cost of 
production is related to the cumulative production or ``experience'' 
with a manufactured product. DOE used historical Producer Price Index 
(``PPI'') data for ``household refrigerator and home freezer 
manufacturing'' from the Bureau of Labor Statistics' (``BLS'') spanning 
the time period between 1981 and 2021 as a proxy of the production cost 
for refrigerators, refrigerator-freezers and freezers.\35\ This is the 
most representative and current price index for refrigerators, 
refrigerator-freezers, and freezers. An inflation-adjusted price index 
was calculated by dividing the PPI series by the gross domestic product 
index from Bureau of Economic Analysis for the same years. The 
cumulative production of refrigerators, refrigerator-freezers, and 
freezers were assembled from the annual shipments from the Association 
of Household Appliance Manufacturers (AHAM) between 1951 and 2020, and 
shipment estimates prior to 1951 using a trend analysis. The estimated 
learning rate (defined as the fractional reduction in price expected 
from each doubling of cumulative production) is 40.0  1.8 
percent.
---------------------------------------------------------------------------

    \34\ Taylor, M. and Fujita, K.S. Accounting for Technological 
Change in Regulatory Impact Analyses: The Learning Curve Technique. 
LBNL-6195E. Lawrence Berkeley National Laboratory, Berkeley, CA. 
April 2013. https://escholarship.org/uc/item/3c8709p4#page-1.
    \35\ Household refrigerator and home freezer manufacturing PPI 
series ID: PCU3352203352202; www.bls.gov/ppi/.
---------------------------------------------------------------------------

    DOE included variable-speed compressors as a technology option for 
higher efficiency levels. To develop future prices specific for that 
technology, DOE applied a different price trend to the controls portion 
of the variable-speed compressor, which represents part of the price 
increment when moving from an efficiency level achieved with the 
highest efficiency single-speed compressor to an efficiency level with 
variable-speed compressor. DOE used PPI data on ``semiconductors and 
related device manufacturing'' between 1967 and 2021 to estimate the 
historic price trend of electronic components in the control.\36\ The 
regression, performed as an exponential trend line fit, results in an 
R-square of 0.99, with an annual price decline rate of 6.3 percent. See 
chapter 8 of the TSD for further details on this topic.
---------------------------------------------------------------------------

    \36\ Semiconductors and related device manufacturing PPI series 
ID: PCU334413334413; www.bls.gov/ppi/.
---------------------------------------------------------------------------

    In response to the October 2021 Preliminary Analysis, AHAM stated 
the use of learning curves to forecast future refrigerator prices is a 
purely empirical relationship without theoretical justification for why 
experience should continue to affect total costs., Rather, AHAM 
comments that DOE should be driven by the actual data. AHAM noted the 
curve used by DOE is already below actual data for certain years, and 
the curve is likely to significantly overestimate the future reduction 
in costs. AHAM stated DOE should recalculate its learning curve values 
to determine an appropriate rate based on the actual current data. 
(AHAM, No. 31 at pp. 13-14)
    DOE notes that there is considerable historical evidence of 
consistent price declines for appliances in the past few decades. This 
phenomenon is generally attributable to manufacturing efficiency gained 
with cumulative experience producing a certain good through learning by 
workers and management, and is modeled by an empirical experience curve 
(Desroches et al. 2013).\37\ Several studies examined refrigerator 
retail prices during different periods of time and showed that prices 
have been steadily falling while efficiency has been increasing, 
including for example Dale, et al. (2009) \38\ and Taylor, et al. 
(2015).\39\ The development of experience curve analysis relies on 
extensive historical data on the manufacturing costs of a given 
product; however, such data are very difficult to obtain. Thus, DOE 
used the Producer Price Index (PPI) published by the BLS as a proxy for 
manufacturing costs. The PPI, which measures the average changes in 
prices received by domestic producers, is quality-adjusted and 
available for a wide variety of specific industries (e.g., refrigerator 
manufacturing). Since what matters in the experience curve model is the 
changes in producer prices and not the absolute prices, the use of PPI 
is suitable for the analysis. To capture the overall price evolution in 
relation to cumulative production during the entire period where data 
are available, the full historical PPI series for ``household 
refrigerator and home freezer manufacturing'' should be used in the 
price learning estimation rather than only focusing on the more recent 
data. A least-square power-law fit performed on the deflated price 
index and cumulative shipments yields an R-square of 97%, which is 
considered a great fit to the data. Sensitivity analyses that are based 
on a particular segment of the PPI data for household refrigerator 
manufacturing were also conducted to investigate the impact of 
different product price projections in the NIA of this NOPR.
---------------------------------------------------------------------------

    \37\ Desroches, L.-B., K. Garbesi, C. Kantner, R. Van Buskirk, 
and H.-C. Yang. Incorporating Experience Curves in Appliance 
Standards Analysis. Energy Policy. 2013. 52 pp. 402-416.
    \38\ Dale, L., C. Antinori, M. McNeil, James E. McMahon, and K. 
S. Fujita. Retrospective evaluation of appliance price trends. 
Energy Policy. 2009. 37 pp. 597-605.
    \39\ Taylor, M., C. A. Spurlock, and H.-C. Yang. Confronting 
Regulatory Cost and Quality Expectations. An Exploration of 
Technical Change in Minimum Efficiency Performance Standards. 2015. 
Lawrence Berkeley National Lab. (LBNL), Berkeley, CA (United 
States). Report No. LBNL-1000576. (Last accessed July 27, 2022.) 
https://www.osti.gov/biblio/1235570/.
---------------------------------------------------------------------------

    The CA IOUs cited a 2014 study which found that energy efficient 
equipment has steeper price learning curves, indicating that efficiency 
standards can accelerate long-term price declines even further. They 
stated that the learning rate used in the preliminary analysis likely 
overstates the cost of increasingly efficient equipment, while 
understating the costs of freezers and the least efficient products 
(since they are undergoing less change). Therefore, the CA IOUs 
recommended DOE develop additional learning curves by efficiency level 
to better reflect the pricing dynamics consistent with established 
economic theory. (CA IOUs, No. 33 at pp. 4-5)
    DOE acknowledges that products at different efficiency levels may 
experience different rates of price learning. For the most part, 
however, there are not sufficient data to derive experience curves at 
that level of detail. However, as noted above, in this NOPR, DOE 
included variable-speed compressors as a technology option for higher 
efficiency levels. To account for the faster learning associated with 
the electronics for variable-speed compressors, DOE applied a separate 
price trend to the controls portion of refrigerators, refrigerator-
freezers, and freezers that utilize variable-speed compressors. DOE 
assumed these controls have an MPC of $20 (see chapter 5 of the NOPR 
TSD). This results in a greater price decline for refrigerators, 
refrigerator-freezers, and freezers at higher efficiency levels. If 
more data become available on this topic in the future, DOE will work 
toward further improving the price learning estimation.
3. Installation Cost
    Installation cost includes labor, overhead, and any miscellaneous 
materials and parts needed to install the product. DOE found no 
evidence that installation costs for refrigerators,

[[Page 12482]]

refrigerator-freezers, and freezers would be impacted with increased 
efficiency levels. As a result, DOE did not include installation costs 
in the LCC and PBP analysis.
    DOE requests comment and data on its assumption that installation 
costs do not change as a function of EL for refrigeration products.
4. Annual Energy Consumption
    For each sampled household or commercial building, DOE determined 
the energy consumption for refrigerators, refrigerator-freezers, and 
freezers at different efficiency levels using the approach described 
previously in section IV.E of this document.
5. 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 EEI Typical 
Bills and Average Rates reports. 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 residential sector, DOE calculated 
electricity prices using the methodology described in Coughlin and 
Beraki (2018).\40\ For the commercial sector, DOE calculated 
electricity prices using the methodology described in Coughlin and 
Beraki (2019).\41\
---------------------------------------------------------------------------

    \40\ Coughlin, K. and B. Beraki. Residential Electricity Prices: 
A Review of Data Sources and Estimation Methods. 2018. Lawrence 
Berkeley National Lab. (LBNL), Berkeley, CA (United States). Report 
No. LBNL-2001169. (Last accessed September 3, 2021.) https://ees.lbl.gov/publications/residential-electricity-prices-review.
    \41\ Coughlin, K. and B. Beraki. Non-residential Electricity 
Prices: A Review of Data Sources and Estimation Methods. 2019. 
Lawrence Berkeley National Lab. (LBNL), Berkeley, CA (United 
States). Report No. LBNL-2001203. (Last accessed September 3, 2021.) 
https://ees.lbl.gov/publications/non-residential-electricity-prices.
---------------------------------------------------------------------------

    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.\42\ To estimate price trends after 2050, 
DOE used the 2050 electricity prices, held constant.\43\
---------------------------------------------------------------------------

    \42\ U.S. Energy Information Administration. Annual Energy 
Outlook 2022. 2022. Washington, DC (Last accessed June 1, 2022.) 
https://www.eia.gov/outlooks/aeo/index.php.
---------------------------------------------------------------------------

6. Maintenance and Repair Costs
    Repair costs are associated with repairing or replacing product 
components that have failed in an appliance; maintenance costs are 
associated with maintaining the operation of the product. DOE is not 
aware of any data that suggest the cost of maintenance changes as a 
function of efficiency for refrigerators, refrigerator-freezers, and 
freezers. DOE therefore assumed that maintenance costs are the same 
regardless of EL and do not impact the LCC or PBP.
    For the preliminary analysis, DOE developed a repair cost 
estimation method based on the average total installed cost and average 
annual repair costs by PC and EL from the 2011 Final Rule. For each of 
three categories--standard-size refrigerator-freezers, standard-size 
freezers, and compact refrigeration products--DOE averaged the annual 
repair cost as a fraction of the total installed cost at each EL. Based 
on this method, DOE estimated consumers with standard-size 
refrigerator-freezers have annual repair costs equal to 1.8 percent of 
their total installed cost, consumers with standard-size freezers have 
an annual repair cost of 0.8 percent of their total installed cost, and 
consumers with compact refrigeration products have an annual repair 
cost of 0.9percent of their total installed cost. Because high-
efficiency products have a higher installed cost, their estimated 
average annual repair costs are also higher.
    As mentioned in section IV of this document, Sub-Zero indicated in 
comments on the preliminary TSD that there are significant limitations 
to further energy regulation if products are to remain reliable, long-
lived and affordable. (Sub-Zero, No. 34, p. 1) As noted here, the LCC 
model DOE used in the preliminary analysis assumes that repair costs 
scale with total installed cost. Therefore, the higher first cost 
associated with higher efficiency levels translates into more expensive 
repair costs in DOE's repair costs analysis. DOE has not received data 
to support a change to this methodology, and therefore has continued to 
use this same methodology in the NOPR analyses. For more detail, see 
chapter 8 of the NOPR TSD.
    DOE requests comment on its assumption that maintenance costs do 
not change as a function of EL for refrigeration products. DOE also 
requests comment and data on its methodology for determining repair 
costs by PC and EL.
7. Product Lifetime
    DOE performed separate modeling of lifetime for standard-size 
refrigerators and refrigerator-freezers, standard-size freezers, and 
compact refrigeration products. For standard-size refrigerators, 
refrigerator-freezers, and freezers, DOE estimated product lifetimes by 
fitting a survival probability function to data on historical shipments 
and the age distributions of installed stock from RECS 2005, RECS 2009, 
and RECS 2015. The survival function, which DOE assumed has the form of 
a cumulative Weibull distribution, provides an average and median 
lifetime. Moreover, the conversion from primary to secondary 
refrigerator or refrigerator-freezer was also modeled as part of the 
lifetime determination for standard-size refrigerators and 
refrigerator-freezers.
    For compact refrigerators, DOE estimated an average lifetime of 7.7 
years using data on shipments and the number of units in use (stock). 
For compact freezers, DOE did not have reliable stock data available to 
compare against historical shipments. Therefore, DOE estimated an 
average lifetime of 10.7 years by multiplying the average lifetime of 
compact refrigerators by the ratio of the average lifetime of standard-
size freezers (20.6 years) to the average lifetime of standard-size 
refrigerators and refrigerator-freezers (14.8 years).
    In response to the preliminary analysis lifetime analysis, AHAM 
encouraged DOE to further consider incorporating AHAM's consumer 
research. Specifically, AHAM recommended that DOE adopt the average 
lifetimes that AHAM provided in a confidential response to the RFI. 
(AHAM, No. 31 at pp. 11-12) DOE appreciates AHAM's comments and the 
average lifetimes provided in response to the RFI. DOE incorporated the 
latest available shipments and representative consumer survey data into 
its lifetime models for the NOPR analysis. When compared to the average 
lifetimes provided confidentially by AHAM in response to the RFI and 
the average lifetimes from the September 2011 Final Rule analysis, DOE 
notes that the lifetime models used in the October 2021 Preliminary 
Analysis generally fall between the two. Using updated shipments data 
from AHAM, DOE has further updated the lifetime distributions for 
compact refrigeration products for this NOPR. This update has increased 
the average lifetime of

[[Page 12483]]

compact products relative to the preliminary analysis, which aligns 
even more closely with the confidential data AHAM provided. A 
comparison of the average lifetimes in each analysis is provided in 
Table IV.12.

              Table IV.12--Comparison of Average Lifetimes by Product Category by Rulemaking Phase
----------------------------------------------------------------------------------------------------------------
                                                                             Average lifetime (years)
                                                                 -----------------------------------------------
                            Category                              2023 Notice of       2021
                                                                     proposed       Preliminary     2011 Final
                                                                    rulemaking       analysis          rule
----------------------------------------------------------------------------------------------------------------
Standard-size refrigerators and refrigerator-freezers...........            14.8            14.8            17.4
Standard-size freezers..........................................            20.6            20.6            22.3
Compact refrigerators and refrigerator-freezers.................             7.7             6.9             5.6
Compact freezers................................................            10.7             9.7             7.5
----------------------------------------------------------------------------------------------------------------

    Because DOE's lifetime models are based on nationally 
representative data, and because DOE's updated lifetime models are more 
aligned with the useful lifetimes provided by AHAM, DOE has continued 
to use the same lifetime model methodology that was used in the 
preliminary analysis, but with updated data.
    See chapter 8 of the NOPR TSD for further details on the method and 
sources DOE used to develop product lifetimes.
    DOE requests comment and data on the assumptions and methodology 
used to calculate refrigerator, refrigerator-freezer, and freezer 
survival probabilities. DOE requests comment and data on source of 
second refrigerators, whether from new purchase, conversion of 
surviving first refrigerators, or second-hand markets. DOE also 
welcomes any information indicating whether or not the service lifetime 
of refrigeration products differs by efficiency level.
8. Discount Rates
    In the calculation of LCC, DOE applies discount rates appropriate 
to residential and commercial consumers to estimate the present value 
of future operating cost savings. DOE estimated distributions of 
residential and commercial discount rates for refrigerators, 
refrigerator-freezers, and freezers based on consumer financing costs 
and the opportunity cost of consumer funds (for the residential sector) 
and cost of capital of publicly traded firms (for the commercial 
sector).
    DOE applies weighted average discount rates calculated from 
consumer debt and asset data, rather than marginal or implicit discount 
rates.\44\ The LCC analysis estimates NPV over the lifetime of the 
product, so the appropriate discount rate will reflect the general 
opportunity cost of household funds, taking this time scale into 
account. Given the long time horizon modeled in the LCC analysis, the 
application of a marginal interest rate associated with an initial 
source of funds is inaccurate. Regardless of the method of purchase, 
consumers are expected to continue to rebalance their debt and asset 
holdings over the LCC analysis period, based on the restrictions 
consumers face in their debt payment requirements and the relative size 
of the interest rates available on debts and assets. DOE estimates the 
aggregate impact of this rebalancing using the historical distribution 
of debts and assets.
---------------------------------------------------------------------------

    \44\ The implicit discount rate is inferred from a consumer 
purchase decision between two otherwise identical goods with 
different first cost and operating cost. It is the interest rate 
that equates the increment of first cost to the difference in net 
present value of lifetime operating cost, incorporating the 
influence of several factors: transaction costs; risk premiums and 
response to uncertainty; time preferences; interest rates at which a 
consumer is able to borrow or lend. The implicit discount rate is 
not appropriate for the LCC analysis because it reflects a range of 
factors that influence consumer purchase decisions, rather than the 
opportunity cost of the funds that are used in purchases.
---------------------------------------------------------------------------

    To establish residential discount rates for the LCC analysis, DOE 
identified all relevant household debt or asset classes in order to 
approximate a consumer's opportunity cost of funds related to appliance 
energy cost savings. It estimated the average percentage shares of the 
various types of debt and equity by household income group using data 
from the Federal Reserve Board's Survey of Consumer Finances (``SCF'') 
for 1995, 1998, 2001, 2004, 2007, 2010, 2013, 2016, and 2019.\45\ Using 
the SCF and other sources, DOE developed a distribution of rates for 
each type of debt and asset by income group to represent the rates that 
may apply in the year in which amended standards would take effect.
---------------------------------------------------------------------------

    \45\ U.S. Board of Governors of the Federal Reserve System. 
Survey of Consumer Finances. 1995, 1998, 2001, 2004, 2007, 2010, 
2013, 2016, and 2019. (Last accessed February 1, 2022.) https://www.federalreserve.gov/econresdata/scf/scfindex.htm.
---------------------------------------------------------------------------

    For commercial consumers, DOE used the cost of capital 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 the cost of capital is the weighted-average 
cost to the firm of equity and debt financing. This corporate finance 
approach is referred to as the weighted-average cost of capital. DOE 
used currently available economic data in developing discount rates. 
See chapter 8 in the NOPR TSD for details.
    In response to the preliminary analysis, AHAM suggested DOE use the 
marginal cost of debt in the LCC, rather than weighted-average interest 
rates from a stable portfolio of debts and assets. AHAM noted that this 
is especially important for low-income households. (AHAM, No. 31 and 
pp. 17-19) AHAM also stated that the distribution of discount rates 
used in the LCC analysis do not correspond to reality, and strongly 
suggested that the assumptions that produced these distributions be 
reconsidered. (AHAM, No. 31 at pp. 19-20)
    In response, DOE notes that the LCC analysis is not modeling a 
purchase decision. The LCC analysis estimates the NPV of financial 
trade-offs of increased upfront product costs weighed against reduced 
operating costs over the lifetime of the covered product, assuming the 
product has already been obtained and installed. The marginal rate is 
not the appropriate discount rate to use because fixing the discount 
rate at the marginal rate associated with a credit card assumes that 
consumers purchase the appliance with a credit card, and keep that 
purchase on the credit card throughout the entire time it takes to pay 
off that debt with only operating costs savings from the more efficient 
product. There is little evidence that consumers behave in this way. 
Consumers do not tend to shift all of their funds to assets with the 
highest interest rate, nor away from debt types with the highest 
interest rate. Examination of many years of data from

[[Page 12484]]

the Federal Reserve's Survey of Consumer Finances suggests that, at the 
time of each survey, the vast majority of households held multiple 
types of debt and/or assets. This tendency is observed across numerous 
cross-sections of the population, such as income groups (low-income 
households included), geographic locations, and age of household head. 
Therefore, DOE believes that using an average discount rate in the LCC 
best approximates the actual opportunity cost of funds faced by 
consumers. This opportunity cost of funds is the time-value of money 
for consumers. For a more detailed discussion, please see the 2020 
final energy conservation standards rulemaking for room air 
conditioners. 85 FR 1378-1447.
    See chapter 8 of the NOPR TSD for further details on the 
development of consumer discount rates.
9. 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 product efficiencies under the no-new-
standards case (i.e., the case without amended or new energy 
conservation standards).
    To estimate the expected energy efficiency distribution of 
refrigerators, refrigerator-freezers, and freezers for 2027, DOE 
utilized model counts from DOE's CCMS database.\46\ Models in the 
database were categorized by capacity and assigned an efficiency level 
based on reported energy use. In the absence of data on trends in 
efficiency, DOE assumed the current efficiency distribution would be 
representative of the efficiency distribution in 2027 in the no-new-
standards case. The estimated market shares for the no-new-standards 
case for refrigerators, refrigerator-freezers, and freezers are shown 
in Table IV.13 of this document. See chapter 8 of the NOPR TSD for 
further information on the derivation of the efficiency distributions.
---------------------------------------------------------------------------

    \46\ https://www.regulations.doe.gov/certification-data/CCMS-4-Refrigerators__Refrigerator-Freezers__and_Freezers.html, Last 
accessed on August 5, 2020.
---------------------------------------------------------------------------

    DOE requests comment on its methodology to develop market share 
distributions by EL for each PC and representative unit for the no-new-
standards case in the compliance year, as well as data to further 
inform these distributions in subsequent rounds of this proposed 
rulemaking. DOE also requests comment on the assumption that the 
current efficiency distribution would remain fixed over the analysis 
period, and data to inform an efficiency trend by PC.

                                           Table IV.13--No-New-Standards Case Efficiency Distributions in 2027
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                     Total                                       2027 Market share (%)
                                                    adjusted  ------------------------------------------------------------------------------------------
                  Product class                      volume
                                                   (cu. ft.)       EL 0         EL 1         EL 2         EL 3         EL 4         EL 5       Total *
--------------------------------------------------------------------------------------------------------------------------------------------------------
3...............................................         11.9         56.3         13.1         30.6          0.0          0.0          0.0        100.0
                                                         20.6         66.2          1.3         32.3          0.0          0.2          0.0        100.0
5...............................................           23         47.6         49.9          1.1          0.8          0.6  ...........        100.0
                                                           30         45.1         32.9         18.3          1.2          2.4  ...........        100.0
5A..............................................           35         96.0          2.1          2.0          0.9  ...........  ...........        100.0
5BI.............................................           26         30.3         48.5          0.0         21.2  ...........  ...........        100.0
7...............................................         31.5         83.3         10.6          4.1          1.6          0.2          0.2        100.0
9...............................................         29.3         75.9         22.5          0.8          0.8          0.0  ...........        100.0
10..............................................           26         94.1          5.9          0.0          0.0          0.0  ...........        100.0
11A.............................................          1.7          9.1         57.0          7.5         17.8          8.6  ...........        100.0
                                                          4.4         22.9         70.3          0.0          5.1          1.7  ...........        100.0
17..............................................            9         35.4         41.5         16.9          6.2  ...........  ...........        100.0
18..............................................          8.9         92.8          6.2          0.0          1.0          0.0  ...........        100.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
* The total may not sum to 100% due to rounding.

    In response to the October 2021 Preliminary Analysis, AHAM objected 
to DOE's use of random assignment of 2015 RECS households to base and 
standard cases, which assumes that consumers are agnostic to energy 
costs. AHAM stated that it is very unlikely that consumers with very 
high potential LCC savings would not have already decided to purchase a 
more efficient refrigerator (i.e., in the no-new-standards case), and 
DOE's assumption that these consumers are indifferent to operating 
costs appears contrary to common sense and experience in the retail 
field.
    While DOE acknowledges that economic factors may play a role when 
consumers decide on what type of refrigeration product to install, 
assignment of refrigeration product efficiency for a given 
installation, based solely on economic measures such as life-cycle cost 
or simple payback period most likely would not fully and accurately 
reflect actual real-world installations. There are a number of market 
failures discussed in the economics literature that illustrate how 
purchasing decisions with respect to energy efficiency are unlikely to 
be perfectly correlated with energy use, as described below. DOE 
maintains that the method of assignment, which is in part random, is a 
reasonable approach, one that simulates behavior in the refrigeration 
product market, where market failures result in purchasing decisions 
not being perfectly aligned with economic interests, and is more 
realistic than relying only on apparent cost-effectiveness criteria 
derived from the information in RECS. DOE further emphasizes that its 
approach does not assume that all purchasers of refrigeration products 
make economically irrational decisions (i.e., the lack of a correlation 
is not the same as a negative correlation). By using this approach, DOE 
acknowledges the uncertainty inherent in the data and minimizes any 
bias in the analysis by using random assignment, as opposed to assuming 
certain market conditions that are unsupported given the available 
evidence.
    DOE notes that consumers are typically motivated by more than 
simple financial trade-offs. There are consumers who are willing to pay 
a premium for more energy-efficient products because they are

[[Page 12485]]

environmentally conscious.\47\ There are also several behavioral 
factors that can influence the purchasing decisions of complicated 
multi-attribute products, such as refrigeration products. For example, 
consumers (or decision makers in an organization) are highly influenced 
by choice architecture, defined as the framing of the decision, the 
surrounding circumstances of the purchase, the alternatives available, 
and how they're presented for any given choice scenario.\48\ The same 
consumer or decision maker may make different choices depending on the 
characteristics of the decision context (e.g., the timing of the 
purchase, competing demands for funds), which have nothing to do with 
the characteristics of the alternatives themselves or their prices. 
Consumers or decision makers also face a variety of other behavioral 
phenomena including loss aversion, sensitivity to information salience, 
and other forms of bounded rationality. Thaler and Sunstein point out 
that these behavioral factors are strongest when the decisions are 
complex and infrequent, when feedback on the decision is muted and 
slow, and when there is a high degree of information asymmetry.\49\ 
These characteristics describe almost all purchasing situations of 
appliances and equipment, including refrigeration products. The 
installation of a new or replacement refrigeration product is done very 
infrequently, as evidenced by the mean lifetime of over 14 years for 
standard-size products. Further, if the purchaser of the refrigeration 
product is not the entity paying the energy costs (e.g., a tenant), 
there may be little to no feedback regarding energy costs on the 
purchase.
---------------------------------------------------------------------------

    \47\ Ward, D.O., Clark, C.D., Jensen, K.L., Yen, S.T., & 
Russell, C.S. (2011): ``Factors influencing willingness-to pay for 
the ENERGY STAR[supreg] label,'' Energy Policy, 39(3), 1450-1458. 
(Available at: www.sciencedirect.com/science/article/abs/pii/S0301421510009171) (Last accessed Feb. 15, 2022).
    \48\ Ward, D.O., Clark, C.D., Jensen, K.L., Yen, S.T., & 
Russell, C.S. (2011): ``Factors influencing willingness-to pay for 
the ENERGY STAR[supreg] label,'' Energy Policy, 39(3), 1450-1458. 
(Available at: www.sciencedirect.com/science/article/abs/pii/S0301421510009171) (Last accessed Feb. 15, 2022).
    \49\ Thaler, R.H., and Sunstein, C.R. (2008). Nudge: Improving 
Decisions on Health, Wealth, and Happiness. New Haven, CT: Yale 
University Press.
---------------------------------------------------------------------------

    Additionally, there are systematic market failures that are likely 
to contribute further complexity to how products are chosen by 
consumers. The first of these market failures is known as the split-
incentive or principal-agent problem. The principal-agent problem is a 
market failure that results when the consumer that purchases the 
equipment does not internalize all of the costs associated with 
operating the equipment. Instead, the user of the product, who has no 
control over the purchase decision, pays the operating costs. There is 
a high likelihood of split incentive problems for refrigeration 
products. For example, in the case of rental properties where the 
landlord makes the choice of what refrigerator to install, whereas the 
renter is responsible for paying energy bills.
    In addition to the split-incentive problem, because of the way 
information is presented, and in part because of the way consumers 
process information, there is also a market failure consisting of a 
systematic bias in the perception of equipment energy usage. Attari, 
Krantz, and Weber \50\ show that consumers tend to underestimate the 
energy use of large energy-intensive appliances, but overestimate the 
energy use of small appliances. This can affect consumer choices. AHAM 
stated that the most appropriate solution is to have a much more robust 
consumer choice theory. (AHAM, no. 36 at p. 12) Therefore, it is likely 
that consumers systematically underestimate the energy use associated 
with refrigerators, resulting in less cost-effective refrigerator 
purchases.
---------------------------------------------------------------------------

    \50\ Attari, S.Z., D.H. Krantz, and E. Weber. Energy 
conservation goals: What people adopt, what they recommend, and why. 
2016. 11 pp. 342-351.
---------------------------------------------------------------------------

    These market failures affect a sizeable share of the consumer 
population. A study by Houde \51\ indicates that there is a significant 
subset of consumers that appear to purchase appliances without taking 
into account their energy efficiency and operating costs at all.
---------------------------------------------------------------------------

    \51\ Houde, S. (2018): ``How Consumers Respond to Environmental 
Certification and the Value of Energy Information,'' The RAND 
Journal of Economics, 49 (2), 453-477 (Available at: 
onlinelibrary.wiley.com/doi/full/10.1111/1756-2171.12231) (Last 
accessed Feb. 15, 2022).
---------------------------------------------------------------------------

    The existence of market failures is well supported by the economics 
literature and by a number of case studies. If DOE developed an 
efficiency distribution that assigned refrigeration product efficiency 
in the no-new-standards case solely according to energy use or economic 
considerations such as life-cycle cost or payback period, the resulting 
distribution of efficiencies within the household sample would not 
reflect any of the market failures or behavioral factors above. DOE 
thus concludes such a distribution would not be representative of the 
refrigerators, refrigerator-freezers, or freezers markets. Further, 
even if a specific household is not subject to the market failures 
above, the purchasing decision of refrigeration product efficiency can 
be highly complex and influenced by a number of factors not captured by 
the information available in the RECS samples. These factors can lead 
to consumers choosing a refrigeration product efficiency that deviates 
from the efficiency predicted using only energy use or economic 
considerations such as life-cycle cost or payback period. However, DOE 
intends to continue to investigate this issue, and it welcomes 
additional comments as to how it might improve its assignment of 
appliance efficiency in its analyses.
10. Payback Period Analysis
    The payback period is the amount of time it takes the consumer to 
recover the additional installed cost of more efficient products, 
compared to baseline products, through energy cost savings. Payback 
periods are expressed in years. Payback periods that exceed the life of 
the product 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 product 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.
    As noted previously, EPCA establishes a rebuttable presumption that 
a standard is economically justified if the Secretary finds that the 
additional cost to the consumer of purchasing a product complying with 
an energy conservation standard level will be less than three times the 
value of the first year's energy savings resulting from the standard, 
as calculated under the applicable test procedure. (42 U.S.C. 
6295(o)(2)(B)(iii)) For each considered EL, DOE determined the value of 
the first year's energy savings by calculating the energy savings in 
accordance with the applicable DOE test procedure, and multiplying 
those savings by the average energy price projection for the year in 
which compliance with the amended standards would be required.

G. Shipments Analysis

    DOE uses projections of annual product shipments to calculate the 
national impacts of potential amended or new energy conservation 
standards on energy use, NPV, and future manufacturer cash flows.\52\ 
The shipments model takes an accounting approach, tracking market 
shares of each product class and the vintage of units in the stock. 
Stock accounting uses product shipments as inputs to estimate

[[Page 12486]]

the age distribution of in-service product stocks for all years. The 
age distribution of in-service product 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.
---------------------------------------------------------------------------

    \52\ 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.
---------------------------------------------------------------------------

    Total shipments for each product category (i.e., standard-size 
refrigerators and refrigerator-freezers, standard-size freezers, 
compact refrigerators and refrigerator-freezers, and compact freezers) 
are developed by considering the demand from various market segments. 
For standard-size refrigerators and refrigerator-freezers, DOE 
considered demand from replacements for units in stock that fail, 
shipments to new construction, and the demand created by increased 
saturation into existing households corresponding to the conversion of 
a primary unit to secondary unit. For all other product categories, DOE 
considered demand from replacements for units in stock that fail, 
shipments to new construction, and shipments to first-time owners in 
existing households. DOE calculated shipments due to replacements using 
the retirement functions developed for the LCC analysis (see chapter 8 
of the NOPR TSD for details). DOE projected shipments to new 
construction using estimates for new housing starts and the average 
saturation of each product category in new households. Shipments to 
first-time owners were estimated by analyzing the increasing 
penetration of products into existing households in each product 
category. For standard-size refrigerators and refrigerator-freezers, 
DOE estimated shipments from increased saturation corresponding to the 
conversion of a primary unit to a secondary unit utilizing the primary-
to-secondary conversion function developed for the LCC analysis.
    For the NOPR analysis, DOE incorporated data from stakeholders into 
the shipments model. Confidential aggregate historical shipments data 
from 2015-2019 provided by AHAM was used to calibrate the total 
shipments for standard-size refrigerator-freezers, compact 
refrigerators, upright freezers, chest freezers, and built-in 
refrigerator-freezers. Based on data provided by AHAM in response to 
the November 2019 RFI, DOE assumed that 1.4% of modelled shipments of 
standard-size refrigerator and refrigerator-freezers shipments were 
built-in units. DOE also used the market share data provided by NEEA in 
response to the November 2019 RFI to further disaggregate shipments of 
standard-size refrigerator-freezers into shipments for top-mount, side-
by-side, and bottom-mount product classes.
    Chapter 9 in the NOPR TSD provides further information on the 
shipments analysis.
    DOE requests comment on the overall methodology and results of the 
shipments analysis.

H. National Impact Analysis

    The NIA assesses the national energy savings (``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.\53\ (``Consumer'' in this context refers to 
consumers of the product 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 refrigerators, refrigerator-freezers, and freezers sold from 2027 
through 2056.
---------------------------------------------------------------------------

    \53\ The NIA accounts for impacts in the 50 states and U.S. 
territories.
---------------------------------------------------------------------------

    DOE evaluates the impacts 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 
product 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 product class if DOE 
adopted new or amended standards at specific energy efficiency levels 
(i.e., the TSLs or standards cases) for that class. For the standards 
cases, DOE considers how a given standard would likely affect the 
market shares of products 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 TSL. 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.14 summarizes the inputs and methods DOE used for the NIA 
analysis for the NOPR. Discussion of these inputs and methods follows 
the table. See chapter 10 of the NOPR TSD for further details.

   Table IV.14--Summary of Inputs and Methods for the National Impact
                                Analysis
------------------------------------------------------------------------
            Inputs                               Method
------------------------------------------------------------------------
Shipments....................  Annual shipments from shipments model.
Compliance Date of Standard..  2027.
Efficiency Trends............  No trend assumed.
Annual Energy Consumption per  Calculated for each efficiency level
 Unit.                          based on inputs from energy use
                                analysis.
Total Installed Cost per Unit  Prices for the year of compliance are
                                calculated in the LCC analysis. Prices
                                in subsequent years are calculated
                                incorporating price learning based on
                                historical data.
Annual Energy Cost per Unit..  Calculated for each efficiency level
                                using the energy use per unit, and
                                electricity prices and trends.
Repair and Maintenance Cost    Annual repair costs from LCC.
 per Unit.
Energy Price Trends..........  AEO2022 projections to 2050 and fixed at
                                2050 thereafter.
Energy Site-to-Primary and     A time-series conversion factor based on
 FFC Conversion.                AEO2022.
Discount Rate................  3 percent and 7 percent.
Present Year.................  2022.
------------------------------------------------------------------------


[[Page 12487]]

1. Product 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.F.9 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 (2027). 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.
    In the absence of data on trends in efficiency, DOE assumed no 
efficiency trend over the analysis period for both the no-new-standards 
and standards cases. For a given case, market shares by efficiency 
level were held fixed to their 2027 distribution.
    DOE requests comment on its assumption of no efficiency trend and 
seeks historical product efficiency data.
2. National Energy Savings
    The NES analysis involves a comparison of national energy 
consumption of the considered products between each potential standards 
case (``TSL'') 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.
    In this NOPR analysis, DOE analyzed the energy and economic impacts 
of a potential standard on all product classes in the scope of 
refrigerators, refrigerator-freezers, and freezers. Non-representative 
product classes (i.e., those not analyzed in the engineering, energy-
use, and LCC analyses) are scaled using results for the analyzed 
product class that best represents each non-representative product 
class. For non-representative freestanding product classes, energy use 
values are scaled by applying the ratio of the current Federal standard 
baseline between the two product classes at a fixed volume. For non-
representative built-in product classes, DOE developed energy scalars 
using the most similar freestanding representative product class and 
assumed a 5 percent reduction in the increase in efficiency at each EL 
relative to the corresponding EL for the freestanding product class. 
For example, a 10 percent reduction in energy use for PC 3 would 
correspond to a 5 percent reduction for PC3-BI). DOE assumes the 
incremental cost between efficiency levels is the same for 
representative and non-representative product classes. See chapter 10 
of the NOPR TSD for more details.
    AHAM stated DOE's use of compact product classes 11 and 11A as a 
proxy for product classes 13 and 13A is inappropriate; classes 11 and 
11A are manual defrost products and 13 and 13A are automatic defrost 
products, meaning they are totally different products and must be 
treated as such. AHAM stated, therefore, DOE should analyze class 11/
11A and 13/13A separately. (AHAM, No. 31, p. 4-5)
    DOE agrees that product class 11/11A is not a representative proxy 
for product class 13/13A. As described in chapter 10 of the October 
2021 Preliminary Analysis TSD, DOE used product class 18 as a proxy for 
product classes 13/13A in the preliminary analysis. In this NOPR, DOE 
conducted an engineering analysis for product class 17, compact upright 
freezers with automatic defrost, which shares a similar product 
architecture with other compact, automatic defrost product classes such 
as product class 13/13A. Given the similarities, DOE used product class 
17 as a proxy for product class 13/13A in this NOPR. DOE also updated 
its approach to use product class 17 as a proxy for product classes 14 
and 15, which, like 13/13A, also use automatic defrost. See chapter 10 
of this NOPR TSD for details.
    DOE requests comment on assumptions made in the energy use scaling 
for non-representative product classes in the National Impacts 
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. DOE did not find any 
data on the rebound effect specific to refrigerators that would 
indicate that consumers would alter their utilization of their product 
as a result of an increase in efficiency. DOE assumed a rebound rate of 
0.
    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 national impact analyses 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 \54\ 
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 NOPR TSD.
---------------------------------------------------------------------------

    \54\ For more information on NEMS, refer to The National Energy 
Modeling System: An Overview 2018, DOE/EIA-0581(2018), April 2019. 
Available at www.eia.gov/outlooks/aeo/nems/documentation/ (last 
accessed July 26, 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.F.2 of this document, DOE developed 
refrigerators, refrigerator-freezers, and freezers price trends based 
on an experience curve calculated using historical PPI data. For 
efficiency levels with a single-speed

[[Page 12488]]

compressor, DOE applied a price trend developed using the ``household 
refrigerator and home freezer manufacturing'' PPI to the entire cost of 
the unit. For efficiency levels with a variable-speed compressor, DOE 
applied a price trend developed from the ``semiconductors and related 
device manufacturing'' PPI to the cost associated with the electronics 
used to control the variable-speed compressor and the same price trend 
used for single-speed compressor units to the non-controls portion of 
the cost of the unit. By 2056, which is the end date of the projection 
period, the average (inflation-adjusted) price of single-speed 
compressor refrigerators, refrigerator-freezers, and freezers is 
projected to drop 34 percent and the average price of refrigerators, 
refrigerator-freezers, and freezers with a variable-speed compressor is 
projected to drop about 35 percent relative to 2027, the compliance 
year. DOE's projection of product prices is described in appendix 10C 
of the NOPR TSD.
    To evaluate the effect of uncertainty regarding the price trend 
estimates, DOE investigated the impact of different product price 
projections on the consumer NPV for the considered TSLs for 
refrigerators, refrigerator-freezers, and freezers. In addition to the 
default price trend, DOE considered high and low-price-decline 
sensitivity cases. For the single-speed compressor refrigerators, 
refrigerator-freezers, and freezers and the non-variable-speed controls 
portion of refrigerators, refrigerator-freezers, and freezers, DOE 
estimated the high price decline and the low-price-decline scenarios 
based on household refrigerator and home freezer PPI data limited to 
the period between the period 1981-2008 and 2009-2021, respectively. 
For the variable-speed controls portion of refrigerators, refrigerator-
freezers, and freezers, DOE estimated the high price decline and the 
low-price-decline scenarios based on an exponential trend line fit of 
the semiconductor PPI between the period 1994-2021 and 1967-1993, 
respectively. The derivation of these price trends and the results of 
these sensitivity cases are described in appendix 10C of the NOPR TSD.
    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. To estimate energy 
prices in future years, DOE multiplied the average regional energy 
prices by the projection of annual national-average residential and 
commercial energy price changes in the reference case from AEO 2022, 
which has an end year of 2050. To estimate price trends after 2050, DOE 
used the average annual rate of change in prices from 2020 through 
2050. As part of the NIA, DOE also analyzed scenarios that used inputs 
from variants of the AEO 2022 reference case that have lower and higher 
economic growth. Those cases have lower and higher energy price trends 
compared to the reference case. NIA results based on these cases are 
presented in appendix 10C of the NOPR TSD.
    In calculating the NPV, DOE multiplies the net savings in future 
years by a discount factor to determine their present value. For this 
NOPR, 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.\55\ 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.
---------------------------------------------------------------------------

    \55\ United States Office of Management and Budget. Circular A-
4: Regulatory Analysis. September 17, 2003. Section E. Available at 
https://www.whitehouse.gov/wp-content/uploads/legacy_drupal_files/omb/circulars/A4/a-4.pdf (last accessed January 9, 2023).
---------------------------------------------------------------------------

I. Consumer Subgroup Analysis

    In analyzing the potential impact of new or amended energy 
conservation standards on consumers, DOE evaluates the impact on 
identifiable subgroups of consumers that may be disproportionately 
affected by a new or amended national standard. The purpose of a 
subgroup analysis is to determine the extent of any such 
disproportional impacts. DOE evaluates impacts on particular subgroups 
of consumers by analyzing the LCC impacts and PBP for those particular 
consumers from alternative standard levels.
    For this NOPR, DOE analyzed the impacts of the considered standard 
levels on low-income households and, for product class 11A, on small 
businesses. For low-income households, the analysis used a subset of 
the RECS 2015 sample composed of low-income households. DOE separately 
analyzed different groups in the low-income household sample using data 
from RECS on home ownership status and on who pays the electricity 
bill. Low-income homeowners are analyzed equivalently to how they are 
analyzed in the standard LCC analysis. Low-income renters who do not 
pay their electricity bill are assumed to not be impacted by any new or 
amended standards. In this case, the landlord purchases the appliance 
and pays its operating costs, so is effectively the consumer and the 
renter is not impacted. Low-income renters who do pay their electricity 
bill are assumed to incur no first cost. DOE made this assumption to 
acknowledge that the vast majority of low-income renters will not pay 
to have their refrigerator replaced (that would be up to the landlord).
    AHAM stated that DOE needs to look separately at the effects on 
renters, and especially low-income renters. (AHAM, No. 42 at p. 21) As 
stated previously, DOE has analyzed low-income renters separately from 
low-income homeowners to account for differences in the responsibility 
for refrigerator, refrigerator-freezer, and freezer purchase and 
operating costs for renters versus owners.
    DOE notes that RECS 2015 indicates that less than 5 percent of low-
income households only have a single compact refrigerator and/or 
freezer. Because this is the only refrigeration product in the 
household, DOE assumed that the landlord typically supplies the 
product. Additionally, RECS 2015 indicates that less than 5 percent of 
low-income households have a refrigeration product that would be 
categorized into PC 5, PC 5BI, or PC 5A. As a result, DOE did not do a 
low-income subgroup analysis on product classes 5, 5BI, 5A, 11A, 17, 
and 18.
    For small businesses, DOE used the same sample from CBECS 2018 that 
was used in the standard LCC analysis, but used discount rates specific 
to small businesses. DOE used the LCC and PBP model to estimate the 
impacts of the considered efficiency levels on these subgroups.
    Chapter 11 in the NOPR TSD describes the consumer subgroup 
analysis.
    DOE requests comment on the overall methodology and results of the 
consumer subgroup analysis.
    In response to the preliminary analysis, AHAM stated that the 
increase in first cost will disproportionately disadvantage low-income 
households, and that increased prices due to new or amended standards 
that eliminate low-price top-mount refrigerators would fall most 
heavily on low-income households. (AHAM, No. 42 at p. 16) As

[[Page 12489]]

described in section V.B.1.b of this document, DOE found that low-
income households typically have higher LCC savings and lower payback 
periods when compared to the full consumer sample. This result is due 
to the fact that most low-income renters are not likely to incur the 
purchase cost of standards-compliant products, but they would still 
reap the benefits from savings in energy costs.

J. Manufacturer Impact Analysis

1. Overview
    DOE performed an MIA to estimate the financial impacts of amended 
energy conservation standards on manufacturers of refrigerators, 
refrigerator-freezers, and freezers and to estimate the potential 
impacts of such standards on direct employment and manufacturing 
capacity. The MIA has both quantitative and qualitative aspects and 
includes analyses of projected industry cash flows, the INPV, 
investments in research and development (``R&D'') and manufacturing 
capital, and domestic manufacturing employment. Additionally, the MIA 
seeks to determine how amended energy conservation standards might 
affect manufacturing employment, capacity, and competition, as well as 
how standards contribute to overall regulatory burden. Finally, the MIA 
serves to identify any disproportionate impacts on manufacturer 
subgroups, including small business manufacturers.
    The quantitative part of the MIA primarily relies on the Government 
Regulatory Impact Model (``GRIM''), an industry cash flow model with 
inputs specific to this rulemaking. The key GRIM inputs include data on 
the industry cost structure, unit production costs, product shipments, 
manufacturer markups, and investments in R&D and manufacturing capital 
required to produce compliant products. The key GRIM outputs are the 
INPV, which is the sum of industry annual cash flows over the analysis 
period, discounted using the industry-weighted average cost of capital, 
and the impact to domestic manufacturing employment. The model uses 
standard accounting principles to estimate the impacts of more 
stringent energy conservation standards on a given industry by 
comparing changes in INPV and domestic manufacturing employment between 
a no-new-standards case and the various TSLs. To capture the 
uncertainty relating to manufacturer pricing strategies following 
amended standards, the GRIM estimates a range of possible impacts under 
different scenarios.
    The qualitative part of the MIA addresses manufacturer 
characteristics and market trends. Specifically, the MIA considers such 
factors as a potential standard's impact on manufacturing capacity, 
competition within the industry, the cumulative impact of other DOE and 
non-DOE regulations, and impacts on manufacturer subgroups. The 
complete MIA is outlined in chapter 12 of the NOPR TSD.
    DOE conducted the MIA for this proposed rulemaking in three phases. 
In Phase 1 of the MIA, DOE prepared a profile of the refrigerator, 
refrigerator-freezer, and freezer manufacturing industry based on the 
market and technology assessment and publicly available information. 
This included a top-down analysis of refrigerator, refrigerator-
freezer, and freezer manufacturers that DOE used to derive preliminary 
financial inputs for the GRIM (e.g., revenues; materials, labor, 
overhead, and depreciation expenses; selling, general, and 
administrative expenses (``SG&A''); and R&D expenses). DOE also used 
public sources of information to further calibrate its initial 
characterization of the refrigerator, refrigerator-freezer, and freezer 
manufacturing industry, including company filings of form 10-K from the 
SEC,\56\ corporate annual reports, the U.S. Census Bureau's Annual 
Survey of Manufactures (``ASM''),\57\ and reports from Dun & 
Bradstreet.\58\
---------------------------------------------------------------------------

    \56\ U.S. Securities and Exchange Commission, Electronic Data 
Gathering, Analysis, and Retrieval (EDGAR) system. Available at 
www.sec.gov/edgar/search/ (last accessed July 1, 2022).
    \57\ U.S. Census Bureau, Annual Survey of Manufactures. 
``Summary Statistics for Industry Groups and Industries in the U.S. 
(2020).'' Available at: www.census.gov/data/tables/time-series/econ/asm/2018-2020-asm.html (Last accessed July 15, 2022).
    \58\ The Dun & Bradstreet Hoovers login is available at: 
app.dnbhoovers.com (Last accessed July 15, 2022).
---------------------------------------------------------------------------

    In Phase 2 of the MIA, DOE prepared a framework industry cash-flow 
analysis to quantify the potential impacts of amended energy 
conservation standards. The GRIM uses several factors to determine a 
series of annual cash flows starting with the announcement of the 
standard and extending over a 30-year period following the compliance 
date of the standard. These factors include annual expected revenues, 
costs of sales, SG&A and R&D expenses, taxes, and capital expenditures. 
In general, energy conservation standards can affect manufacturer cash 
flow in three distinct ways: (1) creating a need for increased 
investment, (2) raising production costs per unit, and (3) altering 
revenue due to higher per-unit prices and changes in sales volumes.
    In addition, during Phase 2, DOE developed interview guides to 
distribute to manufacturers of refrigerators, refrigerator-freezers, 
and freezers in order to develop other key GRIM inputs, including 
product and capital conversion costs, and to gather additional 
information on the anticipated effects of energy conservation standards 
on revenues, direct employment, capital assets, industry 
competitiveness, and manufacturer subgroups.
    In Phase 3 of the MIA, DOE conducted structured, detailed 
interviews with representative manufacturers. During these interviews, 
DOE discussed engineering, manufacturing, procurement, and financial 
topics to validate assumptions used in the GRIM and to identify key 
issues or concerns. See section IV.J.3 of this document for a 
description of the key issues raised by manufacturers during the 
interviews. As part of Phase 3, DOE also evaluated subgroups of 
manufacturers that may be disproportionately impacted by amended 
standards or that may not be accurately represented by the average cost 
assumptions used to develop the industry cash flow analysis. Such 
manufacturer subgroups may include small business manufacturers, low-
volume manufacturers (``LVMs''), niche players, and/or manufacturers 
exhibiting a cost structure that largely differs from the industry 
average. DOE identified two subgroups for a separate impact analysis: 
small business manufacturers and domestic LVMs. The small business 
subgroup is discussed in section VI.B, ``Review under the Regulatory 
Flexibility Act'' and in chapter 12 of the NOPR TSD. The domestic LVM 
subgroup is discussed in section V.B.2.d and in chapter 12 of the NOPR 
TSD.
2. Government Regulatory Impact Model and Key Inputs
    DOE uses the GRIM to quantify the changes in cash flow due to 
amended standards that result in a higher or lower industry value. The 
GRIM uses a standard, annual discounted cash-flow analysis that 
incorporates manufacturer costs, manufacturer markups, shipments, and 
industry financial information as inputs. The GRIM models changes in 
costs, distribution of shipments, investments, and manufacturer margins 
that could result from an amended energy conservation standard. The 
GRIM spreadsheet uses

[[Page 12490]]

the inputs to arrive at a series of annual cash flows, beginning in 
2023 (the NOPR publication year) and continuing to 2056. DOE calculated 
INPVs by summing the stream of annual discounted cash flows during this 
period. For manufacturers of refrigerators, refrigerator-freezers, and 
freezers, DOE used a real discount rate of 9.1 percent, which was 
derived from industry financials and then modified according to 
feedback received during manufacturer interviews.
    The GRIM calculates cash flows using standard accounting principles 
and compares changes in INPV between the no-new-standards case and each 
standards case. The difference in INPV between the no-new-standards 
case and a standards case represents the financial impact of the 
amended energy conservation standard on manufacturers. As discussed 
previously, DOE developed critical GRIM inputs using a number of 
sources, including publicly available data, results of the engineering 
analysis and shipments analysis, and information gathered from industry 
stakeholders during the course of manufacturer interviews. The GRIM 
results are presented in section V.B.2 of this document. Additional 
details about the GRIM, the discount rate, and other financial 
parameters can be found in chapter 12 of the NOPR TSD.
a. Manufacturer Production Costs
    Manufacturing more efficient equipment is typically more expensive 
than manufacturing baseline equipment due to the use of more complex 
components, which are typically more costly than baseline components. 
The changes in the MPCs of covered products can affect the revenues, 
gross margins, and cash flow of the industry. For a complete 
description of the MPCs, see chapter 5 of the NOPR TSD or section IV.C 
of this document.
b. Shipments Projections
    The GRIM estimates manufacturer revenues based on total unit 
shipment projections and the distribution of those shipments by 
efficiency level. Changes in sales volumes and efficiency mix over time 
can significantly affect manufacturer finances. For this analysis, the 
GRIM uses the NIA's annual shipment projections derived from the 
shipments analysis from 2023 (the NOPR publication year) to 2056 (the 
end year of the analysis period). See chapter 9 of the NOPR TSD for 
additional details or section IV.G of this document.
c. Product and Capital Conversion Costs
    Amended energy conservation standards could cause manufacturers to 
incur conversion costs to bring their production facilities and 
equipment designs into compliance. DOE evaluated the level of 
conversion-related expenditures that would be needed to comply with 
each considered efficiency level in each product class. For the MIA, 
DOE classified these conversion costs into two major groups: (1) 
product conversion costs; and (2) capital conversion costs. Product 
conversion costs are investments in research, development, testing, 
marketing, and other non-capitalized costs necessary to make product 
designs comply with amended energy conservation standards. Capital 
conversion costs are investments in property, plant, and equipment 
necessary to adapt or change existing production facilities such that 
new compliant product designs can be fabricated and assembled.
Product Conversion Costs
    DOE based its estimates of the product conversion costs necessary 
to meet the varying efficiency levels on information from manufacturer 
interviews, the design paths analyzed in the engineering analysis, and 
market share and model count information. Generally, manufacturers 
preferred to meet amended standards with design options that were 
direct and relatively straight-forward component swaps, such as 
incrementally more efficiency compressors. However, at higher 
efficiency levels, manufacturers anticipated the need for platform 
redesigns. Efficiency levels that significantly altered cabinet 
construction would require very large investments to update designs. 
Manufacturers noted that increasing foam thickness would require 
complete redesign of the cabinet, and potentially, the liner and 
shelving, should there be changes in interior volume. Additionally, 
extensive use of VIPs would require redesign of the cabinet to maximize 
the benefits of VIPs.
    Based on manufacturer feedback, DOE also estimated ``re-flooring'' 
costs associated with replacing obsolete display models in big-box 
stores (e.g., Lowe's, Home Depot, Best Buy) due to more stringent 
standards. Some manufacturers stated that with a new product release, 
big-box retailers discount outdated display models, and manufacturers 
share any losses associated with discounting the retail price. The 
estimated re-flooring costs for each efficiency level were incorporated 
into the product conversion cost estimates, as DOE modeled the re-
flooring costs as a marketing expense. Manufacturer data was aggregated 
to protect confidential information.
    DOE interviewed manufacturers accounting for approximately 81 
percent of domestic refrigerator, refrigerator-freezer, and freezer 
shipments. DOE scaled product conversion costs by model counts to 
account for the portion of companies that were not interviewed. In 
manufacturer interviews, DOE received feedback on the analyzed product 
classes. For non-represented product classes, for which there was less 
available data, DOE used model counts to scale the product conversion 
cost estimates for analyzed product classes. See chapter 10 of the NOPR 
TSD for details on the mapping of analyzed product classes to non-
represented product classes. See chapter 12 of the NOPR TSD for details 
on product conversion costs.
Capital Conversion Costs
    DOE relied on information derived from manufacturer interviews and 
the engineering analysis to evaluate the level of capital conversion 
costs manufacturers would likely incur at the considered standard 
levels. During the interviews, manufacturers provided estimates and 
descriptions of the required tooling and plant changes that would be 
necessary to upgrade product lines to meet potential efficiency levels. 
Based on these inputs, DOE modeled incremental capital conversion costs 
for efficiency levels that could be reached with individual components 
swaps. However, based on feedback, DOE modeled major capital conversion 
costs when manufacturers would have to redesign their existing product 
platforms. DOE used information from manufacturer interviews to 
determine the cost of the manufacturing equipment and tooling necessary 
to implement complete redesigns.
    Increases in foam thickness require either reductions to interior 
volume or increases to exterior volume. Since most refrigerators, 
refrigerator-freezers, and freezers must fit standard widths, increases 
in foam thickness could result in the loss of interior volume. The 
reduction of interior volume has significant consequences for 
manufacturing. In addition to redesigning the cabinet to increase the 
effectiveness of insulation, manufacturers must update all designs and 
tooling associated with the interior of the product. This could include 
the liner, shelving, drawers, and doors. Manufacturers would need to 
invest in significant new tooling to accommodate the changes in 
dimensions.
    To minimize reductions to interior volume, manufacturers may choose 
to adopt VIP technology. Extensive incorporation of VIPs into designs

[[Page 12491]]

require significant upfront capital due to differences in the handling, 
storing, and manufacturing of VIPs as compared to typical polyurethane 
foams. VIPs are relatively fragile and must be protected from punctures 
and rough handling. If VIPs have leaks of any size, the panel will 
eventually lose much of its thermal insulative properties and 
structural strength. If already installed within a cabinet wall, a 
punctured VIP may significantly reduce the structural strength of the 
refrigerator, refrigerator-freezer, or freezer cabinet. As a result, 
VIPs require cautious handling during the manufacturing process. 
Manufacturers noted the need to allocate special warehouse space in 
order to ensure the VIPs are not jostled or roughly handled in the 
manufacturing environment. Furthermore, manufacturers anticipated the 
need for expansion of warehouse space to accommodate the storage of 
VIPs. VIP panels require significantly more warehouse space than the 
polyurethane foams currently used in most refrigerators, refrigerator-
freezers, and freezers. The application of VIPs can be challenging and 
requires significant investment in hard-tooling or robotic systems to 
ensure the panels are positioned properly within the cabinet or door. 
Manufacturers noted that producing cabinets with VIPs are much more 
labor and time intensive than producing cabinets with typical 
polyurethane foams. Particularly in high volume factories, which can 
produce over a million refrigerator-freezers per year, the increase in 
production time associated in increased VIP usage would necessitate 
additional investment in manufacturing capacity to meet demand. The 
cost of extending production lines varies greatly by manufacturer, as 
it depends heavily on floor space availability in and around existing 
manufacturing plants.
    Higher volume manufacturers would generally have higher investments 
as they have more production lines and greater production capacity. For 
manufacturers of both PC 5 (``refrigerator-freezer--automatic defrost 
with bottom-mounted freezer without an automatic ice maker'') and PC 5A 
(``refrigerator-freezer--automatic defrost with bottom-mounted freezer 
with through-the-door ice service''), cabinet changes in one product 
class would likely necessitate improvements in the other product class 
as they often share the same architecture, tooling and production 
lines.
    DOE estimated industry capital conversion costs by extrapolating 
the interviewed manufacturers' capital conversion costs for each 
product class to account for the market share of companies that were 
not interviewed. DOE used the shipments analysis to scale the capital 
conversion cost estimates of the analyzed product class to account for 
the non-represented product class. See chapter 12 of the NOPR TSD for 
additional details on capital conversion costs.
    DOE acknowledges that manufacturers may follow different design 
paths to reach the various efficiency levels analyzed. An individual 
manufacturer's investments depend on a range of factors, including the 
company's current product offerings and product platforms, existing 
production facilities and infrastructure, and make vs. buy decisions 
for components. DOE's conversion cost methodology incorporated feedback 
from all manufacturers that took part in interviews and extrapolated 
industry values. While industry average values may not represent any 
single manufacturer, DOE's modeling provides reasonable estimates of 
industry-level investments.
    In general, DOE assumes all conversion-related investments occur 
between the year of publication of the final rule and the year by which 
manufacturers must comply with the new standard. The conversion cost 
figures used in the GRIM can be found in section V.B.2 of this 
document. For additional information on the estimated capital and 
product conversion costs, see chapter 12 of the NOPR TSD.
d. Manufacturer Markup Scenarios
    MSPs include direct manufacturing production costs (i.e., labor, 
materials, and overhead estimated in DOE's MPCs) and all non-production 
costs (i.e., SG&A, R&D, and interest), along with profit. To calculate 
the MSPs in the GRIM, DOE applied manufacturer markups to the MPCs 
estimated in the engineering analysis for each product class and 
efficiency level. Modifying these manufacturer markups in the standards 
case yields different sets of impacts on manufacturers. For the MIA, 
DOE modeled two standards-case scenarios to represent uncertainty 
regarding the potential impacts on prices and profitability for 
manufacturers following the implementation of amended energy 
conservation standards: (1) a preservation of gross margin percentage 
scenario; and (2) a preservation of operating profit scenario. These 
scenarios lead to different manufacturer markup values that, when 
applied to the MPCs, result in varying revenue and cash flow impacts.
    Under the preservation of gross margin percentage scenario, DOE 
applied a single uniform ``gross margin percentage'' markup across all 
efficiency levels, which assumes that manufacturers would be able to 
maintain the same amount of profit as a percentage of revenues at all 
efficiency levels within a product class. As manufacturer production 
costs increase with efficiency, this scenario implies that the per-unit 
dollar profit will increase. DOE assumed a gross margin percentage of 
21 percent for all freestanding product classes and 29 percent for all 
built-in product classes.\59\ Manufacturers tend to believe it is 
optimistic to assume that they would be able to maintain the same gross 
margin percentage as their production costs increase, particularly for 
minimally efficient products. Therefore, this scenario represents a 
high bound of industry profitability under an amended energy 
conservation standard.
---------------------------------------------------------------------------

    \59\ The gross margin percentages of 21 percent and 29 percent 
are based on manufacturer markups of 1.26 and 1.40 percent, 
respectively.
---------------------------------------------------------------------------

    In the preservation of operating profit scenario, as the cost of 
production goes up under a standards case, manufacturers are generally 
required to reduce their manufacturer markups to a level that maintains 
base-case operating profit. DOE implemented this scenario in the GRIM 
by lowering the manufacturer markups at each TSL to yield approximately 
the same earnings before interest and taxes in the standards case as in 
the no-new-standards case in the year after the expected compliance 
date of the amended standards. The implicit assumption behind this 
scenario is that the industry can only maintain its operating profit in 
absolute dollars after the standard takes effect.
    A comparison of industry financial impacts under the two scenarios 
is presented in section V.B.2.a of this document.
3. Manufacturer Interviews
    DOE interviewed manufacturers representing approximately 81 percent 
of domestic refrigerator, refrigerator-freezer, and freezer shipments. 
Participants included domestic-based and foreign-based original 
equipment manufacturers (``OEMs'') as well as importers. Participants 
included manufacturers with a wide range of market shares and a variety 
of product class offerings.
    In interviews, DOE asked manufacturers to describe their major 
concerns regarding potential more stringent energy conservation 
standards

[[Page 12492]]

for refrigerators, refrigerator-freezers, and freezers. The following 
section highlights manufacturer concerns that helped inform the 
projected potential impacts of an amended standard on the industry. 
Manufacturer interviews are conducted under nondisclosure agreements 
(``NDAs''), so DOE does not document these discussions in the same way 
that it does public comments in the comment summaries and DOE's 
responses throughout the rest of this document.
a. Specialty Doors and Multiple Door Designs
    Some manufacturers recommended DOE consider specialty door and 
multi-door designs in the NOPR analysis by creating new product classes 
or allowances for the additional energy consumption associated with 
implementing these features. These manufacturers stated that their 
market research indicates that multi-door, door-in-door, and 
transparent door designs provide utility to the consumer. For instance, 
manufacturers stated that multi-door configurations allow for the added 
climate control options, which can aid better food preservation. For 
transparent doors, manufacturers noted that some consumers enjoy the 
aesthetics as well as the ability to view the contents of the 
refrigerator without opening the door. These manufacturers asserted 
that the increasing prevalence of alternative door designs further 
supports that these features provide added value to consumers. Some 
manufacturers expressed concern that more stringent standards would 
limit their ability to offer these consumer features. These 
manufacturers stated that they currently must pair alternative door 
designs with high-efficiency technology options, such as variable-speed 
compressors and VIPs, just to meet the current DOE baseline. 
Manufacturers noted that more stringent standards would be particularly 
problematic for freestanding and built-in versions of both bottom-mount 
(French door) and side-by-side configurations. Some manufacturers also 
noted that high-end compact refrigerators, which are typically fully 
integrated into kitchen cabinetry (sometimes referred to as 
``undercounter'' refrigerators) have transparent door designs.
b. Viability of Low-Cost Standard-Size Refrigerator-Freezers
    Several manufacturers stated that adopting more stringent standards 
for certain product classes would increase upfront costs and negatively 
impact low-income consumers. These manufacturers had concerns about 
more stringent standards for standard-size top-mount refrigerator-
freezers (product class 3). Manufacturers stated that top-mounts are 
typically the most affordable standard-size refrigerator-freezer 
option, and as a result, are often purchased by cost-conscious 
consumers. Specifically, manufacturers noted that efficiency levels 
requiring the use of variable-speed compressors or VIPs would make 
maintaining a range of entry-level price points very challenging. These 
manufacturers suggested that the higher upfront cost could impact 
consumers' purchasing decisions. For example, in lieu of purchasing a 
new refrigerator-freezer, consumers may opt to repair their existing 
standard-size refrigerator-freezer, turn to the pre-owned market, 
participate in a rent-to-own program, or purchase multiple compact 
refrigerator-freezer models. Multiple manufacturers supported including 
a 5-percent ``gap fill'' efficiency level for standard-size top-mount 
products, which would require minimal redesign effort.
c. Built-in Product Classes
    Some manufacturers urged DOE to conduct a separate analysis for 
built-in product classes. These manufacturers asserted that built-in 
products face design constraints related to standardized installation 
dimensions and restricted airflow. These manufacturers stated that 
because of these differences, freestanding products cannot be used as 
proxies for built-in products. Some manufacturers also noted that 
built-in products appeal to a niche consumer segment and have notably 
different price points compared to their freestanding counterparts.
d. Supply Chain Constraints
    In interviews, some manufacturers expressed concerns about the 
ongoing supply chain constraints related to sourcing high-quality 
components (e.g., variable-speed compressors, VIPs), microprocessors 
and electronics, and hydrofluoro-olefin (``HFO'') foam. More stringent 
standards, particularly at TSLs requiring a large-scale implementation 
of variable-speed compressors, would require that industry source more 
high-efficiency compressors and electronic components, which are 
already difficult to secure. As standards get more stringent, some 
manufacturers also indicated they would try to source higher-
performance foam for insulation, which would increase demand for 
certain blowing agents. If these supply constraints continue through 
the end of the conversion period, industry could face production 
capacity constraints.
4. Discussion of MIA Comments
    In response to the October 2021 Preliminary Analysis, Sub-Zero 
detailed some of the challenges they face as a smaller manufacturer of 
major appliances. Sub-Zero noted that they offer a wide range of 
products in order to compete and match product offerings of larger, 
global appliance companies. Sub-Zero further noted that the redesign 
effort required to meet more stringent standards does not scale with 
production volumes. As a result, smaller manufacturers with lower 
staffing levels must work almost exclusively on redesigning products to 
meet amended standards, which impedes their ability to design products 
to meet other consumer requirements. (Sub-Zero, No. 34 at p. 2)
    DOE understands that the level of effort required to redesign a 
model is independent of production volume. DOE's product conversion 
cost estimates reflect this feedback, which are based on aggregated 
manufacturer feedback from confidential interviews and unique basic 
model listings. Furthermore, DOE explores impacts of potential amended 
standards on the domestic LVM subgroup in section V.B.2.d of this 
document.
    Sub-Zero noted that regulations restricting the use of certain 
refrigerants and blowing agents necessitated significant capital 
investment to update manufacturing equipment and production facilities 
for refrigerators, freezers, and miscellaneous refrigeration products. 
The commenter stated the timing of different regulations increased the 
burden. (Sub-Zero, No. 34 at pp. 2-3)
    In NOPR interviews, most manufacturers stated that they have 
transitioned their consumer refrigeration products to make use of 
alternative refrigerants (e.g., R-600a) and low-global warming 
potential (``GWP'') blowing agents (e.g., HFO or cyclopentane), in 
accordance with regulations enacted by states.\60\ However, some 
manufacturers of built-in products noted that they are still in the 
process of transitioning their products to make use of alternative

[[Page 12493]]

refrigerants, namely R-600a. These manufacturers stated that they aim 
to complete the transition by January 1, 2023, due to State regulations 
restricting the use of high-GWP refrigerants in built-in products.\61\
---------------------------------------------------------------------------

    \60\ Shortly after the D.C. Circuit partially vacated the SNAP 
Rule 20 (see Mexichem Fluor, Inc. v. EPA, 866 F.3d 451, 464 (D.C. 
Cir. 2017)), the same court issued a similar partial vacatur for 
portions of the SNAP Rule 21. See Mexichem Fluor, Inc. v. EPA, 760 
Fed. Appx. 6 (Mem) (per curiam) (D.C. Cir. 2019). In lieu of a 
national ban on HFC refrigerants, the California Air Resources Board 
(CARB) adopted an agency regulation for new refrigeration equipment 
that implemented the majority of the HFC prohibitions in SNAP Rules 
20 and 21. Several states have since also adopted SNAP-like 
prohibitions for certain substances in refrigeration and foam end-
uses.
    \61\ California adopted regulations prohibiting the use of 
certain substances in refrigeration and foam end-uses. Specifically, 
California, among other states, will prohibit the use of certain 
refrigerants in built-in residential consumer refrigeration products 
as of January 1, 2023. See California Code of Regulations, Title 17, 
Division 3, Chapter 1, Subchapter 10 Climate Change, Article 4, 
under Section 95374 Table 2. Available at: ww2.arb.ca.gov/sites/default/files/barcu/regact/2020/hfc2020/frorevised.pdf.
---------------------------------------------------------------------------

    As described in section IV.J.2.c of this document, DOE expects that 
all conversion-related investments occur between the year of 
publication of the final rule and the year by which manufacturers must 
comply with the new standard. DOE estimates issuance of a final rule by 
the end of 2023. Therefore, for purposes of its analysis, DOE used 2027 
as the first year of compliance with any amended standards for 
refrigerators, refrigerator-freezers, and freezers. Therefore, DOE 
expects that industry would have fully transitioned the products 
covered by this proposed rulemaking to make use of R-600a prior to any 
publication of a final rule. See section IV.A.2 for additional details 
on how DOE considered the treatment of R-600a as a design option in the 
NOPR analysis.
    Regarding the timing of this energy conservation rulemakings, DOE 
has statutory requirements under EPCA. For refrigerators, refrigerator-
freezers, and freezers, EPCA requires that not later than 6 years after 
issuance of any final rule establishing or amending a standard, DOE 
must publish either a notice of determination that standards for the 
product do not need to be amended, or a notice of proposed rulemaking 
including new proposed energy conservation standards (proceeding to a 
final rule, as appropriate). (42 U.S.C. 6295(m))

K. Emissions Analysis

    The emissions analysis consists of two components. The first 
component estimates the effect of potential energy conservation 
standards on power sector and site (where applicable) combustion 
emissions of CO2, NOX, SO2, and Hg. 
The second component estimates the impacts of potential standards on 
emissions of two additional greenhouse gases, CH4 and 
N2O, as well as the reductions to emissions of other gases 
due to ``upstream'' activities in the fuel production chain. These 
upstream activities comprise extraction, processing, and transporting 
fuels to the site of combustion.
    The analysis of electric power sector emissions of CO2, 
NOX, SO2, and Hg uses emissions factors intended 
to represent the marginal impacts of the change in electricity 
consumption associated with amended or new standards. The methodology 
is based on results published for the AEO, including a set of side 
cases that implement a variety of efficiency-related policies. The 
methodology is described in appendix 13A in the NOPR TSD. The analysis 
presented in this notice uses projections from AEO2022. Power sector 
emissions of CH4 and N2O from fuel combustion are 
estimated using Emission Factors for Greenhouse Gas Inventories 
published by the Environmental Protection Agency (EPA).\62\
---------------------------------------------------------------------------

    \62\ Available at www.epa.gov/sites/production/files/2021-04/documents/emission-factors_apr2021.pdf (last accessed July 12, 
2021).
---------------------------------------------------------------------------

    FFC upstream emissions, which include emissions from fuel 
combustion during extraction, processing, and transportation of fuels, 
and ``fugitive'' emissions (direct leakage to the atmosphere) of 
CH4 and CO2, are estimated based on the 
methodology described in chapter 15 of the NOPR TSD.
    The emissions intensity factors are expressed in terms of physical 
units per MWh or MMBtu of site energy savings. For power sector 
emissions, specific emissions intensity factors are calculated by 
sector and end use. Total emissions reductions are estimated using the 
energy savings calculated in the NIA.
1. Air Quality Regulations Incorporated in DOE's Analysis
    DOE's no-new-standards case for the electric power sector reflects 
the AEO, which incorporates the projected impacts of existing air 
quality regulations on emissions. AEO2022 generally represents current 
legislation and environmental regulations, including recent government 
actions, that were in place at the time of preparation of AEO2022, 
including the emissions control programs discussed in the following 
paragraphs.\63\
---------------------------------------------------------------------------

    \63\ For further information, see the Assumptions to AEO2022 
report that sets forth the major assumptions used to generate the 
projections in the Annual Energy Outlook. Available at www.eia.gov/outlooks/aeo/assumptions/ (last accessed June 22, 2022).
---------------------------------------------------------------------------

    SO2 emissions from affected electric generating units 
(``EGUs'') are subject to nationwide and regional emissions cap-and-
trade programs. Title IV of the Clean Air Act sets an annual emissions 
cap on SO2 for affected EGUs in the 48 contiguous States and 
the District of Columbia (DC). (42 U.S.C. 7651 et seq.) SO2 
emissions from numerous states in the eastern half of the United States 
are also limited under the Cross-State Air Pollution Rule (``CSAPR''). 
76 FR 48208 (Aug. 8, 2011). CSAPR requires these states to reduce 
certain emissions, including annual SO2 emissions, and went 
into effect as of January 1, 2015.\64\ AEO2022 incorporates 
implementation of CSAPR, including the update to the CSAPR ozone season 
program emission budgets and target dates issued in 2016. 81 FR 74504 
(Oct. 26, 2016). Compliance with CSAPR is flexible among EGUs and is 
enforced through the use of tradable emissions allowances. Under 
existing EPA regulations, any excess SO2 emissions 
allowances resulting from the lower electricity demand caused by the 
adoption of an efficiency standard could be used to permit offsetting 
increases in SO2 emissions by another regulated EGU.
---------------------------------------------------------------------------

    \64\ CSAPR requires states to address annual emissions of 
SO2 and NOX, precursors to the formation of 
fine particulate matter (PM2.5) pollution, in order to 
address the interstate transport of pollution with respect to the 
1997 and 2006 PM2.5 National Ambient Air Quality 
Standards (``NAAQS''). CSAPR also requires certain states to address 
the ozone season (May-September) emissions of NOX, a 
precursor to the formation of ozone pollution, in order to address 
the interstate transport of ozone pollution with respect to the 1997 
ozone NAAQS. 76 FR 48208 (Aug. 8, 2011). EPA subsequently issued a 
supplemental rule that included an additional five states in the 
CSAPR ozone season program; 76 FR 80760 (Dec. 27, 2011) 
(Supplemental Rule).
---------------------------------------------------------------------------

    However, beginning in 2016, SO2 emissions began to fall 
as a result of the Mercury and Air Toxics Standards (``MATS'') for 
power plants. 77 FR 9304 (Feb. 16, 2012). In the MATS final rule, EPA 
established a standard for hydrogen chloride as a surrogate for acid 
gas hazardous air pollutants (``HAP''), and also established a standard 
for SO2 (a non-HAP acid gas) as an alternative equivalent 
surrogate standard for acid gas HAP. The same controls are used to 
reduce HAP and non-HAP acid gas; thus, SO2 emissions are 
being reduced as a result of the control technologies installed on 
coal-fired power plants to comply with the MATS requirements for acid 
gas. In order to continue operating, coal power plants must have either 
flue gas desulfurization or dry sorbent injection systems installed. 
Both technologies, which are used to reduce acid gas emissions, also 
reduce SO2 emissions. Because of the emissions reductions 
under the MATS, it is unlikely that excess SO2 emissions 
allowances resulting from the lower electricity demand would be needed 
or

[[Page 12494]]

used to permit offsetting increases in SO2 emissions by 
another regulated EGU. Therefore, energy conservation standards that 
decrease electricity generation would generally reduce SO2 
emissions. DOE estimated SO2 emissions reduction using 
emissions factors based on AEO2022.
    CSAPR also established limits on NOX emissions for 
numerous states in the eastern half of the United States. Energy 
conservation standards would have little effect on NOX 
emissions in those states covered by CSAPR emissions limits if excess 
NOX emissions allowances resulting from the lower 
electricity demand could be used to permit offsetting increases in 
NOX emissions from other EGUs. In such case, NOx emissions 
would remain near the limit even if electricity generation goes down. A 
different case could possibly result, depending on the configuration of 
the power sector in the different regions and the need for allowances, 
such that NOX emissions might not remain at the limit in the 
case of lower electricity demand. In this case, energy conservation 
standards might reduce NOx emissions in covered states. Despite this 
possibility, DOE has chosen to be conservative in its analysis and has 
maintained the assumption that standards will not reduce NOX 
emissions in states covered by CSAPR. Energy conservation standards 
would be expected to reduce NOX emissions in the states not 
covered by CSAPR. DOE used AEO2022 data to derive NOX 
emissions factors for the group of states not covered by CSAPR.
    The MATS limit mercury emissions from power plants, but they do not 
include emissions caps and, as such, DOE's energy conservation 
standards would be expected to slightly reduce Hg emissions. DOE 
estimated mercury emissions reduction using emissions factors based on 
AEO2022, which incorporates the MATS.

L. Monetizing Emissions Impacts

    As part of the development of this proposed rule, for the purpose 
of complying with the requirements of Executive Order 12866, DOE 
considered the estimated monetary benefits from the reduced emissions 
of CO2, CH4, N2O, NOX, and 
SO2 that are expected to result from each of the TSLs 
considered. In order to make this calculation analogous to the 
calculation of the NPV of consumer benefit, DOE considered the reduced 
emissions expected to result over the lifetime of products shipped in 
the projection period for each TSL. This section summarizes the basis 
for the values used for monetizing the emissions benefits and presents 
the values considered in this NOPR.
    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. Among other things, the 
preliminary injunction enjoined the defendants in that case from 
``adopting, employing, treating as binding, or relying upon'' 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. As reflected in this proposed rule, 
DOE has reverted to its approach prior to the injunction and presents 
monetized greenhouse gas abatement benefits where appropriate and 
permissible under law.
    DOE requests comment on how to address the climate benefits and 
other non-monetized effects of the proposal.
1. Monetization of Greenhouse Gas Emissions
    DOE estimates the monetized benefits of the reductions in emissions 
of CO2, CH4, and N2O by using a 
measure of the SC of each pollutant (e.g., SC-CO2). These 
estimates represent the monetary value of the net harm to society 
associated with a marginal increase in emissions of these pollutants in 
a given year, or the benefit of avoiding that increase. These estimates 
are intended to include (but are not limited to) climate-change-related 
changes in net agricultural productivity, human health, property 
damages from increased flood risk, disruption of energy systems, risk 
of conflict, environmental migration, and the value of ecosystem 
services.
    DOE exercises its own judgment in presenting monetized climate 
benefits as recommended by applicable executive orders and DOE would 
reach the same conclusion presented in this proposed rulemaking in the 
absence of the social cost of greenhouse gases, including the February 
2021 Interim Estimates presented by the Interagency Working Group on 
the Social Cost of Greenhouse Gases. DOE estimated the global social 
benefits of CO2, CH4, and N2O 
reductions (i.e., SC-GHGs) using the estimates presented in the 
Technical Support Document: Social Cost of Carbon, Methane, and Nitrous 
Oxide Interim Estimates under Executive Order 13990, published in 
February 2021 by the IWG. The SC-GHGs is the monetary value of the net 
harm to society associated with a marginal increase in emissions in a 
given year, or the benefit of avoiding that increase. In principle, SC-
GHGs includes the value of all climate change impacts, including (but 
not limited to) changes in net agricultural productivity, human health 
effects, property damage from increased flood risk and natural 
disasters, disruption of energy systems, risk of conflict, 
environmental migration, and the value of ecosystem services. The SC-
GHGs therefore, reflects the societal value of reducing emissions of 
the gas in question by one metric ton. The SC-GHGs is the theoretically 
appropriate value to use in conducting benefit-cost analyses of 
policies that affect CO2, N2O, and CH4 
emissions. As a member of the IWG involved in the development of the 
February 2021 SC-GHG TSD, DOE agrees that the interim SC-GHG estimates 
represent the most appropriate estimate of the SC-GHG until revised 
estimates have been developed reflecting the latest, peer reviewed 
science.
    The SC-GHGs estimates presented here were developed over many 
years, using transparent process, peer reviewed methodologies, the best 
science available at the time of that process, and with input from the 
public. Specifically, in 2009, the IWG, that included the DOE and other 
executive branch agencies and offices was established to ensure that 
agencies were using the best available science and to promote 
consistency in the social cost of carbon (SC-CO2) values 
used across agencies. The IWG published SC-CO2 estimates in 
2010 that were developed from an ensemble of three widely cited 
integrated assessment models (IAMs) that estimate global climate 
damages using highly aggregated representations of climate processes 
and the global economy combined into a single modeling framework. The 
three IAMs were run using a common set of input assumptions in each 
model for future population, economic, and CO2 emissions 
growth, as well as equilibrium climate sensitivity--a measure of the 
globally averaged temperature response to increased atmospheric 
CO2 concentrations. These estimates were updated in 2013 
based on new versions of each IAM. In August 2016 the IWG published 
estimates of the social cost of methane (SC-CH4) and nitrous 
oxide (SC-N2O) using methodologies that are consistent with

[[Page 12495]]

the methodology underlying the SC-CO2 estimates. The 
modeling approach that extends the IWG SC-CO2 methodology to 
non-CO2 GHGs has undergone multiple stages of peer review. 
The SC-CH4 and SC-N2O estimates were developed by 
Marten et al.\65\ and underwent a standard double-blind peer review 
process prior to journal publication. In 2015, as part of the response 
to public comments received to a 2013 solicitation for comments on the 
SC-CO2 estimates, the IWG announced a National Academies of 
Sciences, Engineering, and Medicine review of the SC-CO2 
estimates to offer advice on how to approach future updates to ensure 
that the estimates continue to reflect the best available science and 
methodologies. In January 2017, the National Academies released their 
final report, Valuing Climate Damages: Updating Estimation of the 
Social Cost of Carbon Dioxide, and recommended specific criteria for 
future updates to the SC-CO2 estimates, a modeling framework 
to satisfy the specified criteria, and both near-term updates and 
longer-term research needs pertaining to various components of the 
estimation process (National Academies, 2017).\66\ Shortly thereafter, 
in March 2017, President Trump issued Executive Order 13783, which 
disbanded the IWG, withdrew the previous TSDs, and directed agencies to 
ensure SC-CO2 estimates used in regulatory analyses are 
consistent with the guidance contained in OMB's Circular A-4, 
``including with respect to the consideration of domestic versus 
international impacts and the consideration of appropriate discount 
rates'' (Executive Order (``E.O.'') 13783, section 5(c)). Benefit-cost 
analyses following E.O. 13783 used SC-GHG estimates that attempted to 
focus on the U.S.-specific share of climate change damages as estimated 
by the models and were calculated using two discount rates recommended 
by Circular A-4, 3 percent and 7 percent. All other methodological 
decisions and model versions used in SC-GHG calculations remained the 
same as those used by the IWG in 2010 and 2013, respectively.
---------------------------------------------------------------------------

    \65\ Marten, A.L., E.A. Kopits, C.W. Griffiths, S.C. Newbold, 
and A. Wolverton. Incremental CH4 and N2O 
mitigation benefits consistent with the U.S. Government's SC-
CO2 estimates. Climate Policy. 2015. 15(2): pp. 272-298.
    \66\ National Academies of Sciences, Engineering, and Medicine. 
Valuing Climate Damages: Updating Estimation of the Social Cost of 
Carbon Dioxide. 2017. The National Academies Press: Washington, DC.
---------------------------------------------------------------------------

    On January 20, 2021, President Biden issued Executive Order 13990, 
which re-established the IWG and directed it to ensure that the U.S. 
Government's estimates of the social cost of carbon and other 
greenhouse gases reflect the best available science and the 
recommendations of the National Academies (2017). The IWG was tasked 
with first reviewing the SC-GHG estimates currently used in Federal 
analyses and publishing interim estimates within 30 days of the E.O. 
that reflect the full impact of GHG emissions, including by taking 
global damages into account. The interim SC-GHG estimates published in 
February 2021 are used here to estimate the climate benefits for this 
proposed rulemaking. The E.O. instructs the IWG to undertake a fuller 
update of the SC-GHG estimates by January 2022 that takes into 
consideration the advice of the National Academies (2017) and other 
recent scientific literature. The February 2021 SC-GHG TSD provides a 
complete discussion of the IWG's initial review conducted under 
E.O.13990. In particular, the IWG found that the SC-GHG estimates used 
under E.O. 13783 fail to reflect the full impact of GHG emissions in 
multiple ways.
    First, the IWG found that the SC-GHG estimates used under E.O. 
13783 fail to fully capture many climate impacts that affect the 
welfare of U.S. citizens and residents, and those impacts are better 
reflected by global measures of the SC-GHG. Examples of omitted effects 
from the E.O. 13783 estimates include direct effects on U.S. citizens, 
assets, and investments located abroad, supply chains, U.S. military 
assets and interests abroad, and tourism, and spillover pathways such 
as economic and political destabilization and global migration that can 
lead to adverse impacts on U.S. national security, public health, and 
humanitarian concerns. In addition, assessing the benefits of U.S. GHG 
mitigation activities requires consideration of how those actions may 
affect mitigation activities by other countries, as those international 
mitigation actions will provide a benefit to U.S. citizens and 
residents by mitigating climate impacts that affect U.S. citizens and 
residents. A wide range of scientific and economic experts have 
emphasized the issue of reciprocity as support for considering global 
damages of GHG emissions. If the United States does not consider 
impacts on other countries, it is difficult to convince other countries 
to consider the impacts of their emissions on the United States. The 
only way to achieve an efficient allocation of resources for emissions 
reduction on a global basis--and so benefit the U.S. and its citizens--
is for all countries to base their policies on global estimates of 
damages. As a member of the IWG involved in the development of the 
February 2021 SC-GHG TSD, DOE agrees with this assessment and, 
therefore, in this proposed rule DOE centers attention on a global 
measure of SC-GHG. This approach is the same as that taken in DOE 
regulatory analyses from 2012 through 2016. A robust estimate of 
climate damages that accrue only to U.S. citizens and residents does 
not currently exist in the literature. As explained in the February 
2021 TSD, existing estimates are both incomplete and an underestimate 
of total damages that accrue to the citizens and residents of the U.S. 
because they do not fully capture the regional interactions and 
spillovers discussed above, nor do they include all of the important 
physical, ecological, and economic impacts of climate change recognized 
in the climate change literature. As noted in the February 2021 SC-GHG 
TSD, the IWG will continue to review developments in the literature, 
including more robust methodologies for estimating a U.S.-specific SC-
GHG value, and explore ways to better inform the public of the full 
range of carbon impacts. As a member of the IWG, DOE will continue to 
follow developments in the literature pertaining to this issue.
    Second, the IWG found that the use of the social rate of return on 
capital (7 percent under current OMB Circular A-4 guidance) to discount 
the future benefits of reducing GHG emissions inappropriately 
underestimates the impacts of climate change for the purposes of 
estimating the SC-GHG. Consistent with the findings of the National 
Academies (2017) and the economic literature, the IWG continued to 
conclude that the consumption rate of interest is the theoretically 
appropriate discount rate in an intergenerational context,\67\and 
recommended that

[[Page 12496]]

discount rate uncertainty and relevant aspects of intergenerational 
ethical considerations be accounted for in selecting future discount 
rates.
---------------------------------------------------------------------------

    \67\ Interagency Working Group on Social Cost of Carbon. Social 
Cost of Carbon for Regulatory Impact Analysis under Executive Order 
12866. 2010. United States Government. (Last accessed April 15, 
2022.) www.epa.gov/sites/default/files/2016-12/documents/scc_tsd_2010.pdf; Interagency Working Group on Social Cost of 
Carbon. Technical Update of the Social Cost of Carbon for Regulatory 
Impact Analysis Under Executive Order 12866. 2013. (Last accessed 
April 15, 2022.) www.federalregister.gov/documents/2013/11/26/2013-28242/technical-support-document-technical-update-of-the-social-cost-of-carbon-for-regulatory-impact; Interagency Working Group on 
Social Cost of Greenhouse Gases, United States Government. Technical 
Support Document: Technical Update on the Social Cost of Carbon for 
Regulatory Impact Analysis-Under Executive Order 12866. August 2016. 
(Last accessed January 18, 2022.) www.epa.gov/sites/default/files/2016-12/documents/sc_co2_tsd_august_2016.pdf; Interagency Working 
Group on Social Cost of Greenhouse Gases, United States Government. 
Addendum to Technical Support Document on Social Cost of Carbon for 
Regulatory Impact Analysis under Executive Order 12866: Application 
of the Methodology to Estimate the Social Cost of Methane and the 
Social Cost of Nitrous Oxide. August 2016. (Last accessed January 
18, 2022.) www.epa.gov/sites/default/files/2016-12/documents/addendum_to_sc-ghg_tsd_august_2016.pdf.
---------------------------------------------------------------------------

    Furthermore, the damage estimates developed for use in the SC-GHG 
are estimated in consumption-equivalent terms, and so an application of 
OMB Circular A-4's guidance for regulatory analysis would then use the 
consumption discount rate to calculate the SC-GHG. DOE agrees with this 
assessment and will continue to follow developments in the literature 
pertaining to this issue. DOE also notes that while OMB Circular A-4, 
as published in 2003, recommends using 3 percent and 7 percent discount 
rates as ``default'' values, Circular A-4 also reminds agencies that 
``different regulations may call for different emphases in the 
analysis, depending on the nature and complexity of the regulatory 
issues and the sensitivity of the benefit and cost estimates to the key 
assumptions.'' On discounting, Circular A-4 recognizes that ``special 
ethical considerations arise when comparing benefits and costs across 
generations,'' and Circular A-4 acknowledges that analyses may 
appropriately ``discount future costs and consumption benefits . . . at 
a lower rate than for intragenerational analysis.'' In the 2015 
Response to Comments on the Social Cost of Carbon for Regulatory Impact 
Analysis, OMB, DOE, and the other IWG members recognized that 
``Circular A-4 is a living document'' and ``the use of 7 percent is not 
considered appropriate for intergenerational discounting. There is wide 
support for this view in the academic literature, and it is recognized 
in Circular A-4 itself.'' Thus, DOE concludes that a 7 percent discount 
rate is not appropriate to apply to value the social cost of greenhouse 
gases in the analysis presented in this analysis. In this analysis, to 
calculate the present and annualized values of climate benefits, DOE 
uses the same discount rate as the rate used to discount the value of 
damages from future GHG emissions, for internal consistency. That 
approach to discounting follows the same approach that the February 
2021 TSD recommends ``to ensure internal consistency--i.e., future 
damages from climate change using the SC-GHG at 2.5 percent should be 
discounted to the base year of the analysis using the same 2.5 percent 
rate.'' DOE has also consulted the National Academies' 2017 
recommendations on how SC-GHG estimates can ``be combined in RIAs with 
other cost and benefits estimates that may use different discount 
rates.'' The National Academies reviewed ``several options,'' including 
``presenting all discount rate combinations of other costs and benefits 
with [SC-GHG] estimates.''
    As a member of the IWG involved in the development of the February 
2021 SC-GHG TSD, DOE agrees with this assessment and will continue to 
follow developments in the literature pertaining to this issue. While 
the IWG works to assess how best to incorporate the latest, peer 
reviewed science to develop an updated set of SC-GHG estimates, it set 
the interim estimates to be the most recent estimates developed by the 
IWG prior to the group being disbanded in 2017. The estimates rely on 
the same models and harmonized inputs and are calculated using a range 
of discount rates. As explained in the February 2021 SC-GHG TSD, the 
IWG has recommended that agencies to revert to the same set of four 
values drawn from the SC-GHG distributions based on three discount 
rates as were used in regulatory analyses between 2010 and 2016 and 
subject to public comment. For each discount rate, the IWG combined the 
distributions across models and socioeconomic emissions scenarios 
(applying equal weight to each) and then selected a set of four values 
recommended for use in benefit-cost analyses: an average value 
resulting from the model runs for each of three discount rates (2.5 
percent, 3 percent, and 5 percent), plus a fourth value, selected as 
the 95th percentile of estimates based on a 3 percent discount rate. 
The fourth value was included to provide information on potentially 
higher-than-expected economic impacts from climate change. As explained 
in the February 2021 SC-GHG TSD, and DOE agrees, this update reflects 
the immediate need to have an operational SC-GHG for use in regulatory 
benefit-cost analyses and other applications that was developed using a 
transparent process, peer reviewed methodologies, and the science 
available at the time of that process. Those estimates were subject to 
public comment in the context of dozens of proposed rulemakings as well 
as in a dedicated public comment period in 2013.
    There are a number of limitations and uncertainties associated with 
the SC-GHG estimates. First, the current scientific and economic 
understanding of discounting approaches suggests discount rates 
appropriate for intergenerational analysis in the context of climate 
change are likely to be less than 3 percent, near 2 percent or 
lower.\68\ Second, the IAMs used to produce these interim estimates do 
not include all of the important physical, ecological, and economic 
impacts of climate change recognized in the climate change literature 
and the science underlying their ``damage functions''--i.e., the core 
parts of the IAMs that map global mean temperature changes and other 
physical impacts of climate change into economic (both market and 
nonmarket) damages--lags behind the most recent research. For example, 
limitations include the incomplete treatment of catastrophic and non-
catastrophic impacts in the IAMs, their incomplete treatment of 
adaptation and technological change, the incomplete way in which inter-
regional and intersectoral linkages are modeled, uncertainty in the 
extrapolation of damages to high temperatures, and inadequate 
representation of the relationship between the discount rate and 
uncertainty in economic growth over long time horizons. Likewise, the 
socioeconomic and emissions scenarios used as inputs to the models do 
not reflect new information from the last decade of scenario generation 
or the full range of projections. The modeling limitations do not all 
work in the same direction in terms of their influence on the SC-
CO2 estimates. However, as discussed in the February 2021 
TSD, the IWG has recommended that, taken together, the limitations 
suggest that the interim SC-GHG estimates used in this final rule 
likely underestimate the damages from GHG emissions. DOE concurs with 
this assessment.
---------------------------------------------------------------------------

    \68\ Interagency Working Group on Social Cost of Greenhouse 
Gases (IWG). 2021. Technical Support Document: Social Cost of 
Carbon, Methane, and Nitrous Oxide Interim Estimates under Executive 
Order 13990. February. United States Government. Available at: 
<https://www.whitehouse.gov/briefing-room/blog/2021/02/26/a-return-to-science-evidence-based-estimates-of-the-benefits-of-reducing-climate-pollution/.
---------------------------------------------------------------------------

    DOE's derivations of the SC-GHG (SC-CO2, SC-
N2O, and SC-CH4) values used for this NOPR are 
discussed in the following sections, and the results of DOE's analyses 
estimating the benefits of the reductions in emissions of these GHGs 
are presented in section V.B.6 of this document.
a. Social Cost of Carbon
    The SC-CO2 values used for this NOPR were generated 
using the values presented in the 2021 update from the IWG's February 
2021 SC-GHG TSD.

[[Page 12497]]

Table IV.15 shows the updated sets of SC-CO2 estimates from 
the latest interagency update in 5-year increments from 2020 to 2050. 
The full set of annual values used is presented in appendix 14-A of the 
NOPR TSD. For purposes of capturing the uncertainties involved in 
regulatory impact analysis, DOE has determined it is appropriate 
include all four sets of SC-CO2 values, as recommended by 
the IWG.\69\
---------------------------------------------------------------------------

    \69\ For example, the February 2021 TSD discusses how the 
understanding of discounting approaches suggests that discount rates 
appropriate for intergenerational analysis in the context of climate 
change may be lower than 3 percent.

                    Table IV.15--Annual SC-CO2 Values From 2021 Interagency Update, 2020-2050
                                           [2020$ per metric ton CO2]
----------------------------------------------------------------------------------------------------------------
                                                                    Discount rate and statistic
                                                 ---------------------------------------------------------------
                                                        5%              3%             2.5%             3%
                      Year                       ---------------------------------------------------------------
                                                                                                       95th
                                                      Average         Average         Average       percentile
----------------------------------------------------------------------------------------------------------------
2020............................................              14              51              76             152
2025............................................              17              56              83             169
2030............................................              19              62              89             187
2035............................................              22              67              96             206
2040............................................              25              73             103             225
2045............................................              28              79             110             242
2050............................................              32              85             116             260
----------------------------------------------------------------------------------------------------------------

    For 2051 to 2070, DOE used SC-CO2 estimates published by EPA, 
adjusted to 2020$. These estimates are based on methods, assumptions, 
and parameters identical to the 2020-2050 estimates published by the 
IWG. DOE expects additional climate benefits to accrue for any longer-
life refrigerators, refrigerator-freezers, and freezers after 2070, but 
a lack of available SC-CO2 estimates for emissions years 
beyond 2070 prevents DOE from monetizing these potential benefits in 
this analysis.
    DOE multiplied the CO2 emissions reduction estimated for 
each year by the SC-CO2 value for that year in each of the 
four cases. DOE adjusted the values to 2021$ using the implicit price 
deflator for gross domestic product (``GDP'') from the Bureau of 
Economic Analysis. To calculate a present value of the stream of 
monetary values, DOE discounted the values in each of the four cases 
using the specific discount rate that had been used to obtain the SC-
CO2 values in each case.
b. Social Cost of Methane and Nitrous Oxide
    The SC-CH4 and SC-N2O values used for this 
NOPR were based on the values developed for the February 2021 TSD. 
Table IV.16IV. shows the updated sets of SC-CH4 and SC-
N2O estimates from the latest interagency update in 5-year 
increments from 2020 to 2050. The full set of annual values used is 
presented in appendix 14-A of the NOPR TSD. To capture the 
uncertainties involved in regulatory impact analysis, DOE has 
determined it is appropriate to include all four sets of SC-
CH4 and SC-N2O values, as recommended by the IWG. 
DOE derived values after 2050 using the approach described above for 
the SC-CO2.

                                  Table IV.16--Annual SC-CH4 and SC-N2O Values From 2021 Interagency Update, 2020-2050
                                                                 [2020$ per metric ton]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                       SC-CH4                                    SC-N2O
                                                                    ------------------------------------------------------------------------------------
                                                                            Discount rate and statistic                Discount rate and statistic
                                                                    ------------------------------------------------------------------------------------
                                Year                                    5%        3%       2.5%         3%         5%        3%       2.5%        3%
                                                                    ------------------------------------------------------------------------------------
                                                                                                       95th                                      95th
                                                                      Average   Average   Average   percentile   Average   Average   Average  percentile
--------------------------------------------------------------------------------------------------------------------------------------------------------
2020...............................................................       670      1500      2000        3900       5800     18000     27000       48000
2025...............................................................       800      1700      2200        4500       6800     21000     30000       54000
2030...............................................................       940      2000      2500        5200       7800     23000     33000       60000
2035...............................................................      1100      2200      2800        6000       9000     25000     36000       67000
2040...............................................................      1300      2500      3100        6700      10000     28000     39000       74000
2045...............................................................      1500      2800      3500        7500      12000     30000     42000       81000
2050...............................................................      1700      3100      3800        8200      13000     33000     45000       88000
--------------------------------------------------------------------------------------------------------------------------------------------------------

    DOE multiplied the CH4 and N2O emissions 
reduction estimated for each year by the SC-CH4 and SC-
N2O estimates for that year in each of the cases. DOE 
adjusted the values to 2021$ using the implicit price deflator for 
gross domestic product (``GDP'') from the Bureau of Economic Analysis. 
To calculate a present value of the stream of monetary values, DOE 
discounted the values in each of the cases using the specific discount 
rate that had been used to obtain the SC-CH4 and SC-
N2O estimates in each case.
2. Monetization of Other Emissions Impacts
    For the NOPR, DOE estimated the monetized value of NOX 
and SO2 emissions reductions from electricity generation 
using the latest benefit-per-ton estimates for that sector from the 
EPA's Benefits Mapping and Analysis

[[Page 12498]]

Program.\70\ DOE used EPA's values for PM2.5-related 
benefits associated with NOX and SO2 and for 
ozone-related benefits associated with NOX for 2025 2030, 
and 2040, calculated with discount rates of 3 percent and 7 percent. 
DOE used linear interpolation to define values for the years not given 
in the 2025 to 2040 period; for years beyond 2040 the values are held 
constant. DOE derived values specific to the sector for refrigerators, 
refrigerator-freezers, and freezers using a method described in 
appendix 14B of the NOPR TSD.
---------------------------------------------------------------------------

    \70\ Estimating the Benefit per Ton of Reducing PM2.5 
Precursors from 21 Sectors. www.epa.gov/benmap/estimating-benefit-ton-reducing-pm25-precursors-21-sectors.
---------------------------------------------------------------------------

    DOE multiplied the site emissions reduction (in tons) in each year 
by the associated $/ton values, and then discounted each series using 
discount rates of 3 percent and 7 percent as appropriate.

M. Utility Impact Analysis

    The utility impact analysis estimates the changes in installed 
electrical capacity and generation projected to result for each 
considered TSL. The analysis is based on published output from the NEMS 
associated with AEO2022. NEMS produces the AEO reference case, as well 
as a number of side cases that estimate the economy-wide impacts of 
changes to energy supply and demand. For the current analysis, impacts 
are quantified by comparing the levels of electricity sector 
generation, installed capacity, fuel consumption and emissions in the 
AEO2022 Reference case and various side cases. Details of the 
methodology are provided in the appendices to chapters 13 and 15 of the 
NOPR TSD.
    The output of this analysis is a set of time-dependent coefficients 
that capture the change in electricity generation, primary fuel 
consumption, installed capacity and power sector emissions due to a 
unit reduction in demand for a given end use. These coefficients are 
multiplied by the stream of electricity savings calculated in the NIA 
to provide estimates of selected utility impacts of potential new or 
amended energy conservation standards.

N. Employment Impact Analysis

    DOE considers employment impacts in the domestic economy as one 
factor in selecting a proposed standard. Employment impacts from new or 
amended energy conservation standards include both direct and indirect 
impacts. Direct employment impacts are any changes in the number of 
employees of manufacturers of the products subject to standards, their 
suppliers, and related service firms. The MIA addresses those impacts. 
Indirect employment impacts are changes in national employment that 
occur due to the shift in expenditures and capital investment caused by 
the purchase and operation of more efficient appliances. Indirect 
employment impacts from standards consist of the net jobs created or 
eliminated in the national economy, other than in the manufacturing 
sector being regulated, caused by (1) reduced spending by consumers on 
energy, (2) reduced spending on new energy supply by the utility 
industry, (3) increased consumer spending on the products to which the 
new standards apply and other goods and services, and (4) the effects 
of those three factors throughout the economy.
    One method for assessing the possible effects on the demand for 
labor of such shifts in economic activity is to compare sector 
employment statistics developed by the Labor Department's Bureau of 
Labor Statistics (``BLS''). BLS regularly publishes its estimates of 
the number of jobs per million dollars of economic activity in 
different sectors of the economy, as well as the jobs created elsewhere 
in the economy by this same economic activity. Data from BLS indicate 
that expenditures in the utility sector generally create fewer jobs 
(both directly and indirectly) than expenditures in other sectors of 
the economy.\71\ There are many reasons for these differences, 
including wage differences and the fact that the utility sector is more 
capital-intensive and less labor intensive than other sectors. Energy 
conservation standards have the effect of reducing consumer utility 
bills. Because reduced consumer expenditures for energy likely lead to 
increased expenditures in other sectors of the economy, the general 
effect of efficiency standards is to shift economic activity from a 
less labor-intensive sector (i.e., the utility sector) to more labor-
intensive sectors (e.g., the retail and service sectors). Thus, the BLS 
data suggest that net national employment may increase due to shifts in 
economic activity resulting from energy conservation standards.
---------------------------------------------------------------------------

    \71\ See U.S. Department of Commerce-Bureau of Economic 
Analysis. Regional Multipliers: A User Handbook for the Regional 
Input-Output Modeling System (RIMS II). 1997. U.S. Government 
Printing Office: Washington, DC. Available at www.bea.gov/scb/pdf/regional/perinc/meth/rims2.pdf (last accessed July 26, 2022).
---------------------------------------------------------------------------

    DOE estimated indirect national employment impacts for the standard 
levels considered in this NOPR using an input/output model of the U.S. 
economy called Impact of Sector Energy Technologies version 4 
(``ImSET'').\72\ ImSET is a special-purpose version of the ``U.S. 
Benchmark National Input-Output'' (``I-O'') model, which was designed 
to estimate the national employment and income effects of energy saving 
technologies. The ImSET software includes a computer-based I-O model 
having structural coefficients that characterize economic flows among 
187 sectors most relevant to industrial, commercial, and residential 
building energy use.
---------------------------------------------------------------------------

    \72\ Livingston, O.V., S.R. Bender, M.J. Scott, and R.W. 
Schultz. ImSET 4.0: Impact of Sector Energy Technologies Model 
Description and User Guide. 2015. Pacific Northwest National 
Laboratory: Richland, WA. PNNL-24563.
---------------------------------------------------------------------------

    DOE notes that ImSET is not a general equilibrium forecasting 
model, and that the uncertainties involved in projecting employment 
impacts, especially changes in the later years of the analysis. Because 
ImSET does not incorporate price changes, the employment effects 
predicted by ImSET may overestimate actual job impacts over the long 
run for this rule. Therefore, DOE used ImSET only to generate results 
for near-term timeframes (2027-2031), where these uncertainties are 
reduced. For more details on the employment impact analysis, see 
chapter 16 of the NOPR TSD.

V. Analytical Results and Conclusions

    The following section addresses the results from DOE's analyses 
with respect to the considered energy conservation standards for 
refrigerators, refrigerator-freezers, and freezers. It addresses the 
TSLs examined by DOE, the projected impacts of each of these levels if 
adopted as energy conservation standards for refrigerators, 
refrigerator-freezers, and freezers, and the standards levels that DOE 
is proposing to adopt in this NOPR. Additional details regarding DOE's 
analyses are contained in the NOPR TSD supporting this document.

A. Trial Standard Levels

    In general, DOE typically evaluates potential amended standards for 
products and equipment by grouping individual efficiency levels for 
each class into TSLs. Use of TSLs allows DOE to identify and consider 
manufacturer cost interactions between the product classes, to the 
extent that there are such interactions, and market cross elasticity 
from consumer purchasing decisions that may change when different 
standard levels are set.
    In the analysis conducted for this NOPR, DOE analyzed the benefits 
and burdens of six TSLs for refrigerators, refrigerator-freezers, and 
freezers. DOE

[[Page 12499]]

developed TSLs that combine efficiency levels for each analyzed product 
class. These TSLs were developed by combining specific efficiency 
levels for each of the refrigerator, refrigerator-freezer, and freezer 
product classes analyzed by DOE. TSL 1 represents a modest increase in 
efficiency, corresponding to the lowest analyzed efficiency level above 
the baseline for each analyzed product class. TSL 2 represents an 
increase in efficiency of 10% across the product classes analyzed, 
consistent with ENERGY STAR[supreg] requirements, except for product 
class 10, for which a majority of consumers would experience a net cost 
at all considered ELs. Efficiency improvements for product class 10 
were considered only for TSL 1 and max-tech TSL 6. TSL 3 increases the 
stringency for product classes 5, 5A, 7, 11A, and 18 and increases NES 
while keeping economic impacts on consumers relatively modest. TSL 4 
increases the proposed standard level for product classes 3 and 5A, as 
well as the expected NES, while average LCC savings are positive for 
every product class. TSL 5 increases the proposed standard level for 
product class 7, as well as the expected NES, while average LCC savings 
remain positive for every product class. TSL 6 represents max-tech. DOE 
presents the results for the TSLs in this document, while the results 
for all efficiency levels that DOE analyzed are in the NOPR TSD.
    Table V.1 presents the TSLs and the corresponding efficiency levels 
that DOE has identified for potential amended energy conservation 
standards for refrigerators, refrigerator-freezers, and freezers.

                                                     Table V.1--Trial Standard Levels for Refrigerators, Refrigerator-Freezers, and Freezers
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                      PC 3             PC 5           PC 5-BI          PC 5A           PC 7            PC 9            PC 10          PC 11A           PC 17           PC 18
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
TSL 1.........................  EL 1...........  EL 1...........  EL 1..........  EL 1..........  EL 1..........  EL 1..........  EL 1..........  EL 1..........  EL 1..........  EL 1.
TSL 2.........................  EL 2...........  EL 1...........  EL 1..........  EL 1..........  EL 2..........  EL 1..........  EL 0 *........  EL 1..........  EL 1..........  EL 1.
TSL 3.........................  EL 2...........  EL 2...........  EL 1..........  EL 2..........  EL 3..........  EL 1..........  EL 0 *........  EL 2..........  EL 1..........  EL 2.
TSL 4.........................  EL 3...........  EL 2...........  EL 1..........  EL 3..........  EL 3..........  EL 1..........  EL 0 *........  EL 2..........  EL 1..........  EL 2.
TSL 5.........................  EL 3...........  EL 2...........  EL 1..........  EL 3..........  EL 4..........  EL 1..........  EL 0 *........  EL 2..........  EL 1..........  EL 2.
TSL 6.........................  EL 5...........  EL 4...........  EL 3..........  EL 3..........  EL 5..........  EL 4..........  EL 4..........  EL 4..........  EL 3..........  EL 4.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
* DOE did not consider efficiency levels above baseline for PC 10 for TSLs 2-5.

    Table V.2 shows the design options determined to be required for 
representative products of each analyzed class as a function of the 
TSLs.

                                    Table V.2--Design Options Added as Compared to Baseline by Trial Standard Levels
--------------------------------------------------------------------------------------------------------------------------------------------------------
          Product class                  TSL 1               TSL 2               TSL 3               TSL 4               TSL 5               TSL 6
--------------------------------------------------------------------------------------------------------------------------------------------------------
PC 3............................  Higher-EER               Variable Defrost; Higher-EER
                                   Compressor.                       Compressor
                                     Variable-speed compressor system     VIP side walls and
                                                                           doors..
--------------------------------------------------------------------------------------------------------------------------------------------------------
PC 5............................   BLDC Evaporator Fan Motor; Variable-
                                     speed compressor system or higher-
                                           efficiency compressor
                                    Highest-EER Variable-speed Compressor; some use of VIPs   VIP side walls and
                                                                                               doors..
--------------------------------------------------------------------------------------------------------------------------------------------------------
PC 5-BI.........................                         Variable-speed compressor system; 43% of Max-tech VIP                        VIP side walls and
                                                                                                                                       doors.
--------------------------------------------------------------------------------------------------------------------------------------------------------
PC 5A...........................     Variable-speed compressor system     Highest-EER                          VIP side walls and doors.
                                                                           Variable-speed
                                                                           Compressor; 42%
                                                                           of Max-tech VIP.
--------------------------------------------------------------------------------------------------------------------------------------------------------
PC 7............................  Highest-EER         BLDC Evaporator               38% of Max-tech VIP           Highest-EER         VIP side walls and
                                   Compressor.         Fan Motor;                                                  Variable-speed      doors.
                                                       Variable-speed                                              Compressor; 75%
                                                       compressor system.                                          of Max-tech VIP.
--------------------------------------------------------------------------------------------------------------------------------------------------------
PC 9............................               Highest-EER Compressor; Switch to forced-convection condenser; BLDC fans               VIP side walls and
                                                                                                                                       door; Highest-EER
                                                                                                                                       Variable-speed
                                                                                                                                       compressor
                                                                                                                                       system.
--------------------------------------------------------------------------------------------------------------------------------------------------------
PC 10...........................  Variable-speed                                            N/A                                       Wall thickness
                                   compressor system.                                                                                  increase; VIP
                                                                                                                                       door; Variable-
                                                                                                                                       speed compressor
                                                                                                                                       system.
--------------------------------------------------------------------------------------------------------------------------------------------------------
PC 11A..........................           Higher-EER Compressor
                                                    Wall thickness increase                   Variable Speed
                                                                                               Compressor
                                                                                               System; VIP side
                                                                                               walls and door..
--------------------------------------------------------------------------------------------------------------------------------------------------------
PC 17...........................                    Highest-EER Variable Speed Compressor System; Variable Defrost                    VIP side walls and
                                                                                                                                       door panels.
--------------------------------------------------------------------------------------------------------------------------------------------------------
PC 18...........................      Higher-EER Compressor; Variable
                                                  Defrost
                                                    Wall thickness increase                   Variable Speed
                                                                                               Compressor
                                                                                               System; VIP door..
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: Design options are cumulative (i.e., added as TSL's increase), except for PC 10, for which the efficiency level is baseline for TSL's 2 through 5.


[[Page 12500]]

B. Economic Justification and Energy Savings

1. Economic Impacts on Individual Consumers
    DOE analyzed the economic impacts on refrigerator, refrigerator-
freezer, and freezer consumers by looking at the effects that potential 
amended standards at each TSL would have on the LCC and PBP. DOE also 
examined the impacts of potential standards on selected consumer 
subgroups. These analyses are discussed in the following sections.
a. Life-Cycle Cost and Payback Period
    In general, higher-efficiency products affect consumers in two 
ways: (1) purchase price increases and (2) annual operating costs 
decrease. Inputs used for calculating the LCC and PBP include total 
installed costs and operating costs (i.e., annual energy use, energy 
prices, energy price trends, and repair costs). The LCC calculation 
also uses product lifetime and a discount rate. Chapter 8 of the NOPR 
TSD provides detailed information on the LCC and PBP analyses.
    Table V.3 through Table V.22 show the LCC and PBP results for the 
TSLs considered for each product class. In the first of each pair of 
tables, the simple payback is measured relative to the baseline 
product. In the second table, impacts are measured relative to the 
efficiency distribution in the no-new-standards case in the compliance 
year (see section IV.F.9 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 TSL. The 
savings refer only to consumers who are affected by a standard at a 
given TSL. Those who already purchase a product with efficiency at or 
above a given TSL are not affected. Consumers for whom the LCC 
increases at a given TSL experience a net cost.

                                               Table V.3--Average LCC and PBP Results for Product Class 3
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                           Average costs (2021$)
                                                                           ----------------------------------------------------
                                                                                            First                                  Simple      Average
                    TSL                            Efficiency level          Installed      year's      Lifetime                  payback      lifetime
                                                                                cost      operating    operating       LCC        (years)      (years)
                                                                                             cost         cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                            Baseline......................       919.87        66.62       934.76     1,854.63  ...........         14.8
1.........................................  1.............................       924.28        63.47       899.27     1,823.55          1.4         14.8
2-3.......................................  2.............................       945.28        60.33       866.82     1,812.10          4.0         14.8
4-5.......................................  3.............................       969.73        57.18       835.00     1,804.74          5.3         14.8
                                            4.............................     1,017.85        54.04       807.53     1,825.38          7.8         14.8
6.........................................  5.............................     1,071.89        49.13       760.78     1,832.67          8.7         14.8
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each TSL are calculated assuming that all consumers use products at that efficiency level. The PBP is measured relative to the
  baseline product.


            Table V.4--Average LCC Savings Relative to the No-New-Standards Case for Product Class 3
----------------------------------------------------------------------------------------------------------------
                                                                          Life-Cycle cost savings
                                            Efficiency   -------------------------------------------------------
                   TSL                         level       Average LCC savings\*\     Percent of consumers that
                                                                   (2021$)               experience net cost
----------------------------------------------------------------------------------------------------------------
1.......................................               1                     32.16                           2.2
2-3.....................................               2                     42.18                          10.8
4-5.....................................               3                     36.04                          36.2
                                                       4                     15.40                          59.7
6.......................................               5                      8.09                          63.6
----------------------------------------------------------------------------------------------------------------
* The savings represent the average LCC for affected consumers.


                                               Table V.5--Average LCC and PBP Results for Product Class 5
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                           Average Costs (2021$)
                                                                           ----------------------------------------------------
                                                                                            First                                  Simple      Average
                    TSL                            Efficiency level          Installed      year's      Lifetime                  payback      lifetime
                                                                                cost      operating    operating       LCC        (years)      (years)
                                                                                             cost         cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                            Baseline......................     1,347.67       103.18     1,449.02     2,796.70  ...........         14.8
1-2.......................................  1.............................     1,379.42        95.90     1,370.03     2,749.46          4.4         14.8
3-5.......................................  2.............................     1,403.48        91.60     1,324.36     2,727.83          4.8         14.8
                                            3.............................     1,458.23        87.29     1,284.39     2,742.62          7.0         14.8
6.........................................  4.............................     1,485.38        85.31     1,266.25     2,751.63          7.7         14.8
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each TSL are calculated assuming that all consumers use products at that efficiency level. The PBP is measured relative to the
  baseline product.


[[Page 12501]]


            Table V.6--Average LCC Savings Relative to the No-New-Standards Case for Product Class 5
----------------------------------------------------------------------------------------------------------------
                                                                          Life-Cycle cost savings
                                            Efficiency   -------------------------------------------------------
                   TSL                         level             Average LCC          Percent of consumers that
                                                              savings\*\(2021$)          experience net cost
----------------------------------------------------------------------------------------------------------------
1-2.....................................               1                     47.15                           8.9
3-5.....................................               2                     49.73                          23.4
                                                       3                     28.47                          52.2
6.......................................               4                     19.14                          58.3
----------------------------------------------------------------------------------------------------------------
* The savings represent the average LCC for affected consumers.


                                              Table V.7--Average LCC and PBP Results for Product Class 5BI
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                           Average costs (2021$)
                                                                           ----------------------------------------------------
                                                                                            First                                  Simple      Average
                    TSL                            Efficiency level          Installed      year's      Lifetime                  payback      lifetime
                                                                                cost      operating    operating       LCC        (years)      (years)
                                                                                             cost         cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                            Baseline......................     1,775.38       106.96     1,572.50     3,347.88  ...........         14.8
1-5.......................................  1.............................     1,822.41        98.71     1,485.14     3,307.54          5.7         14.8
                                            2.............................     1,873.04        93.56     1,434.47     3,307.52          7.3         14.8
6.........................................  3.............................     1,880.13        92.53     1,423.78     3,303.91          7.3         14.8
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each TSL are calculated assuming that all consumers use products at that efficiency level. The PBP is measured relative to the
  baseline product.


           Table V.8--Average LCC Savings Relative to the No-New-Standards Case for Product Class 5BI
----------------------------------------------------------------------------------------------------------------
                                                                          Life-cycle cost savings
                                            Efficiency   -------------------------------------------------------
                   TSL                         level             Average LCC          Percent of consumers that
                                                              savings\*\(2021$)          experience net cost
----------------------------------------------------------------------------------------------------------------
1-5.....................................               1                     39.94                          10.1
                                                       2                     15.40                          45.4
6.......................................               3                     18.97                          43.9
----------------------------------------------------------------------------------------------------------------
* The savings represent the average LCC for affected consumers.


                                               Table V.9--Average LCC and PBP Results for Product Class 5A
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                            Average Costs2021$
                                                                           ----------------------------------------------------
                                                                                            First                                  Simple      Average
                    TSL                            Efficiency level          Installed      year's      Lifetime                  payback      lifetime
                                                                                cost      operating    operating       LCC        (years)      (years)
                                                                                             cost         cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                            Baseline......................     1,533.04       122.16     1,704.73     3,237.77  ...........         14.8
1-2.......................................  1.............................     1,557.91       109.72     1,564.48     3,122.39          2.0         14.8
3.........................................  2.............................     1,610.23       103.62     1,503.13     3,113.37          4.2         14.8
4-6.......................................  3.............................     1,675.39        97.40     1,442.83     3,118.22          5.7         14.8
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each TSL are calculated assuming that all consumers use products at that efficiency level. The PBP is measured relative to the
  baseline product.


           Table V.10--Average LCC Savings Relative to the No-New-Standards Case for Product Class 5A
----------------------------------------------------------------------------------------------------------------
                                                                          Life-cycle cost savings
                                            Efficiency   -------------------------------------------------------
                   TSL                         level             Average LCC          Percent of consumers that
                                                              savings\*\(2021$)          experience net cost
----------------------------------------------------------------------------------------------------------------
1-2.....................................               1                    115.32                           1.0
3.......................................               2                    121.98                          16.6
4-6.....................................               3                    115.76                          33.2
----------------------------------------------------------------------------------------------------------------
* The savings represent the average LCC for affected consumers.


[[Page 12502]]


                                               Table V.11--Average LCC and PBP Results for Product Class 7
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                           Average costs (2021$)
                                                                           ----------------------------------------------------
                                                                                            First                                  Simple      Average
                    TSL                            Efficiency level          Installed      year's      Lifetime                  payback      lifetime
                                                                                cost      operating    operating       LCC        (years)      (years)
                                                                                             cost         cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                            Baseline......................     1,324.08       106.37     1,464.94     2,789.02  ...........         14.8
1.........................................  1.............................     1,327.60       101.34     1,407.81     2,735.42          0.7         14.8
2.........................................  2.............................     1,350.17        96.31     1,354.21     2,704.37          2.6         14.8
3-4.......................................  3.............................     1,382.07        91.28     1,302.32     2,684.40          3.8         14.8
5.........................................  4.............................     1,424.36        86.25     1,252.36     2,676.72          5.0         14.8
6.........................................  5.............................     1,449.23        84.24     1,233.84     2,683.07          5.7         14.8
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each TSL are calculated assuming that all consumers use products at that efficiency level. The PBP is measured relative to the
  baseline product.


            Table V.12--Average LCC Savings Relative to the No-New-Standards Case for Product Class 7
----------------------------------------------------------------------------------------------------------------
                                                                               Life-cycle cost savings
                                                                   ---------------------------------------------
                        TSL                           Efficiency      Average LCC
                                                         level        savings\*\     Percent of consumers  that
                                                                        (2021$)          experience net cost
----------------------------------------------------------------------------------------------------------------
1.................................................               1           53.56                           0.0
2.................................................               2           78.56                           5.1
3-4...............................................               3           95.26                          15.8
5.................................................               4          101.33                          28.5
6.................................................               5           94.68                          35.7
----------------------------------------------------------------------------------------------------------------
* The savings represent the average LCC for affected consumers.


                                               Table V.13--Average LCC and PBP Results for Product Class 9
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                           Average costs (2021$)
                                                                           ----------------------------------------------------
                                                                                            First                                  Simple      Average
                    TSL                            Efficiency level          Installed      year's      Lifetime                  payback      lifetime
                                                                                cost      operating    operating       LCC        (years)      (years)
                                                                                             cost         cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                            Baseline......................       976.09        70.94     1,148.82     2,124.90  ...........         20.6
1-5.......................................  1.............................     1,002.24        64.25     1,052.68     2,054.91          3.9         20.6
                                            2.............................     1,044.75        60.90     1,007.73     2,052.48          6.8         20.6
                                            3.............................     1,081.93        57.56       962.22     2,044.15          7.9         20.6
6.........................................  4.............................     1,126.10        54.21       917.45     2,043.56          9.0         20.6
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each TSL are calculated assuming that all consumers use products at that efficiency level. The PBP is measured relative to the
  baseline product.


            Table V.14--Average LCC Savings Relative to the No-New-Standards Case for Product Class 9
----------------------------------------------------------------------------------------------------------------
                                                                          Life-cycle cost savings
                                            Efficiency   -------------------------------------------------------
                   TSL                         level             Average LCC          Percent of consumers that
                                                              savings\*\(2021$)          experience net cost
----------------------------------------------------------------------------------------------------------------
1-5.....................................               1                     69.26                          10.5
                                                       2                     55.78                          40.7
                                                       3                     63.68                          45.6
6.......................................               4                     63.71                          51.1
----------------------------------------------------------------------------------------------------------------
* The savings represent the average LCC for affected consumers.


                                              Table V.15--Average LCC and PBP Results for Product Class 10
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                           Average costs (2021$)
                                                                           ----------------------------------------------------
                                                                                            First                                  Simple      Average
                    TSL                            Efficiency level          Installed      year's      Lifetime                  payback      lifetime
                                                                                cost      operating    operating       LCC        (years)      (years)
                                                                                             cost         cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                            Baseline......................     1,030.90        41.71       714.28     1,745.18  ...........         20.6
1.........................................  1.............................     1,071.75        37.89       663.11     1,734.85         10.7         20.6
                                            2.............................     1,109.39        35.98       639.34     1,748.73         13.7         20.6
                                            3.............................     1,112.40        34.07       611.91     1,724.32         10.7         20.6

[[Page 12503]]

 
6.........................................  4.............................     1,148.80        29.86       554.72     1,703.51         10.0         20.6
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each TSL are calculated assuming that all consumers use products at that efficiency level. The PBP is measured relative to the
  baseline product.


           Table V.16--Average LCC Savings Relative to the No-New-Standards Case for Product Class 10
----------------------------------------------------------------------------------------------------------------
                                                                          Life-cycle cost savings
                                            Efficiency   -------------------------------------------------------
                   TSL                         level             Average LCC          Percent of consumers that
                                                              savings\*\(2021$)          experience net cost
----------------------------------------------------------------------------------------------------------------
1.......................................               1                     10.20                          52.7
                                                       2                     -4.30                          68.5
                                                       3                     20.11                          55.8
6.......................................               4                     40.91                          52.1
----------------------------------------------------------------------------------------------------------------
* The savings represent the average LCC for affected consumers.


                                              Table V.17--Average LCC and PBP Results for Product Class 11A
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                           Average costs (2021$)
                                                                           ----------------------------------------------------
                                                                                            First                                  Simple      Average
                    TSL                            Efficiency level          Installed      year's      Lifetime                  payback      lifetime
                                                                                cost      operating    operating       LCC        (years)      (years)
                                                                                             cost         cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                       Residential
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                            Baseline......................       354.75        35.30       255.84       610.59  ...........          7.7
1-2.......................................  1.............................       361.59        31.95       233.59       595.18          2.0          7.7
3-5.......................................  2.............................       365.13        30.27       222.50       587.62          2.1          7.7
                                            3.............................       394.05        28.59       212.60       606.65          5.9          7.7
6.........................................  4.............................       413.92        24.74       187.62       601.54          5.6          7.7
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                       Commercial
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                            Baseline......................       354.64        25.05       165.33       519.97  ...........          7.7
1-2.......................................  1.............................       361.48        22.90       152.77       514.25          3.2          7.7
3-5.......................................  2.............................       365.01        21.82       146.51       511.53          3.2          7.7
                                            3.............................       393.93        20.74       141.33       535.26          9.1          7.7
6.........................................  4.............................       413.79        18.26       127.42       541.21          8.7          7.7
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each TSL are calculated assuming that all consumers use products at that efficiency level. The PBP is measured relative to the
  baseline product.


           Table V.18--Average LCC Savings Relative to the No-New-Standards Case for Product Class 11A
----------------------------------------------------------------------------------------------------------------
                                                                          Life-cycle cost savings
                                            Efficiency   -------------------------------------------------------
                   TSL                         Level             Average LCC          Percent of consumers that
                                                              savings\*\(2021$)          experience net cost
----------------------------------------------------------------------------------------------------------------
                                                   Residential
----------------------------------------------------------------------------------------------------------------
1-2.....................................               1                     16.78                           0.7
3-5.....................................               2                      9.97                           8.3
                                                       3                     -9.08                          60.9
6.......................................               4                     -3.35                          50.9
----------------------------------------------------------------------------------------------------------------
                                                   Commercial
----------------------------------------------------------------------------------------------------------------
1-2.....................................               1                      6.97                           1.6
3-5.....................................               2                      3.42                          17.2
                                                       3                    -19.90                          75.0
6.......................................               4                    -23.47                          73.2
----------------------------------------------------------------------------------------------------------------
* The savings represent the average LCC for affected consumers.


[[Page 12504]]


                                              Table V.19--Average LCC and PBP Results for Product Class 17
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                           Average costs (2021$)
                                                                           ----------------------------------------------------
                                                                                            First                                  Simple      Average
                    TSL                            Efficiency level          Installed      year's      Lifetime                  payback      lifetime
                                                                                cost      operating    operating       LCC        (years)      (years)
                                                                                             cost         cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                            Baseline......................       424.76        65.71       646.11     1,070.86  ...........         10.7
1-5.......................................  1.............................       457.41        59.21       592.27     1,049.68          5.0         10.7
                                            2.............................       489.85        55.95       567.53     1,057.38          6.7         10.7
6.........................................  3.............................       522.28        52.69       542.79     1,065.08          7.5         10.7
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each TSL are calculated assuming that all consumers use products at that efficiency level. The PBP is measured relative to the
  baseline product.


           Table V.20--Average LCC Savings Relative to the No-New-Standards Case for Product Class 17
----------------------------------------------------------------------------------------------------------------
                                                                          Life-cycle cost savings
                                            Efficiency   -------------------------------------------------------
                   TSL                         level       Average LCC savings\*\     Percent of consumers that
                                                                   (2021$)               experience net cost
----------------------------------------------------------------------------------------------------------------
1-5.....................................               1                     21.90                          12.3
                                                       2                      2.41                          50.9
6.......................................               3                     -5.74                          66.3
----------------------------------------------------------------------------------------------------------------
* The savings represent the average LCC for affected consumers.


                                              Table V.21--Average LCC and PBP Results for Product Class 18
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                           Average costs (2021$)
                                                                           ----------------------------------------------------
                                                                                            First                                  Simple      Average
                    TSL                            Efficiency level          Installed      year's      Lifetime                  payback      lifetime
                                                                                cost      operating    operating       LCC        (years)      (years)
                                                                                             cost         cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                            Baseline......................       399.82        31.49       303.92       703.74  ...........         10.7
1-2.......................................  1.............................       403.79        28.55       278.34       682.13          1.3         10.7
3-5.......................................  2.............................       418.21        27.08       266.48       684.69          4.2         10.7
                                            3.............................       438.60        25.61       254.91       693.51          6.6         10.7
6.........................................  4.............................       479.02        22.71       232.22       711.24          9.0         10.7
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each TSL are calculated assuming that all consumers use products at that efficiency level. The PBP is measured relative to the
  baseline product.


           Table V.22--Average LCC Savings Relative to the No-New-Standards Case for Product Class 18
----------------------------------------------------------------------------------------------------------------
                                                                          Life-cycle cost savings
                                            Efficiency   -------------------------------------------------------
                   TSL                         level       Average LCC savings\*\     Percent of consumers that
                                                                   (2021$)               experience net cost
----------------------------------------------------------------------------------------------------------------
1-2.....................................               1                     21.57                           0.6
3-5.....................................               2                     17.59                          21.8
                                                       3                      8.76                          48.2
6.......................................               4                     -9.06                          69.9
----------------------------------------------------------------------------------------------------------------
* The savings represent the average LCC for affected consumers.

b. Consumer Subgroup Analysis
    In the consumer subgroup analysis, DOE estimated the impact of the 
considered TSLs on low-income households. Table V.23 compares the 
average LCC savings and PBP at each trial standard level for the low-
income consumer subgroup with similar metrics for the entire consumer 
sample for product classes 3, 7, 9, and 10 (see section IV.I of this 
document for an explanation of why other product classes are excluded). 
Table V.24 provides a similar comparison for product class 11A for the 
small business subgroup. In most cases, the average LCC savings and PBP 
for low-income households at the considered efficiency levels are 
improved (i.e., higher LCC savings and lower payback period) from the 
average for all households. The LCC savings and payback period results 
for the small business subgroup for product class 11A are similar to 
those for all businesses. Chapter 11 of the NOPR TSD presents the 
complete LCC and PBP results for the subgroups.

[[Page 12505]]



        Table V.23--Comparison of LCC Savings and PBP for Low-Income Consumer Subgroup and All Consumers
----------------------------------------------------------------------------------------------------------------
                                        Average LCC savings\*\ (2021$)              Simple payback (years)
                                  ------------------------------------------------------------------------------
               TSL                      Low-income                                Low-income
                                        households         All households         households      All households
----------------------------------------------------------------------------------------------------------------
Product Class 3:
    1............................  34.97..............  32.16..............  0.6................             1.4
    2-3..........................  61.49..............  42.18..............  1.6................             4.0
    4-5..........................  69.19..............  36.04..............  2.1................             5.3
    6............................  125.31.............  8.09...............  3.4................             8.7
Product Class 7:
    1............................  55.46..............  53.56..............  0.5................             0.7
    2............................  88.12..............  78.56..............  1.9................             2.6
    3-4..........................  115.06.............  95.26..............  2.8................             3.8
    5............................  134.54.............  101.33.............  3.7................             5.0
    6............................  135.73.............  94.68..............  4.2................             5.7
Product Class 9:
    1-5..........................  79.17..............  69.26..............  2.7................             3.9
    6............................  116.06.............  63.71..............  6.2................             9.0
Product Class 10:
    1............................  27.22..............  10.20..............  6.9................            10.7
    2-5..........................  N/A................  N/A................  N/A................             N/A
    6............................  88.95..............  40.91..............  6.4................            10.0
----------------------------------------------------------------------------------------------------------------
* The savings represent the average LCC for affected consumers.


      Table V.24--Comparison of LCC Savings and PBP for Small Business Consumer Subgroup and All Consumers
----------------------------------------------------------------------------------------------------------------
                                                  Average LCC savings *  (2021$)      Simple payback  (years)
                                                 ---------------------------------------------------------------
                       TSL                             Small            All            Small            All
                                                    businesses      businesses      businesses      businesses
----------------------------------------------------------------------------------------------------------------
Product Class 11A:
    1-2.........................................            6.13            6.97             3.1             3.2
    3-5.........................................            2.86            3.42             3.2             3.2
    6...........................................          -25.12          -23.47             8.6             8.7
----------------------------------------------------------------------------------------------------------------

c. Rebuttable Presumption Payback
    As discussed in section IV.F.10 of this document, EPCA establishes 
a rebuttable presumption that an energy conservation standard is 
economically justified if the increased purchase cost for a product 
that meets the standard is less than three times the value of the 
first-year energy savings resulting from the standard. In calculating a 
rebuttable presumption payback period for each of the considered TSLs, 
DOE used discrete values, and, as required by EPCA, based the energy 
use calculation on the DOE test procedure for refrigerators, 
refrigerator-freezers, and freezers. In contrast, the PBPs presented in 
section V.B.1.a of this document were calculated using distributions 
that reflect the range of energy use in the field.
    Table V.25 presents the rebuttable-presumption payback periods for 
the considered TSLs for refrigerators, refrigerator-freezers, and 
freezers. While DOE examined the rebuttable-presumption criterion, it 
considered whether the standard levels considered for the NOPR are 
economically justified through a more detailed analysis of the economic 
impacts of those levels, pursuant to 42 U.S.C. 6295(o)(2)(B)(i), that 
considers the full range of impacts to the consumer, manufacturer, 
Nation, and environment. The results of that analysis serve as the 
basis for DOE to definitively evaluate the economic justification for a 
potential standard level, thereby supporting or rebutting the results 
of any preliminary determination of economic justification.

                                                   Table V.25--Rebuttable-Presumption Payback Periods
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                            Rebuttable payback period (years)
                                ------------------------------------------------------------------------------------------------------------------------
        Efficiency level                                                                                        PC 11A     PC 11A
                                    PC 3       PC 5      PC 5BI     PC 5A       PC 7       PC 9      PC 10      (res)      (com)      PC 17      PC 18
--------------------------------------------------------------------------------------------------------------------------------------------------------
1..............................        1.6        5.0        6.5        2.3        0.8        3.9       10.6        2.0        3.0        4.8        1.3
2..............................        4.6        5.5        8.3        4.7        3.0        6.7       13.5        2.0        3.0        6.4        4.1
3..............................        6.0        7.9        8.3        6.5        4.5        7.8       10.6        5.7        8.5        7.2        6.4
4..............................        8.8        8.8  .........  .........        5.8        8.8        9.9        5.5        8.2  .........        8.8
5..............................        9.8  .........        6.3  .........  .........  .........  .........  .........  .........  .........  .........
--------------------------------------------------------------------------------------------------------------------------------------------------------

2. Economic Impacts on Manufacturers
    DOE performed an MIA to estimate the impact of amended energy 
conservation standards on manufacturers of refrigerators, refrigerator-
freezers, and freezers. The following section describes the expected 
impacts on manufacturers at each considered TSL. Chapter 12 of the

[[Page 12506]]

NOPR TSD explains the analysis in further detail.
a. Industry Cash Flow Analysis Results
    In this section, DOE provides GRIM results from the analysis, which 
examines changes in the industry that would result from a standard. The 
following tables summarize the estimated financial impacts (represented 
by changes in INPV) of potential amended energy conservation standards 
on manufacturers of refrigerators, refrigerator-freezers, and freezers, 
as well as the conversion costs that DOE estimates manufacturers of 
refrigerators, refrigerator-freezers, and freezers would incur at each 
TSL.
    The impact of potential amended energy conservation standards was 
analyzed under two scenarios: (1) the preservation of gross margin 
percentage; and (2) the preservation of operating profit, as discussed 
in section IV.J.2.d of this document. The preservation of gross margin 
percentages applies a ``gross margin percentage'' of 21 percent for all 
freestanding product classes and 29 percent for all built-in product 
classes, across all efficiency levels.\73\ This scenario assumes that a 
manufacturer's per-unit dollar profit would increase as MPCs increase 
in the standards cases and represents the upper-bound to industry 
profitability under potential new and amended energy conservation 
standards.
---------------------------------------------------------------------------

    \73\ The gross margin percentages of 21 percent and 29 percent 
are based on manufacturer markups of 1.26 and 1.40 percent, 
respectively.
---------------------------------------------------------------------------

    The preservation of operating profit scenario reflects 
manufacturers' concerns about their inability to maintain margins as 
MPCs increase to reach more stringent efficiency levels. In this 
scenario, while manufacturers make the necessary investments required 
to convert their facilities to produce compliant products, operating 
profit does not change in absolute dollars and decreases as a 
percentage of revenue. The preservation of operating profit scenario 
results in the lower (or more severe) bound to impacts of potential 
amended standards on industry.
    Each of the modeled scenarios results in a unique set of cash flows 
and corresponding INPV for each TSL. INPV is the sum of the discounted 
cash flows to the industry from the base year through the end of the 
analysis period (2023-2056). The ``change in INPV'' results refer to 
the difference in industry value between the no-new-standards case and 
standards case at each TSL. To provide perspective on the short-run 
cash flow impact, DOE includes a comparison of free cash flow between 
the no-new-standards case and the standards case at each TSL in the 
year before amended standards would take effect. This figure provides 
an understanding of the magnitude of the required conversion costs 
relative to the cash flow generated by the industry in the no-new-
standards case.
    Conversion costs are one-time investments for manufacturers to 
bring their manufacturing facilities and product designs into 
compliance with potential amended standards. As described in section 
IV.J.2.c of this document, conversion cost investments occur between 
the year of publication of the final rule and the year by which 
manufacturers must comply with the new standard. The conversion costs 
can have a significant impact on the short-term cash flow on the 
industry and generally result in lower free cash flow in the period 
between the publication of the final rule and the compliance date of 
potential amended standards. Conversion costs are independent of the 
manufacturer markup scenarios and are not presented as a range in this 
analysis.

                                             Table V.26--Manufacturer Impact Analysis Results for Refrigerators, Refrigerator-Freezers, and Freezers
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                           No-new-
                                          Unit         standards case         TSL 1                TSL 2                TSL 3                TSL 4               TSL 5               TSL 6
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
INPV............................  2021$ Million......         4,966.4  4,908.2 to 4,944.5.  4,867.7 to 4,920.2.  4,475.6 to 4,619.8.  4,366.5 to 4,554.0  3,965.2 to 4,173.5  3,255.9 to
                                                                                                                                                                               3,688.2.
Change in INPV..................  %..................  ..............  (1.2) to (0.4).....  (2.0) to (0.9).....  (9.9) to (7.0).....  (12.1) to (8.3)...  (20.2) to (16.0)..  (34.4) to (25.7).
Free Cash Flow (2026)...........  2021$ Million......           428.7  401.2..............  380.4..............  167.9..............  110.1.............  (118.7)...........  (509.7).
Change in Free Cash Flow (2026).  %..................  ..............  (6.4)..............  (11.3).............  (60.8).............  (74.3)............  (127.7)...........  (218.9).
Conversion Costs................  2021$ Million......  ..............  77.8...............  135.7..............  653.1..............  793.0.............  1,323.6...........  2,251.7.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
* Parentheses denote negative (-) values.

    The following cash flow discussion refers to product classes as 
defined in Table I.1 in section I of this document and the efficiency 
levels and design options as detailed in Table IV.5 through Table IV.7 
in section IV.C.3 of this document.
    At TSL 1, the standard represents a modest increase in efficiency, 
corresponding to the lowest analyzed efficiency level above the 
baseline for each analyzed product class. The change in INPV is 
expected to range from -1.2 to -0.4 percent. At this level, free cash 
flow is estimated to decrease by 6.4 percent compared to the no-new-
standards case value of $428.7 million in the year 2026, the year 
before the standards year.\74\ Currently, approximately 36 percent of 
domestic refrigerator, refrigerator-freezer, and freezer shipments meet 
the efficiencies required at TSL 1.
---------------------------------------------------------------------------

    \74\ DOE estimates issuance of a final rule by the end of 2023. 
Therefore, for purposes of its analysis, DOE used 2027 as the first 
year of compliance with any amended standards for refrigerators, 
refrigerator-freezers, and freezers.
---------------------------------------------------------------------------

    The design options DOE analyzed included implementing more 
efficient single-speed compressors, among other design options, for 
most of the directly analyzed product classes. For product classes 5A, 
5-BI, 10, and 17, the design options analyzed included implementing 
variable-speed compressors. Additionally, for product class 5-BI, DOE 
expects manufacturers would implement some VIPs (though DOE notes that 
70 percent of PC 5-BI shipments already meet TSL 1). At this level, 
capital conversion costs are minimal since most manufacturers can 
achieve TSL 1 efficiencies with relatively minor component changes. 
Product conversion costs may be necessary for developing, qualifying, 
sourcing, and testing new components. DOE expects industry to incur 
some re-flooring costs as manufacturers redesign baseline products to 
meet the efficiency levels required by TSL 1. DOE estimates capital 
conversion costs of $10.2 million and product conversion costs of $67.6 
million. Conversion costs total $77.8 million.

[[Page 12507]]

    At TSL 1, the shipment-weighted average MPC for all refrigerators, 
refrigerator-freezers, and freezers is expected to increase by 1.2 
percent relative to the no-new-standards case shipment-weighted average 
MPC for all refrigerators, refrigerator-freezers, and freezers in 2027. 
In the preservation of gross margin percentage scenario, the minor 
increase in cashflow from the higher MSP is slightly outweighed by the 
$77.8 million in conversion costs, causing a negligible change in INPV 
at TSL 1 under this scenario. Under the preservation of operating 
profit scenario, manufacturers earn the same per-unit operating profit 
as would be earned in the no-new-standards case, but manufacturers do 
not earn additional profit from their investments. In this scenario, 
the manufacturer markup decreases in 2028, the year after the analyzed 
compliance year. This reduction in the manufacturer markup and the 
$77.8 million in conversion costs incurred by manufacturers cause a 
slightly negative change in INPV at TSL 1 under the preservation of 
operating profit scenario.
    At TSL 2, the standard represents an increase in efficiency of 10 
percent across all analyzed product classes, consistent with ENERGY 
STAR[supreg] requirements, except for product class 10. The change in 
INPV is expected to range from -2.0 to -0.9 percent. At this level, 
free cash flow is estimated to decrease by 11.3 percent compared to the 
no-new-standards case value of $428.7 million in the year 2026, the 
year before the standards year. Currently, approximately 38 percent of 
domestic refrigerator, refrigerator-freezer, and freezer shipments meet 
the efficiencies required at TSL 2.
    The design options DOE analyzed include implementing similar design 
options as TSL 1, such as more efficient compressors, brushless-DC 
(``BLDC'') fans, and variable defrost. For product classes 7, the 
design options analyzed included implementing variable-speed 
compressors. For product classes 3 and 7, TSL 2 corresponds to EL 2. 
For product class 10, TSL 2 corresponds to baseline efficiency. For the 
remaining product classes, the efficiencies required at TSL 2 are the 
same as TSL 1. The increase in conversion costs from the prior TSL is 
entirely due to the increased efficiencies required for product classes 
3 and 7. Capital conversion costs may be necessary for updated tooling 
and additional stations to test more variable-speed compressors. 
Product conversion costs may be necessary for developing, qualifying, 
sourcing, and testing variable-speed compressors and associated 
electronics. DOE expects industry to incur slightly more re-flooring 
costs compared to TSL 1. DOE estimates capital conversion costs of 
$21.0 million and product conversion costs of $114.7 million. 
Conversion costs total $135.7 million.
    At TSL 2, the shipment-weighted average MPC for all refrigerators, 
refrigerator-freezers, and freezers is expected to increase by 1.7 
percent relative to the no-new-standards case shipment-weighted average 
MPC for all refrigerators, refrigerator-freezers, and freezers in 2027. 
In the preservation of gross margin percentage scenario, the slight 
increase in cashflow from the higher MSP is outweighed by the $135.7 
million in conversion costs, causing a negative change in INPV at TSL 2 
under this scenario. Under the preservation of operating profit 
scenario, the manufacturer markup decreases in 2028, the year after the 
analyzed compliance year. This reduction in the manufacturer markup and 
the $135.7 million in conversion costs incurred by manufacturers cause 
a negative change in INPV at TSL 2 under the preservation of operating 
profit scenario.
    At TSL 3, the standard represents an increased stringency for 
product classes 5, 5A, 7, 11A, and 18 and increased NES while keeping 
economic impacts on consumers modest. The change in INPV is expected to 
range from -9.9 to -7.0 percent. At this level, free cash flow is 
estimated to decrease by 60.8 percent compared to the no-new-standards 
case value of $428.7 million in the year 2026, the year before the 
standards year. Currently, approximately 26 percent of domestic 
refrigerator, refrigerator-freezer, and freezer shipments meet the 
efficiencies required at TSL 1.
    In addition to the design options DOE analyzed at TSL 2, the design 
options analyzed for product class 5 include implementing variable-
speed compressors. Furthermore, for product classes 5A and 7, DOE 
expects manufacturers would also incorporate some VIPs. Additionally, 
for the compact-size product classes 11A and 18, DOE expects 
manufacturers may need to increase cabinet wall thickness. For product 
classes 5, 5A, 11A, and 18, TSL 3 corresponds to EL 2. For product 
class 7, TSL 3 corresponds to EL 3. For the remaining product classes, 
the efficiencies required at TSL 3 are the same as TSL 2. The increase 
in conversion costs from the prior TSL are driven by the efficiencies 
required for product classes 5A and 7, due to their large market share 
(together, these product classes account for approximately 21 percent 
of total shipments) and the design options required to meet this level. 
Capital conversion costs may be necessary for new tooling for VIP 
placement as well as new testing stations for high-efficiency 
components. Product conversion costs may be necessary for developing, 
qualifying, sourcing, and testing new components. For products 
implementing VIPs, product conversion costs may be necessary for 
prototyping and testing for VIP placement, design, and sizing. DOE 
expects industry to incur re-flooring costs as manufacturers redesign 
their products to meet the efficiency levels required by TSL 3. DOE 
estimates capital conversion costs of $356.5 million and product 
conversion costs of $296.7 million. Conversion costs total $653.1 
million.
    At TSL 3, the shipment-weighted average MPC for all refrigerators, 
refrigerator-freezers, and freezers is expected to increase by 4.5 
percent relative to the no-new-standards case shipment-weighted average 
MPC for all refrigerators, refrigerator-freezers, and freezers in 2027. 
In the preservation of gross margin percentage scenario, the slight 
increase in cashflow from the higher MSP is outweighed by the $653.1 
million in conversion costs, causing a negative change in INPV at TSL 3 
under this scenario. Under the preservation of operating profit 
scenario, the manufacturer markup decreases in 2028, the year after the 
analyzed compliance year. This reduction in the manufacturer markup and 
the $653.1 million in conversion costs incurred by manufacturers cause 
a negative change in INPV at TSL 3 under the preservation of operating 
profit scenario.
    At TSL 4, the standard represents an increased stringency for 
product classes 3 and 5A, as well as the expected NES, while 
maintaining positive average LCC savings for every analyzed product 
class. The change in INPV is expected to range from -12.1 to -8.3 
percent. At this level, free cash flow is estimated to decrease by 74.3 
percent compared to the no-new-standards case value of $428.7 million 
in the year 2026, the year before the standards year. Currently, 
approximately 18 percent of domestic refrigerator, refrigerator-
freezer, and freezer shipments meet the efficiencies required at TSL 4.
    In addition to the design options DOE analyzed at TSL 3, the design 
options analyzed for product class 3 include implementing variable-
speed compressors. Furthermore, for product class 5A, DOE also expects 
manufacturers would incorporate VIPs on roughly half the cabinet 
surface (side walls and doors). For product classes 3 and 5A, TSL 4 
corresponds to EL 3. For the remaining product classes, the 
efficiencies required at TSL 4 are the

[[Page 12508]]

same as TSL 3. At this level, the increase in conversion costs is 
entirely driven by the higher efficiency levels required for product 
classes 3 and 5A, which together account for approximately 35 percent 
of current industry shipments. Many manufacturers of these product 
classes would need to redesign their platforms to integrate variable-
speed compressors and extensive VIPs. Some manufacturers noted the 
potential need to adopt thicker sidewalls in conjunction or as an 
alternative to VIP. DOE expects industry to incur more re-flooring 
costs compared to TSL 3. DOE estimates capital conversion costs of 
$450.5 million and product conversion costs of $342.5 million. 
Conversion costs total $793.0 million.
    At TSL 4, the shipment-weighted average MPC for all refrigerator, 
refrigerator-freezers, and freezers is expected to increase by 5.9 
percent relative to the no-new-standards case shipment-weighted average 
MPC for all refrigerators, refrigerator-freezers, and freezers in 2027. 
In the preservation of gross margin percentage scenario, the increase 
in cashflow from the higher MSP is outweighed by the $793.0 million in 
conversion costs, causing a negative change in INPV at TSL 4 under this 
scenario. Under the preservation of operating profit scenario, the 
manufacturer markup decreases in 2028, the year after the analyzed 
compliance year. This reduction in the manufacturer markup and the 
$793.0 million in conversion costs incurred by manufacturers cause a 
negative change in INPV at TSL 4 under the preservation of operating 
profit scenario.
    At TSL 5, the standard represents the maximum NPV. The change in 
INPV is expected to range from -20.2 to -16.0 percent. At this level, 
free cash flow is estimated to decrease by 127.7 percent compared to 
the no-new-standards case value of $428.7 million in the year 2026, the 
year before the standards year. Currently, approximately 18 percent of 
domestic refrigerator, refrigerator-freezer, and freezer shipments meet 
the efficiencies required at TSL 5.
    In addition to the design options DOE analyzed at TSL 4, the design 
options analyzed for product class 7 include implementing VIPs on 
roughly half the cabinet surface (side walls and doors). For product 
class 7, TSL 5 corresponds to EL 4. For the remaining product classes, 
the efficiencies required at TSL 5 are the same as TSL 4. The increase 
in conversion costs compared to the prior TSL is entirely driven by the 
higher efficiency level required for product class 7, which likely 
necessitates incorporating VIPs on roughly half the cabinet surface 
(side walls and doors). In interviews, some manufacturers stated that 
their existing product class 7 platforms cannot reach this efficiency 
level and would require a platform redesign, which would likely mean 
new cases, liners, and fixtures. DOE expects slightly more re-flooring 
costs compared to the prior TSL as manufacturers redesign products to 
meet the required efficiencies. DOE estimates capital conversion costs 
of $891.2 million and product conversion costs of $432.4 million. 
Conversion costs total $1.32 billion.
    At TSL 5, the large conversion costs result in a free cash flow 
dropping below zero in the years before the standards year. The 
increase in conversion costs at TSL 5 compared to TSL 4 is associated 
with implementing more VIPs into product class 7 designs. The negative 
free cash flow calculation indicates manufacturers may need to access 
cash reserves or outside capital to finance conversion efforts.
    At TSL 5, the shipment-weighted average MPC for all refrigerators, 
refrigerator-freezers, and freezers is expected to increase by 6.5 
percent relative to the no-new-standards case shipment-weighted average 
MPC for all refrigerators, refrigerator-freezers, and freezers in 2027. 
In the preservation of gross margin percentage scenario, the increase 
in cashflow from the higher MSP is outweighed by the $1.32 billion in 
conversion costs, causing a negative change in INPV at TSL 5 under this 
scenario. Under the preservation of operating profit scenario, the 
manufacturer markup decreases in 2028, the year after the analyzed 
compliance year. This reduction in the manufacturer markup and the 
$1.32 billion in conversion costs incurred by manufacturers cause a 
notable decrease in INPV at TSL 5 under the preservation of operating 
profit scenario.
    At TSL 6, the standard reflects max-tech for all product classes. 
The change in INPV is expected to range from -34.4 to -25.7 percent. At 
this level, free cash flow is estimated to decrease by 218.9 percent 
compared to the no-new-standards case value of $428.7 million in the 
year 2026, the year before the standards year. Currently, approximately 
1 percent of domestic refrigerator, refrigerator-freezer, and freezer 
shipments meet the efficiencies required at TSL 6.
    At max-tech levels, manufacturers would likely need to implement 
VIPs for roughly half the cabinet surface (typically side walls and 
doors for an upright cabinet), the best-available-efficiency variable-
speed compressor, forced-convection heat exchangers with multi-speed 
BLDC fans, variable defrost, and increase in cabinet wall thickness for 
some classes (e.g., compact refrigerators and both standard-size and 
compact chest freezers). At TSL 6, only a few manufacturers offer any 
products that meet the efficiencies required. For PC 3, which accounts 
for approximately 25 percent of annual shipments, no OEMs currently 
offer products that meet the efficiency level required. For PC 5, which 
accounts for approximately 21 percent of annual shipments, DOE 
estimates that only one out of 23 OEMs currently offers products that 
meet the efficiency level required. For PC 7, which accounts for 
approximately 11 percent of annual shipments, only one out of the 11 
OEMs currently offers products that meet the efficiency level required.
    The efficiencies required by TSL 6 could require a major renovation 
of existing facilities and completely new refrigerator, refrigerator-
freezer, and freezer platforms for many OEMs. In interviews, some 
manufacturers stated that they are physically constrained at their 
current production location and would therefore need to expand their 
existing production facility or move to an entirely new facility. These 
manufacturers stated that their current manufacturing locations are at 
capacity and cannot accommodate the additional labor required to 
implement VIPs. DOE expects industry to incur more re-flooring costs 
compared to TSL 5 as all display models below max-tech efficiency would 
need to be replaced due the more stringent standard. DOE estimates 
capital conversion costs of $1.58 billion and product conversion costs 
of $670.6 million. Conversion costs total $2.25 billion.
    At TSL 6, the large conversion costs result in a free cash flow 
dropping below zero in the years before the standards year. The 
negative free cash flow calculation indicates manufacturers may need to 
access cash reserves or outside capital to finance conversion efforts.
    At TSL 6, the shipment-weighted average MPC for all refrigerators, 
refrigerator-freezers, and freezers is expected to increase by 13.7 
percent relative to the no-new-standards case shipment-weighted average 
MPC for all refrigerators, refrigerator-freezers, and freezers in 2027. 
In the preservation of gross margin percentage scenario, the increase 
in cashflow from the higher MSP is outweighed by the $2.25 billion in 
conversion costs, causing a large negative change in INPV at TSL 6 
under this scenario. Under the preservation of operating profit 
scenario, the manufacturer markup decreases in 2028,

[[Page 12509]]

the year after the analyzed compliance year. This reduction in the 
manufacturer markup and the $2.25 billion in conversion costs incurred 
by manufacturers cause a significant decrease in INPV at TSL 6 under 
the preservation of operating profit scenario.
    DOE seeks comments, information, and data on the capital conversion 
costs and product conversion costs estimated for each TSL.
b. Direct Impacts on Employment
    To quantitatively assess the potential impacts of amended energy 
conservation standards on direct employment in the refrigerator, 
refrigerator-freezer, and freezer industry, DOE used the GRIM to 
estimate the domestic labor expenditures and number of direct employees 
in the no-new-standards case and in each of the standards cases during 
the analysis period. DOE calculated these values using statistical data 
from the 2020 ASM,\75\ BLS employee compensation data,\76\ results of 
the engineering analysis, and manufacturer interviews.
---------------------------------------------------------------------------

    \75\ U.S. Census Bureau, Annual Survey of Manufactures. 
``Summary Statistics for Industry Groups and Industries in the U.S 
(2020).'' Available at: www.census.gov/data/tables/time-series/econ/asm/2018-2020-asm.html (Last accessed July 15, 2022).
    \76\ U.S. Bureau of Labor Statistics. Employer Costs for 
Employee Compensation. June 16, 2022. Available at: www.bls.gov/news.release/pdf/ecec.pdf (Last accessed August 1, 2022).
---------------------------------------------------------------------------

    Labor expenditures related to product manufacturing depend on the 
labor intensity of the product, the sales volume, and an assumption 
that wages remain fixed in real terms over time. The total labor 
expenditures in each year are calculated by multiplying the total MPCs 
by the labor percentage of MPCs. The total labor expenditures in the 
GRIM were then converted to total production employment levels by 
dividing production labor expenditures by the average fully burdened 
wage multiplied by the average number of hours worked per year per 
production worker. To do this, DOE relied on the ASM inputs: Production 
Workers Annual Wages, Production Workers Annual Hours, Production 
Workers for Pay Period, and Number of Employees. DOE also relied on the 
BLS employee compensation data to determine the fully burdened wage 
ratio. The fully burdened wage ratio factors in paid leave, 
supplemental pay, insurance, retirement and savings, and legally 
required benefits.
    The number of production employees is then multiplied by the U.S. 
labor percentage to convert total production employment to total 
domestic production employment. The U.S. labor percentage represents 
the industry fraction of domestic manufacturing production capacity for 
the covered product. This value is derived from manufacturer 
interviews, product database analysis, and publicly available 
information. DOE estimates that 28 percent of refrigerators, 
refrigerator-freezers, and freezers are produced domestically.
    The domestic production employees estimate covers production line 
workers, including line supervisors, who are directly involved in 
fabricating and assembling products within the OEM facility. Workers 
performing services that are closely associated with production 
operations, such as materials handling tasks using forklifts, are also 
included as production labor. DOE's estimates only account for 
production workers who manufacture the specific products covered by 
this proposed rulemaking.
    Non-production workers account for the remainder of the direct 
employment figure. The non-production employees estimate covers 
domestic workers who are not directly involved in the production 
process, such as sales, engineering, human resources, and management. 
Using the amount of domestic production workers calculated above, non-
production domestic employees are extrapolated by multiplying the ratio 
of non-production workers in the industry compared to production 
employees. DOE assumes that this employee distribution ratio remains 
constant between the no-new-standards case and standards cases.
    Using the GRIM, DOE estimates in the absence of new energy 
conservation standards there would be 6,515 domestic workers for 
refrigerators, refrigerator-freezers, and freezers in 2027. Table V.27 
shows the range of the impacts of energy conservation standards on U.S. 
manufacturing employment in the refrigerator, refrigerator-freezer, and 
freezer industry. The following discussion provides a qualitative 
evaluation of the range of potential impacts presented in Table V.27.

                Table V.27--Domestic Direct Employment Impacts for Refrigerator, Refrigerator-Freezer, and Freezer Manufacturers in 2027
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                              No-new-
                                             standards         TSL 1           TSL 2           TSL 3           TSL 4           TSL 5           TSL 6
                                               case
--------------------------------------------------------------------------------------------------------------------------------------------------------
Direct Employment in 2027 (Production              6,515           6,528           6,530           6,695           6,786           6,897           7,637
 Workers + Non-Production Workers)......
Potential Changes in Direct Employment    ..............   (5,737) to 12   (5,737) to 13  (5,737) to 159  (5,737) to 239  (5,737) to 337  (5,737) to 988
 Workers in 2027*.......................
--------------------------------------------------------------------------------------------------------------------------------------------------------
* DOE presents a range of potential employment impacts. Numbers in parentheses denote negative values.

    The direct employment impacts shown in Table V.27 represent the 
potential domestic employment changes that could result following the 
compliance date for the refrigerator, refrigerator-freezer, and freezer 
product classes in this proposal. The upper bound estimate corresponds 
to an increase in the number of domestic workers that would result from 
amended energy conservation standards if manufacturers continue to 
produce the same scope of covered products within the United States 
after compliance takes effect. The lower bound estimate represents the 
maximum decrease in production workers if manufacturing moved to lower 
labor-cost countries. Most manufacturers currently produce at least a 
portion of their refrigerators, refrigerator-freezers, and freezers in 
countries with lower labor costs. Adopting an amended standard that 
necessitates large increases in labor content or large expenditures to 
re-tool facilities could cause manufacturers to reevaluate domestic 
production siting options. DOE seeks comments on domestic labor 
expenditures and decisions related to expanding domestic production in 
light of the proposed standard levels.
    Additional detail on the analysis of direct employment can be found 
in chapter 12 of the NOPR TSD.

[[Page 12510]]

Additionally, the employment impacts discussed in this section are 
independent of the employment impacts from the broader U.S. economy, 
which are documented in chapter 16 of the NOPR TSD.
c. Impacts on Manufacturing Capacity
    In interviews, some manufacturers noted potential capacity concerns 
related to implementing VIPs, particularly for high-volume product 
lines (i.e., product classes 3, 5, 5A, and 7). These manufacturers 
noted that incorporating VIPs (or additional VIPs) is labor intensive. 
Implementing VIPs requires additional labor associated with initial 
quality control inspections, placement, and post-foam inspections. 
These manufacturers noted they are physically constrained at some 
factories and do not have the ability to extend production lines to 
accommodate additional labor content. As discussed in section V.B.2.a 
of this document, some manufacturers noted that the only way to 
maintain current production levels would be to expand the existing 
footprint, build a mezzanine, or move to a new production facility. In 
interviews, some manufacturers expressed concerns at the max-tech 
efficiencies for top-mount (TSL 6), bottom-mount (TSL 4), and side-by-
side (TSL 6) standard-size refrigerator-freezers, and stated that the 
3-year period between the announcement of the final rule and the 
compliance date of the amended energy conservation standard might be 
insufficient to update existing plants or build new facilities to 
accommodate the additional labor required to manufacture the necessary 
number of products to meet demand.
    DOE seeks comment on whether manufacturers expect manufacturing 
capacity constraints would limit product availability to consumers in 
the timeframe of the amended standard compliance date (2027). In 
particular, DOE requests information on the product classes and 
associated efficiency levels that would delay manufacturer's ability to 
comply with a standard due to the extent of factory investments 
associated with VIP.
    In both manufacturer interviews and written comments, manufacturer 
made statements about the impacts of VSC availability. GEA noted ``if 
DOE were to increase energy efficiency requirements to a level that 
VSCs would be required for nearly all products, a significant supply 
shortage of VSCs would be created in an already supply constrained 
market'' (GEA, No. 38, p.3) AHAM strongly opposed any standard that 
requires VSCs to comply with the standard (AHAM, No. 31, p.10). In 
contrast, Samsung stated its understanding that more than one third of 
the US refrigerator market incorporates VSC compressors. Additionally, 
Samsung noted that the increased adoption of VSC technology has led to 
improved accessibility and lowered costs. (Samsung, No.32, p.2).
    DOE requests data on the availability of VSCs in the timeframe of 
the standard (2027). Additionally, DOE requests comment on the impact 
of international regulations on availability of VSCs for the domestic 
refrigerator, refrigerator-freezer, and freezer market.
d. Impacts on Subgroups of Manufacturers
    Using average cost assumptions to develop industry cash-flow 
estimates may not capture the differential impacts among subgroups of 
manufacturers. Small manufacturers, niche players, or manufacturers 
exhibiting a cost structure that differs substantially from the 
industry average could be affected disproportionately. DOE investigated 
small businesses as a manufacturer subgroup that could be 
disproportionally impacted by energy conservation standards and could 
merit additional analysis. DOE also identified the domestic LVM 
subgroup as a potential manufacturer subgroup that could be adversely 
impacted by energy conservation standards based on the results of the 
industry characterization.
Small Businesses
    DOE analyzes the impacts on small businesses in a separate analysis 
in section VI.B of this document as part of the Regulatory Flexibility 
Analysis. In summary, the SBA defines a ``small business'' as having 
1,500 employees or less for NAICS 335220, ``Major Household Appliance 
Manufacturing.'' Based on this classification, DOE identified one 
domestic OEM that qualifies as a small business. For a discussion of 
the impacts on the small business manufacturer subgroup, see the 
Regulatory Flexibility Analysis in section VI.B of this document and 
chapter 12 of the NOPR TSD.
Domestic, Low-Volume Manufacturers
    In addition to the small business subgroup, DOE identified domestic 
LVMs as a manufacturer subgroup that may experience differential 
impacts due to potential amended standards. DOE identified three 
domestic LVMs of refrigerators, refrigerator-freezers, and freezers 
that would potentially face more challenges with meeting amended 
standards than other larger OEMs of the covered products.
    Although these LVMs do not qualify as small businesses according to 
the SBA criteria previously discussed (i.e., employee count exceeds 
1,500), these manufacturers are significantly smaller in terms of 
annual revenues than the larger, diversified manufacturers selling 
refrigerators, refrigerator-freezers, and freezers in the United 
States. The domestic LVM subgroup consists of refrigerator, 
refrigerator-freezer, and freezer manufacturers that primarily sell 
high-end, built-in or fully integrated consumer refrigeration products 
(``undercounter'' and standard-size) as well as commercial 
refrigeration equipment and cooking products. Specifically, 
manufacturers indicated during confidential interviews that the fully 
integrated compact (``undercounter'') products produced by the domestic 
LVMs are niche products and are more expensive to produce (and, 
therefore, have higher selling prices) than the majority of the compact 
products sold in the United States.
    Table V.28 lists the range of product offerings and total company 
annual revenue for the three domestic LVMs identified. These three 
manufacturers account for approximately 1 percent of the overall 
domestic refrigerator, refrigerator-freezer, and freezer shipments. 
This table also contains the range of total company annual revenue for 
the five largest appliance manufacturers selling refrigerators, 
refrigerator-freezers, and freezers in the U.S. market. These five 
appliance manufacturers account for approximately 95 percent of the 
overall domestic refrigerator, refrigerator-freezer, and freezer 
shipments.

[[Page 12511]]



Table V.28--Revenues and Product Offerings of Low-Volume Manufacturers and Large Manufacturers of Refrigerators,
                                      Refrigerator-Freezers, and Freezers.
----------------------------------------------------------------------------------------------------------------
                                                                                   Refrigerator, refrigerator-
            Manufacturer type               Estimated range of annual company      freezer, and freezer poduct
                                                revenue*  (2021$ Millions)                  offerings
----------------------------------------------------------------------------------------------------------------
Domestic LVMs...........................  $186 to $2,510.......................  High-end, built-in or fully
                                                                                  integrated ``undercounter'' or
                                                                                  standard-size refrigeration
                                                                                  products (e.g., product
                                                                                  classes 5-BI, 13A, 14).
Large Appliance Manufacturers...........  $14,650 to $174,550..................  Wide range of freestanding,
                                                                                  standard-size refrigerator-
                                                                                  freezers and freezers. (e.g.,
                                                                                  product classes 3, 5, 5A, 7,
                                                                                  10) Most also offer premium
                                                                                  brands for standard-size built-
                                                                                  in products.
----------------------------------------------------------------------------------------------------------------
* Revenue estimates refer to the total annual company revenue of the parent company and any associated
  subsidiaries.

    LVMs may be disproportionately affected by conversion costs. 
Product redesign, testing, and certification costs tend to be fixed per 
basic model and do not scale with sales volume. Both large 
manufacturers and LVMs must make investments in R&D to redesign their 
products, but LVMs lack the sales volumes to sufficiently recoup these 
upfront investments without substantially marking up their products' 
selling prices. LVMs may also face challenges related to purchasing 
power and a less robust supply chain for key technologies or 
components, as compared to larger manufacturers. DOE notes that 
domestic LVMs have access to the same technology options as larger 
appliance manufacturers, the challenge with redesigning products to 
meet amended standards relates to scale and their ability to recover 
investments necessitated by more stringent standards.
    Although domestic, low-volume manufacturers would likely face 
additional challenges meeting potential standards for the built-in and 
compact (``undercounter'') refrigerator, refrigerator-freezer, and 
freezer product classes compared to other refrigerator, refrigerator-
freezer, and freezer manufacturers, some of the proposed amendments may 
be beneficial for domestic LVMs. As discussed in IV.A.1 of this 
document, DOE is proposing to incorporate certain energy use allowances 
for products with specialty doors and multi-door designs. A review of 
the three domestic LVM's product offerings and information gathered in 
confidential interviews indicates transparent door designs are 
particularly prevalent in their products.
    See section IV.A.1 for additional details on energy use allowances 
for products with specialty doors and multi-door designs.
    DOE requests comment on the potential impacts on domestic, low-
volume manufacturers at the TSLs presented in this NOPR.
e. Cumulative Regulatory Burden
    One aspect of assessing manufacturer burden involves looking at the 
cumulative impact of multiple DOE standards and the product-specific 
regulatory actions of other Federal agencies that affect the 
manufacturers of a covered product or equipment. While any one 
regulation may not impose a significant burden on manufacturers, the 
combined effects of several existing or impending regulations may have 
serious consequences for some manufacturers, groups of manufacturers, 
or an entire industry. Assessing the impact of a single regulation may 
overlook this cumulative regulatory burden. In addition to energy 
conservation standards, other regulations can significantly affect 
manufacturers' financial operations. Multiple regulations affecting the 
same manufacturer can strain profits and lead companies to abandon 
product lines or markets with lower expected future returns than 
competing products. For these reasons, DOE conducts an analysis of 
cumulative regulatory burden as part of its rulemakings pertaining to 
appliance efficiency.

Table V.29--Compliance Dates and Expected Conversion Expenses of Federal Energy Conservation Standards Affecting Refrigerator, Refrigerator-Freezer, and
                                                        Freezer Original Equipment Manufacturers
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                             Industry
                                                                            Number of OEMs                                                  conversion
           Federal energy conservation standard             Number of OEMs   affected from      Approx.       Industry conversion costs    costs/product
                                                                   *         today's rule   standards year          (millions $)            revenue ***
                                                                                  **                                                            (%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Portable Air Conditioners 85 FR 1378 (January 10, 2020)...              11               2            2025                $320.9 (2015$)             6.7
Room Air Conditioners [dagger] 87 FR 20608 (April 7, 2022)               8               4            2026                  22.8 (2020$)             0.5
Commercial Water Heating Equipment [dagger] 87 FR 30610                 14               1            2026                  34.6 (2020$)             4.7
 (May 19, 2022)...........................................
Consumer Furnaces [dagger] 87 FR 40590 (July 7, 2022).....              15               1            2029                 150.6 (2020$)             1.4
Consumer Clothes Dryers [dagger] 87 FR 51734 (August 23,                15              11            2027                 149.7 (2020$)             1.8
 2022)....................................................
Microwave Ovens [dagger] 87 FR 52282 (August 24, 2022)....              18              11            2026                  46.1 (2021$)             0.7
Consumer Conventional Cooking Products [dagger] 88 FR 6818              34              12            2027                 183.4 (2021$)             1.2
 (February 1, 2023).......................................
Residential Clothes Washers [dagger][Dagger]..............              19              12            2027                 690.8 (2021$)             5.2
--------------------------------------------------------------------------------------------------------------------------------------------------------
* This column presents the total number of OEMs identified in the energy conservation standard rule contributing to cumulative regulatory burden.

[[Page 12512]]

 
** This column presents the number of OEMs producing refrigerators, refrigerator-freezers, and freezers that are also listed as OEMs in the identified
  energy conservation standard contributing to cumulative regulatory burden.
*** This column presents industry conversion costs as a percentage of product revenue during the conversion period. Industry conversion costs are the
  upfront investments manufacturers must make to sell compliant products/equipment. The revenue used for this calculation is the revenue from just the
  covered product/equipment associated with each row. The conversion period is the time frame over which conversion costs are made and lasts from the
  publication year of the final rule to the compliance year of the final rule. The conversion period typically ranges from 3 to 5 years, depending on
  the energy conservation standard.
[dagger] These rulemakings are in the NOPR stage and all values are subject to change until finalized.
[Dagger] At the time of issuance of this refrigerator, refrigerator-freezer, and freezer proposed rule, the residential clothes washer proposed rule has
  been issued and is pending publication in the Federal Register. Once published, the proposed rule pertaining to residential clothes washers will be
  available at: www.regulations.gov/docket/EERE-2017-BT-STD-0014.

    In addition to the rulemakings listed in Table V.29, DOE has 
ongoing rulemakings for other products or equipment that refrigerator, 
refrigerator-freezer, and freezer manufacturers produce, including but 
not limited to miscellaneous refrigeration products; \77\ 
dehumidifiers; \78\ and dishwashers.\79\ If DOE proposes or finalizes 
any energy conservation standards for these products or equipment prior 
to finalizing energy conservation standards for refrigerators, 
refrigerator-freezers, and freezers, DOE will include the energy 
conservation standards for these other products or equipment as part of 
the cumulative regulatory burden for the refrigerators, refrigerator-
freezers, and freezers final rule.
---------------------------------------------------------------------------

    \77\ www.regulations.gov/docket/EERE-2020-BT-STD-0039.
    \78\ www.regulations.gov/docket/EERE-2019-BT-STD-0043.
    \79\ www.regulations.gov/docket/EERE-2019-BT-STD-0039.
---------------------------------------------------------------------------

    DOE requests information regarding the impact of cumulative 
regulatory burden on manufacturers of refrigerators, refrigerator-
freezers, and freezers associated with multiple DOE standards or 
product-specific regulatory actions of other Federal agencies.
3. 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 TSLs considered as 
potential amended standards.
a. Significance of Energy Savings
    To estimate the energy savings attributable to potential amended 
standards for refrigerators, refrigerator-freezers, and freezers, DOE 
compared their energy consumption under the no-new-standards case to 
their anticipated energy consumption under each TSL. 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 (2027-2056). Table V.30 Cumulative National Energy Savings 
for Freestanding Refrigerators, Refrigerator-Freezers, and Freezers; 30 
Years of Shipments (2027-2056) presents DOE's projections of the NES 
for each TSL considered for freestanding consumer refrigerators, 
refrigerator-freezers, and freezers. Table V.30 presents DOE's 
projections of the NES for each TSL considered for built-in consumer 
refrigerators, refrigerator-freezers, and freezers. The savings were 
calculated using the approach described in section IV.H.2 of this 
document.

        Table V.30--Cumulative National Energy Savings for Freestanding Refrigerators, Refrigerator-Freezers, and Freezers; 30 Years of Shipments
                                                                       [2027-2056]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                 Standard size refrigerator-freezers       Standard size freezers           Compact
                                          ---------------------------------------------------------------------------------------------------
                                            Top mount                Bottom     Side-by-                           Refrigerators   Freezers
                                   TSL     (PC 1, 1A,    Bottom    mount with   side (PC     Upright    Chest (PC   (PC 11, 11A,    (PC 16,      Total
                                            2, 3, 3A,   mount (PC    TTD (PC   4, 4I, and   (PC 8 and    10 and     12, 13, 13A,    17, and
                                           3I, and 6)   5 and 5I)      5A)         7)          9)         10A)      14, and 15)       18)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                          quads
--------------------------------------------------------------------------------------------------------------------------------------------------------
Primary Energy:
                                        1       0.292       0.355       0.696       0.316       0.312       0.161         0.047        0.056       2.237
                                        2       0.600       0.355       0.696       0.672       0.293       0.000         0.047        0.056       2.721
                                        3       0.600       0.744       1.046       1.044       0.293       0.000         0.072        0.082       3.881
                                        4       1.054       0.744       1.405       1.044       0.293       0.000         0.072        0.082       4.694
                                        5       1.054       0.744       1.405       1.421       0.293       0.000         0.072        0.082       5.072
                                        6       2.204       1.391       1.405       1.573       0.925       0.521         0.262        0.175       8.455
FFC:
                                        1       0.303       0.369       0.724       0.328       0.325       0.167         0.049        0.058       2.324
                                        2       0.624       0.369       0.724       0.698       0.305       0.000         0.049        0.058       2.827
                                        3       0.624       0.774       1.086       1.084       0.305       0.000         0.075        0.085       4.032
                                        4       1.095       0.774       1.460       1.084       0.305       0.000         0.075        0.085       4.877
                                        5       1.095       0.774       1.460       1.477       0.305       0.000         0.075        0.085       5.269
                                        6       2.290       1.445       1.460       1.634       0.961       0.541         0.273        0.182       8.784
--------------------------------------------------------------------------------------------------------------------------------------------------------


[[Page 12513]]


 Table V.31--Cumulative National Energy Savings for Built-in Refrigerators, Refrigerator-Freezers, and Freezers;
                                              30 Years of Shipments
                                                   [2027-2056]
----------------------------------------------------------------------------------------------------------------
                                                             Built-in
                                 ----------------------------------------------------------------
                                                                   Side-by-side
               TSL                      All        Bottom-mount    refrigerator-      Upright          Total
                                   refrigerator    refrigerator   freezers (PC 4-  freezers  (PC
                                    (PC 3A-BI)    (PC 5-BI,  5I-  BI, 4I-BI, and       9-BI)
                                                        BI)            7-BI)
----------------------------------------------------------------------------------------------------------------
                                                      quads
----------------------------------------------------------------------------------------------------------------
Primary Energy:
    1...........................           0.000           0.006           0.000           0.000           0.006
    2...........................           0.004           0.006           0.005           0.000           0.015
    3...........................           0.004           0.006           0.011           0.000           0.021
    4...........................           0.009           0.006           0.011           0.000           0.025
    5...........................           0.009           0.006           0.017           0.000           0.031
    6...........................           0.025           0.016           0.019           0.001           0.062
FFC:
    1...........................           0.000           0.006           0.000           0.000           0.006
    2...........................           0.004           0.006           0.005           0.000           0.016
    3...........................           0.004           0.006           0.011           0.000           0.022
    4...........................           0.009           0.006           0.011           0.000           0.026
    5...........................           0.009           0.006           0.017           0.000           0.032
    6...........................           0.026           0.017           0.020           0.002           0.065
----------------------------------------------------------------------------------------------------------------

    OMB Circular A-4 \80\ 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 rulemaking, 
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.\81\ The review timeframe established in EPCA is generally 
not synchronized with the product lifetime, product manufacturing 
cycles, or other factors specific to consumer refrigerators, 
refrigerator-freezers, and freezers. 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.32 and 
Table V.33 of this document. The impacts are counted over the lifetime 
of consumer refrigerators, refrigerator-freezers, and freezers 
purchased in 2027-2035.
---------------------------------------------------------------------------

    \80\ U.S. Office of Management and Budget. Circular A-4: 
Regulatory Analysis. September 17, 2003. www.whitehouse.gov/omb/circulars_a004_a-4/ (last accessed July 26, 2022).
    \81\ Section 325(m) of EPCA requires DOE to review its standards 
at least once every 6 years, and requires, for certain products, a 
3-year period after any new standard is promulgated before 
compliance is required, except that in no case may any new standards 
be required within 6 years of the compliance date of the previous 
standards. While adding a 6-year review to the 3-year compliance 
period adds up to 9 years, DOE notes that it may undertake reviews 
at any time within the 6-year period and that the 3-year compliance 
date may yield to the 6-year backstop. A 9-year analysis period may 
not be appropriate given the variability that occurs in the timing 
of standards reviews and the fact that for some products, the 
compliance period is 5 years rather than 3 years.

        Table V.32--Cumulative National Energy Savings for Freestanding Refrigerators, Refrigerator-Freezers, and Freezers; 9 Years of Shipments
                                                                       [2027-2035]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                           Standard size refrigerator-freezers          Standard size freezers             Compact
                                  ----------------------------------------------------------------------------------------------------------
                                    Top mount                   Bottom                                           Refrigerators
               TSL                  (PC 1, 1A,     Bottom     mount with    Side-by-   Upright (PC   Chest (PC    (PC 11, 11A,    Freezers      Total
                                    2, 3, 3A,    mount  (PC    TTD  (PC   side (PC 4,    8 and 9)   10 and 10A)   12, 13, 13A,  (PC 16, 17,
                                   3I,  and 6)   5 and 5I)       5A)      4I,  and 7)                             14, and 15)      and 18)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                          quads
--------------------------------------------------------------------------------------------------------------------------------------------------------
Primary Energy:
    1............................        0.080        0.097        0.190        0.086        0.087        0.045         0.012         0.015        0.612
    2............................        0.164        0.097        0.190        0.183        0.082        0.000         0.012         0.015        0.743
    3............................        0.164        0.203        0.285        0.285        0.082        0.000         0.018         0.022        1.059
    4............................        0.288        0.203        0.384        0.285        0.082        0.000         0.018         0.022        1.281
    5............................        0.288        0.203        0.384        0.388        0.082        0.000         0.018         0.022        1.384
    6............................        0.599        0.379        0.384        0.429        0.257        0.145         0.065         0.046        2.304
FFC:
    1............................        0.083        0.101        0.198        0.090        0.091        0.047         0.012         0.015        0.636
    2............................        0.170        0.101        0.198        0.191        0.085        0.000         0.012         0.015        0.772
    3............................        0.170        0.211        0.297        0.296        0.085        0.000         0.018         0.023        1.100
    4............................        0.299        0.211        0.399        0.296        0.085        0.000         0.018         0.023        1.331

[[Page 12514]]

 
    5............................        0.299        0.211        0.399        0.403        0.085        0.000         0.018         0.023        1.438
    6............................        0.623        0.394        0.399        0.446        0.267        0.151         0.067         0.048        2.395
--------------------------------------------------------------------------------------------------------------------------------------------------------


 Table V.33--Cumulative National Energy Savings for Built-in Refrigerators, Refrigerator-Freezers, and Freezers;
                                              9 Years of Shipments
                                                   [2027-2035]
----------------------------------------------------------------------------------------------------------------
                                                             Built-in
                                 ----------------------------------------------------------------
                                                                   Side-by-side
               TSL                      All        Bottom-mount    refrigerator-      Upright          Total
                                   refrigerator    refrigerator   freezers (PC 4-  freezers  (PC
                                    (PC 3A-BI)    (PC 5-BI,  5I-  BI, 4I-BI, and       9-BI)
                                                        BI)            7-BI)
----------------------------------------------------------------------------------------------------------------
                                                      quads
----------------------------------------------------------------------------------------------------------------
Primary Energy:
    1...........................           0.000           0.002           0.000           0.000           0.002
    2...........................           0.001           0.002           0.001           0.000           0.004
    3...........................           0.001           0.002           0.003           0.000           0.006
    4...........................           0.002           0.002           0.003           0.000           0.007
    5...........................           0.002           0.002           0.005           0.000           0.008
    6...........................           0.007           0.004           0.005           0.000           0.017
FFC:
    1...........................           0.000           0.002           0.000           0.000           0.002
    2...........................           0.001           0.002           0.001           0.000           0.004
    3...........................           0.001           0.002           0.003           0.000           0.006
    4...........................           0.002           0.002           0.003           0.000           0.007
    5...........................           0.002           0.002           0.005           0.000           0.009
    6...........................           0.007           0.005           0.005           0.000           0.018
----------------------------------------------------------------------------------------------------------------

b. 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 the TSLs considered for refrigerators, 
refrigerator-freezers, and freezers. In accordance with OMB's 
guidelines on regulatory analysis,\82\ DOE calculated NPV using both a 
7-percent and a 3-percent real discount rate. Table V.34 and Table V.35 
show the consumer NPV results with impacts counted over the lifetime of 
products purchased in 2027-2056.
---------------------------------------------------------------------------

    \82\ U.S. Office of Management and Budget. Circular A-4: 
Regulatory Analysis. September 17, 2003. www.whitehouse.gov/omb/circulars_a004_a-4/ (last accessed July 26, 2022).

                    Table V.34--Cumulative Net Present Value of Consumer Benefits for Freestanding Refrigerators, Refrigerator-Freezers, and Freezers; 30 Years of Shipments
                                                                                           [2027-2056]
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                Standard size refrigerator-freezers             Standard size freezers              Compact
                                                                     -----------------------------------------------------------------------------------------------------------------
                                                                        Top mount                                                                         Refrigerators
                      Discount rate                           TSL      (PC 1, 1A,   Bottom mount  Bottom mount  Side-by-side   Upright (PC  Chest (PC 10   (PC 11, 11A,  Freezers (PC    Total
                                                                        2, 3, 3A,     (PC 5 and   With TTD (PC   (PC 4, 41,     8 and 9)      and 10A)     12, 13, 13A,  16, 17,  and
                                                                       3I,  and 6)       5I)           5A)         and 7)                                  14, and 15)        18)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                      (Billion $2021)
                                                          --------------------------------------------------------------------------------------------------------------------------------------
3 percent................................................          1          1.85          1.97          4.12          2.01          1.46          0.41           0.10          0.34      12.26
                                                                   2          2.79          1.97          4.12          3.77          1.40          0.00           0.10          0.34      14.49
                                                                   3          2.79          3.64          4.70          4.84          1.40          0.00           0.21          0.35      17.93
                                                                   4          4.34          3.64          4.90          4.84          1.40          0.00           0.21          0.35      19.68
                                                                   5          4.34          3.64          4.90          5.45          1.40          0.00           0.21          0.35      20.29
                                                                   6          3.55          2.95          4.90          5.33          2.53          1.19          -0.53          0.27      20.20
7 percent................................................          1          0.74          0.71          1.63          0.82          0.48          0.07           0.02          0.14       4.61
                                                                   2          0.99          0.71          1.63          1.45          0.47          0.00           0.02          0.14       5.41
                                                                   3          0.99          1.25          1.68          1.74          0.47          0.00           0.07          0.13       6.31
                                                                   4          1.41          1.25          1.51          1.74          0.47          0.00           0.07          0.13       6.57
                                                                   5          1.41          1.25          1.51          1.78          0.47          0.00           0.07          0.13       6.61

[[Page 12515]]

 
                                                                   6          0.09          0.34          1.51          1.60          0.46          0.18          -0.42          0.01       3.77
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------


  Table V.35--Cumulative Net Present Value of Consumer Benefits for Built-in Refrigerators, Refrigerator-Freezers, and Freezers; 30 Years of Shipments
                                                                       [2027-2056]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                     Built-in
                                                                         ----------------------------------------------------------------
                                                                                                           Side-by-side
                      Discount rate                             TSL             All        Bottom-mount    refrigerator-      Upright          Total
                                                                           refrigerator    refrigerator   freezers (PC 4-  freezers  (PC
                                                                            (PC 3A-BI)    (PC 5-BI,  5I-  BI, 4I-BI, and       9-BI)
                                                                                                BI)            7-BI)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                  (Billion $2021)
                                                         -----------------------------------------------------------------------------------------------
3 percent...............................................               1            0.00            0.03            0.00            0.00            0.03
                                                                       2            0.01            0.03            0.02            0.00            0.06
                                                                       3            0.01            0.03            0.04            0.00            0.08
                                                                       4            0.02            0.03            0.04            0.00            0.09
                                                                       5            0.02            0.03            0.06            0.00            0.11
                                                                       6            0.02            0.04            0.06            0.00            0.12
7 percent...............................................               1            0.00            0.01            0.00            0.00            0.01
                                                                       2            0.00            0.01            0.01            0.00            0.02
                                                                       3            0.00            0.01            0.01            0.00            0.02
                                                                       4            0.01            0.01            0.01            0.00            0.03
                                                                       5            0.01            0.01            0.02            0.00            0.03
                                                                       6           -0.01            0.01            0.01            0.00            0.01
--------------------------------------------------------------------------------------------------------------------------------------------------------

    The NPV results based on the aforementioned 9-year analytical 
period are presented in Table V.36 and Table V.37. The impacts are 
counted over the lifetime of products purchased in 2027-2035. 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.36--Cumulative Net Present Value of Consumer Benefits for Consumer Benefits for Freestanding Refrigerators, Refrigerator-Freezers, and Freezers; 9 Years of Shipments
                                                                                           [2027-2035]
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                Standard size refrigerator-freezers             Standard Size Freezers              Compact
                                                                     -----------------------------------------------------------------------------------------------------------------
                                                                        Top mount                                                                         Refrigerators
                      Discount rate                           TSL      (PC 1, 1A,   Bottom mount  Bottom mount  Side-by-side   Upright (PC  Chest (PC 10   (PC 11, 11A,  Freezers (PC    Total
                                                                        2, 3, 3A,     (PC 5 and   with TTD (PC   (PC 4, 4I,     8 and 9)      and 10A)     12, 13, 13A,  16, 17,  and
                                                                       3I,  and 6)       5I)           5A)         and 7)                                  14, and 15)        18)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                      (Billion $2021)
                                                          --------------------------------------------------------------------------------------------------------------------------------------
3 percent................................................          1          0.67          0.63          1.42          0.73          0.52          0.10           0.01          0.12       4.19
                                                                   2          0.95          0.63          1.42          1.27          0.50          0.00           0.01          0.12       4.90
                                                                   3          0.95          1.17          1.57          1.60          0.50          0.00           0.04          0.11       5.96
                                                                   4          1.33          1.17          1.55          1.60          0.50          0.00           0.04          0.11       6.32
                                                                   5          1.33          1.17          1.55          1.75          0.50          0.00           0.04          0.11       6.46
                                                                   6          0.65          0.69          1.55          1.66          0.75          0.34          -0.29          0.03       5.38
7 percent................................................          1          0.36          0.30          0.76          0.40          0.23          0.01           0.00          0.07       2.11
                                                                   2          0.45          0.30          0.76          0.66          0.22          0.00           0.00          0.07       2.45
                                                                   3          0.45          0.53          0.74          0.77          0.22          0.00           0.02          0.06       2.79
                                                                   4          0.56          0.53          0.61          0.77          0.22          0.00           0.02          0.06       2.76
                                                                   5          0.56          0.53          0.61          0.75          0.22          0.00           0.02          0.06       2.74
                                                                   6         -0.31         -0.05          0.61          0.63          0.13          0.04          -0.26         -0.03       0.77
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------


[[Page 12516]]


 Table V.37--Cumulative Net Present Value of Consumer Benefits for Consumer Benefits for Built-in Refrigerators,
                            Refrigerator-Freezers, and Freezers; 9 Years of Shipments
                                                   [2027-2035]
----------------------------------------------------------------------------------------------------------------
                                                             Built-In
                                 ----------------------------------------------------------------
                                                                   Side-by-side
               TSL                      All        Bottom-mount    refrigerator-      Upright          Total
                                   refrigerator    refrigerator   freezers (PC 4-  freezers  (PC
                                    (PC 3A-BI)    (PC 5-BI,  5I-  BI, 4I-BI, and       9-BI)
                                                        BI)            7-BI)
----------------------------------------------------------------------------------------------------------------
                                                                  (Billion $2021)
                                 -------------------------------------------------------------------------------
3 percent
    1...........................            0.00            0.01            0.00            0.00            0.01
    2...........................            0.00            0.01            0.01            0.00            0.02
    3...........................            0.00            0.01            0.01            0.00            0.02
    4...........................            0.01            0.01            0.01            0.00            0.03
    5...........................            0.01            0.01            0.02            0.00            0.03
    6...........................            0.00            0.01            0.02            0.00            0.03
7 percent
    1...........................            0.00            0.00            0.00            0.00            0.00
    2...........................            0.00            0.00            0.00            0.00            0.01
    3...........................            0.00            0.00            0.01            0.00            0.01
    4...........................            0.00            0.00            0.01            0.00            0.01
    5...........................            0.00            0.00            0.01            0.00            0.01
    6...........................           -0.01            0.00            0.01            0.00            0.00
----------------------------------------------------------------------------------------------------------------

    The previous results reflect the use of a default trend to estimate 
the change in price for consumer refrigerators, refrigerator-freezers, 
and freezers over the analysis period (see section IV.H.3 of this 
document). DOE also conducted a sensitivity analysis that considered 
one scenario with a lower rate of price decline than the reference case 
and one scenario with a higher rate of price decline than the reference 
case. The results of these alternative cases are presented in appendix 
10C of the NOPR TSD. In the high-price-decline case, the NPV of 
consumer benefits is higher than in the default case. In the low-price-
decline case, the NPV of consumer benefits is lower than in the default 
case.
c. Indirect Impacts on Employment
    It is estimated that that amended energy conservation standards for 
refrigerators, refrigerator-freezers, and freezers would reduce energy 
expenditures for consumers of those products, with the resulting net 
savings being redirected to other forms of economic activity. These 
expected shifts in spending and economic activity could affect the 
demand for labor. As described in section IV.N of this document, DOE 
used an input/output model of the U.S. economy to estimate indirect 
employment impacts of the TSLs that DOE considered. There are 
uncertainties involved in projecting employment impacts, especially 
changes in the later years of the analysis. Therefore, DOE generated 
results for near-term timeframes (2027-2031), where these uncertainties 
are reduced.
    The results suggest that the proposed standards would be likely to 
have a negligible impact on the net demand for labor in the economy. 
The net change in jobs is so small that it would be imperceptible in 
national labor statistics and might be offset by other, unanticipated 
effects on employment. Chapter 16 of the NOPR TSD presents detailed 
results regarding anticipated indirect employment impacts.
4. Impact on Utility or Performance of Products
    As discussed in section III.E.1.d of this document, DOE has 
tentatively concluded that the standards proposed in this NOPR would 
not lessen the utility or performance of the refrigerators, 
refrigerator-freezers, and freezers under consideration in this 
rulemaking. Manufacturers of these products currently offer units that 
meet or exceed the proposed standards.
    DOE's analysis for this proposed rule includes wall thickness 
increases over baseline only for product classes 10, 11A, and 18. 
Thickness increases were assumed to impact the external dimensions of 
the aforementioned product classes rather than internal volume. Thus, 
the expected useable, refrigerated volume would not be impacted and 
would remain similar to commercially available models today. DOE only 
considered an incremental increase in external dimensions for those 
three product classes that are consistent with commercially available 
product dimensions currently on the market. DOE does not believe such 
incremental increases that are consistent with currently available 
product dimensions will have an adverse impact on consumer utility 
because these products will not likely be installed within cabinetry.
    DOE seeks comment on its analysis of wall thickness increases for 
product classes 10, 11A, and 18 along with its preliminary conclusions 
that consumer utility will not be impacted.
5. Impact of Any Lessening of Competition
    DOE considered any lessening of competition that would be likely to 
result from new or amended standards. As discussed in section III.E.1.e 
of this document, the Attorney General determines the impact, if any, 
of any lessening of competition likely to result from a proposed 
standard, and transmits such determination in writing to the Secretary, 
together with an analysis of the nature and extent of such impact. To 
assist the Attorney General in making this determination, DOE has 
provided DOJ with copies of this NOPR and the accompanying TSD for 
review. DOE will consider DOJ's comments on the proposed rule in 
determining whether to proceed to a final rule. DOE will publish and 
respond to DOJ's comments in that document. DOE invites comment from 
the public regarding the competitive impacts that are likely to result 
from this proposed rule. In addition, stakeholders may also provide 
comments separately to DOJ regarding

[[Page 12517]]

these potential impacts. See the ADDRESSES section for information to 
send comments to DOJ.
6. Need of the Nation To Conserve Energy
    Enhanced energy efficiency, where economically justified, improves 
the Nation's energy security, strengthens the economy, and reduces the 
environmental impacts (costs) of energy production. Reduced electricity 
demand due to energy conservation standards is also likely to reduce 
the cost of maintaining the reliability of the electricity system, 
particularly during peak-load periods. Chapter 15 in the NOPR TSD 
presents the estimated impacts on electricity generating capacity, 
relative to the no-new-standards case, for the TSLs that DOE considered 
in this proposed rule.
    Energy conservation resulting from potential energy conservation 
standards for refrigerators, refrigerator-freezers, and freezers is 
expected to yield environmental benefits in the form of reduced 
emissions of certain air pollutants and greenhouse gases. Table V.38 
provides DOE's estimate of cumulative emissions reductions expected to 
result from the TSLs considered in this rulemaking. The emissions were 
calculated using the multipliers discussed in section IV.K of this 
document. DOE reports annual emissions reductions for each TSL in 
chapter 13 of the NOPR TSD.

                 Table V.38--Cumulative Emissions Reduction for Refrigerators, Refrigerator-Freezers, and Freezers Shipped in 2027-2056
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                               Trial standard level
                                                         -----------------------------------------------------------------------------------------------
                                                                 1               2               3               4               5               6
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                 Power Sector Emissions
--------------------------------------------------------------------------------------------------------------------------------------------------------
CO2 (million metric tons)...............................           73.10           89.28          127.39          154.09          166.62          277.77
CH4 (thousand tons).....................................            5.76            7.04           10.05           12.16           13.15           21.90
N2O (thousand tons).....................................            0.81            0.99            1.41            1.70            1.84            3.07
NOX (thousand tons).....................................           36.66           44.81           63.96           77.37           83.66          139.34
SO2 (thousand tons).....................................           36.07           44.06           62.87           76.05           82.24          137.05
Hg (tons)...............................................            0.24            0.29            0.41            0.50            0.54            0.90
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                   Upstream Emissions
--------------------------------------------------------------------------------------------------------------------------------------------------------
CO2 (million metric tons)...............................            5.53            6.75            9.62           11.64           12.59           21.00
CH4 (thousand tons).....................................          523.58          638.80          911.11        1,101.96        1,191.52        1,988.67
N2O (thousand tons).....................................            0.03            0.03            0.05            0.06            0.06            0.10
NOX (thousand tons).....................................           83.81          102.25          145.84          176.40          190.73          318.32
SO2 (thousand tons).....................................            0.38            0.46            0.66            0.80            0.86            1.44
Hg (tons)...............................................            0.00            0.00            0.00            0.00            0.00            0.00
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                   Total FFC Emissions
--------------------------------------------------------------------------------------------------------------------------------------------------------
CO2 (million metric tons)...............................           78.63           96.03          137.01          165.73          179.20          298.78
CH4 (thousand tons).....................................          529.34          645.84          921.16        1,114.12        1,204.67        2,010.57
N2O (thousand tons).....................................            0.83            1.02            1.46            1.76            1.90            3.17
NOX (thousand tons).....................................          120.46          147.06          209.80          253.77          274.39          457.66
SO2 (thousand tons).....................................           36.45           44.53           63.53           76.85           83.10          138.49
Hg (tons)...............................................            0.24            0.29            0.41            0.50            0.54            0.90
--------------------------------------------------------------------------------------------------------------------------------------------------------
Negative values refer to an increase in emissions.

    As part of the analysis for this proposed rule, DOE estimated 
monetary benefits likely to result from the reduced emissions of 
CO2 that DOE estimated for each of the considered TSLs for 
refrigerators, refrigerator-freezers, and freezers. Section IV.L of 
this document discusses the SC-CO2 values that DOE used. 
Table V.39 presents the value of CO2 emissions reduction at 
each TSL for each of the SC-CO2 cases. The time-series of 
annual values is presented for the proposed TSL in chapter 14 of the 
NOPR TSD.

  Table V.39--Present Monetized Value of CO2 Emissions Reduction for Refrigerators, Refrigerator-Freezers, and
                                          Freezers Shipped in 2027-2056
----------------------------------------------------------------------------------------------------------------
                                                            SC-CO2 case Discount rate and statistics
                                              ------------------------------------------------------------------
                     TSL                                                                            3% 95th
                                                 5% Average      3% Average     2.5% Average       percentile
----------------------------------------------------------------------------------------------------------------
                                                                        (billion 2021$)
                                              ------------------------------------------------------------------
1............................................            0.66            2.89            4.56               8.77
2............................................            0.81            3.57            5.62              10.82
3............................................            1.16            5.10            8.04              15.49
4............................................            1.40            6.18            9.73              18.75
5............................................            1.52            6.68           10.53              20.28
6............................................            2.50           11.04           17.39              33.48
----------------------------------------------------------------------------------------------------------------


[[Page 12518]]

    As discussed in section IV.L.1 of this document, DOE estimated the 
climate benefits likely to result from the reduced emissions of methane 
and N2O that DOE estimated for each of the considered TSLs 
for refrigerators, refrigerator-freezers, and freezers. Table V.40 
presents the value of the CH4 emissions reduction at each 
TSL, and Table V.41 presents the value of the N2O emissions 
reduction at each TSL. The time-series of annual values is presented 
for the proposed TSL in chapter 14 of the NOPR TSD.

Table V.40--Present Monetized Value of Methane Emissions Reduction for Refrigerators, Refrigerator-Freezers, and
                                          Freezers Shipped in 2027-2056
----------------------------------------------------------------------------------------------------------------
                                                           SC-CH4 case  discount rate and statistics
                                              ------------------------------------------------------------------
                     TSL                                                                            3% 95th
                                                 5% Average      3% Average     2.5% Average       percentile
----------------------------------------------------------------------------------------------------------------
                                                                        (billion 2021$)
                                              ------------------------------------------------------------------
1............................................            0.20            0.62            0.88               1.65
2............................................            0.25            0.77            1.08               2.03
3............................................            0.36            1.10            1.55               2.91
4............................................            0.43            1.33            1.87               3.52
5............................................            0.47            1.44            2.02               3.81
6............................................            0.77            2.38            3.35               6.30
----------------------------------------------------------------------------------------------------------------


    Table V.41--Present Monetized Value of Nitrous Oxide Emissions Reduction for Refrigerators, Refrigerator-
                                   Freezers, and Freezers Shipped in 2027-2056
----------------------------------------------------------------------------------------------------------------
                                                           SC-N2O case  discount rate and statistics
                                              ------------------------------------------------------------------
                     TSL                                                                            3% 95th
                                                 5% Average      3% Average     2.5% Average       percentile
----------------------------------------------------------------------------------------------------------------
                                                                        (billion 2021$)
                                              ------------------------------------------------------------------
1............................................            0.00            0.01            0.02               0.03
2............................................            0.00            0.01            0.02               0.04
3............................................            0.00            0.02            0.03               0.05
4............................................            0.01            0.02            0.04               0.06
5............................................            0.01            0.03            0.04               0.07
6............................................            0.01            0.04            0.07               0.11
----------------------------------------------------------------------------------------------------------------

    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. Among other things, the 
preliminary injunction enjoined the defendants in that case from 
``adopting, employing, treating as binding, or relying upon'' 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. As reflected in this rule, DOE has 
reverted to its approach prior to the injunction and presents monetized 
greenhouse gas abatement benefits where appropriate and permissible 
under law.
    DOE is well aware that scientific and economic knowledge about the 
contribution of CO2 and other GHG emissions to changes in 
the future global climate and the potential resulting damages to the 
global and U.S. economy continues to evolve rapidly. DOE, together with 
other Federal agencies, will continue to review methodologies for 
estimating the monetary value of reductions in CO2 and other 
GHG emissions. This ongoing review will consider the comments on this 
subject that are part of the public record for this and other 
rulemakings, as well as other methodological assumptions and issues. 
DOE notes that the proposed standards would be economically justified 
even without inclusion of monetized benefits of reduced GHG emissions.
    DOE also estimated the monetary value of the health benefits 
associated with NOX and SO2 emissions reductions 
anticipated to result from the considered TSLs for refrigerators, 
refrigerator-freezers, and freezers. The dollar-per-ton values that DOE 
used are discussed in section IV.L of this document. Table V.42 
presents the present value for NOX emissions reduction for 
each TSL calculated using 7-percent and 3-percent discount rates, and 
Table V.43 presents similar results for SO2 emissions 
reductions. The results in these tables reflect application of EPA's 
low dollar-per-ton values, which DOE used to be conservative. The time-
series of annual values is presented for the proposed TSL in chapter 14 
of the NOPR TSD.

[[Page 12519]]



   Table V.42--Present Monetized Value of NOX Emissions Reduction for
 Refrigerators, Refrigerator-Freezers, and Freezers Shipped in 2027-2056
------------------------------------------------------------------------
                TSL                  3% Discount rate   7% Discount rate
------------------------------------------------------------------------
                                               (million 2021$)
                                   -------------------------------------
1.................................           4,368.08           1,612.82
2.................................           5,376.87           1,999.06
3.................................           7,692.46           2,866.91
4.................................           9,310.10           3,471.24
5.................................          10,069.16           3,754.82
6.................................          16,660.11           6,171.74
------------------------------------------------------------------------


   Table V.43--Present Monetized Value of SO2 Emissions Reduction for
 Refrigerators, Refrigerator-Freezers, and Freezers Shipped in 2027-2056
------------------------------------------------------------------------
                TSL                  3% Discount rate   7% Discount rate
------------------------------------------------------------------------
                                               (million 2021$)
                                   -------------------------------------
1.................................           1,789.12             677.21
2.................................           2,203.60             839.89
3.................................           3,153.20           1,204.76
4.................................           3,816.49           1,458.78
5.................................           4,127.73           1,577.98
6.................................           6,824.58           2,591.74
------------------------------------------------------------------------

    DOE has not considered the monetary benefits of the reduction of Hg 
for this proposed rule. Not all the public health and environmental 
benefits from the reduction of greenhouse gases, NOx, and 
SO2 are captured in the values above, and additional 
unquantified benefits from the reductions of those pollutants as well 
as from the reduction of Hg, direct PM, and other co-pollutants may be 
significant.
7. Other Factors
    The Secretary of Energy, in determining whether a standard is 
economically justified, may consider any other factors that the 
Secretary deems to be relevant. (42 U.S.C. 6295(o)(2)(B)(i)(VII)) No 
other factors were considered in this analysis.
8. Summary of Economic Impacts
    Table V.44 presents the NPV values that result from adding the 
estimates of the potential economic benefits resulting from reduced GHG 
and NOX and SO2 emissions to the NPV of consumer 
benefits calculated for each TSL considered in this proposed rule. The 
consumer benefits are domestic U.S. monetary savings that occur as a 
result of purchasing the covered refrigerators, refrigerator-freezers, 
and freezers, and are measured for the lifetime of products shipped in 
2027-2056. The climate benefits associated with reduced GHG emissions 
resulting from the adopted standards are global benefits, and are also 
calculated based on the lifetime of refrigerators, refrigerator-
freezers, and freezers shipped in 2027-2056.

                         Table V.44--Consumer NPV Combined With Present Value of Monetized Climate Benefits and Health Benefits
--------------------------------------------------------------------------------------------------------------------------------------------------------
                        Category                               TSL 1           TSL 2           TSL 3           TSL 4           TSL 5           TSL 6
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                          3% discount rate for Consumer NPV and Health Benefits (billion 2021$)
--------------------------------------------------------------------------------------------------------------------------------------------------------
5% Average SC-GHG case..................................            19.3            23.2            30.4            34.7            36.6            47.1
3% Average SC-GHG case..................................            22.0            26.5            35.1            40.4            42.7            57.3
2.5% Average SC-GHG case................................            23.9            28.8            38.5            44.5            47.2            64.6
3% 95th percentile SC-GHG case..........................            28.9            35.0            47.3            55.2            58.7            83.7
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                          7% discount rate for Consumer NPV and Health Benefits (billion 2021$)
--------------------------------------------------------------------------------------------------------------------------------------------------------
5% Average SC-GHG case..................................             7.8             9.3            11.9            13.4            14.0            15.8
3% Average SC-GHG case..................................            10.4            12.6            16.6            19.1            20.1            26.0
2.5% Average SC-GHG case................................            12.4            15.0            20.0            23.2            24.6            33.3
3% 95th percentile SC-GHG case..........................            17.4            21.2            28.9            33.9            36.1            52.4
--------------------------------------------------------------------------------------------------------------------------------------------------------

C. Conclusion

    When considering new or amended energy conservation standards, the 
standards that DOE adopts for any type (or class) of covered product 
must be designed to achieve the maximum improvement in energy 
efficiency that the Secretary determines is technologically feasible 
and economically justified. (42 U.S.C. 6295(o)(2)(A)) In determining 
whether a standard is economically justified, the Secretary must 
determine whether the benefits of the standard exceed its burdens by, 
to the greatest extent practicable, considering the seven statutory 
factors discussed previously.

[[Page 12520]]

(42 U.S.C. 6295(o)(2)(B)(i)) The new or amended standard must also 
result in significant conservation of energy. (42 U.S.C. 6295(o)(3)(B))
    For this NOPR, DOE considered the impacts of amended standards for 
refrigerators, refrigerator-freezers, and freezers at each TSL, 
beginning with the maximum technologically feasible level, to determine 
whether that level was economically justified. Where the max-tech level 
was not justified, DOE then considered the next most efficient level 
and undertook the same evaluation until it reached the highest 
efficiency level that is both technologically feasible and economically 
justified and saves a significant amount of energy.
    To aid the reader as DOE discusses the benefits and/or burdens of 
each TSL, tables in this section present a summary of the results of 
DOE's quantitative analysis for each TSL. In addition to the 
quantitative results presented in the tables, DOE also considers other 
burdens and benefits that affect economic justification. These include 
the impacts on identifiable subgroups of consumers who may be 
disproportionately affected by a national standard and impacts on 
employment.
    DOE also notes that the economics literature provides a wide-
ranging discussion of how consumers trade off upfront costs and energy 
savings in the absence of government intervention. Much of this 
literature attempts to explain why consumers appear to undervalue 
energy efficiency improvements.\83\ There is evidence that consumers 
undervalue future energy savings as a result of (1) a lack of 
information or informational asymmetries, (2) a lack of sufficient 
salience of the long-term or aggregate benefits, (3) a lack of 
sufficient personal financial savings to warrant delaying or altering 
purchases, (4) excessive focus on the short term, in the form of 
inconsistent weighting of future energy cost savings relative to 
available returns on other investments, due to loss aversion, myopia, 
inattention, or other factors, (5) computational or other difficulties 
associated with the evaluation of relevant tradeoffs, and (6) a 
divergence in incentives (for example, between renters and owners, or 
builders and purchasers, or between current and subsequent owners). 
Having less than perfect foresight and a high degree of uncertainty 
about the future, consumers may trade off these types of investments at 
a higher-than-expected rate between current consumption and uncertain 
future energy cost savings.
---------------------------------------------------------------------------

    \83\ Thaler, R.H., and Sunstein, C.R. (2008). Nudge: Improving 
Decisions on Health, Wealth, and Happiness. New Haven, CT: Yale 
University Press.
---------------------------------------------------------------------------

    In addition to the demand-side market failures, an expanding set of 
studies highlight the need to recognize the importance of market 
failure on the supply side.\84\ These market failures are associated 
primarily with innovation and imperfect competition. Underinvestment in 
innovation as a source of market failure emerges if there is 
underinvestment in R&D relative to the social optimum due to the 
positive externalities associated with increased knowledge.\85\ \86\ 
Findings suggest that if appliance manufacturers were induced to 
innovate in the direction of increased energy efficiency by standards, 
the stock of knowledge in that direction would increase, thereby 
facilitating even more innovation in that direction in the future.\87\ 
\88\ Imperfect competition in the appliance market in the U.S. is 
another source of market failure that standards can address. 
Ronnen,\89\ one of the first papers investigating minimum quality 
standards (MQS) in an imperfect competition setting, provides most of 
the intuition for this result. He showed that a MQS can be welfare 
improving because they effectively limit firms' ability to 
differentiate their products. This, in turn, limits the ability of the 
firm to screen customers with heterogeneous preferences over the 
regulated quality dimension (such as energy efficiency). As a result, 
firms can no longer charge an exaggerated premium for quality to 
customers with a high willingness to pay by suppressing quality 
targeted to customers with a low willingness to pay. A more recent 
study that looked at the U.S. clothes washer market and focused on how 
price changed following the revision of minimum standards found a 
similar pattern.\90\ The findings show that mid-low efficiency products 
had a large decrease in price level together with a downward break in 
price trend exactly at the time more stringent standards became 
effective. This is the effect predicted when the market is made up of 
price-discriminating firms who want to continue to serve customers 
previously targeted with the products that were eliminated by the 
standard.
---------------------------------------------------------------------------

    \84\ Houde, S., and Spurlock, C.A. (2016). ``Minimum Energy 
Efficiency Standards for Appliances: Old and New Economic 
Rationales,'' Economics of Energy & Environmental Policy, 5(2).
    \85\ Jaffe, A.B., R.G. Newell, and R.N. Stavins (2003). 
``Technological change and the environment,'' Handbook of 
Environmental Economics, 1,461-516.
    \86\ Spence, M. (1984). ``Cost reduction, competition, and 
industry performance,'' Econometrica: Journal of the Econometric 
Society, 101-121.
    \87\ Newell, R.G., A.B. Jaffe, and R.N. Stavins (1999). ``The 
Induced Innovation Hypothesis and Energy Saving Technological 
Change,'' Quarterly Journal of Economics, 114(458), 907-940.
    \88\ Popp, D. (2002). ``Induced Innovation and energy prices,'' 
American Economic Review, 92(1), 160-180.
    \89\ Ronnen, U. (1991). ``Minimum quality standards, fixed 
costs, and competition,'' The RAND Journal of Economics, 490-504.
    \90\ Spurlock, C.A. (2013). ``Appliance Efficiency Standards and 
Price Discrimination,'' Lawrence Berkeley National Laboratory 
Report, LBNL-6283E. https://escholarship.org/uc/item/6wh9838j.
---------------------------------------------------------------------------

    In DOE's current regulatory analysis, potential changes in the 
benefits and costs of a regulation due to changes in consumer purchase 
decisions are included in two ways. First, if consumers forgo the 
purchase of a product in the standards case, this decreases sales for 
product manufacturers, and the impact on manufacturers attributed to 
lost revenue is included in the MIA. Second, DOE accounts for energy 
savings attributable only to products actually used by consumers in the 
standards case; if a standard decreases the number of products 
purchased by consumers, this decreases the potential energy savings 
from an energy conservation standard. DOE provides estimates of 
shipments and changes in the volume of product purchases in chapter 9 
of the NOPR TSD. However, DOE's current analysis does not explicitly 
control for heterogeneity in consumer preferences, preferences across 
subcategories of products or specific features, or consumer price 
sensitivity variation according to household income.\91\
---------------------------------------------------------------------------

    \91\ P.C. Reiss and M.W. White. Household Electricity Demand, 
Revisited. Review of Economic Studies. 2005. 72(3): pp. 853-883. 
doi: 10.1111/0034-6527.00354.
---------------------------------------------------------------------------

    While DOE is not prepared at present to provide a fuller 
quantifiable framework for estimating the benefits and costs of changes 
in consumer purchase decisions due to an energy conservation standard, 
DOE is committed to developing a framework that can support empirical 
quantitative tools for improved assessment of the consumer welfare 
impacts of appliance standards. DOE has posted a paper that discusses 
the issue of consumer welfare impacts of appliance energy conservation 
standards, and potential enhancements to the methodology by which these 
impacts are defined and estimated in the regulatory process.\92\ DOE 
welcomes comments on how to more fully assess the potential impact of 
energy conservation standards on

[[Page 12521]]

consumer choice and how to quantify this impact in its regulatory 
analysis in future rulemakings.
---------------------------------------------------------------------------

    \92\ Sanstad, A.H. Notes on the Economics of Household Energy 
Consumption and Technology Choice. 2010. Lawrence Berkeley National 
Laboratory. www1.eere.energy.gov/buildings/appliance_standards/pdfs/consumer_ee_theory.pdf (last accessed July 26, 2022).
---------------------------------------------------------------------------

1. Benefits and Burdens of TSLs Considered for Refrigerator, 
Refrigerator-Freezer, and Freezer Standards
    Table V.45 and Table V.46 summarize the quantitative impacts 
estimated for each TSL for refrigerators, refrigerator-freezers, and 
freezers. There are also other important unquantified effects not 
presented in these tables, including certain unquantified climate 
benefits, unquantified public health benefits from the reduction of 
toxic air pollutants and other emissions, unquantified energy security 
benefits, and distributional effects, among others. The national 
impacts are measured over the lifetime of refrigerators, refrigerator-
freezers, and freezers purchased in the 30-year period that begins in 
the anticipated year of compliance with amended standards (2027-2056). 
The energy savings, emissions reductions, and value of emissions 
reductions refer to full-fuel-cycle results. The efficiency levels 
contained in each TSL are described in section V.A of this document.

            Table V.45--Summary of Analytical Results for Consumer Refrigerators, Refrigerator-Freezers, and Freezers TSLs: National Impacts
--------------------------------------------------------------------------------------------------------------------------------------------------------
                        Category                               TSL 1           TSL 2           TSL 3           TSL 4           TSL 5           TSL 6
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                         Cumulative FFC National Energy Savings
--------------------------------------------------------------------------------------------------------------------------------------------------------
Quads...................................................           2.330           2.842           4.054           4.903           5.302           8.849
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                           Cumulative FFC Emissions Reduction
--------------------------------------------------------------------------------------------------------------------------------------------------------
CO2 (million metric tons)...............................           78.63           96.03          137.01          165.73          179.20          298.78
CH4 (thousand tons).....................................          529.34          645.84          921.16        1,114.12        1,204.67        2,010.57
N2O (thousand tons).....................................            0.83            1.02            1.46            1.76            1.90            3.17
NOX (thousand tons).....................................          120.46          147.06          209.80          253.77          274.39          457.66
SO2 (thousand tons).....................................           36.45           44.53           63.53           76.85           83.10          138.49
Hg (tons)...............................................            0.24            0.29            0.41            0.50            0.54            0.90
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                     Present Monetized Value of Benefits and Costs (3% discount rate, billion 2021$)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings.........................           14.79           18.11           25.57           30.47           32.71           52.41
Climate Benefits *......................................            3.53            4.35            6.22            7.53            8.15           13.46
Health Benefits **......................................            6.16            7.58           10.85           13.13           14.20           23.48
                                                         -----------------------------------------------------------------------------------------------
    Total Benefits [dagger].............................           24.47           30.04           42.63           51.13           55.06           89.35
Consumer Incremental Product Costs......................            2.50            3.56            7.55           10.70           12.32           32.09
                                                         -----------------------------------------------------------------------------------------------
    Consumer Net Benefits...............................           12.29           14.55           18.01           19.77           20.40           20.31
                                                         -----------------------------------------------------------------------------------------------
    Total Net Monetized Benefits........................           21.97           26.48           35.08           40.43           42.74           57.26
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                     Present Monetized Value of Benefits and Costs (7% discount rate, billion 2021$)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings.........................            6.06            7.47           10.58           12.62           13.55           21.59
Climate Benefits *......................................            3.53            4.35            6.22            7.53            8.15           13.46
Health Benefits **......................................            2.29            2.84            4.07            4.93            5.33            8.76
                                                         -----------------------------------------------------------------------------------------------
    Total Benefits [dagger].............................           11.88           14.66           20.87           25.08           27.03           43.81
Consumer Incremental Product Costs......................            1.44            2.05            4.24            6.02            6.91           17.81
                                                         -----------------------------------------------------------------------------------------------
    Consumer Net Benefits...............................            4.62            5.43            6.34            6.60            6.64            3.78
                                                         -----------------------------------------------------------------------------------------------
    Total Net Monetized Benefits........................           10.44           12.61           16.63           19.06           20.12           26.00
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: This table presents the costs and benefits associated with consumer refrigerators, refrigerator-freezers, and freezers shipped in 2027-2056. These
  results include benefits to consumers which accrue after 2056 from the products shipped in 2027-2056.
* Climate benefits are calculated using four different estimates of the SC-CO2, SC-CH4 and SC-N2O. Together, these represent the global SC-GHG. For
  presentational purposes of this table, the climate benefits associated with the average SC-GHG at a 3 percent discount rate are shown, but the
  Department does not have a single central SC-GHG point estimate. 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. Among other things, the preliminary injunction enjoined the defendants in that case
  from ``adopting, employing, treating as binding, or relying upon'' 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. As reflected in this rule, DOE has reverted to its approach prior to the injunction and presents monetized greenhouse gas abatement
  benefits where appropriate and permissible under law.
** Health benefits are calculated using benefit-per-ton values for NOX and SO2. DOE is currently only monetizing (for NOX and SO2) PM2.5 precursor
  health benefits and (for NOX) ozone precursor health benefits, but will continue to assess the ability to monetize other effects such as health
  benefits from reductions in direct PM2.5 emissions. The health benefits are presented at real discount rates of 3 and 7 percent. See section IV.L of
  this document for more details.
[dagger] Total and net benefits include consumer, climate, and health benefits. For presentation purposes, total and net benefits for both the 3-percent
  and 7-percent cases are presented using the average SC-GHG with 3-percent discount rate, but the Department does not have a single central SC-GHG
  point estimate. DOE emphasizes the importance and value of considering the benefits calculated using all four SC-GHG estimates.


[[Page 12522]]


          Table V.46--Summary of Analytical Results for Refrigerator, Refrigerator-Freezer, and Freezer TSLs: Manufacturer and Consumer Impacts
--------------------------------------------------------------------------------------------------------------------------------------------------------
               Category                       TSL 1              TSL 2              TSL 3              TSL 4              TSL 5              TSL 6
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  Manufacturer Impacts
--------------------------------------------------------------------------------------------------------------------------------------------------------
Industry NPV (million 2021$) (No-new-          4,908.2 to         4,867.7 to         4,475.6 to         4,366.5 to         3,965.2 to         3,255.9 to
 standards case INPV = $4,966.4)......            4,944.5            4,920.2            4,619.8            4,554.0            4,173.5            3,688.2
Industry NPV (% change)...............     (1.2) to (0.4)     (2.0) to (0.9)     (9.9) to (7.0)    (12.1) to (8.3)   (20.2) to (16.0)   (34.4) to (25.7)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                          Consumer Average LCC Savings (2021$)
--------------------------------------------------------------------------------------------------------------------------------------------------------
PC 3..................................              32.16              42.18              42.18              36.04              36.04               8.09
PC 5..................................              47.15              47.15              49.73              49.73              49.73              19.14
PC 5BI................................              39.94              39.94              39.94              39.94              39.94              18.97
PC 5A.................................             115.32             115.32             121.98             115.76             115.76             115.76
PC 7..................................              53.56              78.56              95.26              95.26             101.33              94.68
PC 9..................................              69.26              69.26              69.26              69.26              69.26              63.71
PC 10.................................              10.20                N/A                N/A                N/A                N/A              40.91
PC 11A (residential)..................              16.78              16.78               9.97               9.97               9.97             (3.35)
PC 11A (commercial)...................               6.97               6.97               3.42               3.42               3.42            (23.47)
PC 17.................................              21.90              21.90              21.90              21.90              21.90             (5.74)
PC 18.................................              21.57              21.57              17.59              17.59              17.59             (9.06)
Shipment-Weighted Average *...........              48.75              57.83              61.26              58.58              59.43              39.97
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               Consumer Simple PBP (years)
--------------------------------------------------------------------------------------------------------------------------------------------------------
PC 3..................................                1.4                4.0                4.0                5.3                5.3                8.7
PC 5..................................                4.4                4.4                4.8                4.8                4.8                7.7
PC 5BI................................                5.7                5.7                5.7                5.7                5.7                7.3
PC 5A.................................                2.0                2.0                4.2                5.7                5.7                5.7
PC 7..................................                0.7                2.6                3.8                3.8                5.0                5.7
PC 9..................................                3.9                3.9                3.9                3.9                3.9                9.0
PC 10.................................               10.7                N/A                N/A                N/A                N/A               10.0
PC 11A (residential)..................                2.0                2.0                2.1                2.1                2.1                5.6
PC 11A (commercial)...................                3.2                3.2                3.2                3.2                3.2                8.7
PC 17.................................                5.0                5.0                5.0                5.0                5.0                7.5
PC 18.................................                1.3                1.3                4.2                4.2                4.2                9.0
Shipment-Weighted Average *...........                2.9                3.5                4.2                4.7                4.9                7.7
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                     Percent of Consumers that Experience a Net Cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
PC 3..................................                2.2               10.8               10.8               36.2               36.2               63.6
PC 5..................................                8.9                8.9               23.4               23.4               23.4               58.3
PC 5BI................................               10.1               10.1               10.1               10.1               10.1               43.9
PC 5A.................................                1.0                1.0               16.6               33.2               33.2               33.2
PC 7..................................                0.0                5.1               15.8               15.8               28.5               35.7
PC 9..................................               10.5               10.5               10.5               10.5               10.5               51.1
PC 10.................................               52.7                N/A                N/A                N/A                N/A               52.1
PC 11A (residential)..................                0.7                0.7                8.3                8.3                8.3               50.9
PC 11A (commercial)...................                1.6                1.6               17.2               17.2               17.2               73.2
PC 17.................................               12.3               12.3               12.3               12.3               12.3               66.3
PC 18.................................                0.6                0.6               21.8               21.8               21.8               69.9
Shipment-Weighted Average *...........                7.2                7.6               15.7               25.7               27.5               53.3
--------------------------------------------------------------------------------------------------------------------------------------------------------
Parentheses indicate negative (-) values. The entry ``N/A'' means not applicable because there is no change in the standard at certain TSLs.
* Weighted by shares of each product class in total projected shipments in 2027.

    DOE first considered TSL 6, which represents the max-tech 
efficiency levels. At this level, DOE expects that all product classes 
would require VIPs and most would require VSCs. For most product 
classes, this represents the use of VIPs for roughly half the cabinet 
surface (typically side walls and doors for an upright cabinet), the 
best-available-efficiency variable-speed compressor, forced-convection 
heat exchangers with multi-speed BLDC fans, variable defrost, and 
increase in cabinet wall thickness for some classes (e.g., compact 
refrigerators and both standard-size and compact chest freezers). DOE 
estimates that approximately 1 percent of annual shipments across all 
refrigerator, refrigerator-freezer, and freezer product classes 
currently meet the max-tech efficiencies required. TSL 6 would save an 
estimated 8.85 quads of energy, an amount DOE considers significant. 
Under TSL 6, the NPV of consumer benefit would be $3.78 billion using a 
discount rate of 7 percent, and $20.31 billion using a discount rate of 
3 percent.
    The cumulative emissions reductions at TSL 6 are 299 Mt of 
CO2, 138 thousand tons of SO2, 458 thousand tons 
of NOX, 0.90 tons of Hg, 2,011 thousand tons of 
CH4, and 3.17 thousand tons of N2O. The estimated 
monetary value of the climate benefits from reduced GHG emissions 
(associated with the average SC-GHG at a 3-percent discount rate) at 
TSL 6 is $13.46 billion. The estimated monetary value of the health 
benefits from reduced SO2 and NOX emissions at 
TSL 6 is $8.76 billion using a 7-percent discount rate and $23.48 
billion using a 3-percent discount rate.
    Using a 7-percent discount rate for consumer benefits and costs, 
health benefits from reduced SO2 and NOX 
emissions, and the 3-percent discount rate case for climate benefits 
from reduced GHG emissions, the estimated total NPV at TSL 6 is $26.00 
billion. Using a 3-percent discount rate for all benefits and costs, 
the estimated total NPV at TSL 6 is $57.26 billion. The estimated total 
NPV is provided for additional information, however DOE primarily 
relies upon the NPV of consumer benefits when determining whether a 
proposed standard level is economically justified.

[[Page 12523]]

    At TSL 6, for the largest product classes, which are 3, 5, 5A, and 
7 and together account for approximately 67 percent of annual 
shipments, there is a life cycle cost savings of $8.09, $19.14, 
$115.76, and $94.68 and a payback period of 8.7 years, 7.7 years, 5.7 
years and 5.7 years, respectively. However, for these product classes, 
the fraction of customers experiencing a net LCC cost is 63.6 percent, 
58.3 percent, 33.2 percent and 35.7 percent due to increases in first 
cost of $152.02, $137.71, $142.35, and $125.15, respectively. Overall, 
a majority of refrigerators, refrigerator-freezers, and freezers 
consumers (53.3 percent) would experience a net cost and the average 
LCC savings would be negative for PC 11A, PC 17, and PC 18. 
Additionally, 29 percent of low-income households with a side-by-side 
refrigerator-freezer (represented by PC 7 and used by 19 percent of 
low-income households) would experience a net cost.
    At TSL 6, the projected change in INPV ranges from a decrease of 
$1.71 billion to a decrease of $1.23 billion, which correspond to 
decreases of 34.4 percent and 25.7 percent, respectively. Industry 
conversion costs could reach $2.25 billion as manufacturers work to 
redesign their portfolio of model offerings and re-tool entire 
factories to comply with amended standards at TSL 6.
    DOE estimates that approximately 1 percent of refrigerator, 
refrigerator-freezer, and freezer current annual shipments meet the 
max-tech levels. At TSL 6, only a few manufacturers offer any standard-
size products that meet the efficiencies required. For PC 3, which 
accounts for approximately 25 percent of annual shipments, no OEMs 
currently offer products that meet the efficiency level required. For 
PC 5, which accounts for approximately 21 percent of annual shipments, 
DOE estimates that only one out of 23 OEMs currently offers products 
that meet the efficiency level required. For PC 7, which accounts for 
approximately 11 percent of annual shipments, only one out of the 11 
OEMs currently offers products that meet the efficiency level required.
    At max-tech, manufacturers would likely need to implement all of 
the most efficient design options in the engineering analysis. In 
interviews, manufacturer indicated they would redesign all product 
platforms and dramatically update manufacturing facilities to meet max-
tech for all approximately 16.7 million annual shipments of 
refrigerators, refrigerator-freezers, and freezers.
    In particular, increased incorporation of VIPs could increase the 
expense of adapting manufacturing plants. As discussed in section 
IV.J.2.c of this document, DOE expects manufacturers would need to 
adopt VIP technology to improve thermal insulation while minimizing 
loss to the interior volume for their products. Extensive incorporation 
of VIPs requires significant capital expenditures due to the need for 
more careful product handling and conveyor, increased warehousing 
requirements, investments in tooling necessary for the VIP installation 
process, and adding production line capacity to compensate for more 
time-intensive manufacturing associated with VIPs. Manufacturers with 
facilities that have limited space and few options to expand may 
consider greenfield projects. In interviews, several manufacturers 
expressed concerns about their ability to produce sufficient quantities 
of refrigerators, refrigerator-freezers, and freezers at max-tech given 
the required scale of investment, redesign effort, and 3-year 
compliance timeline.
    The Secretary tentatively concludes that at TSL 6 for 
refrigerators, refrigerator-freezers, and freezers, the benefits of 
energy savings, positive NPV of consumer benefits, emission reductions, 
and the estimated monetary value of the emissions reductions would be 
outweighed by the economic burden on many consumers, and the impacts on 
manufacturers, including the large potential reduction in INPV and the 
lack of manufacturers currently offering products meeting the 
efficiency levels required at this TSL. At TSL 6, a majority of 
refrigerator, refrigerator-freezer, and freezers consumer (53.3 
percent) would experience a net cost and the average LCC savings would 
be negative for PC 11A, PC 17, and PC 18. Additionally, manufacturers 
would need to make significant upfront investments to update product 
lines and manufacturing facilities. Manufacturers expressed concern 
that they would not be able to complete product and production line 
updates within the 3-year conversion period. Consequently, the 
Secretary has tentatively concluded that TSL 6 is not economically 
justified.
    DOE then considered TSL 5 for refrigerators, refrigerator-freezers, 
and freezers. For classes other than refrigerator-freezers with bottom-
mounted freezers and through-the-door ice service (PC 5A), this TSL 
represents efficiency levels less than max-tech. TSL 5 represents 
similar design option as max-tech, but generally incorporates the use 
of high-efficiency rather than maximum-efficiency VSCs, incorporates 
VIPs in fewer product classes, and incorporates less VIP surface area 
for the product classes requiring the use of VIPs as compared to TSL 6. 
TSL 5 would save an estimated 5.30 quads of energy, an amount DOE 
considers significant. Under TSL 5, the NPV of consumer benefit would 
be $6.64 billion using a discount rate of 7 percent, and $20.40 billion 
using a discount rate of 3 percent.
    The cumulative emissions reductions at TSL 5 are 179 Mt of 
CO2, 83.1 thousand tons of SO2, 274 thousand tons 
of NOX, 0.54 tons of Hg, 1,205 thousand tons of 
CH4, and 1.90 thousand tons of N2O. The estimated 
monetary value of the climate benefits from reduced GHG emissions 
(associated with the average SC-GHG at a 3-percent discount rate) at 
TSL 5 is $8.15 billion. The estimated monetary value of the health 
benefits from reduced SO2 and NOX emissions at 
TSL 5 is $5.33 billion using a 7-percent discount rate and $14.20 
billion using a 3-percent discount rate.
    Using a 7-percent discount rate for consumer benefits and costs, 
health benefits from reduced SO2 and NOX 
emissions, and the 3-percent discount rate case for climate benefits 
from reduced GHG emissions, the estimated total NPV at TSL 5 is $20.12 
billion. Using a 3-percent discount rate for all benefits and costs, 
the estimated total NPV at TSL 5 is $42.74 billion. The estimated total 
NPV is provided for additional information, however DOE primarily 
relies upon the NPV of consumer benefits when determining whether a 
proposed standard level is economically justified.
    At TSL 5, for the largest product classes, which are 3, 5, 5A, and 
7, there is a life cycle cost savings of $36.04, $49.73, $115.76, and 
$101.33 and a payback period of 5.3 years, 4.8 years, 5.7 years and 5.0 
years, respectively. For these product classes, the fraction of 
customers experiencing a net LCC cost is 36.2 percent, 23.4 percent, 
33.2 percent and 28.5 percent due to increases in first cost of $49.86, 
$55.81, $142.35, and $100.28, respectively. Overall, 27.5 percent of 
refrigerators, refrigerator-freezers, and freezers consumers would 
experience a net cost and the average LCC savings are positive for all 
product classes.
    At TSL 5, an estimated 12 percent of all low-income households 
experience a net cost, including less than 10 percent of low-income 
households with a top-mount or single-door refrigerator-freezer 
(represented by PC 3 and used by 72 percent of low-income households) 
and 23 percent of low-income households with a side-by-side 
refrigerator-freezer (represented by PC 7 and used by 19 percent of 
low-income households).

[[Page 12524]]

While 23 percent of low-income PC 7 consumers experience a net cost at 
TSL5, more than half of those consumers experience a net cost of $30 or 
less and low-income PC 7 consumers experience an average LCC savings of 
$134.54, larger average LCC savings than at any lower TSL. Further, 
across all consumers, TSL 5 represents the largest average LCC savings 
for PC 7 of any TSL.
    At TSL 5, the projected change in INPV ranges from a decrease of 
$1.0 billion to a decrease of $792.8 million, which correspond to 
decreases of 20.2 percent and 16.0 percent, respectively. DOE estimates 
that industry must invest $1.32 billion to comply with standards set at 
TSL 5.
    DOE estimates that approximately 18 percent of refrigerator, 
refrigerator-freezer, and freezer annual shipments meet the TSL 5 
efficiencies. For standard-size refrigerator-freezers, which account 
for approximately 70 percent of total annual shipments, approximately 5 
percent of shipments meet the efficiencies required at TSL 5. Compared 
to max-tech, more manufacturers offer standard-size refrigerator-
freezer products that meet the required efficiencies, however, many 
manufacturers do not offer products that meet this level. Of the 23 
OEMs offering PC 3 products, two offer models that meet the efficiency 
level required. Of the 23 OEMs offering PC 5 products, 13 offer models 
that meet the efficiency level required. Of the 11 OEMs offering PC 7 
products, one offers models that meet the efficiency level required.
    The manufacturers that do not currently offer models that meet TSL 
5 efficiencies would need to develop new product platforms. Updates 
could include incorporating variable defrost, BLDC evaporator fan 
motors, and high-efficiency VSCs. Additionally, some product classes--
notably, high-volume PCs 5, 5A, and 7--could require the use of VIPs. 
As discussed in section IV.J.2.c of this document, the inclusion of 
VIPs in product design necessitates large investments in tooling and 
significant changes to production plants. Furthermore, given that only 
5 percent of current standard-size refrigerator-freezer shipments meet 
TSL 5 efficiency levels, the manufacturers that are currently able to 
meet TSL 5 would need to scale up manufacturing capacity of compliant 
models. DOE anticipates conversion costs as high as $1.32 billion as 
the majority of product platforms in the industry would require 
redesign and investment.
    DOE requests data on manufacturers' ability to complete investments 
necessary to adapt product designs and production facilities within the 
3-year compliance timeline at TSL 5. Further, DOE requests comment on 
the specific limitations, including specific financial impacts on 
manufacturers, that would limit industry's ability to adapt to amended 
standards at TSL 5.
    Some stakeholders raised concerns about the availability of VSCs 
necessary to meet TSL 5. (GE, No.38 at p.3; AHAM, No.31 at p.10) In 
particular, those stakeholders worried that current supply constraints 
on VSCs would continue through the compliance date and those 
constraints would be exacerbated by amended standards. The concern was 
not shared by all stakeholders. One manufacturer suggested that more 
than one-third of the US refrigerator market already uses VSCs and that 
the technology is becoming more accessible and more affordable 
(Samsung, No.32 at p.2). Additional information on the VSC supply 
chain, including current suppliers, current constraints, and the 
potential impacts of regulation certainty, would help DOE determine the 
validity of VSC availability concerns at TSL 5.
    DOE requests comment on whether regulatory certainty and a 3-year 
compliance period would allow for manufacturers and suppliers to 
establish sufficient supply availability of VSCs for the refrigerators, 
refrigerator-freezers, and freezers industry at TSL 5.
    After considering the analysis and weighing the benefits and 
burdens, the Secretary has tentatively concluded that a standard set at 
TSL 5 for refrigerators, refrigerator-freezers, and freezers would be 
economically justified. At this TSL, the average LCC savings are 
positive for all product classes for which an amended standard is 
considered. An estimated 27.5 percent of all refrigerator, 
refrigerator-freezer, and freezer consumers experience a net cost, 
which is a significantly lower percentage than under TSL 6. An 
estimated 12 percent of all low-income households experience a net 
cost, including less than 10 percent of low-income households with a 
top-mount or single-door refrigerator-freezer (represented by PC 3 and 
used by 72 percent of low-income households) and 23 percent of low-
income households with a side-by-side refrigerator-freezer (represented 
by PC 7 and used by 19 percent of low-income households). DOE notes 
that low-income PC 7 consumers experience a greater average net benefit 
at TSL 5, with larger average LCC savings, than at any lower TSL. 
Across all consumers, TSL 5 represents the largest average LCC savings 
for PC 7 of any TSL. The FFC national energy savings are significant 
and the NPV of consumer benefits is positive at TSL 5 using both a 3-
percent and 7-percent discount rate. Notably, the benefits to consumers 
vastly outweigh the cost to manufacturers. At TSL 5, the NPV of 
consumer benefits, even measured at the more conservative discount rate 
of 7 percent is over 6 times higher than the maximum estimated 
manufacturers' loss in INPV. The standard levels at TSL 5 are 
economically justified even without weighing the estimated monetary 
value of emissions reductions. When those emissions reductions are 
included--representing $8.15 billion in climate benefits (associated 
with the average SC-GHG at a 3-percent discount rate), and $14.20 
billion (using a 3-percent discount rate) or $5.33 billion (using a 7-
percent discount rate) in health benefits--the rationale becomes 
stronger still.
    As stated, DOE conducts the walk-down analysis to determine the TSL 
that represents the maximum improvement in energy efficiency that is 
technologically feasible and economically justified as required under 
EPCA. Although DOE has not conducted a comparative analysis to select 
the proposed energy conservation standards, DOE notes 19 percent of 
low-income households have a side-by-side refrigerator-freezer 
(represented by PC 7) and that an estimated 23 percent of low-income PC 
7 households experience a net cost at TSL 5, whereas an estimated 14 
percent of low-income households with a side-by-side refrigerator-
freezer experience a net cost at TSL 4. However, the average LCC 
savings for low-income PC 7 consumers are $19.48 higher at TSL 5 than 
at TSL 4. Further, compared to TSL 4, it is estimated that TSL 5 would 
result in additional FFC national energy savings of 0.40 quads and 
additional health benefits of $1.07 billion (using a 3-percent discount 
rate) or $0.40 billion (using a 7-percent discount rate). The national 
consumer NPV similarly increases at TSL 5, compared to TSL 4, by $0.04 
billion using a 7-percent discount rate and $0.63 billion using a 3-
percent discount rate. These additional savings and benefits at TSL 5 
are significant. DOE considers the impacts to be, as a whole, 
economically justified at TSL 5.
    Although DOE considered proposed amended standard levels for 
refrigerators, refrigerator-freezers, and freezers by grouping the 
efficiency levels for each product class into TSLs, DOE evaluates all 
analyzed efficiency levels in its analysis. For all product classes 
other than product class 7, the proposed standard level represents the

[[Page 12525]]

maximum energy savings that does not result in a large percentage of 
consumers experiencing a net LCC cost. For product class 7, the 
proposed standard level represents the maximum energy savings that does 
not represent a significant potential burden for more than 25 percent 
of low-income households with side-by-side refrigerator-freezers, and 
less than 15 percent of all low-income households. The ELs at the 
proposed standard level result in positive LCC savings for all product 
classes, significantly reduce the number of consumers experiencing a 
net cost, and reduce the decrease in INPV and conversion costs to the 
point where DOE has tentatively concluded they are economically 
justified, as discussed for TSL 5 in the preceding paragraphs.
    Therefore, based on the previous considerations, DOE proposes to 
adopt the energy conservation standards for refrigerators, 
refrigerator-freezers, and freezers at TSL 5. The proposed amended 
energy conservation standards for refrigerators, refrigerator-freezers, 
and freezers, which are expressed as kWh/year, are shown in Table V.47.

     Table V.47--Proposed Amended Energy Conservation Standards for
           Refrigerators, Refrigerator-Freezers, and Freezers
------------------------------------------------------------------------
                                  Equations for maximum energy use (kWh/
                                                    yr)
          Product class          ---------------------------------------
                                      Based on AV
                                        (ft\3\)         Based on AV (L)
------------------------------------------------------------------------
1. Refrigerator-freezers and      6.79AV + 191.3....  0.240av + 191.3.
 refrigerators other than all-
 refrigerators with manual
 defrost.
1A. All-refrigerators--manual     5.77AV + 164.6....  0.204av + 164.6.
 defrost.
2. Refrigerator-freezers--        (6.79AV +           (0.240av +
 partial automatic defrost.        191.3)*K2.          191.3)*K2.
3. Refrigerator-freezers--        6.86AV + 198.6 +    0.242av + 198.6 +
 automatic defrost with top-       28I.                28I.
 mounted freezer.
3-BI. Built-in refrigerator-      8.24AV + 238.4 +    0.291av + 238.4 +
 freezer--automatic defrost with   28I.                28I.
 top-mounted freezer.
3A. All-refrigerators--automatic  (6.01AV +           (0.212av +
 defrost.                          171.4)*K3A.         171.4)*K3A.
3A-BI. Built-in All-              (7.22AV +           (0.255av +
 refrigerators--automatic          205.7)*K3ABI.       205.7)*K3ABI.
 defrost.
4. Refrigerator-freezers--        6.89AV + 241.2 +    0.243av + 241.2 +
 automatic defrost with side-      28I.                28I.
 mounted freezer.
4-BI. Built-In Refrigerator-      8.79AV + 307.4 +    0.310av + 307.4 +
 freezers--automatic defrost       28I.                28I.
 with side-mounted freezer.
5. Refrigerator-freezers--        (7.61AV +           (0.269av +
 automatic defrost with bottom-    272.6)*K5 + 28I.    272.6)*K5 + 28I.
 mounted freezer.
5-BI. Built-In Refrigerator-      (8.65AV +           (0.305av +
 freezers--automatic defrost       309.9)*K5BI + 28I.  309.9)*K5BI +
 with bottom-mounted freezer.                          28I.
5A. Refrigerator-freezer--        (7.26AV +           (0.256av +
 automatic defrost with bottom-    329.2)*K5A.         329.2)*K5A.
 mounted freezer with through-
 the-door ice service.
5A-BI. Built-in refrigerator-     (8.21AV +           (0.290av +
 freezer--automatic defrost with   370.7)*K5ABI.       370.7)*K5ABI.
 bottom-mounted freezer with
 through-the-door ice service.
6. Refrigerator-freezers--        7.14AV + 280.0....  0.252av + 280.0.
 automatic defrost with top-
 mounted freezer with through-
 the-door ice service.
7. Refrigerator-freezers--        (6.92AV +           (0.244av +
 automatic defrost with side-      305.2)*K7.          305.2)*K7.
 mounted freezer with through-
 the-door ice service.
7-BI. Built-In Refrigerator-      (8.82AV +           (0.311av +
 freezers--automatic defrost       384.1)*K7BI.        384.1)*K7BI.
 with side-mounted freezer.
8. Upright freezers with manual   5.57AV + 193.7....  0.197av + 193.7.
 defrost.
9. Upright freezers with          7.76AV + 205.5 +    0.274av + 205.5 +
 automatic defrost.                28I.                28I.
9-BI. Built-In Upright freezers   9.37AV + 247.9 +    0.331av + 247.9 +
 with automatic defrost.           28I.                28I.
10. Chest freezers and all other  7.29AV + 107.8....  0.257av + 107.8.
 freezers except compact
 freezers.
10A. Chest freezers with          10.24AV + 148.1...  0.362av + 148.1.
 automatic defrost.
11. Compact refrigerator-         7.68AV + 214.5....  0.271av + 214.5.
 freezers and refrigerators
 other than all-refrigerators
 with manual defrost.
11A. Compact all-refrigerators--  6.66AV + 186.2....  0.235av + 186.2.
 manual defrost.
12. Compact refrigerator-         (7.68AV +           (0.271av +
 freezers--partial automatic       214.5)*K12.         214.5)*K12.
 defrost.
13. Compact refrigerator-         10.62AV + 305.3 +   0.375av + 305.3 +
 freezers--automatic defrost       28I.                28I.
 with top-mounted freezer.
13A. Compact all-refrigerators--  (8.25AV +           (0.291av +
 automatic defrost.                233.4)*K13A.        233.4)*K13A.
14. Compact refrigerator-         6.14AV + 411.2 +    0.217av + 411.2 +
 freezers--automatic defrost       28I.                28I.
 with side-mounted freezer.
15. Compact refrigerator-         10.62AV + 305.3 +   0.375av + 305.3 +
 freezers--automatic defrost       28I.                28I.
 with bottom-mounted freezer.
16. Compact upright freezers      7.35AV + 191.8....  0.260av + 191.8.
 with manual defrost.
17. Compact upright freezers      9.15AV + 316.7....  0.323av + 316.7.
 with automatic defrost.
18. Compact chest freezers......  7.86AV + 107.8....  0.278av + 107.8.
------------------------------------------------------------------------
 AV = Total adjusted volume, expressed in ft\3\, as determined in
  appendices A and B of subpart B of 10 CFR part 430.
av = Total adjusted volume, expressed in Liters.
I = 1 for a product with an automatic icemaker and = 0 for a product
  without an automatic icemaker. Door Coefficients (e.g., K3A) are as
  defined in the table below.


[[Page 12526]]


    Table V.48--Description of Door Coefficients for Proposed Maximum Energy Use Equations for Refrigerators,
                                       Refrigerator-freezers, and Freezers
----------------------------------------------------------------------------------------------------------------
                                                                                  Products      Products without
                                                                Products with     without a      a transparent
                       Door coefficient                         a transparent    transparent    door or door-in-
                                                                    door         door with a    door with added
                                                                                door-in-door     external doors
----------------------------------------------------------------------------------------------------------------
K2...........................................................             N/A             N/A  1 + 0.02 * (Nd-1)
K3A..........................................................            1.10             N/A                N/A
K3ABI........................................................
K13A.........................................................
K5...........................................................                            1.06  1 + 0.02 * (Nd-2)
K5BI.........................................................
K5A..........................................................                                  1 + 0.02 * (Nd-3)
K5ABI........................................................
K7...........................................................                                  1 + 0.02 * (Nd-2)
K7BI.........................................................
K12..........................................................             N/A             N/A  1 + 0.02 * (Nd-1)
----------------------------------------------------------------------------------------------------------------
Nd is the number of external doors.

2. Annualized Benefits and Costs of the Proposed Standards
    The benefits and costs of the proposed standards can also be 
expressed in terms of annualized values. The annualized net benefit is 
(1) the annualized national economic value (expressed in 2021$) of the 
benefits from operating products that meet the proposed standards 
(consisting primarily of operating cost savings from using less energy, 
minus increases in product purchase costs, and (2) the annualized 
monetary value of the climate and health benefits from emission 
reductions.
    Table V.49 shows the annualized values for refrigerators, 
refrigerator-freezers, and freezers under TSL 5, expressed in 2021$. 
The results under the primary estimate are as follows.
    Using a 7-percent discount rate for consumer benefits and costs and 
NOX and SO2 reduction benefits, and a 3-percent 
discount rate case for GHG social costs, the estimated cost of the 
proposed standards for refrigerators, refrigerator-freezers, and 
freezers is $730.0 million per year in increased equipment costs, while 
the estimated annual benefits are $1.4317 billion from reduced 
equipment operating costs, $467.9 million from GHG reductions, and 
$563.3 million from reduced NOX and SO2 
emissions. In this case, the net benefit amounts to $1.7329 billion per 
year.
    Using a 3-percent discount rate for all benefits and costs, the 
estimated cost of the proposed standards for refrigerators, 
refrigerator-freezers, and freezers is $707.4 million per year in 
increased equipment costs, while the estimated annual benefits are 
$1.8786 billion in reduced operating costs, $467.9 million from GHG 
reductions, and $815.2 million from reduced NOX and 
SO2 emissions. In this case, the net benefit amounts to 
$2.4543 billion per year.

     Table V.49--Annualized Benefits and Costs of Proposed Energy Conservation Standards for Refrigerators,
                                   Refrigerator-Freezers, and Freezers (TSL 5)
----------------------------------------------------------------------------------------------------------------
                                                                                Million 2021$/year
                                                                 -----------------------------------------------
                                                                                     Low-net-        High-net-
                                                                      Primary        benefits        benefits
                                                                     estimate        estimate        estimate
----------------------------------------------------------------------------------------------------------------
                                                3% discount rate
----------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings.................................         1,878.6         1,745.5         2,030.6
Climate Benefits *..............................................           467.9           453.4           482.4
Health Benefits **..............................................           815.2           790.3           840.1
                                                                 -----------------------------------------------
    Total Benefits [dagger].....................................         3,161.7         2,989.3         3,353.1
Consumer Incremental Product Costs [Dagger].....................           707.4           774.3           681.3
                                                                 -----------------------------------------------
    Net Monetized Benefits......................................         2,454.3         2,215.0         2,671.9
----------------------------------------------------------------------------------------------------------------
                                                7% discount rate
----------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings.................................         1,431.7         1,339.6         1,534.2
Climate Benefits * (3% discount rate)...........................           467.9           453.4           482.4
Health Benefits **..............................................           563.3           547.4           579.1
                                                                 -----------------------------------------------
    Total Benefits [dagger].....................................         2,462.9         2,340.4         2,595.7
Consumer Incremental Product Costs..............................           730.0           788.4           706.3
                                                                 -----------------------------------------------

[[Page 12527]]

 
    Net Monetized Benefits......................................         1,732.9         1,552.0         1,889.4
----------------------------------------------------------------------------------------------------------------
Note: This table presents the costs and benefits associated with refrigerators, refrigerator-freezers, and
  freezers shipped in 2027-2056. These results include benefits to consumers which accrue after 2056 from the
  products shipped in 2027-2056. The Primary, Low Net Benefits, and High Net Benefits Estimates utilize
  projections of energy prices from the AEO2022 Reference case, Low Economic Growth case, and High Economic
  Growth case, respectively. In addition, incremental equipment costs reflect a medium decline rate in the
  Primary Estimate, a low decline rate in the Low Net Benefits Estimate, and a high decline rate in the High Net
  Benefits Estimate. The methods used to derive projected price trends are explained in section IV.H.3. Note
  that the Benefits and Costs may not sum to the Net Benefits due to rounding.
* Climate benefits are calculated using four different estimates of the global SC-GHG (see section IV.L of this
  notice). For presentational purposes of this table, the climate benefits associated with the average SC-GHG at
  a 3 percent discount rate are shown, but the Department does not have a single central SC-GHG point estimate,
  and it emphasizes the importance and value of considering the benefits calculated using all four SC-GHG
  estimates. 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. Among other things, the preliminary injunction enjoined the defendants in
  that case from ``adopting, employing, treating as binding, or relying upon'' 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. As
  reflected in this rule, DOE has reverted to its approach prior to the injunction and presents monetized
  greenhouse gas abatement benefits where appropriate and permissible under law.
** Health benefits are calculated using benefit-per-ton values for NOX and SO2. DOE is currently only monetizing
  (for SO2 and NOX) PM2.5 precursor health benefits and (for NOX) ozone precursor health benefits, but will
  continue to assess the ability to monetize other effects such as health benefits from reductions in direct
  PM2.5 emissions. The health benefits are presented at real discount rates of 3 and 7 percent. See section IV.L
  of this document for more details.
[dagger] Total benefits for both the 3-percent and 7-percent cases are presented using the average SC-GHG with 3-
  percent discount rate, but the Department does not have a single central SC-GHG point estimate.

D. Reporting, Certification, and Sampling Plan

    Manufacturers, including importers, must use product-specific 
certification templates to certify compliance to DOE. For 
refrigerators, refrigerator-freezers, and freezers, the certification 
template reflects the general certification requirements specified at 
10 CFR 429.12 and the product-specific requirements specified at 10 CFR 
429.14. As discussed in the previous paragraphs, DOE is not proposing 
to amend the product-specific certification requirements for these 
products.

VI. Procedural Issues and Regulatory Review

A. Review Under Executive Orders 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 adopt; and (5) identify and assess available alternatives to 
direct regulation, including providing economic incentives to encourage 
the desired behavior, such as user fees or marketable permits, or 
providing information upon which choices can be made by the public. DOE 
emphasizes as well that E.O. 13563 requires agencies to use the best 
available techniques to quantify anticipated present and future 
benefits and costs as accurately as possible. In its guidance, the 
Office of Information and Regulatory Affairs (``OIRA'') in the Office 
of Management and Budget (``OMB'') has emphasized that such techniques 
may include identifying changing future compliance costs that might 
result from technological innovation or anticipated behavioral changes. 
For the reasons stated in the preamble, this proposed/final regulatory 
action is consistent with these principles.
    Section 6(a) of E.O. 12866 also requires agencies to submit 
``significant regulatory actions'' to OIRA for review. OIRA has 
determined that this proposed regulatory action is an economically 
significant regulatory action within the scope of section 3(f)(1) of 
E.O. 12866. Accordingly, pursuant to section 6(a)(3)(C) of E.O. 12866, 
DOE has provided to OIRA an assessment, including the underlying 
analysis, of benefits and costs anticipated from the proposed 
regulatory action, together with, to the extent feasible, a 
quantification of those costs; and an assessment, including the 
underlying analysis, of costs and benefits of potentially effective and 
reasonably feasible alternatives to the planned regulation, and an 
explanation why the planned regulatory action is preferable to the 
identified potential alternatives. These assessments are summarized in 
this preamble and further detail can be found in the TSD for this 
rulemaking.

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,

[[Page 12528]]

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 (energy.gov/gc/office-general-counsel). DOE has prepared the following IRFA for the products that are 
the subject of this rulemaking.
    For manufacturers of refrigerators, refrigerator-freezers, and 
freezers, the SBA has set a size threshold, which defines those 
entities classified as ``small businesses'' for the purposes of the 
statute. DOE used the SBA's small business size standards to determine 
whether any small entities would be subject to the requirements of the 
rule. (See 13 CFR part 121.) The size standards are listed by North 
American Industry Classification System (``NAICS'') code and industry 
description and are available at www.sba.gov/document/support--table-size-standards. Manufacturing of refrigerators, refrigerator-freezers, 
and freezers is classified under NAICS 335220, ``Major Household 
Appliance Manufacturing.'' The SBA sets a threshold of 1,500 employees 
or fewer for an entity to be considered as a small business for this 
category.
1. Description of Reasons Why Action Is Being Considered
    DOE is proposing amended energy conservation standards for 
refrigerators, refrigerator-freezers, and freezers. EPCA prescribed 
energy conservation standards for these products (42 U.S.C. 6295(b)(1)-
(2)), and directed DOE to conduct three cycles of future rulemakings to 
whether to amend these standards. (42 U.S.C. 6295(b)(3)(A)(i), 
(b)(3)(B), and (b)(4)). DOE has completed these rulemakings. EPCA 
further provides that, not later than 6 years after the issuance of any 
final rule establishing or amending a standard, 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. 
6295(m)(1)) This rulemaking is in accordance with DOE's obligations 
under EPCA.
2. Objectives of, and Legal Basis for, Rule
    EPCA authorizes DOE to regulate the energy efficiency of a number 
of consumer products and certain industrial equipment. Title III, Part 
B of EPCA established the Energy Conservation Program for Consumer 
Products Other Than Automobiles. These products include refrigerators, 
refrigerator-freezers, and freezers, the subject of this document. (42 
U.S.C. 6292(a)(1)) EPCA prescribed energy conservation standards for 
these products (42 U.S.C. 6295(b)(1)-(2)), and directed. DOE to conduct 
three cycles of future rulemakings to whether to amend these standards. 
(42 U.S.C. 6295(b)(3)(A)(i), (b)(3)(B), and (b)(4)). DOE has completed 
these rulemakings. EPCA further provides that, not later than 6 years 
after the issuance of any final rule establishing or amending a 
standard, 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. 6295(m)(1))
3. Description on Estimated Number of Small Entities Regulated
    DOE reviewed this proposed rule under the provisions of the 
Regulatory Flexibility Act and the procedures and policies published on 
February 19, 2003. 68 FR 7990. DOE conducted a market survey to 
identify potential small manufacturers of refrigerators, refrigerator-
freezers, and freezers. DOE began its assessment by reviewing DOE's 
CCD,\93\ California Energy Commission's Modernized Appliance Efficiency 
Database System (``MAEDbS''),\94\ individual company websites, and 
prior refrigerator, refrigerator-freezer, and freezer rulemakings to 
identify manufacturers of the covered product. DOE then consulted 
publicly available data, such as manufacturer websites, manufacturer 
specifications and product literature, import/export logs (e.g., bills 
of lading from Panjiva \95\), and basic model numbers, to identify 
original equipment manufacturers (``OEMs'') of covered refrigerators, 
refrigerator-freezers, and freezers. DOE further relied on public data 
and subscription-based market research tools (e.g., Dun & Bradstreet 
reports \96\) to determine company, location, headcount, and annual 
revenue. DOE also asked industry representatives if they were aware of 
any small manufacturers during manufacturer interviews. DOE screened 
out companies that do not offer products covered by this rulemaking, do 
not meet the SBA's definition of a ``small business,'' or are foreign-
owned and operated.
---------------------------------------------------------------------------

    \93\ U.S. Department of Energy's Compliance Certification 
Database is available at: www.regulations.doe.gov/certification-data/#q=Product_Group_s%3A* (Last accessed March 25, 2022).
    \94\ California Energy Commission's Modernized Appliance 
Efficiency Database System is available at: 
cacertappliances.energy.ca.gov/Pages/ApplianceSearch.aspx (Last 
accessed March 25, 2022).
    \95\ S&P Global. Panjiva Market Intelligence is available at: 
panjiva.com/import-export/United-States (Last accessed May 5, 2022).
    \96\ D&B Hoovers [verbar] Company Information [verbar] Industry 
Information [verbar] Lists, app.dnbhoovers.com/ (Last accessed 
August 24, 2022).
---------------------------------------------------------------------------

    DOE initially identified 49 OEMs that sell refrigerators, 
refrigerator-freezers, or freezers in the United States. Of the 49 OEMs 
identified, DOE tentatively determined that one company qualifies as a 
small business and is not foreign-owned and operated.
    DOE reached out to the small business and invited them to 
participate in a voluntary interview. The small business did not 
consent to participate in a formal MIA interview. DOE also requested 
information about small businesses and potential impacts on small 
businesses while interviewing larger manufacturers.
4. Description and Estimate of Compliance Requirements Including 
Differences in Cost, if Any, for Different Groups of Small Entities
    The one small business identified has 45 refrigerator, 
refrigerator-freezer, and freezer models certified in DOE's CCD. Of 
those 45 models, 43 models are compact-size refrigerators, 
refrigerator-freezers, or freezers (34 PC 13A models, three PC 15 
models, and six PC 17 models). The remaining two models are standard-
size built-in refrigerator-freezer models (PC 3A-BI). Of the 34 PC 13A 
models, 22 models meet the efficiency required at TSL 5. For PC 15, PC 
17, and PC 3A-BI, this small manufacturer only offers models at the 
current DOE baseline efficiency and, therefore, does not offer any 
products that meet the proposed TSL 5 efficiencies (i.e., 10 percent 
reduction in energy use from the current DOE baseline). To meet the 
required efficiencies, DOE expects this small manufacturer would likely 
need to implement variable defrost and variable-speed compressors, 
along with other design options across all their product platforms. 
Some capital conversion costs may be necessary for additional tooling 
and new stations to test more variable-speed compressors. Product 
conversion costs may be necessary for developing, qualifying, sourcing, 
and testing new components. DOE estimated conversion costs for this 
small manufacturer by using model counts to scale-down the industry 
conversion costs. DOE estimates that the small manufacturer may incur 
$400,000 in capital conversion costs and $490,000 in product conversion 
costs related to redesigning their products to meet proposed amended 
standards. Based on

[[Page 12529]]

subscription-based market research reports,\97\ the small business has 
an annual revenue of approximately $85.3 million. The total conversion 
costs of $890,000 are approximately 0.3 percent of company revenue over 
the 3-year conversion period.
---------------------------------------------------------------------------

    \97\ D&B Hoovers [verbar] Company Information [verbar] Industry 
Information [verbar] Lists, app.dnbhoovers.com/ (Last accessed 
August 24, 2022).
---------------------------------------------------------------------------

    DOE seeks comments, information, and data on the number of small 
businesses in the industry, the names of those small businesses, and 
their market shares by product class. DOE also requests comment on the 
potential impacts of the proposed standards on small manufacturers.
5. Duplication, Overlap, and Conflict With Other Rules and Regulations
    DOE is not aware of any rules or regulations that duplicate, 
overlap, or conflict with the proposed rule.
6. Significant Alternatives to the Rule
    The discussion in the previous section analyzes impacts on small 
businesses that would result from DOE's proposed rule, represented by 
TSL 5. In reviewing alternatives to the proposed rule, DOE examined 
energy conservation standards set at lower efficiency levels. While TSL 
1, TSL 2, TSL 3, and TSL 4 would reduce the impacts on small business 
manufacturers, it would come at the expense of a reduction in energy 
savings. TSL 1 achieves 56 percent lower energy savings compared to the 
energy savings at TSL 5. TSL 2 achieves 46 percent lower energy savings 
compared to the energy savings at TSL 5. TSL 3 achieves 24 percent 
lower energy savings compared to the energy savings at TSL 5. TSL 4 
achieves 8 percent lower energy savings compared to the energy savings 
at TSL 5.
    Based on the presented discussion, establishing standards at TSL 5 
balances the benefits of the energy savings at TSL 5 with the potential 
burdens placed on refrigerator, refrigerator-freezer, and freezer 
manufacturers, including small business manufacturers. Accordingly, DOE 
does not propose one of the other TSLs considered in the analysis, or 
the other policy alternatives examined as part of the regulatory impact 
analysis and included in chapter 17 of the NOPR TSD.
    Additional compliance flexibilities may be available through other 
means. EPCA provides that a manufacturer whose annual gross revenue 
from all of its operations does not exceed $8 million may apply for an 
exemption from all or part of an energy conservation standard for a 
period not longer than 24 months after the effective date of a final 
rule establishing the standard. (42 U.S.C. 6295(t)) Additionally, 
manufacturers subject to DOE's energy efficiency standards may apply to 
DOE's Office of Hearings and Appeals for exception relief under certain 
circumstances. Manufacturers should refer to 10 CFR part 430, subpart 
E, and 10 CFR part 1003 for additional details.

C. Review Under the Paperwork Reduction Act

    Manufacturers of refrigerators, refrigerator-freezers, and freezers 
must certify to DOE that their products comply with any applicable 
energy conservation standards. In certifying compliance, manufacturers 
must test their products according to the DOE test procedures for 
refrigerators, refrigerator-freezers, and freezers, including any 
amendments adopted for those test procedures. DOE has established 
regulations for the certification and recordkeeping requirements for 
all covered consumer products and commercial equipment, including 
refrigerators, refrigerator-freezers, and freezers. (See generally 10 
CFR part 430). The collection of information requirement for the 
certification and recordkeeping is subject to review and approval by 
OMB under the Paperwork Reduction Act (``PRA''). This requirement has 
been approved by OMB under OMB control number 1910-1400. Public 
reporting burden for the certification is estimated to average 35 hours 
per response, including the time for reviewing instructions, searching 
existing data sources, gathering and maintaining the data needed, and 
completing and reviewing the collection of information.
    Notwithstanding any other provision of the law, no person is 
required to respond to, nor shall any person be subject to a penalty 
for failure to comply with, a collection of information subject to the 
requirements of the PRA, unless that collection of information displays 
a currently valid OMB Control Number.

D. Review Under the National Environmental Policy Act of 1969

    DOE is analyzing this proposed regulation 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 rulemakings that establish energy 
conservation standards for consumer products or industrial equipment. 
10 CFR part 1021, subpart D, appendix B5.1. DOE anticipates that this 
proposed rulemaking qualifies for categorical exclusion B5.1 because it 
is a rulemaking that establishes energy conservation standards for 
consumer products or industrial equipment, none of the exceptions 
identified in categorical exclusion B5.1(b) apply, no extraordinary 
circumstances exist that require further environmental analysis, and it 
otherwise meets the requirements for application of a categorical 
exclusion. See 10 CFR 1021.410. DOE will complete its NEPA review 
before issuing the final rule.

E. Review Under Executive Order 13132

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

F. Review Under Executive Order 12988

    With respect to the review of existing regulations and the 
promulgation of new regulations, section 3(a) of E.O. 12988, ``Civil 
Justice Reform,'' 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

[[Page 12530]]

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 Executive Order 12988 requires executive agencies to 
review regulations in light of applicable standards in section 3(a) and 
section 3(b) to determine whether they are met or it is unreasonable to 
meet one or more of them. DOE has completed the required review and 
determined that, to the extent permitted by law, this proposed rule 
meets the relevant standards of E.O. 12988.

G. Review Under the Unfunded Mandates Reform Act of 1995

    Title II of the Unfunded Mandates Reform Act of 1995 (``UMRA'') 
requires each Federal agency to assess the effects of Federal 
regulatory actions on State, local, and Tribal governments and the 
private sector. Public Law 104-4, section 201 (codified at 2 U.S.C. 
1531). For a proposed regulatory action likely to result in a rule that 
may cause the expenditure by State, local, and Tribal governments, in 
the aggregate, or by the private sector of $100 million or more in any 
one year (adjusted annually for inflation), section 202 of UMRA 
requires a Federal agency to publish a written statement that estimates 
the resulting costs, benefits, and other effects on the national 
economy. (2 U.S.C. 1532(a), (b)) The UMRA also requires a Federal 
agency to develop an effective process to permit timely input by 
elected officers of State, local, and Tribal governments on a proposed 
``significant intergovernmental mandate,'' and requires an agency plan 
for giving notice and opportunity for timely input to potentially 
affected small governments before establishing any requirements that 
might significantly or uniquely affect them. On March 18, 1997, DOE 
published a statement of policy on its process for intergovernmental 
consultation under UMRA. 62 FR 12820. DOE's policy statement is also 
available at www.energy.gov/sites/prod/files/gcprod/documents/umra_97.pdf.
    Although this proposed rule does not contain a Federal 
intergovernmental mandate, it may require expenditures of $100 million 
or more in any one year by the private sector. Such expenditures may 
include: (1) investment in research and development and in capital 
expenditures by refrigerator, refrigerator-freezer, and freezer 
manufacturers in the years between the final rule and the compliance 
date for the new standards and (2) incremental additional expenditures 
by consumers to purchase higher-efficiency refrigerators, refrigerator-
freezers, and freezers, starting at the compliance date for the 
applicable standard.
    Section 202 of UMRA authorizes a Federal agency to respond to the 
content requirements of UMRA in any other statement or analysis that 
accompanies the proposed rule. (2 U.S.C. 1532(c)) The content 
requirements of section 202(b) of UMRA relevant to a private sector 
mandate substantially overlap the economic analysis requirements that 
apply under section 325(o) of EPCA and Executive Order 12866. The 
SUPPLEMENTARY INFORMATION section of this NOPR and the TSD for this 
proposed rule respond to those requirements.
    Under section 205 of UMRA, the Department is obligated to identify 
and consider a reasonable number of regulatory alternatives before 
promulgating a rule for which a written statement under section 202 is 
required. (2 U.S.C. 1535(a)) DOE is required to select from those 
alternatives the most cost-effective and least burdensome alternative 
that achieves the objectives of the proposed rule unless DOE publishes 
an explanation for doing otherwise, or the selection of such an 
alternative is inconsistent with law. As required by 42 U.S.C. 6295(m), 
this proposed rule would establish amended energy conservation 
standards for refrigerators, refrigerator-freezers, and freezers that 
are designed to achieve the maximum improvement in energy efficiency 
that DOE has determined to be both technologically feasible and 
economically justified, as required by 42 U.S.C. 6295(o)(2)(A) and 
6295(o)(3)(B). A full discussion of the alternatives considered by DOE 
is presented in chapter 17 of the TSD for this proposed rule.

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 rule would not have any impact on the autonomy or integrity of the 
family as an institution. Accordingly, DOE has concluded that it is not 
necessary to prepare a Family Policymaking Assessment.

I. Review Under Executive Order 12630

    Pursuant to E.O. 12630, ``Governmental Actions and Interference 
with Constitutionally Protected Property Rights,'' 53 FR 8859 (Mar. 15, 
1988), DOE has determined that this proposed rule 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 NOPR 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 OIRA at OMB, 
a Statement of Energy Effects for any proposed significant energy 
action. A ``significant energy action'' is defined as any action by an 
agency that promulgates or is expected to lead to promulgation of a 
final rule, and that (1) is a significant regulatory action under 
Executive Order 12866, or any successor order; and (2) is likely to 
have a significant adverse effect on the supply, distribution, or use 
of energy, or (3) is designated by the Administrator of OIRA as a 
significant energy action. For

[[Page 12531]]

any proposed significant energy action, the agency must give a detailed 
statement of any adverse effects on energy supply, distribution, or use 
should the proposal be implemented, and of reasonable alternatives to 
the action and their expected benefits on energy supply, distribution, 
and use.
    DOE has tentatively concluded that this regulatory action, which 
proposes amended energy conservation standards for refrigerators, 
refrigerator-freezers, and freezers is not a significant energy action 
because the proposed standards are not likely to 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 proposed 
rule.

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.'' 70 FR 2664, 2667.
    In response to OMB's Bulletin, DOE conducted formal peer reviews of 
the energy conservation standards development process and the analyses 
that are typically used and has prepared a report describing that peer 
review.\98\ 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.\99\
---------------------------------------------------------------------------

    \98\ 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 August 24, 2022).
    \99\ The report is available at www.nationalacademies.org/our-work/review-of-methods-for-setting-building-and-equipment-performance-standards.
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VII. Public Participation

A. Attendance at the Public Meeting

    The time and date of the webinar meeting are listed in the DATES 
section at the beginning of this document. Webinar registration 
information, participant instructions, and information about the 
capabilities available to webinar participants will be published on 
DOE's website at www1.eere.energy.gov/buildings/appliance_standards/standards.aspx?productid=37. Participants are responsible for ensuring 
their systems are compatible with the webinar software.

B. Procedure for Submitting Prepared General Statements for 
Distribution

    Any person who has plans to present a prepared general statement 
may request that copies of his or her statement be made available at 
the public meeting. Such persons may submit requests, along with an 
advance electronic copy of their statement in PDF (preferred), 
Microsoft Word or Excel, WordPerfect, or text (ASCII) file format, to 
the appropriate address shown in the ADDRESSES section at the beginning 
of this document. The request and advance copy of statements must be 
received at least one week before the public meeting and are to be 
emailed. Please include a telephone number to enable DOE staff to make 
follow-up contact, if needed.

C. Conduct of the Public Meeting

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

D. Submission of Comments

    DOE will accept comments, data, and information regarding this 
proposed rule before or after the public meeting, but no later than the 
date provided in the DATES section at the beginning of this proposed 
rule. Interested parties may submit comments, data, and other 
information using any of the methods described in the ADDRESSES section 
at the beginning of this document.
    Submitting comments via www.regulations.gov. The 
www.regulations.gov web page will require you to provide your name and 
contact information. Your contact information will be viewable to DOE 
Building Technologies staff only. Your

[[Page 12532]]

contact information will not be publicly viewable except for your first 
and last names, organization name (if any), and submitter 
representative name (if any). If your comment is not processed properly 
because of technical difficulties, DOE will use this information to 
contact you. If DOE cannot read your comment due to technical 
difficulties and cannot contact you for clarification, DOE may not be 
able to consider your comment.
    However, your contact information will be publicly viewable if you 
include it in the comment itself or in any documents attached to your 
comment. Any information that you do not want to be publicly viewable 
should not be included in your comment, nor in any document attached to 
your comment. Otherwise, persons viewing comments will see only first 
and last names, organization names, correspondence containing comments, 
and any documents submitted with the comments.
    Do not submit to www.regulations.gov information for which 
disclosure is restricted by statute, such as trade secrets and 
commercial or financial information (hereinafter referred to as 
Confidential Business Information (``CBI'')). Comments submitted 
through www.regulations.gov cannot be claimed as CBI. Comments received 
through the website will waive any CBI claims for the information 
submitted. For information on submitting CBI, see the Confidential 
Business Information section.
    DOE processes submissions made through www.regulations.gov before 
posting. Normally, comments will be posted within a few days of being 
submitted. However, if large volumes of comments are being processed 
simultaneously, your comment may not be viewable for up to several 
weeks. Please keep the comment tracking number that www.regulations.gov 
provides after you have successfully uploaded your comment.
    Submitting comments via email, hand delivery/courier, or postal 
mail. Comments and documents submitted via email, hand delivery/
courier, or postal mail also will be posted to www.regulations.gov. If 
you do not want your personal contact information to be publicly 
viewable, do not include it in your comment or any accompanying 
documents. Instead, provide your contact information in a cover letter. 
Include your first and last names, email address, telephone number, and 
optional mailing address. The cover letter will not be publicly 
viewable as long as it does not include any comments.
    Include contact information each time you submit comments, data, 
documents, and other information to DOE. If you submit via postal mail 
or hand delivery/courier, please provide all items on a CD, if 
feasible, in which case it is not necessary to submit printed copies. 
No telefacsimiles (``faxes'') will be accepted.
    Comments, data, and other information submitted to DOE 
electronically should be provided in PDF (preferred), Microsoft Word or 
Excel, WordPerfect, or text (ASCII) file format. Provide documents that 
are not secured, that are written in English, and that are free of any 
defects or viruses. Documents should not contain special characters or 
any form of encryption and, if possible, they should carry the 
electronic signature of the author.
    Campaign form letters. Please submit campaign form letters by the 
originating organization in batches of between 50 to 500 form letters 
per PDF or as one form letter with a list of supporters' names compiled 
into one or more PDFs. This reduces comment processing and posting 
time.
    Confidential Business Information. Pursuant to 10 CFR 1004.11, any 
person submitting information that he or she believes to be 
confidential and exempt by law from public disclosure should submit via 
email two well-marked copies: one copy of the document marked 
``confidential'' including all the information believed to be 
confidential, and one copy of the document marked ``non-confidential'' 
with the information believed to be confidential deleted. DOE will make 
its own determination about the confidential status of the information 
and treat it according to its determination.
    It is DOE's policy that all comments may be included in the public 
docket, without change and as received, including any personal 
information provided in the comments (except information deemed to be 
exempt from public disclosure).

E. Issues on Which DOE Seeks Comment

    Although DOE welcomes comments on any aspect of this proposal, DOE 
is particularly interested in receiving comments and views of 
interested parties concerning the following issues:
    (1) DOE requests comments on its proposal to consolidate the 
presentation of maximum allowable energy use for products of classes 
that may or may not have an automatic icemaker.
    (2) DOE requests comment on its proposal for establishing energy 
use allowances for multiple doors and/or specialty doors. Should such 
an energy use allowance structure be established, and, if so, are the 
proposed energy use allowance levels appropriate? If they are not 
appropriate, DOE requests input on what the energy use allowance values 
should be, with supporting data to demonstrate that the alternative 
levels suggested are justified.
    (3) DOE requests comments on the proposed definitions to clarify 
transparent door and door-in-door features. If the proposed definitions 
are not appropriate, DOE requests comment on what specific changes 
should be made to the definitions, or what other definitions are 
necessary, so that they would appropriately describe the intended 
specialized doors.
    (4) DOE seeks comment on the method for estimating manufacturing 
production costs and on the resulting cost-efficiency curves.
    (5) DOE requests comment on its markups analysis and the underlying 
assumptions, including price elasticities specific to the market for 
new refrigeration products and any potential effects from a market for 
second refrigerators or second-hand products.
    (6) DOE requests comment on its methodology to develop UAFs and 
also requests data on actual energy use for standard-size consumer 
refrigerators, refrigerator-freezers, and freezers in the field to 
further inform the UAF development for subsequent rounds of this 
rulemaking.
    (7) DOE requests comment on the overall methodology and results of 
the LCC and PBP analyses.
    (8) DOE requests comment on its methodology to develop market share 
distributions by adjusted volume in the compliance year for each PC 
with two representative volumes, as well as data to further inform 
these distributions in subsequent rounds of this rulemaking.
    (9) DOE requests comment and data on its assumption that 
installation costs do not change as a function of EL for refrigeration 
products.
    (10) DOE requests comment on its assumption that maintenance costs 
do not change as a function of EL for refrigeration products. DOE also 
requests comment and data on its methodology for determining repair 
costs by PC and EL.
    (11) DOE requests comment and data on the assumptions and 
methodology used to calculate refrigerator, refrigerator-freezer, and 
freezer survival probabilities. DOE requests comment and data on source 
of second refrigerators, whether from new purchase, conversion of 
surviving first refrigerators, or second-hand markets. DOE also 
welcomes any information indicating whether or not the service

[[Page 12533]]

lifetime of refrigeration products differs by efficiency level.
    (12) DOE requests comment on its methodology to develop market 
share distributions by EL for each PC and representative unit for the 
no-new-standards case in the compliance year, as well as data to 
further inform these distributions in subsequent rounds of this 
rulemaking. DOE also requests comment on the assumption that the 
current efficiency distribution would remain fixed over the analysis 
period, and data to inform an efficiency trend by PC.
    (13) DOE requests comment on the overall methodology and results of 
the shipments analysis.
    (14) DOE requests comment on its assumption of no efficiency trend 
and seeks historical product efficiency data.
    (15) DOE requests comment on assumptions made in the energy use 
scaling for non-representative product classes in the National Impacts 
Analysis.
    (16) DOE requests comment on the overall methodology and results of 
the consumer subgroup analysis.
    (17) DOE requests comment on how to address the climate benefits 
and other non-monetized effects of the proposal.
    (18) DOE seeks comments, information, and data on the capital 
conversion costs and product conversion costs estimated for each TSL.
    (19) DOE seeks comment on whether manufacturers expect 
manufacturing capacity constraints would limit product availability to 
consumers in the timeframe of the amended standard compliance date 
(2027). In particular, DOE requests information on the product classes 
and associated efficiency levels that would delay manufacturer's 
ability to comply with a standard due to the extent of factory 
investments associated with VIP.
    (20) DOE requests data on the availability of VSCs in the timeframe 
of the standard (2027). Additionally, DOE requests comment on the 
impact of international regulations on availability of VSCs for the 
domestic refrigerator, refrigerator-freezer, and freezer market.
    (21) DOE requests comment on the potential impacts on domestic, 
low-volume manufacturers at the TSLs presented in this NOPR.
    (22) DOE requests information regarding the impact of cumulative 
regulatory burden on manufacturers of refrigerators, refrigerator-
freezers, and freezers associated with multiple DOE standards or 
product-specific regulatory actions of other Federal agencies.
    (23) DOE seeks comment on its analysis of wall thickness increases 
for product classes 10, 11A, and 18 along with its preliminary 
conclusions that consumer utility will not be impacted.
    (24) DOE requests data on manufacturers' ability to complete 
investments necessary to adapt product designs and production 
facilities within the 3-year compliance timeline at TSL 5. Further, DOE 
requests comment on the specific limitations, including specific 
financial impacts on manufacturers, that would limit industry's ability 
to adapt to amended standards at TSL 5.
    (25) DOE requests comment on whether regulatory certainty and a 3-
year compliance period would allow for manufacturers and suppliers to 
establish sufficient supply availability of VSCs for the refrigerators, 
refrigerator-freezers, and freezers industry at TSL 5.
    (26) DOE seeks comments, information, and data on the number of 
small businesses in the industry, the names of those small businesses, 
and their market shares by product class. DOE also requests comment on 
the potential impacts of the proposed standards on small manufacturers.
    Additionally, DOE welcomes comments on other issues relevant to the 
conduct of this rulemaking that may not specifically be identified in 
this document.

VIII. Approval of the Office of the Secretary

    The Secretary of Energy has approved publication of this notice of 
proposed rulemaking and announcement of public meeting.

List of Subjects in 10 CFR Part 430

    Administrative practice and procedure, Confidential business 
information, Energy conservation, Household appliances, Imports, 
Incorporation by reference, Intergovernmental relations, Small 
businesses.

Signing Authority

    This document of the Department of Energy was signed on February 9, 
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 14, 2023.
Treena V. Garrett,
Federal Register Liaison Officer, U.S. Department of Energy.

    For the reasons set forth in the preamble, DOE proposes to amend 
part 430 of chapter II, subchapter D, of title 10 of the Code of 
Federal Regulations, as set forth below:

PART 430--ENERGY CONSERVATION PROGRAM FOR CONSUMER PRODUCTS

0
1. The authority citation for part 430 continues to read as follows:

    Authority:  42 U.S.C. 6291-6309; 28 U.S.C. 2461 note.

0
2. Amend appendix A to subpart B of part 430 by:
0
a. In section 3. Definitions, by adding, in alphabetical order, 
definitions for ''Door-in-door'' and ``Transparent door'';
0
b. In section 5.3:
0
(i) Removing paragraphs (a) and (f), and;
0
(ii) Redesignating paragraphs (b) through (e) as paragraphs (a) through 
(d); and
0
c. Adding new sections 5.4 and 5.5.

    The additions read as follows.

Appendix A to Subpart B of Part 430--Uniform Test Method for Measuring 
the Energy Consumption of Refrigerators, Refrigerator-Freezers, and 
Miscellaneous Refrigeration Products

* * * * *
    3. * * *
    Door-in-door means a set of doors or an outer door and inner 
drawer for which--
    (a) Both doors (or both the door and the drawer) must be opened 
to provide access to the interior through a single opening;
    (b) Gaskets for both doors (or both the door and the drawer) are 
exposed to external ambient conditions on the outside around the 
full perimeter of the respective openings; and
    (c) The space between the two doors (or between the door and the 
drawer) achieves temperature levels consistent with the temperature 
requirements of the interior compartment to which the door-in-door 
provides access.
* * * * *
    Transparent door means a door for which 75 percent or more of 
the surface area is glass or another transparent material.
* * * * *

5.4 Icemaker Energy Use

    (a) For refrigerators and refrigerator-freezers: To demonstrate 
compliance with the energy conservation standards at 10 CFR 
430.32(a) applicable to products manufactured on or after September 
15, 2014, but before the compliance date of any

[[Page 12534]]

amended standards published after January 1, 2022, IET, expressed in 
kilowatt-hours per cycle, equals 0.23 for a product with one or more 
automatic icemakers and otherwise equals 0 (zero). To demonstrate 
compliance with any amended standards published after January 1, 
2022, IET, expressed in kilowatt-hours per cycle, is as defined 
section 5.9.2.1 of HRF-1-2019 (incorporated by reference, see Sec.  
430.3).
    (b) For miscellaneous refrigeration products: To demonstrate 
compliance with the energy conservation standards at 10 CFR 
430.32(aa) applicable to products manufactured on or after October 
28, 2019, IET, expressed in kilowatt-hours per cycle, equals 0.23 
for a product with one or more automatic icemakers and otherwise 
equals 0 (zero).

5.5 Triangulation Method

    If the three-point interpolation method of section 5.2(b) of 
this appendix is used for setting temperature controls, the average 
per-cycle energy consumption shall be defined as follows:

E = EX + IET

Where:

E is defined in section 5.9.1.1 of HRF-1-2019;
IET is defined in section 5.4 of this appendix; and
EX is defined and calculated as described in appendix M, 
section M4(a) of AS/NZS 4474.1:2007 (incorporated by reference, see 
Sec.  430.3). The target temperatures txA and 
txB defined in section M4(a)(i) of AS/NZS 4474.1:2007 
shall be the standardized temperatures defined in section 5.6 of 
HRF-1-2019.
* * * * *
0
3. Amend appendix B to subpart B of part 430 by:
0
a. In section 5.3:
0
(i) Removing paragraph (a); and
0
(ii) Redesignating paragraphs (b) and (c) as paragraphs (a) and (b); 
and;
0
b. Adding new section 5.4.

    The additions read as follows:

Appendix B to Subpart B of Part 430--Uniform Test Method for Measuring 
the Energy Consumption of Freezers

* * * * *

5.4 Icemaker Energy Use

    For freezers: To demonstrate compliance with the energy 
conservation standards at 10 CFR 430.32(a) applicable to products 
manufactured on or after September 15, 2014 but before the 
compliance date of any amended standards published after January 1, 
2022, IET, expressed in kilowatt-hours per cycle, equals 0.23 for a 
product with one or more automatic icemakers and otherwise equals 0 
(zero). To demonstrate compliance with any amended standards 
published after January 1, 2022, IET, expressed in kilowatt-hours 
per cycle, is as defined in section 5.9.2.1 of HRF-1-2019 
(incorporated by reference, see Sec.  430.3).
* * * * *
0
4. Amend Sec.  430.32 by revising paragraph (a) to read as follows:


Sec.  430.32   Energy and water conservation standards and their 
compliance dates.

* * * * *
    (a) Refrigerators/refrigerator-freezers/freezers. These standards 
do not apply to refrigerators and refrigerator-freezers with total 
refrigerated volume exceeding 39 cubic feet (1104 liters) or freezers 
with total refrigerated volume exceeding 30 cubic feet (850 liters). 
The energy standards as determined by the equations of the following 
table(s) shall be rounded off to the nearest kWh per year. If the 
equation calculation is halfway between the nearest two kWh per year 
values, the standard shall be rounded up to the higher of these values.
    The following standards remain in effect from September 15, 2014, 
until [date 3 years after the publication of the final rule].

----------------------------------------------------------------------------------------------------------------
                                                               Equations for maximum energy use  (kWh/yr)
                    Product class                     ----------------------------------------------------------
                                                            Based on AV (ft\3\)            Based on av (L)
----------------------------------------------------------------------------------------------------------------
1. Refrigerators and refrigerator-freezers with        7.99AV + 225.0..............  0.282av + 225.0.
 manual defrost.
1A. All-refrigerators--manual defrost................  6.79AV + 193.6..............  0.240av + 193.6.
2. Refrigerator-freezers--partial automatic defrost..  7.99AV + 225.0..............  0.282av + 225.0.
3. Refrigerator-freezers--automatic defrost with top-  8.07AV + 233.7..............  0.285av + 233.7.
 mounted freezer without an automatic icemaker.
3-BI. Built-in refrigerator-freezer--automatic         9.15AV + 264.9..............  0.323av + 264.9.
 defrost with top-mounted freezer without an
 automatic icemaker.
3I. Refrigerator-freezers--automatic defrost with top- 8.07AV + 317.7..............  0.285av + 317.7.
 mounted freezer with an automatic icemaker without
 through-the-door ice service.
3I-BI. Built-in refrigerator-freezers--automatic       9.15AV + 348.9..............  0.323av + 348.9.
 defrost with top-mounted freezer with an automatic
 icemaker without through-the-door ice service.
3A. All-refrigerators--automatic defrost.............  7.07AV + 201.6..............  0.250av + 201.6.
3A-BI. Built-in All-refrigerators--automatic defrost.  8.02AV + 228.5..............  0.283av + 228.5.
4. Refrigerator-freezers--automatic defrost with side- 8.51AV + 297.8..............  0.301av + 297.8.
 mounted freezer without an automatic icemaker.
4-BI. Built-In Refrigerator-freezers--automatic        10.22AV + 357.4.............  0.361av + 357.4.
 defrost with side-mounted freezer without an
 automatic icemaker.
4I. Refrigerator-freezers--automatic defrost with      8.51AV + 381.8..............  0.301av + 381.8.
 side-mounted freezer with an automatic icemaker
 without through-the-door ice service.
4I-BI. Built-In Refrigerator-freezers--automatic       10.22AV + 441.4.2...........  0.361av + 441.4.
 defrost with side-mounted freezer with an automatic
 icemaker without through-the-door ice service.
5. Refrigerator-freezers--automatic defrost with       8.85AV + 317.0..............  0.312av + 317.0.
 bottom-mounted freezer without an automatic icemaker.
5-BI. Built-In Refrigerator-freezers--automatic        9.40AV + 336.9..............  0.332av + 336.9.
 defrost with bottom-mounted freezer without an
 automatic icemaker.
5I. Refrigerator-freezers--automatic defrost with      8.85AV + 401.0..............  0.312av + 401.0.
 bottom-mounted freezer with an automatic icemaker
 without through-the-door ice service.
5I-BI. Built-In Refrigerator-freezers--automatic       9.40AV + 420.9..............  0.332av + 420.9.
 defrost with bottom-mounted freezer with an
 automatic icemaker without through-the-door ice
 service.
5A. Refrigerator-freezer--automatic defrost with       9.25AV + 475.4..............  0.327av + 475.4.
 bottom-mounted freezer with through-the-door ice
 service.
5A-BI. Built-in refrigerator-freezer--automatic        9.83AV + 499.9..............  0.347av + 499.9.
 defrost with bottom-mounted freezer with through-the-
 door ice service.
6. Refrigerator-freezers--automatic defrost with top-  8.40AV + 385.4..............  0.297av + 385.4.
 mounted freezer with through-the-door ice service.

[[Page 12535]]

 
7. Refrigerator-freezers--automatic defrost with side- 8.54AV + 432.8..............  0.302av + 431.1.
 mounted freezer with through-the-door ice service.
7-BI. Built-In Refrigerator-freezers--automatic        10.25AV + 502.6.............  0.362av + 502.6.
 defrost with side-mounted freezer with through-the-
 door ice service.
8. Upright freezers with manual defrost..............  5.57AV + 193.7..............  0.197av + 193.7.
9. Upright freezers with automatic defrost without an  8.62AV + 228.3..............  0.305av + 228.3.
 automatic icemaker.
9I. Upright freezers with automatic defrost with an    8.62AV + 312.3..............  0.305av + 312.3.
 automatic icemaker.
9-BI. Built-In Upright freezers with automatic         9.86AV + 260.9..............  0.348av + 260.6.
 defrost without an automatic icemaker.
9I-BI. Built-In Upright freezers with automatic        9.86AV + 344.9..............  0.348av + 344.9.
 defrost with an automatic icemaker.
10. Chest freezers and all other freezers except       7.29AV + 107.8..............  0.257av + 107.8.
 compact freezers.
10A. Chest freezers with automatic defrost...........  10.24AV + 148.1.............  0.362av + 148.1.
11. Compact refrigerators and refrigerator-freezers    9.03AV + 252.3..............  0.319av + 252.3.
 with manual defrost.
11A.Compact refrigerators and refrigerator-freezers    7.84AV + 219.1..............  0.277av + 219.1.
 with manual defrost.
12. Compact refrigerator-freezers--partial automatic   5.91AV + 335.8..............  0.209av + 335.8.
 defrost.
13. Compact refrigerator-freezers--automatic defrost   11.80AV + 339.2.............  0.417av + 339.2.
 with top-mounted freezer.
13I. Compact refrigerator-freezers--automatic defrost  11.80AV + 423.2.............  0.417av + 423.2.
 with top-mounted freezer with an automatic icemaker.
13A. Compact all-refrigerator--automatic defrost.....  9.17AV + 259.3..............  0.324av + 259.3.
14. Compact refrigerator-freezers--automatic defrost   6.82AV + 456.9..............  0.241av + 456.9.
 with side-mounted freezer.
14I. Compact refrigerator-freezers--automatic defrost  6.82AV + 540.9..............  0.241av + 540.9.
 with side-mounted freezer with an automatic icemaker.
15. Compact refrigerator-freezers--automatic defrost   11.80AV + 339.2.............  0.417av + 339.2.
 with bottom-mounted freezer.
15I. Compact refrigerator-freezers--automatic defrost  11.80AV + 423.2.............  0.417av + 423.2.
 with bottom-mounted freezer with an automatic
 icemaker.
16. Compact upright freezers with manual defrost.....  8.65AV + 225.7..............  0.306av + 225.7.
17. Compact upright freezers with automatic defrost..  10.17AV + 351.9.............  0.359av + 351.9.
18. Compact chest freezers...........................  9.25AV + 136.8..............  0.327av + 136.8.
----------------------------------------------------------------------------------------------------------------
AV = Total adjusted volume, expressed in ft\3\, as determined in appendices A and B of subpart B of this part.
av = Total adjusted volume, expressed in Liters.

    The following standards apply to products manufacturer starting on 
[date 3 years after the publication of the final rule].

----------------------------------------------------------------------------------------------------------------
                                                               Equations for maximum energy use  (kWh/yr)
                    Product class                     ----------------------------------------------------------
                                                           Based on AV  (ft\3\)            Based on av  (L)
----------------------------------------------------------------------------------------------------------------
1. Refrigerator-freezers and refrigerators other than  6.79AV + 191.3..............  0.240av + 191.3.
 all-refrigerators with manual defrost.
1A. All-refrigerators--manual defrost................  5.77AV + 164.6..............  0.204av + 164.6.
2. Refrigerator-freezers--partial automatic defrost..  (6.79AV + 191.3)*K2.........  (0.240av + 191.3)*K2.
3. Refrigerator-freezers--automatic defrost with top-  6.86AV + 198.6 + 28I........  0.242av + 198.6 + 28I.
 mounted freezer.
3-BI. Built-in refrigerator-freezer--automatic         8.24AV + 238.4 + 28I........  0.291av + 238.4 + 28I.
 defrost with top-mounted freezer.
3A. All-refrigerators--automatic defrost.............  (6.01AV + 171.4)*K3A........  (0.212av + 171.4)*K3A.
3A-BI. Built-in All-refrigerators--automatic defrost.  (7.22AV + 205.7)*K3ABI......  (0.255av + 205.7)*K3ABI.
4. Refrigerator-freezers--automatic defrost with side- 6.89AV + 241.2 + 28I........  0.243av + 241.2 + 28I.
 mounted freezer.
4-BI. Built-In Refrigerator-freezers--automatic        8.79AV + 307.4 + 28I........  0.310av + 307.4 + 28I.
 defrost with side-mounted freezer.
5. Refrigerator-freezers--automatic defrost with       (7.61AV + 272.6)*K5 + 28I...  (0.269av + 272.6)*K5 + 28I.
 bottom-mounted freezer.
5-BI. Built-In Refrigerator-freezers--automatic        (8.65AV + 309.9)*K5BI + 28I.  (0.305av + 309.9)*K5BI +
 defrost with bottom-mounted freezer.                                                 28I.
5A. Refrigerator-freezer--automatic defrost with       (7.26AV + 329.2)*K5A........  (0.256av + 329.2)*K5A.
 bottom-mounted freezer with through-the-door ice
 service.
5A-BI. Built-in refrigerator-freezer--automatic        (8.21AV + 370.7)*K5ABI......  (0.290av + 370.7)*K5ABI.
 defrost with bottom-mounted freezer with through-the-
 door ice service.
6. Refrigerator-freezers--automatic defrost with top-  7.14AV + 280.0..............  0.252av + 280.0.
 mounted freezer with through-the-door ice service.
7. Refrigerator-freezers--automatic defrost with side- (6.92AV + 305.2)*K7.........  (0.244av + 305.2)*K7.
 mounted freezer with through-the-door ice service.
7-BI. Built-In Refrigerator-freezers--automatic        (8.82AV + 384.1)*K7BI.......  (0.311av + 384.1)*K7BI.
 defrost with side-mounted freezer.
8. Upright freezers with manual defrost..............  5.57AV + 193.7..............  0.197av + 193.7.
9. Upright freezers with automatic defrost...........  7.76AV + 205.5 + 28I........  0.274av + 205.5 + 28I.
9-BI. Built-In Upright freezers with automatic         9.37AV + 247.9 + 28I........  0.331av + 247.9 + 28I.
 defrost.
10. Chest freezers and all other freezers except       7.29AV + 107.8..............  0.257av + 107.8.
 compact freezers.
10A. Chest freezers with automatic defrost...........  10.24AV + 148.1.............  0.362av + 148.1.

[[Page 12536]]

 
11. Compact refrigerator-freezers and refrigerators    7.68AV + 214.5..............  0.271av + 214.5.
 other than all-refrigerators with manual defrost.
11A. Compact all-refrigerators--manual defrost.......  6.66AV + 186.2..............  0.235av + 186.2.
12. Compact refrigerator-freezers--partial automatic   (7.68AV + 214.5)*K12........  (0.271av + 214.5)*K12.
 defrost.
13. Compact refrigerator-freezers--automatic defrost   10.62AV + 305.3 + 28I.......  0.375av + 305.3 + 28I.
 with top-mounted freezer.
13A. Compact all-refrigerators--automatic defrost....  (8.25AV + 233.4)*K13A.......  (0.291av + 233.4)*K13A.
14. Compact refrigerator-freezers--automatic defrost   6.14AV + 411.2 + 28I........  0.217av + 411.2 + 28I.
 with side-mounted freezer.
15. Compact refrigerator-freezers--automatic defrost   10.62AV + 305.3 + 28I.......  0.375av + 305.3 + 28I.
 with bottom-mounted freezer.
16. Compact upright freezers with manual defrost.....  7.35AV + 191.8..............  0.260av + 191.8.
17. Compact upright freezers with automatic defrost..  9.15AV + 316.7..............  0.323av + 316.7.
18. Compact chest freezers...........................  7.86AV + 107.8..............  0.278av + 107.8.
----------------------------------------------------------------------------------------------------------------
AV = Total adjusted volume, expressed in ft\3\, as determined in appendices A and B of subpart B of 10 CFR part
  430.
av = Total adjusted volume, expressed in Liters.
I = 1 for a product with an automatic icemaker and = 0 for a product without an automatic icemaker. Door
  Coefficients (e.g., K3A) are as defined in the table.


----------------------------------------------------------------------------------------------------------------
                                                                                  Products      Products without
                                                                Products with     without a      a transparent
                       Door coefficient                         a transparent    transparent    door or door-in-
                                                                    door         door with a    door with added
                                                                                door-in-door     external doors
----------------------------------------------------------------------------------------------------------------
K2...........................................................             N/A             N/A  1 + 0.02 * (Nd-1)
K3A..........................................................            1.10             N/A                N/A
K3ABI........................................................
K13A.........................................................
K5...........................................................                            1.06  1 + 0.02 * (Nd-2)
K5BI.........................................................
K5A..........................................................                                  1 + 0.02 * (Nd-3)
K5ABI........................................................
K7...........................................................                                  1 + 0.02 * (Nd-2)
K7BI.........................................................
K12..........................................................             N/A             N/A  1 + 0.02 * (Nd-1)
----------------------------------------------------------------------------------------------------------------
Nd is the number of external doors.

* * * * *
[FR Doc. 2023-03436 Filed 2-24-23; 8:45 am]
BILLING CODE 6450-01-P