[Federal Register Volume 88, Number 194 (Tuesday, October 10, 2023)]
[Proposed Rules]
[Pages 70196-70307]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-21987]
[[Page 70195]]
Vol. 88
Tuesday,
No. 194
October 10, 2023
Part III
Department of Energy
-----------------------------------------------------------------------
10 CFR Part 431
Energy Conservation Program: Energy Conservation Standards for
Commercial Refrigerators, Freezers, and Refrigerator-Freezers; Proposed
Rule
Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 /
Proposed Rules
[[Page 70196]]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF ENERGY
10 CFR Part 431
[EERE-2017-BT-STD-0007]
RIN 1904-AD82
Energy Conservation Program: Energy Conservation Standards for
Commercial Refrigerators, Freezers, and Refrigerator-Freezers
AGENCY: Office of Energy Efficiency and Renewable Energy, Department of
Energy.
ACTION: Notice of proposed rulemaking and announcement of public
meeting.
-----------------------------------------------------------------------
SUMMARY: The Energy Policy and Conservation Act, as amended (``EPCA''),
prescribes energy conservation standards for various consumer equipment
and certain commercial and industrial equipment, including commercial
refrigerators, freezers, and refrigerator-freezers (``commercial
refrigeration equipment'' or ``CRE''). EPCA also requires the U.S.
Department of Energy (``DOE'' ``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 new and amended energy conservation standards for CRE, 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 December 11, 2023.
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 November 9, 2023.
Meeting: DOE will hold a public meeting on Tuesday, November 7th,
2023, from 10 a.m. to 4 p.m., in Washington, DC. This meeting will also
be broadcast as a webinar.
ADDRESSES: The public meeting will be held at the U.S. Department of
Energy, Forrestal Building, Room 6E-069, 1000 Independence Avenue SW,
Washington, DC 20585. See section VII of this document, ``Public
Participation,'' for further details, including procedures for
attending the in-person meeting, webinar registration information,
participant instructions, and information about the capabilities
available to webinar participants.
Interested persons are encouraged to submit comments using the
Federal Rulemaking Portal at www.regulations.gov under docket number
EERE-2017-BT-STD-0007. Follow the instructions for submitting comments.
Alternatively, interested persons may submit comments, identified by
docket number EERE-2017-BT-STD-0007, by any of the following methods:
(1) Email: [email protected]. Include the docket number
EERE-2017-BT-STD-0007 in the subject line of the message.
(2) Postal Mail: Appliance and Equipment Standards Program, U.S.
Department of Energy, Building Technologies Office, Mailstop EE-5B,
1000 Independence Avenue SW, Washington, DC 20585-0121. Telephone:
(202) 287-1445. If possible, please submit all items on a compact disc
(``CD''), in which case it is not necessary to include printed copies.
(3) Hand Delivery/Courier: Appliance and Equipment Standards
Program, U.S. Department of Energy, Building Technologies Office, 950
L'Enfant Plaza SW, 6th Floor, Washington, DC 20024. Telephone: (202)
287-1445. If possible, please submit all items on a CD, in which case
it is not necessary to include printed copies.
No telefacsimiles (``faxes'') will be accepted. For detailed
instructions on submitting comments and additional information on this
process, see section VII of this document.
Docket: The docket 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-0007. 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 standards. 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 rulemaking.
FOR FURTHER INFORMATION CONTACT:
Mr. Jeremy Dommu, U.S. Department of Energy, Office of Energy
Efficiency and Renewable Energy, Building Technologies Office, EE-5B,
1000 Independence Avenue SW, Washington, DC 20585-0121. Telephone:
(202) 586-9870. Email: [email protected].
Ms. Kristin Koernig, U.S. Department of Energy, Office of the
General Counsel, GC-33, 1000 Independence Avenue SW, Washington, DC
20585-0121. Telephone: (202) 586-3593. Email:
[email protected].
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Synopsis of the Proposed Rule
A. Benefits and Costs to Consumers
B. Impact on Manufacturers
C. National Benefits and Costs
D. Conclusion
II. Introduction
A. Authority
B. Background
1. Current Standards
2. History of Standards Rulemaking for CRE
C. Deviation From Process Rule
1. Framework Document
2. Public Comment Period
3. Amended Test Procedures
III. General Discussion
A. General Comments
B. Scope of Coverage
C. Test Procedure
D. Technological Feasibility
1. General
2. Maximum Technologically Feasible Levels
E. Energy Savings
1. Determination of Savings
2. Significance of Savings
F. 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 Equipment
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. Equipment Classes and Definitions
a. Current Equipment Classes
b. New Definitions
c. Equipment Class Modifications
2. CRE Market
3. Technology Options
a. Compressors
[[Page 70197]]
b. R-290
c. Insulation
d. Doors
e. Evaporators and Condensers
f. Fan Motors
g. Defrost
B. Screening Analysis
1. Screened-Out Technologies
a. Increased Insulation Thickness
b. Vacuum-Insulated Panels
c. Linear Compressors
d. Air Curtain Design
2. Remaining Technologies
C. Engineering Analysis
1. Efficiency Analysis
a. Baseline Energy Use
b. Higher Efficiency Levels
c. Engineering Spreadsheet Model
d. Industry Trade Association Survey
2. Cost Analysis
3. Cost-Efficiency Results
D. Markups Analysis
E. Energy Use Analysis
F. Life-Cycle Cost and Payback Period Analysis
1. Equipment Cost
2. Installation Cost
3. Annual Energy Consumption
4. Energy Prices
5. Repair and Maintenance Costs
6. Equipment Lifetime
7. Residual Value
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. Equipment 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. Changes to the Cabinet Structure
b. Supply Chain Concerns
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 Equipment
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 CRE 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, 13563, and 14094
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. Participation in the Public Meeting and Webinar
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 C of EPCA established the Energy
Conservation Program for Certain Industrial Equipment. (42 U.S.C. 6311-
6317) Such equipment includes CRE, the subject of this proposed
rulemaking.
---------------------------------------------------------------------------
\1\ All references to EPCA in this document refer to the statute
as amended through the Energy Act of 2020, Public Law 116-260
(December 27, 2020), which reflect the last statutory amendments
that impact parts A and A-1 of EPCA.
---------------------------------------------------------------------------
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. 6316(e)(1); 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. 6316(e)(1); 42 U.S.C. 6295(o)(3)(B))
EPCA established standards for certain categories of CRE (42 U.S.C.
6313(c)(2)-(4)) and directs DOE to conduct future rulemakings to
determine whether to amend these standards. (42 U.S.C. 6313(c)(6)(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 equipment 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. 6316(e)(1); 42 U.S.C. 6295(m)(1))
In accordance with these and other statutory provisions discussed
in this document, DOE analyzed the benefits and burdens of six trial
standard levels (``TSLs'') for CRE. The TSLs and their associated
benefits and burdens are discussed in detail in sections V.A through
V.C of this document. As discussed in section V.C, DOE has tentatively
determined that TSL 5 represents the maximum improvement in energy
efficiency that is technologically feasible and economically justified
and to establish new energy conservation standards for covered
equipment not yet subject to energy conservation standards. The
proposed standards, which are expressed in maximum daily energy
consumption (``MDEC''), are shown in table I.1. These proposed
standards, if adopted, would apply to all CRE listed in table I.1
manufactured in, or imported into, the United States on or after the
date that is (1) 3 years after the date on which the final new and
amended standards are published or (2) if the Secretary determines, by
rule, that 3 years is inadequate, not later than 5 years after the date
on which the final
[[Page 70198]]
rule is published. (42 U.S.C. 6313(c)(6)(C)).
DOE notes that the U.S. Environmental Protection Agency (``EPA'')
proposed refrigerant restrictions pursuant to the American Innovation
and Manufacturing Act (``AIM Act'') \2\ affecting CRE in a NOPR
published on December 15, 2022 (``December 2022 EPA NOPR''). 87 FR
76738. The proposal would prohibit manufacture or import of such CRE
starting January 1, 2025, and would ban sale, distribution, purchase,
receipt, or export of such CRE starting January 1, 2026. Id. at 87 FR
76809. See section IV.C.1.a of this document for more details. DOE
understands that it would be beneficial to CRE equipment manufacturers
to align the compliance date of any DOE amended or established
standards as closely as possible with the refrigerant prohibition dates
proposed by the December 2022 EPA NOPR. Therefore, DOE is proposing
that the proposed standards, if adopted, would apply to all CRE listed
in table I.1 manufactured in, or imported into, the United States on or
after the date that is 3 years after the date on which the final new
and amended standards are published.
---------------------------------------------------------------------------
\2\ Under subsection (i) of the AIM Act, entitled ``Technology
Transitions,'' the EPA may by rule restrict the use of
hydrofluorocarbons (``HFCs'') in sectors or subsectors where they
are used. A person or entity may also petition EPA to promulgate
such a rule. ``H.R.133--116th Congress (2019-2020): Consolidated
Appropriations Act, 2021.'' Congress.gov, Library of Congress,
December 27, 2020, available at www.congress.gov/bill/116thcongress/house-bill/133.
Table I.1--Proposed Energy Conservation Standards for CRE
------------------------------------------------------------------------
Maximum daily energy
Equipment class consumption (kWh/
day)
------------------------------------------------------------------------
VOP.RC.H.......................................... 0.31 x TDA + 1.99
VOP.RC.M.......................................... 0.56 x TDA + 3.57
VOP.RC.L.......................................... 2.04 x TDA + 6.36
VOP.RC.I.......................................... 2.59 x TDA + 8.08
SVO.RC.H.......................................... 0.32 x TDA + 1.55
SVO.RC.M.......................................... 0.58 x TDA + 2.79
SVO.RC.L.......................................... 2.04 x TDA + 6.36
SVO.RC.I.......................................... 2.59 x TDA + 8.08
HZO.RC.H.......................................... 0.19 x TDA + 1.56
HZO.RC.M.......................................... 0.34 x TDA + 2.81
HZO.RC.L.......................................... 0.54 x TDA + 6.81
HZO.RC.I.......................................... 0.69 x TDA + 8.64
VCT.RC.H.......................................... 0.07 x TDA + 0.97
VCT.RC.M.......................................... 0.134 x TDA + 1.74
VCT.RC.L.......................................... 0.47 x TDA + 2.51
VCT.RC.I.......................................... 0.56 x TDA + 2.97
HCT.RC.M.......................................... 0.16 x TDA + 0.13
HCT.RC.L.......................................... 0.34 x TDA + 0.26
HCT.RC.I.......................................... 0.38 x TDA + 0.29
VCS.RC.H.......................................... 0.06 x V + 0.14
VCS.RC.M.......................................... 0.1 x V + 0.26
VCS.RC.L.......................................... 0.21 x V + 0.54
VCS.RC.I.......................................... 0.25 x V + 0.63
HCS.RC.M.......................................... 0.1 x V + 0.26
HCS.RC.L.......................................... 0.21 x V + 0.54
HCS.RC.I.......................................... 0.25 x V + 0.63
SOC.RC.H.......................................... 0.22 x TDA + 0.05
SOC.RC.M.......................................... 0.39 x TDA + 0.1
SOC.RC.L.......................................... 0.83 x TDA + 0.2
SOC.RC.I.......................................... 1.04 x TDA + 0.25
CB.RC.M........................................... 0.03 x V + 0.39
CB.RC.L........................................... 0.13 x V + 1.37
VOP.SC.H.......................................... 0.69 x TDA + 1.94
VOP.SC.M.......................................... 1.25 x TDA + 3.48
VOP.SC.L.......................................... 3.29 x TDA + 9.15
VOP.SC.I.......................................... 4.18 x TDA + 11.63
SVO.SC.H.......................................... 0.65 x TDA + 1.77
SVO.SC.M.......................................... 1.18 x TDA + 3.18
SVO.SC.L.......................................... 3.25 x TDA + 8.78
SVO.SC.I.......................................... 4.13 x TDA + 11.16
HZO.SC.H.......................................... 0.27 x TDA + 2.06
HZO.SC.M.......................................... 0.48 x TDA + 3.71
HZO.SC.L.......................................... 1.48 x TDA + 5.5
HZO.SC.I.......................................... 1.97 x TDA + 7.34
VCT.SC.H.......................................... 0.053 x V + 0.85
VCT.SC.M.......................................... 0.054 x V + 0.86
VCT.SC.L.......................................... 0.234 x V + 2.38
VCT.SC.I.......................................... 0.6 x TDA + 3.2
HCT.SC.M.......................................... 0.06 x V + 0.37
HCT.SC.L.......................................... 0.08 x V + 1.23
HCT.SC.I.......................................... 0.34 x TDA + 0.43
VCS.SC.H.......................................... 0.0082 x V + 0.21
VCS.SC.M.......................................... 0.02 x V + 0.54
VCS.SC.L.......................................... 0.155 x V + 0.97
VCS.SC.I.......................................... 0.25 x V + 0.88
HCS.SC.M.......................................... 0.022 x V + 0.41
HCS.SC.L.......................................... 0.043 x V + 0.81
HCS.SC.I.......................................... 0.31 x V + 0.81
SOC.SC.H.......................................... 0.17 x TDA + 0.33
SOC.SC.M.......................................... 0.304 x TDA + 0.59
SOC.SC.L.......................................... 1.1 x TDA + 2.1
SOC.SC.I.......................................... 1.53 x TDA + 0.36
CB.SC.M........................................... 0.049 x V + 0.54
CB.SC.L........................................... 0.180 x V + 1.92
PD.SC.M........................................... 0.11 x V + 0.81
VCT.RC.M.PT....................................... 0.139 x TDA + 1.81
VCT.SC.M.PT....................................... 0.056 x V + 0.86
VCT.SC.L.PT....................................... 0.243 x V + 2.47
VCS.SC.M.PT....................................... 0.02 x V + 0.56
VCS.SC.L.PT....................................... 0.161 x V + 1.01
VCT.RC.M.SD....................................... 0.143 x TDA + 1.86
VCT.SC.M.SD....................................... 0.058 x V + 0.86
VCT.RC.M.SDPT..................................... 0.149 x TDA + 1.93
VCT.SC.M.SDPT..................................... 0.060 x V + 0.86
VCT.RC.M.RI....................................... 0.140 x TDA + 1.83
VCT.SC.M.RI....................................... 0.057 x V + 0.86
VCS.SC.M.RI....................................... 0.02 x V + 0.57
VCS.SC.L.RI....................................... 0.162 x V + 1.02
VCT.RC.M.RT....................................... 0.146 x TDA + 1.9
VCT.SC.M.RT....................................... 0.059 x V + 0.86
VCS.SC.M.RT....................................... 0.02 x V + 0.59
VCS.SC.L.RT....................................... 0.169 x V + 1.06
HCS.SC.L.FA....................................... 0.052 x V + 0.97
------------------------------------------------------------------------
The equipment classes are separated by equipment family, condensing unit
configuration, and operating temperature. Equipment Families: VOP--
Vertical Open; SVO--Semi-Vertical Open; HZO--Horizontal Open; VCT--
Vertical Closed Transparent; HCT--Horizontal Closed Transparent; VCS--
Vertical Closed Solid; HCS--Horizontal Closed Solid; SOC--Service Over
Counter; CB--Chef Base; PD--Pull Down. Condensing Unit Configurations:
RC--Remote Condensing; SC--Self Contained. Operating Temperatures: H--
High Temperature; M--Medium Temperature; L--Low Temperature; I--Ice
Cream Temperature.
Table I.2--Description of Coefficients for Proposed Maximum Daily Energy
Consumption Standards for CRE
------------------------------------------------------------------------
Unique design characteristic Abbreviation
------------------------------------------------------------------------
Pass-through Door........................ PT
Sliding Door............................. SD
Sliding and Pass-through Doors........... SDPT
Roll-in Door............................. RI
Roll-through Door........................ RT
Forced Air Evaporator.................... FA
------------------------------------------------------------------------
DOE requests comments on its proposal to require that the proposed
standards, if adopted, would apply to all CRE listed in table I.1
manufactured in, or imported into, the United States on or after the
date that is 3 years after the date on which the final new and amended
standards are published. More generally, DOE requests comment on
whether it would be beneficial to CRE manufacturers to align the
compliance date of any DOE amended or established standards as closely
as possible with the refrigerant prohibition dates proposed by the
December 2022 EPA NOPR.
A. Benefits and Costs to Consumers
Table I.3 presents DOE's evaluation of the economic impacts of the
proposed standards--represented by TSL 5--on consumers of CRE, as
measured by the average life-cycle cost (``LCC'') savings and the
simple payback period (``PBP'').\3\ The average LCC savings are
positive for all equipment classes, and the PBP is less than the
average lifetime for the vast majority of CRE equipment classes,\4\
which is estimated to be 13.9 years (see section IV.F.7 of this
document).
---------------------------------------------------------------------------
\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.8 of this document). The simple PBP, which is
designed to compare specific efficiency levels, is measured relative
to the baseline product (see section IV.F.9 of this document).
\4\ For the HZO.RC.M equipment class, the estimated PBP at TSL 5
is 13.8 years for an estimated average lifetime of approximately 13
years.
[[Page 70199]]
Table I.3--Impacts of Proposed Energy Conservation Standards on
Consumers of CRE
------------------------------------------------------------------------
Average LCC Simple payback
Equipment class savings (2022$) period (years)
------------------------------------------------------------------------
CB.SC.L........................... 566.92 2.2
CB.SC.M........................... 44.90 5.0
HCS.SC.L.......................... 7.77 5.1
HCS.SC.M.......................... 84.89 1.8
HCT.SC.I.......................... 55.03 7.1
HCT.SC.L *........................ ................. .................
HCT.SC.M *........................ ................. .................
HZO.RC.L.......................... 46.57 13.0
HZO.RC.M.......................... 40.29 13.8
HZO.SC.L.......................... 841.89 2.8
HZO.SC.M.......................... 199.91 5.2
SOC.RC.M.......................... 929.51 3.3
SOC.SC.M.......................... 698.37 5.4
SVO.RC.M.......................... 406.59 7.3
SVO.SC.M.......................... 602.17 4.3
VCS.SC.H.......................... 162.47 3.7
VCS.SC.I.......................... 486.70 3.4
VCS.SC.L.......................... 260.73 3.2
VCS.SC.M.......................... 128.81 4.1
VCT.RC.L.......................... 331.04 6.4
VCT.RC.M.......................... 133.62 10.9
VCT.SC.H *........................ ................. .................
VCT.SC.I.......................... 77.46 8.3
VCT.SC.L.......................... 120.34 5.8
VCT.SC.M.......................... 82.53 7.6
VOP.RC.L.......................... 1524.52 3.6
VOP.RC.M.......................... 707.13 5.7
VOP.SC.M.......................... 992.17 3.6
------------------------------------------------------------------------
* For these equipment classes, TSL 5 corresponds to efficiency level 0.
DOE's analysis of the impacts of the proposed standards on
consumers is described in section IV.F of this document.
B. Impact on Manufacturers \5\
---------------------------------------------------------------------------
\5\ All monetary values in this document are expressed in 2022
dollars.
---------------------------------------------------------------------------
The industry net present value (``INPV'') is the sum of the
discounted cash flows to the industry from the base year through the
end of the analysis period (2023-2057). Using a real discount rate of
10.0 percent, DOE estimates that the INPV for manufacturers of CRE in
the case without new and amended standards is $3,286.4 million. Under
the proposed standards, the change in INPV is estimated to range from -
4.8 percent to -0.9 percent, which is approximately -$159.3 million to
-$30.9 million. In order to bring equipment into compliance with new
and amended standards, it is estimated that the industry would incur
total conversion costs of $226.4 million.\6\
---------------------------------------------------------------------------
\6\ Conversion costs are incurred between the publication of the
final rule (modeled as 2025) and the compliance year (modeled as
2028) and are included in the change in INPV presented in this
section.
---------------------------------------------------------------------------
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.
C. National Benefits and Costs
DOE's analyses indicate that the proposed energy conservation
standards for CRE would save a significant amount of energy. Relative
to the case without new and amended standards, the lifetime energy
savings for CRE purchased in the 30-year period that begins in the
anticipated year of compliance with the new and amended standards
(2028-2057) amount to 3.11 quadrillion British thermal units (``Btu''),
or quads.\7\ This represents a savings of 16.8 percent relative to the
energy use of these equipment in the case without new or amended
standards (referred to as the ``no-new-standards case'').
---------------------------------------------------------------------------
\7\ 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 CRE ranges from $2.4 billion (at
a 7-percent discount rate) to $7.1 billion (at a 3-percent discount
rate). This NPV expresses the estimated total value of future
operating-cost savings minus the estimated increased equipment costs
for CRE purchased in 2028-2057.
In addition, the proposed standards for CRE 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 55.8 million metric tons (``Mt'') \8\
of carbon dioxide (``CO2''), 17.1 thousand tons of sulfur
dioxide (``SO2''), 104.2 thousand tons of nitrogen oxides
(``NOX''), 472 thousand tons of methane
(``CH4''), 0.54 thousand tons of nitrous oxide
(``N2O''), and 0.12 tons of mercury (``Hg'').\9\
---------------------------------------------------------------------------
\8\ A metric ton is equivalent to 1.1 short tons. Results for
emissions other than CO2 are presented in short tons.
\9\ DOE calculated emissions reductions relative to the no-new-
standards-case, which reflects key assumptions in the Annual Energy
Outlook 2023 (``AEO2023''). AEO2023 reflects, to the extent
possible, laws and regulations adopted through mid-November 2022,
including the Inflation Reduction Act. See section IV.K of this
document for further discussion of AEO2023 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-
[[Page 70200]]
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''). DOE used interim
SC-GHG values (in terms of benefit per ton of GHG emissions avoided)
developed by an Interagency Working Group on the Social Cost of
Greenhouse Gases (``IWG'').\10\ 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 $3.04 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 sets of SC-GHG estimates.
---------------------------------------------------------------------------
\10\ To monetize the benefits of reducing GHG emissions this
analysis uses the interim 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. (``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 using benefit per ton estimates
from the Environmental Protection Agency,\11\ as discussed in section
IV.L of this document. DOE estimated the present value of the health
benefits would be $2.32 billion using a 7-percent discount rate, and
$5.94 billion using a 3-percent discount rate.\12\ DOE is currently
only monetizing health benefits from changes in ambient fine
particulate matter (PM2.5) concentrations from two
precursors (SO2 and NOX), and from changes in
ambient ozone from one precursor (for NOX), but will
continue to assess the ability to monetize other effects such as health
benefits from reductions in direct PM2.5 emissions.
---------------------------------------------------------------------------
\11\ U.S. EPA. Estimating the Benefit per Ton of Reducing
Directly Emitted PM2.5, PM2.5 Precursors and
Ozone Precursors from 21 Sectors. Available at www.epa.gov/benmap/estimating-benefit-ton-reducing-pm25-precursors-21-sectors.
\12\ DOE estimates the economic value of these emissions
reductions resulting from the considered TSLs for the purpose of
complying with the requirements of Executive Order 12866.
---------------------------------------------------------------------------
Table I.4 summarizes the monetized benefits and costs expected to
result from the proposed standards for CRE. There are other important
unquantified effects, including certain unquantified climate benefits,
unquantified public health benefits from the reduction of toxic air
pollutants and other emissions, unquantified energy security benefits,
and distributional effects, among others.
Table I.4--Summary of Monetized Benefits and Costs of Proposed Energy
Conservation Standards for CRE (TSL 5)
------------------------------------------------------------------------
Billion 2022$
------------------------------------------------------------------------
3% discount rate
------------------------------------------------------------------------
Consumer Operating Cost Savings...................... 12.8
Climate Benefits *................................... 3.04
Health Benefits **................................... 5.94
------------------
Total Benefits [dagger].......................... 21.8
Consumer Incremental Equipment Costs................. 5.74
------------------
Net Benefits..................................... 16.1
Change in Producer Cashflow (INPV[Dagger][Dagger])... (0.16)-(0.03)
------------------------------------------------------------------------
7% discount rate
------------------------------------------------------------------------
Consumer Operating Cost Savings...................... 5.55
Climate Benefits * (3% discount rate)................ 3.04
Health Benefits **................................... 2.32
------------------------------------------------------------------------
Total Benefits [dagger].......................... 10.9
Consumer Incremental Equipment Costs................. 3.17
------------------
Net Benefits..................................... 7.74
Change in Producer Cashflow (INPV[Dagger][Dagger])... (0.16)-(0.03)
------------------------------------------------------------------------
Note: This table presents the costs and benefits associated with CRE
shipped in 2028-2057. These results include consumer, climate, and
health benefits that accrue after 2057 from the equipment shipped in
2028-2057.
* 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; however, DOE emphasizes the importance and value of considering
the benefits calculated using all four sets of SC-GHG estimates. To
monetize the benefits of reducing GHG emissions, this analysis uses
the interim 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.
** 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 3-percent discount
rate.
[[Page 70201]]
[Dagger][Dagger] Operating Cost Savings are calculated based on the life
cycle costs analysis and national impact analysis as discussed in
detail below. See sections IV.F and IV.H of this document. DOE's NIA
includes all impacts (both costs and benefits) along the distribution
chain beginning with the increased costs to the manufacturer to
manufacture the equipment and ending with the increase in price
experienced by the consumer. DOE also separately conducts a detailed
analysis on the impacts on manufacturers (the MIA). See section IV.J.
In the detailed MIA, DOE models manufacturers' pricing decisions based
on assumptions regarding investments, conversion costs, cashflow, and
margins. The MIA produces a range of impacts, which is the rule's
expected impact on the INPV. The change in INPV is the present value
of all changes in industry cash flow, including changes in production
costs, capital expenditures, and manufacturer profit margins. Change
in INPV is calculated using the industry weighted average cost of
capital value of 10.0 percent that is estimated in the MIA (see
chapter 12 of the NOPR TSD for a complete description of the industry
weighted average cost of capital). For commercial refrigeration
equipment, those values are -$159 million to -$31 million. DOE
accounts for that range of likely impacts in analyzing whether a TSL
is economically justified. See section V.C of this document. DOE is
presenting the range of impacts to the INPV under two manufacturer
markup scenarios: the Preservation of Gross Margin scenario, which is
the manufacturer markup scenario used in the calculation of Consumer
Operating Cost Savings in this table, and the Preservation of
Operating Profit scenario, where DOE assumed manufacturers would not
be able to increase per-unit operating profit in proportion to
increases in manufacturer production costs. DOE includes the range of
estimated INPV in the above table, drawing on the MIA explained
further in section IV.J of this document, to provide additional
context for assessing the estimated impacts of this proposal to
society, including potential changes in production and consumption,
which is consistent with OMB's Circular A-4 and E.O. 12866. If DOE
were to include the INPV into the net benefit calculation for this
proposed rule, the net benefits would range from $15.94 billion to
$16.07 billion at 3-percent discount rate and would range from $7.58
billion to $7.71 billion at 7-percent discount rate. Parentheses ()
indicate negative values. DOE seeks comment on this approach.
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 equipment purchase prices and
installation costs, plus (3) the value of climate and health benefits
of emission reductions, all annualized.\13\
---------------------------------------------------------------------------
\13\ To convert the time-series of costs and benefits into
annualized values, DOE calculated a present value in 2023, 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 2023. 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 cost savings are domestic private U.S.
consumer monetary savings that occur as a result of purchasing the
covered equipment and are measured for the lifetime of CRE shipped in
2028-2057. The benefits associated with reduced emissions achieved as a
result of the proposed standards are also calculated based on the
lifetime of CRE shipped in 2028-2057. Total benefits for both the 3-
percent and 7-percent cases are presented using the average GHG social
costs with 3-percent discount rate. Estimates of SC-GHG values are
presented for all four discount rates in section V.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 $334.6 million per year in increased equipment
costs, while the estimated annual benefits are $586.1 million in
reduced equipment operating costs, $174.4 million in climate benefits,
and $245.5 million in health benefits. In this case, the net benefit
would amount to $671.4 million per year.
Using a 3-percent discount rate for all benefits and costs, the
estimated cost of the proposed standards is $329.8 million per year in
increased equipment costs, while the estimated annual benefits are
$737.7 million in reduced operating costs, $174.4 million in climate
benefits, and $341.3 million in health benefits. In this case, the net
benefit would amount to $923.5 million per year.
Table I.5--Annualized Monetized Benefits and Costs of Proposed Energy Conservation Standards for CRE (TSL 5)
----------------------------------------------------------------------------------------------------------------
Million 2022$/year
-----------------------------------------------
Low-net- High-net-
Primary benefits benefits
estimate estimate estimate
----------------------------------------------------------------------------------------------------------------
3% discount rate
----------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings................................. 737.7 714.3 773.7
Climate Benefits *.............................................. 174.4 173.5 178.9
Health Benefits **.............................................. 341.4 339.7 349.9
-----------------------------------------------
Total Benefits [dagger]..................................... 1253.3 1227.5 1302.8
Consumer Incremental Equipment Costs............................ 329.8 337.9 328.3
-----------------------------------------------
Net Benefits................................................ 923.5 889.5 974.1
Change in Producer Cashflow (INPV [Dagger][Dagger])............. (17)-(3) (17)-(3) (17)-(3)
----------------------------------------------------------------------------------------------------------------
7% discount rate
----------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings................................. 586.1 569.3 613.0
Climate Benefits * (3% discount rate)........................... 174.4 173.5 178.9
Health Benefits **.............................................. 245.5 244.7 250.9
Total Benefits [dagger]..................................... 1006.0 987.5 1042.8
Consumer Incremental Equipment Costs............................ 334.6 341.7 333.5
Net Benefits................................................ 671.4 645.7 709.3
[[Page 70202]]
Change in Producer Cashflow (INPV [Dagger][Dagger])............. (17)-(3) (17)-(3) (17)-(3)
----------------------------------------------------------------------------------------------------------------
Note: This table presents the costs and benefits associated with CRE shipped in 2028-2057. These results include
benefits to consumers which accrue after 2057 from the equipment shipped in 2028-2057. The Primary, Low Net
Benefits, and High Net Benefits Estimates utilize projections of energy prices from the AEO2023 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 sections V.F.1 and V.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 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 sets of SC-GHG
estimates. To monetize the benefits of reducing GHG emissions this analysis uses the interim 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.
** 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 benefits for both the 3-percent and 7-percent cases are presented using the average SC-GHG with 3-
percent discount rate.
[Dagger][Dagger] Operating Cost Savings are calculated based on the life cycle costs analysis and national
impact analysis as discussed in detail below. See sections IV.F and IV.H. DOE's NIA includes all impacts (both
costs and benefits) along the distribution chain beginning with the increased costs to the manufacturer to
manufacture the equipment and ending with the increase in price experienced by the consumer. DOE also
separately conducts a detailed analysis on the impacts on manufacturers (the MIA). See section IV.J. In the
detailed MIA, DOE models manufacturers' pricing decisions based on assumptions regarding investments,
conversion costs, cashflow, and margins. The MIA produces a range of impacts, which is the rule's expected
impact on the INPV. The change in INPV is the present value of all changes in industry cash flow, including
changes in production costs, capital expenditures, and manufacturer profit margins. The annualized change in
INPV is calculated using the industry weighted average cost of capital value of 10.0 percent that is estimated
in the MIA (see chapter 12 of the NOPR TSD for a complete description of the industry weighted average cost of
capital). For commercial refrigeration equipment, those values are -$16.65 million to -$3.23 million. DOE
accounts for that range of likely impacts in analyzing whether a TSL is economically justified. See section
V.C. DOE is presenting the range of impacts to the INPV under two manufacturer markup scenarios: the
Preservation of Gross Margin scenario, which is the manufacturer markup scenario used in the calculation of
Consumer Operating Cost Savings in this table, and the Preservation of Operating Profit scenario, where DOE
assumed manufacturers would not be able to increase per-unit operating profit in proportion to increases in
manufacturer production costs. DOE includes the range of estimated annualized change in INPV in the above
table, drawing on the MIA explained further in section IV.J, to provide additional context for assessing the
estimated impacts of this proposal to society, including potential changes in production and consumption,
which is consistent with OMB's Circular A-4 and E.O. 12866. If DOE were to include the INPV into the
annualized net benefit calculation for this proposed rule, the annualized net benefits would range from $906.8
million to $920.3 million at 3-percent discount rate and would range from $654.7 million to $668.2 million at
7-percent discount rate. Parentheses ( ) indicate negative values. DOE seeks comment on this approach.
DOE's analysis of the national impacts of the proposed standards is
described in sections V.H, V.K, and V.L of this document.
D. 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 regards to
technological feasibility, design options used to achieve these
standard levels are already commercially available for all equipment
classes covered by this proposal. 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 CRE is $334.6 million per year in increased
equipment costs, while the estimated annual benefits are $586.1 million
in reduced equipment operating costs, $174.4 million in climate
benefits and $245.5 million in health benefits. The net benefit amounts
to $671.4 million 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.\14\ For
example, some covered products and equipment have substantial energy
consumption occur during periods of peak energy demand. The impacts of
these equipment on the energy infrastructure can be more pronounced
than equipment with relatively constant demand. Accordingly, DOE
evaluates the significance of energy savings on a case-by-case basis.
---------------------------------------------------------------------------
\14\ 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 standards are projected to result in
estimated national energy savings of 3.11 quad FFC, the equivalent of
the primary annual energy use of 33 million homes. The NPV of consumer
benefit for these projected energy savings is $2.38 billion using a
discount rate of 7 percent, and $7.10 billion using a discount rate of
3 percent. The cumulative emissions reductions associated with these
energy savings are 55.8 Mt of CO2, 17.1 thousand tons of
SO2, 104.2 thousand tons of NOX, 0.12 tons of Hg,
472.0 thousand tons of CH4, and 0.54 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) is $ 3.04 billion. The estimated monetary value
of the health benefits from reduced SO2 and NOX
emissions is $ 2.32 billion using a 7-percent discount rate and $ 5.94
billion using a 3-percent discount rate. As such, 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 these tentative conclusions is
contained in the
[[Page 70203]]
remainder of this document and the accompanying technical support
document (``NOPR TSD'').\15\
---------------------------------------------------------------------------
\15\ The NOPR TSD is available in the docket for this rulemaking
at www.regulations.gov/docket/EERE-2017-BT-STD-0007.
---------------------------------------------------------------------------
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
CRE.
A. Authority
EPCA authorizes DOE to regulate the energy efficiency of a number
of consumer equipment and certain industrial equipment. Title III, part
C of EPCA, added by Public Law 95-619, title IV, section 441(a) (42
U.S.C. 6311-6317, as codified), established the Energy Conservation
Program for Certain Industrial Equipment, which sets forth a variety of
provisions designed to improve energy efficiency. This equipment
includes CRE, the subject of this document. (42 U.S.C. 6311(1)(E))
EPCA established standards for certain categories of CRE (42 U.S.C.
6313(c)(2)-(4)) and directs DOE to conduct future rulemakings to
determine whether to amend these standards. (42 U.S.C. 6313(c)(6)(B))
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
equipment 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. 6316(e)(1); 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 include definitions (42 U.S.C.
6311), test procedures (42 U.S.C. 6314), labeling provisions (42 U.S.C.
6315), energy conservation standards (42 U.S.C. 6313), and the
authority to require information and reports from manufacturers (42
U.S.C. 6316; 42 U.S.C. 6296).
Federal energy efficiency requirements for covered equipment
established under EPCA generally supersede State laws and regulations
concerning energy conservation testing, labeling, and standards. (42
U.S.C. 6316(a) and (b); 42 U.S.C. 6297) DOE may, however, grant waivers
of Federal preemption for particular State laws or regulations, in
accordance with the procedures and other provisions set forth under
EPCA. (See 42 U.S.C. 6316(a) and 42 U.S.C. 6316(e) (applying the
preemption waiver provisions of 42 U.S.C. 6297))
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 equipment. (42
U.S.C. 6316(e)(1); 42 U.S.C. 6295(o)(3)(A) and 42 U.S.C. 6295(r))
Manufacturers of covered equipment must use the Federal test procedures
as the basis for: (1) certifying to DOE that their equipment complies
with the applicable energy conservation standards adopted pursuant to
EPCA (42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(s)), and (2) making
representations about the efficiency of that equipment (42 U.S.C.
6314(d)). Similarly, DOE must use these test procedures to determine
whether the equipment complies with relevant standards promulgated
under EPCA. (42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(s)) The DOE test
procedures for CRE appear at title 10 of the Code of Federal
Regulations (``CFR'') part 431, subpart C, appendix B (``appendix B'').
DOE must follow specific statutory criteria for prescribing new or
amended standards for covered equipment, including CRE. Any new or
amended standard for a covered equipment must be designed to achieve
the maximum improvement in energy efficiency that the Secretary of
Energy determines is technologically feasible and economically
justified. (42 U.S.C. 6295(o)(2)(A)) Furthermore, DOE may not adopt any
standard that would not result in the significant conservation of
energy. (42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(o)(3))
Moreover, DOE may not prescribe a standard: (1) for certain
equipment, including CRE, if no test procedure has been established for
the equipment, or (2) if DOE determines by rule that the standard is
not technologically feasible or economically justified. (42 U.S.C.
6316(e)(1); 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. 6316(e)(1); 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 equipment subject to the standard;
(2) The savings in operating costs throughout the estimated average
life of the covered equipment in the type (or class) compared to any
increase in the price, initial charges, or maintenance expenses for the
covered equipment that are likely to result from the standard;
(3) The total projected amount of energy (or as applicable, water)
savings likely to result directly from the standard;
(4) Any lessening of the utility or the performance of the covered
equipment likely to result from the standard;
(5) The impact of any lessening of competition, as determined in
writing by the Attorney General, that is likely to result from the
standard;
(6) The need for national energy and water conservation; and
(7) Other factors the Secretary of Energy (``Secretary'') considers
relevant. (42 U.S.C. 6316(e)(1); 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 an equipment 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. 6316(e)(1); 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
equipment. (42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(o)(1)) Also, the
Secretary
[[Page 70204]]
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 equipment 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. 6316(e)(1); 42 U.S.C. 6295(o)(4))
Additionally, EPCA specifies requirements when promulgating an
energy conservation standard for a covered equipment that has two or
more subcategories. DOE must specify a different standard level for a
type or class of equipment that has the same function or intended use,
if DOE determines that equipment within such group: (A) consume a
different kind of energy from that consumed by other covered equipment
within such type (or class); or (B) have a capacity or other
performance-related feature which other equipment within such type (or
class) do not have and such feature justifies a higher or lower
standard. (42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(q)(1)) In determining
whether a performance-related feature justifies a different standard
for a group of equipment, 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. 6316(e)(1); 42 U.S.C. 6295(q)(2))
B. Background
1. Current Standards
On March 28, 2014, DOE published a final rule in the Federal
Register that prescribed the current energy conservation standards for
CRE manufactured on and after March 27, 2017 (``March 2014 Final
Rule''). 79 FR 17725. These standards are set forth in DOE's
regulations at 10 CFR 431.66(e).
For CRE with two or more compartments (i.e., hybrid refrigerators,
hybrid freezers, hybrid refrigerator-freezers, and non-hybrid
refrigerator-freezers), 10 CFR 431.66(e)(2) specifies that the maximum
daily energy consumption for each model shall be the sum of the
applicable standard for each of the compartments, as specified in 10
CFR 431.66(e)(1). For wedge cases, 10 CFR 431.66(e)(3) specifies
instructions to comply with the applicable standards specified in 10
CFR 431.66(e)(1).\16\ Certain exclusions to the standards at 10 CFR
431.66(e)(1) are specified at 10 CFR 431.66(f) (i.e., the energy
conservation standards do not apply to salad bars, buffet tables, and
chef bases or griddle stands).
---------------------------------------------------------------------------
\16\ A wedge case is a CRE that forms the transition between two
regularly shaped display cases. 10 CFR 431.62.
---------------------------------------------------------------------------
2. History of Standards Rulemaking for CRE
On July 16, 2021, DOE published a request for information (``RFI'')
in the Federal Register to undertake an early assessment review for
amended energy conservation standards for CRE to determine whether to
amend applicable energy conservation standards for this equipment.
(``July 2021 RFI'') 86 FR 37708. Specifically, through the published
notice and request for information, DOE sought data and information
that could enable the agency to determine whether amended energy
conservation standards would: (1) result in a significant savings of
energy; (2) be technologically feasible; and (3) be economically
justified. Id.
On June 28, 2022, DOE published in the Federal Register a
notification of the availability of a preliminary technical support
document for CRE (``June 2022 Preliminary Analysis''). 87 FR 38296. In
that notification, DOE sought comment on the analytical framework,
models, and tools that DOE used to evaluate potential standards for
CRE, the results of preliminary analyses performed, and the potential
energy conservation standard levels derived from these analyses, which
DOE presented in the accompanying Preliminary TSD (``June 2022
Preliminary TSD'').\17\ Id. DOE held a public meeting related to the
June 2022 Preliminary Analysis on August 8, 2022 (hereafter, the
``August 8, 2022, public meeting'').
---------------------------------------------------------------------------
\17\ The June 2022 Preliminary TSD is available in the docket
for this rulemaking at www.regulations.gov/document/EERE-2017-BT-STD-0007-0013.
---------------------------------------------------------------------------
DOE received comments in response to the June 2022 Preliminary
Analysis from the interested parties listed in table II.1.
Table II.1--Written Comments Received in Response to the June 2022 Preliminary Analysis
----------------------------------------------------------------------------------------------------------------
Comment No. in
Commenter(s) Abbreviation the docket Commenter type
----------------------------------------------------------------------------------------------------------------
AHT Cooling Systems...................... AHT....................... 48 Manufacturer.
Air-Conditioning, Heating and AHRI...................... 46 Trade Association.
Refrigeration Institute.
Appliance Standards Awareness Project, Joint Commenters.......... 39 Efficiency Organizations.
American Council for an Energy-Efficient
Economy, and the Natural Resources
Defense Council.
California Investor-Owned Utilities...... CA IOUs................... 43 Energy Utilities.
Continental Refrigerator................. Continental............... 38 Manufacturer.
Hillphoenix.............................. Hillphoenix............... * 42 Manufacturer.
Hussmann Corporation..................... Hussmann.................. 45 Manufacturer.
ITW-Food Equipment Group, LLC dba ITW....................... 41 Manufacturer.
Traulsen/Kairak.
National Automatic Merchandising NAMA...................... 37 Trade Association.
Association.
North American Association of Food NAFEM..................... 40 Trade Association.
Equipment Manufacturers.
Northwest Energy Efficiency Alliance..... NEEA...................... 47 Efficiency Organizations.
Zero Zone, Inc........................... Zero Zone................. 44 Manufacturer.
----------------------------------------------------------------------------------------------------------------
* Hillphoenix requested that its response be treated as Confidential Business Information.
A parenthetical reference at the end of a comment quotation or
paraphrase provides the location of the item in the public record.\18\
Where interested parties have provided written comments that are
substantively consistent with their oral comments provided during the
August 8, 2022, public meeting, DOE cites the written comments
throughout this document. DOE did not identify any oral comments
provided during the August 8, 2022, public
[[Page 70205]]
meeting, that are substantively different from written comments
provided by interested parties.
---------------------------------------------------------------------------
\18\ The parenthetical reference provides a reference for
information located in the docket of DOE's rulemaking to develop
energy conservation standards for CRE. (Docket No. EERE-2017-BT-STD-
0007, which is maintained at www.regulations.gov). The references
are arranged as follows: (commenter name, comment docket ID number,
page of that document).
---------------------------------------------------------------------------
C. Deviation From Process Rule
In accordance with 10 CFR 431.4 and section 3(a) of 10 CFR part
430, subpart C, appendix A (``Process Rule''), DOE notes that it is
deviating from the provision in the Process Rule regarding the pre-NOPR
and NOPR stages for an energy conservation standard rulemaking.
1. Framework Document
Section 6(a)(2) of the Process Rule states that if DOE 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. While DOE
published a preliminary analysis for this rulemaking (see 87 FR 38296),
DOE did not publish a framework document in conjunction with the
preliminary analysis. DOE notes, however, that chapter 2 of the June
2022 Preliminary TSD that accompanied the June 2022 Preliminary
Analysis--entitled Analytical Framework, Comments from Interested
Parties, and DOE Responses--describes the general analytical framework
that DOE used in evaluating and developing potential new and amended
energy conservation standards.\19\ As such, publication of a separate
framework document would be largely redundant of chapter 2 of the June
2022 Preliminary TSD.
---------------------------------------------------------------------------
\19\ The June 2022 Preliminary TSD is available in the docket
for this rulemaking at www.regulations.gov/document/EERE-2017-BT-STD-0007-0013.
---------------------------------------------------------------------------
2. Public Comment Period
Section 6(f)(2) of the Process Rule specifies that the length of
the public comment period for a NOPR will be not less than 75 calendar
days. For this NOPR, DOE is instead providing a 60-day comment period,
consistent with EPCA requirements. (42 U.S.C. 6316(e)(1); 42 U.S.C.
6295(p).
As noted previously, DOE requested comment in the July 2021 RFI on
the analysis conducted in support of the last energy conservation
standard rulemaking for CRE and provided a 45-day comment period. (See
86 FR 37708). In its June 2022 Preliminary Analysis and accompanying
TSD, for which DOE provided a 60-day comment period, DOE's analysis
remained largely the same as the analysis conducted in support of the
last energy conservation standards rulemaking for CRE. DOE requested
comment in the June 2022 Preliminary Analysis on the analysis conducted
in support of this current rulemaking. In this NOPR, DOE incorporated
the most recent data inputs but largely relied on many of the same
analytical assumptions and approaches used in the June 2022 Preliminary
Analysis. Given that the analysis presented in this NOPR remains
largely the same as the June 2022 Preliminary Analysis, and in light of
the 45-day comment period DOE has already provided with the July 2021
RFI and the 60-day comment period DOE has already provided with its
June 2022 Preliminary Analysis, DOE has determined that a 60-day
comment period is appropriate and will provide interested parties with
a meaningful opportunity to comment on the proposed rule.
3. Amended Test Procedures
Section 8(d)(1) of the Process Rule specifies that test procedure
rulemakings establishing methodologies used to evaluate proposed energy
conservation standards will be finalized prior to publication of a NOPR
proposing new or amended energy conservation standards. Additionally,
new test procedures and amended test procedures that impact measured
energy use or efficiency will be finalized at least 180 days prior to
the close of the comment period for (1) a NOPR proposing new or amended
energy conservation standards or (2) a notice of proposed determination
that standards do not need to be amended.
On September 26, 2023, DOE published a Federal Register notice
amending and establishing test procedures for CRE (``September 2023
Test Procedure Final Rule''). 88 FR 66152. DOE determined that the
amendments adopted in the September 2023 Test Procedure Final Rule will
not alter the measured efficiency of CRE currently subject to energy
conservation standards. 88 FR 66152, 66156. However, the measured
energy use for chef bases or griddle stands and high-temperature
refrigerators would likely change as a result of the September 2023
Test Procedure Final Rule. Nonetheless, the September 2023 Test
Procedure Final Rule aligns with the requirements that the CRE industry
has developed or proposed. Specifically, AHRI 1200-2023 \20\ was
approved by the American National Standards Institute on June 12, 2023,
and addendum B to ASHRAE 72-2022 \21\ was proposed on September 15,
2023. AHRI 1200-2023 specifies that high-temperature refrigerators
shall be tested at an integrated average temperature of 55 [deg]F
2.0 [deg]F, consistent with the September 2023 Test
Procedure Final Rule. The addendum B to ASHRAE 72-2022 proposal
specifies a dry-bulb temperature of 86.0 [deg]F with a tolerance for
the average over test period of 1.8 [deg]F and a tolerance
for the individual measurements of 3.6 [deg]F; wet-bulb
temperature of 73.7 [deg]F with a tolerance for the average over test
period of 1.8 [deg]F and a tolerance for the individual
measurements of 3.6 [deg]F; and radiant heat temperature
of greater than or equal to 81.0 [deg]F, consistent with the September
2023 Test Procedure Final Rule. Both AHRI 1200-2023 and the proposed
addendum B to ASHRAE 72-2022 were developed by the CRE industry over
several years, and the September 2023 Test Procedure Final Rule aligns
with the provisions included in both test standards for chef bases or
griddle stands and high-temperature refrigerators. As such, DOE finds
it appropriate to deviate from the requirement that the amended test
procedures for chef bases or griddle stands and high-temperature
refrigerators be finalized at least 180 days prior to the close of the
comment period for this NOPR.
---------------------------------------------------------------------------
\20\ AHRI Standard 1200-2023 (I-P), 2023 Standard for
Performance Rating of Commercial Refrigerated Display Merchandisers
and Storage Cabinets, copyright 2023.
\21\ Proposed Addendum b to Standard 72-2022, Method of Testing
Open and Closed Commercial Refrigerators and Freezers. See https://osr.ashrae.org/Online-Comment-Database/ShowDoc2/Table/DocumentAttachments/FileName/4130-72-2022%20Addendum%20b.21_072823_chair_approved.pdf/download/false.
---------------------------------------------------------------------------
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. General Comments
This section summarizes general comments received from interested
parties regarding rulemaking timing and process.
NEEA generally supported the process outlined in the June 2022
Preliminary Analysis. (NEEA, No. 47 at p. 5) NEEA commented that DOE's
analysis in the June 2022 Preliminary TSD showed a strong standard for
CRE equipment would be economically justified and deliver significant
energy savings to the Nation. (Id.) As a result, NEEA recommended DOE
adopt increased efficiency standards for existing classes
[[Page 70206]]
of CRE and continue to push the industry toward more-efficient products
and greater energy savings across all CRE equipment classes via
technical, market, and economic analyses. (Id.) NEEA recommended
further that DOE consider energy-saving technologies in CRE and that
DOE collect additional data for analysis. (Id.) NEEA stated that they
believe further analysis of specific features would help establish
stronger standards, especially when the analysis improved
representativeness of equipment in the market and appropriately
characterized energy use and energy savings. (Id.) NEEA stated it
recognized CRE as a complex energy conservation standard with many
combinations of equipment and a variety of use cases and commended DOE
for the depth of analysis and concerted efforts to incorporate new
classes and utilize available data for analysis. (Id.) NEEA commented
that DOE's analysis demonstrated significant cost-effective savings,
and NEEA recommended DOE adopt increased energy conservation standards
for existing CRE equipment classes as supported by the analysis in the
June 2022 Preliminary TSD. (Id.)
Other commenters expressed concern with the rulemaking timeline.
NAFEM commented that it had previously requested a comment period
extension, which was denied, and requested to see the CRE engineering
spreadsheets, which were provided on August 18, 2022, leaving an 11-
calendar-day review period. (NAFEM, No. 40 at p. 2) NAFEM acknowledged
that DOE had initiated multiple energy efficiency rulemakings on a
compressed schedule, but NAFEM stated that this did not serve as
justification for neglecting to provide important information and
adequate time for review. (Id.) NAFEM disagreed with DOE's
justification that the comment period could be shortened due to
similarities between the June 2022 Preliminary TSD and its 2014
counterpart. (Id.) NAFEM commented that many of its concerns regarding
the July 2021 RFI were dismissed or remain unresolved in the June 2022
Preliminary TSD. (Id.) Furthermore, NAFEM commented that DOE's claim
was inaccurate that the engineering spreadsheets ``do not contain any
new or additional information that was not already published with the
TSD in June.'' (Id.) NAFEM added that it would have had two additional
weeks to analyze the spreadsheets if DOE had adhered to the appendix A
Process Rule permitting no less than a 75-day comment period. (Id. at
pp. 2-3) NAFEM concluded that it was unable to provide a complete list
of errors or concerns due to insufficient time and presented its
comments as representative, but not exhaustive, of the types of
problems and inaccuracies contained in the spreadsheets. (Id. at p. 3)
Hussmann commented that it supports the comments provided by AHRI
and NAFEM and noted that it and other commenters were denied extensions
to the August 29, 2022, comment deadline. (Hussmann, No. 45 at p. 1).
Hussmann stated that it hopes discussions with DOE will improve this
rulemaking. (Id.)
NAMA shared its view that, despite this CRE rulemaking being one of
the most complex DOE has undertaken within EERE, DOE reduced the time
for public comment. (NAMA, No. 37 at p. 4) NAMA additionally commented
that DOE released the engineering spreadsheets on August 8, 2022,
leaving only 7 working days for review prior to the comment receipt
deadline, and that this limited notice violated all elements of the
notice and comment in the Administrative Procedure Act.\22\ (Id.) NAMA
added that the United States has admonished other countries for similar
regulatory actions. (Id.)
---------------------------------------------------------------------------
\22\ See 5 U.S.C. 551-559.
---------------------------------------------------------------------------
ITW commented that the June 2022 Preliminary TSD made clear the
importance of the CRE engineering spreadsheet, prompting ITW to request
that DOE grant access to the spreadsheet. (ITW, No. 41 at p. 1). ITW
stated that DOE provided the spreadsheet but did not extend the comment
period to allow adequate time for review of information ITW considered
critical. (Id.)
In response to comments regarding timing and the 2022 Engineering
Spreadsheet Related to the Preliminary Analysis for Commercial
Refrigerators, Refrigerator-Freezers and Freezers Standards
(``engineering spreadsheet''), DOE published this document in the
rulemaking docket on August 18, 2022 after commenters requested its
publication. This practice was consistent with prior rulemakings
conducted for CRE, such as when DOE did not include an engineering
spreadsheet with the notice of availability of preliminary technical
support document published on March 30, 2011 (``March 2011 Preliminary
Analysis''). Instead, DOE published the engineering spreadsheet with
its NOPR on September 11, 2013. Similarly, in this rulemaking, DOE did
not publish the engineering spreadsheet used for the preliminary
analysis at the time of the June 2022 Preliminary Analysis publication.
Consistent with past practice, DOE is publishing the engineering
spreadsheet that supports this NOPR analysis along with this NOPR.
With respect to comments regarding the comment-period, DOE
discusses deviations from the Process Rule, and the justifications for
such deviations, in section II.C of this NOPR.
In response to comments regarding the Administrative Procedure Act,
5 U.S.C. 553 provides requirements for a notice of proposed rulemaking.
The June 2022 Preliminary Analysis was not a notice of proposed
rulemaking as it was a notification that announced the availability of
the preliminary analysis DOE had conducted for purposes of evaluating
the need for amended energy conservation standards for CRE. However,
DOE provided notice of that preliminary analysis and sought comment on
the analysis. See 87 FR 38296. The June 2022 Preliminary Analysis was
in compliance with EPCA and the Process Rule.
Other commenters had general comments regarding the June 2022
Preliminary Analysis, the accompanying June 2022 Preliminary TSD, and
the rulemaking process. NAMA commented that the June 2022 Preliminary
TSD is flawed and should be re-written, with CRE categories split into
ranges by size. (NAMA, No. 37 at p. 8) NAMA stated that if the
engineering analysis were to be incorrect, then the technology
screening would be incorrect also, which means the baseline machine
design was incorrect and the rest of the report could not be used.
(Id.) NAMA recommended that DOE begin the process again, using machines
that are currently available on the market as its baseline. (Id.) NAMA
also recommended that DOE use low-GWP refrigerants and incorporate most
of the design options shown in table 5.8.10 of NAMA's written
submission, along with current costs. (Id.) NAMA added that if this
approach is not possible, DOE should acknowledge the costs already
incurred by manufacturers to meet the goals established by the Biden
Administration to reduce global warming. (Id.)
NAMA commented that while it appreciated DOE's willingness to hold
a hearing on the proposed energy efficiency standards levels, it
believed that the August 8, 2022, public meeting was rushed and
abruptly terminated before all questions were answered. (NAMA, No. 37
at p. 4) NAMA requested that DOE return to ``in-person'' meetings to
support dialogue on these subjects. (Id.)
[[Page 70207]]
NAMA commented that the market dynamic was currently distorted due
to the COVID-19 pandemic and a lack of available equipment, making
efficiency a secondary priority to availability. (Id. at p. 16)
NAMA recommended that DOE should cease the rulemaking on this
category of CRE until after the beverage vending machines rulemaking is
in the final rule stage and until the test procedure for CRE equipment
is finalized. (Id. at p. 17) NAMA commented that due to the fact that
the rulemakings for beverage vending machines and CRE affect the same
manufacturers, overlapping comment periods result in result increased
complexity to the responses. (Id.) NAMA also stated that a final test
procedure should be established before setting future standard levels,
and that the Process Rule requires DOE to finish the test procedure
rulemaking before engaging in cost and energy calculations for a new
standard. (Id.) NAMA further commented that DOE has requested comments
on the CRE test procedure at the same time as it requested comments on
the NOPR for future standards levels. (Id.) NAMA stated that, it is
illogical to set future standards levels because the final test
procedure for CRE is not yet known. (Id.)
Finally, NAMA commented that it does not believe the June 2022
Preliminary TSD or other documents for this rulemaking reflect the
state of the CRE industry in 2022 or the projections for equipment
manufactured after this rule becomes effective. (Id. at p. 19) NAMA
requested that DOE conduct a complete revision of all energy efficiency
changes, the base case, the standards cases, and the economic analysis
after the test procedure final standard is issued and the Cooperative
Research and Development Agreement (``CRADA'') \23\ extension is
complete. (Id.) NAMA stated its belief that accurate information will
show that a new set of standards levels for the classes of CRE covered
by NAMA is unwarranted. (Id.) NAMA commented that the payback period
will grow significantly when the net present value is re-calculated
using accurate numbers. (Id.) NAMA recommended allowing manufacturers
to complete the change to hydrocarbon refrigerants, which NAMA asserted
would have up to 10 times the environmental impact of any new DOE
standards. (Id.)
---------------------------------------------------------------------------
\23\ Most of the activities of the 2019-2021 CRADA were directed
toward reduction of the risk involved in a possible leak situation
if it were ever to occur. ORNL did extensive testing on leak
scenarios and proposed new methods to reduce the risk from such a
leak in a public space.
---------------------------------------------------------------------------
In response to NAMA's comments, DOE is maintaining the current
equipment class structure in this NOPR, except for the new equipment
classes which are proposed and discussed in section IV.A.1.c of this
document. In accordance with section 6(d)(3) of the Process Rule, DOE
may make any necessary changes to the engineering analysis or the
candidate standard levels based on consideration of the comments
received. DOE notes that it considered CRE that are currently available
on the market when developing the NOPR engineering analysis. DOE
acknowledges and accounts for the December 2022 EPA NOPR in this NOPR
analysis. As noted in section I of this document, the December 2022 EPA
NOPR would prohibit manufacture or import of such CRE starting January
1, 2025, and would ban sale, distribution, purchase, receipt, or export
of such CRE starting January 1, 2026. 87 FR 76809. The December 2022
EPA NOPR compliance date would occur prior to the expected the
compliance date of any DOE amended or established standards (i.e., on
or after the date that is 3 years after the date on which the final new
and amended standards are published). Thus, the transition to
refrigerants in compliance with the December 2022 EPA NOPR (including
hydrocarbon refrigerants) would have already occurred prior to the
expected the compliance date of any DOE amended or established
standards. Additionally, DOE considered the December 2022 EPA NOPR when
developing the NOPR engineering analysis baseline as discussed in
section IV.C.1.a of this document. In the no-new-standards case, DOE
incorporated the cost of refrigerant transition as discussed in section
IV.J.2.c of this document. DOE also revised the components considered
in the engineering analysis baseline in this NOPR as discussed in
section IV.C.1.a of this document and updated the costs as discussed in
section IV.C.2. of this document. In response to market distortions,
DOE used the latest shipments, market shares, and MPCs based on
manufacturer feedback. Supply chain constraints are discussed in
section V.B.2.c of this document.
In response to the comments about the August 8, 2022, public
meeting, DOE notes that it responded to all questions asked during the
August 8, 2022, public meeting.\24\ Similar to the process with the
June 2022 Preliminary Analysis, DOE welcomes comments in response to
this NOPR and participation in the public meeting, and DOE provides
information on public participation in response to this NOPR in section
VII. of this document.
---------------------------------------------------------------------------
\24\ See www.regulations.gov/document/EERE-2017-BT-STD-0007-0049.
---------------------------------------------------------------------------
DOE notes that section 8(d)(1) of the Process Rule specifies that
test procedure rulemakings establishing methodologies used to evaluate
proposed energy conservation standards will be finalized prior to
publication of a NOPR proposing new and amended energy conservation
standards. Additionally, energy conservation standards for refrigerated
bottled or canned beverage vending machines are separate from CRE, and
evaluated through a separate rulemaking process, and are located at 10
CFR 431.296.
AHT stated that there is a high risk of eliminating the entire
equipment class if DOE were to further increase restrictions for
horizontal closed transparent self-contained low temperature
(``HCT.SC.L''), horizontal closed transparent self-contained medium
temperature (``HCT.SC.M''), horizontal closed transparent self-
contained ice-cream freezer (``HCT.SC.I''), and vertical closed
transparent self-contained low temperature (``VCT.SC.L.'') equipment
classes and recommended that DOE maintain the current regulatory
framework in design options and efficiency standards for these
equipment classes. (AHT, No. 48 at p. 6)
In response to AHT's comments, DOE has revised the components
considered in the engineering analysis baseline in this NOPR as
discussed in section IV.C.1.a of this document and presented the
results of this NOPR analysis in section V of this document. DOE also
notes that it observed CRE models currently available and rated to the
DOE Compliance Certification Database (``CCD'') that currently comply
with the proposed energy conservation standards in this NOPR for the
equipment classes listed in AHT's comment.
B. Scope of Coverage
This NOPR covers those commercial refrigeration equipment that meet
the definition of ``commercial refrigerators, refrigerator-freezers,
and freezers,'' as codified at 10 CFR 431.62.
A ``commercial refrigerator, freezer, and refrigerator-freezer''
means refrigeration equipment that--(1) is not consumer equipment (as
defined in Sec. 430.2); (2) is not designed and marketed exclusively
for medical, scientific, or research purposes; (3) operates at a
chilled, frozen, combination chilled and frozen, or variable
temperature; (4) displays or stores merchandise and other perishable
[[Page 70208]]
materials horizontally, semi-vertically, or vertically; (5) has
transparent or solid doors, sliding or hinged doors, a combination of
hinged, sliding, transparent, or solid doors, or no doors; (6) is
designed for pull-down temperature applications or holding temperature
applications; and (7) is connected to a self-contained condensing unit
or to a remote condensing unit. 10 CFR 431.62.
However, this NOPR does not include some types of commercial
refrigerators, refrigerator-freezers, and freezers that meet the
definition at 10 CFR 431.62. These include blast chillers, blast
freezers, buffet tables or preparation tables, and mobile refrigerated
cabinets.
See section IV.A.1 of this document for discussion of the equipment
classes analyzed in this NOPR.
C. Test Procedure
EPCA sets forth generally applicable criteria and procedures for
DOE's adoption and amendment of test procedures. (42 U.S.C. 6314(a))
Manufacturers of covered equipment must use these test procedures to
certify to DOE that their equipment complies with energy conservation
standards and to quantify the efficiency of their equipment. (42 U.S.C.
6314(d); 42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(s)) DOE's current energy
conservation standards for CRE are expressed in terms of maximum daily
energy consumption as measured using appendix B. (See 10 CFR 431.66(e))
D. Technological Feasibility
1. General
In each energy conservation standards rulemaking, DOE conducts a
screening analysis based on information gathered on all current
technology options and prototype designs that could improve the
efficiency of the products or equipment that are the subject of the
rulemaking. As the first step in such an analysis, DOE develops a list
of technology options for consideration in consultation with
manufacturers, design engineers, and other interested parties. DOE then
determines which of those means for improving efficiency are
technologically feasible. DOE considers technologies incorporated in
commercially-available equipment or in working prototypes to be
technologically feasible. 10 CFR 431.4; sections 6(b)(3)(i) and 7(b)(1)
of the Process Rule.
After DOE has determined that particular technology options are
technologically feasible, it further evaluates each technology option
in light of the following additional screening criteria: (1)
practicability to manufacture, install, and service; (2) adverse
impacts on equipment utility or availability; (3) adverse impacts on
health or safety, and (4) unique-pathway proprietary technologies. 10
CFR 431.4; 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 CRE, 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 a new or amended standard for a type or
class of covered equipment, it must determine the maximum improvement
in energy efficiency or maximum reduction in energy use that is
technologically feasible for such equipment. (42 U.S.C. 6316(e)(1); 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 CRE, using the design parameters
for the most efficient equipment available on the market or in working
prototypes. The max-tech levels that DOE determined for this rulemaking
are described in section IV.C.1.b of this proposed rule and in chapter
5 of the NOPR TSD.
E. Energy Savings
1. Determination of Savings
For each TSL, DOE projected energy savings from application of the
TSL to CRE purchased in the 30-year period that begins in the year 2028
with the proposed standards (2028-2057).\25\ The savings are measured
over the entire lifetime of CRE purchased in the previous 30-year
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
equipment would likely evolve in the absence of new and amended energy
conservation standards.
---------------------------------------------------------------------------
\25\ 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. Note
that the analysis does not consider benefits and costs resulting
from the December 2022 EPA NOPR.
---------------------------------------------------------------------------
DOE used its national impact analysis (``NIA'') spreadsheet model
to estimate national energy savings (``NES'') from potential amended
and new standards for CRE. 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 equipment at the
locations where they are used. For electricity, DOE reports national
energy savings 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.\26\ 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.1 of this document.
---------------------------------------------------------------------------
\26\ The FFC metric is discussed in DOE's statement of policy
and notice of policy amendment. 76 FR 51282 (August 18, 2011), as
amended at 77 FR 49701 (August 17, 2012).
---------------------------------------------------------------------------
2. Significance of Savings
To adopt any new or amended standards for covered equipment, DOE
must determine that such action would result in significant energy
savings. (42 U.S.C. 6316(e)(1); 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.\27\ For
example, some covered products and equipment have most of their energy
consumption occur during periods of peak energy demand. The impacts of
these equipment on the energy infrastructure can be more pronounced
than equipment with relatively constant demand. Accordingly, DOE
evaluates the significance of energy savings on a case-by-case basis,
taking into account the significance of cumulative FFC national energy
savings, the cumulative FFC emissions reductions, and the need to
[[Page 70209]]
confront the global climate crisis, among other factors.
---------------------------------------------------------------------------
\27\ 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 12, 2021 (86 FR 70892, 70906).
---------------------------------------------------------------------------
As stated, the standard levels proposed in this document are
projected to result in national energy savings of 3.11 quad FFC, the
equivalent of the primary annual energy use of 33 million homes. Based
on the amount of FFC savings, the corresponding reduction in emissions,
and the need to confront the global climate crisis, DOE has initially
determined the energy savings from the proposed standard levels are
``significant'' within the meaning of 42 U.S.C. 6316(e)(1); 42 U.S.C.
6295(o)(3)(B).
F. 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. 6316(e)(1); 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 proposed rulemaking.
a. Economic Impact on Manufacturers and Consumers
In determining the impacts of a potential new or 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 and 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; for CRE, DOE evaluated the impacts on
small businesses.
DOE requests comment on the impacts to CRE manufacturers and
consumers from the Inflation Reduction Act (IRA) and the Infrastructure
Investment and Jobs Act (IIJA).
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 equipment in the
type (or class) compared to any increase in the price of, or in the
initial charges for, or maintenance expenses of, the covered equipment
that are likely to result from a standard. (42 U.S.C. 6316(e)(1); 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 equipment (including
its installation) and the operating expense (including energy,
maintenance, and repair expenditures) discounted over the lifetime of
the equipment. The LCC analysis requires a variety of inputs, such as
equipment prices, equipment energy consumption, energy prices,
maintenance and repair costs, equipment lifetime, and discount rates
appropriate for consumers. To account for uncertainty and variability
in specific inputs, such as equipment lifetime and discount rate, DOE
uses a distribution of values, with probabilities attached to each
value.
The PBP is the estimated amount of time (in years) it takes
consumers to recover the increased purchase cost (including
installation) of more-efficient equipment through lower operating
costs. DOE calculates the PBP by dividing the change in purchase cost
due to a more stringent standard by the change in annual operating cost
for the year that standards are assumed to take effect.
For its LCC and PBP analysis, DOE assumes that consumers will
purchase the covered equipment in the first full year of compliance
with new and amended standards. The LCC savings for the considered
efficiency levels are calculated relative to the case that reflects
projected market trends in the absence of new and 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
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. 6316(e)(1); 42 U.S.C.
6295(o)(2)(B)(i)(III)) As discussed in section III.E of this document,
DOE uses the NIA spreadsheet models to project national energy savings.
d. Lessening of Utility or Performance of Equipment
In establishing equipment 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 equipment. (42 U.S.C. 6316(e)(1); 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 equipment under consideration in this proposed 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. 6316(e)(1); 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. 6316(e)(1); 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.
[[Page 70210]]
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. 6316(e)(1); 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 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. 6316(e)(1); 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
EPCA creates a rebuttable presumption that an energy conservation
standard is economically justified if the additional cost to the
equipment 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. (42 U.S.C.
6316(e(1)); 42 U.S.C. 6295(o)(2)(B)(iii)) 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. 6316(e)(1) and 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 V.B.1.c of this proposed
rule.
IV. Methodology and Discussion of Related Comments
This section addresses the analyses DOE has performed for this
rulemaking with regard to CRE. 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 and 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-0007. Additionally, DOE
used output from the 2023 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.
A. Market and Technology Assessment
DOE develops information in the market and technology assessment
that provides an overall picture of the market for the equipment
concerned, including the purpose of the equipment, the industry
structure, manufacturers, market characteristics, and technologies used
in the equipment. This activity includes both quantitative and
qualitative assessments, based primarily on publicly-available
information. The subjects addressed in the market and technology
assessment for this rulemaking include (1) a determination of the scope
of the rulemaking and equipment 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 CRE. 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. Equipment Classes and Definitions
When evaluating and establishing energy conservation standards, DOE
may establish separate standards for a group of covered equipment
(i.e., establish a separate equipment class) if DOE determines that
separate standards are justified based on the type of energy used, or
if DOE determines that a product's capacity or other performance-
related feature justifies a different standard. (42 U.S.C. 6316(e)(1);
42 U.S.C. 6295(q)) 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. (Id.)
a. Current Equipment Classes
DOE currently separates CRE into 49 equipment classes, which are
categorized according to the following performance-related features:
(1) operating temperature--refrigerator (>=32 [deg]F), freezer (<32
[deg]F), or ice-cream freezer (<=-5 [deg]F); (2) presence of doors--
open or closed; (3) door type--solid or transparent; (4) condensing
unit--remote or self-contained; (5) configuration--horizontal,
vertical, semi-vertical, or service over counter; (6) temperature pull-
down capability. Definitions supporting the equipment classes are as
follows:
Closed solid means equipment with doors, and in which more than 75
percent of the outer surface area of all doors on a unit are not
transparent.
Closed transparent means equipment with doors, and in which 25
percent or more of the outer surface area of all doors on the unit are
transparent.
Commercial freezer means a unit of commercial refrigeration
equipment in which all refrigerated compartments in the unit are
capable of operating below 32 [deg]F (2 [deg]F).
[[Page 70211]]
Commercial refrigerator means a unit of commercial refrigeration
equipment in which all refrigerated compartments in the unit are
capable of operating at or above 32 [deg]F (2 [deg]F).
Commercial refrigerator, freezer, and refrigerator-freezer means
refrigeration equipment that--(1) Is not a consumer product (as defined
in Sec. 430.2);
(2) Is not designed and marketed exclusively for medical,
scientific, or research purposes;
(3) Operates at a chilled, frozen, combination chilled and frozen,
or variable temperature;
(4) Displays or stores merchandise and other perishable materials
horizontally, semi-vertically, or vertically;
(5) Has transparent or solid doors, sliding or hinged doors, a
combination of hinged, sliding, transparent, or solid doors, or no
doors;
(6) Is designed for pull-down temperature applications or holding
temperature applications; and
(7) Is connected to a self-contained condensing unit or to a remote
condensing unit.
Door means a movable panel that separates the interior volume of a
unit of commercial refrigeration equipment from the ambient environment
and is designed to facilitate access to the refrigerated space for the
purpose of loading and unloading product. This includes hinged doors,
sliding doors, and drawers. This does not include night curtains.
Holding temperature application means a use of commercial
refrigeration equipment other than a pull-down temperature application,
except a blast chiller or freezer.
Horizontal Closed means equipment with hinged or sliding doors and
a door angle greater than or equal to 45[deg].
Horizontal Open means equipment without doors and an air-curtain
angle greater than or equal to 80[deg] from the vertical.
Ice-cream freezer means:
(1) Prior to the compliance date(s) of any amended energy
conservation standard(s) issued after January 1, 2023 for ice-cream
freezers, a commercial freezer that is capable of an operating
temperature at or below -5.0 [deg]F and that the manufacturer designs,
markets, or intends specifically for the storing, displaying, or
dispensing of ice cream or other frozen desserts; or
(2) Upon the compliance date(s) of any amended energy conservation
standard(s) issued after January 1, 2023 for ice-cream freezers, a
commercial freezer that is capable of an operating temperature at or
below -13.0 [deg]F and that the manufacturer designs, markets, or
intends specifically for the storing, displaying, or dispensing of ice
cream or other frozen desserts.
Pull-down temperature application means a commercial refrigerator
with doors that, when fully loaded with 12 ounce beverage cans at 90
degrees F, can cool those beverages to an average stable temperature of
38 degrees F in 12 hours or less.
Remote condensing unit means a factory-made assembly of
refrigerating components designed to compress and liquefy a specific
refrigerant that is remotely located from the refrigerated equipment
and consists of 1 or more refrigerant compressors, refrigerant
condensers, condenser fans and motors, and factory supplied
accessories.
Self-contained condensing unit means a factory-made assembly of
refrigerating components designed to compress and liquefy a specific
refrigerant that is an integral part of the refrigerated equipment and
consists of 1 or more refrigerant compressors, refrigerant condensers,
condenser fans and motors, and factory supplied accessories.
Semivertical open means equipment without doors and an air-curtain
angle greater than or equal to 10[deg] and less than 80[deg] from the
vertical.
Service over counter means equipment that has sliding or hinged
doors in the back intended for use by sales personnel, with glass or
other transparent material in the front for displaying merchandise, and
that has a height not greater than 66 inches and is intended to serve
as a counter for transactions between sales personnel and customers.
Transparent means greater than or equal to 45-percent light
transmittance, as determined in accordance with the ASTM Standard E
1084-86 (Reapproved 2009), at normal incidence and in the intended
direction of viewing.
Vertical Closed means equipment with hinged or sliding doors and a
door angle less than 45[deg].
Vertical Open means equipment without doors and an air-curtain
angle greater than or equal to 0[deg] and less than 10[deg] from the
vertical.
10 CFR 431.62.
On March 28, 2014, DOE published in the Federal Register the March
2014 Final Rule that established the current equipment classes and
corresponding standards for CRE. 79 FR 17725. DOE currently sets forth
energy conservation standards and relevant definitions for CRE
equipment classes at 10 CFR 431.66 and 10 CFR 431.62, respectively.
Table IV.1 shows the current CRE equipment classes and standards.
Table IV.1--Current CRE Equipment Classes
----------------------------------------------------------------------------------------------------------------
Operating Maximum daily energy
Condensing unit configuration Equipment family temperature Equipment class consumption (kilowatt-
([deg]F) designation hours per day) *
----------------------------------------------------------------------------------------------------------------
Remote Condensing (RC)....... Vertical Open >=32 VOP.RC.M.............. 0.64 x TDA + 4.07
(VOP). <32 VOP.RC.L.............. 2.2 x TDA + 6.85
<=-5 VOP.RC.I.............. 2.79 x TDA + 8.7
Semivertical >=32 SVO.RC.M.............. 0.66 x TDA + 3.18
Open (SVO). <32 SVO.RC.L.............. 2.2 x TDA + 6.85
<=-5 SVO.RC.I.............. 2.79 x TDA + 8.7
Horizontal Open >=32 HZO.RC.M.............. 0.35 x TDA + 2.88
(HZO). <32 HZO.RC.L.............. 0.55 x TDA + 6.88
<=-5 HZO.RC.I.............. 0.7 x TDA + 8.74
Vertical Closed >=32 VCT.RC.M.............. 0.15 x TDA + 1.95
Transparent <32 VCT.RC.L.............. 0.49 x TDA + 2.61
(VCT).
<=-5 VCT.RC.I.............. 0.58 x TDA + 3.05
Horizontal >=32 HCT.RC.M.............. 0.16 x TDA + 0.13
Closed <32 HCT.RC.L.............. 0.34 x TDA + 0.26
Transparent
(HCT).
<=-5 HCT.RC.I.............. 0.4 x TDA + 0.31
Vertical Closed >=32 VCS.RC.M.............. 0.1 x V + 0.26
Solid (``VCS''). <32 VCS.RC.L.............. 0.21 x V + 0.54
[[Page 70212]]
<=-5 VCS.RC.I.............. 0.25 x V + 0.63
Horizontal >=32 HCS.RC.M.............. 0.1 x V + 0.26
Closed Solid <32 HCS.RC.L.............. 0.21 x V + 0.54
(HCS).
<=-5 HCS.RC.I.............. 0.25 x V + 0.63
Service Over >=32 SOC.RC.M.............. 0.44 x TDA + 0.11
Counter (SOC). <32 SOC.RC.L.............. 0.93 x TDA + 0.22
<=-5 SOC.RC.I.............. 1.09 x TDA + 0.26
Self-Contained (SC).......... Vertical Open >=32 VOP.SC.M.............. 1.69 x TDA + 4.71
(VOP). <32 VOP.SC.L.............. 4.25 x TDA + 11.82
<=-5 VOP.SC.I.............. 5.4 x TDA + 15.02
Semivertical >=32 SVO.SC.M.............. 1.7 x TDA + 4.59
Open (SVO). <32 SVO.SC.L.............. 4.26 x TDA + 11.51
<=-5 SVO.SC.I.............. 5.41 x TDA + 14.63
Horizontal Open >=32 HZO.SC.M.............. 0.72 x TDA + 5.55
(HZO). <32 HZO.SC.L.............. 1.9 x TDA + 7.08
<=-5 HZO.SC.I.............. 2.42 x TDA + 9
Vertical Closed >=32 VCT.SC.M.............. 0.1 x V + 0.86
Transparent <32 VCT.SC.L.............. 0.29 x V + 2.95
(VCT).
<=-5 VCT.SC.I.............. 0.62 x TDA + 3.29
Vertical Closed >=32 VCS.SC.M.............. 0.05 x V + 1.36
Solid (VCS). <32 VCS.SC.L.............. 0.22 x V + 1.38
<=-5 VCS.SC.I.............. 0.34 x V + 0.88
Horizontal >=32 HCT.SC.M.............. 0.06 x V + 0.37
Closed <32 HCT.SC.L.............. 0.08 x V + 1.23
Transparent
(HCT).
<=-5 HCT.SC.I.............. 0.56 x TDA + 0.43
Horizontal >=32 HCS.SC.M.............. 0.05 x V + 0.91
Closed Solid <32 HCS.SC.L.............. 0.06 x V + 1.12
(HCS).
<=-5 HCS.SC.I.............. 0.34 x V + 0.88
Service Over >=32 SOC.SC.M.............. 0.52 x TDA + 1
Counter (SOC). <32 SOC.SC.L.............. 1.1 x TDA + 2.1
<=-5 SOC.SC.I.............. 1.53 x TDA + 0.36
Pull-Down (PD).. >=32 PD.SC.M............... 0.11 x V + 0.81
----------------------------------------------------------------------------------------------------------------
* The term ``V'' means the chilled or frozen compartment volume (ft\3\) as defined in the Association of Home
Appliance Manufacturers (``AHAM'') Standard HRF 1-2008. The term ``TDA'' means the total display area (ft\2\)
of the case, as defined in Air-Conditioning, Heating, and Refrigeration Institute (``AHRI'') Standard 1200-
2006.
b. New Definitions
In the June 2022 Preliminary TSD, DOE sought comment on whether
updates to the existing equipment class structure are appropriate. In
response, ITW commented that DOE failed to recognize that manufacturers
might use other options to produce cabinets with increased heat loads
due to their physical features (other than those required by a simple
reach-in refrigerator), citing the following applications as examples:
(1) pass-through refrigerators--cabinets with doors on both sides,
providing access to stored items from either side; (2) roll-in
refrigerators--cabinets with ramps and door sweeps that allow for
loading of bakery carts; and (3) roll-through refrigerators--cabinets
with ramps and door sweeps on both sides that allow for bakery carts to
move in and out from one side to the other. (ITW, No. 41 at p. 33)
NAFEM stated that it and other commenters recommended separating
forced-air and cold-wall refrigeration systems into different
categories in response to the July 2021 RFI, yet it appeared that DOE
deferred making a decision until a future proposed rule. (NAFEM, No. 40
at p. 3)
Continental commented that DOE should provide separate equipment
classes and standard levels to segregate forced-air from cold-wall
models, as well as roll-in from reach-in models, and pass-through from
non-pass-through models, because these equipment types have
differentiating characteristics that impact energy consumption, and
separate energy standard levels are needed to avoid weighting standards
in an unfair manner. (Continental, No. 38 at p. 2)
In response to commenter's suggestions and after a review of
similar terms defined by the California Code of Regulations,\28\ DOE is
proposing to define the terms ``cold-wall evaporator,'' ``forced-air
evaporator,'' ``pass-through doors,'' ``roll-in door,'' ``roll-through
doors,'' and ``sliding door'' as follows:
---------------------------------------------------------------------------
\28\ See https://govt.westlaw.com/calregs/Document/I7AE76FC19E3011EDA9D5EB8195EB4110?viewType=FullText&originationContext=documenttoc&transitionType=CategoryPageItem&contextData=(sc.Default
)&bhcp=1.
---------------------------------------------------------------------------
Cold-wall evaporator means an evaporator that comprises a portion
or all of the commercial refrigerator, freezer, and refrigerator
freezer cabinet's interior surface that transfers heat through means
other than fan-forced convection.
Forced-air evaporator means an evaporator that employs the use of
fan-forced convection to transfer heat within the commercial
refrigerator, freezer, and refrigerator freezer cabinet.
[[Page 70213]]
Pass-through doors means doors located on both the front and rear
of the commercial refrigerator, freezer, and refrigerator freezer.
Roll-in door means a door that includes a door sweep to seal the
bottom of the door and may include a ramp that allows wheeled racks of
product to be rolled into the commercial refrigerator, freezer, and
refrigerator freezer.
Roll-through doors means doors located on both the front and rear
of the commercial refrigerator, freezer, and refrigerator freezer, that
includes a door sweep to seal the bottom of the door and may include a
ramp that allows wheeled racks of product to be rolled into and through
the commercial refrigerator, freezer, and refrigerator freezer.
Sliding door means a door that opens when a portion of the door
moves in a direction generally parallel to its surface.
In addition to proposing to define the terms ``cold-wall
evaporator,'' ``forced-air evaporator,'' ``pass-through doors,''
``roll-in door,'' ``roll-through doors,'' and ``sliding door,'' DOE is
proposing to allow certain equipment classes that contain CRE with
forced-air evaporators, CRE with pass-through doors, CRE with roll-in
doors, CRE with roll-through doors, and CRE with sliding doors to use a
higher amount of energy use than the proposed standards, if the
standard has been proposed to be amended for an equipment class, while
also complying with EPCA's ``anti-backsliding'' provision. This
proposal recognizes the unique utility and different energy use
characteristics of certain types of CRE. DOE discusses these unique
utility and different energy use characteristics in further detail in
section IV.C.1.a.
DOE has also reviewed the current definitions for CRE at 10 CFR
431.62 and is proposing to revise the definition for ``rating
temperature'' to update the reference to the required integrated
average temperature (``IAT'') or lowest application product temperature
(``LAPT''), as applicable, as follows:
Rating temperature means the integrated average temperature a unit
must maintain during testing, as determined in accordance with section
2.1. or section 2.2. of appendix B to subpart C of part 431, as
applicable.
DOE requests comment on the proposed definitions for ``cold-wall
evaporator,'' ``forced-air evaporator,'' ``pass-through doors,''
``roll-in door,'' ``roll-through doors,'' ``sliding door,'' and
``rating temperature.''
c. Equipment Class Modifications
In the June 2022 Preliminary TSD, DOE had initially determined that
additional equipment classes may be appropriate to address certain CRE
available on the market. Specifically, DOE initially determined to
split several commercial refrigerator equipment classes and establish
separate classes for high-temperature refrigerators. Also, DOE
initially determined to establish standards for chef bases or griddle
stands with operating temperatures of >=32 [deg]F or <32 [deg]F (10 CFR
431.66(f) currently excludes chef bases or griddle stands from energy
conservation standards). See chapter 3 of the June 2022 Preliminary TSD
for additional details.
In the September 2023 Test Procedure Final Rule, DOE established
and amended definitions and test procedures for high-temperature
refrigerators, medium-temperature refrigerators, and chef bases or
griddle stands. 88 FR 66152, 66154-66155. Specifically, DOE established
definitions for ``high-temperature refrigerators'' and ``medium-
temperature refrigerators,'' amended the definition for ``chef bases or
griddle stands,'' and incorporated by reference AHRI Standard 1200-2023
(I-P), which provides a IAT of 55 [deg]F 2.0 [deg]F for
which high-temperature refrigerators may be tested. Id. DOE also
established a definition for ``low-temperature freezers'' and amended
the definition for ``ice-cream freezers.'' Id. The newly established
and amended definitions in the test procedure final rule are as
follows.
Chef base or griddle stand means commercial refrigeration equipment
that has a maximum height of 32 inches, including any legs or casters,
and that is designed and marketed for the express purpose of having a
griddle or other cooking appliance placed on top of it that is capable
of reaching temperatures hot enough to cook food.
High-temperature refrigerator means a commercial refrigerator that
is not capable of an operating temperature at or below 40.0 [deg]F.
Medium-temperature refrigerator means a commercial refrigerator
that is capable of an operating temperature at or below 40.0 [deg]F.
Ice-cream freezer means:
(1) Prior to the compliance date(s) of any amended energy
conservation standard(s) issued after January 1, 2023 for ice-cream
freezers, a commercial freezer that is capable of an operating
temperature at or below -5.0 [deg]F and that the manufacturer designs,
markets, or intends specifically for the storing, displaying, or
dispensing of ice cream or other frozen desserts; or
(2) Upon the compliance date(s) of any amended energy conservation
standard(s) issued after January 1, 2023 for ice-cream freezers, a
commercial freezer that is capable of an operating temperature at or
below -13.0 [deg]F and that the manufacturer designs, markets, or
intends specifically for the storing, displaying, or dispensing of ice
cream or other frozen desserts.
Low-temperature freezer means a commercial freezer that is not an
ice-cream freezer.
88 FR 66152, 66223-66224.
Based on CRE models certified to DOE's Compliance Certification
Management System (``CCMS'') under the LAPT designation for commercial
refrigerators, DOE has tentatively determined that high-temperature
refrigerators can be categorized under the self-contained and remote
condensing unit configurations and under the vertical closed
transparent (``VCT''), vertical closed solid (``VCS''), service over
counter (``SOC''), vertical open (``VOP''), semi-vertical open
(``SVO''), and horizontal open (``HZO'') equipment families. For these
equipment families with high-temperature equipment, DOE proposes to
sub-categorize them as high-temperature refrigerators (operating
temperature greater than 40.0 [deg]F) and medium-temperature
refrigerators (operating temperature greater than or equal to 32.0
[deg]F and less than or equal to 40.0 [deg]F). DOE proposes to maintain
the categorization of commercial refrigerator (operating temperature
greater than or equal to 32.0 [deg]F) for the remaining equipment
families (i.e., any horizontal closed transparent (``HCT''), horizontal
closed solid (``HCS''), chef bases (``CB''), or pull-down (``PD'')
equipment that operates above 40 [deg]F, if commercialized, would be
considered a ``commercial refrigerator'' and required to comply with
the ``medium-temperature refrigerator'' standard when tested at the
LAPT). For this NOPR, DOE has directly analyzed high temperature
refrigerators in the self-contained condensing unit configuration for
the VCT and VCS equipment families.
DOE has also tentatively determined that chef bases or griddle
stands can be categorized under the self-contained condensing unit
configuration and the >=32 [deg]F or <32 [deg]F operating temperatures
(i.e., commercial refrigerator or low-temperature freezer,
respectively).
[[Page 70214]]
Accordingly, DOE is considering potential equipment classes for
high-temperature refrigerators and chef bases or griddle stands and is
proposing potential equipment class structure modifications as
presented in table IV.2.
Table IV.2--Proposed Equipment Classes and Equipment Class Modifications
----------------------------------------------------------------------------------------------------------------
Operating
Condensing unit configuration Equipment family Rating temperature Equipment class
temperature ** ([deg]F) designation
----------------------------------------------------------------------------------------------------------------
Self-Contained (SC)........... Vertical Open HR (55 [deg]F).. x >40........... VOP.SC.H *
(VOP). MR (38 [deg]F).. 40 >= x >=32.... VOP.SC.M
LF (0 [deg]F)... x <32........... VOP.SC.L
IF (-15 [deg]F). x <=-13......... VOP.SC.I
Semivertical Open HR (55 [deg]F).. x >40........... SVO.SC.H *
(SVO). MR (38 [deg]F).. 40 >= x >=32.... SVO.SC.M
LF (0 [deg]F)... x <32........... SVO.SC.L
IF (-15 [deg]F). x <=-13......... SVO.SC.I
Horizontal Open HR (55 [deg]F).. x >40........... HZO.SC.H *
(HZO). MR (38 [deg]F).. 40 >= x >=32.... HZO.SC.M
LF (0 [deg]F)... x <32........... HZO.SC.L
IF (-15 [deg]F). x <=-13......... HZO.SC.I
Vertical Closed HR (55 [deg]F).. x >40........... VCT.SC.H *
Transparent MR (38 [deg]F).. 40 >= x >=32.... VCT.SC.M
(VCT). LF (0 [deg]F)... x <32........... VCT.SC.L
IF (-15 [deg]F). x <=-13......... VCT.SC.I
Vertical Closed HR (55 [deg]F).. x >40........... VCS.SC.H *
Solid (VCS). MR (38 [deg]F).. 40 >= x >=32.... VCS.SC.M
LF (0 [deg]F)... x <32........... VCS.SC.L
IF (-15 [deg]F). x <=-13......... VCS.SC.I
Horizontal Closed CR (38 [deg]F).. x >=32.......... HCT.SC.M
Transparent LF (0 [deg]F)... x <32........... HCT.SC.L
(HCT). IF (-15 [deg]F). x <=-13......... HCT.SC.I
Horizontal Closed CR (38 [deg]F).. x >=32.......... HCS.SC.M
Solid (HCS). LF (0 [deg]F)... x <32........... HCS.SC.L
IF (-15 [deg]F). x <=-13......... HCS.SC.I
Service Over HR (55 [deg]F).. x >40........... SOC.SC.H *
Counter (SOC). MR (38 [deg]F).. 40 >= x >=32.... SOC.SC.M
LF (0 [deg]F)... x <32........... SOC.SC.L
IF (-15 [deg]F). x <=-13......... SOC.SC.I
Pull-Down (PD)... CR (38 [deg]F).. x >=32.......... PD.SC.M
Chef Base (CB)... CR (38 [deg]F).. x >=32.......... CB.SC.M *
LF (0 [deg]F)... x <32........... CB.SC.L*
Remote Condensing (RC)........ Vertical Open HR (55 [deg]F).. x >40........... VOP.RC.H *
(VOP). MR (38 [deg]F).. 40 >= x >=32.... VOP.RC.M
LF (0 [deg]F)... x <32........... VOP.RC.L
IF (-15 [deg]F). x <=-13......... VOP.RC.I
Semivertical Open HR (55 [deg]F).. x >40........... SVO.RC.H *
(SVO). MR (38 [deg]F).. 40 >= x >=32.... SVO.RC.M
LF (0 [deg]F)... x <32........... SVO.RC.L
IF (-15 [deg]F). x <=-13......... SVO.RC.I
Horizontal Open HR (55 [deg]F).. x >40........... HZO.RC.H *
(HZO). MR (38 [deg]F).. 40 >= x >=32.... HZO.RC.M
LF (0 [deg]F)... x <32........... HZO.RC.L
IF (-15 [deg]F). x <=-13......... HZO.RC.I
Vertical Closed HR (55 [deg]F).. x >40........... VCT.RC.H *
Transparent MR (38 [deg]F).. 40 >= x >=32.... VCT.RC.M
(VCT). LF (0 [deg]F)... x <32........... VCT.RC.L
IF (-15 [deg]F). x <=-13......... VCT.RC.I
Horizontal Closed CR (38 [deg]F).. x >=32.......... HCT.RC.M
Transparent LF (0 [deg]F)... x <32........... HCT.RC.L
(HCT). IF (-15 [deg]F). x <=-13......... HCT.RC.I
Vertical Closed HR (55 [deg]F).. x >40........... VCS.RC.H *
Solid (VCS). MR (38 [deg]F).. 40 >= x >=32.... VCS.RC.M
LF (0 [deg]F)... x <32........... VCS.RC.L
IF (-15 [deg]F). x <=-13......... VCS.RC.I
Horizontal Closed CR (38 [deg]F).. x >=32.......... HCS.RC.M
Solid (HCS). LF (0 [deg]F)... x <32........... HCS.RC.L
IF (-15 [deg]F). x <=-13......... HCS.RC.I
Service Over HR (55 [deg]F).. x >40........... SOC.RC.H *
Counter (SOC). MR (38 [deg]F).. 40 >= x >=32.... SOC.RC.M
LF (0 [deg]F)... x <32........... SOC.RC.L
IF (-15 [deg]F). x <=-13......... SOC.RC.I
Chef Base (CB)... CR (38 [deg]F).. x >=32.......... CB.RC.M *
LF (0 [deg]F)... x <32........... CB.RC.L *
----------------------------------------------------------------------------------------------------------------
* Proposed new equipment class.
[[Page 70215]]
** HR--High-Temperature Refrigerator.
LF--Low Temperature Freezer.
MR--Medium-Temperature Refrigerator.
IF--Ice-Cream Freezer.
CR--Commercial Refrigerator.
DOE received several comments in response to the June 2022
Preliminary Analysis regarding the amendments to the equipment classes
for CRE.
Equipment Classes With Newly Proposed Standards
NEEA supported DOE's proposed definitions in the June 2022 CRE Test
Procedure NOPR for blast chillers and blast freezers, buffet tables and
preparation tables, and high-temperature CRE, noting that these
definitions allowed consideration of potential standards,
categorization of equipment classes, and testing of the equipment
separate from other CRE. (NEEA, No. 47 at p. 2)
The Joint Commenters supported DOE's consideration of potential
standards for additional equipment categories. (Joint Commenters, No.
39 at p. 1) The Joint Commenters stated that DOE found cost-effective
potential energy savings for chef bases/griddle stands and high-
temperature refrigerators in the June 2022 Preliminary TSD and
commented that they support DOE setting standards for these equipment
classes. (Id.)
The CA IOUs commended DOE for proposing to expand the scope of the
energy conservation standards for CRE to include chef bases or griddle
stands and high-temperature refrigeration. (CA IOUs, No. 43 at p. 1)
The CA IOUs stated that these added product classes constitute a
significant inventory of equipment with a substantial cumulative energy
load that were previously outside the scope of DOE's regulation. (Id.
at pp. 1-2)
AHRI commented that it has no objection to the added equipment
classes detailed in the June 2022 Preliminary TSD. (AHRI, No. 46 at p.
2) However, Continental recommended that DOE delay inclusion of any new
categories until applicable industry standard test procedures are
published and have been thoroughly evaluated. (Continental, No. 38 at
p. 2)
DOE has proposed standards for new equipment classes (e.g., chef
bases, and high-temperature refrigerators) in this NOPR, as supported
by commenters. And as described in the September 2023 Test Procedure
Final Rule, DOE has incorporated by reference the latest versions of
ASHRAE 72 and AHRI 1200, which were evaluated by each respective
committee and subject to public reviews, in the CRE test procedure. 88
FR 66152. In addition, based on the September 2023 Test Procedure Final
Rule, chef bases or griddle stands must be tested at a dry-bulb
temperature of 86.0 [deg]F and wet-bulb temperature of 73.7 [deg]F. 88
FR 66152, 66203. Therefore, DOE has considered higher ambient
temperature conditions in the analysis of chef bases or griddle stands
compared to other CRE, which are tested at a dry-bulb temperature of
75.2 [deg]F and wet-bulb temperature of 64.4 [deg]F. See chapter 5 of
the NOPR TSD for additional information.
Equipment Classes Without Proposed Standards
NEEA recommended that DOE analyze the new equipment classes and
consider adopting efficiency standards that would better reflect the
specific energy consumption of equipment subclasses, resulting in more
significant energy savings. (NEEA, No. 47 at p. 4) NEEA commented that
DOE had analyzed two of the four new product classes and, as was shown
in the CRE June 2022 Preliminary TSD analysis, energy conservation
standards were viable for high-temperature CRE and chef bases and
griddle stands. (Id.) NEEA commented that for vertical closed
transparent self-contained high temperature (``VCT.SC.H''), vertical
closed solid self-contained high temperature (``VCS.SC.H''), and chef
bases self-contained low temperature (``CB.SC.L''), the average life-
cost savings ranged from $300-$500 at EL 3, presenting justification of
the energy and cost savings for these equipment classes. (Id.) NEEA
added that DOE should conduct similar analyses on blast chillers and
buffet tables, citing DOE's test procedures for these classes as key to
allowing data collection. (Id. at p. 4) NEEA commented that DOE's
analysis of high-temperature refrigerators and chef bases indicated
that additional significant savings would likely be available from
these products. (Id.)
Similarly, the Joint Commenters commented that DOE stated DOE
lacked sufficient information to fully analyze buffet/preparation
tables and blast chillers/freezers in the June 2022 Preliminary TSD,
but the Joint Commenters noted that the California Energy Commission
(``CEC'') Modernized Appliance Efficiency Database System (``MAEDbS'')
includes over 100 buffet/preparation tables with a broad range of
energy usage. (Joint Commenters, No. 39 at p. 1) The Joint Commenters
requested that DOE further investigate the energy usage and savings
potential for these products. (Id.)
However, Continental agreed with DOE that a preliminary analysis of
energy consumption for buffet tables and preparation tables is not
appropriate until a standard test procedure is established for these
equipment types. (Continental. No. 38 at p. 2).
Consistent with comments from NEEA and based on the new rating
temperature in the September 2023 Test Procedure Final Rule for high-
temperature refrigerators, DOE is proposing to amend the energy
conservation standards for high-temperature refrigerators and to
establish energy conservation standards for chef bases or griddle
stands in this NOPR. See table IV.2.
With respect to the comments from NEEA and the Joint Commenters
regarding blast chillers and blast freezers, DOE notes that it lacks
sufficient data and information regarding blast chillers and blast
freezer performance, and related design options, for units tested via
the DOE test procedure. As stated in the September 2023 Test Procedure
Final Rule, blast chillers and blast freezers are designed for ``rapid
temperature pull-down'' capable of reducing the internal temperature
from 135 [deg]F to 40 [deg]F within a period of 4 hours. 88 FR 66152,
66189. Therefore, in this NOPR, DOE is not currently able to model
expected performance of this equipment because the established test
procedure is significantly different from the test procedure applicable
to other CRE categories, which are intended for ``holding temperature
application''. Due to a lack of data and information regarding
performance of blast chillers and blast freezers, DOE has not conducted
an analysis of potential energy conservation standards for these
equipment categories.
DOE requests comment on blast chiller or freezer design options,
design specifications, and energy consumption data tested per the DOE
test procedure located in appendix D of 10 CFR 431.64.
With respect to the comments from NEEA and the Joint Commenters
regarding buffet tables and preparation tables, while DOE acknowledges
that
[[Page 70216]]
CEC's MAEDbS database contains data for buffet/preparation tables, DOE
notes that title 20 of the California Code of Regulations requires
refrigerated buffet/preparation tables to follow the ANSI/ASTM F2143-01
test method.\29\ This test method has been revised several times, with
ASTM F2143-16 being the most recent version. In the September 2023 Test
Procedure Final Rule, DOE stated that ASTM F2143-16 cannot be
referenced as a standalone test method but determined the approach
based on ASTM F2143-16 with additional requirements is representative
for buffet/preparation tables. 88 FR 66152, 66175. Therefore, in this
NOPR, DOE is not able to model expected performance of this equipment
at this time because the established test procedure is significantly
different from the test procedure applicable to other CRE categories,
and from the test procedure used to measure energy consumption for the
CEC's MAEDbS. Due to a lack of data and information regarding
performance and related design options of refrigerated buffet/
preparation tables, DOE has not conducted an analysis of potential
energy conservation standards for these equipment categories.
---------------------------------------------------------------------------
\29\ See table A-1 in 20 CCR section 1604.a.2 located at https://govt.westlaw.com/calregs/Document/ID5812C41DABD11ED852BC9A091C0DD8F?viewType=FullText&originationContext=documenttoc&transitionType=CategoryPageItem&contextData=(sc.Default
).
---------------------------------------------------------------------------
DOE requests comment on refrigerated buffet/preparation table
design options, design specifications, and energy consumption data
tested per the DOE test procedure located in appendix C of 10 CFR
431.64.
Customer Order Storage Cabinets
The CA IOUs supported creating a separate equipment class for
customer-order refrigerated storage lockers. (CA IOUs, No. 43 at p. 10)
The CA IOUs commented that they expect the refrigerated storage locker
market to increase as grocery delivery and pick up continues to be a
growing segment of grocery sales. (Id.) The CA IOUs stated that they
support aggregating the maximum daily energy consumption values for all
compartments in a refrigerated storage locker according to 10 CFR
431.66(e)(2). (Id.) The CA IOUs also pointed out that ``temperature
controlled pick up lockers'' can be refrigerated lockers; however, some
of these models can be either refrigerated or heated or neither. (Id.)
The CA IOUs recommended that DOE analyze the individual
refrigerator, freezer, and refrigerator/freezer compartments in
customer-order refrigerated storage lockers as a separate equipment
family as noted in the CA IOUs comments on DOE's July 2021 CRE Test
Procedure RFI. (Id.) The CA IOUs highlighted the Traulsen waiver \30\
to show that these compartments will have distinct door-opening
conditions compared to the CRE equipment families. (Id.)
---------------------------------------------------------------------------
\30\ CA IOUs provided the footnote reference 83 FR 46148 for the
granted waiver.
---------------------------------------------------------------------------
In response to the CA IOUs comments, DOE has not conducted an
analysis specifically for customer order storage cabinets in this
NOPR.\31\ DOE has analyzed a representative volume for the VCS
equipment families of which customer order storage cabinets are
typically included. In the September 2023 Test Procedure Final Rule,
DOE provides a discussion of customer order storage cabinets and
determination to adopt a test procedure based on existing test
procedure waivers. 88 FR 66152, 66211-66213.
---------------------------------------------------------------------------
\31\ DOE defines customer order storage cabinet at Sec. 431.62
to mean a commercial refrigerator, freezer, or refrigerator-freezer
that stores customer orders and includes individual, secured
compartments with doors that are accessible to customers for order
retrieval.
---------------------------------------------------------------------------
Comments on Specific Equipment Classes
The Joint Commenters recommended that DOE analyze additional
equipment classes and stated that DOE did not directly analyze the
vertical closed solid remote condensing medium temperature
(``VCS.RC.M''), vertical closed solid remote condensing low temperature
(``VCS.RC.L''), horizontal closed transparent remote condensing medium
temperature (``HCT.RC.M''), or horizontal closed transparent remote
condensing low temperature (``HCT.RC.L'') equipment classes in the June
2022 Preliminary TSD. (Joint Commenters, No. 39 at p. 2) The Joint
Commenters commented that the number of models for each of these
classes in the CCD suggests their market share could be larger than the
estimated volume of shipments for these classes in the analysis for the
March 2014 Final Rule. (Id.) The Joint Commenters stated that there are
nearly 500 VCS.RC.M models certified in the CCD, and there are more
HCT.RC.M models in the CCD than horizontal closed transparent self-
contained medium temperature (``HCT.SC.M''), an equipment class that
was analyzed by DOE in the June 2022 Preliminary TSD. (Id.) The Joint
Commenters commented that, based on these data, the market share of
these equipment classes may be larger than estimated, and the Joint
Commenters encouraged DOE to analyze these additional equipment
classes. (Id.)
AHRI asked that DOE clarify whether DOE removed the vertical self-
contained class from the June 2022 Preliminary TSD. (AHRI, No. 46 at p.
2) And Zero Zone commented that it did not see any evaluation of solid-
door remote commercial refrigerators and inquired whether DOE is
dropping that equipment class or has no plans to change the energy
requirements. (Zero Zone, No. 44 at p. 5)
With respect to the comments from the Joint Commenters, AHRI, and
Zero Zone, DOE notes that the equipment classes mentioned by the Joint
Commenters were not directly analyzed as primary equipment classes in
the June 2022 Preliminary Analysis, but are analyzed as secondary
equipment classes in this NOPR using DOE's primary to secondary
equipment class multipliers. See chapter 5 of the NOPR TSD for
additional details on secondary equipment classes. Additionally, DOE
notes that in the June 2022 Preliminary Analysis, DOE analyzed vertical
closed solid, self contained equipment, as well as other vertical self-
contained equipment (e.g., vertical open self-contained medium
temperature (``VOP.SC.M'') and vertical closed transparent self-
contained medium temperature (``VCT.SC.M'')). See table 5.8.1 of the
June 2022 Preliminary TSD for a full list of primary equipment classes
DOE analyzed in the June 2022 Preliminary Analysis.
AHRI commented that breaking equipment classes into smaller (under
30 cubic feet) and larger units (over 30 cubic feet) could be
beneficial. (AHRI, No. 46 at p. 7) Additionally, NAMA commented that
DOE appeared to have overlooked or not fully recognized the existence
of smaller refrigerated single- and double-door beverage (and food)
coolers. (NAMA, No. 37 at p. 5) NAMA stated that energy efficiency
analyses of larger (e.g., 60 cubic feet) units may not be applicable to
smaller (e.g., 24 cubic feet) units. (Id.) NAMA recommended that, for
purposes of DOE analysis, units under 30 cubic feet should be
considered differently from those over 30 cubic feet in refrigerated
volume. (Id.)
In response to the June 2021 Test Procedure RFI, True Manufacturing
Company, Inc. (``True'') commented that there are examples where the
ice-cream freezer maximum allowable energy consumption is less than for
an equivalent commercial freezer.\32\ (Docket No. EERE-2017-BT-TP-0008,
[[Page 70217]]
True, No. 4 at p. 3) True provided three examples of common VCT.SC.L
CREs found in the marketplace where the maximum DOE energy allowance
for the ice-cream freezer is less than that of the equivalent
commercial freezer. (Id.) True also commented that when comparing the
VCS.SC.I and VCS.SC.L formulas, for cabinets with a volume of 4 cubic
feet or less, the energy use allowance for the ice-cream freezer is
less than for the equivalent commercial freezer. (Id.)
---------------------------------------------------------------------------
\32\ See www.regulations.gov/comment/EERE-2017-BT-TP-0008-0004.
---------------------------------------------------------------------------
Additionally, in response to the July 2021 RFI, Glastender, Inc.
(``Glastender'') provided a chart and commented that the energy
allowance for VCT.SC.M CRE is less than the energy allowance for
VCS.SC.M CRE when the refrigerated volume is less than 10 cubic feet.
(Glastender, No. 4 at p. 1). Glastender commented that it believed the
requirement curves were generated from primarily larger volume models
and smaller volume refrigerators need to be considered when generating
new curves. (Id.)
In response to comments from AHRI and NAMA, DOE is maintaining the
current equipment class structure in this NOPR, except for the new
equipment classes which are proposed and discussed in section IV.A.1.c
of this document. DOE considers all volumes and TDAs when developing
the proposed standards in this NOPR in addition to the representative
volume or TDA for each directly analyzed equipment class. Based on
market research and feedback received during manufacturer interviews,
DOE expects the use of sliding and pass-through doors represent
equipment utilities that have unique energy use characteristics that
differentiate CRE in the VCT.SC.M equipment class and that beverage
coolers are a common type of equipment in the VCT.SC.M equipment class
that use sliding and pass-through doors. Therefore, based on market
research and feedback received during manufacturer interviews, DOE has
proposed separate energy use equations based on an energy consumption
multiplier for CRE with sliding and pass-through doors.
In response to comments from AHRI, NAMA, True, and Glastender, DOE
considered all volumes and TDAs when developing the proposed standards
in this NOPR in addition to the representative volume or TDA for each
directly analyzed equipment class. When developing the proposed
standards in this NOPR, DOE generally applied the energy use reduction
percentage selected in section V.C of this document to the baseline
energy use equation's slope and intercept. However, in three directly
analyzed equipment classes, VCT.SC.M, VCS.SC.I, and HCT.SC.I, DOE has
tentatively determined that, based on the efficiency distribution of
the market across the equipment classes, additional consideration is
necessary. For these three classes, DOE maintained the current standard
equation intercept and calculated a slope based on the current
intercept and the proposed energy use level at the representative
volume or TDA. This approach addresses the standard line crossover that
True and Glastender mentioned in their comments and better represents
the energy use characteristics of CRE at volumes and TDAs that are
smaller than the representative volume or TDA for these three classes.
Additionally, DOE reviewed the proposed standard for VCT.SC.I and
VCT.SC.L and observed that the standard lines do not have the crossover
that True mentioned in its comment.
See section IV.C.1 of this document and chapter 5 of the NOPR TSD
for additional details.
The Joint Commenters recommended that DOE eliminate the equipment
class for pull-down CREs. (Joint Commenters, No. 39 at p. 2) The Joint
Commenters stated that while there are currently no pull-down models
certified in DOE's CCD, the Joint Commenters are concerned that models
could be certified as pull-down CRE in the future in order to be
subject to a less-stringent standard. (Id.)
In response to the Joint Commenters, DOE notes that the ``pull-down
temperature application'' is defined in 42 U.S.C. 6311(9)(d) and the
equipment class was established by the Energy Policy Act of 2005 (Pub.
L. 109-58).\33\ In the September 2023 Test Procedure Final Rule, DOE
established verification provisions for pull-down temperature
applications based on the EPCA definition, which are intended to ensure
CRE are certified correctly as pull-down temperature applications. 88
FR 66152, 66187-66189. Therefore, DOE is not proposing to eliminate the
equipment class for pull-down CREs in this NOPR.
---------------------------------------------------------------------------
\33\ See 119 STAT. 639 at https://www.govinfo.gov/content/pkg/PLAW-109publ58/pdf/PLAW-109publ58.pdf.
---------------------------------------------------------------------------
Equipment Rating
The CA IOUs recommended changing the key metric for service over
the counter (``SOC'') refrigeration from total display area (``TDA'')
to either refrigerated volume or refrigerated floor area. (CA IOUs, No.
43 at pp. 9-10). The CA IOUs commented that the current energy
conservation standard for SOC is based on TDA, which incentivizes the
use of more glass to increase the TDA and the corresponding maximum
daily energy consumption. (Id. at p. 9) The CA IOUs stated that basing
the energy conservation standard for SOC equipment on refrigerated
volume would ensure that any increases in an SOC unit's maximum
allowable energy consumption is directly linked to an increase in the
equipment's useful holding capacity. (Id.) The CA IOUs commented that
this change would ensure that manufacturers wanting to increase TDA
would be incentivized to use glass with better thermal insulation
properties. (Id.) The CA IOUs commented also that switching to a
refrigerated volume metric would also be more consistent with other
closed refrigeration categories with display functionality, such as
refrigerators with glass doors. (Id.) The CA IOUs stated that the
burden of shifting to refrigerated volume as a metric could be
minimized by allowing either physical measurement or measurement based
on a diagram or computer-aided design (``CAD'') drawing. (Id. at p. 10)
The CA IOUs added that an alternative metric for deli cases without
shelving could also be refrigerated floor area, which would be the
available surface area for product, although the CA IOUs noted that
most SOC refrigerators are sold with shelving that can be added or
removed depending on food product being displayed. (Id.)
However, in response to the July 2021 RFI, other commenters
indicated that TDA is the appropriate metric for the respective
equipment classes, and the industry has adapted to the use of TDA or
volume and that no change is necessary (see chapter 2 of the June 2022
Preliminary TSD for additional information). Therefore, in this NOPR,
DOE has not evaluated revising the capacity metrics for any equipment
classes.
The CA IOUs commented that they support the proposal to rate
equipment capable of operating at temperatures of multiple equipment
classes at all relevant temperature conditions. (CA IOUs, No. 43 at p.
8-9)
Consistent with the CA IOUs comment, in the September 2023 Test
Procedure Final Rule, DOE specified in 10 CFR 429.42 that basic models
of CRE that operate in multiple equipment classes must be certified and
comply with the energy conservation standards for each applicable
equipment class. 88 FR 66152, 66162.
2. CRE Market
In response to the June 2022 Preliminary Analysis, DOE received
[[Page 70218]]
several comments regarding the CRE market.
NAMA commented that it was not listed in the proposed regulation or
list of manufacturers. (NAMA, No. 37 at p. 4) NAMA added that the names
of CRE manufacturers represented by NAMA, which were filed in the DOE's
CCMS, were not mentioned. (Id.)
In response to this comment from NAMA, for this NOPR, DOE updated
its assessment of manufacturer trade groups to include NAMA and
reviewed the list of CRE manufacturers based on the list of supporters
on NAMA's website.\34\ See chapter 3 of the NOPR TSD for additional
information regarding CRE original equipment manufacturers (``OEMs'')
and manufacturer trade groups.
---------------------------------------------------------------------------
\34\ DOE reviewed the ``2022 Annual Dues Donors'' accessible at
namanow.org/foundation/supporters/ to identify members of NAMA (last
accessed March 31, 2023).
---------------------------------------------------------------------------
Continental commented that relying on manufacturer model counts in
the CCD is not an accurate way of approximating company market share
and stated that model counts in DOE's CCD reflect the variety of models
offered, but do not represent the sales or market share of a company.
(Continental, No. 38, p. 2)
In the June 2022 Preliminary TSD, DOE used manufacturer model
counts to identify key CRE OEMs operating in the United States. DOE
presented an abridged list of OEMs with more than 1-percent share of
basic model listings in chapter 3 of the June 2022 Preliminary TSD. DOE
understands that model counts do not reflect company market shares. For
this NOPR, DOE conducted confidential manufacturer interviews. During
these interviews, DOE asked manufacturers about their estimated CRE
market share, annual shipments by equipment class, and the estimated
market shares of other CRE manufacturers. DOE used the information from
confidential interviews, data from the shipments analysis, and model
listings from CCD to estimate manufacturer market shares, which were
then used to weight certain inputs used in the MIA (e.g., industry
financial parameters, manufacturer markups). DOE does not present these
company-specific market share estimates in the NOPR TSD chapter 3 as
the information is protected under nondisclosure agreements (``NDAs'').
See chapter 3 of the NOPR TSD for additional details on the CRE market
and manufacturers.
DOE requests comment on publicly available market data on CRE
manufacturers or identification of any CRE manufacturers with large
market shares not identified in Chapter 3 of the NOPR TSD.
3. Technology Options
In the preliminary market analysis and technology assessment, DOE
identified technology options that would be expected to improve the
efficiency of CRE, as measured by the DOE test procedure and shown in
table IV.3.
Table IV.3--Technology Options for CRE
------------------------------------------------------------------------
-------------------------------------------------------------------------
Insulation:
Improved resistivity of insulation (insulation type).
Increased insulation thickness.
Vacuum-insulated panels.
Lighting:
Higher-efficiency lighting.
Occupancy Sensors.
Improved transparent doors: *
Low-emissivity coatings.*
Inert gas fill.*
Vacuum-insulated glass.*
Additional panes.*
Anti-sweat heater controls.*
Anti-fog films.*
Frame design.*
Compressor.**
Improved compressor efficiency.**
Alternative refrigerants.**
Variable-speed compressors.**
Linear compressors.**
Evaporator:
Increased surface area.
Improved evaporator coil design.
Low-pressure differential evaporator.
Condenser: **
Increased surface area.**
Tube-and-fin enhancements.**
Microchannel heat exchanger.**
Fans and fan motors:
Evaporator fan motors.
Evaporator fan blades.
Evaporator fan controls.
Condenser fan motors.**
Condenser fan blades.**
Condenser fan controls.**
Other technologies:
Defrost systems.
Expansion valve improvements.
Air curtain design.***
Night curtains.***
Liquid suction heat exchanger.**
------------------------------------------------------------------------
* Only applies to equipment classes with doors.
** Only applies to self-contained equipment classes.
*** Only applies to equipment classes without doors (open equipment
classes).
DOE received several comments in response to the June 2022
Preliminary Analysis regarding the technology options.
a. Compressors
NEEA referred to its previous comment to the July 2021 RFI that DOE
consider the energy-use impact of compressor technologies like scroll
compressors and variable-speed compressors. (NEEA No. 47 at pp. 4-5)
NEEA commented that DOE had expressed agreement with NEEA in the June
2022 Preliminary TSD that variable-speed compressors represented an
energy-saving technology and estimated that implementing variable-speed
compressors could save 3-38 percent of energy consumption, depending on
equipment class. (Id. at p. 4) NEEA pointed out that DOE had not tested
a model with a variable-speed compressor and encouraged DOE to further
research the energy-savings potential of variable-speed compressors in
CRE. (Id.) NEEA commented that, in the June 2022 Preliminary TSD Table
5.5.1,\35\ DOE noted propane variable-speed compressors as a design
option for a majority of CRE equipment classes. (Id.) NEEA encouraged
DOE to collect data and consider other equipment classes that could
utilize variable-speed compressors to improve the energy-savings
potential and common use of this technology option. (Id. at pp. 4-5)
---------------------------------------------------------------------------
\35\ Technical Support Document: Commercial Refrigeration
Equipment: Table 5.5.1 Design Options by Equipment. Class. PreTSD
CRE 2022. June 2022. https://www.regulations.gov/document/EERE-2017-BT-STD-0007-0013.
---------------------------------------------------------------------------
Consistent with the preliminary analysis, DOE has included R-290
variable-speed compressors as a technology option in this NOPR. Due to
the refrigerant transition in response to the December 2022 EPA NOPR,
DOE has analyzed R-290 compressors (single and variable speed) for all
self-contained equipment classes. See section IV.C.1 of this document
and chapter 5 of the NOPR TSD for additional details on the refrigerant
transition and analyzed compressors. Additionally, scroll compressors
have not been included as a design option in this NOPR. While DOE has
not observed scroll compressors in any directly analyzed models, DOE is
aware that scroll compressors may be used on very large, self-contained
CRE. Based on market research, DOE observed that fixed-speed scroll
compressors have similar efficiencies to hermetic, reciprocating
compressors; therefore, DOE has not considered scroll compressors in
this analysis.
Continental commented that variable-speed compressors hold promise
for reducing energy consumption of self-contained CRE, but the
increased technical complexity and related increases in material and
service costs have thus far limited use of this technology.
(Continental, No. 38 at p. 2) Similarly, AHRI commented that variable-
speed compressors do not
[[Page 70219]]
contribute significantly to energy savings in specific products and
present additional technical challenges for servicers. (AHRI, No. 46 at
p. 5) Further, AHRI commented that DOE should not assume that equipment
employing variable-speed compressors will automatically have an energy-
efficiency increase of 15-20 percent and that this design option is
more complex and requires more careful analysis. (Id.)
To estimate the performance impacts of transitioning to a variable-
speed compressor, DOE incorporated the performance data for variable-
speed R-290 compressors currently available on the market into DOE's
engineering spreadsheet. DOE assumed that variable-speed compressors
would operate at the minimum speed under steady-state operation. DOE
also assumed that the fan motors would operate during the compressor
run time (i.e., the fan motor operating duration would likely increase
compared to a single-speed compressor). Overall, DOE estimated a 0.5-25
percent energy consumption reduction when implementing variable-speed
compressors, with savings varying depending on equipment class. See
chapters 3 and 5 of the NOPR TSD for additional details on variable
speed compressors.
b. R-290
NAMA stated that it began evaluating the changes necessary for CRE
to utilize lower GWP refrigerants, such as R-290, in 2018, and NAMA
pointed out that the ASHRAE 15 standard was changed in the summer of
2020 to allow CRE using up to 114 grams of A-3 refrigerants to be
placed in public places and that CRE with A-3 refrigerants began to
appear in the U.S. market in the first quarter of 2021. (NAMA, No. 37
at p. 6) NAMA stated that manufacturers had to re-design heat
exchangers, use new compressors and expansion valves, and make all
switches, electrical components, motors, wiring, connectors, and larger
electrical components (e.g., compressors) compliant with ``spark-proof
connections'' to manufacture machines using A-3 refrigerant. (Id. at
pp. 6-7) NAMA commented that the June 2022 Preliminary TSD did not
adequately address this level of re-design using expensive components,
nor the re-design of factories to comply with health and safety
regulations through greater ventilation, safety sensors, and other
measures. (Id. at p.7) NAMA noted that every model, product line,
quality assurance facility, factory, warehouse, and service center must
be updated to install, warehouse, and service units with R-290
refrigerant, and only a handful of State and local building codes have
been updated to accommodate these changes. (Id.) NAMA stated that
significant work remains to be done in finalizing these codes, and they
are unlikely to be complete before 2026. (Id.) NAMA commented that DOE
did not address this transition in the June 2022 Preliminary TSD. (Id.)
Similarly, AHRI commented that the June 2022 Preliminary TSD cited
an example of a transition from an R-134a (ASHRAE Class A1) to an R-290
(propane or an ASHRAE Class A3) compressor as the only required change,
but AHRI added that compressors, switches, and other components in the
system must also be upgraded to comply with UL60335-2-89 requirements
to reduce the risk of ignition. (AHRI, No. 46 at p. 13)
The CA IOUs noted that their comments to the July 2021 RFI stated
that since energy conservation standards were last analyzed, the market
has developed higher-efficiency compressors, and self-contained CRE has
increasingly shifted to R-290. (CA IOUs, No. 43 at pp. 4-6) While the
CA IOUs thanked DOE for analyzing these technology advances, they noted
that the June 2022 Preliminary TSD analyzes the refrigerant propane as
a technology option for nearly all self-contained refrigeration
categories except for vertical open self-contained medium temperature
(``VOP.SC.M''), semi-vertical self-contained medium temperature
(``SVO.SC.M''), and horizontal glass self-contained ice cream
(``HCT.SC.I'') categories. (Id. at pp. 4-5) The CA IOUs stated that
propane had already become an industry standard for self-contained
refrigeration equipment, and the CA IOUs recommended considering it as
a baseline refrigerant for all self-contained refrigeration categories.
(Id. at p. 5) The CA IOUs further commented that the June 2022
Preliminary TSD excludes variable-speed compressors as a technology
option for almost all categories where it does not consider propane as
an option. (Id.) The CA IOUs commented that variable-speed compressors
can use any refrigerant and are not limited to propane. (Id.) The CA
IOUs stated that the current market availability of variable-speed
compressors that use refrigerants other than propane is limited to
compressors above 1 horsepower, and the CA IOUs recommended that DOE
work with manufacturer stakeholders to determine future market
availability of variable-speed compressors for all refrigerants. (Id.
at pp. 5-6)
NEEA stated support for DOE's consideration of propane refrigerants
as an energy-saving technology option in the technology assessment and
engineering analysis for CRE, but NEEA noted that table 5.5.18 in the
June 2022 Preliminary TSD showed that DOE had not considered propane as
an option for all CRE equipment classes. (NEEA, No. 47 at p. 4) NEEA
commented that CRE refrigerants are transitioning from
hydrofluorocarbons (``HFC'') refrigerants to alternative options like
propane (R-290) and NEEA anticipated an increase in the use of propane
in other equipment classes. (Id.) NEEA recommended that DOE ensure its
analysis take into consideration the current availability of propane
products in the product classes not currently considered by DOE as a
design option (e.g., VOP.SC.M and SVO.SC.M). (Id.) NEEA further
recommended DOE anticipate that more products would likely become
available with propane refrigerants if the charge limit (currently 150
grams under the EPA's Significant New Alternatives Policy (``SNAP''))
for propane were to increase, as allowed in ASHRAE 15-2022. (Id.)
Similarly, the Joint Commenters commented that DOE excluded propane
compressors as a design option for some equipment classes due to
propane charge limits, but the Joint Commenters further commented that
ASHRAE 15 is proposing to increase the charge limits for higher-
flammability refrigerants. (Joint Commenters, No. 39 at p. 2)
Additionally, the Joint Commenters stated that models are available on
the market in some of the equipment classes for which DOE excluded
propane technology options, including the VOP.SC.M, SVO.SC.M, and
HCT.SC.I categories. (Id. at pp. 2-3) The Joint Commenters recommended
that DOE consider propane refrigerant for these additional equipment
classes. (Id. at p. 3)
In the June 2022 Preliminary Analysis, DOE considered only CRE that
could meet the 150-gram charge limit for R-290, per the EPA's SNAP
regulations.\36\ Based on the December 2022 EPA NOPR's proposed GWP
limits, DOE anticipates EPA will harmonize with UL 60335-2-89 and allow
R-290 charge limits of 304g for closed CRE and 494g for open CRE.
Therefore, DOE has updated its engineering analysis in the NOPR to
analyze R-290 compressors as a technology option for all self-contained
CRE. See section IV.C.1 of this
[[Page 70220]]
document and chapter 5 of the NOPR TSD for additional information.
---------------------------------------------------------------------------
\36\ See https://www.govinfo.gov/content/pkg/FR-2015-04-10/pdf/2015-07895.pdf.
---------------------------------------------------------------------------
Additionally, based on information gathered from interviews,
component data, and teardowns, DOE has reevaluated the cost associated
with the switch to R-290 on self-contained units. Because DOE has
analyzed R-290 as the baseline for all self-contained classes in
response to the December 2022 EPA NOPR, the costs associated with
additional components necessary to comply with safety standards for R-
290 are incorporated into the core case cost.\37\ See the engineering
analysis in section IV.C.1 of this document for more detail on the
refrigerant transition.
---------------------------------------------------------------------------
\37\ The ``core case'' consists of components, such as
structural members, shelving, wiring, air curtain grilles, and trim,
that do not change at higher design option levels. To develop the
core case cost, DOE dismantled units available on the market
component-by component to develop a bill of materials and cost model
for the core of the refrigerated case. The core case cost is just
one component of the overall baseline cost, which takes into account
all manufacturer production costs associated with baseline
equipment. Therefore, changes in CRE case design due to the
transition to R-290are accounted for in the core case and design
option manufacturer production costs.
---------------------------------------------------------------------------
c. Insulation
AHT commented that the combination of an additional half inch of
insulation and vacuum-insulated panels (``VIPs'') does not make sense
and should not be included as two cumulative potential savings. (AHT,
No. 48 at p. 6)
Based on feedback from manufacturers, DOE has not analyzed
increased insulation thickness or VIPs as a design option in this NOPR.
See section IV.B.1 of this document and chapters 3 and 4 of the NOPR
TSD for additional information.
ITW commented that, in terms of improved resistivity of insulation,
some manufacturers have introduced new hydrofluorolefin (``HFO'') low-
GWP blowing agents with claims of improved efficiencies and thermal
resistivities from 2 to 11 percent compared to the previous typical
HFC-245fa blowing agents and that DOE expected that manufacturers had
already incorporated these new agents into models currently available
on the market. (ITW, No. 41 at p. 25) ITW commented that, in fact, such
claims for HFOs were ``marketing hype'' and without much promised
improvement in thermal performance. (Id.)
Regarding ITW's comment on foam blowing agents, DOE calibrated its
engineering analysis based on directly analyzed units, and, therefore,
DOE expects that the analysis represents the foam blowing agents
currently in use for units available on the market.
d. Doors
AHT commented that the best design option to save energy for open
CRE is to add transparent doors. (AHT, No. 48 at p. 1) AHT noted that
the existing equipment class definitions and corresponding energy
conservation standards permit manufacturers that cannot reach the
energy limits for closed transparent units to remove the transparent
doors, which would then require compliance with the increased energy
limits of open units. (Id.)
AHRI commented that efficient doors are generally used today, but
there remain instances where charge sizes are insufficient and may only
be allowed to be increased sufficiently if doors are not present on
equipment. (AHRI, No. 46 at p. 13)
Zero Zone commented that a commenter referenced Zero Zone marketing
literature for customer preference on certain types of cases with doors
in section 2.3.2.5 of the June 2022 Preliminary TSD. (Zero Zone, No 44
at p. 5). Zero Zone stated that an interview with two grocers is not an
exhaustive industry study and also noted that, since that marketing
literature was published, Zero Zone has developed an open-case product
line. (Id.)
With respect to the comment from AHT, AHRI, and Zero Zone, DOE
notes that open cases provide distinct utility with respect to features
such as unobstructed view and access to product, as well as simplified
stocking, cleaning, and maintenance. While DOE understands there are
different charge size limitations for refrigerant safety for open and
closed CRE, DOE has tentatively determined to not analyze the addition
of doors to open cases or the removal of doors on closed cases due to
the distinct utility differences between open and closed CRE.
e. Evaporators and Condensers
Continental commented that larger evaporator coils take up more
internal space, reducing product storage and utility of the equipment.
(Continental, No. 38 at p. 2)
Zero Zone disagreed with DOE's evaluation of the high-performance
coil. (Zero Zone, No. 44 at p. 4) Zero Zone commented that using wavy
fins without changing the fin pitch in an application with high-glide
refrigerants can lead to a build up of frost and ice across the
evaporator coil. (Id.) Zero Zone commented additionally that adding
another tube row transverse to airflow without a change to the physical
dimensions of the coil will compact the tubes, impeding airflow and
causing the accumulation of frost and snow. (Id.) Zero Zone stated that
it does not believe the addition of either of these design changes to
an evaporator coil would create a ``high-performance'' coil. (Id.) Zero
Zone commented that if coil design allowed for an increased evaporator
temperature, a superheat setting at a value that avoids liquid
carryover and compressor damage would be very difficult. (Id.) Zero
Zone provided a white paper called ``High-glide Refrigerants: What's
the Point?'' to describe the challenges with superheat settings in door
cases. (Id.)
Based on feedback from manufacturer interviews and commenters, DOE
has not considered increased evaporator or condenser sizes in this
NOPR. DOE has tentatively determined that manufacturers have maximized
the heat exchanger size without reducing internal storage or increasing
the external dimensions of the unit, both of which would impact product
utility. In addition, due to refrigerant transition in response to the
December 2022 EPA NOPR, DOE has analyzed refrigerants with charge size
limitations in this NOPR. Because manufacturers have only partially
converted to refrigerants that would be allowed per the December 2022
EPA NOPR, there is still uncertainty in refrigerant charge size, and
therefore the evaporator and condenser design, required for all sizes
of CRE.
In the June 2022 Preliminary Analysis, DOE analyzed ``baseline''
and ``high efficiency'' evaporator and condenser design options. While
DOE understands the exact characteristics of the evaporator or
condenser may change depending on equipment class, the evaporator and
condenser design options normalize the overall conductance-area
(``UA'') based on the design load. Based on stakeholder comments,
interviews with manufacturers, and CoilDesigner \38\ simulation, DOE
tentatively determined that the ``high efficiency'' evaporator and
condenser design options are representative of current manufacturer
designs. Therefore, DOE tentatively determined to analyze the ``high
efficiency'' evaporator and condenser coil as ``baseline'' in this NOPR
and remove the ``high efficiency'' evaporator and condenser design
options in the NOPR. See chapters 3 and 5 of the TSD for additional
details.
---------------------------------------------------------------------------
\38\ See https://ots-rd.com/software-development/for further
information on the CoilDesigner software.
---------------------------------------------------------------------------
Zero Zone commented that it believes one CRE manufacturer holds a
patent on split-circuit evaporators. (Zero Zone, No. 44 at p. 5) Zero
Zone stated that
[[Page 70221]]
DOE suggested manufacturers use this product with propane even though
DOE does not include patented design options in rulemakings. (Id.) Zero
Zone commented that DOE should plan energy levels around the use of A2L
refrigerants in large, self-contained appliances instead of focusing on
propane. (Id.)
Based on a limited review of patents listed for split-circuit
evaporators, DOE was able to find several patents for dual circuit
evaporators, which are all either expired or abandoned.\39\ Zero Zone
did not specify what is meant by ``split-circuit evaporators,'' and DOE
was unable to locate any patent that would impact CRE manufacturer's
ability to use evaporators with multiple circuits. Additionally, Zero
Zone did not specify the manufacturer that it believes holds a patent
on split-circuit evaporators. As such, DOE has tentatively determined
that each manufacturer's design is unique and would not infringe on
active patents and notes that even if there is an intellectual property
claim on a specific split-circuit design, manufacturers could use a
multiple circuit design with multiple evaporators without necessarily
using split-circuit evaporators.
---------------------------------------------------------------------------
\39\ See https://patents.google.com/patent/US3537274; https://patents.google.com/patent/US3866439A/en; https://patents.google.com/patent/US20120137724A1/en.
---------------------------------------------------------------------------
f. Fan Motors
Zero Zone commented that it already uses electronically commutated
motors (``ECM'') fan motors to meet the current energy standard and
stated that it believes most of industry is also using this style of
motor. (Zero Zone, No. 44 at p. 5) Zero Zone requested that DOE include
the ECM motor in the base model. (Id.) Zero Zone stated that the
opening height for this type of product has a disproportional impact on
energy consumption because larger opening heights disproportionally
increase energy use. (Id.) Zero Zone commented that DOE's models
account for this characteristic. (Id.)
DOE has maintained fan motor improvements as a technology option in
this NOPR. As indicated by Zero Zone, DOE has observed that ECM fan
motors are incorporated to a large extent in CRE. While DOE has
observed ECMs incorporated in baseline equipment for multiple analyzed
equipment classes, DOE has tentatively determined that certain baseline
equipment still incorporates other less-efficient motor types. For
these classes, DOE has maintained a transition to ECMs as a design
option change. DOE has also updated its motor costs relative to the
June 2022 Preliminary Analysis in this analysis to reflect current
pricing. See chapter 3 and 5 of the NOPR TSD for additional details.
Zero Zone commented that DOE suggested using permanent magnet
synchronous motors for CRE. (Zero Zone, No. 44 at p. 6) Zero Zone noted
that the study DOE references was completed in 2019, and the motors
have not permeated the market since that time. (Id.) Zero Zone stated
that the motors of such fans operate at 1800 RPM, creating unacceptable
fan noise, and although its fan suppliers are aware of this technology,
they do not recommend this style of motor for use in CRE. (Id.) Zero
Zone recommended screening permanent magnet synchronous motors from use
in CRE. (Id.)
In response to Zero Zone, DOE has observed that permanent magnet
synchronous motors are available on the market for CRE. However, DOE
has not identified specific commercialized designs of permanent magnet
synchronous motors with the appropriate size and rated airflow for the
equipment analyzed in this NOPR. Based on these observations along with
further discussions with manufacturers, DOE has not considered
permanent magnet synchronous motors as a design option in this NOPR, as
discussed further in section IV.C.1 of this document and chapter 5 of
the NOPR TSD.
g. Defrost
Continental commented that, to its knowledge, variable defrost
controls have not proven to reduce energy consumption in CRE.
(Continental, No. 38 at p. 2)
Zero Zone commented that variable defrost is an unreliable option
that results in lost food product and therefore a monetary impact when
it does not operate as intended. (Zero Zone, No. 44 at p. 4) Zero Zone
commented that the potential energy savings of variable defrost are
outweighed by the potential loss of product. (Id.)
While DOE considered variable defrost as a design option in the
preliminary analysis, DOE has tentatively determined to not consider
this design option in the NOPR. For further discussion, see section
IV.C.1.b of this document and chapter 5 of the NOPR TSD.
B. Screening Analysis
DOE uses the following five screening criteria to determine which
technology options are suitable for further consideration in an energy
conservation standards rulemaking:
(1) Technological feasibility. Technologies that are not
incorporated in commercial products or in commercially viable, existing
prototypes will not be considered further.
(2) Practicability to manufacture, install, and service. If it is
determined that mass production of a technology in commercial products
and reliable installation and servicing of the technology 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. If a technology is determined to
have a significant adverse impact on the utility of the product to
subgroups of consumers, or 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) Safety of technologies. 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 technology has
proprietary protection and represents a unique pathway to achieving a
given efficiency level, it will not be considered further, due to the
potential for monopolistic concerns.
(See 10 CFR 431.4; sections 6(b)(3) and 7(b) of the Process Rule).
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.
DOE received the following comments in response to the June 2022
Preliminary Analysis regarding the screening analysis.
ITW listed six design options that ITW stated sounded good but
proved problematic: variable-speed
[[Page 70222]]
compressors that force other components to run; synchronous-reluctance
fan motors with performance that does not match CRE applications;
enhanced-UA condenser or evaporator coils that increase energy
consumption; microchannel condenser coils that cannot be cleaned;
additional one-half-inch insulation that adds cost but not value; and
vacuum-insulated panels that prove too fragile for CRE. (ITW, No. 41 at
pp. 34-35)
AHRI provided feedback on Table 4.3.1 ``Retained Design Options,''
stating that improved transparent doors; higher efficiency lighting;
ECM motors; evaporator and condenser fans, motors, blades and controls
(closed self-contained cases); compressors; and variable-speed
compressor horizontal closed transparent self-contained ice cream
freezer (``HCT.SCI'') (specific to some specific smaller self-contained
equipment) were already in use to meet the current standard. (AHRI, No.
46 at p. 15) AHRI stated vacuum-insulated glass (``VIG'') was not
economically viable. (Id.) AHRI stated thicker insulation, synchronous-
speed motors, and larger evaporators (due to space constraints) had
reduced utility. (Id.) AHRI stated vacuum-insulated panels (prone to
puncture, cannot be repaired), microchannel condensers (leak and plug
during operation), evaporator and condenser fans, motors, blades, and
controls (open cases), high-tech defrost fans (do not necessarily save
energy and are unreliable), variable-defrost systems (do not reduce
energy consumption), expansion valves, and larger evaporators
(limitations due to flammable refrigerants) are not technically viable.
(Id.) AHRI noted that in previous comments to DOE these options were
considered to be max-tech, but, after further consultation with
members, AHRI found them to be not technically viable design options.
(Id.) AHRI stated that antisweat controls and night curtains, and
occupancy sensors had a limited market. (Id.) And AHRI concluded that
variable speed compressors (specific to some smaller, self-contained
equipment--already used in some equipment) were a viable design option.
(Id.)
Zero Zone commented that vacuum-insulated glass is not a viable
design option. (Zero Zone, No. 44 at p. 6) Zero Zone stated that its
door supplier reported that the one vacuum-insulated glass supplier in
the United States no longer offers the product because its high cost
prevented customers from using it. (Id.)
NAMA commented that several of the design options shown in the June
2022 Preliminary TSD could reduce the overall machine capacity, such as
larger condensers or evaporators, more insulation, and changes to the
type of glass that require new structural components. (NAMA, No. 37 at
p. 15) NAMA commented that the external dimensions of a CRE appliance
are limited by the height of breakrooms and built-in areas, and the
width and length are limited by the machine's integration with other
machines with which CRE are paired. (Id.) NAMA commented that the June
2022 Preliminary TSD did not address the resultant change in utility or
performance caused by a reduction in overall capacity. (Id.) NAMA
stated that smaller capacity resulted in customers opening the door for
longer periods of time and necessitated more frequent re-stocking,
making the appliance more difficult for business owners to operate.
(Id.)
NAMA also commented that several of the design options suggested by
DOE (e.g., lower-wattage refrigeration systems, vacuum-panel
insulation, different evaporators or condensers, and lower-wattage fan
motors) could affect the overall performance of the machine. (Id.) NAMA
stated that overall performance of CRE is critical and can be
significantly affected by a difference of 1 degree Celsius. (Id.) NAMA
requested that DOE review the design options for energy efficiency and
also their ability to maintain critical design features and
performance. (Id.)
Based on these comments, DOE has tentatively determined to screen
out two technology options mentioned by commenters, increased
insulation thickness and vacuum-insulated panels, which are discussed
in more detail in section IV.B.1 of this document.
However, DOE disagrees with commenters that permanent magnet
synchronous motors meet the criteria of ``impacts on product utility''
because, although the permanent magnet synchronous motors currently
available on the market are not optimized for size and rated airflow of
CRE,\40\ there is not a significant adverse impact on the utility of
the product. DOE also disagrees with commenters that increased
evaporator or condenser surface areas meet the criteria of ``impacts on
product utility'' because there is not a significant adverse impact on
the utility of the product unless the increased evaporator or condenser
requires a reduction in the overall CRE capacity. DOE notes that it did
not consider any technology options that reduce the overall CRE
capacity, consistent with the criteria ``impacts on product utility.''
---------------------------------------------------------------------------
\40\ See www.qmpower.com/wp-content/uploads/2022/06/Product_Info-QSync_12W_60Hz-6.2.22-WEB.pdf.
---------------------------------------------------------------------------
DOE also disagrees with commenters that microchannel condensers,
evaporator fan controls, variable defrost systems, expansion valve
improvements, and increased evaporator surface area meet the criteria
of ``technological feasibility.'' Microchannel heat exchangers are
often used in the automobile industry, and the stationary air
conditioning and refrigeration markets have seen recent increases in
implementation of microchannel heat exchangers. As noted by commenters
and based on feedback during manufacturer interviews, DOE only
considered evaporator fan controls as a design option on closed self-
contained CRE equipment classes. DOE notes that the amount of energy
saved for each design option is not a criterion for the screening
analysis and is discussed in the engineering analysis. For increased
evaporator surface area, DOE considered the limitations due to
flammable refrigerants (e.g., R-290) consistent with industry safety
standards as discussed in section IV.C.1.a of this document.
Additionally, DOE disagrees with commenters that vacuum-insulated
glass is not a viable design option. DOE is aware of vacuum-insulated
glass door suppliers outside of the United States and notes that that
``not economically viable'' is not one of the screening criteria
specified in the Process Rule. DOE considered the cost of each design
option in the engineering analysis.
Finally, in response to commenters, DOE notes that ``high-tech
defrost fans,'' ``lower-wattage refrigeration systems,'' and ``lower-
wattage fan motors'' are not technology options DOE has analyzed in the
preliminary or NOPR analysis.
DOE discusses the screened-out technologies in section IV.B.1 of
this document, lists the remaining technology options in section IV.B.2
of this document, and discusses the design options in section IV.C of
this document and chapter 5 of the NOPR TSD.
1. Screened-Out Technologies
For CRE, the screening criteria were applied to the technology
options to either retain or eliminate technology for consideration in
the engineering analysis. The screened-out technology options and the
rationale for screening out each technology option considered in this
analysis is detailed below.
a. Increased Insulation Thickness
In response to the June 2022 Preliminary Analysis, Continental
commented that increasing insulation thickness, even by half an inch as
[[Page 70223]]
proposed by DOE, would expand equipment sizes and/or reduce internal
capacity, both of which would have significant negative impact on
utility for the end user. (Continental, No. 38 at p. 2)
Zero Zone commented that DOE's expectation that manufacturers will
increase the thickness of insulation does not take into account the
importance of physical dimensions in CRE equipment. (Zero Zone, No. 44
at p. 4) Zero Zone added that customers need replacement equipment that
will fit in the existing available space and fit through 80-inch
doorways. (Id.) Zero Zone stated that increasing the thickness of the
internal insulation reduces the refrigerated volume, and equipment
classes that use refrigerated volume in their allowable energy
calculation would therefore see a ``double hit.'' (Id.) Zero Zone
asserted that the resources in engineering design hours and retooling
costs for the sheet metal necessary to accommodate such adjustments to
insulation would be overly burdensome to manufacturers. (Id. at pp. 4-
5) Zero Zone stated that increasing the thickness of internal
insulation would result in stranded inventory for manufacturers and
would affect end users' ability to replace their aging equipment due to
size limitations. (Id. at p. 5)
As discussed in chapter 3 of the NOPR TSD, increasing insulation
thickness increases the thermal resistivity of the exterior of the
unit, which in turn reduces the heat load that must be removed by the
CRE's refrigeration system. However, to increase insulation thickness,
either an increase to the size of the unit or a decrease to the
refrigerated volume of the unit must occur. Because CRE is typically
required to meet standard dimensions to fit into a fixed amount of
space, the refrigerated volume of the unit may need to be decreased to
accommodate increased insulation thickness, thus limiting the capacity
of the unit. As a result, DOE has tentatively determined that increased
insulation thickness meets the screening criterion of ``impacts on
product utility.'' In this NOPR, DOE has screened out increased
insulation thickness as a design option for improving the energy
efficiency of CRE.
b. Vacuum-Insulated Panels
In response to the June 2022 Preliminary Analysis, Continental
commented that vacuum-insulated panels are relatively expensive,
introduce significant complexity to manufacturing, reduce equipment
structural stability, are subject to damage, and are not easily
replaceable, requiring replacement of the entire unit. (Continental,
No. 38 at p. 2)
AHRI commented that cost estimates in the June 2022 Preliminary TSD
were significantly underestimated related to pandemic-related scarcity
pricing. (AHRI, No. 46 at pp. 14-15) AHRI stated it planned to complete
a survey to clarify the cost of vacuum panels (estimated by DOE to be
considerably less expensive than is accurate) among other components,
but could not do so within the 30-day deadline, especially given that
the comment period for the test procedure and the walk-in cooler and
walk-in freezer Preliminary TSD overlapped. (Id. at p. 15) AHRI stated
that components are difficult to obtain because of longer shipping
times and this impacts research and development and testing timelines
and time for listing through nationally recognized testing
laboratories. (Id.) AHRI commented that these factors should be
considered in future timing and rulemaking processes. (Id.)
Zero Zone commented that vacuum-insulation panels are
insufficiently robust and can lose their vacuum through bending or
flexing. (Zero Zone, No 44 at p. 6) Zero Zone commented also that it
can be difficult to determine the vacuum has been lost until the final
product operation reveals condensation. (Id.) Zero Zone stated that
large commercial refrigerators flex during shipping and customers
fasten items to commercial refrigerators with screws, which can
increase the risk of failure when using vacuum panels. (Id.) Zero Zone
noted that a vacuum panel failure in a continuous line-up of remote
commercial refrigerators results in the entire line up being moved to
access the panel, which can result in replacement of the refrigerator.
(Id.) Zero Zone recommended that DOE should not include vacuum-
insulated panels as a design option. (Id.)
As discussed in chapter 3 of the NOPR TSD, VIPs allow reduction in
insulation thickness while maintaining or increasing thermal
resistivity, due to the reduced conductivity that occurs in a low
vacuum. Because VIPs consist of an outer airtight membrane surrounding
a core material to form a cavity, any puncture to a panel renders the
VIP ineffective. This may prevent customers from being able to install
any screws or fasteners into the panel. VIPs cannot be repaired once a
leak is detected in the field and would require replacement upon
puncture or failure. In the June 2022 Preliminary Analysis TSD, DOE
stated that it had not observed VIPs incorporated in CRE but had
observed VIPs used in other refrigeration products (e.g., consumer
refrigerators) (see section 2.5.1.6 of the June 2022 Preliminary TSD).
Based on comments received and feedback during manufacturer
interviews, DOE has tentatively determined that because of the
significant difference in shelf loads between commercial and consumer
refrigeration units, CRE may require brackets or other supporting
structures to accommodate the heavier shelf loads, installed with
screws or fasteners that could puncture the VIP. As a result, DOE has
tentatively determined that vacuum-insulated panels meet the screening
criterion of ``impacts on product utility.'' In this NOPR, DOE has
screened out vacuum-insulated panels as a design option for improving
the energy efficiency of CRE.
c. Linear compressors
As discussed in chapter 3 of the June 2022 Preliminary TSD and
chapter 3 of the NOPR TSD, linear compressors use a linear rather than
rotary motion to reduce the need for a crankshaft and linkage,
resulting in reduced friction and side forces. Most linear compressors
use a free-piston arrangement and can be controlled for a range of
capacities. Compressor manufacturers had begun development on linear
compressors for residential refrigerators. However, a lack of
availability on the market of linear compressors with a large enough
cooling capacity for commercial refrigeration sizes has prevented
further development of this technology for commercial refrigeration
applications and, therefore, DOE has tentatively determined that linear
compressors meet the screening criterion of ``practicability to
manufacture, install, and service.'' DOE did not receive any comments
on its tentative determination to screen out linear compressors in
response to the June 2022 Preliminary Analysis, and, in this NOPR, DOE
has screened out linear compressors as a design option for improving
the energy efficiency of CRE.
d. Air curtain design
As discussed in chapter 3 of the June 2022 Preliminary TSD and
chapter 3 of the NOPR TSD, an air curtain is a fan-powered device that
creates a moving wall (curtain) of air, which separates two spaces of
different temperatures. Air curtains are used in CRE to minimize the
infiltration of warmer external air into the refrigerated space. DOE's
research had presented the possibility of advanced air-curtain designs
with levels of performance beyond the traditional air curtains
generally employed in open display cases being used in the CRE
industry.
[[Page 70224]]
However, DOE has tentatively determined that advanced air-curtain
designs are currently only in the research stage and, therefore, DOE
has initially determined that advanced air-curtain designs meet the
screening criterion of ``practicability to manufacture, install, and
service.'' DOE did not receive any comments on its tentative
determination to screen out air curtains in response to the June 2022
Preliminary Analysis, and, in this NOPR, DOE has screened out improved
air curtains as a design option for improving the energy efficiency of
CRE.
2. Remaining Technologies
Through a review of each technology, DOE tentatively concludes 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 presented in table IV.4.
Table IV.4--Remaining Technology Options for CRE
------------------------------------------------------------------------
------------------------------------------------------------------------
Insulation............................. Evaporator
Improved resistivity of insulation Increased surface area
(insulation type).
Lighting............................... Improved evaporator coil design
Higher-efficiency lighting............. Low-pressure differential
evaporator
Occupancy Sensors...................... Condenser **
Improved transparent doors *........... Increased surface area **
Low-emissivity coatings *.............. Tube-and-fin enhancements **
Inert gas fill *....................... Microchannel heat exchanger **
Vacuum-insulated glass *............... Compressor **
Additional panes *..................... Improved compressor efficiency
**
Anti-sweat heater controls *........... Alternative refrigerants **
Anti-fog films *....................... Variable-speed compressors **
Frame design *......................... Other technologies
Fans and fan motors.................... Defrost systems
Evaporator fan motors.................. Expansion valve improvements
Evaporator fan blades.................. Night curtains ***
Evaporator fan controls................ Liquid suction heat exchanger
**
Condenser fan motors **................ ...............................
Condenser fan blades **................ ...............................
Condenser fan controls **.............. ...............................
------------------------------------------------------------------------
* Only applies to equipment classes with doors.
** Only applies to self-contained equipment classes.
*** Only applies to equipment classes without doors (open equipment
classes).
DOE has initially determined that these technology options are
technologically feasible because they are being used or have previously
been used in commercially available equipment 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 requests comment on the decision to screen out increased
insulation thickness, vacuum-insulated panels, linear compressors, and
air curtain design as design options for improving the energy
efficiency of CRE.
C. Engineering Analysis
The purpose of the engineering analysis is to establish the
relationship between the efficiency and cost of CRE. 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 equipment cost at each efficiency level (i.e., the
``cost analysis''). In determining the performance of higher-efficiency
equipment, DOE considers technologies and design option combinations
not eliminated by the screening analysis. For each equipment class, DOE
estimates the baseline cost, as well as the incremental cost for the
equipment at efficiency levels above the baseline. The output of the
engineering analysis is a set of cost-efficiency ``curves'' that are
used in downstream analyses (i.e., the LCC and PBP analyses and the
NIA).
1. Efficiency Analysis
DOE typically uses one of two approaches to develop energy
efficiency levels for the engineering analysis: (1) relying on observed
efficiency levels in the market (i.e., the efficiency-level approach),
or (2) determining the incremental efficiency improvements associated
with incorporating specific design options to a baseline model (i.e.,
the design-option approach). Using the efficiency-level approach, the
efficiency levels established for the analysis are determined based on
the market distribution of existing equipment (in other words, based on
the range of efficiencies and efficiency level ``clusters'' that
already exist on the market). Using the design-option approach, the
efficiency levels established for the analysis are determined through
detailed engineering calculations and/or computer simulations of the
efficiency improvements from implementing specific design options that
have been identified in the technology assessment. DOE may also rely on
a combination of these two approaches. For example, the efficiency-
level approach (based on actual equipment on the market) may be
extended using the design-option approach to ``gap fill'' levels (to
bridge large gaps between other identified efficiency levels) and/or to
extrapolate to the max-tech level (particularly in cases where the max-
tech level exceeds the maximum efficiency level currently available on
the market).
In this rulemaking, DOE relies on a design-option approach,
supported with the testing and reverse engineering of directly analyzed
CRE. The design options were incrementally added to the baseline
configuration and continued through the ``max-tech'' configuration
(i.e., implementing the ``best available'' combination of available
design options).
Consistent with the March 2014 Final Rule analysis (see chapter 5
of the
[[Page 70225]]
March 2014 Final Rule TSD \41\), DOE estimated the performance of
design option combinations using an engineering analysis spreadsheet
model. This model estimates the daily energy consumption of CRE in kWh/
day at various performance levels using a design-option approach. DOE
generally relied on test data, CCD information, feedback from
manufacturer interviews, publicly available component information, and
reverse engineering to support and calibrate the engineering analysis
spreadsheet model. The model calculates energy consumption at each
performance level separately for each analysis configuration.
---------------------------------------------------------------------------
\41\ See www.regulations.gov/document/EERE-2010-BT-STD-0003-0102.
---------------------------------------------------------------------------
In the March 2014 Final Rule analysis, DOE selected 25 high
shipment volume equipment classes, referred to as ``primary'' classes,
to analyze directly in the engineering analysis (see chapter 5 of the
March 2014 Final Rule TSD \42\). In this NOPR, DOE has followed a
similar approach of directly analyzing 28 primary equipment classes.
DOE directly analyzed the same primary equipment classes as the March
2014 Final Rule, except that the PD.SC.M equipment class was not
included, and DOE directly analyzed four new equipment classes:
VCT.SC.H, VCS.SC.H, chef base self-contained medium temperature
(``CB.SC.M''), chef base self-contained low temperature (``CB.SC.L'').
Additional details of the engineering analysis are available in chapter
5 of the NOPR TSD.
---------------------------------------------------------------------------
\42\ See www.regulations.gov/document/EERE-2010-BT-STD-0003-0102.
---------------------------------------------------------------------------
a. Baseline Energy Use
For each 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 equipment class represents the characteristics
of 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.
In the June 2022 Preliminary TSD, DOE utilized the current
standards for CRE for classes with current standards and the energy
consumption based on the assumed baseline specifications modeled in the
engineering analysis spreadsheet for classes without current standards
as the baseline energy use for each analyzed equipment class. For
higher efficiency levels, DOE assessed CRE efficiencies as a percent
improvement relative to the baseline model. This provided a consistent
efficiency comparison across each equipment class. DOE considered the
efficiency improvements associated with implementing available design
options beyond the baseline to the max-tech efficiency level. See
chapter 5 of the June 2022 Preliminary TSD for additional details.
In response to the June 2022 Preliminary Analysis, Zero Zone
commented that, while it believes DOE is developing models and setting
energy levels based on average energy values, no data were provided to
confirm or deny that suspicion. (Zero Zone, No. 44 at p. 2) Zero Zone
stated that setting energy values at an average expected level and
requiring manufacturers to have all products meet the average energy
level is incorrect, and such approach necessitates that manufacturers
develop equipment with low enough average energy levels that the worst
measured performance of any product is less than DOE's average value.
(Id.) Zero Zone provided figures illustrating that if DOE's regulated
average energy requirement is 30 kWh/day, then industry must shift to a
new average that is less than the uncertainty level in order to be sure
that products do not exceed the energy level requirement. (Id.) Zero
Zone requested that DOE account for this lower energy level penalty and
provide which options are included in each energy level so that Zero
Zone can fully evaluate the proposals. (Id. at p. 3)
Zero Zone additionally commented that DOE's proposed CRE test
procedure requires manufacturers to calculate the uncertainty level and
apply it to their rating, but DOE does not appear to apply the test
requirements for uncertainty to its own work. (Id. at p. 2) Zero Zone
stated that DOE proposed a 5-percent tolerance on total display area,
but that one variation caused a 4.62-percent variation in allowable
energy swinging on Zero Zone's five-door case. (Id.) Zero Zone
requested that DOE take into account all uncertainty when estimating
energy consumption of CRE. (Id.)
In response to the comment from Zero Zone, DOE notes that the
engineering spreadsheet model that is used to develop the baseline and
efficiency levels is calibrated using publicly available CCD data,
which are subject to the requirements of the determination of
represented value at 10 CFR 429.42(a), as well as ENERGY STAR data and
manufacturer-submitted data. The DOE requirements specify that
manufacturers must determine the represented value, which includes the
certified rating, for each basic model of commercial refrigerator,
freezer, or refrigerator-freezer either by testing, in conjunction with
the applicable sampling provisions, or by applying an alternative
efficiency determination method (``AEDM''). In the case where the
reported value is derived from testing, at least two or more units
should be tested pursuant to 10 CFR 429.42 and the appropriate sampling
statistics must be applied in order to develop the represented value.
79 FR 22277, 22296. Any represented value of energy consumption or
other measure of energy use of a basic model for which consumers would
favor lower values shall be greater than or equal to the higher of: (1)
the mean of the sample or, (2) the upper 95 percent confidence limit
(UCL) of the true mean divided by 1.10. 10 CFR 429.42(a)(1)(ii)(A).
These requirements provide a statistical assessment of test results
used to determine the represented value for a basic model which
indicates a high level of confidence that the model population average
energy use is less than or equal to the standard. DOE did not consider
additional uncertainty in the proposed maximum daily energy consumption
standard equation in this NOPR analysis.
DOE expects that Zero Zone is referring to section J., Enforcement
Provisions, of the June 2022 Test Procedure NOPR and the respective
proposed regulatory text at 10 CFR 429.134. As stated in the June 2022
Test Procedure NOPR, product-specific enforcement provisions specify
which ratings or measurements DOE will use to determine compliance with
applicable energy or water conservation standards. 87 FR 39164, 39211.
Generally, DOE provides that the certified metric is used for
enforcement purposes (e.g., calculation of the applicable energy
conservation standard) if the average value measured during assessment
and enforcement testing is within a specified percent of the rated
value. Id. Otherwise, the average measured value would be used. Id. DOE
proposed to add a new product-specific enforcement provision section
stating that the certified volume for CRE will be considered valid only
if the measurement(s) (either the measured volume for a single unit
sample or the average of the measured volumes for a multiple unit
sample) is within five percent of the certified volume; otherwise, the
measured volume would be used as the basis for determining the
[[Page 70226]]
applicable energy conservation standard. Id. at 87 FR 39212. Similarly,
DOE proposed that the certified TDA for CRE will be considered valid
only if the measurement(s) (either the measured TDA for a single unit
sample or the average of the measured TDAs for a multiple unit sample)
is within five percent of the certified TDA. Id. If the certified TDA
is found to not be valid, the measured TDA would be used to determine
the applicable energy conservation standard. Id. These proposals in the
June 2022 Test Procedure NOPR are specific to how DOE conducts
enforcement testing and a tolerance on the certified volume or TDA of a
given CRE model is used to decide whether the certified volume or TDA
will be used to determine compliance with the applicable standard, or,
if the average measured volume or TDA is outside of the tolerance, the
average measured volume or TDA of the assessment and enforcement units
will be used to determine compliance with the applicable standard.
Refrigerants. In response to the June 2022 Preliminary Analysis,
DOE received several comments from stakeholders regarding how
refrigerants were considered in the preliminary engineering analysis.
AHRI commented that many states that adopted the SNAP Rules do not
allow the use of the refrigerant R404A. (AHRI, No. 46 at p. 3) AHRI
requested clarification regarding whether this addresses self-contained
cases. (Id.)
NAFEM expressed concern about DOE's position not to account for
future refrigerant regulatory changes by the EPA. (NAFEM, No. 40 at p.
3). NAFEM stated its concern that DOE had not analyzed refrigerant
transitions of remote condensing systems in the June 2022 Preliminary
TSD and had declined to evaluate alternative refrigerants as a design
option for remote CRE due to the lack of a test procedure. (Id.) NAFEM
recommended that DOE and EPA better coordinate their actions to achieve
their mutual goals, and NAFEM volunteered to educate DOE technical
staff so that any proposed rule accurately reflects industry knowledge.
(Id.)
The Joint Commenters requested that DOE analyze propane refrigerant
for additional equipment classes. (Joint Commenters, No. 39 at p. 1)
AHRI commented that a preliminary transition was in process from R-
404A to refrigerants with a global warming potential of approximately
1500 and refrigerants used in colder temperature applications have a
GWP of 2200. (AHRI, No. 46 at p. 12) AHRI noted that most lower-GWP
refrigerants were limited by building codes because the necessary
standard, UL 60335-2-89, was just published recently in October 2021.
(Id.) AHRI commented that the second, more complex and costly
refrigerant transition in January 2026 was unaccounted for in the June
2022 Preliminary TSD, and that the two transitions will have a
significant reduction in radiative-forcing, short-lived climate-
polluting HFCs and should be taken into consideration in the social
cost of carbon and environmental impact assessments. (Id.)
AHRI commented that EPA does not yet allow for R-290 or an ASHRAE
Class A3 refrigerant to be used and few of the thousands of State and
local building codes have been updated to charge refrigeration
equipment and store necessary quantities to supply end-user needs. (Id.
at p. 13) AHRI stated that significant work must be done to finalize
codes prior to the anticipated 2026 transition and AHRI noted that AZ,
CO, IN, ME, MO, NY, TN, TX, VT, WA, and WV would allow for the use
these new refrigerants once the EPA listed them. (Id. at pp. 13-14)
AHRI pointed out that manufacturers are still testing refrigerants
for the 2026 transition, and that because refrigerant and component
manufacturers have largely been focused on larger markets than many of
the equipment types sold in the CRE space, not all of the details are
known about the impact of specific refrigerants to energy efficiency.
(Id. at p. 13) AHRI stated, however, that some proposed blends are
known to have higher glide and lower efficiencies (some significantly
lower) than those in use, especially for colder-temperature
applications. (Id.) AHRI commented that, in addition, the energy
efficiency impact of an important mitigation strategy related to
refrigerants has not been addressed--the need to continuously operate
fans to reduce the risk of reaching a flammable concentration. (Id.)
AHRI noted that, in some cases, glide is high enough that evaporator
re-design is needed, making costs even higher to conform with energy
conservation standards. (Id.)
AHRI commented that most lower-GWP refrigerants have a different
flammability classification than those currently used today and cost
estimates must also include new electrical components required to be
``spark-proof'' to eliminate the risk of ignition in case of a leak.
(Id. at p. 12) AHRI noted that motors, wiring, compressors, and other
components must all comply with this flammability classification,
making them more costly than estimated in the June 2022 Preliminary
TSD. (Id.)
NAMA stated that several of the design options mentioned in the
June 2022 Preliminary TSD are either not available or not realistic in
NAMA equipment, such as the change to an A-3 refrigerant that would
require nearly a dozen other components to also be changed. (NAMA, No.
37 at p. 7).
NAMA commented that DOE failed to mention the CRADA between the
NAMA Foundation, DOE, and Oak Ridge National Laboratory (``ORNL'') in
the June 2022 Preliminary TSD. (Id. at p. 12) NAMA stated that most of
the activities during the 2019-2021 CRADA were focused on reducing the
risk during a potential leak situation. (Id.) NAMA stated that in
nearly all scenarios tested by ORNL, additional fans were necessary to
reduce the mixture of air and refrigerant below the lower flammability
limit (``LFL''), but the energy used by these fans was not accounted
for in the June 2022 Preliminary TSD. (Id.) NAMA commented that the
proposed DOE test procedure would actually penalize self-contained
bottle cooler manufacturers for using additional ventilation. (Id.)
NAMA further stated that the COVID-19 pandemic had delayed progress in
the CRADA and that NAMA had requested an extension so that the
remaining items (over half) could be studied. (Id.) NAMA commented that
these remaining items look at possible energy efficiency gains, and the
lack of results had put its industry behind schedule to meet any new
energy efficiency requirements from DOE. (Id.) NAMA requested that DOE
delay new minimum energy efficiency standards until manufacturers have
the research from ORNL to pursue the research and development of new
technologies. (Id.)
Zero Zone commented that DOE asserted multi-circuit evaporators are
a design option that would allow larger pieces of equipment to use
propane in multiple small systems. (Zero Zone, No. 44 at p. 5) Zero
Zone commented that using propane in systems over 150 grams requires
additional leak-mitigation equipment. (Id.) Zero Zone stated that until
the release of UL 60335-2-89, CRE could only use 150-gram charges of
propane and were not required to have mitigation strategies, which
explains why DOE has not observed mitigation on CRE on the market.
(Id.) Zero Zone requested that DOE include the mitigation cost in its
evaluation. (Id.)
As recommended by stakeholders, DOE is considering the impact of
the December 2022 EPA NOPR on CRE in this NOPR. As described in section
I of this document, DOE understands that it would be beneficial to CRE
equipment
[[Page 70227]]
manufacturers to align the compliance date of any DOE amended or
established standards as closely as possible with the refrigerant
prohibition dates proposed by the December 2022 EPA NOPR. Therefore,
DOE is proposing that the proposed standards, if adopted, would apply
to all CRE listed in table I.1 manufactured in, or imported into, the
United States on or after the date that is 3 years after the date on
which the final established and amended standards are published. The
December 2022 EPA NOPR proposed to prohibit manufacture or import of
such CRE starting January 1, 2025, which is at least 3 years earlier
than the expected compliance date for any amended CRE standards
associated with the proposals in this document. Hence, the proposed
refrigerant prohibitions listed in the December 2022 EPA NOPR are
assumed to be enacted for the purpose of DOE's analysis in support of
this NOPR.
Refrigerants not prohibited from use in CRE in the December 2022
EPA NOPR are presumed to be permitted for use in CRE. Table IV.5
summarizes the relevant provisions from the December 2022 EPA NOPR.
Table IV.5--December 2022 EPA NOPR Summary for CRE
------------------------------------------------------------------------
Proposed GWP
Sectors and subsectors limit Compliance date
------------------------------------------------------------------------
Retail food refrigeration--stand- 150 January 1, 2025.
alone units.
Retail food refrigeration-- 150 January 1, 2025.
refrigerated food processing
and dispensing equipment.
Retail food refrigeration-- 150 January 1, 2025.
supermarket systems with
refrigerant charge capacities
of 200 pounds or greater.
Retail food refrigeration-- 300 January 1, 2025.
supermarket systems with
refrigeration charge capacities
less than 200 pounds charge.
Retail food refrigeration-- 300 January 1, 2025.
supermarket systems, high
temperature side of cascade
system.
Retail food refrigeration-- 150 January 1, 2025.
remote condensing units with
refrigerant charge capacities
of 200 pounds or greater.
Retail food refrigeration-- 300 January 1, 2025.
remote condensing units with
refrigerant charge capacities
less than 200 pounds.
Retail food refrigeration-- 300 January 1, 2025.
remote condensing units, high
temperature side of cascade
systems.
------------------------------------------------------------------------
In the December 2022 EPA NOPR, self-contained CRE (EPA refers to
self-contained CRE as ``stand-alone equipment'') are limited to a GWP
of 150 for all DOE self-contained equipment classes. Commercial
refrigeration equipment has typically used R-404A or R-134a
refrigerant, which have a GWP above 150. Because of the high GWP of R-
404A and R-134a, significant research has been conducted to find
alternative refrigerants with less or no GWP. Naturally occurring
substances such as carbon dioxide, ammonia, and hydrocarbons
(specifically propane (i.e., R-290) for commercial refrigeration
equipment) all have very low GWP. DOE notes that several manufacturers
currently rate CRE models to both ENERGY STAR \43\ and DOE \44\ with
CRE equipment using R-290 (GWP of 3) and manufacturers indicated in
manufacturer interviews that the industry is planning to transition to
R-290 for self-contained CRE. EPA currently lists R-290 as acceptable
with use conditions for self-contained CRE,\45\ however, EPA has not
yet updated the use conditions for R-290 consistent with the latest
industry safety standards for CRE. EPA currently lists R-290 as
acceptable with use conditions for a refrigerant charge of up to 150
grams in self-contained CRE, but in a recent proposed rule, EPA
proposed to increase the allowable charge to 304 grams for closed
equipment and 494 grams for open equipment to harmonize with the
maximum charge quantity allowed by industry safety standards \46\ and
to be consistent with the December 2022 EPA NOPR (i.e., prohibitions
for retail food refrigeration--standalone units, when using or intended
to use a regulated substance, or a blend containing a regulated
substance with a global warming potential of 150 or greater).
Therefore, DOE has tentatively determined that once EPA finalizes the
proposed increases to the allowable charge limits, all self-contained
CRE equipment can use R-290.
---------------------------------------------------------------------------
\43\ See www.energystar.gov/productfinder/product/certified-commercial-refrigerators-and-freezers/results.
\44\ See www.regulations.doe.gov/certification-data/#q=Product_Group_s%3A*.
\45\ See www.epa.gov/snap/substitutes-stand-alone-equipment.
\46\ SNAP Proposed Rule 26 (88 FR 33722) harmonizes with UL
Standard 60335-2-89, Edition 2, published on October 27, 2021.
---------------------------------------------------------------------------
DOE expects that the use of R-290 generally will improve efficiency
as compared with the refrigerants currently in use (e.g., R-404A),
which are proposed to be prohibited by the December 2022 EPA NOPR,
because R-290 has higher refrigeration-cycle efficiency than the
current refrigerants. Thus, DOE expects the December 2022 EPA NOPR to
require redesign that will improve the efficiency of self-contained CRE
equipment. Hence, the baseline levels for self-contained CRE in this
NOPR reflect the design changes made by manufacturers in response to
the December 2022 EPA NOPR, which incorporates refrigerant conversion
to R-290. The expected efficiency improvement associated with this
refrigerant change varies by class and is presented in table IV.6.
DOE considered the requirement for components to be ``spark-proof''
for use with the R-290 refrigerant (i.e., propane) and the associated
costs were included in the cost of baseline models.
In chapter 2 of the June 2022 Preliminary TSD, DOE stated that DOE
has not observed any additional leak monitoring or ventilation
components for leak mitigation in any analyzed self-contained equipment
that currently incorporates R-290 refrigerant.\47\ (See June 2022
Preliminary TSD, Chapter 2). As a result, for the representative
equipment sizes considered in the preliminary engineering analysis, DOE
initially determined that leak mitigation controls are not needed and
therefore did not account for any additional energy consuming
components with the transition to R-290 refrigerant. (Id.) Based on the
CRE that DOE tested and tore down in support of this NOPR, DOE
[[Page 70228]]
has not observed any refrigerant leak mitigation controls that consume
additional energy use for self-contained CRE that use 150 grams of R-
290 or less. DOE expects that any refrigerant leak mitigation controls
that manufacturers implement on self-contained CRE would not use any
additional energy use as measured according to the DOE test procedure
(e.g., any ventilation fans used to disperse refrigerant in the event
of a refrigerant leak would not be on and using energy unless a
refrigerant leak was detected).
---------------------------------------------------------------------------
\47\ See www.regulations.gov/document/EERE-2017-BT-STD-0007-0013.
---------------------------------------------------------------------------
In response to the comment from NAMA, DOE acknowledges the ongoing
research at ORNL under the CRADA. DOE recognizes that leak mitigation
technologies are still under development and requests comment and data
on the use of such technologies, how they may impact CRE energy use as
measured according to the DOE test procedure, and the associated cost
of such technologies. DOE welcomes any additional comments and
supporting data, including any additional results of the CRADA, in
response to this NOPR.
DOE is also aware of small CRE equipment using R-600a, which is a
similar refrigerant to R-290. DOE has tentatively determined that R-
600a has similar refrigeration-cycle efficiency as R-290 and that the
performance of CRE using R-290 is representative of CRE using R-600a.
As discussed in section IV.C.1.a, remote condensing CRE have
proposed GWP limits of either 150 or 300, depending on the refrigerant
system charge size or refrigerant system type. In chapter 2 of the June
2022 Preliminary TSD, DOE noted that the current and proposed DOE test
procedures account for the refrigeration load of remote cases plus any
energy consumed by components within the equipment.\48\ (See June 2022
TSD, Chapter 2) By reference to table 1 in AHRI 1200, the test
procedure calculates an expected compressor energy consumption
associated with the case refrigeration load, independent of compressor
details including refrigerant type. (Id.) Hence, DOE initially
determined that alternative refrigerants in remote CRE cases do not
result in changes in measured energy consumption. (Id.) Therefore, DOE
did not consider alternative refrigerants in remote CRE cases in the
preliminary engineering analysis. (Id.) In this NOPR, DOE has
tentatively determined that the current standard is representative of
the baseline energy use for remote-condensing CRE using refrigerants
that comply with the December 2022 EPA NOPR when tested according to
the DOE test procedure.
---------------------------------------------------------------------------
\48\ See www.regulations.gov/document/EERE-2017-BT-STD-0007-0013.
---------------------------------------------------------------------------
DOE's analysis considers that these efficiency improvements,
equipment costs, and manufacturer investments required to comply with
the December 2022 EPA NOPR will be in effect prior to the time of
compliance for the proposed amended DOE CRE standards for all CRE
equipment classes and sizes. DOE has updated its baseline equipment
costs to reflect current costs based on feedback received during
manufacturer interviews, information collected during CRE teardowns,
and market research.
Table IV.6--Effect of Use of R-290 on Energy Use in Baseline Models
------------------------------------------------------------------------
Energy use
reduction
Equipment class below DOE
standard (%)
------------------------------------------------------------------------
VOP.SC.M................................................ 4.4
SVO.SC.M................................................ 9.2
HZO.SC.M................................................ 19.5
HZO.SC.L................................................ 4.8
VCT.SC.M................................................ 18.8
VCT.SC.L................................................ 2.8
VCS.SC.M................................................ 20.5
VCS.SC.L................................................ 8.5
HCT.SC.M................................................ 0.0
HCT.SC.L................................................ 0.0
HCS.SC.M................................................ 20.1
HCS.SC.L................................................ 22.1
SOC.SC.M................................................ 2.7
VCT.SC.I................................................ 0.0
HCT.SC.I................................................ 0.0
VCS.SC.I................................................ 3.3
------------------------------------------------------------------------
The expected energy efficiency improvement associated with the
change to R-290 is based on R-290 single-speed compressors currently
available on the market suitable for CRE equipment. In this NOPR, DOE
did not consider additional single-speed compressor efficiency
improvements beyond the baseline because DOE expects that the single-
speed compressors currently available on the market for refrigerants
that comply with the December 2022 EPA NOPR represent the maximum
single-speed compressor efficiency achievable for each respective
equipment class.
DOE requests comment on its proposal to use baseline levels for CRE
equipment based upon the anticipated design changes that will be made
by manufacturers in response to the December 2022 EPA NOPR.
DOE further requests comment on its estimates of energy-use
reduction associated with the design changes made by manufacturers in
response to the December 2022 EPA NOPR.
Baseline Components. NAMA commented that the June 2022 Preliminary
TSD contained errors and appeared to have been prepared prior to
significant changes that occurred from 2019-2022. (NAMA, No. 37, p. 4-
5) NAMA commented also that features DOE seemed to believe represented
future improvements to design had already been implemented, leading to
inaccurate baseline model assumptions by DOE about energy efficiency
levels and incremental costs. (Id. at p. 5)
NAMA stated that DOE's design changes, project energy efficiency
improvements, and cost data on the 12 design options under
consideration appeared outdated by 10 years and applicable only to very
large machines greater than 50 cubic feet in volume. (Id. at p. 7) NAMA
further commented that the design options were not representative of
the possible changes, availability, and costs associated with
refrigerated bottle coolers and small self-contained display cabinets.
(Id.) NAMA recommended that DOE change its categories and make
allowances for the differences in energy efficiency between small and
large equipment, as well as differences in cost and cost-benefit
analysis. (Id. at p. 9) NAMA commented that DOE could use data on
shipments to modify DOE percentages according to sales-weighted
numbers. (Id.) NAMA proposed that DOE restructure its categories in the
June 2022 Preliminary TSD to include two ranges: Range 1, which would
be less than 30 cubic feet, and Range 2, which would be 30 cubic feet
and over in volume. (Id.) NAMA commented that it believes using these
categories would enable a more accurate assessment of the energy
savings and cost burden. (Id.)
NAFEM and NAMA commented that the design options in the 2014 TSD
were so stringent that industry had to go beyond DOE's standards and
incorporate features such as LED lighting, brushless DC evaporator fan
motors, high-performance doors, and brushless DC condenser fan motors.
(NAFEM, No. 40 at pp. 5-6; NAMA, No. 37 at p. 5)
Zero Zone similarly stated that it disagrees with the design
options that fall above the 2017 equipment class maximum daily energy
consumption standard level and that LED lighting, high-efficiency fan
motors (like ECM), and high-performance doors are already employed to
meet current maximum energy consumption levels. (Zero Zone, No. 44 at
p. 3) Zero Zone commented that this information is available on company
specification sheets and that an analysis using this available
information would show that the slope
[[Page 70229]]
of the manufacturer production costs versus daily energy use in DOE's
engineering spreadsheet should be re-evaluated. (Id.)
ITW recommended adding technologies to the baseline as they were
applied by industry, citing examples including ECM fans, high-
efficiency compressors, and evaporator fan controls. (ITW, No. 41 at p.
34)
NAFEM and NAMA stated that because these and other technologies
were already necessary to meet the 2014 standard, DOE should not be
able to claim any new energy efficiency benefits when incorporating
such technologies into the June 2022 Preliminary TSD. (NAFEM, No. 40 at
p. 6; NAMA, No. 37 at p. 5) Zero Zone similarly commented that DOE's
graph in the June 2022 Preliminary TSD indicates that using high-
performance doors would reduce the calculated daily energy use from
35.14 kWh/day to 26.60 kWh/day, but Zero Zone stated that this design
option is already employed by manufacturers, and that DOE is therefore
double counting the impact of high-performance doors. (Zero Zone, No.
44 at p. 3).
AHRI commented that design options included in the June 2022
Preliminary TSD--such as high efficiency doors, fans, motors, and ECM
in self-contained cases--are largely already incorporated by
manufacturers to meet current standards and that counting them a second
time will not cause the equipment to meet the proposed energy
efficiency levels. (AHRI, No. 46 at p. 3) AHRI noted that vacuum-packed
doors and insulation are a few of the recommended design options that
are not already in use by manufacturers. (Id.) AHRI commented that low-
temperature vertical closed transparent (``VCT'') classes already use
high-efficiency doors and that DOE's model is incorrect regarding low-
temperature VCT equipment classes as DOE assumes no-sweat anti-heat.
(Id. at p. 6) AHRI noted that DOE's baseline does not meet current
energy-efficiency standards, as the current standard for VCT remote low
temperature allowable is 34.46 kWh/day compared to 35.14 kWh/day in
DOE's baseline design without design options. (Id.) AHRI noted also
that there is no room for anti-sweat controls under the ASHRAE test
conditions and therefore this technology is not logical. (Id.)
AHRI commented that many potential energy saving scenarios in the
June 2022 Preliminary TSD contain elements that are already in use or
are technically impractical for refrigeration equipment. (Id. at p. 14)
AHRI stated that the tear-down analysis must have used equipment built
before 2019, which would have excluded design features needed to meet
current energy conservation standards, such as efficient doors and LED
lights. (Id.) AHRI commented that variable-speed compressors are
impactful with significant changing loads, but not for most
refrigeration systems. (Id.) AHRI also stated that the analysis failed
to recognize concerns with proposed product features; for example,
retailers generally do not want occupancy lighting because a light that
is off indicates to consumers that equipment is not working properly
and that food may be spoiled. (Id.) AHRI commented that energy-saving
opportunities are lower after the elimination of design features that
are technically infeasible, already in use, or cost prohibitive. (Id.)
AHRI stated that design options are also limited by the equipment
footprint: larger compressors or additional insulation requirements
increase case sizes and reduce storage capacity, creating less utility
and requiring remodeling to fit in current spaces. (Id.) AHRI commented
that the June 2022 Preliminary TSD failed to address the impact of
design options on performance or other design features, such as
temperature, and offered the example of the VCT.RC.M equipment class in
which some OEMs have begun incorporating high-efficiency, triple-pane
doors and increased insulation. (Id.) AHRI stated the baseline
components in the tear-down analysis included evaporator fans that are
shaded pole motors and have not been used in years. (Id.)
Continental stated that some selections in the June 2022
Preliminary TSD technology options have not been sufficiently evaluated
for their current usage, anticipated contribution to energy reduction,
technological viability, cost impact, and/or bearing on the utility of
the equipment. (Continental, No. 38 at p. 2) Continental noted that
many manufacturers already use improved transparent doors, high-
efficiency LED lighting, and high-efficiency ECM fans to meet current
standards for DOE and/or ENERGY STAR. (Id.)
Zero Zone commented that DOE did not conduct manufacturer
interviews. (Zero Zone, No. 44 at p. 5) Zero Zone stated that each of
its models in the compliance database uses a unique code to identify
the components provided. (Id.) Zero Zone questioned how DOE determined
what is included in this base line. (Id.)
With respect to comments from NAMA, NAFEM, ITW, AHRI, Continental,
and Zero Zone, DOE followed a similar approach to the March 2014 Final
Rule analysis in the June 2022 Preliminary Analysis but incorporated
additional design options and updated the design option assumptions
based on publicly available manufacturer specifications and preliminary
test data. In support of this NOPR, manufacturer interviews were
conducted and interviews yielded feedback on several aspects of the
June 2022 Preliminary Analysis, including typical CRE baseline
components. Further, DOE has reviewed the current CRE market,
incorporated feedback from the June 2022 Preliminary Analysis, and
incorporated information gathered during manufacturer interviews to
update the baseline components in this NOPR to reflect current designs
and ensure that design options have not already been implemented in a
representative baseline CRE for each equipment class.
For the June 2022 Preliminary Analysis, DOE directly analyzed
multiple equipment classes intended to represent the majority of
industry shipments for CRE. Within each analyzed equipment class, DOE
also selected a volume or TDA for the analysis to best represent the
range of equipment available in that equipment class. For currently
covered equipment classes, the representative volumes and TDAs selected
were consistent with those analyzed for the March 2014 Final Rule. DOE
has retained the June 2022 Preliminary Analysis approach in this NOPR.
Although the NOPR analysis is conducted at one representative volume or
TDA for each directly analyzed class, DOE considers the components,
design options, costs, and energy use characteristics of CRE across the
entire equipment class.
See chapter 5 of the NOPR TSD for additional details on the
baseline components in each equipment class.
AHT commented that internal LED lighting is a common characteristic
in all closed transparent equipment classes, yet in the June 2022
Preliminary Analysis, DOE does not indicate lights for the baseline
design options for horizontal closed transparent self-contained
equipment classes (HCT.SC.M, HCT.SC.L, HCT.SC.I). (AHT, No. 48 at p. 1)
AHT stated that good internal illumination is of high importance for
these units because their purpose is to display refrigerated or frozen
food to the end consumer, whereas open units may be sufficiently
illuminated with external ceiling lights. (Id. at pp. 1-2) AHT
commented that DOE's energy rating regulation does not consider the
energy consumption of such external lights or the additional headload,
further disadvantaging closed
[[Page 70230]]
units compared to open units. (Id. at p. 2) AHT commented that the
energy consumption of open units relying on external lights is
substantially higher than the test result suggests because the
additional lighting is often higher than the 800 lux stated in the test
procedure. (Id.)
AHT commented that manufacturers have already incorporated many of
the proposed design options to meet current limits for HCT.SC.M/L/I and
provided the example of a unit from the HCT.SC.M equipment class with
around 25 ft\2\ of TDA, which already uses high-efficiency
reciprocating compressors, brushless DC condenser fan motors, variable-
speed compressors, and an additional half inch of insulation to achieve
the measured consumption of 1.9 kWh/24h in the test. (Id. at pp. 2-3)
Based on a review of these comments, manufacturer feedback, and the
available equipment on the market, DOE has included lighting and
additional components at the baseline for horizontal closed transparent
CRE equipment in this NOPR. See chapter 5 of the NOPR TSD for
additional details.
Regarding fan motors, the CA IOUs referred DOE to their comments on
the July 2021 RFI in which they stated that there has been continued
improvement in fan motors since energy conservation standards were last
analyzed. (CA IOUs, No. 43 at p. 2) The CA IOUs expressed gratitude
that DOE included electronically commutated permanent magnet motors,
also known as brushless permanent magnet motors or brushless DC motors
and synchronous motors; however, the CA IOUs also commented that the
list of fan motor technology options analyzed for the closed-door
refrigeration categories is incomplete, as shown in the CA IOUs Table
1, which lists all analyzed fan types alongside all self-contained
equipment families. (Id. at pp. 2-3) The CA IOUs recommended that the
evaporator fan technology options analyzed in the vertical closed
refrigeration category also be analyzed for the horizontal closed
refrigeration category. (Id. at p. 2) The CA IOUs stated that several
horizontal glass case manufacturers offer medium- to low-temperature
convertible units, suggesting that analyzing the same technology
options for these two equipment classes makes sense. (Id.)
The Joint Commenters recommended that DOE analyze evaporator
technologies for horizontal, closed CREs as DOE had done for the
majority of CRE equipment classes. (Joint Commenters, No. 39 at p. 2)
The Joint Commenters stated that DOE's analysis found that these
evaporator-related technology options result in significant energy
savings for other equipment classes analyzed. (Id.) The Joint
Commenters stated that they are unsure why DOE excluded evaporator
technology options for horizontal closed CREs. (Id.)
In response to the comments from the CA IOUs and the Joint
Commenters, DOE notes that the horizontal closed category (horizontal
closed transparent or solid equipment classes) consists of CRE that
utilize either cold-wall or forced-air evaporators depending on the
equipment class. DOE observed that each primary equipment class that
utilizes forced air evaporators has an evaporator fan and motor and
each primary equipment class that utilizes cold-wall evaporators does
not have an evaporator fan and motor. Therefore, classes with a cold-
wall evaporator did not have an evaporator fan motor design option. See
chapter 5 of the NOPR TSD for additional details.
The CA IOUs commented that the June 2022 Preliminary TSD analysis
for several equipment categories (e.g., chef bases/griddle stands,
semi-vertical open, and horizontal closed transparent) assumes shaded-
pole motors as the baseline; however, the CA IOUs stated that shaded-
pole motors are rarely used in new equipment in the industry and
recommended that DOE analyze permanent split capacitor (``PSC'') motors
as the baseline. (CA IOUs, No. 43 at p. 3) Similarly, AHRI commented
that there are inconsistencies with the assumptions made regarding
efficiency levels in the June 2022 Preliminary TSD: (1) the VOP.RC.M
(open dairy cases) class in the baseline already have ECMs, which
should have been the baseline motor, and (2) LED lighting contributing
to increased efficiency. (AHRI, No. 46 at p. 2)
With respect to the comment from the CA IOUs, for chef bases or
griddle stands, DOE has tentatively determined that, based on teardowns
conducted in support of this NOPR, shaded-pole motors (``SPMs'') are
used for fan motors in baseline equipment. See chapter 5 of the NOPR
TSD for additional details.
Regarding the equipment noted by commenters, DOE has also updated
baseline components in this NOPR for all equipment classes (including
those components and classes mentioned by commenters) to better reflect
baseline CRE. See chapter 5 of the NOPR TSD for additional detail.
Equipment Classes with Unique Energy Use Characteristics. ITW
commented that, in terms of design-options compliance with the MDEC
value, DOE failed to recognize that manufacturers might use other
options farther down the list of compliant design options to produce
cabinets with increased heat loads due to their physical features
(other than those required by a simple reach-in refrigerator), citing
the following applications as examples: (1) pass-through
refrigerators--cabinets with doors on both sides, providing access to
stored items from either side; (2) roll-in refrigerators--cabinets with
ramps and door sweeps that allow for loading of bakery carts; and (3)
roll-through refrigerators--cabinets with ramps and door sweeps on both
sides that allow for bakery carts to move in and out from one side to
the other. (ITW, No. 41 at p. 33) ITW commented that in the 2014 TSD,
DOE proposed many of the same design options to achieve compliance and
manufacturers adopted many of the options, such as ECM fans and high-
efficiency compressors, with the industry trending toward R-290
refrigeration systems. (Id.) ITW commented that DOE does not prescribe
technologies; it recommends them and industry selects the technology
used for compliance. (Id.)
NAFEM stated that it and other commenters recommended separating
forced-air and cold-wall refrigeration systems into different
categories, yet DOE deferred making a decision until a future proposed
rule. (NAFEM, No. 40 at p. 3) NAFEM commented that the preliminary TSD
stage is the appropriate stage to adopt a position on these categories
and that DOE's deferral missed an opportunity for DOE to work with
NAFEM members to fully understand the issues. (Id.)
NAFEM also commented that DOE's decision to defer accounting for
different door configurations (roll-in, roll-through, and pass-through
doors) presented a similar missed opportunity for DOE to work with
NAFEM members. (Id.)
With respect to the comments from ITW and NAFEM, DOE recognizes
that certain CRE equipment classes may contain equipment that utilize
either forced-air evaporators or cold-wall evaporators and that certain
CRE equipment classes may contain equipment that have different door
configurations (e.g., roll-in, roll-through, and pass-through). Based
on CCD data, information from commenters and manufacturer interviews,
and DOE's directly analyzed units showing an energy use difference
between certain types of CRE, DOE has tentatively determined to include
separate energy use equations based on an energy use multiplier for
certain equipment classes that contain CRE with unique utility. This
energy use multiplier will require models with certain characteristics
(e.g.,
[[Page 70231]]
roll-in doors, roll-thru doors, pass-thru doors, forced-air
evaporators) to comply with an energy conservation standard that has a
higher maximum daily energy consumption than the proposed energy
conservation standard for a specific equipment class. DOE has initially
determined that the energy use multipliers do not result in maximum
daily energy consumptions that are higher than the current energy
conservation standard for a given equipment class (i.e., complying with
EPCA's ``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 equipment. (42 U.S.C. 6316(e)(1); 42 U.S.C.
6295(o)(1))).
In section IV.A.1.b of this NOPR, DOE proposes definitions for
pass-through, roll-in, roll-through, and sliding doors. Based on CCD
data, information from commenters and manufacturer interviews, and
DOE's directly analyzed units showing an energy use difference between
certain types of CRE, DOE has tentatively developed an energy use
multiplier for equipment classes that DOE observed CRE with pass-
through, roll-in, roll-through, or sliding doors on the market. DOE has
tentatively developed multipliers for pass-through, sliding, and roll-
in doors (roll-through is a combination of pass-through and roll-in),
which in combination account for all the different door designs
currently observed on the market. See table IV.7 for additional
details.
Table IV.7--Description of Equipment Class Multipliers for Unique Door Characteristics
----------------------------------------------------------------------------------------------------------------
Equipment
Door type Applicable equipment Equipment type coefficient class
classes multiplier
----------------------------------------------------------------------------------------------------------------
Pass-through.......................... VCT.RC.M; VCT.SC.M; PT........................... 1.04
VCT.SC.L; VCS.SC.M;
VCS.SC.L.
Sliding............................... VCT.RC.M; VCT.SC.M....... SD........................... 1.07
Pass-through and Sliding.............. VCT.RC.M; VCT.SC.M....... SDPT......................... 1.11
Roll-in............................... VCT.RC.M; VCT.SC.M; RI........................... 1.05
VCS.SC.M; VCS.SC.L.
Roll-through.......................... VCT.RC.M; VCT.SC.M; RT........................... 1.09
VCS.SC.M; VCS.SC.L.
----------------------------------------------------------------------------------------------------------------
In section IV.A.1.b of this NOPR, DOE additionally proposes
definitions for cold-wall and forced-air evaporators. Based on CCD
data, information from commenters and manufacturer interviews, and
DOE's directly analyzed units showing an energy use difference between
certain types of CRE, DOE has tentatively developed an energy use
multiplier for equipment classes that were directly analyzed in this
NOPR as CRE with a cold-wall evaporator and which DOE observed CRE with
forced-air evaporators in those equipment classes on the market. DOE
has tentatively developed this multiplier to account for the additional
energy use associated with a forced-air evaporator as compared to a
cold-wall evaporator. See table IV.8 for additional details.
Table IV.8--Description of Equipment Class Multipliers for Unique Refrigeration Systems
----------------------------------------------------------------------------------------------------------------
Equipment
Refrigeration system Applicable equipment Equipment type coefficient class
classes multiplier
----------------------------------------------------------------------------------------------------------------
Forced Air............................ HCS.SC.L................. FA........................... 1.2
----------------------------------------------------------------------------------------------------------------
DOE requests comment on its proposal to apply an energy use
multiplier to certain equipment classes that contain CRE with unique
utility and energy use characteristics. DOE additionally requests
comment on the proposed multiplier values and equipment classes for
which these multipliers would be applied.
b. Higher Efficiency Levels
As part of DOE's analysis, the maximum available efficiency level
is the highest efficiency unit currently available on the market. DOE
also defines a ``max-tech'' efficiency level to represent the maximum
possible efficiency for a given equipment.
After conducting the screening analysis described in section IV.B
of this document and chapter 4 of the NOPR TSD, DOE considered the
remaining design options in the engineering analysis to achieve higher
efficiency levels. See chapter 5 of the NOPR TSD for additional detail
on the design options.
Design Options beyond Baseline. In response to the June 2022
Preliminary Analysis, the CA IOUs recommended analyzing variable-speed
fan control as a technology option for vertical, medium-temperature
refrigerators. (CA IOUs, No. 43 at p. 2)
With respect to the recommendation from the CA IOUs, DOE has not
considered variable-speed fan technology as a design option for this
NOPR. For open cases, the evaporator fan must run continuously to
maintain the air curtain so any variable-speed function could disrupt
the air curtain. For closed cases, DOE did not receive any data to show
energy use savings associated with variable-speed fan control and has
tentatively determined that variable-speed fan control would not reduce
energy use according to the DOE test procedure. DOE notes that it did
consider evaporator fan control (i.e., cycling the evaporator fan on
and off as opposed to running constantly) as a design option. See
chapter 5 of the NOPR TSD for additional information.
NAFEM commented that DOE should make it easier for the public to
understand how it calculates possible improvements that reduce energy
consumption, providing the example of the efficiency of permanent-
magnet synchronous motors (also known as synchronous-reluctance
motors). (NAFEM, No. 40 at p. 6) NAFEM commented that these motors, for
which NAFEM stated DOE claimed a theoretical efficiency of 75 percent,
are not available in the rated wattages found in the 2022 spreadsheet,
despite being the basis for two design-level options. (Id.)
Based on feedback during manufacturer interviews, feedback from
commenters, and a review of the current market, DOE has tentatively
determined to remove permanent-magnet synchronous motors (previously
referred to as synchronous-reluctance motors) from the NOPR analysis
because motors currently available on the market
[[Page 70232]]
do not span the range of CRE fan wattages and revolutions per minute
needed for proper operation. For more information, see chapter 5 of the
NOPR TSD.
The CA IOUs commented that the June 2022 Preliminary TSD
inconsistently considered variable defrost for certain low- and medium-
temperature categories. (CA IOUs, No. 43 at p. 6) As an example, the CA
IOUs stated that the June 2022 Preliminary TSD analyzed variable
defrost for horizontal open self-contained cases--medium temperature
(``HZO.SC.M'') but not horizontal open self-contained cases--low
temperature (``HZO.SC.L''). (Id.) The CA IOUs recommended that DOE
review technology options analyzed across equipment categories for
consistency and that DOE analyze variable defrost as a technology
option for vertical glass door self-contained freezers (``VCT.SC.L'')
and vertical solid door self-contained ice cream freezers
(``VCS.SC.I'') because there are after-market controllers available to
enable variable defrost in any freezer category. (Id.)
While DOE considered variable defrost as a design option in the
June 2022 Preliminary Analysis, DOE has tentatively determined to
remove this design option in the NOPR. Based on manufacturer feedback
and test data, DOE has tentatively determined that there is variation
across equipment classes and defrost types that would not allow for a
variable-defrost control design option that is representative of each
class. And based on discussions with manufacturers, all manufacturers
are already controlling the defrost period on a time- or temperature-
based defrost specific to each individual model to minimize the defrost
time and energy consumption. For further discussion, see chapter 5 of
the NOPR TSD.
AHT commented that it is unable to comprehend the listed energy-
saving potentials for the different temperature classes and the values
seem incorrect. (AHT, No. 48 at p. 6) AHT asked why the potential
savings for variable-speed compressors, for example, are rated at 20
percent in the ice cream class, 35 percent in the low-temperature
class, and zero percent in the medium-temperature class. (Id.)
DOE reviewed its engineering spreadsheet model and compressors
analyzed and tentatively determined the discrepancy noted by AHT occurs
because of the energy efficiency ratios (``EERs'') for single-speed and
variable-speed compressors available on the market. Based on
compressors analyzed from several manufacturers of CRE compressors,
single-speed compressors available on the market, operating at medium
back pressure (``MBP'') (medium-temperature refrigerators), typically
have EERs more similar to those of variable-speed compressors available
on the market, operating at MBP, when compared to compressors operating
at low back pressure (``LBP'') (low-temperature freezers and ice-cream
freezers). This means that there is less potential energy savings for
medium-temperature refrigerators that use variable-speed compressors.
The difference in EERs is based on the operation of a single-speed vs
variable-speed compressor, which has a significant decrease in cooling
capacity as the operating temperature decreases. See chapter 5 of the
NOPR TSD for additional details on the compressor analysis.
Efficiency Levels and Max-Tech. AHRI commented that DOE has not
defined efficiency levels in adequate detail and recommended that DOE
verify its analysis for accuracy and consistency. (AHRI, No. 46 at p.
3)
NAMA commented that DOE should reduce the demands to make
additional changes and acknowledge that manufacturers have already made
changes that would contribute significantly to the Administration's
climate change initiatives. (NAMA, No. 37 at p. 8) NAMA stated that the
actual energy savings that can be attributed to DOE's design options in
the June 2022 Preliminary TSD engineering analysis are closer to a 5-
10-percent reduction from baseline energy usage after removing design
options that are not technically feasible or that were accomplished
years ago. (Id.) NAMA noted that its estimate of a 5-10-percent
reduction is significantly lower than DOE's estimate of a 41-percent
reduction in energy use. (Id.)
DOE has considered commenters' feedback, information gathered
through manufacturer interviews, and additional testing of analysis
units to update the analysis, including the efficiency levels and max
tech. See chapters 3 and 5 of the NOPR TSD for a description of each
design option and how each is incorporated into the NOPR analysis.
AHT commented that the limits from the March 2014 Final Rule have
almost eliminated the equipment classes HCT.SC.M, HCT.SC.L, and
HCT.SC.I. (AHT, No. 48 at p. 2) AHT stated that the closed units within
these classes are among the most efficient food display equipment in
retail stores and corresponding open units consume far more energy
while being regulated less strictly. (Id.) AHT commented that the 72.6-
percent reduction of energy consumption for the HCT.SC.M, the 60.4-
percent reduction of energy consumption for the HCT.SC.L, and the 61.6-
percent reduction of energy consumption for the HCT.SC.I are
impossible, and AHT recommended repeating the engineering analysis for
these equipment classes. (Id. at p. 3-6)
DOE has considered commenters' feedback, information gathered
through manufacturer interviews, and additional testing of analysis
units to update the analysis for horizontal closed transparent
equipment. See chapter 5 of the NOPR TSD for additional details on the
baseline specifications and design options analyzed for these equipment
classes.
The Joint Commenters stated that, for several of the equipment
classes analyzed, multiple models at comparable sizes in DOE's CCD
exceed the max-tech efficiency level in the engineering analysis.
(Joint Commenters, No. 39 at p. 3) The Joint Commenters provided an
example that DOE's max-tech level for the representative service over
counter remote condensing medium temperature (``SOC.RC.M'') unit is
14.7 kWh/day, yet there are multiple models in the CCD at a comparable
size with energy consumption as low as about 10 kWh/day. (Id.) The
Joint Commenters added that multiple models of vertical open self-
contained medium temperature (``VOP.SC.M'') units significantly exceed
DOE's max-tech level of 23.5 kWh/day at similar total display areas.
(Id.) The Joint Commenters stated that models are available beyond
DOE's max-tech levels for additional equipment classes as well and
recommended that DOE set max-tech levels that are at least as high as
efficiencies currently available on the market. (Id.)
While DOE considers the maximum efficiency level for CRE available
on the market, there are certain components or technologies for
equipment classes that manufacturers may choose to implement that are
not directly analyzed as a design option. For example, some
manufacturers may have different airflow designs for open cases that
affect energy use, which are calibrated specific to a CRE model,
referred to as an ``air curtain''. Air curtains are only applicable on
open units (such as the VOP.SC.M equipment class mentioned by the Joint
Commenters) and are intended to mitigate heat infiltration into the
CRE. See section IV.B.1.d of this NOPR or chapters 3 and 4 of the NOPR
TSD for additional details on air curtains. DOE analyzes design options
that pass the
[[Page 70233]]
screening criteria and have a measurable impact on CRE efficiency.
c. Engineering Spreadsheet Model
In performing the engineering analysis in the March 2014 Final
Rule, DOE selected representative units for each primary equipment
class to serve as analysis points in the development of cost-efficiency
curves. 79 FR 17726, 17746. In selecting these units, DOE researched
the offerings of major manufacturers to select models that were
generally representative of the typical offerings produced within the
given equipment class. Id. Unit sizes, configurations, and features
were based on high-shipment-volume designs prevalent in the market. Id.
Using these data, a set of specifications was developed defining a
representative unit for each primary equipment class. Id. These
specifications include geometric dimensions, quantities of components
(such as fans), operating temperatures, and other case features that
are necessary to calculate energy consumption. Id. Modifications to the
units modeled were made as needed to ensure that those units were
representative of typical models from industry, rather than a specific
unit offered by one manufacturer. Id. This process created a
representative unit for each equipment class with typical
characteristics for physical parameters (e.g., volume, TDA), and
minimum performance of energy-consuming components (e.g., fans,
lighting). Id.
As noted in the Executive Summary of the June 2022 Preliminary
Analysis, DOE analyzed the same representative volumes and TDAs
developed in the March 2014 Final Rule. See 79 FR 17726, 17746. In the
June 2022 Preliminary Analysis, DOE kept the same design specifications
in most cases, but updated some design specifications to better match
the directly analyzed units available on the market. DOE received
several comments on the updates made to the engineering spreadsheet
model, summarized below.
NAFEM stated that, as demonstrated in its 2015 brief,\49\ errors
and omissions in the engineering spreadsheet have significant effects
on DOE's CRE analyses and final standards-setting process. (NAFEM, No.
40 at p. 2) NAFEM commented that its members could provide important
information to DOE to improve and correct its engineering spreadsheets
to make any future proposed CRE rules less controversial and more
representative of real-world applications. (Id. at p. 4) NAFEM stated
that any concerns identified by NAFEM are only limited examples of
issues it believes exist throughout the document. (Id.)
---------------------------------------------------------------------------
\49\ NAFEM included its 2015 brief in addition to their comment
responses. NAFEM specifically referenced pp. 35-51 for this comment.
---------------------------------------------------------------------------
NAFEM stated that ITW compared the March 2014 Final Rule
engineering spreadsheet to the 2022 engineering spreadsheet related to
the preliminary analysis for CRE. (NAFEM, No. 40 at p. 4) NAFEM
commented that the equipment classes subject to review were VCT.SC.M,
VCT.SC.L, VCS.SC.M, and VCS.SC.L, which included self-contained
refrigerators and freezers at medium and low temperatures with both
solid and transparent vertical closed doors. (Id.) NAFEM commented that
many of the observations provided by ITW applied to other equipment
classes as well. (Id. at p. 5)
ITW commented that the CRE engineering spreadsheet made generalized
assumptions that could be considered opinion versus facts and all
product types in an equipment class are not reflected. (ITW, No. 41 at
p. 2) ITW commented that the spreadsheet requires validation, that
costs are inaccurate to the point of being useless, that more
collaboration with manufacturers is needed, and that DOE should build
confidence in the spreadsheet by making it more visible. (Id.)
Zero Zone commented that some of DOE's models have errors and asked
that DOE share the raw data for these models, including, at minimum,
the type and number of models that were reverse engineered and/or lab
tested. (Zero Zone, No. 44 at p. 1)
With respect to the comments from NAFEM, ITW, and Zero Zone, DOE
developed and calibrated the engineering spreadsheet model based on
test data from directly analyzed units, feedback from manufacturer
interviews, and market data from the CCD. DOE has also published the
engineering spreadsheet model for the June 2022 Preliminary Analysis
and for this NOPR. In support of this NOPR, DOE tested 70 CRE models
and reverse engineered 47 CRE models. These models consisted of all
equipment families within the scope of this NOPR except pull-down
temperature applications, and all temperature classes. The volume range
of these models is 3 ft\3\-69 ft\3\ and the TDA range is 5 ft\2\-32
ft\2\.
NAFEM requested an explanation regarding the 75-percent reduction
in ``Infiltrated Air Mass Flow (lb/hr)'' on the 2022 engineering
spreadsheet under ``Design Specifications'' when compared with the 2014
spreadsheet. (NAFEM, No. 40 at p. 6)
ITW similarly commented that DOE failed to provide any supporting
documentation, calculations, or impact analysis for updates from the
2013 and 2014 CRE engineering spreadsheets to the 2022 revision used to
estimate performance in terms of Infiltrated Air Mass Flow [lb/hr] and
Polyurethane Foam K-Factor [Btu*in/ft\2\h[deg]F]. (ITW, No. 41 at p.
18) ITW commented that some design specifications listed in table
5A.2.5 through table 5A.2.8 were updated in the June 2022 Preliminary
TSD while other changes received only brief commentary, such as
``Improved Resistivity of Insulation'' found in section 3.3.1.1
concerning polyurethane foam. (Id.) ITW further commented that this
issue was discovered at the end of the comment period and that said
comment period required extension because the changes do not represent
a thermal efficiency improvement for polyurethane foam insulation.
(Id.) ITW questioned why two differing methods were used to calculate
the ``Conduction Through Walls and Solid Doors [Btu/hr]'' and requested
justification for the change, stating that one formula in the
spreadsheet or the other could be correct, but not both. (Id.)
ITW added that DOE spent considerable time in 2013 and 2014
developing the energy consumption model and calculating the right
values for Infiltrated Air Mass Flow [lb/hr], working with
manufacturers' detailed specifications, calculating sensible and latent
heat loads due to infiltration, and reviewing and revising the
infiltrated air mass flow values for certain equipment classes,
including VCT and VCS based on stakeholder feedback. (Id. at pp. 18-23)
ITW commented that, by contrast, in the 2022 CRE engineering
spreadsheet, DOE made significant changes to the Infiltrated Air Mass
Flow value for 17 different equipment classes, including VCT and VCS
models, without an explanation other than DOE did update design
specifications. (Id. at p. 23) ITW stated that the formulas used to
calculate the ``Load Due to Infiltration [Btu/hr]'' on the engineering
spreadsheet tab ``Calculations'' and the CRE cabinet specification have
not changed from 2014. (Id.) ITW summarized its comment by stating DOE
needed to explain this discrepancy or recalculate the 17 classes with
revised or reverted values for Infiltrated Air Mass Flow [lb/hr]. (Id.)
ITW concluded that its calculations resulted in the following
assumptions: (1) DOE underestimated by 28 percent the theoretical
quantity of heat (BTU/hr) infiltrating the representative 49 (cu ft)
VCS.SC.M model during the 2014 CRE
[[Page 70234]]
rulemaking; (2) DOE would overstate a decline in thermal performance
for the foam insulation by 25 percent for the same model in the June
2022 Preliminary TSD; (3) if 1 and 2 were correct, DOE would need to
correct its energy use model for all equipment classes; and (4)
discrepancies in DOE's own parameter Conduction Through Walls and Solid
Doors [Btu/hr] between the 2014 TSD and the June 2022 Preliminary TSD
should have been flagged for further explanation and discussion in the
June 2022 Preliminary TSD. (Id. at pp. 25-26)
ITW commented that DOE discarded specific data when faced with
energy consumption values above the MDEC for the baseline unit in the
2022 engineering spreadsheet, instead calculating new values for the
baseline unit and not DOE's own energy model. (Id. at p. 34) ITW
questioned whether DOE trusted its engineering spreadsheet. (Id.)
Based on comments received from NAFEM and ITW, DOE has re-evaluated
the infiltrated air-mass flow and insulation design specifications in
this NOPR. Based on feedback provided from manufacturers during
manufacturer interviews, DOE updated the infiltrated air-mass flow and
insulation design specifications in this NOPR to be more consistent
with the March 2014 Final Rule. See chapter 5 of the NOPR TSD for
additional details.
Zero Zone commented that the fraction of power into case for
evaporator motors is missing. (Zero Zone, No. 44 at p. 3) Zero Zone
stated that this heat load is illustrated in the component load in the
model diagram tab but not included in the daily energy consumption
calculations. (Id.)
DOE reviewed the engineering spreadsheet model published to the
docket \50\ and found that this calculation was included (see the
``Calculations'' tab, row 176).
---------------------------------------------------------------------------
\50\ See www.regulations.gov/document/EERE-2017-BT-STD-0007-0032.
---------------------------------------------------------------------------
ITW commented that to review data in the CRE engineering
spreadsheets, the Excel macros needed to function, but the 2013 and
2014 CRE engineering spreadsheet macros were not found to be executable
in Excel using a 64-bit Windows 10 computer and instead required Excel
running on a 32-bit WindowsNT machine. (ITW, No. 41 at p. 6)
In response to the comment from ITW, DOE notes that the data and
formulas are reviewable regardless of the version of the Windows
operating system being used because the macros do not affect the
underlying data and formulas.
d. Industry Trade Association Survey
In response to the June 2022 Preliminary Analysis, three industry
trade associations surveyed their members to provide feedback to DOE on
the June 2022 Preliminary Analysis. The survey is located on the
docket,\51\ and DOE has provided a summary of the engineering-related
results of the survey.
---------------------------------------------------------------------------
\51\ See www.regulations.gov/document/EERE-2017-BT-STD-0007-0050.
---------------------------------------------------------------------------
AHRI, NAMA, and NAFEM stated that more than 50 percent of the data
in the survey was shared by small businesses (<1250 employees). (Trade
Associations Survey, No. 50 at p. 8) The manufacturers surveyed
manufacture all equipment types (to varying degrees) directly analyzed
in the June 2022 Preliminary Analysis, besides VCT.SC.I equipment. (Id.
at pp. 9-10)
The survey provided a heat map of design options currently used
across different equipment classes. (Id. at p. 11) AHRI, NAMA, and
NAFEM noted that all members reported using LED lighting and are
unaware of any higher-efficiency lighting that could be incorporated
into their equipment. (Id.) DOE notes that, based on the survey, all
design options besides vacuum-insulated panels are currently used by at
least a small percentage of the market, but many technologies are used
by less than 50 percent of manufacturers surveyed. (See Id.)
AHRI, NAMA, and NAFEM provided a chart asking manufacturers why
certain design options were not used. (Id. at p. 12) The responses
included: ``not economically justified,'' ``reduced utility,'' ``not
technologically feasible, '' ``limited market (not as desireable),''
``already in use to meet current ECS,'' and ``option not available for
this equipment.'' (Id.) AHRI, NAMA, and NAFEM added that the most
common response was that the design options were already in use by
manufacturers, and the second most common response was that those
design options not already in use were not economically justified.
(Id.)
AHRI, NAMA, and NAFEM stated that some manufacturers identified
ways to use design options to meet EL 1-3 proposed in the June 2022
Preliminary Analysis; however, no manufacturers thought EL 4-6 was
feasible for any equipment class. (Id. at p. 14) As a follow up to what
ELs manufacturers thought were appropriate, AHRI, NAMA, and NAFEM
stated that manufacturers responded that a 1-percent increase in energy
efficiency over today's levels would be acceptable, and numerous
responses stated that max tech has already been achieved. (Id. at p.
15)
AHRI, NAMA, and NAFEM commented that manufacturers reported using
the most energy-efficient foam insulation available, with an average K
factor of 0.15. (Id. at p. 19) AHRI, NAMA, and NAFEM stated that
manufacturers primarily use high-pressure, two-component foam systems,
with the remainder using an application technique, such as foam boards
and spray polyurethane foam insulation. (Id.) AHRI, NAMA, and NAFEM
noted that refurbished equipment is not reinsulated to meet the current
standard. (Id.) AHRI, NAMA, and NAFEM also commented that increased
thickness either increases the cabinet footprint or decreases internal
dimensions in cases, making them more costly for consumers, especially
for equipment replacement, which would require a redesign of the
architecture of the store. (Id.) AHRI, NAMA, and NAFEM commented that
survey respondents stated that increased insulation thickness would
require a new foam mixture, as well as tooling and design changes, and
decrease the display/storage area or increase the footprint of the
equipment. (Id. at p. 20)
AHRI, NAMA, and NAFEM noted that survey respondents indicated that
VIPs could not be incorporated into the foam matrix without early
failures, raising concerns that VIPs are not a viable design option.
(Id. at p. 19)
DOE has considered the results of this survey as part of its NOPR
engineering analysis.
2. Cost Analysis
The cost analysis portion of the engineering analysis is conducted
using one or a combination of cost approaches. The selection of cost
approach depends on a suite of factors, including the availability and
reliability of public information, characteristics of the regulated
equipment, and the availability and timeliness of purchasing the
equipment on the market. The cost approaches are summarized as follows:
Physical teardowns: Under this approach, DOE physically
dismantles a commercially available equipment, component by component,
to develop a detailed bill of materials for the equipment.
Catalog teardowns: In lieu of physically deconstructing
equipment, DOE identifies each component using parts diagrams
(available from manufacturer websites or appliance
[[Page 70235]]
repair websites, for example) to develop the bill of materials for the
equipment.
Price surveys: If neither a physical nor catalog teardown
is feasible (e.g., for tightly integrated products such as fluorescent
lamps, which are infeasible to disassemble and for which parts diagrams
are unavailable) or cost-prohibitive and otherwise impractical (e.g.,
large commercial boilers), DOE conducts price surveys using publicly
available pricing data published on major online retailer websites and/
or by soliciting prices from distributors and other commercial
channels.
In the present case, DOE conducted the analysis using physical and
catalog teardowns. See chapter 5 of the NOPR TSD for additional
details.
DOE received several comments in response to the June 2022
Preliminary Analysis related to the manufacturer production costs
(``MPCs'').
NAFEM commented that it compared inflation index and cost model
values in DOE's engineering spreadsheets with ITW's own calculations
for the same values. (NAFEM, No. 40 at p. 5) NAFEM stated that
significant discrepancies existed between DOE's and ITW's calculations
of the inflation index for evaporator and condenser fan motors,
evaporator coil, condenser coil, insulation, and core case cost. (Id.)
NAFEM commented also that it found inaccuracies in DOE's
calculations used for a cost analysis of design-level technology
options. (Id. p. 5) For example, according to NAFEM, the simulated
condenser and evaporator coil costs for self-contained models were off
or low by 250 percent and the costs for evaporator and condenser fan
blades were off by more than 300 percent, having not been updated since
before DOE published the March 2014 Final Rule. (Id.)
NAFEM commented that it reviewed the calculations and assumptions
for DOE's energy analysis at the 16 design option levels, and NAFEM
noted that ITW would supply DOE with a current inflation rate for
review as a cost structure update for 2022. (Id. at pp. 5-6)
NAMA commented that it conducted an analysis of the effect of
present inflation levels on the cost of components, summarizing the
results of its analysis in a table showing the major components in
efficiency compared with cost increases from October 2020 to April 2021
and from October 2021 to April 2022. (NAMA, No. 37 at pp. 13-14) NAMA
recommended that DOE factor in the unprecedented inflation of basic
constituents in CRE machines into the costs shown for design options
and into the economic analysis. (Id. at p. 14)
ITW presented several examples of spreadsheet data comparing the
2014 TSD and June 2022 Preliminary TSD engineering spreadsheets. (ITW,
No. 41 at pp. 36-47) ITW noted that, for all evaluations, MPC appeared
to be down in 2022 relative to the 2014 reference, but the 2022
engineering spreadsheet did not reflect actual market changes, and when
specifications and ordering were held to the 2014 reference, energy was
up. (Id. at p. 37) ITW summarized that, as a result, the 2014 and 2022
engineering spreadsheets did not appear to have a strong correlation.
(Id.)
AHRI commented that the baseline case should be modified to reflect
current market prices, including the use of LEDs and energy-efficient
doors, enhanced frames, and ECM fan motors. (AHRI, No. 46 at p. 6) AHRI
commented that components were incorporated and upgraded to meet DOE's
previous CRE energy-efficiency requirements and that the no-standards-
case efficiency distribution will need to be amended based on those
corrections. (Id.) AHRI stated that prices of various design options
need to be upgraded for the no-standards-case efficiency distribution.
(Id.)
ITW commented that, in DOE's engineering analysis in the June 2022
Preliminary TSD, DOE failed to establish an accurate baseline cost and,
as a result, justification for any change to the MDEC was suspect to
bias and/or error. (ITW, No. 41 at pp. 27-28) ITW commented that costs
have not fallen by 12.4 percent or even remained flat as stated in the
June 2022 Preliminary TSD, section 5.6 Core Case Costs, and that, in
fact, costs have risen by up to 24.9 percent. (Id. at p. 28) ITW
commented that it cannot make determinations or move forward without
correcting the cost issue found in the June 2022 Preliminary TSD,
considering that costs have not gone down since 2013 or 2014. (Id.)
In response to these comments, DOE has updated the NOPR analysis to
reflect current inflation rates (i.e., 2022 dollars) and component and
design option costs based on feedback from commenters, feedback from
manufacturer interviews, a review of market data, and teardowns of
directly analyzed units. See chapter 5 of the NOPR TSD for additional
details.
NAFEM commented that DOE should make it easier for the public to
understand how it calculates possible improvements that reduce energy
consumption. (NAFEM, No. 40 at p. 6) NAFEM identified the costs of
microchannel condenser coils as an example where it believes improved
clarity would be beneficial. (Id.)
With respect to the comment from NAFEM, DOE has further described
the cost and efficiency assumptions for each design option, including
microchannel condensers, in chapter 5 of the NOPR TSD.
NAMA commented that it found errors in the June 2022 Preliminary
TSD for design options as follows: (a) high-efficiency reciprocating
compressor for VCS.SC.M is shown at a cost of $9.23 but for VCT.SC.M it
is shown as $4.01; (b) UA evaporator coil is shown for VCT.SC.H at
$16.01 but for VCT.RC.M is $65.84, for VCS.SC.M is $14.33 and for
VCT.SC.M is $22.90; (c) variable-speed compressor for VCS.SC.M is
$72.54, for VCT.SC.M is $79.27 but for VCT.SC.L is $168.34; and (d) VIG
door for VCT.SC.M is $837.38 but for VCT.RC.M is projected at
$2,095.84. (NAMA, No. 37 at pp. 10-11) NAMA requested DOE's
justification for variations in the cost of the same component and
further stated that this rulemaking should be withdrawn and replaced
with accurate estimates, particularly for machines under 30 cubic feet
in capacity. (Id. at p. 12)
With respect to the comment from NAMA, DOE assigns design
specifications and costs for each equipment class based on a
representative volume or TDA. Therefore, components may be a different
size or capacity than other equipment classes, which likely yields a
different cost. DOE expects that the different representative volumes
or TDAs account for the differences described by NAMA. For example, the
VCT.SC.M primary equipment class analyzed has 2 doors, whereas the
VCT.RC.M primary equipment class analyzed has 5 doors. For more
information on the design option costs, see chapter 5 of the NOPR TSD.
To account for manufacturers' non-production costs and profit
margin, DOE applies a multiplier (the manufacturer markup) to the MPC.
The resulting manufacturer selling price (``MSP'') is the price at
which the manufacturer distributes a unit into commerce. DOE developed
an industry average manufacturer markup by examining the prior CRE
rulemaking and annual Securities and Exchange Commission (``SEC'') 10-K
reports \52\ filed by publicly traded manufacturers primarily engaged
in commercial refrigeration manufacturing and whose combined equipment
range includes CRE. 79 FR 17725, 17758. See section IV.J.2.d of this
[[Page 70236]]
document and chapter 12 of the NOPR TSD for additional information on
the manufacturer markup.
---------------------------------------------------------------------------
\52\ U.S. Securities and Exchange Commission's Electronic Data
Gathering, Analysis, and Retrieval system is available at
www.sec.gov/edgar/searchedgar/companysearch (last accessed March 30,
2023).
---------------------------------------------------------------------------
DOE seeks comment on the method for estimating manufacturing
production costs.
3. Cost-Efficiency Results
The results of the engineering analysis are reported as cost-
efficiency data (or ``curves'') in the form of daily energy consumption
(in kWh) versus MPC (in dollars). DOE developed curves representing the
primary equipment classes. The methodology for developing the curves
started with determining the energy consumption for baseline equipment
and MPCs for this equipment. Above the baseline, design options were
implemented until all available technologies were employed (i.e., at a
max-tech level). See chapter 5 of the NOPR TSD for additional detail on
the engineering analysis and appendix 5B of the NOPR TSD for complete
cost-efficiency results.
In response to the June 2022 Preliminary Analysis, the Joint
Commenters recommended that DOE evaluate additional, intermediate-
efficiency levels for certain equipment classes that fall between the
downstream efficiency levels currently analyzed. (Joint Commenters, No.
39 at p. 4) The Joint Commenters commented that EL 5 for the VCS.SC.M
equipment class is cost effective but EL 6 is not; however, an
intermediate level between EL 5 and EL 6 (a so-called ``EL 5.5'') could
be cost effective. (Id.) The Joint Commenters stated that they provided
a table (table 1) showing examples of classes in which an intermediate
efficiency level may be cost effective. (Id.)
NAMA stated that DOE had requested comments on the design options
for each equipment class, but provided very little information on which
commenters can base comments. (NAMA, No. 37 at p. 10) NAMA provided a
detailed review of each of the design options considered by DOE in
annex A to its comment and commented that DOE estimated that options
AD4, 8, 9, 11, 12, and 13 in table 5.8.8 (results for VCT.SC.M) each
have energy savings of less than 3 percent. (Id. at pp. 10, 21-40) NAMA
further stated that the change suggested by AD4 is not possible. (Id.
at p. 10) NAMA commented that for other options, the savings potential
is very small despite being extremely expensive, even using DOE's
estimates, which NAMA stated are erroneous. (Id.) NAMA stated that it
provided significantly different energy savings and cost estimates that
it believes to be more accurate than those provided by DOE. (Id.)
In response to the comments from the Joint Commenters and NAMA, DOE
updated the EL structure in its NOPR analysis to better reflect the
cost-effective design path that manufacturers can take to achieve the
ELs. DOE notes that design options are typically ordered by cost
effectiveness, which may result in design options with low energy
savings and high costs at the end of the design option order. DOE has
updated the NOPR analysis based on comments received and manufacturer
interview feedback. DOE provides additional details on design options
in chapters 3-5 of the NOPR TSD.
D. Markups Analysis
The markups analysis develops appropriate markups (e.g., wholesaler
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 equipment to cover business costs and profit
margin.
In the June 2022 Preliminary Analysis, DOE considered the following
distribution channels:
1a. Contractor channel with replacement (Manufacturer [rarr]
Wholesaler [rarr] Mechanical Contractor [rarr] Consumer)
1b. Contractor channel with new construction (Manufacturer [rarr]
Wholesaler [rarr] Mechanical Contractor [rarr] General Contractor
[rarr] Consumer)
2. Wholesale channel (Manufacturer [rarr] Wholesaler [rarr]
Consumer)
3. National account channel (Manufacturer [rarr] Consumer).
Following the June 2022 Preliminary Analysis, AHRI suggested that
DOE should revise several channels, create a fourth channel for reused
or refurbished equipment, and refer to consumers as ``end-users''
because the term consumer may imply individuals or families. (AHRI, No.
46 at pp. 3-4) AHRI also recommended DOE to include other CRE purchaser
categories, such as buyer's clubs, restaurant consortiums, food service
consultants, and governmental bids. (Id.). Further, in the Trade
Associations Survey, some manufacturers proposed including an
additional channel under channel 2 for OEM to OEM that ``moves through
a supply chain similarly to a wholesaler.'' (Trade Associations Survey,
No. 50 at p. 24)
In consideration of the AHRI feedback, DOE included an additional
national account channel in which manufacturers sell the equipment to
contractors, who in turn sell the equipment to end users. With regard
to the suggested addition of distribution channels for reused or
refurbished equipment, DOE notes that the markup analysis only pertains
to new equipment purchases; therefore, DOE did not consider such
distribution channels in the markups analysis. However, refurbishments
were considered in the LCC analysis (see section IV.F of this document
for details). In the Trade Associations Survey, no market share inputs
were provided for the OEM-to-OEM channel. As a result, DOE did not
consider this in the final distribution channels. DOE re-estimated the
market shares of distribution channels based on manufacturer inputs
from the Trade Associations Survey. DOE clarifies that it considers all
purchasers of CRE in its analyses and is using the term CRE
``purchaser'' and ``consumer'' interchangeably in this document.
The CA IOUs commented that DOE should separate distribution
channels by condensing unit configuration. (CA IOUs, No. 43 at p. 6)
The CA IOUs stated that there are differences in the sales structure
for remote-condensing and self-contained equipment that necessitate a
separate pricing analysis. (Id.)
DOE acknowledges that equipment with different condensing unit
configurations would have different applications and thus different
sales structures. In the markups analysis, DOE contends that each
equipment type (e.g., display cases and solid-door equipment) consists
of equipment with different condensing unit configurations, and their
relative pricing structures are already reflected through the channels
market shares. For example, the display-case equipment type is
represented by a higher fraction of remote-condensing units used in
large grocery store chains; hence, a greater share of shipments go
through the national account channel, which provides better price
advantages.
DOE developed baseline and incremental markups for each actor in
the distribution chain. Baseline markups are applied to the price of
equipment with baseline efficiency, while incremental markups are
applied to the difference in price between baseline and higher-
efficiency models (the incremental cost increase). The incremental
markup is typically less than the baseline markup and is designed to
maintain similar per-unit
[[Page 70237]]
operating profit before and after new and amended standards.\53\
---------------------------------------------------------------------------
\53\ 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.
---------------------------------------------------------------------------
DOE developed baseline and incremental markups for wholesalers and
contractors using U.S. Census Bureau data from the 2017 Annual
Wholesale Trade Report and the 2017 U.S. Economic Census, respectively.
DOE requests comment on the CRE distribution channels and overall
on the markups analysis.
Chapter 6 of the NOPR TSD provides details on DOE's development of
the markups analysis for CRE.
E. Energy Use Analysis
The purpose of the energy use analysis is to determine the annual
energy consumption of CRE at different efficiencies in representative
U.S. commercial buildings, and to assess the energy savings potential
of increased CRE efficiency. The energy use analysis estimates the
range of energy use of CRE 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.
For CRE, DOE calculated the energy consumption of the equipment as
part of the engineering analysis (see chapter 5 of the NOPR TSD).
DOE requests comment on its approach for the energy use analysis.
Chapter 7 of the NOPR TSD addresses DOE's energy use analysis for
CRE.
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
CRE. The effect of new and amended energy conservation standards on
individual purchasers usually involves a reduction in operating cost
and an increase in purchase cost. DOE used the following two metrics to
measure consumer impacts:
The LCC is the total consumer expense of an equipment over
the life of that equipment, 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 equipment.
The PBP is the estimated amount of time (in years) it
takes consumers to recover the increased purchase cost (including
installation) of more-efficient equipment through lower operating
costs. DOE calculates the PBP by dividing the change in purchase cost
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 CRE in the absence of new and
amended energy conservation standards. In contrast, the PBP for a given
efficiency level is measured relative to the baseline equipment.
For each considered efficiency level in each equipment class, DOE
calculated the LCC and PBP for a nationally representative set of
commercial buildings that use CRE. DOE developed commercial buildings
samples from the DOE EIA's 2018 Commercial Buildings Energy Consumption
Survey (``2018 CBECS'').\54\ DOE divided the 2018 CBECS sample into
building types characterized by their principal building activity
(CBECS variable ``PBA'') using a subset of the data that excluded
vacant buildings. DOE then grouped building types into six categories:
(1) large food sales, (2) small food sales, (3) large food service, (4)
small food service, (5) large other, and (6) small other. DOE defined
small buildings as those less than or equal to 5,000 ft\2\, while large
buildings are defined as those greater than 5,000 ft\2\. For each
sample commercial building, DOE determined the energy consumption and
the appropriate energy price of CRE. By developing a representative
sample of CRE purchasers, the analysis captures the variability in
energy prices associated with the use of CRE.
---------------------------------------------------------------------------
\54\ U.S. Department of Energy--Energy Information
Administration. 2018 Commercial Buildings Energy Consumption Survey
(CBECS). 2018. Available at www.eia.gov/consumption/commercial/data/2018/ (last accessed February 1, 2023).
---------------------------------------------------------------------------
Inputs to the calculation of total installed cost include the cost
of the equipment--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, equipment lifetimes, and discount rates. DOE created
distributions of values for equipment lifetime, discount rates, and
sales taxes, with probabilities attached to each value, to account for
their uncertainty and variability.
The computer model DOE uses to calculate the LCC 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 CRE user samples. For this
rulemaking, DOE conducted probability analyses by randomly sampling
from probability distributions using Python. To calculate the LCC and
PBP for CRE, DOE performed 10,000 Monte Carlo simulations for each
variable. During a single trial, random values are selected from the
defined probability distributions for each variable, which enables the
estimation of LCC and PBP with uncertainty evaluation. 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 purchaser, equipment efficiency
is chosen based on its probability. If the chosen equipment efficiency
is greater than or equal to the efficiency of the standard level under
consideration, the LCC calculation reveals that a consumer is not
impacted by the standard level. By accounting for consumers who already
purchase more-efficient equipment, DOE avoids overstating the potential
benefits from increasing equipment efficiency.
DOE calculated the LCC and PBP for consumers of CRE as if each were
to purchase new equipment in the expected year of required compliance
with new and amended standards. New and amended standards would apply
to CRE manufactured 3 years after the date on which any new and amended
standards are published. (42 U.S.C. 6313(c)(6)(C)(i). At this time, DOE
estimates publication of a final rule in the second half of 2024.
Therefore, for purposes of its analysis, DOE used 2028 as the first
full year of compliance with any amended standards for CRE.
Table IV.9 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 Python model,
[[Page 70238]]
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.9--Summary of Inputs and Methods for the LCC and PBP Analysis *
----------------------------------------------------------------------------------------------------------------
Inputs Source/method
----------------------------------------------------------------------------------------------------------------
Equipment Cost......................................... Derived by multiplying MPCs by manufacturer and
retailer markups and sales tax, as appropriate. Apply
price learning between present (2022) and compliance
year (2028) for LED lighting and variable-speed
compressor electronics, using historical data to
derive a price scaling index to project equipment
costs for those components.
Installation Costs..................................... Assumed not to change with efficiency level and,
therefore, not considered in the LCC and PBP analyses.
Annual Energy Use...................................... Obtained from the test procedure for each equipment
class at each considered efficiency level.
Energy Prices.......................................... Electricity: Edison Electric Institute Typical Bills
and Average Rates reports.
Variability: Regional energy prices across nine census
divisions.
Energy Price Trends.................................... Based on AEO2023 \55\ price projections.
Repair and Maintenance Costs........................... Material costs derived from the engineering analysis
and labor costs derived from RS Means 2023. Assumed
additional labor time for maintaining equipment with
microchannel heat exchangers; considered replacement
of LED lighting, evaporators, condensers, and
compressors; assumed LED lighting repair frequency
decreases due to the presence of occupancy sensor.
Equipment Lifetime..................................... Average: 10 years for large businesses and 20 years for
small buildings.
Discount Rates......................................... Approach involves identifying all possible debt or
asset classes that might be used to purchase the
considered equipment or might be affected indirectly.
Primary data source was the Federal Reserve Board's
Survey of Consumer Finances.
Compliance Date........................................ 2028.
----------------------------------------------------------------------------------------------------------------
* Not used for PBP calculation. 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.
1. Equipment Cost
---------------------------------------------------------------------------
\55\ For further information, see the Assumptions to AEO2023
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 March 30, 2023).
---------------------------------------------------------------------------
To calculate consumer equipment costs, DOE multiplied the MPCs
developed in the engineering analysis by the markups described
previously (along with sales taxes). DOE used different markups for
baseline equipment and higher-efficiency equipment because DOE applies
an incremental markup to the increase in MSP associated with higher-
efficiency equipment.
DOE used a price learning analysis to account for changes in LED
lamp prices that are expected to occur between the time for which DOE
has data for lamp prices (2022) and the assumed compliance date of the
rulemaking (2028). See chapter 8 of the NOPR TSD for more details on
how price learning for LED lighting was applied.
In response to the June 2022 Preliminary Analysis, the Joint
Commenters noted that while DOE included price trends for lighting
design options, other design options, such as variable-speed
compressors and high-efficiency fans were not included, and the Joint
Commenters encouraged DOE to incorporate price trends for additional
CRE design options. (Joint Commenters, No. 39 at p. 5)
As discussed in section IV.C of this document, DOE included
variable-speed compressors as a technology option for higher efficiency
levels in certain equipment classes. To develop future prices specific
for that technology, DOE applied a different price trend to the
electronic control board of the variable-speed compressor. DOE
estimated that the cost of that control board was 50 percent of the
cost of the variable frequency drive (``VFD'') included in the variable
speed compressor. DOE used Producer Price Index (``PPI'') data on
``semiconductors and related device manufacturing'' between 1967 and
2021 to estimate the historic price trend of electronic components in
the control.\56\ The regression, performed as an exponential trend line
fit, results in an R-square of 0.99, with an annual price decline rate
of 6.5 percent. See chapter 8 of the TSD for further details on this
topic.
---------------------------------------------------------------------------
\56\ Semiconductors and related device manufacturing PPI series
ID: PCU334413334413; www.bls.gov/ppi/.
---------------------------------------------------------------------------
DOE requests comment on its price learning assumptions and
methodology.
2. Installation Cost
Installation cost includes labor, overhead, and any miscellaneous
materials and parts needed to install the equipment.
In response to the June 2022 Preliminary Analysis, the CA IOUs
commented that DOE overestimated installation costs for self-contained
equipment compared to remote condensing equipment. (CA IOUs, No. 43 at
p. 7) DOE notes that, in the LCC and PBP, such costs were assumed not
to vary by EL within the same equipment class, and, therefore, were not
considered in the June 2022 Preliminary Analysis.
AHRI commented that more efficient equipment can be more expensive
to install and may require more time to set up due to additional
programming, equipment size changes with type of insulation used, and
technician training. (AHRI, No. 46 at p. 5) Thus, AHRI concluded that
installation cost may change with efficiency level. (Id.) Similarly,
AHRI, NAMA, and NAFEM commented that adding components to CRE and
increasing their energy efficiency would lead to increased installation
costs due to additional programing time and floor space rearrangement
needs. (Trade Associations Survey, No. 50 at p. 25) AHRI, NAMA, and
NAFEM also stated that technicians require additional technical
training to install such equipment. (Id.)
In response to these comments, DOE found no evidence that any of
the analyzed design options considered in this NOPR require additional
installation time. DOE estimates that installation workers may already
have the required skills to install the analyzed design options or
would adjust their labor rates equally across all efficiency levels if
necessary skills are lacking. Therefore, as in the June 2022
Preliminary Analysis, DOE assumed that installation costs do not vary
by efficiency level (within the same equipment class) and did not
account for installation costs in the LCC and PBP analyses.
[[Page 70239]]
DOE requests comment and data to inform how any of the analyzed
design options would require additional installation time, training, or
other related skills compared to the baseline equipment.
3. Annual Energy Consumption
For each equipment class, DOE determined the annual energy
consumption for each sample equipment user of CRE at different
efficiency levels using the approach described in section IV.E of this
document.
4. Energy Prices
Because marginal electricity price more accurately captures the
incremental savings associated with a change in energy use from higher
efficiency, it provides a better representation of incremental change
in consumer costs than average electricity prices. Therefore, DOE
applied average electricity prices for the energy use of the equipment
purchased in the no-new-standards case, and marginal electricity prices
for the incremental change in energy use associated with the other
efficiency levels considered.
DOE derived electricity prices in 2022 for each census division
using data from Edison Electric Institute (``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 commercial sector, DOE calculated electricity
prices using the methodology described in Coughlin and Beraki
(2019).\57\
---------------------------------------------------------------------------
\57\ Coughlin, K. and B. Beraki. 2019. Non-residential
Electricity Prices: A Review of Data Sources and Estimation Methods.
Lawrence Berkeley National Lab. Berkeley, CA. Report No. LBNL-
2001203. Available at ees.lbl.gov/publications/non-residential-electricity-prices (last accessed March 9, 2023).
---------------------------------------------------------------------------
DOE's methodology allows electricity prices to vary by sector,
region, and season. In the analysis, variability in electricity prices
is chosen to be consistent with the way the consumer economic and
energy use characteristics are defined in the LCC analysis. For CRE,
DOE calculated weighted-average values for average and marginal price
for the nine census divisions for the commercial sector for both large-
size (greater than 5,000 ft\2\) and small-size (less than 5,000 ft\2\)
buildings. As the EEI data are published separately for summer and
winter, DOE calculated seasonal prices for each division and sector.
Each EEI utility in a given region was assigned a weight based on the
number of consumers it serves. DOE adjusted these regional weighted-
average prices to account for systematic differences between investor-
owned utilities (``IOUs'') and publicly owned utilities (``POUs''), as
the latter are not included in the EEI data set. See chapter 8 of the
NOPR TSD for details.
To estimate energy prices in future years, DOE multiplied the 2022
energy prices by the projection of annual average price changes for
each of the nine census divisions from the Reference case in AEO2023,
which has an end year of 2050.\58\ To estimate price trends after 2050,
a simple average of the 2046-2050 values was used for 2051 and all
subsequent years.
---------------------------------------------------------------------------
\58\ EIA. Annual Energy Outlook 2023. Available at www.eia.gov/outlooks/aeo/ (last accessed March 28, 2023).
---------------------------------------------------------------------------
5. Repair and Maintenance Costs
Repair costs are associated with repairing or replacing equipment
components that have failed in an appliance or equipment; maintenance
costs are associated with maintaining the operation of the equipment.
Typically, small incremental increases in equipment efficiency entail
no, or only minor, changes in repair and maintenance costs compared to
baseline efficiency equipment. DOE does not account for lost time when
CRE fails or breaks, as DOE does not have data indicating how that
would affect outcomes considered in the LCC, such as operating cost. In
the June 2022 Preliminary Analysis, DOE calculated repair costs by
considering the typical failure rate of refrigeration system components
(compressor, lighting, and evaporator and condenser fan motors),
component MPCs and associated markups, and the labor cost of repairs,
which is assumed to be performed by private vendors. As discussed in
sections 8.3.3 and 8.3.4 of the June 2022 Preliminary Analysis TSD, DOE
considered the following specific CRE components and associated failure
probabilities during typical CRE lifetime in its repair cost approach:
compressor (25 percent), evaporator fan motor (50 percent), condenser
fan motor (25 percent), and LED lighting (100 percent), with the
presence of occupancy sensors decreasing LED lighting repair frequency
by half.
In response to the June 2022 Preliminary Analysis, Continental
commented that microchannel condenser coils require more frequent
cleaning due to the accumulation of debris and are more susceptible to
corrosion and leaks, which often requires replacement. (Continental No.
38 at p. 2) And AHRI stated that microchannel condenser coils require
more frequent cleaning. (AHRI, No. 46 at pp. 5-6)
In response to these comments regarding the impact of microchannel
condenser coils on repair and maintenance costs and based on feedback
from manufacturer interviews, DOE agrees with commenters that
microchannel condenser coils are subject to more accumulation of
debris, which may result in extended cleaning time. However, DOE found
no evidence that microchannel condenser coils may be more susceptible
to corrosion and leaks, or that these problems are not repairable with
similar labor and material inputs as baseline units. Accordingly, DOE
has updated its maintenance costs of equipment with microchannel
condenser coils to account for an additional 10 minutes of annual
cleaning.
Continental commented that controls for defrost, lighting, and
anti-sweat heaters can be challenging for technicians to diagnose and
fix, leading to additional labor time and material replacement costs.
(Continental No. 38 at p. 2) AHRI, NAMA, and NAFEM commented that
adding higher-efficiency CRE components leads to increased repair and
maintenance costs due to the component purchase price and labor time.
(Trade Associations Survey, No. 50 at p. 26)
With respect to the comments from Continental and AHRI, NAMA, and
NAFEM, DOE clarifies that neither vacuum-insulated panels nor controls
for defrost and anti-sweat heaters are considered design options. DOE
did not consider preventative maintenance for other design options,
such as lighting occupancy sensors and night curtains, because DOE
assumed they have similar average lifetimes to the equipment in which
they are installed.
AHRI commented that additional labor costs should be considered for
flammable refrigerants. (AHRI, No. 46 at p. 15) AHRI, NAMA, and NAFEM
commented that equipment using alternative refrigerants (R-290) should
have higher repair costs because leaks are harder to detect. (Trade
Associations Survey, No. 50 at p. 26) DOE reiterates in response that
equipment classes are analyzed individually and all analyzed self-
contained equipment classes use R-290, so there are no refrigerant
changes by efficiency level.
AHRI commented that labor shortages have caused an increase in
servicing costs. (AHRI, No. 46 at p. 15) AHRI, NAMA, and NAFEM
commented that there is a shortage of qualified service technicians for
CRE in the United States
[[Page 70240]]
and higher standards would exacerbate the issue and lead to longer
equipment downtimes for food retailers. (Trade Associations Survey, No.
50 at p. 30) In response to these comments, DOE clarifies that short-
term labor supply variations are not included in its analysis because
economic theory maintains that labor markets are expected to adjust in
the long-term period considered in the LCC analysis.
DOE requests comment and data on its assumptions and approach
regarding consideration of repair and maintenance costs in the LCC and
PBP analyses. Specifically, DOE requests data on the expected lifetimes
and repair and maintenance frequencies of the considered design options
in this NOPR.
6. Equipment Lifetime
DOE used a lifetime distribution to characterize the probability
that CRE will be retired from service at a given age. For the June 2022
Preliminary Analysis, consistent with the approach followed in the
March 2014 Final Rule, which was based on discussions with industry
experts, DOE had assumed that lifetime of CRE is correlated to the
frequency of store renovations. DOE had also estimated an average
lifetime of 10 years for all large-size and small food-service
buildings and 15 years for small food-sales buildings, and other
businesses with CRE (per the CBECS sample) correlating such buildings
with businesses that may have longer renovation cycles, such as
independent grocery stores.\59\ DOE also assumed that the probability
function for the annual survival of CRE would take the form of a
Weibull distribution. A Weibull distribution is a probability
distribution commonly used to measure failure rates.\60\ Further, in
the June 2022 Preliminary Analysis, due to lack of data to suggest
otherwise, DOE had assumed that retired but functional CRE had low
salvage value and that the refurbished/used market for CRE was
negligible. Therefore, DOE had not considered such CRE in the LCC
analysis.
---------------------------------------------------------------------------
\59\ See section 8.3.5 of the June 2022 Preliminary Analysis TSD
and section 8.2.3.5 of the March 2014 Final Rule TSD for details.
\60\ Weibull distributions are commonly used to model appliance
lifetimes.
---------------------------------------------------------------------------
In response to the June 2022 Preliminary Analysis, AHRI commented
that smaller businesses use their equipment for 15-25 years due to the
cost of upgrading. (AHRI, No. 46 at p. 6) AHRI added that, in some
cases, compressor racks may be used for 30-40 years, while display
cases are switched out once during this time. (Id.) AHRI commented that
businesses replacing CRE may also buy used equipment or ``reskin''
equipment by changing out sheet metal panels and bumpers. (Id.) NAMA
recommended that DOE estimate the number of refurbished machines with
an increased energy usage versus refurbished energy-compliant ones.
(NAMA, No. 37 at p. 16)
Based on these comments, DOE has adjusted the mean lifetime
distribution assumption for CRE to 10 years for large-size buildings
and 20 years for small-size buildings, with a maximum lifetime of 40
years for each. DOE clarifies that it does not analyze the energy use
of refurbished CRE because such equipment is not subject to new
standards. However, DOE accounted for purchasers who sell their CRE to
a refurbisher before the end of the equipment lifetime, by assigning a
credit equivalent to the residual value of the used equipment at the
selling year. See the following section (IV.F.7) for details on the
residual value approach.
DOE requests comment and data regarding the CRE lifetime
assumptions and methodology.
See chapter 8 of the NOPR TSD for more information.
7. Residual Value
To model the phenomenon of CRE sold for refurbishment, DOE utilized
a residual value for such equipment in the LCC. The residual value
represents the remaining dollar value of surviving CRE at the average
age of refurbishment, estimated to be 5 years for small-size food
service buildings (e.g., restaurants) and 10 years for small-size food
sales and other commercial buildings. To account for the value of CRE
with remaining life to the consumer, the LCC model applies this
residual value as a ``credit'' at the end of the CRE lifetime and
discounts it back to the start of the analysis period. Per manufacturer
feedback, this was only applied to a fraction of self-contained CRE in
small buildings, totaling about 10 percent of all CRE in the LCC
sample.
DOE requests comment and data on the assumed business types and the
corresponding CRE lifetimes at which refurbishment may occur.
8. Discount Rates
In the calculation of LCC, DOE applies discount rates appropriate
to commercial consumers to estimate the present value of future
operating cost savings.
For purchasers of CRE in the commercial sector, 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 commercial discount rates, with Damodaran Online being the
primary data source.\61\ The weighted-average discount rates for the
commercial sector for CRE is 6.4 percent.
---------------------------------------------------------------------------
\61\ Damodaran, A. Data: Cost of Capital by Industry Sector,
United States. 2023. (Last accessed March 1, 2023.) http://
pages.stern.nyu.edu/~adamodar/.
---------------------------------------------------------------------------
See chapter 8 of the NOPR TSD for further details on the
development of 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 equipment efficiencies under the no-
new-standards case (i.e., the case without amended or new energy
conservation standards).
To estimate the energy efficiency distribution of CRE for 2028, DOE
used test data, feedback from manufacturer interviews, surveys (see
Trade Associations Survey, No. 50), and the Single Compartment
Commercial Refrigeration Equipment data from DOE's CCMS, accessed in
March 2023.\62\ As discussed in the engineering analysis, DOE assumed
that all manufacturers will switch to R-290 in response to the December
2022 EPA NOPR, a proposed rule to restrict use of certain HFC
refrigerants in specific equipment, including CRE. The EPA compliance
date is 2025, which is earlier than the expected DOE CRE ECS compliance
date of 2028. This approach reduces the potential maximum energy
savings below the baseline compared to the June 2022 Preliminary
Analysis.
---------------------------------------------------------------------------
\62\ U.S. Department of Energy. Compliance Certification
Management System (CCMS) for Refrigeration Equipment--Commercial,
Single Compartment. Available at www.regulations.doe.gov/certification-data/CCMS-4-Refrigeration_Equipment_-_Commercial__Single_Compartment.html#q=Product_Group_s%3A%22Refrigeration%20Equipment%20-%20Commercial%2C%20Single%20Compartment%22 (last
accessed April 4, 2023).
---------------------------------------------------------------------------
To create a robust sample for the energy efficiency distribution
used in the LCC analysis, DOE grouped the 28 CRE equipment classes into
21 separate groups. For the equipment classes that DOE relied on CCMS
model count data
[[Page 70241]]
to formulate the efficiency distributions, this approach was used to
allow equipment classes with a limited sample to share the efficiency
distribution of a group of similar classes with a larger sample in the
CCMS. DOE compared energy use data from the CCMS with energy use
equations from the engineering analysis to derive model counts at each
efficiency level. Equipment classes whose efficiency distributions were
derived from aggregated data from manufacturer interviews, surveys, and
test data were assigned their own groups. The estimated market shares
for the no-new-standards case for CRE and the corresponding groupings
are shown in table IV.10. See chapter 8 of the NOPR TSD for further
information on the derivation of the efficiency distributions.
In response to the June 2022 Preliminary Analysis, Continental
commented that DOE's approach to derive the no-standards-case
efficiency distribution by relying on manufacturer model counts in the
CCMS database is erroneous. (Continental, No. 38 at p. 2) Continental
stated that model counts in DOE's CCMS do not reflect sales or market
share, but rather the variety of different models that manufacturers
offer. (Id.)
For this NOPR, as discussed in previous sections, DOE was able to
conduct manufacturer interviews and collect shipments data for several
equipment classes. The equipment classes for which data was collected
account for 85 percent of total shipments and are marked with an
asterisk in table IV.10. For the remainder of the equipment classes for
which DOE was not able to collect representative shipments data from
manufacturers, DOE utilized the CCMS database to estimate the no-new-
standards-case efficiency distribution.
Table IV.10--No-New-Standards Case Efficiency Distributions in 2028
--------------------------------------------------------------------------------------------------------------------------------------------------------
Market share by efficiency level
Equipment class Group ---------------------------------------------------------------------------------------
EL 0 (%) EL 1 (%) EL 2 (%) EL 3 (%) EL 4 (%) EL 5 (%) EL 6 (%) EL 7 (%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
VOP.RC.M............................................. 1 73 27 0 ......... ......... ......... ......... .........
VOP.RC.L............................................. 1 73 27 0 ......... ......... ......... ......... .........
VOP.SC.M *........................................... 2 86 5 4 0 0 5 ......... .........
VCT.RC.M............................................. 3 93 1 6 0 0 ......... ......... .........
VCT.RC.L............................................. 3 93 1 6 0 ......... ......... ......... .........
VCT.SC.H *........................................... 4 60 15 17 5 0 0 0 3
VCT.SC.M *........................................... 5 48 17 17 1 0 0 17 0
VCT.SC.L*............................................ 6 35 5 0 50 0 0 10 0
VCT.SC.I............................................. 7 44 19 27 10 0 ......... ......... .........
VCS.SC.H *........................................... 8 70 30 0 0 0 0 0 0
VCS.SC.M *........................................... 9 71 8 2 11 3 5 ......... .........
VCS.SC.L*............................................ 10 77 8 0 1 14 0 0 .........
VCS.SC.I............................................. 11 100 0 0 0 0 0 0 .........
SVO.RC.M............................................. 12 76 24 0 ......... ......... ......... ......... .........
SVO.SC.M............................................. 13 66 2 2 8 8 2 1 10
SOC.RC.M............................................. 14 98 1 1 0 0 ......... ......... .........
SOC.SC.M............................................. 15 36 7 9 6 15 0 2 25
HZO.RC.M............................................. 16 100 0 ......... ......... ......... ......... ......... .........
HZO.RC.L............................................. 16 100 0 ......... ......... ......... ......... ......... .........
HZO.SC.M............................................. 17 81 4 15 0 0 0 ......... .........
HZO.SC.L............................................. 17 81 4 15 0 0 0 ......... .........
HCT.SC.M............................................. 18 72 6 0 9 2 0 2 9
HCT.SC.L............................................. 18 72 6 0 9 2 0 2 9
HCT.SC.I............................................. 18 72 6 0 9 2 0 2 9
HCS.SC.M............................................. 19 88 12 0 0 ......... ......... ......... .........
HCS.SC.L............................................. 19 88 12 0 0 ......... ......... ......... .........
CB.SC.M *............................................ 20 50 40 10 0 0 0 0 .........
CB.SC.L *............................................ 21 70 30 0 0 0 0 0 .........
--------------------------------------------------------------------------------------------------------------------------------------------------------
* The distributions for these equipment classes were derived from aggregated data from the Trade Associations Survey, test data, and manufacturer
interview data.
The LCC Monte Carlo simulations draw from the efficiency
distributions and randomly assign an efficiency to the CRE purchased by
each sample CRE purchaser in the no-new-standards case. The resulting
percent shares within the sample match the market shares in the
efficiency distributions.
While DOE acknowledges that economic factors may play a role when
consumers purchase CRE, assignment of CRE 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 in the commercial sector with respect to energy
efficiency are unlikely to be perfectly correlated with energy use. One
study in particular showed evidence of substantial gains in energy
efficiency that could have been achieved without negative repercussions
on profitability, but the investments had not been undertaken by
firms.\63\ The study found that multiple organizational and
institutional factors caused firms to require shorter payback periods
and higher returns than the cost of capital for alternative investments
of similar risk. A number of other case studies similarly demonstrate
the existence of market failures preventing the adoption of energy-
efficient technologies in a variety of commercial sectors around the
world, including
[[Page 70242]]
office buildings,\64\ supermarkets,\65\ and the electric motor
market.\66\
---------------------------------------------------------------------------
\63\ DeCanio, S.J. (1998). ``The Efficiency Paradox:
Bureaucratic and Organizational Barriers to Profitable Energy-Saving
Investments,'' Energy Policy, 26(5), 441-454.
\64\ Prindle 2007, op. cit. Howarth, R.B., Haddad, B.M., and
Paton, B. (2000). ``The economics of energy efficiency: insights
from voluntary participation programs,'' Energy Policy, 28, 477-486.
\65\ Klemick, H., Kopits, E., Wolverton, A. (2017). ``Potential
Barriers to Improving Energy Efficiency in Commercial Buildings: The
Case of Supermarket Refrigeration,'' Journal of Benefit-Cost
Analysis, 8(1), 115-145.
\66\ de Almeida, E.L.F. (1998), ``Energy efficiency and the
limits of market forces: The example of the electric motor market in
France'', Energy Policy, 26(8), 643-653. Xenergy, Inc. (1998),
United States Industrial Electric Motor Systems Market Opportunity
Assessment (Available at: www.energy.gov/sites/default/files/2014/04/f15/mtrmkt.pdf) (Last accessed Jan. 3, 2023).
---------------------------------------------------------------------------
DOE requests comment on its methodology and data to better inform
the no-standards-case efficiency distribution for CRE.
10. Payback Period Analysis
The payback period is the amount of time (expressed in years) it
takes the consumer to recover the additional installed cost of more
efficient equipment, compared to baseline equipment, through energy
cost savings. Payback periods that exceed the life of the equipment
mean that the increased total installed cost is not recovered in
reduced operating expenses.
The inputs to the PBP calculation for each efficiency level are the
change in total installed cost of the equipment and the change in the
first-year annual operating expenditures relative to the baseline. DOE
refers to this as a ``simple PBP'' because it does not consider changes
over time in operating cost savings. The PBP calculation uses the same
inputs as the LCC analysis when deriving first-year operating costs.
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 equipment 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.
6316(e)(1); 42 U.S.C. 6295(o)(2)(B)(iii)). For each considered
efficiency level, 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 new and amended standards would be required.
G. Shipments Analysis
DOE uses projections of annual equipment shipments to calculate the
national impacts of potential amended or new energy conservation
standards on energy use, NPV, and future manufacturer cash flows.\67\
The shipments model takes an accounting approach, tracking market
shares of each equipment class and the vintage of units in the stock.
Stock accounting uses equipment shipments as inputs to estimate the age
distribution of in-service equipment stocks for all years. The age
distribution of in-service equipment stocks is a key input to
calculations of both the NES and NPV, because operating costs for any
year depend on the age distribution of the stock.
---------------------------------------------------------------------------
\67\ 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.
---------------------------------------------------------------------------
The shipments analysis projects units of open and closed
refrigeration cases sold in future years in each of food sales, food
service, and all other applications combined. These equipment
classifications and applications are defined in EIA's 2018 CBECS. DOE
estimates demand for these equipment categories in these applications
by calculating demand coming from new construction as well as the
replacement of retiring units, for each year.
To calculate new demand for these equipment classes in each
application, DOE combined new and existing floorspace projections from
AEO2023 with saturation estimates based on 2018 CBECS and AEO2023.
Shipments to meet this demand for these CRE equipment categories in
each application are then disaggregated across the analyzed CRE
classes, using fixed market shares derived from data collected during
manufacturer interviews.
To compute demand for replacements, DOE used the lifetime
distributions determined in the LCC analysis, which estimates an
average lifetime of 10 years for large grocery/multi-line stores (food-
sales buildings) and restaurants (food-service buildings), and an
average lifetime of 20 years for small food-sales and food-service
buildings, with a maximum lifetime of 40 years for all equipment. In
each analysis year of the model, DOE calculated retirements across the
distribution to compute all demand arising from the retirements.
In response to the June 2022 Preliminary Analysis, AHRI stated that
significantly higher-cost equipment would drive growth of the
refurbished equipment market and lead to continued use of older
equipment with lower efficiencies and higher GWP refrigerants. (AHRI,
No. 46 at p. 15) As discussed in section IV.F.6 of this NOPR, DOE
revised its assumptions of lifetime of equipment for small buildings
from 15 years at the stage of the preliminary analysis to 20 years in
this NOPR. To account for the use of refurbished equipment, DOE assumed
an elasticity effect for a fraction of the CRE shipments, which is
limited to small-size buildings. DOE applied an elasticity constant of
-0.5 to shipments for small-size buildings and scaled this constant
down to -0.15 over a period of 20 years (then constant thereafter) from
the current year of calculations.
DOE requests comment on the price elasticity assumptions for the
CRE shipments analysis as they relate to the overall CRE market and the
market for refurbished CRE.
AHRI stated that DOE incorrectly estimated the number of existing
units in use, as well as their average lifespan and noted that there
are significantly more units in current use than DOE estimated. (Id. at
p. 7). In response, DOE notes that it collected shipments data during
manufacturer interviews and re-estimated the market shares for each
equipment class based on the collected data. DOE then used the shipment
and stock estimates from the floorspace and saturations calculations
and scaled them to the data obtained from the manufacturers for the
year 2022. DOE notes that, due to lack of shipments data for some
equipment classes with a small market share, DOE estimated their
shipments based on other equipment classes with similar characteristics
for those equipment classes. For example, in this NOPR, DOE assumed
that shipments of VCT.SC.H are one percent of VCT.SC.I and that
shipments for HZO.SC.M are equivalent to HZO.SC.L. More information on
these assumptions can be found in chapter 9 of the NOPR TSD. DOE also
compared its shipments data with the numbers provided by ENERGY STAR in
its unit shipment and market penetration report for the calendar year
2021.\68\ DOE's shipment results are generally consistent with the
figures provided by ENERGY STAR,
[[Page 70243]]
which reported 50-percent market penetration for the reported year.
---------------------------------------------------------------------------
\68\ ENERGY STAR[supreg]. ENERGY STAR[supreg] Unit Shipment and
Market Penetration Report Calendar Year 2021 Summary. 2021. U.S.
Environmental Protection Agency and U.S. Department of Energy. (Last
accessed April 11, 2022.) https://energystar.gov/sites/default/files/asset/document/2021%20Unit%20Shipment%20Data%20Summary%20Report_0.pdf.
---------------------------------------------------------------------------
Historically, the annual amount of CRE capacity shipped has been
depicted in linear feet, which is also an alternative way to express
shipments data. DOE determined the linear feet shipped for any given
year by multiplying each unit shipped by its associated average length
and then summing all the linear footage values. Chapter 9 of the NOPR
TSD presents the representative equipment-class lengths used for the
conversion of per-unit shipments to linear footage within each
equipment class.
AHRI commented that changes to market shares would result in
corresponding changes to shipping methodologies and added that some of
the imposed requirements would cause retailers to favor open cases, or
to take doors off completely. (AHRI, No. 46 at pp. 7-8) AHRI added that
the impact of pending refrigerant regulations is unknown. (Id. at p. 8)
AHRI also stated that because door cases have a greater maximum
allowable charge compared to cases with doors, customers wishing to use
A2L refrigerants may choose to use larger commercial refrigerators
without doors. (Id. at p. 8) In response to these comments, DOE did not
find any significant shift from closed cases to open cases or vice
versa. The ratio between closed cases and open cases is approximately
93 percent and 7 percent respectively, as derived from manufacturer
provided data for the year 2022. Based on these data, DOE concluded
that any shift in the market may already have occurred and currently
DOE does not anticipate any new market trends in this direction.
AHRI shared, in response to DOE's inquiring about market trends in
the June 2022 Preliminary Analysis, that architecture in facilities is
anticipated to change due to the refrigerant transition. (AHRI, No. 46
at p. 7) AHRI added that these changes are due in part to the lack of
available refrigerants and the likely consequent growth in market share
in self-contained and smaller units. (Id.) AHRI commented that a great
deal of uncertainty exists about this direction. (Id.) DOE appreciates
AHRI's comments and continues to request information on market trends
and shipments data to better inform the shipments analysis.
Chapter 9 of the NOPR TSD provides additional details regarding the
shipments analysis.
H. National Impact Analysis
The NIA assesses the NES and the NPV from a national perspective of
total consumer costs and savings that would be expected to result from
new and amended standards at specific efficiency levels.\69\
(``Consumer'' in this context refers to consumers of the equipment
being regulated.) DOE calculates the NES and NPV for the potential
standard levels considered based on projections of annual equipment
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,
equipment costs, and NPV of consumer benefits over the lifetime of CRE
sold from 2028 through 2057.
---------------------------------------------------------------------------
\69\ The NIA accounts for impacts in the 50 States and U.S.
territories.
---------------------------------------------------------------------------
DOE evaluates the impacts of new and 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
equipment class in the absence of new and 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 equipment class if DOE
adopted new and 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 equipment with efficiencies greater than the standard.
DOE utilized the Python programming language for its shipments'
analysis. The final results of the shipments analysis are available in
the NIA spreadsheet developed for this analysis, accessible at
www.regulations.gov/docket/EERE-2017-BT-STD-0007. 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.11 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.11--Summary of Inputs and Methods for the National Impact
Analysis
------------------------------------------------------------------------
Inputs Method
------------------------------------------------------------------------
Shipments..................... Annual shipments from shipments model.
Compliance Date of Standard... 2028.
Efficiency Trends............. N/A (No efficiency trends were applied).
Annual Energy Consumption per Expressed as a function of energy use at
Unit. each TSL.
Total Installed Cost per Unit. Expressed as a function of cost at each
TSL.
Incorporates projection of future
equipment prices.
Annual Energy Cost per Unit... Annual weighted-average values as a
function of the annual energy
consumption per unit and energy prices.
Repair and Maintenance Cost Annual, weighted-average values from the
per Unit. LCC model.
Energy Price Trends........... AEO2023 projections (to 2050) and
extrapolation thereafter.
Energy Site-to-Primary and FFC A time-series conversion factor based on
Conversion. AEO2023.
Discount Rate................. 3 percent and 7 percent.
Present Year.................. 2023.
------------------------------------------------------------------------
1. Equipment Efficiency Trends
A key component of the NIA is the trend in energy efficiency
projected for the no-new-standards case and each of the standards
cases. Section IV.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 equipment classes for the first full year of anticipated
compliance (2028) with an amended or new standard.
[[Page 70244]]
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 (2028). In this scenario, the market
shares of equipment 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 equipment 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 equipment class, market shares by
efficiency level were held fixed to their estimated distribution in
2028.\70\
---------------------------------------------------------------------------
\70\ DOE notes that, as discussed in section IV.C.1.a.i of this
document, DOE has accounted for CRE efficiency trends by assuming
that all self-contained units will have transitioned to R-290
(propane) by 2028.
---------------------------------------------------------------------------
DOE requests comment on its assumption of no efficiency trend for
CRE and seeks historical CRE efficiency data, ideally by equipment
class or alternatively by equipment family, or overall for the CRE
market as a whole.
2. National Energy Savings
The national energy savings analysis involves a comparison of
national energy consumption of the considered equipment between each
potential standards case and the case with no new and amended energy
conservation standards. DOE calculated the national energy consumption
by multiplying the number of units (stock) of each equipment (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
AEO2023. Cumulative energy savings are the sum of the NES for each year
over the timeframe of the analysis.
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 document, 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 \71\
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.
---------------------------------------------------------------------------
\71\ For more information on NEMS, refer to The National Energy
Modeling System: An Overview 2009, DOE/EIA-0581(2009), October 2009.
Available at www.eia.gov/forecasts/aeo/index.cfm (last accessed
March 9, 2023).
---------------------------------------------------------------------------
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
equipment shipped during the projection period.
As discussed in section IV.F.1 of this document, DOE developed
price trends for CRE with variable speed compressors and CRE with LED
lighting. DOE applied the same trends to project component prices for
each representative unit of each equipment class containing variable
speed compressors and/or LED lighting. By 2057, which is the end date
of the projection period, the average CRE LED lighting price is
expected to drop by approximately 25 percent, while the average price
of variable speed compressors is expected to drop by approximately 42
percent, relative to projected 2028 prices. Because these component
prices do not typically contribute substantively to the overall price
of equipment, overall equipment prices are projected to decrease by at
most 7 percent by 2057 relative to 2028. The price of equipment at the
current baseline efficiency level is expected to drop by at most 3
percent in the same period. For details on the price learning
methodology and assumptions, see chapter 8 of the NOPR TSD.
The energy cost savings 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 commercial energy price changes in the Reference case from
AEO2023, which has an end year of 2050. To estimate price trends after
2050, the 2046-2050 average was used for all years. To estimate repair
and maintenance costs, DOE considered the typical failure rate of
refrigeration system components, component MPCs and associated markups,
and the labor cost of repairs. As part of the NIA, DOE also analyzed
scenarios that used inputs from variants of the AEO2023 Reference case
that have lower and higher economic growth. Those cases have lower and
higher energy price trends and stock compared to the Reference case.
NIA results based on these cases are presented in appendix 10C of the
NOPR TSD.
Use of higher-efficiency equipment is occasionally associated with
a direct rebound effect, which refers to an increase in utilization of
the equipment due to the increase in efficiency. DOE did not find any
data on the rebound effect specific to CRE that would indicate that
end-users or CRE purchasers would alter the utilization of their
equipment as a result of an increase in efficiency. CRE are typically
plugged in and operate continuously; therefore, DOE assumed a rebound
rate of 0.
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.\72\ The discount rates for the determination of NPV are in
contrast to the discount rates used in the LCC analysis, which are
designed to
[[Page 70245]]
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.
---------------------------------------------------------------------------
\72\ United States Office of Management and Budget. Circular A-
4: Regulatory Analysis. September 17, 2003. Section E. Available at
georgewbush-whitehouse.archives.gov/omb/memoranda/m03-21.html (last
accessed February 17, 2023).
---------------------------------------------------------------------------
I. Consumer Subgroup Analysis
In analyzing the potential impact of new and 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.
In response to the June 2022 Preliminary Analysis, AHRI commented
that the cost per energy efficiency improvement will be very high and
especially challenging for small business owners, and in particular for
restaurants and small retailers located in rural and urban food
deserts, in which profit margins are low. (AHRI, No. 46 at p. 8)
For this NOPR, DOE analyzed the impacts of the considered standard
levels on small businesses. For this subgroup, DOE applied discount
rates specific to small businesses to the same consumer sample that was
used in the standard LCC analysis. DOE used the LCC and PBP model to
estimate the impacts of the considered efficiency levels on this
subgroup. For details on the subgroup analysis, see chapter 11 of the
NOPR TSD.
J. Manufacturer Impact Analysis
1. Overview
DOE performed an MIA to estimate the financial impacts of new and
amended energy conservation standards on manufacturers of CRE and to
estimate the potential impacts of such standards on 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 new and 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 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, equipment shipments, manufacturer markups, and
investments in R&D and manufacturing capital required to produce
compliant equipment. 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 standards cases (i.e., 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 rulemaking in three phases. In Phase
1 of the MIA, DOE prepared a profile of the CRE manufacturing industry
based on the market and technology assessment and publicly available
information. This included a top-down analysis of CRE 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 CRE manufacturing
industry, including company filings of form 10-K from the SEC,\73\
corporate annual reports, the U.S. Census Bureau's ASM,\74\ the U.S.
Census Bureau's Economic Census,\75\ the U.S. Census Bureau's Quarterly
Survey of Plant Capacity Utilization,\76\ and reports from Dun &
Bradstreet.\77\
---------------------------------------------------------------------------
\73\ U.S. Securities and Exchange Commission. Electronic Data
Gathering, Analysis, and Retrieval system. Available at www.sec.gov/edgar/searchedgar/companysearch (last accessed April 20, 2022).
\74\ U.S. Census Bureau. Annual Survey of Manufactures. (2013-
2022). Available at www.census.gov/programs-surveys/asm.html (last
accessed February 1, 2023).
\75\ U.S. Census Bureau. Economic Census. (2012 and 2017).
Available at www.census.gov/programs-surveys/economic-census.html
(last accessed February 1, 2023).
\76\ U.S. Census Bureau. Quarterly Survey of Plant Capacity
Utilization. (2010-2022). Available at www.census.gov/programs-surveys/qpc/data/tables.html (Last accessed December 14, 2022).
\77\ Dun & Bradstreet Hoovers. Subscription login accessible at
app.dnbhoovers.com/ (last accessed March 27, 2023).
---------------------------------------------------------------------------
In Phase 2 of the MIA, DOE prepared a framework industry cash-flow
analysis to quantify the potential impacts of new and 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 CRE in order to develop other key GRIM
inputs, including equipment 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 subgroup impacts.
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
[[Page 70246]]
during the interviews. As part of Phase 3, DOE also evaluated subgroups
of manufacturers that may be disproportionately impacted by new and
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, niche players, and/or
manufacturers exhibiting a cost structure that largely differs from the
industry average. DOE identified one subgroup for a separate impact
analysis: small business manufacturers. The small business subgroup is
discussed in section VI.B of this document, ``Review under the
Regulatory Flexibility Act,'' 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 new
or 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, 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 the inputs to arrive at a series of annual cash flows,
beginning in 2023 (the base year of the analysis) and continuing to
2057. DOE calculated INPVs by summing the stream of annual discounted
cash flows during this period. For manufacturers of CRE, DOE used a
real discount rate of 10.0 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 new or
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, results of the 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 equipment can affect the revenues,
gross margins, and cash flow of the industry. For this NOPR, DOE relied
on a design-option approach, supported with the testing and reverse
engineering of directly analyzed CRE. The design options were
incrementally added to the baseline configuration and continued through
the ``max-tech'' configuration (i.e., implementing the ``best
available'' combination of available design options). For a complete
description of the MPCs, see section IV.C of this document and chapter
5 of the NOPR TSD.
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 base year) to 2057 (the end year of
the analysis period). See section IV.J.2.b of this document and chapter
9 of the NOPR TSD for additional details.
c. Product and Capital Conversion Costs
New or 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 equipment 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 equipment
designs comply with new or 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 equipment designs can be fabricated and
assembled.
DOE based its estimates of the product conversion costs that would
be required to meet each efficiency level on information obtained from
manufacturer interviews; the design pathways analyzed in the
engineering analysis; the equipment teardown analysis; the shipments
analysis; and model count information. DOE estimated product
development effort, including engineer, laboratory technician, and
marketing resources, associated with design options and scaled the
costs based on the number of basic models (or product platforms,
depending on the nature of the design option). Product development
effort varied by design option. DOE modeled door design changes (i.e.,
moving from a double-pane to triple-pane door, incorporating vacuum-
insulated glass) would require more complex system redesigns and more
cost, as compared to implementing more efficient components (e.g.,
incorporating a PSC motor or an ECM). DOE also assumed additional
engineering effort would be required to optimize variable-speed
compressors to ensure energy efficiency benefits, based on interview
feedback.
To estimate industry product conversion costs, DOE multiplied the
product development cost estimate at each efficiency level for each
equipment class by the number of industry basic models or product
platforms that would require redesign. DOE used its CCD \78\ and
California Energy Commission's MAEDbS \79\ to identify CRE models
covered by this proposed rulemaking. To identify chef bases and high-
temperature CRE models, DOE further relied on publicly available data
aggregated from web scraping retail websites. DOE used the no-new-
standards case efficiency distribution from the shipments analysis to
estimate the model efficiency distribution. DOE also included the
estimated cost of testing to the DOE test procedure for chef bases and
high-temperature units using the estimated per-unit testing cost of
$5,000 detailed in the September 2023 Test Procedure Final Rule. 88 FR
66152, 66215.
---------------------------------------------------------------------------
\78\ 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 February 21, 2023).
\79\ California Energy Commission's Modernized Appliance
Efficiency Database System is available at
cacertappliances.energy.ca.gov/Pages/Search/AdvancedSearch.aspx
(last accessed February 21, 2023).
---------------------------------------------------------------------------
In addition to the sources used to derive product conversion costs,
DOE relied on additional sources of information such as the Trade
[[Page 70247]]
Associations Survey \80\ to estimate the capital conversion costs
manufacturers would incur to comply with potential new and amended
energy conservation standards. During interviews, manufacturers
provided estimates and descriptions of the required tooling changes
required by the considered design options. (See Trade Associations
Survey. No. 50 at pp. 16-18) Based on these inputs, DOE assumed that
most component swaps, while requiring moderate product conversion
costs, would not require changes to existing production lines or
equipment, and, therefore, would not require notable capital
expenditures because one-for-one component swaps would not require
changes to existing production equipment (i.e., manufacturers will
continue to be able to use their existing production equipment and
production lines to manufacture CREs that achieve higher efficiency
levels through component swaps, which are typically associated with
lower ELs). However, based on manufacturer feedback, DOE modeled some
tooling and capital expenditures when manufacturers implement improved
door designs and variable-speed compressors. For improved door designs,
some manufacturers noted that they would need new fixtures.
Incorporating additional panes of glass for high-volume equipment
classes could also necessitate heavier duty lifting equipment to
transport and assemble heavier glass packs. For variable-speed
compressors, which could be larger than existing single-speed
compressors, manufacturers may need new tools for the baseplate. To
estimate industry capital conversion costs, DOE scaled the estimated
capital expenditures at each efficiency level for each equipment class
by the number of applicable OEMs.
---------------------------------------------------------------------------
\80\ www.regulations.gov/document/EERE-2017-BT-STD-0007-0050.
---------------------------------------------------------------------------
As previously stated, the Trade Associations Survey included
information about the anticipated capital investments associated with a
range of design options. (Id. at pp. 16-18) The survey results showed
high capital investments associated with increasing insulation
thickness and incorporating vacuum-insulated panels. (Id. at p. 18) As
discussed in section IV.B.1 of this document, DOE excluded these
technologies from further consideration in the engineering analysis.
Other design options potentially requiring notable capital investment
included microchannel heat exchangers, additional panes of glass, and
variable-speed compressors. DOE compared the feedback from the Trade
Associations Survey with information from the equipment teardown
analysis and manufacturer interviews and incorporated the feedback
where applicable.
DOE requests detailed comment and information on the capital
investments associated with each analyzed design option. In particular,
DOE requests detailed comment and feedback on the specific changes in
equipment and tooling required to incorporate microchannel heat
exchangers, as DOE currently models microchannel heat exchangers as a
purchased part that can be substituted for tube and fin heat exchangers
with minor production line changes.
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 IV.J.2.c of this
document. For additional information on the estimated capital and
product conversion costs, see chapter 12 of the NOPR TSD.
Regarding the potential investments associated with redesigning CRE
to use flammable refrigerants in response to refrigerant regulations
such as the December 2022 EPA NOPR, DOE did not consider these
investments as conversion costs as they are independent of DOE actions
related to any new or amended energy conservation standards. Instead,
the refrigerant transition expenses are modeled as an impact to
industry cashflow and are incorporated into both the no-new-standards
case and standards cases. The refrigerant transition expenses includes
redesigning CRE to use flammable refrigerants and retrofitting
production facilities to accommodate flammable refrigerants. DOE relied
on manufacturer feedback in confidential interviews, a report prepared
for EPA,\81\ results of the engineering analysis, and investment
estimates submitted by NAMA and AHRI in response to the June 2022
Preliminary Analysis to estimate the industry refrigerant transition
costs. Based on feedback, DOE assumed that the transition to low-GWP
refrigerants would require industry to invest approximately $21.3
million in R&D and $33.3 million in capital expenditures (e.g.,
investments in new charging equipment, leak detection systems, etc.).
These costs are included in the no-new-standards case as well as the
standards cases. See section V.B.2.e of this document or chapter 12 of
the NOPR TSD for additional information.
---------------------------------------------------------------------------
\81\ See pp. 5-113 of the ``Global Non-CO2 Greenhouse
Gas Emission Projections & Marginal Abatement Cost Analysis:
Methodology Documentation'' (2019). Available at www.epa.gov/sites/default/files/2019-09/documents/nonco2_methodology_report.pdf.
---------------------------------------------------------------------------
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 non-production cost markups to the
MPCs estimated in the engineering analysis for each equipment 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 new and 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 an equipment 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
29 percent for all equipment classes.\82\ 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 equipment. Therefore, this
scenario represents an upper bound of industry profitability under a
new and amended energy conservation standard.
---------------------------------------------------------------------------
\82\ The gross margin percentage of 29 percent is based on a
manufacturer markup of 1.40.
---------------------------------------------------------------------------
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
no-new-standards-case operating profit. DOE implemented
[[Page 70248]]
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 new and 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.
DOE seeks comment on the use of a 1.40 manufacturer markup for all
CRE equipment classes analyzed in this proposed rule. DOE also seeks
comment on the estimated manufacturer markups and incremental MSPs that
result from the analyzed energy conservation standards.
A comparison of industry financial impacts under the two
manufacturer markup scenarios is presented in section V.B.2.a of this
document.
3. Manufacturer Interviews
DOE interviewed manufacturers representing approximately 60 percent
of the domestic CRE shipments. Participants included domestic-based and
foreign-based OEMs. Participants included manufacturers with a wide
range of market shares and variety of equipment offerings, including
four manufacturers who offered equipment under the expanded scope.
In interviews, DOE asked manufacturers to describe their major
concerns regarding the potential for more stringent energy conservation
standards for CRE. 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 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. Changes to the Cabinet Structure
In interviews, manufacturers expressed numerous concerns about
efficiency levels that would necessitate significant changes to the
cabinet structure (i.e., increasing insulation thickness or
implementing VIPs). Regarding thicker insulation, manufacturers noted
that changing the exterior dimensions of equipment would be extremely
undesirable for the replacement market because customers expect
equipment to fit within the same footprint as the equipment being
replaced. A change in exterior dimensions could cause misalignment
between existing cases and new cases. As manufacturers typically treat
exterior dimensions as fixed, increasing insulation thickness would
necessitate reducing interior volume, which could reduce useable,
refrigerated volume. Furthermore, manufacturers stated that increasing
insulation thickness would require significant capital and product
conversion costs. Manufacturers would need to invest in new foam
fixtures and tooling. Manufacturers would likely need to update all
designs and tooling associated with the interior of the equipment.
Regarding VIPs, manufacturers noted there is very limited industry
experience with incorporating VIPs into CRE. Manufacturers emphasized
that commercial environments may not be suitable for VIPs as they could
be easily punctured, which would erode any efficiency improvements.
Manufacturers noted that it would be nearly impossible to do in-field
replacements of ineffectual VIPs, meaning that a puncture could require
an entirely new CRE unit. Manufacturers also noted that implementing
VIPs would require significant investment and redesign to the foaming
station, manufacturing facility, and equipment design. Typically, CRE
designs require numerous fasteners to secure internal components to the
cabinet, which would not be feasible with VIPs. Manufacturers also
noted the need to allocate special warehouse space to ensure the VIPs
are not jostled or roughly handled in the manufacturing environment.
b. Supply Chain Concerns
Multiple manufacturers expressed concerns about the ongoing supply
chain constraints related to sourcing a range of components, such as
high-efficiency motors, compressors, and control boards and
electronics. Manufacturers noted that limited component availability,
increases in raw material prices, and escalating shipping and
transportation costs all affect manufacturer production costs. In
addition to higher production costs, these manufacturers stated that
the evolving nature of these component shortages requires dedicating
personnel resources to identify and qualify new suppliers, build
prototypes, conduct testing, and update equipment literature. Some
manufacturers expressed concern about standard levels that would
necessitate numerous component changes, as the manufacturers are
already experiencing delays sourcing parts for prototypes. If these
supply constraints continue through the end of the conversion period,
industry could face capacity constraints. DOE discusses potential
supply constraints in section V.B.2.c of this document.
4. Discussion of MIA Comments
In response to the June 2022 Preliminary Analysis, NAMA asserted
that the convenience services industry had suffered greatly over the
past 3 years due to new DOE energy efficiency regulations, new ENERGY
STAR levels, regulations on refrigerants (e.g., California Air
Resources Board), the global pandemic, record inflation, and staffing
troubles. (NAMA, No. 37 at pp. 2-3) NAMA commented that DOE assumed
during the previous rulemaking that the industry would be using natural
refrigerants, but industry had not completed these transitions due in
part to pandemic shutdowns and the cost of redesigning and
manufacturing. (Id. at p. 3)
Furthermore, NAMA commented that the costs associated with setting
up the production of R-290 machines can easily cost between $0.5
million and $1.0 million per production line depending on the scale and
stated that the June 2022 Preliminary TSD does not capture these costs.
(Id. at pp. 7-8) NAMA commented further that the cost of redesigning
equipment for lower GWP chemicals and the associated costs for safety
compliance, improvements to factories, changes to service, and training
of factory employees and service providers proved a huge burden to
smaller manufacturers. (Id. at p. 3) NAMA stated that several of its
member manufacturing companies qualified as small- and medium-
enterprise businesses and requested that DOE pay close attention to the
economic impacts of a new set of energy regulations on an industry
already under extreme pressure. (Id.) NAMA recommended that the
environmental impact analysis include the fact that the CRE industry
has spent many millions of dollars converting to lower-GWP refrigerant
blends and hydrocarbon refrigerants such as R-290, which have a direct
and immediate impact on climate change. (Id. at p. 8)
AHRI commented similarly on the costs and burdens to transition to
alternative refrigerants. (AHRI, No. 46 at pp. 12-13, 17-18) AHRI
commented that the AIM Act requires refrigerant manufacturers to phase
down the supply of high-GWP HFCs, encouraging CRE manufacturers to
switch to low-GWP refrigerants, which often have some degree of
flammability. (Id. at p. 18) AHRI commented that new low-GWP
refrigerants would significantly impact CRE and that new safety
[[Page 70249]]
standards must address the application of these new flammable
refrigerants and subsequent leak mitigation. (Id.) AHRI commented that
flammable refrigerant sensors would likely be employed, with
significant redesign of equipment needed to achieve required mitigation
capability, and all equipment would require certification to these new
standards, which included a number of additional requirements due to
the combination of multiple standards. (Id.) AHRI added that all
equipment would also need to eliminate potential ignition sources.
(Id.) AHRI stated that manufacturers estimate the capital investment
needed to safely handle and store flammable refrigerants at
manufacturing facilities at $0.5 to $1.0 million for small facilities
that only manufacture self-contained equipment and $2.0 to $4.0 million
for medium and larger facilities. (Id. at pp. 12-13) AHRI noted that
some companies have made this investment and transitioned products with
smaller charges (114 grams in areas of egress, such as hallways) and
150 grams limit in occupied spaces for A3 products (such as propane).
(Id. at p. 13)
Regarding the comments about new DOE energy efficiency regulations,
DOE's cumulative regulatory burden analysis is based on rulemakings
that go into effect within a 3-year time frame before or after the
expected compliance date of amended CRE energy conservation standards
(2028). Section V.B.2.e of this document includes a list of DOE energy
conservation standards rulemakings that contribute to cumulative
regulatory burden within the 3-year period before or after the expected
compliance date of new and amended CRE energy conservation standards,
should they be finalized.
Regarding the comments about EPA's new ENERGY STAR levels, DOE
notes that participating in ENERGY STAR is voluntary and not considered
in DOE's analysis of cumulative regulatory burden.
Regarding the comments about the costs associated with redesigning
equipment to make use of lower-GWP refrigerants, DOE understands that
manufacturers of CRE using high-GWP refrigerants (e.g., R-404a) will
likely need to transition to alternative, lower-GWP refrigerants to
comply with anticipated refrigeration regulations, such as the December
2022 EPA NOPR, prior to the expected 2028 compliance date of potential
energy conservation standards. See 87 FR 76738. DOE did incorporate the
estimated expenses associated with redesigning CRE to make use of
flammable refrigerants and upgrading production facilities to
accommodate flammable refrigerants in the GRIM. DOE relied on a range
of sources to estimate the investment required to transition CRE using
high-GWP refrigerants to low-GWP refrigerants that satisfy the
restrictions outlined in the December 2022 EPA NOPR. These sources
included feedback from confidential manufacturer interviews, a report
prepared for EPA,\83\ results of the engineering analysis, and
investment estimates submitted by NAMA and AHRI in response to the June
2022 Preliminary Analysis. DOE also reviewed other public sources, such
as retail websites, EPA's ENERGY STAR Product Finder dataset, and
equipment literature to estimate the portion of the CRE market that
still needs to transition to low-GWP refrigerants (e.g., R-290). The
expenses associated with a change in refrigerant are independent on
DOE's proposal to amend energy conservation standards and are separate
from DOE's estimates of conversion costs to meet amended standards. See
section V.B.2.e of this document and chapter 12 of the NOPR TSD for
additional discussion on cumulative regulatory burden.
---------------------------------------------------------------------------
\83\ See pp. 5-113 of the ``Global Non-CO2 Greenhouse
Gas Emission Projections & Marginal Abatement Cost Analysis:
Methodology Documentation'' (2019). Available at www.epa.gov/sites/default/files/2019-09/documents/nonco2_methodology_report.pdf.
---------------------------------------------------------------------------
NAMA commented that DOE should not discount the time and resources
needed to evaluate and respond to simultaneous proposed test procedures
and energy conservation standards for multiple equipment over a short
period of time. (NAMA, No. 37 at p. 17) NAMA stated that when
rulemakings occur simultaneously, the cumulative burden increases
dramatically. (Id.) NAMA noted that manufacturers of CRE are in the
middle of transitioning from HFC refrigerants to lower-GWP refrigerants
and commented that additional requirements from DOE would increase the
time necessary for transition. (Id.) NAMA commented that the transition
to lower-GWP refrigerants is more impactful to the environment than the
new energy efficiency requirements shown in the June 2022 Preliminary
Analysis. (Id.) NAMA requested that DOE incorporate the financial
results of the current cumulative regulatory burden analysis directly
into the MIA by adding the combined costs of complying with multiple
regulations into the product conversion costs in the GRIM. (Id. at p.
18) NAMA requested that DOE complete a consolidated analysis for
multiple regulations starting from the time of the first regulation.
(Id.) NAMA stated that DOE has asserted such an analysis would require
counting the costs/investments and the revenues/profits for both
equipment, which is correct and represents a feature, not a deficiency.
(Id.) NAMA further commented that if this is not possible, DOE should
incorporate a value reduction factor in the first post-regulation year
of the analysis that subtracts the value lost from the remaining years
of the previous regulation. (Id.)
Regarding NAMA's suggestion to account for the financial results of
the cumulative regulatory burden analysis into the GRIM, DOE
incorporated the estimated refrigerant transition costs that occur in
the timeframe of the analysis directly into the GRIM in both the no-
new-standards case and the standards-case to reflect the impact of
refrigerant regulation on CRE industry cash flow. See section V.B.2.e
of this document for additional information.
NAMA requested also that DOE stage its energy efficiency
regulations at least 3, and preferably 5, years away from other
significant and overlapping governmental regulations. (Id.) NAMA
commented that changes to State and local building codes are another
regulatory burden that should have been factored in the June 2022
Preliminary Analysis.
Regarding NAMA's suggestion to promulgate energy efficiency
regulations at least 3, and preferably 5, years away from other
significant and overlapping governmental regulations, DOE has statutory
requirements under EPCA on the timing of rulemakings. For CRE, EPCA
requires that, not later than 6 years after the issuance of any final
rule establishing or amending a standard, DOE evaluate the energy
conservation standards for each type of covered equipment and publish
either a notification of determination that the standards do not need
to be amended, or a NOPR that includes new proposed energy conservation
standards (proceeding to a final rule, as appropriate). (42 U.S.C.
6316(e)(1)); 42 U.S.C. 6295(m)(1)) The current CRE energy conservation
standards were implemented by the March 2014 Final Rule. 79 FR 17725.
Under EPCA, any potential new and amended standards would go into
effect (1) 3 years after the date on which the final amended standard
is published or (2) if the Secretary determines, by rule, that 3 years
is inadequate, not later than 5 years after the date on which the final
rule is published. (42 U.S.C. 6313(c)(6)(C)). For this NOPR, DOE has
proposed a 3-year compliance period after the date on which final
amended standard is published. DOE welcomes stakeholder feedback on
choice of 3
[[Page 70250]]
years or 5 years between the final rule publication and the compliance
date.
NAMA commented that large inaccuracies exist in the tables of
design options in the June 2022 TSD and that the June 2022 Preliminary
TSD failed to take into account the substantial capital costs caused by
these design options, not including recent cost increases due to
inflation. (NAMA, No. 37 at pp. 9-10) NAMA stated that it sees no sign
DOE has factored into its estimates the cost of capital-intensive
design options, such as increased insulation, vacuum panels, heavier
doors, and microchannel coils, and that these costs, which would be
accrued on top of the millions of dollars being invested to move from
high-GWP refrigerants to low-GWP refrigerants, comprise an issue of
cumulative burden. (Id.)
With respect to NAMA's comment on design options and capital costs,
DOE did not estimate capital conversion costs for the June 2022
Preliminary Analysis as DOE does not conduct a full MIA for rulemaking
stages prior to the NOPR analysis stage. For this NOPR, DOE accounts
for the capital investments required to implement the considered design
options in the MIA. See section IV.J.2.c of this document for
additional details on conversion costs.
AHRI commented that its members face significant regulatory burdens
requiring redesign, retooling, testing, and listing of equipment; new
regulations related to the inclusion of special/definite-purpose motors
as regulated; state-mandated refrigerant emissions limits, which
coincide with a change in the safety standard for CRE; and new
regulations requiring elimination of the use of phenyl isopropylated
phosphate (PIP 3:1) in components. (AHRI, No. 46 at p. 16) AHRI
commented that recent changes to the scope of test procedures for
electric motors will increase the burden on manufacturers significantly
if all equipment using special and definite-purpose motors were
suddenly forced to certify compliance with standards for component
parts, including the testing, paperwork, and recordkeeping requirements
that accompany certification. (Id. at pp. 16-17) AHRI stated that
efficient electric motors incorporated into finished equipment are
already a major part of the energy equation when OEMs consider what
design options to apply to meet new standards, as is evidenced by the
June 2022 Preliminary TSD, and urged DOE to account for these costs.
(Id. at p. 17) AHRI recommended that DOE should consider the impact of
new motor designs on CRE and stated that, for equipment yet to be
produced, the impact could range from retesting/recertification
aligning with safety standards to a full equipment redesign
accommodating a new, larger motor. (Id.) AHRI commented that the impact
could be devastating for equipment already installed in businesses as
motors could no longer be available as replacement parts, thereby
forcing consumers to prematurely discard equipment that could have
otherwise been repaired, imposing significant additional costs on
consumers, and generating environmental impacts that would likely
entirely offset any marginal gains from the increased scope. (Id.) AHRI
recommended that DOE should account for the decrease in useful life
from this component regulation in the product's LCC calculations. (Id.)
AHRI stated that the 180-day timeline for motor manufacturers to comply
with the electric motor test procedure puts the need to consider the
impact of motor test procedures into this analysis. (Id.) AHRI
calculated and submitted a detailed cost analysis of changing an
embedded motor totaling $304,000 for one model of commercial HVAC
equipment in response to the electric motor rulemaking. (Id.) AHRI
stated that CRE will likely face similar costs and that the expanded
definition of ``manufacturer'' would redefine OEMs as electric motor
manufacturers and they would need to comply with these certification
requirements, which is a burden that DOE has not accounted for this
burden in its analysis. (Id.)
DOE analyzes cumulative regulatory burden pursuant to section 13(g)
of the Process Rule. Regarding comments related to the electric motors
test procedure final rule published on October 19, 2022 (``October 2022
Final Rule''), DOE tentatively expects that the motors used in the CRE
covered by this rulemaking would not be directly impacted by the
electric motors rulemaking because the motors used in CRE are typically
below 0.25 horsepower, and, thus, are outside the scope of the October
2022 Final Rule. See 87 FR 63588, 63601. Regarding comments related to
a change in safety standards for CRE, DOE understands that existing
safety standards will be replaced by UL 60335-2-89 in 2024 after which
all new equipment and certain modifications to existing CRE will
require evaluation to the latest edition of UL 60335-2-89. Some
manufacturers noted that the latest edition of UL 60335-2-89 is more
onerous than existing safety standards for CRE. DOE understood that the
product conversion cost feedback from manufacturer interviews reflects
the additional time investment associated with testing to UL 60335-2-
89.
Regarding comments related to regulations requiring elimination of
the use of PIP 3:1 in components, DOE did not consider chemical
regulations in its NOPR cumulative regulatory burden analysis as EPA's
final rule is not a CRE-specific Federal regulatory action and the
required compliance date does not occur within the specified 3-year
cumulative regulatory burden timeframe analyzed in this NOPR. See 87 FR
12875.
AHRI commented that manufacturers of chef bases, griddle stands,
and other equipment for which there is no test procedure would have to
spend additional time and funds to determine test efficacy and whether
it is possible to meet DOE-designated energy conservation standards.
(AHRI, No. 46 at p. 8)
DOE is proposing new and amended conservation standards for chef
bases and high-temperature units (e.g., VCT.SC.H, VCS.SC.H, CB.SC.M,
CB.SC.L). In its modeling, DOE incorporated the upfront per-unit costs
associated with testing to the September 2023 Test Procedure Final Rule
for the classes of equipment for which there was no test procedure. DOE
incorporated the testing costs into its product conversion cost
estimates. See section IV.J.2.c of this document and chapter 12 of the
NOPR TSD for additional details.
NAMA commented that the CRE industry has suffered shortages in the
supply chain of critical parts during recent years. (NAMA, No. 37 at p.
14) Specifically, NAMA commented regarding difficulties in acquiring
fabricated computer chips and other components in the electronics,
displays, and electrical area. (Id.) NAMA stated that the economic
analysis in support of the June 2022 Preliminary Analysis did not
account for these disruptions. (Id.) NAMA recommended that DOE consider
the impact of supply chain issues as part of the new energy efficiency
standards levels. (Id.) NAMA commented that unavailable components had
increased the complexity of equipment design, and further changes based
on perceived energy efficiency added additional complexity without
benefiting the customer. (Id.)
As detailed in section IV.J.3 of this document, DOE received
similar comments about the challenges sourcing certain CRE components
in recent years during confidential manufacturer interviews. DOE notes
that increased costs associated with recent supply
[[Page 70251]]
chain issues have been implemented in the cost analysis and are
presented in the MPCs in this NOPR analysis, specifically by way of 5-
year moving averages for materials and the most up-to-date information
on purchased part prices for this NOPR analysis.
DOE requests comment on the availability of computer chips and
other electronic components used in CREs in the timeframe of 2028, and
specifically how availability would affect industry's ability to
achieve higher efficiency levels.
NAFEM commented that DOE was evasive in DOE's response to comments
regarding negative impacts on a substantial number of small businesses
in the July 2021 RFI. (NAFEM, No. 40 at p. 4) NAFEM commented that it
continues to work with the Small Business Administration (``SBA'')
Office of Advocacy to ensure that small businesses have a direct avenue
for input and that DOE properly assesses cumulative regulatory burden
and conducts a fair regulatory flexibility analysis. (Id.)
DOE notes that there is no regulatory flexibility analysis or
manufacturer impact analysis in the preliminary analysis stage of
rulemakings. At this NOPR stage, DOE identified 25 small domestic OEMs
selling covered CRE in the United States. In support of this NOPR
analysis, DOE contractors conducted confidential manufacturer
interviews, which included discussions with small, domestic OEMs. DOE
incorporated their feedback into the MIA. Additionally, DOE analyzed
the impact of the proposed amended standards on small business
manufacturers in section VI.B of this document and in chapter 12 of the
NOPR TSD.
NAMA commented that no contact between DOE consultants and its
manufacturing members was apparent and stated its belief that the
information in the June 2022 Preliminary TSD would have been more
accurate and reflective of today's market if NAMA's members had been
interviewed. (NAMA, No. 37 at p. 6)
DOE did not conduct preliminary manufacturer interviews in support
of the June 2022 Preliminary Analysis. However, DOE conducted
interviews with a range of manufacturers in support of this NOPR
analysis. DOE conducted manufacturer interviews with eight CRE OEMs,
representing approximately 60 percent of domestic industry shipments.
For additional information on manufacturer interviews, see section
IV.J.3 of this document and chapter 12 of the NOPR TSD.
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 document uses projections from AEO2023. Power sector
emissions of CH4 and N2O from fuel combustion are
estimated using Emission Factors for Greenhouse Gas Inventories
published by the EPA.\84\
---------------------------------------------------------------------------
\84\ Available at www.epa.gov/sites/production/files/2021-04/documents/emission-factors_apr2021.pdf (last accessed March 9,
2023).
---------------------------------------------------------------------------
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 national impact analysis.
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. AEO2023 reflects, to the extent
possible, laws and regulations adopted through mid-November 2022,
including the emissions control programs discussed in the following
paragraphs the emissions control programs discussed in the following
paragraphs, and the Inflation Reduction Act.\85\
---------------------------------------------------------------------------
\85\ For further information, see the Assumptions to AEO2023
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 March 30, 2023).
---------------------------------------------------------------------------
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 (D.C.). (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.\86\ The AEO
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.
---------------------------------------------------------------------------
\86\ 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 (December 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.\87\ 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)
[[Page 70252]]
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 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 AEO2023.
---------------------------------------------------------------------------
\87\ 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.
---------------------------------------------------------------------------
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 cases, 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 AEO2023 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
AEO2023, 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. 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 equipment 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.
To monetize the benefits of reducing GHG emissions, this analysis
uses the interim 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
(``February 2021 SC-GHG TSD'').
In response to the June 2022 Preliminary Analysis, AHRI expressed
concern that DOE's social cost of carbon (``SCC'') analysis used to
generate the original 2007 and updated 2020 new interim value for the
social cost of carbon dioxide extends beyond the statutory authority
and the scope contemplated by Congress. (AHRI, No. 46 at p. 9) AHRI
stated its belief that DOE should withdraw the SCC values and refrain
from using the SCC in any other rulemaking or policymaking until the
SCC undergoes a more rigorous notice, review and comment process. (Id.)
AHRI added that while AHRI agrees that the SCC should be estimated,
presented, and made publicly available for every DOE rule, the SCC has
not been adequately reviewed before being used as a factor in
calculating net benefits. (Id.)
As stated in section III.F.1.f of this document, DOE accounts for
the environmental and public health benefits associated with the more
efficient use of energy, including those connected to global climate
change, and considers them important to take into account when
considering the need for national energy conservation. (See 42 U.S.C.
6316(e)(1); 42 U.S.C. 6295(o)(2)(B)(i)(IV)) In addition, Executive
Order 13563 states that each agency must, among other things: ``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).'' 76 FR 3821 (Jan. 21, 2011) For
these reasons, DOE includes monetized emissions reductions in its
evaluation of potential standard levels and reporting of net benefits.
As previously stated, however, DOE would reach the same conclusion
presented in this proposed rulemaking in the absence of the social cost
of greenhouse gases.
AHRI stated that the SCC's time-period for analysis renders its
applicability suspect. (AHRI, No. 46 at p. 9) AHRI noted that, in
contrast to the timeframe considered for carbon emissions, DOE
calculates the present value of the costs to consumers and
manufacturers over a 30-year period. (Id.) AHRI contends that DOE's
comparison of 30 years of cost to hundreds of years of presumed future
benefits is inconsistent and improper. (Id.)
In response, DOE notes that its analysis considers the costs and
benefits associated with 30 years of shipments of a covered product.
Because such products continue to operate beyond 30 years, DOE accounts
for energy cost savings and reductions in emissions until all products
shipped within the 30-year period are retired. In the case of
CO2 emissions, which remain in the atmosphere and contribute
to climate change for many decades, the benefits of reductions in
emissions likewise occur over a lengthy period. To not include such
benefits would be inappropriate. However, because benefits associated
with a ton of CO2 emissions are discounted to derive the SCC
value for a given emissions year, and then the benefits from potential
standards are discounted to the present, the contribution of climate
change benefits in the far future to the total benefits from
CO2 reduction is very small.
AHRI stated that EPCA's focus is exclusively on benefits accruing
within this nation, and thus SCC figures reported by DOE at the global
level are beyond the scope and authority of DOE. (Id. at p. 10) As
previously discussed in this section, many climate impacts that affect
the welfare of U.S. citizens and residents are better reflected by
global measures of the SC-GHG. 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.
AHRI stated that DOE wrongly assumes that SCC values will increase
over time. (Id.) AHRI contended that the
[[Page 70253]]
more economic development that occurs, the more adaptation and
mitigation efforts are both undertaken by humanity and that a
population living in a growing economy can afford to undertake. (Id.)
In response, DOE notes that there are many reasons why the analysis of
the IWG, along with other rigorous assessments, shows SCC values rising
over time. Briefly, as concentrations of GHGs increase, so do the
impacts on climate and sea level. Growing population in many parts of
the world mean more people who would suffer the effects of heat waves
and rising sea levels, and continued economic growth means that the
overall magnitude of economic damage from climate change is likely to
rise. In its February 2021 TSD, the IWG notes that various limitations
in the analysis suggest that the range of SC-GHG estimates presented in
the TSD likely underestimate societal damages from GHG emissions.\88\
---------------------------------------------------------------------------
\88\ See the February 2021 SC-GHG TSD at p. 4. Available at
www.whitehouse.gov/wp-content/uploads/2021/02/TechnicalSupportDocument_SocialCostofCarbonMethaneNitrousOxide.pdf.
---------------------------------------------------------------------------
AHRI commented that if DOE still chooses to include the SCC, DOE
should consider the benefits of foam blowing and the refrigerant
transition in its analysis. (Id. at p. 9) In response, DOE notes that
the benefits of foam blowing agents and the refrigerant transition is
independent of DOE actions related to any new and amended energy
conservation standards, therefore such benefits are not accounted for
in its monetizing emissions analysis.
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. That is, the social
costs of greenhouse gases, whether measured using the February 2021
interim estimates presented by the IWG or by another means, did not
affect the rule ultimately proposed by DOE.
DOE estimated the global social benefits of CO2,
CH4, and N2O emission reductions using SC-GHG
values that were based on the interim values 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 (``February 2021 SC-GHG TSD''). The SC-GHG 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, the SC-GHG 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. Therefore, the SC-GHG reflects the societal value
of reducing emissions of the gas in question by one metric ton. The SC-
GHG 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-GHG estimates presented here were developed over many years,
using a 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, which included 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 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 consistent with 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.\89\ 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.\90\ 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'' (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
[[Page 70254]]
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.
---------------------------------------------------------------------------
\89\ 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.
\90\ 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.
nap.nationalacademies.org/catalog/24651/valuing-climate-damages-updating-estimation-of-the-social-cost-of.
---------------------------------------------------------------------------
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 in the National Academies 2017 report. 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 that takes into consideration the advice
in the National Academies 2017 report 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, 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 United States 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 SC-GHG TSD, existing estimates are both incomplete and an
underestimate of total damages that accrue to the citizens and
residents of the United States 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 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,\91\ and recommended that
discount rate uncertainty and relevant aspects of intergenerational
ethical considerations be accounted for in selecting future discount
rates.
---------------------------------------------------------------------------
\91\ Interagency Working Group on Social Cost of Carbon. Social
Cost of Carbon for Regulatory Impact Analysis under Executive Order
12866. 2010. United States Government, available at www.epa.gov/sites/default/files/2016-12/documents/scc_tsd_2010.pdf (last
accessed March 9, 2023); 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, available at
www.federalregister.gov/documents/2013/11/26/2013-28242/technical-support-document-technical-update-of-the-social-cost-of-carbon-for-regulatory-impact (last accessed March 9, 2023); 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, available at www.epa.gov/sites/default/files/201612/documents/sc_co2_tsd_august_2016.pdf (last accessed March 9, 2023);
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, available
at www.epa.gov/sites/default/files/2016-12/documents/addendum_to_sc-ghg_tsd_august_2016.pdf (last accessed January 18, 2022).
---------------------------------------------------------------------------
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 NOPR.
To calculate the present and annualized values of climate benefits,
DOE uses the same discount rate as the
[[Page 70255]]
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 SC-GHG 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 the above 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 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 were 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, 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, and DOE agrees with this determination. 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.\92\ 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 model 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
SC-GHG TSD, the IWG has recommended that, taken together, the
limitations suggest that the interim SC-GHG estimates used in this
proposed rule likely underestimate the damages from GHG emissions. DOE
concurs with this assessment.
---------------------------------------------------------------------------
\92\ 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
www.whitehouse.gov/wp-content/uploads/2021/02/TechnicalSupportDocument_SocialCostofCarbonMethaneNitrousOxide.pdf
(last accessed March 9, 2023).
---------------------------------------------------------------------------
DOE's derivations of the 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 based on the
values presented for the IWG's February 2021 TSD, which are shown in
table IV.12 in five-year increments from 2020 to 2050. shows the
updated sets of SC-CO2 estimates from the IWG's TSD in 5-
year increments from 2020 to 2050. The set of annual values that DOE
used, which was adapted from estimates published by EPA,\93\ is
presented in appendix 14-A of the final rule TSD. These estimates are
based on methods, assumptions, and parameters identical to the
estimates published by the IWG (which were based on EPA modeling), and
include values for 2051 to 2070. DOE expects additional climate
benefits to accrue for products still operating 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.
---------------------------------------------------------------------------
\93\ See EPA, Revised 2023 and Later Model Year Light-Duty
Vehicle GHG Emissions Standards: Regulatory Impact Analysis,
Washington, DC, December 2021. Available at nepis.epa.gov/Exe/ZyPDF.cgi?Dockey=P1013ORN.pdf (last accessed February 21, 2023).
Table IV.10--Annual SC-CO2 Values From 2021 Interagency Update, 2020-2050
[2020$ per metric ton CO2]
----------------------------------------------------------------------------------------------------------------
Discount rate and statistic
-----------------------------------------------------------------------
Year 3% 95th
5% Average 3% Average 2.5% Average percentile
----------------------------------------------------------------------------------------------------------------
2020.................................... 14 51 76 152
[[Page 70256]]
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$.\94\ These estimates are based on methods,
assumptions, and parameters identical to the 2020-2050 estimates
published by the IWG. DOE expects additional climate benefits to accrue
for any longer-life CRE after 2070, but a lack of available SC-
CO2 estimates for emissions years beyond 2070 prevents DOE
from monetizing these potential benefits in this analysis.
---------------------------------------------------------------------------
\94\ See EPA, Revised 2023 and Later Model Year Light-Duty
Vehicle GHG Emissions Standards: Regulatory Impact Analysis,
Washington, DC, December 2021. Available at www.federalregister.gov/documents/2021/10/30/2021-27854/revised-2023-and-later-model-year-light-duty-vehicle-greenhouse-gas-emissions-standards (last accessed
March 9, 2023).
---------------------------------------------------------------------------
DOE multiplied the CO2 emissions reduction estimated for
each year by the SC-CO2 value for that year in each of the
four cases. DOE adjusted the values to 2020$ 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 SC-GHG
TSD. Table IV.13 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.13--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 -------------------------------------------------------------------------------------------------------------------
2.5% 3% 95th 2.5% 3% 95th
5% Average 3% Average Average percentile 5% Average 3% Average Average percentile
--------------------------------------------------------------------------------------------------------------------------------------------------------
2020................................ 670 1,500 2,000 3,900 5,800 18,000 27,000 48,000
2025................................ 800 1,700 2,200 4,500 6,800 21,000 30,000 54,000
2030................................ 940 2,000 2,500 5,200 7,800 23,000 33,000 60,000
2035................................ 1,100 2,200 2,800 6,000 9,000 25,000 36,000 67,000
2040................................ 1,300 2,500 3,100 6,700 10,000 28,000 39,000 74,000
2045................................ 1,500 2,800 3,500 7,500 10,000 30,000 42,000 81,000
2050................................ 1,700 3,100 3,800 8,200 13,000 33,000 45,000 88,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
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 2022$ using the implicit price deflator for 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 Program.\95\ 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 combined the EPA regional
benefit-per-ton estimates with regional information on electricity
consumption and emissions from AEO2023 to define weighted-average
national values for NOX and SO2 (see appendix 14B
of the NOPR TSD).
---------------------------------------------------------------------------
\95\ U.S. Environmental Protection Agency. Estimating the
Benefit per Ton of Reducing Directly-Emitted PM2.5,
PM2.5 Precursors and Ozone Precursors from 21 Sectors.
www.epa.gov/benmap/estimating-benefit-ton-reducing-directly-emitted-pm25-pm25-precursors-and-ozone-precursors.
---------------------------------------------------------------------------
DOE also estimated the monetized value of NOX and
SO2 emissions reductions from site use of natural gas
[[Page 70257]]
in CRE using benefit-per-ton estimates from the EPA's Benefits Mapping
and Analysis Program. Although none of the sectors covered by EPA
refers specifically to residential and commercial buildings, the sector
called ``area sources'' would be a reasonable proxy for residential and
commercial buildings.\96\ The EPA document provides high and low
estimates for 2025 and 2030 at 3- and 7-percent discount rates.\97\ DOE
used the same linear interpolation and extrapolation as it did with the
values for electricity generation.
---------------------------------------------------------------------------
\96\ ``Area sources'' represents all emission sources for which
states do not have exact (point) locations in their emissions
inventories. Because exact locations would tend to be associated
with larger sources, ``area sources'' would be fairly representative
of small dispersed sources like homes and businesses.
\97\ ``Area sources'' are a category in the 2018 document from
EPA, but are not used in the 2021 document cited above. Available at
www.epa.gov/sites/default/files/2018-02/documents/sourceapportionmentbpttsd_2018.pdf (last accessed March 9, 2023).
---------------------------------------------------------------------------
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 AEO2023. 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
AEO2023 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 and
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
and 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 equipment 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 equipment 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.\98\ 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.
---------------------------------------------------------------------------
\98\ 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 apps.bea.gov/scb/pdf/regional/perinc/meth/rims2.pdf (last accessed March 9, 2023).
---------------------------------------------------------------------------
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'').\99\ 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.
---------------------------------------------------------------------------
\99\ 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 there are 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 over-estimate actual job
impacts over the long run for this rulemaking. Therefore, DOE used
ImSET only to generate results for near-term timeframes (2028-2032),
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 CRE.
It addresses the TSLs examined by DOE, the projected impacts of each of
these levels if adopted as energy conservation standards for CRE, 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 new or amended
standards for 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 equipment classes, to the
extent that there are such
[[Page 70258]]
interactions, and price elasticity of 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 CRE. DOE developed TSLs that combine
efficiency levels for each analyzed equipment class. 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 new and amended energy
conservation standards for CRE. TSL 6 represents the maximum
technologically feasible (``max-tech'') energy efficiency for all
equipment classes. TSL 5 represents the highest efficiency level with
positive LCC savings, including subgroups, for all equipment classes.
TSL 4 represents the highest efficiency level with maximum LCC savings
for all equipment classes. TSL 3 represents the highest efficiency
level with positive LCC savings and single speed compressor for
equipment classes in which this design option was considered. TSL 2
represents the highest efficiency level with maximum LCC savings and
single speed compressor for equipment classes with compressors, which
also corresponds to the minimum efficiency level between TSL 4 and TSL
3. TSL 1 represents the minimum efficiency level with positive LCC
savings.
Table V.1--Trial Standard Levels for CRE--Efficiency Levels
----------------------------------------------------------------------------------------------------------------
Equipment class TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 TSL 6
----------------------------------------------------------------------------------------------------------------
VOP.RC.M...................................... 1 2 2 2 2 2
VOP.RC.L...................................... 1 2 2 2 2 2
VOP.SC.M...................................... 1 2 2 4 5 5
VCT.RC.M...................................... 1 1 3 1 3 4
VCT.RC.L...................................... 1 2 2 2 2 3
VCT.SC.M...................................... 1 1 1 3 3 7
VCT.SC.L...................................... 1 3 3 5 6 7
VCT.SC.I...................................... 1 2 2 2 2 4
VCT.SC.H...................................... 0 0 0 0 0 7
VCS.SC.M...................................... 1 3 3 3 4 5
VCS.SC.L...................................... 1 4 4 5 6 6
VCS.SC.I...................................... 1 4 4 5 6 6
VCS.SC.H...................................... 1 1 5 1 6 7
SVO.RC.M...................................... 1 1 2 1 2 2
SVO.SC.M...................................... 1 4 4 6 7 7
SOC.RC.M...................................... 1 1 3 1 3 4
SOC.SC.M...................................... 1 3 3 5 7 7
HZO.RC.M...................................... 1 1 1 1 1 1
HZO.RC.L...................................... 1 1 1 1 1 1
HZO.SC.M...................................... 1 2 2 3 5 5
HZO.SC.L...................................... 1 2 2 3 5 5
HCT.SC.M...................................... 0 0 0 0 0 7
HCT.SC.L...................................... 0 0 0 0 0 7
HCT.SC.I...................................... 1 0 0 1 2 7
HCS.SC.M...................................... 1 1 2 1 2 4
HCS.SC.L...................................... 1 1 1 1 1 3
CB.SC.M....................................... 1 2 4 2 5 6
CB.SC.L....................................... 1 4 4 5 6 6
----------------------------------------------------------------------------------------------------------------
Table V.2 presents the TSLs and the corresponding percent reduction
in energy use below baseline by equipment class. The baseline values
for the self-contained equipment classes are presented in table IV.6 in
section IV.C.1.a of this document.
Table V.2--Trial Standard Levels for CRE--% Energy Reduction Below Analyzed Baseline
----------------------------------------------------------------------------------------------------------------
Equipment class TSL 1 (%) TSL 2 (%) TSL 3 (%) TSL 4 (%) TSL 5 (%) TSL 6 (%)
----------------------------------------------------------------------------------------------------------------
VOP.RC.M...................................... 4.5 12.2 12.2 12.2 12.2 12.2
VOP.RC.L...................................... 1.6 7.1 7.1 7.1 7.1 7.1
VOP.SC.M...................................... 2.6 11.0 11.0 21.9 22.6 22.6
VCT.RC.M...................................... 9.5 9.5 10.8 9.5 10.8 11.6
VCT.RC.L...................................... 3.4 3.8 3.8 3.8 3.8 6.8
VCT.SC.M...................................... 3.0 3.0 3.0 24.8 24.8 27.7
VCT.SC.L...................................... 2.9 4.6 4.6 16.7 17.0 20.1
VCT.SC.I...................................... 0.6 2.6 2.6 2.6 2.6 8.8
VCT.SC.H...................................... 0.0 0.0 0.0 0.0 0.0 41.3
VCS.SC.M...................................... 26.7 40.4 40.4 40.4 50.1 51.0
VCS.SC.L...................................... 6.6 13.8 13.8 22.6 23.2 23.2
VCS.SC.I...................................... 4.8 10.0 10.0 22.0 22.1 22.1
VCS.SC.H...................................... 53.9 53.9 69.3 53.9 77.6 78.1
SVO.RC.M...................................... 5.0 5.0 12.2 5.0 12.2 12.2
SVO.SC.M...................................... 3.4 14.9 14.9 22.6 23.7 23.7
[[Page 70259]]
SOC.RC.M...................................... 10.9 10.9 11.1 10.9 11.1 11.2
SOC.SC.M...................................... 13.7 22.9 22.9 38.9 39.8 39.8
HZO.RC.M...................................... 2.3 2.3 2.3 2.3 2.3 2.3
HZO.RC.L...................................... 1.1 1.1 1.1 1.1 1.1 1.1
HZO.SC.M...................................... 3.8 5.2 5.2 14.7 16.9 16.9
HZO.SC.L...................................... 2.4 3.1 3.1 17.7 18.4 18.4
HCT.SC.M...................................... 0.0 0.0 0.0 0.0 0.0 28.4
HCT.SC.L...................................... 0.0 0.0 0.0 0.0 0.0 43.2
HCT.SC.I...................................... 30.0 0.0 0.0 30.0 33.4 42.5
HCS.SC.M...................................... 36.7 36.7 44.2 36.7 44.2 45.4
HCS.SC.L...................................... 7.7 7.7 7.7 7.7 7.7 44.3
CB.SC.M....................................... 22.4 50.3 58.2 50.3 60.9 61.2
CB.SC.L....................................... 15.6 38.4 38.4 54.1 54.4 54.4
----------------------------------------------------------------------------------------------------------------
B. Economic Justification and Energy Savings
1. Economic Impacts on Individual Consumers
DOE analyzed the economic impacts on CRE consumers by looking at
the effects that potential new and 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 equipment affect consumers in two
ways: (1) purchase price increases and (2) annual operating costs
decrease. Inputs used for calculating the LCC and PBP include total
installed costs (i.e., equipment price plus installation costs), and
operating costs (i.e., annual energy use, energy prices, energy price
trends, repair costs, and maintenance costs). The LCC calculation also
uses equipment 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.58 show the LCC and PBP results for the
TSLs considered for each equipment class. In the first of each pair of
tables, the simple payback is measured relative to the baseline
equipment. 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 equipment with higher efficiency in the no-new-standards case,
the average savings are less than the difference between the average
LCC of the baseline equipment 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 an equipment 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--LCC and PBP Results by Efficiency Level for CB.SC.L
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average costs (2022F$)
---------------------------------------------------------------- Simple PBP Average
TSL Efficiency level First year's Lifetime (years) lifetime
Installed cost operating cost operating cost LCC (years)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline.............. 2,413.64 275.08 2,506.40 4,780.95 .............. 14.0
1............................... 1..................... 2,447.35 239.80 2,212.22 4,518.53 1.0 14.0
2..................... 2,480.02 195.85 1,840.56 4,177.65 0.8 14.0
3..................... 2,496.88 192.38 1,814.45 4,167.42 1.0 14.0
2,3............................. 4..................... 2,513.22 188.05 1,780.62 4,148.99 1.1 14.0
4............................... 5..................... 2,654.88 155.98 1,527.83 4,029.69 2.0 14.0
5,6............................. 6..................... 2,675.72 155.68 1,613.81 4,135.31 2.2 14.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each EL represent the average value if all purchasers in the sample use equipment with that efficiency level. The PBP is measured
relative to the baseline equipment.
Table V.4--Average LCC Savings for CB.SC.L
----------------------------------------------------------------------------------------------------------------
Average LCC % of consumers
TSL Efficiency savings * that experience
level (2022$) net cost
----------------------------------------------------------------------------------------------------------------
1............................................................. 1 263.09 0.0
2 524.57 0.0
3 534.80 0.0
2,3........................................................... 4 553.24 0.0
4............................................................. 5 672.54 0.2
5,6........................................................... 6 566.92 1.3
----------------------------------------------------------------------------------------------------------------
* The calculation considers only affected consumers. It excludes purchasers whose purchasing decision would not
change under a standard set at the corresponding EL, i.e., those with zero LCC savings.
[[Page 70260]]
Table V.5--LCC and PBP Results by Efficiency Level for CB.SC.M
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average costs (2022$)
---------------------------------------------------------------- Simple PBP Average
TSL Efficiency level First year's Lifetime (years) lifetime
Installed cost operating cost operating cost LCC (years)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline.............. 1,750.66 86.90 797.20 2,452.05 .............. 13.9
1............................... 1..................... 1,767.51 71.40 669.43 2,340.22 1.1 13.9
2,4............................. 2..................... 1,783.85 52.08 507.74 2,193.97 1.0 13.9
3..................... 1,800.70 49.43 488.95 2,191.11 1.3 13.9
3............................... 4..................... 1,817.04 46.12 464.25 2,181.85 1.6 13.9
5............................... 5..................... 1,958.70 45.03 484.78 2,336.27 5.0 13.9
6............................... 6..................... 1,992.58 44.94 571.95 2,455.47 5.8 13.9
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each EL represent the average value if all purchasers in the sample use equipment with that efficiency level. The PBP is measured
relative to the baseline equipment.
Table V.6--Average LCC Savings for CB.SC.M
----------------------------------------------------------------------------------------------------------------
Average LCC % of consumers
TSL Efficiency savings * that experience
level (2022$) net cost
----------------------------------------------------------------------------------------------------------------
1............................................................. 1 111.31 0.0
2,4........................................................... 2 208.70 0.0
3 190.07 4.1
3............................................................. 4 199.32 3.3
5............................................................. 5 44.90 45.9
6............................................................. 6 (74.29) 73.7
----------------------------------------------------------------------------------------------------------------
* The calculation considers only affected consumers. It excludes purchasers whose purchasing decision would not
change under a standard set at the corresponding EL, i.e., those with zero LCC savings.
Table V.7--LCC and PBP Results by Efficiency Level for HCS.SC.L
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average costs (2022$)
---------------------------------------------------------------- Simple PBP Average
TSL Efficiency level First year's Lifetime (years) lifetime
Installed cost operating cost operating cost LCC (years)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline.............. 1,646.86 44.53 428.89 1,984.18 .............. 14.0
1-5............................. 1..................... 1,661.72 41.62 407.13 1,976.45 5.1 14.0
2..................... 1,803.38 28.51 321.35 2,024.44 9.8 14.0
6............................... 3..................... 1,827.70 27.85 404.44 2,130.49 10.8 14.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each EL represent the average value if all purchasers in the sample use equipment with that efficiency level. The PBP is measured
relative to the baseline equipment.
Table V.8--Average LCC Savings for HCS.SC.L
----------------------------------------------------------------------------------------------------------------
Average LCC % of consumers
TSL Efficiency savings * that experience
level (2022$) net cost
----------------------------------------------------------------------------------------------------------------
1-5........................................................... 1 7.77 22.2
2 (41.22) 72.9
6............................................................. 3 (147.27) 96.1
----------------------------------------------------------------------------------------------------------------
* The calculation considers only affected consumers. It excludes purchasers whose purchasing decision would not
change under a standard set at the corresponding EL, i.e., those with zero LCC savings.
Table V.9--LCC and PBP Results by Efficiency Level for HCS.SC.M
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average costs 2022$
---------------------------------------------------------------- Simple PBP Average
TSL Efficiency level First year's Lifetime (years) lifetime
Installed cost operating cost operating cost LCC (years)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline.............. 1,658.31 37.22 382.20 1,953.10 .............. 14.0
1,2,4........................... 1..................... 1,667.94 25.66 279.21 1,859.23 0.8 14.0
3,5............................. 2..................... 1,682.80 23.32 262.46 1,856.56 1.8 14.0
3..................... 1,707.13 23.02 348.86 1,965.99 3.4 14.0
[[Page 70261]]
6............................... 4..................... 1,848.81 22.94 379.24 2,130.58 13.3 14.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each EL represent the average value if all purchasers in the sample use equipment with that efficiency level. The PBP is measured
relative to the baseline equipment.
Table V.10--Average LCC Savings for HCS.SC.M
----------------------------------------------------------------------------------------------------------------
Average LCC % of consumers
TSL Efficiency savings * that experience
level (2022$) net cost
----------------------------------------------------------------------------------------------------------------
1,2,4......................................................... 1 94.14 0.0
3,5........................................................... 2 84.89 4.9
3 (24.55) 73.5
6............................................................. 4 (189.13) 99.1
----------------------------------------------------------------------------------------------------------------
* The calculation considers only affected consumers. It excludes purchasers whose purchasing decision would not
change under a standard set at the corresponding EL, i.e., those with zero LCC savings.
Table V.11--LCC and PBP Results by Efficiency Level for HCT.SC.I
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average costs (2022$)
---------------------------------------------------------------- Simple PBP Average
TSL Efficiency level First year's Lifetime (years) lifetime
Installed cost operating cost operating cost LCC (years)
--------------------------------------------------------------------------------------------------------------------------------------------------------
2,3............................. Baseline.............. 1,532.98 115.03 1,152.21 2,599.07 .............. 14.0
1,4............................. 1..................... 1,674.44 85.83 923.71 2,504.07 4.8 14.0
5............................... 2..................... 1,764.26 82.51 870.76 2,535.89 7.1 14.0
3..................... 1,795.72 81.94 954.60 2,649.42 7.9 14.0
4..................... 1,869.93 75.95 901.32 2,666.17 8.6 14.0
5..................... 1,882.40 74.88 891.73 2,668.35 8.7 14.0
6..................... 1,885.31 74.52 888.53 2,667.90 8.7 14.0
6............................... 7..................... 2,146.62 73.68 881.07 2,907.06 14.8 14.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each EL represent the average value if all purchasers in the sample use equipment with that efficiency level. The PBP is measured
relative to the baseline equipment.
Table V.12--Average LCC Savings for HCT.SC.I
----------------------------------------------------------------------------------------------------------------
Average LCC % of consumers
TSL Efficiency savings * that experience
level (2022$) net cost
----------------------------------------------------------------------------------------------------------------
1,4........................................................... 1 93.84 15.0
5............................................................. 2 55.03 32.5
3 (58.42) 56.4
4 (68.58) 63.7
5 (69.11) 65.2
6 (68.66) 65.0
6............................................................. 7 (306.51) 85.8
----------------------------------------------------------------------------------------------------------------
* The calculation considers only affected consumers. It excludes purchasers whose purchasing decision would not
change under a standard set at the corresponding EL, i.e., those with zero LCC savings.
Table V.13--LCC and PBP Results by Efficiency Level for HCT.SC.L
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average costs (2022$)
---------------------------------------------------------------- Simple PBP Average
TSL Efficiency level First year's Lifetime (years) lifetime
Installed cost operating cost operating cost LCC (years)
--------------------------------------------------------------------------------------------------------------------------------------------------------
1-5............................. Baseline.............. 1,426.49 71.52 740.91 2,089.70 .............. 13.9
1..................... 1,567.94 53.78 614.92 2,097.45 8.0 13.9
2..................... 1,657.75 50.47 562.23 2,129.67 11.0 13.9
3..................... 1,689.21 49.85 645.27 2,242.46 12.1 13.9
4..................... 1,763.42 46.64 616.76 2,284.11 13.5 13.9
5..................... 1,775.89 46.06 611.63 2,290.76 13.7 13.9
[[Page 70262]]
6..................... 1,778.80 45.87 609.92 2,291.80 13.7 13.9
6............................... 7..................... 2,040.10 45.42 605.93 2,534.87 23.5 13.9
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each EL represent the average value if all purchasers in the sample use equipment with that efficiency level. The PBP is measured
relative to the baseline equipment.
Table V.14--Average LCC Savings for HCT.SC.L
----------------------------------------------------------------------------------------------------------------
Average LCC % of consumers
TSL Efficiency savings * that experience
level (2022$) net cost
----------------------------------------------------------------------------------------------------------------
1 (8.05) 42.8
2 (39.67) 57.0
3 (152.24) 71.5
4 (178.19) 81.8
5 (180.80) 83.9
6 (181.84) 83.8
6............................................................. 7 (421.60) 90.5
----------------------------------------------------------------------------------------------------------------
*The calculation considers only affected consumers. It excludes purchasers whose purchasing decision would not
change under a standard set at the corresponding EL, i.e., those with zero LCC savings.
Table V.15--LCC and PBP Results by Efficiency Level for HCT.SC.M
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average costs (2022$)
---------------------------------------------------------------- Simple PBP Average
TSL Efficiency level First year's Lifetime (years) lifetime
Installed cost operating cost operating cost LCC (years)
--------------------------------------------------------------------------------------------------------------------------------------------------------
1-5............................. Baseline.............. 1,310.11 33.30 378.46 1,617.43 .............. 14.0
1..................... 1,451.54 30.61 386.32 1,759.03 52.6 14.0
2..................... 1,541.34 27.30 333.51 1,791.13 38.5 14.0
3..................... 1,572.79 27.05 420.09 1,907.45 42.1 14.0
4..................... 1,646.98 25.79 408.84 1,966.35 44.9 14.0
5..................... 1,659.45 25.56 406.81 1,976.12 45.1 14.0
6..................... 1,662.35 25.48 406.14 1,978.19 45.1 14.0
6............................... 7..................... 1,923.61 25.31 404.56 2,223.67 76.8 14.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each EL represent the average value if all purchasers in the sample use equipment with that efficiency level. The PBP is measured
relative to the baseline equipment.
Table V.16--Average LCC Savings for HCT.SC.M
----------------------------------------------------------------------------------------------------------------
Average LCC % of consumers
TSL Efficiency savings * that experience
level (2022$) net cost
----------------------------------------------------------------------------------------------------------------
1 (141.71) 72.3
2 (164.18) 76.8
3 (279.83) 77.8
4 (307.69) 87.5
5 (309.50) 89.8
6 (311.58) 89.8
6............................................................. 7 (551.40) 91.4
----------------------------------------------------------------------------------------------------------------
* The calculation considers only affected consumers. It excludes purchasers whose purchasing decision would not
change under a standard set at the corresponding EL, i.e., those with zero LCC savings.
Table V.17--LCC and PBP Results by Efficiency Level for HZO.RC.L
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average costs (2022$)
---------------------------------------------------------------- Simple PBP Average
TSL Efficiency level First year's Lifetime (years) lifetime
Installed cost operating cost operating cost LCC (years)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline.............. 6,037.15 1,214.59 11,439.53 17,476.68 .............. 13.0
[[Page 70263]]
1-6............................. 1..................... 6,180.64 1,203.55 11,249.48 17,430.12 13.0 13.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each EL represent the average value if all purchasers in the sample use equipment with that efficiency level. The PBP is measured
relative to the baseline equipment.
Table V.18--Average LCC Savings for HZO.RC.L
----------------------------------------------------------------------------------------------------------------
Average LCC % of consumers
TSL Efficiency savings * that experience
level (2022$) net cost
----------------------------------------------------------------------------------------------------------------
1-6........................................................ 1 46.57 7.8
----------------------------------------------------------------------------------------------------------------
* The calculation considers only affected consumers. It excludes purchasers whose purchasing decision would not
change under a standard set at the corresponding EL, i.e., those with zero LCC savings.
Table V.19--LCC and PBP Results by Efficiency Level for HZO.RC.M
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average costs (2022$)
---------------------------------------------------------------- Simple PBP Average
TSL Efficiency level First year's Lifetime (years) lifetime
Installed cost operating cost operating cost LCC (years)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline.............. 6,023.23 543.01 5,247.93 11,271.17 .............. 13.0
1-6............................. 1..................... 6,166.77 532.57 5,064.11 11,230.88 13.8 13.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each EL represent the average value if all purchasers in the sample use equipment with that efficiency level. The PBP is measured
relative to the baseline equipment.
Table V.20--Average LCC Savings for HZO.RC.M
----------------------------------------------------------------------------------------------------------------
Average LCC % of consumers
TSL Efficiency savings * that experience
level (2022$) net cost
----------------------------------------------------------------------------------------------------------------
1-6........................................................ 1 40.29 10.8
----------------------------------------------------------------------------------------------------------------
* The calculation considers only affected consumers. It excludes purchasers whose purchasing decision would not
change under a standard set at the corresponding EL, i.e., those with zero LCC savings.
Table V.21--LCC and PBP Results by Efficiency Level for HZO.SC.L
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average costs (2022$)
---------------------------------------------------------------- Simple PBP Average
TSL Efficiency level First year's Lifetime (years) lifetime
Installed cost operating cost operating cost LCC (years)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline.............. 3,086.17 1,070.30 9,605.52 12,578.04 .............. 13.1
1............................... 1..................... 3,102.46 1,048.99 9,428.65 12,416.86 0.8 13.1
2,3............................. 2..................... 3,117.28 1,042.34 9,374.71 12,377.19 1.1 13.1
4............................... 3..................... 3,399.80 911.71 8,295.65 11,570.22 2.0 13.1
4..................... 3,425.87 908.91 8,358.49 11,658.16 2.1 13.1
5,6............................. 5..................... 3,542.47 905.58 8,287.58 11,699.54 2.8 13.1
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each EL represent the average value if all purchasers in the sample use equipment with that efficiency level. The PBP is measured
relative to the baseline equipment.
Table V.22--Average LCC Savings for HZO.SC.L
----------------------------------------------------------------------------------------------------------------
Average LCC % of consumers
TSL Efficiency savings * that experience
level (2022$) net cost
----------------------------------------------------------------------------------------------------------------
1............................................................. 1 160.85 0.0
2,3........................................................... 2 193.59 0.0
4............................................................. 3 971.22 0.2
4 883.28 0.5
[[Page 70264]]
5,6........................................................... 5 841.89 0.9
----------------------------------------------------------------------------------------------------------------
* The calculation considers only affected consumers. It excludes purchasers whose purchasing decision would not
change under a standard set at the corresponding EL, i.e., those with zero LCC savings.
Table V.23--LCC and PBP Results by Efficiency Level for HZO.SC.M
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average costs (2022$)
---------------------------------------------------------------- Simple PBP Average
TSL Efficiency level First year's Lifetime (years) lifetime
Installed cost operating cost operating cost LCC (years)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline.............. 2,397.43 429.17 3,921.92 6,226.78 .............. 13.1
1............................... 1..................... 2,412.25 415.60 3,812.49 6,131.59 1.1 13.1
2,3............................. 2..................... 2,427.07 410.44 3,771.80 6,105.15 1.6 13.1
4............................... 3..................... 2,568.36 376.54 3,509.56 5,978.72 3.3 13.1
4..................... 2,594.43 371.96 3,556.41 6,050.63 3.4 13.1
5,6............................. 5..................... 2,711.05 368.63 3,398.99 6,005.32 5.2 13.1
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each EL represent the average value if all purchasers in the sample use equipment with that efficiency level. The PBP is measured
relative to the baseline equipment.
Table V.24--Average LCC Savings for HZO.SC.M
----------------------------------------------------------------------------------------------------------------
Average LCC % of consumers
TSL Efficiency savings* that experience
level (2022$) net cost
----------------------------------------------------------------------------------------------------------------
1............................................................. 1 95.03 0.0
2,3........................................................... 2 117.44 0.2
4............................................................. 3 226.50 6.8
4 154.59 19.6
5,6........................................................... 5 199.91 14.8
----------------------------------------------------------------------------------------------------------------
* The calculation considers only affected consumers. It excludes purchasers whose purchasing decision would not
change under a standard set at the corresponding EL, i.e., those with zero LCC savings.
Table V.25--LCC and PBP Results by Efficiency Level for SOC.RC.M
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average costs (2022$)
---------------------------------------------------------------- Simple PBP Average
TSL Efficiency level First year's Lifetime (years) lifetime
Installed cost operating cost operating cost LCC (years)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline.............. 13,455.98 847.97 8,984.53 22,440.51 .............. 12.9
1,2,4........................... 1..................... 13,653.31 770.99 7,801.16 21,454.47 2.6 12.9
2..................... 13,701.42 769.68 7,789.05 21,490.47 3.1 12.9
3,5............................. 3..................... 13,712.64 769.26 7,785.15 21,497.79 3.3 12.9
6............................... 4..................... 14,720.84 768.26 7,775.94 22,496.78 15.9 12.9
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each EL represent the average value if all purchasers in the sample use equipment with that efficiency level. The PBP is measured
relative to the baseline equipment.
Table V.26--Average LCC Savings for SOC.RC.M
----------------------------------------------------------------------------------------------------------------
Average LCC % of consumers
TSL Efficiency savings * that experience
level (2022$) net cost
----------------------------------------------------------------------------------------------------------------
1,2,4......................................................... 1 986.27 0.0
2 944.21 0.6
3,5........................................................... 3 929.51 1.4
6............................................................. 4 (70.50) 70.9
----------------------------------------------------------------------------------------------------------------
* The calculation considers only affected consumers. It excludes purchasers whose purchasing decision would not
change under a standard set at the corresponding EL, i.e., those with zero LCC savings.
[[Page 70265]]
Table V.27--LCC and PBP Results by Efficiency Level for SOC.SC.M
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average costs (2022$)
---------------------------------------------------------------- Simple PBP Average
TSL Efficiency level First year's Lifetime (years) lifetime
Installed cost operating cost operating cost LCC (years)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline.............. 15,074.90 1,010.13 10,218.96 24,736.27 .............. 13.0
1............................... 1..................... 15,084.50 894.71 9,215.75 23,742.30 0.1 13.0
2..................... 15,216.87 841.08 8,823.37 23,477.38 0.8 13.0
2,3............................. 3..................... 15,292.93 816.47 8,630.16 23,357.41 1.1 13.0
4..................... 15,575.42 761.20 8,212.91 23,212.16 2.0 13.0
4............................... 5..................... 15,772.73 681.78 7,036.90 22,226.13 2.1 13.0
6..................... 15,820.79 676.67 6,992.45 22,227.96 2.2 13.0
5,6............................. 7..................... 16,888.21 673.64 7,052.97 23,316.27 5.4 13.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each EL represent the average value if all purchasers in the sample use equipment with that efficiency level. The PBP is measured
relative to the baseline equipment.
Table V.28--Average LCC Savings for SOC.SC.M
----------------------------------------------------------------------------------------------------------------
Average LCC % of consumers
TSL Efficiency savings * that experience
level (2022$) net cost
----------------------------------------------------------------------------------------------------------------
1............................................................. 1 994.55 0.0
2 1,085.17 0.4
2,3........................................................... 3 1,015.54 0.9
4 1,063.82 3.7
4............................................................. 5 1,834.72 0.0
6 1,832.85 0.0
5,6........................................................... 7 698.37 25.6
----------------------------------------------------------------------------------------------------------------
* The calculation considers only affected consumers. It excludes purchasers whose purchasing decision would not
change under a standard set at the corresponding EL, i.e., those with zero LCC savings.
Table V.29--LCC and PBP Results by Efficiency Level for SVO.RC.M
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average costs (2022$)
---------------------------------------------------------------- Simple PBP Average
TSL Efficiency level First year's Lifetime (years) lifetime
Installed cost operating cost operating cost LCC (years)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline.............. 6,998.28 1,115.54 11,064.57 18,062.84 .............. 13.0
1,2,4........................... 1..................... 7,222.52 1,068.46 10,317.17 17,539.69 4.8 13.0
3,5,6........................... 2..................... 7,833.88 1,001.65 9,696.11 17,529.99 7.3 13.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each EL represent the average value if all purchasers in the sample use equipment with that efficiency level. The PBP is measured
relative to the baseline equipment.
Table V.30--Average LCC Savings for SVO.RC.M
----------------------------------------------------------------------------------------------------------------
Average LCC % of consumers
TSL Efficiency savings * that experience
level (2022$) net cost
----------------------------------------------------------------------------------------------------------------
1,2,4......................................................... 1 522.85 0.0
3,5,6......................................................... 2 406.59 18.4
----------------------------------------------------------------------------------------------------------------
* The calculation considers only affected consumers. It excludes purchasers whose purchasing decision would not
change under a standard set at the corresponding EL, i.e., those with zero LCC savings.
Table V.31--LCC and PBP Results by Efficiency Level for SVO.SC.M
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average costs (2022$)
---------------------------------------------------------------- Simple PBP Average
TSL Efficiency level First year's Lifetime (years) lifetime
Installed cost operating cost operating cost LCC (years)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline.............. 4,779.96 902.18 8,199.62 12,793.46 .............. 13.0
1............................... 1..................... 4,810.58 876.57 7,995.58 12,618.85 1.2 13.0
2..................... 4,844.20 864.11 7,897.08 12,552.66 1.7 13.0
3..................... 4,876.77 848.60 7,771.84 12,458.72 1.8 13.0
2,3............................. 4..................... 5,080.56 789.90 7,264.50 12,147.21 2.7 13.0
5..................... 5,363.08 746.66 6,953.23 12,107.44 3.8 13.0
[[Page 70266]]
4............................... 6..................... 5,479.68 731.65 6,718.66 11,984.91 4.1 13.0
5,6............................. 7..................... 5,550.97 723.43 6,733.74 12,068.50 4.3 13.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each EL represent the average value if all purchasers in the sample use equipment with that efficiency level. The PBP is measured
relative to the baseline equipment.
Table V.32--Average LCC Savings for SVO.SC.M
----------------------------------------------------------------------------------------------------------------
Average LCC % of consumers
TSL Efficiency savings * that experience
level (2022$) net cost
----------------------------------------------------------------------------------------------------------------
1............................................................. 1 175.56 0.0
2 237.26 0.2
3 324.02 0.1
2,3........................................................... 4 600.52 0.1
5 586.37 8.2
4............................................................. 6 692.32 4.6
5,6........................................................... 7 602.17 11.0
----------------------------------------------------------------------------------------------------------------
* The calculation considers only affected consumers. It excludes purchasers whose purchasing decision would not
change under a standard set at the corresponding EL, i.e., those with zero LCC savings.
Table V.33--LCC and PBP Results by Efficiency Level for VCS.SC.H
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average costs (2022$)
---------------------------------------------------------------- Simple PBP Average
TSL Efficiency level First year's Lifetime (years) lifetime
Installed cost operating cost operating cost LCC (years)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline.............. 3,949.97 101.23 969.24 4,701.69 .............. 14.0
1,2,4........................... 1..................... 3,959.60 55.10 558.87 4,300.41 0.2 14.0
2..................... 3,991.29 50.58 535.86 4,307.35 0.8 14.0
3..................... 4,021.01 44.95 501.90 4,301.47 1.3 14.0
4..................... 4,037.86 43.59 494.32 4,309.82 1.5 14.0
3............................... 5..................... 4,054.20 41.89 483.62 4,314.55 1.8 14.0
5............................... 6..................... 4,195.84 34.74 451.10 4,415.86 3.7 14.0
6............................... 7..................... 4,242.12 34.34 536.33 4,544.82 4.4 14.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each EL represent the average value if all purchasers in the sample use equipment with that efficiency level. The PBP is measured
relative to the baseline equipment.
Table V.34--Average LCC Savings for VCS.SC.H
----------------------------------------------------------------------------------------------------------------
Average LCC % of consumers
TSL Efficiency savings * that experience
level (2022$) net cost
----------------------------------------------------------------------------------------------------------------
1,2,4......................................................... 1 399.54 0.0
2 270.97 17.8
3 276.86 15.0
4 268.51 17.4
3............................................................. 5 263.78 18.4
5............................................................. 6 162.47 31.6
6............................................................. 7 33.51 52.8
----------------------------------------------------------------------------------------------------------------
* The calculation considers only affected consumers. It excludes purchasers whose purchasing decision would not
change under a standard set at the corresponding EL, i.e., those with zero LCC savings.
Table V.35--LCC and PBP Results by Efficiency Level for VCS.SC.I
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average costs (2022$)
---------------------------------------------------------------- Simple PBP Average
TSL Efficiency level First year's Lifetime (years) lifetime
Installed cost operating cost operating cost LCC (years)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline.............. 4,529.28 627.67 5,752.96 10,031.71 .............. 14.1
1............................... 1..................... 4,538.91 602.08 5,524.85 9,812.69 0.4 14.1
[[Page 70267]]
2..................... 4,568.63 584.86 5,387.74 9,703.65 0.9 14.1
3..................... 4,585.48 580.39 5,352.37 9,684.20 1.2 14.1
2,3............................. 4..................... 4,601.82 574.81 5,307.05 9,654.31 1.4 14.1
4............................... 5..................... 4,885.14 511.08 4,801.64 9,416.52 3.1 14.1
5,6............................. 6..................... 4,931.42 510.61 4,886.41 9,545.00 3.4 14.1
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each EL represent the average value if all purchasers in the sample use equipment with that efficiency level. The PBP is measured
relative to the baseline equipment.
Table V.36--Average LCC Savings for VCS.SC.I
----------------------------------------------------------------------------------------------------------------
Average LCC % of consumers
TSL Efficiency savings * that experience
level (2022$) net cost
----------------------------------------------------------------------------------------------------------------
1............................................................. 1 219.02 0.0
2 328.05 0.0
3 347.51 0.0
2,3........................................................... 4 377.40 0.0
4............................................................. 5 615.19 3.6
5,6........................................................... 6 486.70 8.9
----------------------------------------------------------------------------------------------------------------
* The calculation considers only affected consumers. It excludes purchasers whose purchasing decision would not
change under a standard set at the corresponding EL, i.e., those with zero LCC savings.
Table V.37--LCC and PBP Results by Efficiency Level for VCS.SC.L
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average costs (2022$)
---------------------------------------------------------------- Simple PBP Average
TSL Efficiency level First year's Lifetime (years) lifetime
Installed cost operating cost operating cost LCC (years)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline.............. 4,195.10 411.78 3,767.90 7,721.94 .............. 14.0
1............................... 1..................... 4,204.73 388.98 3,565.71 7,528.82 0.4 14.0
2..................... 4,234.45 373.64 3,446.25 7,437.36 1.0 14.0
3..................... 4,251.30 369.23 3,411.70 7,418.70 1.3 14.0
2,3............................. 4..................... 4,267.64 363.74 3,367.39 7,389.78 1.5 14.0
4............................... 5..................... 4,409.29 332.97 3,125.76 7,281.65 2.7 14.0
5,6............................. 6..................... 4,455.57 331.05 3,197.27 7,396.77 3.2 14.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each EL represent the average value if all purchasers in the sample use equipment with that efficiency level. The PBP is measured
relative to the baseline equipment.
Table V.38--Average LCC Savings for VCS.SC.L
----------------------------------------------------------------------------------------------------------------
Average LCC % of consumers
TSL Efficiency savings * that experience
level (2022$) net cost
----------------------------------------------------------------------------------------------------------------
1............................................................. 1 193.07 0.0
2 265.56 0.1
3 284.18 0.2
2,3........................................................... 4 309.04 0.2
4............................................................. 5 375.85 4.3
5,6........................................................... 6 260.73 17.1
----------------------------------------------------------------------------------------------------------------
* The calculation considers only affected consumers. It excludes purchasers whose purchasing decision would not
change under a standard set at the corresponding EL, i.e., those with zero LCC savings.
Table V.39--LCC and PBP Results by Efficiency Level for VCS.SC.M
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average costs (2022$)
---------------------------------------------------------------- Simple PBP Average
TSL Efficiency level First year's Lifetime (years) lifetime
Installed cost operating cost operating cost LCC (years)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline.............. 3,956.46 112.72 1,080.77 4,809.78 .............. 14.1
1............................... 1..................... 3,966.08 87.24 854.78 4,592.87 0.4 14.1
[[Page 70268]]
2..................... 3,995.80 77.73 786.61 4,552.70 1.1 14.1
2-4............................. 3..................... 4,012.13 74.16 759.47 4,540.95 1.4 14.1
5............................... 4..................... 4,153.76 64.87 709.37 4,624.33 4.1 14.1
6............................... 5..................... 4,200.04 64.02 790.45 4,749.02 5.0 14.1
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each EL represent the average value if all purchasers in the sample use equipment with that efficiency level. The PBP is measured
relative to the baseline equipment.
Table V.40--Average LCC Savings for VCS.SC.M
----------------------------------------------------------------------------------------------------------------
Average LCC % of consumers
TSL Efficiency savings * that experience
level (2022$) net cost
----------------------------------------------------------------------------------------------------------------
1............................................................. 1 217.33 0.0
2 235.40 1.3
2-4........................................................... 3 240.66 1.6
5............................................................. 4 128.81 27.0
6............................................................. 5 0.17 56.2
----------------------------------------------------------------------------------------------------------------
* The calculation considers only affected consumers. It excludes purchasers whose purchasing decision would not
change under a standard set at the corresponding EL, i.e., those with zero LCC savings.
Table V.41--LCC and PBP Results by Efficiency Level for VCT.RC.L
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average costs (2022$)
---------------------------------------------------------------- Simple PBP Average
TSL Efficiency level First year's Lifetime (years) lifetime
Installed cost operating cost operating cost LCC (years)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline.............. 9,261.69 1,277.59 12,897.96 22,159.65 .............. 14.0
1............................... 1..................... 9,486.23 1,241.24 12,349.78 21,836.00 6.2 14.0
2-5............................. 2..................... 9,525.84 1,236.13 12,299.80 21,825.64 6.4 14.0
6............................... 3..................... 13,084.28 1,204.29 11,988.81 25,073.10 52.2 14.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each EL represent the average value if all purchasers in the sample use equipment with that efficiency level. The PBP is measured
relative to the baseline equipment.
Table V.42--Average LCC Savings for VCT.RC.L
----------------------------------------------------------------------------------------------------------------
Average LCC % of consumers
TSL Efficiency savings * that experience
level (2022$) net cost
----------------------------------------------------------------------------------------------------------------
1............................................................. 1 323.67 0.0
2-5........................................................... 2 331.04 0.4
6............................................................. 3 (2,934.72) 99.7
----------------------------------------------------------------------------------------------------------------
* The calculation considers only affected consumers. It excludes purchasers whose purchasing decision would not
change under a standard set at the corresponding EL, i.e., those with zero LCC savings.
Table V.43--LCC and PBP Results by Efficiency Level for VCT.RC.M
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average costs (2022$)
---------------------------------------------------------------- Simple PBP Average
TSL Efficiency level First year's Lifetime (years) lifetime
Installed cost operating cost operating cost LCC (years)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline.............. 9,052.59 433.39 4,761.74 13,814.33 .............. 13.9
1,2,4........................... 1..................... 9,277.06 398.58 4,228.77 13,505.84 6.5 13.9
2..................... 9,446.82 394.88 4,192.70 13,639.51 10.2 13.9
3,5............................. 3..................... 9,486.42 393.69 4,181.07 13,667.49 10.9 13.9
6............................... 4..................... 13,043.92 390.88 4,153.62 17,197.54 93.9 13.9
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each EL represent the average value if all purchasers in the sample use equipment with that efficiency level. The PBP is measured
relative to the baseline equipment.
[[Page 70269]]
Table V.44--Average LCC Savings for VCT.RC.M
----------------------------------------------------------------------------------------------------------------
Average LCC % of Consumers
TSL Efficiency savings * that experience
level (2022$) net cost
----------------------------------------------------------------------------------------------------------------
1,2,4......................................................... 1 308.65 0.0
2 171.49 8.1
3,5........................................................... 3 133.62 24.0
6............................................................. 4 (3,397.02) 100.0
----------------------------------------------------------------------------------------------------------------
* The calculation considers only affected consumers. It excludes purchasers whose purchasing decision would not
change under a standard set at the corresponding EL, i.e., those with zero LCC savings.
Table V.45--LCC and PBP Results by Efficiency Level for VCT.SC.H
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average costs (2022$)
---------------------------------------------------------------- Simple PBP Average
TSL Efficiency level First year's Lifetime (years) lifetime
Installed cost operating cost operating cost LCC (years)
--------------------------------------------------------------------------------------------------------------------------------------------------------
1-5............................. Baseline.............. 4,470.66 126.82 1,370.85 5,586.32 .............. 14.0
1..................... 4,531.98 116.79 1,315.87 5,589.16 6.1 14.0
2..................... 4,565.12 112.31 1,285.13 5,589.67 6.5 14.0
3..................... 4,706.57 97.60 1,186.12 5,624.01 8.1 14.0
4..................... 4,823.32 85.18 1,008.73 5,556.70 8.5 14.0
5..................... 4,907.08 83.82 996.65 5,623.60 10.2 14.0
6..................... 4,953.92 83.25 1,080.12 5,751.23 11.1 14.0
6............................... 7..................... 6,377.25 82.48 1,073.29 7,086.37 43.0 14.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each EL represent the average value if all purchasers in the sample use equipment with that efficiency level. The PBP is measured
relative to the baseline equipment.
Table V.46--Average LCC Savings for VCT.SC.H
----------------------------------------------------------------------------------------------------------------
Average LCC % of Consumers
TSL Efficiency savings * that experience
level (2022$) net cost
----------------------------------------------------------------------------------------------------------------
1 (2.49) 30.6
2 (2.54) 42.4
3 (36.07) 62.7
4 33.12 46.7
5 (33.78) 63.8
6 (161.50) 79.4
6............................................................. 7 (1,496.81) 96.9
----------------------------------------------------------------------------------------------------------------
* The calculation considers only affected consumers. It excludes purchasers whose purchasing decision would not
change under a standard set at the corresponding EL, i.e., those with zero LCC savings.
Table V.47--LCC and PBP Results by Efficiency Level for VCT.SC.I
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average costs (2022$)
---------------------------------------------------------------- Simple PBP Average
TSL Efficiency level First year's Lifetime (years) lifetime
Installed cost operating cost operating cost LCC (years)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline.............. 6,606.39 717.90 6,723.31 12,967.00 .............. 14.0
1............................... 1..................... 6,622.23 714.41 6,692.45 12,951.12 4.6 14.0
2-5............................. 2..................... 6,738.97 701.99 6,515.27 12,884.25 8.3 14.0
3..................... 7,046.29 690.86 6,505.12 13,164.53 16.3 14.0
6............................... 4..................... 8,469.43 664.72 6,273.60 14,277.88 35.0 14.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each EL represent the average value if all purchasers in the sample use equipment with that efficiency level. The PBP is measured
relative to the baseline equipment.
Table V.48--Average LCC Savings for VCT.SC.I
----------------------------------------------------------------------------------------------------------------
Average LCC % of Consumers
TSL Efficiency savings * that experience
level (2022$) net cost
----------------------------------------------------------------------------------------------------------------
1............................................................. 1 15.76 1.5
2-5........................................................... 2 77.46 1.1
3 (226.28) 85.6
[[Page 70270]]
6............................................................. 4 (1,318.52) 100.0
----------------------------------------------------------------------------------------------------------------
* The calculation considers only affected consumers. It excludes purchasers whose purchasing decision would not
change under a standard set at the corresponding EL, i.e., those with zero LCC savings.
Table V.49--LCC and PBP Results by Efficiency Level for VCT.SC.L
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average costs (2022$)
---------------------------------------------------------------- Simple PBP Average
TSL Efficiency level First year's Lifetime (years) lifetime
Installed cost operating cost operating cost LCC (years)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline.............. 6,441.77 616.41 5,793.30 11,866.44 .............. 14.0
1............................... 1..................... 6,471.45 601.18 5,674.48 11,775.59 2.0 14.0
2..................... 6,487.76 595.37 5,627.26 11,743.75 2.2 14.0
2,3............................. 3..................... 6,503.61 592.42 5,601.15 11,732.58 2.6 14.0
4..................... 6,786.54 541.91 5,215.01 11,613.15 4.6 14.0
4............................... 5..................... 6,903.32 529.48 5,037.56 11,545.79 5.3 14.0
5............................... 6..................... 6,956.92 527.53 5,108.98 11,667.74 5.8 14.0
6............................... 7..................... 8,380.48 511.74 4,968.73 12,869.46 18.5 14.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each EL represent the average value if all purchasers in the sample use equipment with that efficiency level. The PBP is measured
relative to the baseline equipment.
Table V.50--Average LCC Savings for VCT.SC.L
----------------------------------------------------------------------------------------------------------------
Average LCC % of Consumers
TSL Efficiency savings * that experience
level (2022$) net cost
----------------------------------------------------------------------------------------------------------------
1............................................................. 1 91.06 0.3%
2 111.65 0.6%
2,3........................................................... 3 122.78 0.7%
4 174.92 22.6%
4............................................................. 5 242.33 18.8%
5............................................................. 6 120.34 37.5%
6............................................................. 7 (1,093.50) 98.2%
----------------------------------------------------------------------------------------------------------------
* The calculation considers only affected consumers. It excludes purchasers whose purchasing decision would not
change under a standard set at the corresponding EL, i.e., those with zero LCC savings.
Table V.51--LCC and PBP Results by Efficiency Level for VCT.SC.M
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average costs (2022$)
---------------------------------------------------------------- Simple PBP Average
TSL Efficiency level First year's Lifetime (years) lifetime
Installed cost operating cost operating cost LCC (years)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline.............. 4,523.51 173.05 1,797.38 6,066.11 .............. 13.9
1-3............................. 1..................... 4,539.82 168.71 1,763.44 6,047.55 3.8 13.9
2..................... 4,681.25 149.19 1,623.12 6,040.70 6.6 13.9
4,5............................. 3..................... 4,798.00 136.78 1,446.54 5,974.28 7.6 13.9
4..................... 4,865.91 135.23 1,432.85 6,024.67 9.1 13.9
5..................... 4,881.76 134.73 1,428.43 6,035.20 9.4 13.9
6..................... 4,928.59 133.74 1,507.74 6,158.71 10.3 13.9
6............................... 7..................... 6,351.83 132.58 1,497.52 7,491.48 45.2 13.9
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each EL represent the average value if all purchasers in the sample use equipment with that efficiency level. The PBP is measured
relative to the baseline equipment.
Table V.52--Average LCC Savings for VCT.SC.M
----------------------------------------------------------------------------------------------------------------
Average LCC % of Consumers
TSL Efficiency savings * that experience
level (2022$) net cost
----------------------------------------------------------------------------------------------------------------
1-3........................................................... 1 18.80 5.7%
2 20.52 29.8
4,5........................................................... 3 82.53 20.1
4 30.92 42.4
5 20.36 45.9
[[Page 70271]]
6 (103.42) 64.6
6............................................................. 7 (1,417.22) 100.0
----------------------------------------------------------------------------------------------------------------
* The calculation considers only affected consumers. It excludes purchasers whose purchasing decision would not
change under a standard set at the corresponding EL, i.e., those with zero LCC savings.
Table V.53--LCC and PBP Results by Efficiency Level for VOP.RC.L
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average costs (2022$)
---------------------------------------------------------------- Simple PBP Average
TSL Efficiency level First year's Lifetime (years) lifetime
Installed cost operating cost operating cost LCC (years)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline.............. 9,804.18 3,953.75 37,429.46 47,233.63 .............. 13.0
1............................... 1..................... 10,028.41 3,901.88 36,591.13 46,619.55 4.3 13.0
2-6............................. 2..................... 10,639.77 3,719.92 34,905.64 45,545.41 3.6 13.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each EL represent the average value if all purchasers in the sample use equipment with that efficiency level. The PBP is measured
relative to the baseline equipment.
Table V.54--Average LCC Savings for VOP.RC.L
----------------------------------------------------------------------------------------------------------------
Average LCC % of Consumers
TSL Efficiency savings * that experience
level (2022$) net cost
----------------------------------------------------------------------------------------------------------------
1............................................................. 1 615.37 0.0
2-6........................................................... 2 1,524.52 0.0
----------------------------------------------------------------------------------------------------------------
* The calculation considers only affected consumers. It excludes purchasers whose purchasing decision would not
change under a standard set at the corresponding EL, i.e., those with zero LCC savings.
Table V.55--LCC and PBP Results by Efficiency Level for VOP.RC.M
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average costs (2022$)
---------------------------------------------------------------- Simple PBP Average
TSL Efficiency level First year's Lifetime (years) lifetime
Installed cost operating cost operating cost LCC (years)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline.............. 8,943.72 1,436.26 14,170.99 23,114.71 .............. 13.0
1............................... 1..................... 9,167.99 1,381.81 13,308.67 22,476.66 4.1 13.0
2-6............................. 2..................... 9,779.42 1,290.04 12,457.83 22,237.25 5.7 13.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each EL represent the average value if all purchasers in the sample use equipment with that efficiency level. The PBP is measured
relative to the baseline equipment.
Table V.56--Average LCC Savings for VOP.RC.M
----------------------------------------------------------------------------------------------------------------
Average LCC % of Consumers
TSL Efficiency savings * that experience
level (2022$) net cost
----------------------------------------------------------------------------------------------------------------
1............................................................. 1 638.01 0.0
2-6........................................................... 2 707.13 8.2
----------------------------------------------------------------------------------------------------------------
* The calculation considers only affected consumers. It excludes purchasers whose purchasing decision would not
change under a standard set at the corresponding EL, i.e., those with zero LCC savings.
Table V.57--LCC and PBP Results by Efficiency Level for VOP.SC.M
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average costs (2022$)
---------------------------------------------------------------- Simple PBP Average
TSL Efficiency level First year's Lifetime (years) lifetime
Installed cost operating cost operating cost LCC (years)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline.............. 6,563.78 1,076.62 9,936.29 16,264.24 .............. 13.0
1............................... 1..................... 6,612.64 1,053.03 9,745.17 16,120.22 2.1 13.0
2,3............................. 2..................... 6,816.42 977.96 9,092.80 15,664.28 2.6 13.0
3..................... 7,098.92 897.61 8,457.71 15,301.52 3.0 13.0
4............................... 4..................... 7,242.43 879.28 8,164.31 15,146.45 3.4 13.0
[[Page 70272]]
5,6............................. 5..................... 7,303.09 872.97 8,196.09 15,236.71 3.6 13.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each EL represent the average value if all purchasers in the sample use equipment with that efficiency level. The PBP is measured
relative to the baseline equipment.
Table V.58--Average LCC Savings for VOP.SC.M
----------------------------------------------------------------------------------------------------------------
Average LCC % of consumers
TSL Efficiency savings * that experience
level (2022$) net cost
----------------------------------------------------------------------------------------------------------------
1............................................................. 1 143.30 0.6
2,3........................................................... 2 590.02 0.0
3 927.32 1.0
4............................................................. 4 1,082.34 0.4
5,6........................................................... 5 992.17 1.0
----------------------------------------------------------------------------------------------------------------
* The calculation considers only affected consumers. It excludes purchasers whose purchasing decision would not
change under a standard set at the corresponding EL, i.e., those with zero LCC savings.
b. Consumer Subgroup Analysis
In the consumer subgroup analysis, DOE estimated the impact of the
considered TSLs on small businesses. Table V.59 compares the average
LCC savings and PBP at each efficiency level for small businesses with
the entire consumer sample for CRE. In most cases, the average LCC
savings and PBP for small businesses at the considered efficiency
levels are not substantially different from the average for all
businesses. Chapter 11 of the NOPR TSD presents the complete LCC and
PBP results for the subgroup.
Table V.59--Average LCC and PBP Results Comparison for Small Businesses for CRE
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average LCC savings (2022$) Simple payback period (years) Net cost (%)
Equipment class EL -----------------------------------------------------------------------------------------------
Small business All purchasers Small business All purchasers Small business All purchasers
--------------------------------------------------------------------------------------------------------------------------------------------------------
CB.SC.L...................................... 1 227.9 263.09 1.0 1.0 0 0
2 455.5 524.57 0.8 0.8 0 0
3 462.59 534.80 1.0 1.0 0 0
4 476.95 553.24 1.1 1.1 0 0
5 565.61 672.54 2.0 2.0 0 0
6 473.70 566.92 2.2 2.2 2 1
CB.SC.M...................................... 1 96.14 111.31 1.1 1.1 0 0
2 180.72 208.70 1.0 1.0 0 0
3 162.71 190.07 1.3 1.3 5 4
4 168.99 199.32 1.6 1.6 4 3
5 16.80 44.90 5.0 5.0 53 46
6 (88.63) (74.29) 5.8 5.8 79 74
HCS.SC.L..................................... 1 5.13 7.77 5.11 5.1 28 22
2 (54.10) (41.22) 9.77 9.8 77 73
3 (146.77) (147.27) 10.84 10.8 98 96
HCS.SC.M..................................... 1 81.56 94.14 0.83 0.8 0 0
2 71.87 84.89 1.76 1.8 6 5
3 (23.76) (24.55) 3.44 3.4 76 74
4 (184.84) (189.13) 13.34 13.3 99 99
HCT.SC.I..................................... 1 66.18 93.84 4.84 4.8 19 15
2 21.88 55.03 7.11 7.1 40 33
3 (78.05) (58.42) 7.94 7.9 60 56
4 (93.01) (68.58) 8.62 8.6 69 64
5 (94.20) (69.11) 8.70 8.7 70 65
6 (94.15) (68.66) 8.70 8.7 70 65
7 (334.29) (306.51) 14.84 14.8 89 86
HCT.SC.L..................................... 1 (23.30) (8.05) 7.97 8.0 49 43
2 (61.20) (39.67) 10.99 11.0 61 57
3 (160.47) (152.24) 12.13 12.1 75 72
4 (189.47) (178.19) 13.54 13.5 85 82
5 (192.51) (180.80) 13.72 13.7 87 84
6 (193.78) (181.84) 13.73 13.7 87 84
7 (435.54) (421.60) 23.51 23.5 91 90
[[Page 70273]]
HCT.SC.M..................................... 1 (140.89) (141.71) 52.63 52.6 72 72
2 (170.95) (164.18) 38.53 38.5 77 77
3 (272.85) (279.83) 42.07 42.1 78 78
4 (303.34) (307.69) 44.85 44.9 87 87
5 (305.59) (309.50) 45.14 45.1 90 90
6 (307.77) (311.58) 45.07 45.1 90 90
7 (549.59) (551.40) 76.76 76.8 91 91
HZO.RC.L..................................... 1 20.91 46.57 12.99 13.0 32 8
HZO.RC.M..................................... 1 15.27 40.29 13.75 13.8 38 11
HZO.SC.L..................................... 1 140.87 160.85 0.76 0.8 0 0
2 168.35 193.59 1.11 1.1 0 0
3 826.60 971.22 1.98 2.0 0 0
4 749.21 883.28 2.10 2.1 1 0
5 698.01 841.89 2.77 2.8 1 1
HZO.SC.M..................................... 1 82.72 95.03 1.09 1.1 0 0
2 101.05 117.44 1.58 1.6 0 0
3 182.80 226.50 3.25 3.3 8 7
4 119.58 154.59 3.44 3.4 24 20
5 141.74 199.91 5.18 5.2 22 15
SOC.RC.M..................................... 1 828.50 986.27 2.56 2.6 0 0
2 785.91 944.21 3.13 3.1 1 1
3 771.98 929.51 3.26 3.3 1 1
4 (229.00) (70.50) 15.87 15.9 82 71
SOC.SC.M..................................... 1 880.09 994.55 0.08 0.1 0 0
2 947.58 1085.17 0.84 0.8 0 0
3 880.22 1015.54 1.13 1.1 1 1
4 894.49 1063.82 2.01 2.0 5 4
5 1551.11 1834.72 2.13 2.1 0 0
6 1543.96 1832.85 2.24 2.2 0 0
7 422.14 698.37 5.39 5.4 32 26
SVO.RC.M..................................... 1 422.15 522.85 4.76 4.8 0 0
2 253.11 406.59 7.34 7.3 26 18
SVO.SC.M..................................... 1 152.71 175.56 1.20 1.2 0 0
2 203.94 237.26 1.69 1.7 0 0
3 277.65 324.02 1.81 1.8 0 0
4 500.97 600.52 2.68 2.7 0 0
5 461.06 586.37 3.75 3.8 11 8
6 540.59 692.32 4.10 4.1 7 5
7 456.68 602.17 4.31 4.3 16 11
VCS.SC.H..................................... 1 349.72 399.54 0.21 0.2 0 0
2 233.72 270.97 0.82 0.8 20 18
3 235.66 276.86 1.26 1.3 17 15
4 226.40 268.51 1.52 1.5 19 17
5 220.36 263.78 1.76 1.8 20 18
6 114.89 162.47 3.70 3.7 36 32
7 (0.49) 33.51 4.37 4.4 57 53
VCS.SC.I..................................... 1 191.10 219.02 0.38 0.4 0 0
2 283.57 328.05 0.92 0.9 0 0
3 298.70 347.51 1.19 1.2 0 0
4 323.05 377.40 1.37 1.4 0 0
5 498.66 615.19 3.05 3.1 5 4
6 383.73 486.70 3.44 3.4 11 9
VCS.SC.L..................................... 1 168.73 193.07 0.42 0.4 0 0
2 229.45 265.56 1.03 1.0 0 0
3 243.92 284.18 1.32 1.3 0 0
4 264.03 309.04 1.51 1.5 0 0
5 307.51 375.85 2.72 2.7 5 4
6 204.16 260.73 3.23 3.2 20 17
VCS.SC.M..................................... 1 189.78 217.33 0.38 0.4 0 0
2 202.56 235.40 1.12 1.1 1 1
3 205.44 240.66 1.44 1.4 2 2
4 91.46 128.81 4.12 4.1 31 27
5 (23.05) 0.17 5.00 5.0 61 56
VCT.RC.L..................................... 1 245.49 323.67 6.18 6.2 0 0
2 246.83 331.04 6.37 6.4 0 0
3 (3056.29) (2934.72) 52.15 52.2 100 100
VCT.RC.M..................................... 1 233.10 308.65 6.45 6.5 0 0
2 91.96 171.49 10.24 10.2 26 8
[[Page 70274]]
3 57.11 133.62 10.93 10.9 45 24
4 (3476.87) (3397.02) 93.89 93.9 100 100
VCT.SC.H..................................... 1 (8.77) (2.49) 6.12 6.1 34 31
2 (11.19) (2.54) 6.51 6.5 47 42
3 (55.34) (36.07) 8.07 8.1 67 63
4 (8.95) 33.12 8.47 8.5 57 47
5 (77.88) (33.78) 10.15 10.2 71 64
6 (192.35) (161.50) 11.09 11.1 86 79
7 (1538.28) (1496.81) 43.00 43.0 97 97
VCT.SC.I..................................... 1 11.97 15.76 4.55 4.6 3 2
2 51.25 77.46 8.34 8.3 6 1
3 (244.33) (226.28) 16.27 16.3 89 86
4 (1372.20) (1318.52) 35.04 35.0 100 100
VCT.SC.L..................................... 1 76.90 91.06 1.95 2.0 0 0
2 93.55 111.65 2.19 2.2 1 1
3 101.44 122.78 2.58 2.6 1 1
4 118.16 174.92 4.63 4.6 29 23
5 161.77 242.33 5.31 5.3 26 19
6 51.55 120.34 5.80 5.8 46 38
7 (1182.18) (1093.50) 18.52 18.5 99 98
VCT.SC.M..................................... 1 14.68 18.80 3.75 3.8 6 6
2 0.46 20.52 6.61 6.6 36 30
3 43.04 82.53 7.57 7.6 29 20
4 (10.13) 30.92 9.05 9.1 52 42
5 (21.33) 20.36 9.35 9.4 55 46
6 (132.37) (103.42) 10.31 10.3 69 65
7 (1451.68) (1417.22) 45.18 45.2 100 100
VOP.RC.L..................................... 1 502.94 615.37 4.32 4.3 0 0
2 1234.55 1524.52 3.57 3.6 0 0
VOP.RC.M..................................... 1 522.36 638.01 4.12 4.1 0 0
2 516.94 707.13 5.72 5.7 13 8
VOP.SC.M..................................... 1 121.91 143.30 2.07 2.1 1 1
2 495.13 590.02 2.56 2.6 0 0
3 764.98 927.32 2.99 3.0 1 1
4 882.37 1082.34 3.44 3.4 1 0
5 798.96 992.17 3.63 3.6 2 1
--------------------------------------------------------------------------------------------------------------------------------------------------------
Notes: The results for each EL are calculated assuming that all consumers use products at that efficiency level. The PBP is measured relative to the
baseline product. The savings represent the average LCC savings for affected consumers.
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 an equipment
that meets the standard is less than three times the value of the
first-year energy savings resulting from the standard. (42 U.S.C.
6316(e)(1); 42 U.S.C. 6295(o)(2)(B)(iii)) 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 CRE. 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.60 presents the rebuttable-presumption payback periods for
the considered TSLs for CRE. 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. 6316(e)(1) and 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.60--Rebuttable-Presumption Payback Periods
--------------------------------------------------------------------------------------------------------------------------------------------------------
Rebuttable payback period (years)
---------------------------------------------------------------------------------------------------------------------------------------------------------
Equipment class EL 1 EL 2 EL 3 EL 4 EL 5 EL 6 EL 7
--------------------------------------------------------------------------------------------------------------------------------------------------------
CB.SC.L................................. 0.9 0.7 0.9 1.0 1.8 2.0 ..............
CB.SC.M................................. 1.0 0.8 1.2 1.4 4.4 5.1 ..............
HCS.SC.L................................ 4.5 8.7 9.6 .............. .............. .............. ..............
[[Page 70275]]
HCS.SC.M................................ 0.7 1.6 3.0 11.8 .............. .............. ..............
HCT.SC.I................................ 4.3 6.3 7.1 7.7 7.7 7.7 13.2
HCT.SC.L................................ 7.1 9.7 10.7 12.0 12.1 12.1 20.8
HCT.SC.M................................ 46.7 34.2 37.3 39.8 40.0 40.0 68.1
HZO.RC.L................................ 11.6 .............. .............. .............. .............. .............. ..............
HZO.RC.M................................ 12.3 .............. .............. .............. .............. .............. ..............
HZO.SC.L................................ 0.7 1.0 1.8 1.9 2.5 .............. ..............
HZO.SC.M................................ 1.0 1.4 2.9 3.1 4.6 .............. ..............
SOC.RC.M................................ 2.3 2.8 2.9 14.1 .............. .............. ..............
SOC.SC.M................................ 0.1 0.8 1.0 1.8 1.9 2.0 4.8
SVO.RC.M................................ 4.3 6.6 .............. .............. .............. .............. ..............
SVO.SC.M................................ 1.1 1.5 1.6 2.4 3.3 3.7 3.9
VCS.SC.H................................ 0.2 0.7 1.1 1.4 1.6 3.3 3.9
VCS.SC.I................................ 0.3 0.8 1.1 1.2 2.7 3.0 ..............
VCS.SC.L................................ 0.4 0.9 1.2 1.3 2.4 2.9 ..............
VCS.SC.M................................ 0.3 1.0 1.3 3.7 4.5 .............. ..............
VCT.RC.L................................ 5.5 5.7 46.3 .............. .............. .............. ..............
VCT.RC.M................................ 5.7 9.1 9.7 83.3 .............. .............. ..............
VCT.SC.H................................ 5.4 5.8 7.2 7.5 9.0 9.8 38.1
VCT.SC.I................................ 4.0 7.4 14.4 31.1 .............. .............. ..............
VCT.SC.L................................ 1.7 1.9 2.3 4.1 4.7 5.1 16.4
VCT.SC.M................................ 3.3 5.9 6.7 8.0 8.3 9.1 40.0
VOP.RC.L................................ 3.9 3.2 .............. .............. .............. .............. ..............
VOP.RC.M................................ 3.7 5.1 .............. .............. .............. .............. ..............
VOP.SC.M................................ 1.8 2.3 2.7 3.1 3.2 .............. ..............
--------------------------------------------------------------------------------------------------------------------------------------------------------
2. Economic Impacts on Manufacturers
DOE performed an MIA to estimate the impact of new and amended
energy conservation standards on manufacturers of CRE. The following
section describes the expected impacts on manufacturers at each
considered TSL. Chapter 12 of the 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 new and amended
standards. Table V.61 summarizes the estimated financial impacts
(represented by changes in INPV) of potential new and amended energy
conservation standards on manufacturers of CRE, as well as the
conversion costs that DOE estimates manufacturers of CRE would incur at
each TSL.
The impact of potential new and 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 29
percent for all equipment classes across all efficiency levels.\100\
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.
---------------------------------------------------------------------------
\100\ The gross margin percentage of 29 percent is based on a
manufacturer markup of 1.40.
---------------------------------------------------------------------------
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 equipment, operating
profit does not change in absolute dollars and decreases as a
percentage of revenue. The preservation-of-operating-profit scenario
represents the lower (or more severe) bound to industry profitability
under potential new and amended energy conservation standards.
Each of the modeled scenarios resulted 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 (2023-2057). 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 new and 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 equipment designs into
compliance with potential new and 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 standards. 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 new and amended standards. Conversion costs are independent
of the manufacturer markup scenarios and are not presented as a range
in this analysis.
[[Page 70276]]
Table V.61--Manufacturer Impact Analysis Results
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
No-new-
Unit standards case TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 TSL 6
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
INPV............................ 2022$ Million...... 3,286.4 3,274.2 to 3,290.8. 3,241.9 to 3,279.6. 3,224.4 to 3,271.4. 3,182.5 to 3,269.6 3,127.0 to 3,255.5 2,985.9 to
3,529.9.
Change in INPV.................. 2022$ Million...... .............. (12.2) to 4.5...... (44.4) to (6.7).... (61.9) to (15.0)... (103.8) to (16.7). (159.3) to (30.9). (300.4) to 243.6.
%.................. .............. (0.4) to 0.1....... (1.4) to (0.2)..... (1.9) to (0.5)..... (3.2) to (0.5).... (4.8) to (0.9).... (9.1) to 7.4.
Free Cash Flow (2027)........... 2022$ Million...... 291.2 285.7.............. 268.0.............. 258.3.............. 238.7............. 210.8............. 170.9.
Change in Free Cash Flow (2027). %.................. .............. (1.9).............. (8.0).............. (11.3)............. (18.0)............ (27.6)............ (41.3).
Product Conversion Costs........ 2022$ Million...... - 12.6............... 66.1............... 94.0............... 121.5............. 187.5............. 299.9.
Capital Conversion Costs........ 2022$ Million...... .............. 2.7................ 2.2................ 3.1................ 26.0.............. 38.9.............. 43.9.
Total Conversion Costs.......... 2022$ Million...... .............. 15.3............... 68.3............... 97.1............... 147.5............. 226.4............. 343.8.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
* Parentheses denote negative (-) values.
The following cash flow discussion refers to the equipment classes
as detailed in table IV.1 in section IV.A of this document and the TSLs
as detailed in section V.A of this document. Table V.62 through table
V.66 show the design options analyzed in the engineering analysis for
each directly analyzed equipment class by TSL. See section IV.C of this
document and chapter 5 of the NOPR TSD for additional information on
the engineering analysis.
Table V.62--Design Options Analyzed as Compared to Baseline by Trial Standard Level for Vertical, Open Equipment Families
--------------------------------------------------------------------------------------------------------------------------------------------------------
Equipment class TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 TSL 6
--------------------------------------------------------------------------------------------------------------------------------------------------------
VOP.RC.M............... Occupancy Sensors... Night Curtains; Occupancy Sensors.
--------------------------------------------------------------------------------------------------------------------------------------------------------
VOP.RC.L............... Occupancy Sensors... Night Curtains; Occupancy Sensors.
--------------------------------------------------------------------------------------------------------------------------------------------------------
VOP.SC.M............... Electronically EC Cond. Fan Motor; Night Curtains EC Cond. Fan Motor; EC Cond. Fan Motor; Night Curtains; VSC;
Commutated (``EC'') Night Curtains; Occupancy Sensors; Microchannel
Cond. Fan Motor. variable-speed Condenser.
compressors
(``VSCs'');
Occupancy Sensors.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Table V.63--Design Options Analyzed as Compared to Baseline by Trial Standard Level for Vertical, Closed Equipment Families
--------------------------------------------------------------------------------------------------------------------------------------------------------
Equipment class TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 TSL 6
--------------------------------------------------------------------------------------------------------------------------------------------------------
VCT.RC.M................. Occupancy Sensors Occupancy Sensors; Occupancy Sensors.. Occupancy Sensors; Occupancy Sensors;
Triple Pane Door-- Triple Pane Door-- VIG Door.
Krypton Fill. Krypton Fill.
--------------------------------------------------------------------------------------------------------------------------------------------------------
VCT.RC.L................. Occupancy Sensors... Occupancy Sensors; Triple Pane Door--Krypton Fill. Occupancy Sensors;
VIG Door.
--------------------------------------------------------------------------------------------------------------------------------------------------------
VCT.SC.H................. Baseline. EC Evap. Fan Motor;
EC Cond. Fan
Motor; VSC;
Occupancy Sensors;
Microchannel
Condenser; VIG
Door.
--------------------------------------------------------------------------------------------------------------------------------------------------------
VCT.SC.M................. EC Cond. Fan Motor
EC Cond. Fan Motor; VSC; Occupancy EC Cond. Fan Motor;
Sensors. VSC; Occupancy
Sensors;
Microchannel
Condenser; VIG
Door..
--------------------------------------------------------------------------------------------------------------------------------------------------------
[[Page 70277]]
VCT.SC.L................. EC Evap. Fan Motor.. EC Evap. Fan Motor; EC Cond. Fan Motor; EC Evap. Fan Motor; EC Evap. Fan Motor; EC Evap. Fan Motor;
Triple Pane Door--Krypton Fill. EC Cond. Fan EC Cond. Fan EC Cond. Fan
Motor; Triple Pane Motor; Triple Pane Motor; VSC;
Door--Krypton Door--Krypton Occupancy Sensors;
Fill; VSC; Fill; VSC; Microchannel
Occupancy Sensors. Occupancy Sensors; Condenser; VIG
Microchannel Door.
Condenser.
--------------------------------------------------------------------------------------------------------------------------------------------------------
VCT.SC.I................. Triple Pane Door-- Triple Pane Door--Krypton Fill; Occupancy Sensors Occupancy Sensors;
Krypton Fill. Microchannel
Condenser; VIG
Door.
--------------------------------------------------------------------------------------------------------------------------------------------------------
VCS.SC.H................. Evap. Fan Control Evap. Fan Control; Evap. Fan Control.. Evap. Fan Control; Evap. Fan Control;
EC Evap. Fan EC Evap. Fan EC Evap. Fan
Motor; EC Cond. Motor; EC Cond. Motor; EC Cond.
Fan Motor. Fan Motor; VSC. Fan Motor; VSC;
Microchannel
Condenser.
--------------------------------------------------------------------------------------------------------------------------------------------------------
VCS.SC.M................. Evap. Fan Control... Evap. Fan Control; EC Evap. Fan Motor; EC Cond. Fan Motor. Evap. Fan Control; Evap. Fan Control;
EC Evap. Fan EC Evap. Fan
Motor; EC Cond. Motor; EC Cond.
Fan Motor; VSC. Fan Motor; VSC;
Microchannel
Condenser.
--------------------------------------------------------------------------------------------------------------------------------------------------------
VCS.SC.L; VCS.SC.I....... Evap. Fan Control... Evap. Fan Control; EC Evap. Fan Motor; Evap. Fan Control; Evap. Fan Control;
EC Cond. Fan Motor EC Evap. Fan EC Evap. Fan
Motor; EC Cond. Motor; EC Cond.
Fan Motor; VSC. Fan Motor; VSC;
Microchannel
Condenser..
--------------------------------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------------------------------
Table V.64--Design Options Analyzed as Compared to Baseline by Trial Standard Level for Semi-Vertical, Open and Service Over-Counter Equipment Families
--------------------------------------------------------------------------------------------------------------------------------------------------------
Equipment class TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 TSL 6
--------------------------------------------------------------------------------------------------------------------------------------------------------
SVO.RC.M................. Occupancy Sensors. Occupancy Sensors; Occupancy Sensors.. Occupancy Sensors; Night Curtains.
Night Curtains.
--------------------------------------------------------------------------------------------------------------------------------------------------------
SVO.SC.M................. EC Evap. Fan Motor.. EC Evap. Fan Motor; EC Cond. Fan Motor; EC Evap. Fan Motor; EC Evap. Fan Motor; EC Cond. Fan Motor;
Night Curtains EC Cond. Fan Night Curtains; SC; Occupancy Sensors;
Motor; Night Microchannel Condenser.
Curtains; VSC;
Occupancy Sensors.
--------------------------------------------------------------------------------------------------------------------------------------------------------
SOC.RC.M................. Occupancy Sensors Occupancy Sensors; Occupancy Sensors.. Occupancy Sensors; Occupancy Sensors;
Triple Pane Door-- Triple Pane Door-- VIG Door.
Krypton Fill. Krypton Fill.
--------------------------------------------------------------------------------------------------------------------------------------------------------
SOC.SC.M................. Evap. Fan Control... Evap. Fan Control; EC Evap. Fan Motor; Evap. Fan Control; Evap. Fan Control; EC Evap. Fan Motor;
EC Cond. Fan Motor EC Evap. Fan EC Cond. Fan Motor; VSC; Occupancy
Motor; EC Cond. Sensors; Microchannel Condenser; VIG
Fan Motor; VSC; Door.
Occupancy Sensors.
--------------------------------------------------------------------------------------------------------------------------------------------------------
[[Page 70278]]
Table V.65--Design Options Analyzed as Compared to Baseline by Trial Standard Level for Horizontal Equipment Families
--------------------------------------------------------------------------------------------------------------------------------------------------------
Equipment class TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 TSL 6
--------------------------------------------------------------------------------------------------------------------------------------------------------
HZO.RC.M; HZO.RC.L....... Occupancy Sensors.
--------------------------------------------------------------------------------------------------------------------------------------------------------
HZO.SC.M; HZO.SC.L....... EC Evap. Fan Motor.. EC Evap. Fan Motor; EC Cond. Fan Motor EC Evap. Fan Motor; EC Evap. Fan Motor;
EC Cond. Fan EC Cond. Fan
Motor; VSC. Motor; VSC;
Microchannel
Condenser;
Occupancy Sensors..
--------------------------------------------------------------------------------------------------------------------------------------------------------
HCT.SC.M................. Baseline VSC; Occupancy
Sensors; VIG Door.
--------------------------------------------------------------------------------------------------------------------------------------------------------
HCT.SC.L................. Baseline VSC; Occupancy
Sensors;
Microchannel
Condenser; VIG
Door.
--------------------------------------------------------------------------------------------------------------------------------------------------------
HCT.SC.I................. VSC................. Baseline VSC................ VSC; Occupancy VSC; Occupancy
Sensors. Sensors;
Microchannel
Condenser; VIG
Door.
--------------------------------------------------------------------------------------------------------------------------------------------------------
HCS.SC.M................. Evap. Fan Control Evap. Fan Control; Evap. Fan Control.. Evap. Fan Control; Evap. Fan Control;
EC Cond. Fan Motor. EC Cond. Fan Motor. EC Cond. Fan
Motor;
Microchannel
Condenser; VSC.
--------------------------------------------------------------------------------------------------------------------------------------------------------
HCS.SC.L................. EC Cond. Fan Motor EC Cond. Fan Motor;
VSC; Microchannel
Condenser.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Table V.66--Design Options Analyzed as Compared to Baseline by Trial Standard Level for Chef Base Equipment Classes
--------------------------------------------------------------------------------------------------------------------------------------------------------
Equipment class TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 TSL 6
--------------------------------------------------------------------------------------------------------------------------------------------------------
CB.SC.M................ PSC Evap. Fan Motor. EC Evap. Fan Motor.. EC Evap. Fan Motor; EC Evap. Fan Motor. EC Evap. Fan Motor; EC Evap. Fan Motor;
EC Cond. Fan Motor. EC Cond. Fan EC Cond. Fan
Motor; VSC. Motor; VSC;
Microchannel
Condenser.
--------------------------------------------------------------------------------------------------------------------------------------------------------
CB.SC.L................ PSC Evap. Fan Motor. EC Evap. Fan Motor; EC Cond. Fan Motor EC Evap. Fan Motor; EC Evap. Fan Motor; EC Cond. Fan Motor;
EC Cond. Fan VSC; Microchannel Condenser.
Motor; VSC.
--------------------------------------------------------------------------------------------------------------------------------------------------------
At TSL 6, the standard represents the max-tech efficiencies for all
equipment classes. The change in INPV is expected to range from -$300.4
million to $243.6 million, which represents a change in INPV of -9.1
percent to 7.4 percent, respectively. At this level, free cash flow is
estimated to decrease by 41.3 percent compared to the no-new-standards
case value of $291.2 million in the year 2027, the year before
compliance would be required. In 2027, approximately 2.2 percent of
covered CRE shipments are expected to meet the efficiencies required at
TSL 6. See table V.67 for the percent of equipment class shipments that
would meet or exceed the efficiencies required at each TSL in 2027.
The design options DOE analyzed at TSL 6 included the max-tech
technologies for all equipment classes. For all open (i.e., equipment
classes without doors) and transparent door equipment classes, DOE
expects manufacturers would likely need to incorporate occupancy
sensors with dimming capability. Open equipment classes would also
likely require the use of night curtains. For equipment classes with
transparent doors, DOE expects manufacturers would likely need to
incorporate vacuum-insulated glass. For self-contained equipment
classes, DOE expects manufacturers would need to incorporate EC
evaporator and
[[Page 70279]]
condenser fan motors, variable-speed compressors, and microchannel
condensers. For closed, self-contained equipment classes using forced-
air refrigeration systems, DOE expects manufacturers would also need to
incorporate evaporator fan control. Of the 28 directly analyzed
equipment classes, 5 equipment classes (VCT.RC.M, VCT.SC.M, VCT.SC.L,
VCS.SC.M, and VCS.SC.L) account for approximately 81.5 percent of
industry shipments. For VCT.RC.M, TSL 6 corresponds to EL 4. For
VCT.SC.M and VCT.SC.L, TSL 6 corresponds to EL 7. For VCS.SC.M, TSL 6
corresponds to EL 5. For VCS.SC.L, TSL 6 corresponds to EL 6. See
section of this V.A of this document for more information on the
efficiency levels analyzed at each TSL.
At max-tech, DOE expects that nearly all manufacturers would need
to dedicate notable engineering resources to update equipment designs
and source, qualify, and test high-efficiency components across their
CRE portfolio. However, most design options analyzed involve more
efficient components (e.g., high-efficiency motors) and would not
necessitate significant capital investment. Self-contained CRE
equipment classes account for 87.1 percent of industry shipments in
2027 and DOE estimates 2.5 percent of self-contained CRE shipments
would meet TSL 6 in 2027. Incorporating variable-speed compressors into
self-contained CRE designs would likely require additional development
and testing time to optimize for different CRE applications to realize
maximum efficiency benefits. Capital conversion costs may be necessary
for new tooling if additional modifications are required to accommodate
a larger compressor system.
CRE equipment classes with transparent doors (i.e., HCT.SC.I,
HCT.SC.L, HCT.SC.M, SOC.RC.M, SOC.SC.M, VCT.RC.L, VCT.RC.M, VCT.SC.H,
VCT.SC.I, VCT.SC.L, VCT.SC.M) account for approximately 43.8 percent of
industry shipments in 2027. For the 71 OEMs that offer directly
analyzed CRE with transparent doors, implementing vacuum-insulated
glass would require significant engineering resources and testing time
to ensure adequate durability of their doors in all commercial
settings. Capital conversion costs may be necessary for new fixtures.
In interviews, some manufacturers raised concerns about standards
requiring a widespread adoption of vacuum-insulated glass as it is
still a relatively untested technology in the commercial refrigeration
market. There is very little industry experience with implementing
vacuum-insulated glass in CRE applications and DOE estimates that
approximately 1.7 percent of CRE equipment classes with transparent
doors would meet the max-tech efficiencies in 2027. Manufacturers
expressed concerns that the 3-year conversion period between the
publication of the final rule and the compliance date of the new and
amended energy conservation standards might be insufficient to design
and test a full portfolio of CRE with vacuum-insulated glass doors that
meet the max-tech efficiencies and maintain their internal performance
metrics for durability and safety over the equipment lifetime. DOE
estimates capital conversion costs of $43.9 million and product
conversion costs of $299.9 million. Conversion costs total $343.8
million.
At TSL 6, the shipment-weighted average MPC for all CRE is expected
to increase by 25.0 percent relative to the no-new-standards case
shipment-weighted average MPC for all CRE in 2028. Given the projected
increase in production costs, DOE expects an estimated 2.9 percent drop
in shipments in the year the standard takes effect relative to the no-
new-standards case. In the preservation of gross margin percentage
scenario, the large increase in cashflow from the higher MSP outweighs
the $343.8 million in conversion costs, causing an increase in INPV at
TSL 6 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 analyzed compliance year.
This reduction in the manufacturer markup and the $343.8 million in
conversion costs incurred by manufacturers cause a negative change in
INPV at TSL 6 under the preservation of operating profit scenario. See
section IV.J.2.d of this document for further details on the
manufacturer markup scenarios.
At TSL 5, the standard represents the highest efficiency level with
positive LCC savings for all equipment classes. The change in INPV is
expected to range from -$159.3 million to -$30.9 million, which
represents a change in INPV of -4.8 percent to -0.9 percent,
respectively. At this level, free cash flow is estimated to decrease by
27.6 percent compared to the no-new-standards case value of $291.2
million in the year 2027, the year before compliance is required. In
2027, approximately 10.8 percent of covered CRE shipments are expected
to meet the efficiencies required at TSL 5.
The design options DOE analyzed at TSL 5 are similar to the design
options analyzed at TSL 6 except most equipment classes with
transparent doors would not need to incorporate vacuum-insulated glass
doors. All VCT equipment classes would likely need to incorporate
triple pane glass with krypton fill except for VCT.SC.H and VCT.SC.M
(together accounting for 26.4 percent of industry shipments), which
would likely not require improved door designs. DOE expects that HCT
equipment classes would not need to incorporate additional panes of
glass to meet TSL 5 levels. At this level, DOE also expects that fewer
self-contained equipment classes would need to incorporate microchannel
condensers. Additionally, manufacturers of HCS equipment classes may
not need to incorporate variable-speed compressors to meet the
efficiencies required. For the five highest-volume equipment classes,
TSL 5 corresponds to lower efficiency levels for four equipment
classes: VCT.RC.M, VCT.SC.M, VCT.SC.L, and VCS.SC.M. For VCT.RC.M and
VCT.SC.M, TSL 5 corresponds to EL 3. For VCT.SC.M, TSL 5 corresponds to
EL 5. For VCT.SC.L, TSL 5 corresponds to EL 6. For VCS.SC.M, TSL 5
corresponds to EL 4. For VCS.SC.M and VCS.SC.L, the efficiencies
required at TSL 5 are the same as TSL 6. At this level, the VCT.RC.M
and VCT.SC.L equipment classes would both need to incorporate triple
pane glass with krypton fill. Out of the four highest volume self-
contained classes, only VCT.SC.L and VCS.SC.L would require the use of
microchannel condensers.
Similar to TSL 6, DOE expects manufacturers would spend development
time updating equipment designs to incorporate high-efficiency
components. However, at this level, DOE expects that most manufacturers
of CRE with transparent doors could meet the TSL 5 efficiencies without
implementing vacuum-insulated glass doors. Of the 11 directly analyzed
transparent door equipment classes, only SOC.SC.M would likely require
the use of vacuum-insulated glass doors to meet the efficiencies
required. SOC.SC.M accounts for approximately 0.4 percent of analyzed
industry shipments in 2027. DOE estimates capital conversion costs of
$38.9 million and product conversion costs of $187.5 million.
Conversion costs total $226.4 million.
At TSL 5, the shipment-weighted average MPC for all CRE is expected
to increase by 6.0 percent relative to the no-new-standards case
shipment-weighted average MPC for all CRE in 2028. Given the projected
increase in
[[Page 70280]]
production costs, DOE expects an estimated 0.7 percent drop in
shipments in the year the standard takes effect relative to the no-new-
standards case. In the preservation of gross margin percentage
scenario, the increase in cashflow from the higher MSP is outweighed by
the $226.4 million in conversion costs, causing a slight decrease in
INPV at TSL 5 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 analyzed compliance
year. This reduction in the manufacturer markup and the $226.4 million
in conversion costs incurred by manufacturers cause a negative change
in INPV at TSL 5 under the preservation of operating profit scenario.
At TSL 4, the standard represents the highest efficiency level with
maximum LCC savings for all equipment classes. The change in INPV is
expected to range from -$103.8 million to -$16.7 million, which
represents a change in INPV of -3.2 percent to -0.5 percent,
respectively. At this level, free cash flow is estimated to decrease by
18.0 percent compared to the no-new-standards case value of $291.2
million in the year 2027, the year before compliance is required. In
2027, approximately 15.7 percent of covered CRE shipments are expected
to meet the efficiencies required at TSL 4.
At TSL 4, the efficiency levels required for most equipment classes
are lower than the efficiency levels required at TSL 5, including for
the five highest-volume equipment classes. At this level, no self-
contained equipment classes are expected to require the use of
microchannel condensers. At TSL 4, none of the highest-volume self-
contained equipment classes (VCT.SC.M, VCT.SC.L, VCS.SC.M, VCS.SC.L)
would need to incorporate microchannel condensers. Additionally, DOE
does not expect VCS.SC.M would require the use of variable-speed
compressors to meet TSL 5 efficiencies. For VCT.RC.M and VCT.SC.M, DOE
expects manufacturers would not need to implement additional panes of
glass to meet the efficiencies required. For VCT.RC.M, TSL 4
corresponds to EL 1. For VCT.SC.M, TSL 4 corresponds to EL 3. For
VCT.SC.L, TSL 4 corresponds to EL 5. For VCS.SC.M, TSL 4 corresponds to
EL 3. For VCS.SC.L, TSL 4 corresponds to EL 5. At this level, product
conversion costs may be necessary to source, qualify, and test high-
efficiency components but to a lesser extent than higher TSLs. Some
manufacturers of self-contained equipment classes may need to invest in
new tooling if incorporating variable-speed compressors require
additional modifications to CRE designs. Some manufacturers of
transparent door equipment classes may need to invest in new fixtures
to accommodate additional panes of glass into CRE designs. DOE
estimates capital conversion costs of $26.0 million and product
conversion costs of $121.5 million. Conversion costs total $147.5
million.
At TSL 4, the shipment-weighted average MPC for all CRE is expected
to increase by 4.1 percent relative to the no-new-standards case
shipment-weighted average MPC for all CRE in 2028. Given the projected
increase in production costs, DOE expects an estimated 0.4 percent drop
in shipments in the year the standard takes effect relative to the no-
new-standards case. In the preservation-of-gross-margin-percentage
scenario, the increase in cashflow from the higher MSP is slightly
outweighed by the $147.5 million in conversion costs, causing a small
decrease in INPV at TSL 4 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 analyzed
compliance year. This reduction in the manufacturer markup and the
$147.5 million in conversion costs incurred by manufacturers cause a
negative change in INPV at TSL 4 under the preservation of operating
profit scenario.
At TSL 3, the standard represents the highest efficiency level with
positive LCC savings and the incorporation of single speed compressors
for all equipment classes in which this design option was considered.
The change in INPV is expected to range from -$ 61.9 million to -$15.0
million, which represents a change in INPV of -1.9 percent to -0.5
percent, respectively. At this level, free cash flow is estimated to
decrease by 11.3 percent compared to the no-new-standards case value of
$291.2 million in the year 2027, the year before compliance is
required. In 2027, approximately 28.8 percent of covered CRE shipments
are expected to meet the efficiencies required at TSL 3.
At TSL 3, the efficiency levels required for many equipment classes
are lower than the efficiency levels required at TSL 4. However, the
efficiency levels required for some equipment classes are the same or
are higher (i.e., more stringent) than the TSL 4 efficiencies. At this
level, DOE expects that none of the self-contained equipment classes
would require the use of variable-speed compressor systems. DOE also
expects that fewer equipment classes with transparent doors would need
to incorporate additional panes of glass to meet TSL 3. For the five
highest-volume equipment classes, the efficiency levels required at TSL
3, as compared to TSL 4, are lower for VCT.SC.M, VCT.SC.L, and
VCS.SC.L; higher for VCT.RC.M; and the same for VCT.SC.M. For VCT.RC.M,
TSL 3 corresponds to EL 3. For VCT.SC.M, TSL 3 corresponds to EL 1. For
VCT.SC.L, TSL 3 corresponds to EL 3. For VCS.SC.L, TSL 3 corresponds to
EL 4. At this level, DOE expects industry would incur minimal capital
conversion costs. Product conversion costs may be necessary to source,
qualify, and test high-efficiency components but to a lesser extent
than higher TSLs. DOE estimates capital conversion costs of $3.1
million and product conversion costs of $94.0 million. Conversion costs
total $97.1 million.
At TSL 3, the shipment-weighted average MPC for all CRE is expected
to increase by 2.2 percent relative to the no-new-standards case
shipment-weighted average MPC for all CRE in 2028. Given the relatively
small increase in production costs, DOE does not project a notable drop
in shipments in the year the standard takes effect. In the
preservation-of-gross-margin-percentage scenario, the minor increase in
cashflow from the higher MSP is slightly outweighed by the $97.1
million in conversion costs, causing a small decrease in INPV at TSL 3
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 analyzed compliance year.
This reduction in the manufacturer markup and the $97.1 million in
conversion costs incurred by manufacturers cause a slightly negative
change in INPV at TSL 3 under the preservation-of-operating-profit
scenario.
At TSL 2, the standard represents the highest efficiency level with
maximum LCC savings and the incorporation of single speed compressors
for all equipment classes in which this design option was considered.
The change in INPV is expected to range from -$44.4 million to -$6.7
million, which represents a change in INPV of -1.4 percent to -0.2
percent, respectively.
[[Page 70281]]
At this level, free cash flow is estimated to decrease by 8.0 percent
compared to the no-new-standards case value of $291.2 million in the
year 2027, the year before compliance is required. In 2027,
approximately 29.9 percent of covered CRE shipments are expected to
meet the efficiencies required at TSL 2.
At this level, the efficiency levels required for most equipment
classes are the same as TSL 3. For the five highest-volume equipment
classes, TSL 2 corresponds to lower efficiency levels for one equipment
class: VCT.RC.M. DOE expects manufacturers would likely need to
implement occupancy sensors into VCT.RC.M designs. For VCT.SC.M,
VCT.SC.L, VCS.SC.M, and VCS.SC.L, the efficiencies at TSL 2 are the
same as TSL 3. At this level, DOE expects industry would incur minimal
capital conversion costs. The lower efficiency levels required for two
equipment classes--VCT.RC.M and SOC.RC.M--drive the drop in product
conversion costs at this level. For VCT.RC.M and SOC.RC.M, DOE expects
manufacturers could meet TSL 2 efficiencies by incorporating occupancy
sensors, which requires minimal development effort. DOE estimates
capital conversion costs of $2.2 million and product conversion costs
of $66.1 million. Conversion costs total $68.3 million.
At TSL 2, the shipment-weighted average MPC for all CRE is expected
to increase by 1.7 percent relative to the no-new-standards case
shipment-weighted average MPC for all CRE in 2028. Given the relatively
small increase in production costs, DOE does not project a notable drop
in shipments in the year the standard takes effect. In the preservation
of gross margin percentage scenario, the minor increase in cashflow
from the higher MSP is slightly outweighed by the $68.3 million in
conversion costs, causing a minor decrease in INPV at TSL 2 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 analyzed compliance year.
This reduction in the manufacturer markup and the $68.3 million in
conversion costs incurred by manufacturers cause a slightly negative
change in INPV at TSL 2 under the preservation of operating profit
scenario.
At TSL 1, the standard represents the minimum efficiency level with
positive LCC savings. The change in INPV is expected to range from -
$12.2 million to $4.5 million, which represents a change in INPV of -
0.4 percent to 0.1 percent, respectively. At this level, free cash flow
is estimated to decrease by 1.9 percent compared to the no-new-
standards case value of $291.2 million in the year 2027, the year
before compliance is required. In 2027, approximately 35.6 percent of
covered CRE shipments are expected to meet the efficiencies required at
TSL 1.
At this level, the efficiency levels correspond to EL 1 for nearly
all equipment classes (except for VCT.SC.H, HCT.SC.M, and HCT.SC.L,
which are set to baseline or EL 0). DOE expects most self-contained
equipment classes would need to incorporate higher-efficiency fan
motors (i.e., EC evaporator or condenser fan motors or PSC evaporator
fan motors for chef bases). Other self-contained equipment classes may
need to incorporate evaporator fan controls in lieu of higher-
efficiency motors. DOE expects that HCT.SC.L and HCT.SC.I may require
the use of variable-speed compressors to meet TSL 1 efficiencies. At
this level, DOE expects that manufacturers of VCT.SC.I may need to
incorporate an additional pane of glass. Remote-controlled equipment
classes would likely need to incorporate occupancy sensors. Capital
conversion costs are driven by tooling costs associated with
incorporating variable-speed compressors into HCT.SC.L and HCT.SC.I
designs. Product conversion costs are driven by incorporating high-
efficiency components into CRE designs. DOE estimates capital
conversion costs of $2.7 million and product conversion costs of $12.6
million. Conversion costs total $15.3 million.
At TSL 1, the shipment-weighted average MPC for all CRE is expected
to increase by 0.8 percent relative to the no-new-standards case
shipment-weighted average MPC for all CRE in 2028. Given the relatively
small increase in production costs, DOE does not project a notable drop
in shipments in the year the standard takes effect. In the preservation
of gross margin percentage scenario, the minor increase in cashflow
from the higher MSP slightly outweighs the $15.3 million in conversion
costs, causing a minor increase 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 analyzed compliance year. This reduction in the
manufacturer markup and the $15.3 million in conversion costs incurred
by manufacturers cause a slightly negative change in INPV at TSL 1
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.
Table V.67--Percentages of 2027 No-New-Standards Case Shipments That Meet Each TSL by Equipment Class
--------------------------------------------------------------------------------------------------------------------------------------------------------
Directly analyzed equipment class TSL 1 (%) TSL 2 (%) TSL 3 (%) TSL 4 (%) TSL 5 (%) TSL 6 (%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
CB.SC.L................................................. 30.0 0.0 0.0 0.0 0.0 0.0
CB.SC.M................................................. 50.0 10.0 0.0 10.0 0.0 0.0
HCS.SC.L................................................ 12.4 12.4 12.4 12.4 12.4 0.0
HCS.SC.M................................................ 12.4 12.4 0.0 12.4 0.0 0.0
HCT.SC.I................................................ 28.3 100.0 100.0 28.3 22.3 8.9
HCT.SC.L................................................ 100.0 100.0 100.0 100.0 100.0 8.9
HCT.SC.M................................................ 100.0 100.0 100.0 100.0 100.0 8.9
HZO.RC.L................................................ 0.0 0.0 0.0 0.0 0.0 0.0
HZO.RC.M................................................ 0.0 0.0 0.0 0.0 0.0 0.0
HZO.SC.L................................................ 18.9 15.2 15.2 0.0 0.0 0.0
HZO.SC.M................................................ 18.9 15.2 15.2 0.0 0.0 0.0
SOC.RC.M................................................ 1.6 1.6 0.2 1.6 0.2 0.0
SOC.SC.M................................................ 63.7 47.2 47.2 26.7 24.8 24.8
SVO.RC.M................................................ 23.8 23.8 0.0 23.8 0.0 0.0
[[Page 70282]]
SVO.SC.M................................................ 34.0 21.5 21.5 11.4 10.5 10.5
VCS.SC.H................................................ 30.0 30.0 0.0 30.0 0.0 0.0
VCS.SC.I................................................ 0.0 0.0 0.0 0.0 0.0 0.0
VCS.SC.L................................................ 23.0 14.0 14.0 0.0 0.0 0.0
VCS.SC.M................................................ 29.0 19.0 19.0 19.0 8.0 5.0
VCT.RC.L................................................ 7.0 6.0 6.0 6.0 6.0 0.4
VCT.RC.M................................................ 7.0 7.0 0.4 7.0 0.4 0.0
VCT.SC.H................................................ 100.0 100.0 100.0 100.0 100.0 3.0
VCT.SC.I................................................ 55.8 36.5 36.5 36.5 36.5 0.0
VCT.SC.L................................................ 65.0 60.0 60.0 10.0 10.0 0.0
VCT.SC.M................................................ 52.0 52.0 52.0 18.0 18.0 0.0
VOP.RC.L................................................ 26.9 0.0 0.0 0.0 0.0 0.0
VOP.RC.M................................................ 26.9 0.0 0.0 0.0 0.0 0.0
VOP.SC.M................................................ 14.0 9.0 9.0 5.0 5.0 5.0
Overall Industry........................................ 35.6 29.9 28.8 15.7 10.8 2.2
--------------------------------------------------------------------------------------------------------------------------------------------------------
b. Direct Impacts on Employment
To quantitatively assess the potential impacts of new and amended
energy conservation standards on direct employment in the CRE 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 2021 ASM,\101\ BLS employee
compensation data,\102\ results of the engineering analysis, and
manufacturer interviews.
---------------------------------------------------------------------------
\101\ U.S. Census Bureau, Annual Survey of Manufactures.
``Summary Statistics for Industry Groups and Industries in the U.S
(2021).'' Available at www.census.gov/data/tables/time-series/econ/asm/2018-2021-asm.html (last accessed January 20, 2023).
\102\ U.S. Bureau of Labor Statistics. Employer Costs for
Employee Compensation. December 15, 2022. Available at www.bls.gov/news.release/pdf/ecec.pdf (last accessed January 20, 2023).
---------------------------------------------------------------------------
Labor expenditures related to equipment manufacturing depend on the
labor intensity of the equipment, 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.
Total production employees was 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 equipment. This value is derived from manufacturer interviews,
equipment database analysis, DOE's shipments analysis, and publicly
available information. DOE estimates that approximately 77 percent of
currently covered CRE are produced domestically.
The domestic production employees estimate covers production line
workers, including line supervisors, who are directly involved in
fabricating and assembling equipment 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.\103\ DOE's estimates only account for
production workers who manufacture the specific equipment covered by
this proposed rule.
---------------------------------------------------------------------------
\103\ U.S. Census Bureau, ``Definitions and Instructions for the
Annual Survey of Manufactures, MA-10000.'' Available at
www2.census.gov/programs-surveys/asm/technical-documentation/questionnaire/2021/instructions/MA_10000_Instructions.pdf (last
accessed January 25, 2023).
---------------------------------------------------------------------------
Non-production workers account for the remainder of the direct
employment figure. The non-production employees category covers
domestic workers who are not directly involved in the production
process, such as sales, engineering, human resources, management,
etc.\104\ Using the number 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.
---------------------------------------------------------------------------
\104\ Id.
---------------------------------------------------------------------------
Using the GRIM, DOE estimates in the absence of new energy
conservation standards there would be 7,472 domestic workers for CRE in
2028. Table V.68 shows the range of the impacts of energy conservation
standards on U.S. manufacturing employment in the CRE industry. The
discussion below provides a qualitative evaluation of the range of
potential impacts presented in the table.
Table V.68--Direct Employment Impacts for Domestic CRE Manufacturers in 2028 *
--------------------------------------------------------------------------------------------------------------------------------------------------------
No-new-standards
case TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 TSL 6
--------------------------------------------------------------------------------------------------------------------------------------------------------
Direct Employment in 2028 7,472........... 7,475........... 7,467........... 7,464........... 7,429.......... 7,393.......... 7,234.
(Production Workers + Non-
Production Workers).
[[Page 70283]]
Potential Changes in Direct ................ (5,484) to 3.... (5,484) to (5).. (5,484) to (8).. (5,484) to (43) (5,484) to (79) (5,484) to
Employment in 2028*. (238).
--------------------------------------------------------------------------------------------------------------------------------------------------------
* DOE presents a range of potential employee impacts. Numbers in parentheses indicate negative numbers.
The direct employment impacts in table V.68 represent the potential
domestic employment changes that could result following the compliance
date for CRE in this proposal. The upper bound estimate corresponds to
a potential change in the number of domestic workers that would result
from new and amended energy conservation standards if manufacturers
continue to produce the same scope of covered equipment within the
United States after compliance takes effect.
To establish a conservative lower bound, DOE assumes all
manufacturers would shift production to foreign countries with lower
labor costs. Most of the design options analyzed in the engineering
analysis require manufacturers to purchase more-efficient components
from suppliers. These components do not require significant additional
labor to assemble or significant production line updates. Incorporating
vacuum-insulated panels could lead to greater labor requirements,
however, as discussed in section IV.B.1 of this document, DOE did not
consider vacuum-insulated panels as a design option in its engineering
analysis. As a result, DOE believes the likelihood of changes in
production location due to new and amended standards are relatively
low.
Additional detail on the analysis of direct employment can be found
in chapter 12 of the NOPR TSD. 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, most manufacturers noted potential manufacturing
capacity concerns relating to widespread adoption of increased
insulation thickness or VIPs. As discussed in section IV.B.1 of this
document, DOE excluded these technologies from further consideration in
the engineering analysis and, thus, DOE does not expect manufacturers
would need to increase insulation thickness or incorporate VIPs to meet
any of the efficiency levels analyzed in this NOPR. Therefore, when
considering potential new and amended energy conservation standards in
isolation, DOE believes manufacturers would be able to maintain
manufacturing capacity levels and continue to meet market demand under
the proposed new and amended energy conservation standards. However,
multiple manufacturers raised concerns about technical and laboratory
resource constraints due to overlapping regulations over a short time
period. Specifically, these manufacturers mentioned the testing and
redesign required for new safety standards and the various regulations
necessitating the transition to low-GWP refrigerants. Some
manufacturers stated that there are already experiencing testing
laboratory shortages, which would further be exacerbated should EPA
finalize its proposals in the December 2022 EPA NOPR and DOE set more
stringent standards that necessitate the redesign of the majority of
basic models. Manufacturers noted that the ongoing supply chain
constraints further strain technical and laboratory resources as
manufacturers are forced to identify and qualify new component
suppliers due to shortages and long lead times.
DOE seeks comment on whether manufacturers expect that
manufacturing capacity constraints, engineering resource constraints,
or laboratory constraints would limit equipment availability to
consumers in the timeframe of the new and amended standards compliance
date (2028).
d. Impacts on Subgroups of Manufacturers
Small business, low volume, and niche equipment manufacturers, and
manufacturers exhibiting a cost structure substantially different from
the industry average could be affected disproportionately. As discussed
in section IV.J of this document, using average cost assumptions to
develop an industry cash flow estimate is inadequate to assess
differential impacts among manufacturer subgroups.
For CRE, DOE identified and evaluated the impact of new and amended
conservation standards on one subgroup: small manufacturers. The SBA
defines a ``small business'' as having 1,250 employees or less for
NAICS 333415, ``Air-Conditioning and Warm Air Heating Equipment and
Commercial and Industrial Refrigeration Equipment Manufacturing,''
which includes CRE manufacturing. Based on this definition, DOE
identified 25 domestic OEM in the CRE industry that qualify as a
``small business.''
For a discussion of the impacts on the small manufacturer subgroup,
see the regulatory flexibility analysis in section VI.B of this
document or chapter 12 of the NOPR TSD.
e. Cumulative Regulatory Burden
One aspect of assessing manufacturer burden involves looking at the
cumulative impact of multiple DOE standards and the equipment/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 equipment. For these reasons, DOE conducts an analysis of
cumulative regulatory burden as part of its rulemakings pertaining to
appliance efficiency. DOE evaluates equipment/product-specific
regulations that will take effect approximately three years before or
after the estimated 2028 compliance date of any new and amended energy
conservation standards for CRE. This information is presented in table
V.69.
[[Page 70284]]
Table V.69--Compliance Dates and Expected Conversion Expenses of Federal Energy Conservation Standards Affecting
Commercial Refrigeration Equipment OEMs
----------------------------------------------------------------------------------------------------------------
Industry
Number of OEMs Approx. conversion
Federal energy conservation Number of affected by standards Industry costs/
standard OEMs* this compliance conversion costs equipment
rulemaking ** year (Millions $) revenue*** (
%)
----------------------------------------------------------------------------------------------------------------
Consumer Furnaces[dagger] 87 15 2 2029 $150.6 (2020$) 1.4
FR 40590 (July 7, 2022)....
Consumer Clothes Dryers 15 3 2027 149.7 (2020$) 1.8
[dagger] 87 FR 51734
(August 23, 2022)..........
Consumer Conventional 34 4 2027 183.4 (2021$) 1.2
Cooking Products 88 FR 6818
[dagger] (February 1, 2023)
Refrigerators, Freezers, and 49 8 2027 1,323.6 (2021$) 3.8
Refrigerator-Freezers
[dagger] 88 FR 12452.......
(February 27, 2023).........
Residential Clothes Washers 19 3 2027 690.8 (2021$) 5.2
[dagger] 88 FR 13520 (March
3, 2023)...................
Room Air Conditioners 88 FR 8 1 2026 24.8 (2021$) 0.4
34298 (May 26, 2023).......
Miscellaneous Refrigeration 38 6 2029 126.9 (2021$) 3.1
Products [dagger] 88 FR
19382 (March 31, 2023).....
Dishwashers[dagger] 88 FR 22 5 2027 125.6 2.1
32514 (May 19, 2023)....... (2021$)
Automatic Commercial Ice 23 7 2027 15.9 (2022$) 0.6
Makers [dagger] 88 FR 30508
(May 11, 2023).............
Refrigerated Bottled or 5 2 2027 1.5 (2022$) 0.7
Canned Beverage Vending
Machines [dagger] 88 FR
33968......................
May 25, 2023)...............
Microwave Ovens 88 FR 39912 18 3 2026 46.1 (2021$) 0.7
(June 20, 2023)............
Walk-in Coolers and Freezers 79 5 2027 89.0 (2022$) 0.8
[dagger] 88 FR 60746
(September 5, 2023)........
----------------------------------------------------------------------------------------------------------------
* This column presents the total number of OEMs identified in the energy conservation standard rule that is
contributing to cumulative regulatory burden.
** This column presents the number of OEMs producing CRE that are also listed as OEMs in the identified energy
conservation standard that is contributing to cumulative regulatory burden.
*** This column presents industry conversion costs as a percentage of equipment 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 energy conservation
standard. The conversion period typically ranges from 3 to 5 years, depending on the rulemaking.
[dagger] These rulemakings are at the NOPR stage, and all values are subject to change until finalized through
publication of a final rule.
DOE requests information regarding the impact of cumulative
regulatory burden on manufacturers of CRE associated with multiple DOE
standards or equipment/product-specific regulatory actions of other
Federal agencies.
Refrigerant Regulations
The December 2022 EPA NOPR \105\ rulemaking proposes to restrict
the use of HFCs in specific sectors or subsectors, including use in
certain CRE covered by this rulemaking. DOE is considering the impacts
of change in refrigerants in its analysis. DOE understands that
switching from non-flammable to flammable refrigerants (e.g., R-290)
requires time and investment to redesign CRE models and upgrade
production facilities to accommodate the additional structural and
safety precautions required. As discussed in section IV.C.1 of this
document, DOE expects CRE manufacturers will transition most models to
R-290 to comply with anticipated refrigeration regulations, such as the
December 2022 EPA NOPR, prior to the expected 2028 compliance date of
any potential energy conservation standards. Therefore, the engineering
analysis assumes the use of R-290 compressors as a baseline design
option for select equipment classes. See section IV.C.1 of this
document for additional information on refrigerant assumptions in the
engineering analysis.
---------------------------------------------------------------------------
\105\ The proposed rule was published on December 15, 2022. 87
FR 76738.
---------------------------------------------------------------------------
DOE accounted for the costs associated with redesigning CRE to make
use of flammable refrigerants and retrofitting production facilities to
accommodate flammable refrigerants in the GRIM. DOE considers the
expenses associated with the refrigerant transition as independent of
DOE actions related to any new and amended energy conservation
standards. Therefore, DOE incorporated the refrigerant transition
expenses into both the no-new-standards case and standards cases. DOE
relied on manufacturer feedback in confidential interviews, a report
prepared for EPA,\106\ results of the engineering analysis, and
investment estimates submitted by NAMA and AHRI in response to the June
2022 Preliminary Analysis to estimate the industry refrigerant
transition costs. Based on feedback, DOE assumed that the transition to
low-GWP refrigerants would require industry to invest approximately
$21.3 million in R&D and $33.3 million in capital expenditures (e.g.,
investments in new charging equipment, leak detection systems, etc.).
---------------------------------------------------------------------------
\106\ See pp. 5-113 of the ``Global Non-CO2 Greenhouse Gas
Emission Projections & Marginal Abatement Cost Analysis: Methodology
Documentation'' (2019). Available at www.epa.gov/sites/default/files/2019-09/documents/nonco2_methodology_report.pdf.
---------------------------------------------------------------------------
DOE requests comments on the magnitude of costs associated with
transitioning CRE designs and production facilities to accommodate low-
GWP refrigerants that would be incurred between the publication of this
NOPR and the proposed compliance date of new and amended standards.
Quantification and categorization of
[[Page 70285]]
these costs, such as engineering efforts, testing lab time,
certification costs, and capital investments (e.g., new charging
equipment), would enable DOE to refine its analysis.
3. National Impact Analysis
This section presents DOE's estimates of the national energy
savings and the NPV of consumer benefits that would result from each of
the TSLs considered as potential new and amended standards.
a. Significance of Energy Savings
To estimate the energy savings attributable to potential new and
amended standards for CRE, 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
equipment purchased in the 30-year period that begins in the year of
anticipated compliance with new and amended standards (2028-2057).
Table V.70 presents DOE's projections of the national energy savings
for each TSL considered for CRE. The savings were calculated using the
approach described in section IV.E of this document.
Table V.70--Cumulative National Energy Savings for CRE; 30 Years of Shipments (2028-2057)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Trial standard level
-----------------------------------------------------------------------------------------------
1 2 3 4 5 6
--------------------------------------------------------------------------------------------------------------------------------------------------------
(quads)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Primary energy.......................................... 1.00 1.70 1.79 2.70 3.02 3.29
FFC energy.............................................. 1.03 1.75 1.83 2.78 3.11 3.38
--------------------------------------------------------------------------------------------------------------------------------------------------------
OMB Circular A-4 \107\ 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 equipment 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.\108\ The review timeframe established in EPCA is generally
not synchronized with the equipment lifetime, equipment manufacturing
cycles, or other factors specific to CRE. 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.71. The impacts are counted over the lifetime of CRE purchased in
2028-2036.
---------------------------------------------------------------------------
\107\ U.S. Office of Management and Budget. Circular A-4:
Regulatory Analysis. September 17, 2003.
obamawhitehouse.archives.gov/omb/circulars_a004_a-4 (last accessed
February 17, 2023).
\108\ 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. (42 U.S.C.
6316(e)(1)); 42 U.S.C. 6295(m)) 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.71--Cumulative National Energy Savings for CRE; 9 Years of Shipments (2028-2036)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Trial standard level
-----------------------------------------------------------------------------------------------
1 2 3 4 5 6
--------------------------------------------------------------------------------------------------------------------------------------------------------
(quads)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Primary energy.......................................... 0.28 0.48 0.51 0.77 0.86 0.93
FFC energy.............................................. 0.29 0.50 0.52 0.79 0.88 0.96
--------------------------------------------------------------------------------------------------------------------------------------------------------
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 CRE. In
accordance with OMB's guidelines on regulatory analysis,\109\ DOE
calculated NPV using both a 7-percent and a 3-percent real discount
rate. Table V.72 shows the consumer NPV results with impacts counted
over the lifetime of equipment purchased in 2028-2057.
---------------------------------------------------------------------------
\109\ U.S. Office of Management and Budget. Circular A-4:
Regulatory Analysis. September 17, 2003.
obamawhitehouse.archives.gov/omb/circulars_a004_a-4 (last accessed
February 17, 2023).
[[Page 70286]]
Table V.72--Cumulative Net Present Value of Consumer Benefits for CRE; 30 Years of Shipments (2028-2057)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Trial standard level
Discount rate -----------------------------------------------------------------------------------------------
1 2 3 4 5 6
--------------------------------------------------------------------------------------------------------------------------------------------------------
(billion [2022$])
--------------------------------------------------------------------------------------------------------------------------------------------------------
3 percent............................................... 4.39 6.01 5.87 8.59 7.10 -16.5
7 percent............................................... 1.80 2.38 2.27 3.24 2.38 -10.1
--------------------------------------------------------------------------------------------------------------------------------------------------------
The NPV results based on the aforementioned 9-year analytical
period are presented in 2022$ table V.73. The impacts are counted over
the lifetime of equipment purchased in 2028-2036. 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.
Tabl--V.73--Cumulative Net Present Value of Consumer Benefits for CRE; 9 Years of Shipments (2028-2036)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Trial standard level
Discount rate -----------------------------------------------------------------------------------------------
1 2 3 4 5 6
--------------------------------------------------------------------------------------------------------------------------------------------------------
(billion [2022$])
--------------------------------------------------------------------------------------------------------------------------------------------------------
3 percent............................................... 1.68 2.30 2.25 3.16 2.50 -6.42
7 percent............................................... 0.92 1.21 1.16 1.58 1.09 -5.21
--------------------------------------------------------------------------------------------------------------------------------------------------------
The previous results reflect the use of a default trend to estimate
the change in price for CRE over the analysis period (see section
IV.F.1 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
DOE estimates that that new and amended energy conservation
standards for CRE would reduce energy expenditures for consumers of
those equipment, 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
(2028-2032), 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 Equipment
As discussed in section IV.C.1.b of this document, DOE has
tentatively concluded that the standards proposed in this NOPR would
not lessen the utility or performance of the CRE under consideration in
this rulemaking. Manufacturers of these equipment currently offer units
that meet or exceed the proposed standards.
5. Impact of Any Lessening of Competition
DOE considered any lessening of competition that would be likely to
result from new and amended standards. As discussed in section III.F.1
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 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 rulemaking.
Energy conservation resulting from potential energy conservation
standards for CRE is expected to yield
[[Page 70287]]
environmental benefits in the form of reduced emissions of certain air
pollutants and greenhouse gases. Tabl--V.74 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.L.1 of this document. DOE reports
annual emissions reductions for each TSL in chapter 13 of the NOPR TSD.
Table V.74--Cumulative Emissions Reduction for CRE Shipped in 2028-2057
--------------------------------------------------------------------------------------------------------------------------------------------------------
Trial Standard Level
-----------------------------------------------------------------------------------------------
1 2 3 4 5 6
--------------------------------------------------------------------------------------------------------------------------------------------------------
Power Sector and Site Emissions
--------------------------------------------------------------------------------------------------------------------------------------------------------
CO2 (million metric tons)............................... 16.7 28.5 29.9 45.3 50.7 55.1
CH4 (thousand tons)..................................... 1.24 2.11 2.21 3.35 3.75 4.08
N2O (thousand tons)..................................... 0.17 0.29 0.31 0.47 0.52 0.57
NOX (thousand tons)..................................... 7.89 13.4 14.1 21.3 23.9 26.0
SO2 (thousand tons)..................................... 5.53 9.43 9.89 15.0 16.8 18.2
Hg (tons)............................................... 0.04 0.07 0.07 0.10 0.12 0.13
--------------------------------------------------------------------------------------------------------------------------------------------------------
Upstream Emissions
--------------------------------------------------------------------------------------------------------------------------------------------------------
CO2 (million metric tons)............................... 1.70 2.90 3.04 4.61 5.15 5.61
CH4 (thousand tons)..................................... 155 263 277 419 468 509
N2O (thousand tons)..................................... 0.01 0.01 0.01 0.02 0.02 0.03
NOX (thousand tons)..................................... 26.5 45.2 47.4 71.8 80.3 87.4
SO2 (thousand tons)..................................... 0.10 0.17 0.18 0.28 0.31 0.34
Hg (tons)............................................... 0.00 0.00 0.00 0.00 0.00 0.00
--------------------------------------------------------------------------------------------------------------------------------------------------------
FFC Emissions
--------------------------------------------------------------------------------------------------------------------------------------------------------
CO2 (million metric tons)............................... 18.4 31.4 33.0 49.9 55.8 60.7
CH4 (thousand tons)..................................... 156 266 279 422 472 514
N2O (thousand tons)..................................... 0.18 0.31 0.32 0.49 0.54 0.59
NOX (thousand tons)..................................... 34.4 58.6 61.5 93.1 104 113
SO2 (thousand tons)..................................... 5.64 9.60 10.1 15.3 17.1 18.6
Hg (tons)............................................... 0.04 0.07 0.07 0.10 0.12 0.13
--------------------------------------------------------------------------------------------------------------------------------------------------------
As part of the analysis for this rulemaking, DOE estimated monetary
benefits likely to result from the reduced emissions of CO2
that DOE estimated for each of the considered TSLs for CRE. Section
IV.L of this document discusses the SC-CO2 values that DOE
used. Table V.75 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.75--Present Value of CO2 Emissions Reduction for CRE Shipped in 2028-2057
----------------------------------------------------------------------------------------------------------------
SC-CO2 Case
-----------------------------------------------------------------
Discount rate and statistics
TSL -----------------------------------------------------------------
3% 95th
5% Average 3% Average 2.5% Average percentile
----------------------------------------------------------------------------------------------------------------
(million 2022$)
-----------------------------------------------------------------
1............................................. 183 788 1,233 2,391
2............................................. 312 1,342 2,101 4,074
3............................................. 327 1,408 2,205 4,276
4............................................. 495 2,132 3,337 6,472
5............................................. 554 2,384 3,733 7,239
6............................................. 602 2,593 4,060 7,872
----------------------------------------------------------------------------------------------------------------
As discussed in section IV.L.2 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 CRE. Table V.76 presents the value of the CH4 emissions
reduction at each TSL, and table V.77 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.
The time-series of annual values is presented for the proposed TSL
in chapter 14 of the NOPR TSD.
[[Page 70288]]
Table V.76--Present Value of Methane Emissions Reduction for CRE Shipped in 2028-2057
----------------------------------------------------------------------------------------------------------------
SC-CH4 Case
-----------------------------------------------------------------
Discount rate and statistics
TSL -----------------------------------------------------------------
3% 95th
5% Average 3% Average 2.5% Average percentile
----------------------------------------------------------------------------------------------------------------
(Million 2022$)
-----------------------------------------------------------------
1............................................. 70.7 213 297 562
2............................................. 120 362 506 958
3............................................. 126 380 532 1005
4............................................. 191 576 805 1522
5............................................. 214 644 900 1702
6............................................. 233 700 979 1852
----------------------------------------------------------------------------------------------------------------
Table V.77--Present Value of Nitrous Oxide Emissions Reduction for CRE Shipped in 2028-2057
----------------------------------------------------------------------------------------------------------------
SC-N2O Case
-----------------------------------------------------------------
Discount rate and statistics
TSL -----------------------------------------------------------------
3% 95th
5% Average 3% Average 2.5% Average percentile
----------------------------------------------------------------------------------------------------------------
(Million 2022$)
-----------------------------------------------------------------
1............................................. 0.69 2.74 4.25 7.30
2............................................. 1.17 4.67 7.23 12.4
3............................................. 1.23 4.90 7.59 13.0
4............................................. 1.85 7.42 11.5 19.8
5............................................. 2.07 8.29 12.9 22.1
6............................................. 2.25 9.02 14.0 24.0
----------------------------------------------------------------------------------------------------------------
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 CRE. The dollar-per-
ton values that DOE used are discussed in section IV.L of this
document. Table V.78 shows the present value for NOX
emissions reduction for each TSL calculated using 7-percent and 3-
percent discount rates, and table V.79 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.
Table V.78--Present Value of NOX Emissions Reduction for CRE Shipped in
2028-2057
------------------------------------------------------------------------
TSL 3% Discount rate 7% Discount rate
------------------------------------------------------------------------
million [2022$]
------------------------------------------------------------------------
1................................. 1,597 623
2................................. 2,721 1,061
3................................. 2,855 1,114
4................................. 4,322 1,686
5................................. 4,834 1,885
6................................. 5,257 2,048
------------------------------------------------------------------------
Table V.79--Present Value of SO2 Emissions Reduction for CRE Shipped in
2028-2057
------------------------------------------------------------------------
TSL 3% Discount rate 7% Discount rate
------------------------------------------------------------------------
million [2022$]
-------------------------------------
1................................. 145 366
2................................. 247 624
[[Page 70289]]
3................................. 260 655
4................................. 393 992
5................................. 439 1109
6................................. 478 1206
------------------------------------------------------------------------
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
direct PM and other co-pollutants may be significant. DOE has not
included monetary benefits of the reduction of Hg emissions because the
amount of reduction is very small.
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. 6316(e)(1); 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.80 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 rulemaking. The
consumer benefits are domestic U.S. monetary savings that occur as a
result of purchasing the covered equipment, and are measured for the
lifetime of equipment shipped in 2028-2057. 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 CRE shipped in 2028-2057.
Table V.80--Consumer NPV Combined with Present Value of Climate Benefits and Health Benefits
--------------------------------------------------------------------------------------------------------------------------------------------------------
Category TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 TSL 6
--------------------------------------------------------------------------------------------------------------------------------------------------------
Using 3% discount rate for Consumer NPV and Health Benefits (billion 2022$)
--------------------------------------------------------------------------------------------------------------------------------------------------------
5% Average SC-GHG case.................................. 6.6 9.8 9.8 14.6 13.8 -9.2
3% Average SC-GHG case.................................. 7.4 11.1 11.2 16.6 16.1 -6.7
2.5% Average SC-GHG case................................ 7.9 12.0 12.1 18.1 17.7 -5.0
3% 95th percentile SC-GHG case.......................... 9.3 14.4 14.7 21.9 22.0 -0.3
--------------------------------------------------------------------------------------------------------------------------------------------------------
Using 7% discount rate for Consumer NPV and Health Benefits (billion 2022$)
--------------------------------------------------------------------------------------------------------------------------------------------------------
5% Average SC-GHG case.................................. 2.8 4.1 4.1 6.0 5.5 -6.7
3% Average SC-GHG case.................................. 3.6 5.4 5.4 8.0 7.7 -4.2
2.5% Average SC-GHG case................................ 4.1 6.3 6.4 9.5 9.4 -2.5
3% 95th percentile SC-GHG case.......................... 5.5 8.7 8.9 13.3 13.7 2.2
--------------------------------------------------------------------------------------------------------------------------------------------------------
C. Conclusion
When considering new or amended energy conservation standards, the
standards that DOE adopts for any type (or class) of covered equipment
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. 6316(e)(1); 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. (42
U.S.C. 6316(e)(1); 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. 6316(e)(1); 42 U.S.C. 6295(o)(3)(B))
For this NOPR, DOE considered the impacts of new and amended
standards for CRE 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. There is evidence that consumers
undervalue future energy savings as a result of (1) a lack of
information; (2) a lack of sufficient salience of the long-term or
aggregate benefits; (3) a lack of sufficient 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; (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). 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
[[Page 70290]]
current consumption and uncertain future energy cost savings.
1. Benefits and Burdens of TSLs Considered for CRE Standards
Table V.81 and table V.82 summarize the quantitative impacts
estimated for each TSL for CRE. The national impacts are measured over
the lifetime of CRE purchased in the 30-year period that begins in the
anticipated year of compliance with new and amended standards (2028-
2057). 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.81--Summary of Analytical Results for CRE TSLs: National Impacts
--------------------------------------------------------------------------------------------------------------------------------------------------------
Category TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 TSL 6
--------------------------------------------------------------------------------------------------------------------------------------------------------
Cumulative FFC National Energy Savings
--------------------------------------------------------------------------------------------------------------------------------------------------------
Quads................................................... 1.03 1.75 1.83 2.78 3.11 3.38
--------------------------------------------------------------------------------------------------------------------------------------------------------
Cumulative FFC Emissions Reduction
--------------------------------------------------------------------------------------------------------------------------------------------------------
CO2 (million metric tons)............................... 18.4 31.4 33.0 49.9 55.8 60.7
CH4 (thousand tons)..................................... 156 266 279 422 472 514
N2O (thousand tons)..................................... 0.18 0.31 0.32 0.49 0.54 0.59
NOX (thousand tons)..................................... 34.4 58.6 61.5 93.1 104 113
SO2 (thousand tons)..................................... 5.64 9.60 10.1 15.3 17.1 18.6
Hg (tons)............................................... 0.04 0.07 0.07 0.10 0.12 0.13
--------------------------------------------------------------------------------------------------------------------------------------------------------
Present Value of Benefits and Costs (3% discount rate, billion 2022$)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings......................... 5.28 8.03 8.38 12.6 12.8 11.2
Climate Benefits *...................................... 1.00 1.71 1.79 2.71 3.04 3.30
Health Benefits **...................................... 1.96 3.34 3.51 5.31 5.94 6.46
-----------------------------------------------------------------------------------------------
Total Benefits[dagger].............................. 8.25 13.1 13.7 20.7 21.8 21.0
Consumer Incremental Equipment Costs[Dagger]............ 0.89 2.02 2.51 4.05 5.74 27.7
-----------------------------------------------------------------------------------------------
Consumer Net Benefits............................... 4.39 6.01 5.87 8.59 7.10 -16.5
Total Net Benefits.................................. 7.36 11.1 11.2 16.6 16.1 -6.72
--------------------------------------------------------------------------------------------------------------------------------------------------------
Present Value of Benefits and Costs (7% discount rate, billion 2022$)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings......................... 2.28 3.47 3.62 5.46 5.55 4.84
Climate Benefits *...................................... 1.00 1.71 1.79 2.71 3.04 3.30
Health Benefits **...................................... 0.77 1.31 1.37 2.08 2.32 2.53
-----------------------------------------------------------------------------------------------
Total Benefits[dagger].............................. 4.05 6.49 6.79 10.3 10.9 10.7
Consumer Incremental Equipment Costs[Dagger]............ 0.48 1.08 1.35 2.22 3.17 14.9
-----------------------------------------------------------------------------------------------
Consumer Net Benefits............................... 1.80 2.38 2.27 3.24 2.38 -10.1
-----------------------------------------------------------------------------------------------
Total Net Benefits.................................. 3.58 5.40 5.44 8.03 7.74 -4.24
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: This table presents the costs and benefits associated with CRE shipped in 2028--2057. These results include benefits to consumers which accrue
after 2057 from the equipment shipped in 2028-2057.
* 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; however, DOE
emphasizes the importance and value of considering the benefits calculated using all four sets of SC-GHG estimates. To monetize the benefits of
reducing GHG emissions, this analysis uses the interim 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.
** 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.
[Dagger] Costs include incremental equipment costs as well as installation costs.
Table V.82--Summary of Analytical Results: Manufacturer and Consumer Impacts
--------------------------------------------------------------------------------------------------------------------------------------------------------
Category TSL 1 * TSL 2 * TSL 3 * TSL 4 * TSL 5 * TSL 6 *
--------------------------------------------------------------------------------------------------------------------------------------------------------
Manufacturer Impacts
--------------------------------------------------------------------------------------------------------------------------------------------------------
Industry NPV (million 2022$) (No-new- 3,274.2 to 3,241.9 to 3,224.4 to 3,182.5 to 3,127.0 to 2,985.9 to
standards case INPV = 3,286.4)....... 3,290.8 3,279.6 3,271.4 3,269.6 3,255.5 3,529.9
Industry NPV (% change)............... (0.4) to 0.1 (1.4) to (0.2) (1.9) to (0.5) (3.2) to (0.5) (4.8) to (0.9) (9.1) to 7.4
--------------------------------------------------------------------------------------------------------------------------------------------------------
[[Page 70291]]
Consumer Average LCC Savings (2022$)
--------------------------------------------------------------------------------------------------------------------------------------------------------
CB.SC.L............................... $263.1 $263.1 $553.2 $672.5 $566.9 $566.9
CB.SC.M............................... 111.3 111.3 199.3 208.7 44.9 -74.3
HCS.SC.L.............................. 7.8 7.8 7.8 7.8 7.8 -147.3
HCS.SC.M.............................. 94.1 94.1 84.9 94.1 84.9 -189.1
HCT.SC.I.............................. 93.8 NA NA 93.8 55.0 -306.5
HCT.SC.L.............................. NA NA NA NA NA -421.6
HCT.SC.M.............................. NA NA NA NA NA -551.4
HZO.RC.L.............................. 46.6 46.6 46.6 46.6 46.6 46.6
HZO.RC.M.............................. 40.3 40.3 40.3 40.3 40.3 40.3
HZO.SC.L.............................. 160.9 193.6 193.6 971.2 841.9 841.9
HZO.SC.M.............................. 95.0 117.4 117.4 226.5 199.9 199.9
SOC.RC.M.............................. 986.3 986.3 929.5 986.3 929.5 -70.5
SOC.SC.M.............................. 994.6 1,015.5 1,015.5 1,834.7 698.4 698.4
SVO.RC.M.............................. 522.8 522.8 406.6 522.8 406.6 406.6
SVO.SC.M.............................. 175.6 600.5 600.5 692.3 602.2 602.2
VCS.SC.H.............................. 399.5 399.5 263.8 399.5 162.5 33.5
VCS.SC.I.............................. 219.0 377.4 377.4 615.2 486.7 486.7
VCS.SC.L.............................. 193.1 309.0 309.0 375.8 260.7 260.7
VCS.SC.M.............................. 217.3 240.7 240.7 240.7 128.8 0.2
VCT.RC.L.............................. 323.7 331.0 331.0 331.0 331.0 -2,934.7
VCT.RC.M.............................. 308.7 308.7 133.6 308.7 133.6 -3,397.0
VCT.SC.H.............................. NA NA NA NA NA -1,496.8
VCT.SC.I.............................. 15.8 77.5 77.5 77.5 77.5 -1,318.5
VCT.SC.L.............................. 91.1 122.8 122.8 242.3 120.3 -1,093.5
VCT.SC.M.............................. 18.8 18.8 18.8 82.5 82.5 -1,417.2
VOP.RC.L.............................. 615.4 1,524.5 1,524.5 1,524.5 1,524.5 1,524.5
VOP.RC.M.............................. 638.0 707.1 707.1 707.1 707.1 707.1
VOP.SC.M.............................. 143.3 590.0 590.0 1,082.3 992.2 992.2
Shipment-Wtd Average *................ 169.8 169.8 192.3 242.7 165.5 -649.8
--------------------------------------------------------------------------------------------------------------------------------------------------------
Consumer Simple PBP (years)
--------------------------------------------------------------------------------------------------------------------------------------------------------
CB.SC.L............................... 1.0 1.0 1.1 2.0 2.2 2.2
CB.SC.M............................... 1.1 1.1 1.6 1.0 5.0 5.8
HCS.SC.L.............................. 5.1 5.1 5.1 5.1 5.1 10.8
HCS.SC.M.............................. 0.8 0.8 1.8 0.8 1.8 13.3
HCT.SC.I.............................. 4.8 NA NA 4.8 7.1 14.8
HCT.SC.L.............................. NA NA NA NA NA 23.5
HCT.SC.M.............................. NA NA NA NA NA 76.8
HZO.RC.L.............................. 13.0 13.0 13.0 13.0 13.0 13.0
HZO.RC.M.............................. 13.8 13.8 13.8 13.8 13.8 13.8
HZO.SC.L.............................. 0.8 1.1 1.1 2.0 2.8 2.8
HZO.SC.M.............................. 1.1 1.6 1.6 3.3 5.2 5.2
SOC.RC.M.............................. 2.6 2.6 3.3 2.6 3.3 15.9
SOC.SC.M.............................. 0.1 1.1 1.1 2.1 5.4 5.4
SVO.RC.M.............................. 4.8 4.8 7.3 4.8 7.3 7.3
SVO.SC.M.............................. 1.2 2.7 2.7 4.1 4.3 4.3
VCS.SC.H.............................. 0.2 0.2 1.8 0.2 3.7 4.4
VCS.SC.I.............................. 0.4 1.4 1.4 3.1 3.4 3.4
VCS.SC.L.............................. 0.4 1.5 1.5 2.7 3.2 3.2
VCS.SC.M.............................. 0.4 1.4 1.4 1.4 4.1 5.0
VCT.RC.L.............................. 6.2 6.4 6.4 6.4 6.4 52.2
VCT.RC.M.............................. 6.5 6.5 10.9 6.5 10.9 93.9
VCT.SC.H.............................. NA NA NA NA NA 43.0
VCT.SC.I.............................. 4.6 8.3 8.3 8.3 8.3 35.0
VCT.SC.L.............................. 2.0 2.6 2.6 5.3 5.8 18.5
VCT.SC.M.............................. 3.8 3.8 3.8 7.6 7.6 45.2
VOP.RC.L.............................. 4.3 3.6 3.6 3.6 3.6 3.6
VOP.RC.M.............................. 4.1 5.7 5.7 5.7 5.7 5.7
VOP.SC.M.............................. 2.1 2.6 2.6 3.4 3.6 3.6
Shipment-Wtd Average *................ 2.2 2.2 3.1 4.1 5.5 23.1
--------------------------------------------------------------------------------------------------------------------------------------------------------
Percent of Consumers that Experience a Net Cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
CB.SC.L............................... 0.0 0.0 0.0 0.2 1.3 1.3
CB.SC.M............................... 0.0 0.0 3.3 0.0 45.9 73.7
HCS.SC.L.............................. 22.2 22.2 22.2 22.2 22.2 96.1
HCS.SC.M.............................. 0.0 0.0 4.9 0.0 4.9 99.1
HCT.SC.I.............................. 15.0 NA NA 15.0 32.5 85.8
HCT.SC.L.............................. NA NA NA NA NA 90.5
HCT.SC.M.............................. NA NA NA NA NA 91.4
HZO.RC.L.............................. 7.8 7.8 7.8 7.8 7.8 7.8
HZO.RC.M.............................. 10.8 10.8 10.8 10.8 10.8 10.8
HZO.SC.L.............................. 0.0 0.0 0.0 0.2 0.9 0.9
HZO.SC.M.............................. 0.0 0.2 0.2 6.8 14.8 14.8
SOC.RC.M.............................. 0.0 0.0 1.4 0.0 1.4 70.9
SOC.SC.M.............................. 0.0 0.9 0.9 0.0 25.6 25.6
SVO.RC.M.............................. 0.0 0.0 18.4 0.0 18.4 18.4
SVO.SC.M.............................. 0.0 0.1 0.1 4.6 11.0 11.0
VCS.SC.H.............................. 0.0 0.0 18.4 0.0 31.6 52.8
[[Page 70292]]
VCS.SC.I.............................. 0.0 0.0 0.0 3.6 8.9 8.9
VCS.SC.L.............................. 0.0 0.2 0.2 4.3 17.1 17.1
VCS.SC.M.............................. 0.0 1.6 1.6 1.6 27.0 56.2
VCT.RC.L.............................. 0.0 0.4 0.4 0.4 0.4 99.7
VCT.RC.M.............................. 0.0 0.0 24.0 0.0 24.0 100.0
VCT.SC.H.............................. NA NA NA NA NA 96.9
VCT.SC.I.............................. 1.5 1.1 1.1 1.1 1.1 100.0
VCT.SC.L.............................. 0.3 0.7 0.7 18.8 37.5 98.2
VCT.SC.M.............................. 5.7 5.7 5.7 20.1 20.1 100.0
VOP.RC.L.............................. 0.0 0.0 0.0 0.0 0.0 0.0
VOP.RC.M.............................. 0.0 8.2 8.2 8.2 8.2 8.2
VOP.SC.M.............................. 0.6 0.0 0.0 0.4 1.0 1.0
Shipment-Wtd Average *................ 2.0 2.0 4.2 8.2 21.9 69.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The entry ``NA'' means not applicable because there is no change in the standard at certain TSLs.
* Weighted by shares of each equipment class in total projected shipments in 2022.
DOE first considered TSL 6, which represents the max-tech
efficiency levels for all equipment classes. The design options DOE
analyzed at this level included the max-tech technologies for all
equipment classes. For all open (i.e., equipment classes without doors)
and transparent door equipment classes, DOE expects manufacturers would
likely need to incorporate occupancy sensors with dimming capability.
Open equipment classes would also likely require the use of night
curtains. For equipment classes with transparent doors, DOE expects
manufacturers would likely need to incorporate vacuum-insulated glass
doors. For self-contained equipment classes, DOE expects manufacturers
would need to incorporate EC evaporator and condenser fan motors,
variable-speed compressors, and microchannel condensers. For closed,
self-contained equipment classes using forced-air refrigeration
systems, DOE expects manufacturers would also need to incorporate
evaporator fan control.
TSL 6 would save an estimated 3.38 quads of FFC energy over 30
years of shipments (2028-2057), an amount DOE considers significant.
Under TSL 6, the NPV of consumer benefits would be -$10.1 billion using
a discount rate of 7 percent, and -$16.5 billion using a discount rate
of 3 percent for the same 30-year period.
The cumulative emissions reductions at TSL 6 are 60.7 Mt of
CO2, 18.6 thousand tons of SO2, 113 thousand tons
of NOX, 0.13 tons of Hg, 514 thousand tons of
CH4, and 0.59 thousand tons of N2O for the same
30-year period. 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 $3.30 billion. The estimated
monetary value of the health benefits from reduced SO2 and
NOX emissions at TSL 6 is $2.53 billion using a 7-percent
discount rate and $6.46 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 -$4.24
billion. Using a 3-percent discount rate for all benefits and costs,
the estimated total NPV at TSL 6 are -$6.72 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 6, affected purchasers of CRE experience an average LCC
savings ranging from -$3,397.0. to $1,524.5 with a payback period
ranging from 94 years to 2.1 years. For example, for equipment classes
VCS.SC.M, VCT.SC.M, VCS.SC.L, VCT.SC.L, and VCT.RC.M, which account for
82% of annual CRE shipments, there is a net LCC savings of $0.171, -
$1,417.24, $260.731, -$1,093.53, and -$3,397.0 and a PBP of 5.04, 4539,
3.2, 18.5, and 94 years, respectively. Overall, a majority of CRE
purchasers (69.0 percent) would experience a net cost and the LCC
savings would be negative for 13 of 28 analyzed equipment classes,
representing 48% of annual shipments. Furthermore, the shipment-
weighted-average PBP is estimated at 23 years, which is generally
higher than the average CRE lifetime.
At TSL 6, the projected change in INPV ranges from a decrease of
$300.4 million to an increase of $243.6 million, which corresponds to a
decrease of 9.1 percent and an increase of 7.4 percent, respectively.
DOE estimates that industry must invest $343.8 million to update
equipment designs and source, qualify, and test high-efficiency
components across their entire CRE portfolio. In 2027, a year before
compliance is required, DOE estimates that approximately 2.2 percent of
CRE shipments would meet the efficiency levels analyzed at TSL 6.
At this level, nearly all manufacturers would need to spend notable
development time incorporating the analyzed max-tech design options
across their entire CRE portfolio. However, most design options
analyzed involve more efficient components (e.g., high-efficiency
motors) and would not necessitate significant capital investment. CRE
equipment classes with transparent doors (i.e., HCT.SC.I, HCT.SC.L,
HCT.SC.M, SOC.RC.M, SOC.SC.M, VCT.RC.L, VCT.RC.M, VCT.SC.H, VCT.SC.I,
VCT.SC.L, and VCT.SC.M) account for approximately 43.8 percent of
industry shipments in 2027. For the 71 manufacturers that offer CRE
with transparent doors, implementing vacuum-insulated glass would
require significant engineering resources and testing time to ensure
adequate safety and durability of their equipment in all commercial
settings. In interviews, most manufacturers raised concerns about
standards requiring a widespread adoption of vacuum-insulated glass as
it is still a relatively untested technology in the commercial
refrigeration market. Manufacturers expressed concerns about the
potential for reduced equipment reliability as vacuum-insulated glass
can be relatively more fragile than existing glass door designs and
there is very little industry experience with implementing vacuum-
insulated glass in CRE applications. DOE estimates that less than 2
percent of shipments of CRE equipment classes with transparent doors
would meet the max-tech efficiencies in 2027. In interviews,
manufacturers emphasized that there are currently a limited number of
suppliers of vacuum-insulated glass for CRE applications.
Based on this analysis, the Secretary tentatively concludes that at
TSL 6 for CRE, the benefits of energy savings,
[[Page 70293]]
emission reductions, and the estimated monetary value of the emissions
reductions would be outweighed by the negative NPV of consumer
benefits, economic burden on many CRE purchasers, and the impacts on
manufacturers, including the conversion costs that could result in a
reduction in INPV. For the manufacturers of CRE with transparent doors,
implementing vacuum-insulated glass would require significant
engineering resources and testing time to ensure adequate safety and
durability of their equipment in all commercial settings. There is
limited industry experience incorporating vacuum-insulated glass into
CRE designs. And a majority of CRE purchasers (69.0 percent) would
experience a net cost and the average LCC savings would be negative.
Consequently, the Secretary has tentatively concluded that TSL 6 is not
economically justified.
DOE then considered TSL 5, which represents the highest efficiency
level with positive LCC savings for each equipment class. For
approximately half of the classes, this TSL represents efficiency
levels less than max-tech. For most open (i.e., equipment classes
without doors) and transparent door equipment classes, DOE expects
manufacturers would likely need to incorporate occupancy sensors with
dimming capability. Open equipment classes would also likely require
the use of night curtains. For most equipment classes with transparent
doors, DOE expects manufacturers would need to incorporate triple-pane,
krypton-filled glass doors or vacuum-insulated glass doors. For self-
contained equipment classes, DOE expects manufacturers would need to
incorporate EC evaporator and condenser fan motors and may require
microchannel condensers and variable-speed compressors. For closed,
self-contained equipment classes using forced-air refrigeration
systems, DOE expects manufacturers would also need to incorporate
evaporator fan control.
TSL 5 would save an estimated 3.11 quads of full fuel cycle energy
over 30 years of shipments (2028 to 2057), an amount DOE considers
significant. Under TSL 5, the NPV of consumer benefit would be $2.38
billion using a discount rate of 7 percent, and $7.10 billion using a
discount rate of 3 percent.
The cumulative emissions reductions at TSL 5 are 55.8 Mt of
CO2, 17.1 thousand tons of SO2, 104 thousand tons
of NOX, 0.12 tons of Hg, 472 thousand tons of
CH4, and 0.54 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 3.04 billion. The estimated monetary value of the health
benefits from reduced SO2 and NOX emissions at
TSL 5 is $2.32 billion using a 7-percent discount rate and $5.94
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 $7.74
billion. Using a 3-percent discount rate for all benefits and costs,
the estimated total NPV at TSL 5 is $16.1 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, affected purchasers for each CRE equipment class
experience an average LCC savings ranging from $7.77 to $1,524.52 with
a payback period ranging from 1.765 years to 13.8 years. For example,
for equipment classes VCS.SC.M, VCT.SC.M, VCS.SC.L, VCT.SC.L, and
VCT.RC.M, which account for 82% of annual CRE shipments, there is a net
LCC savings of $128.91, $82.53, $260.73, $120.34,1 and $133.625 and a
PBP of 4.1, 7.6, 3.2, 5.8, and 10.9 years, respectively. Overall,
approximately 78 percent of affected CRE purchasers would experience a
net benefit or not be affected at TSL 5. Furthermore, the estimated
shipment-weighted-average LCC savings is $165.52 and PBP is 5.5 years,
which is lower than the average CRE lifetime.
At TSL 5, the projected change in INPV ranges from a decrease of
$159.3 million to a decrease of $30.9 million, which correspond to
decreases of 4.8 percent and 0.9 percent, respectively. DOE estimates
that industry must invest $226.4 million to comply with standards set
at TSL 5. In 2027, the year before compliance is required, DOE
estimates that approximately 10.8 percent of CRE shipments would meet
the efficiency levels analyzed at TSL 5. Similar to TSL 6, DOE expects
manufacturers would spend development time updating equipment designs
to incorporate high-efficiency components. However, at this level, DOE
expects that most manufacturers of CRE with transparent doors could
meet the TSL 5 efficiencies without implementing vacuum-insulated glass
doors. Of the 11 directly analyzed transparent door equipment classes,
only the SOC.SC.M equipment class would likely require vacuum-insulated
glass doors to meet the TSL 5 efficiency levels. SOC.SC.M accounts for
approximately 0.4 percent of analyzed industry shipments in 2027.
After considering the analysis and weighing the benefits and
burdens, the Secretary has tentatively concluded that at a standard set
at TSL 5 for CRE would be economically justified. At this TSL, the
average LCC savings for all affected purchasers is positive. An
estimated 67.1 percent of purchasers experience a net benefit, while
21.9 percent of purchasers experience a net LCC cost. The FFC national
energy savings are significant and the NPV of consumer benefits is
positive 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 14 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 $3.04 billion in climate benefits
(associated with the average SC-GHG at a 3-percent discount rate), and
$5.94 billion (using a 3-percent discount rate) or $2.32 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. The walk-down is not a comparative analysis, as a comparative
analysis would result in the maximization of net benefits instead of
energy savings that are technologically feasible and economically
justified, which would be contrary to the statute. 86 FR 70892, 70908.
Although DOE has not conducted a comparative analysis to select the
proposed energy conservation standards, DOE notes that TSL 5 represents
the highest efficiency level for each equipment class with positive LCC
savings for each equipment class, and a considerably lower reduction in
INPV, and positive consumer NPV compared to TSL 6.
Although DOE considered proposed new and amended standard levels
for CRE by grouping the efficiency levels for each equipment class into
TSLs, DOE evaluates all analyzed efficiency levels in its analysis. For
all equipment classes, the proposed standard level
[[Page 70294]]
represents the maximum energy savings that does not result in negative
LCC savings. The ELs at the proposed standard level result in positive
LCC savings for all equipment classes, significantly reduce the number
of purchasers 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. As previously discussed, setting standards at
max-tech (TSL 6) would result in negative LCC savings for 13 of the
analyzed equipment classes, representing 48 percent of the estimated
CRE shipments.
Therefore, based on the previous considerations, DOE proposes to
adopt the energy conservation standards for CRE at TSL 5. The proposed
new and amended energy conservation standards for CRE, which are
expressed as kWh/day, are shown in table V.83.
Table V.83--Proposed New or Amended Energy Conservation Standards for
CRE
------------------------------------------------------------------------
Maximum daily energy
Equipment class consumption (kWh/day)
------------------------------------------------------------------------
VOP.RC.H............................... 0.31 x TDA + 1.99.
VOP.RC.M............................... 0.56 x TDA + 3.57.
VOP.RC.L............................... 2.04 x TDA + 6.36.
VOP.RC.I............................... 2.59 x TDA + 8.08.
SVO.RC.H............................... 0.32 x TDA + 1.55.
SVO.RC.M............................... 0.58 x TDA + 2.79.
SVO.RC.L............................... 2.04 x TDA + 6.36.
SVO.RC.I............................... 2.59 x TDA + 8.08.
HZO.RC.H............................... 0.19 x TDA + 1.56.
HZO.RC.M............................... 0.34 x TDA + 2.81.
HZO.RC.L............................... 0.54 x TDA + 6.81.
HZO.RC.I............................... 0.69 x TDA + 8.64.
VCT.RC.H............................... 0.07 x TDA + 0.97.
VCT.RC.M............................... 0.134 x TDA + 1.74.
VCT.RC.L............................... 0.47 x TDA + 2.51.
VCT.RC.I............................... 0.56 x TDA + 2.97.
HCT.RC.M............................... 0.16 x TDA + 0.13.
HCT.RC.L............................... 0.34 x TDA + 0.26.
HCT.RC.I............................... 0.38 x TDA + 0.29.
VCS.RC.H............................... 0.06 x V + 0.14.
VCS.RC.M............................... 0.1 x V + 0.26.
VCS.RC.L............................... 0.21 x V + 0.54.
VCS.RC.I............................... 0.25 x V + 0.63.
HCS.RC.M............................... 0.1 x V + 0.26.
HCS.RC.L............................... 0.21 x V + 0.54.
HCS.RC.I............................... 0.25 x V + 0.63.
SOC.RC.H............................... 0.22 x TDA + 0.05.
SOC.RC.M............................... 0.39 x TDA + 0.1.
SOC.RC.L............................... 0.83 x TDA + 0.2.
SOC.RC.I............................... 1.04 x TDA + 0.25.
CB.RC.M................................ 0.03 x V + 0.39.
CB.RC.L................................ 0.13 x V + 1.37.
VOP.SC.H............................... 0.69 x TDA + 1.94.
VOP.SC.M............................... 1.25 x TDA + 3.48.
VOP.SC.L............................... 3.29 x TDA + 9.15.
VOP.SC.I............................... 4.18 x TDA + 11.63.
SVO.SC.H............................... 0.65 x TDA + 1.77.
SVO.SC.M............................... 1.18 x TDA + 3.18.
SVO.SC.L............................... 3.25 x TDA + 8.78.
SVO.SC.I............................... 4.13 x TDA + 11.16.
HZO.SC.H............................... 0.27 x TDA + 2.06.
HZO.SC.M............................... 0.48 x TDA + 3.71.
HZO.SC.L............................... 1.48 x TDA + 5.5.
HZO.SC.I............................... 1.97 x TDA + 7.34.
VCT.SC.H............................... 0.053 x V + 0.85.
VCT.SC.M............................... 0.054 x V + 0.86.
VCT.SC.L............................... 0.234 x V + 2.38.
VCT.SC.I............................... 0.6 x TDA + 3.2.
HCT.SC.M............................... 0.06 x V + 0.37.
HCT.SC.L............................... 0.08 x V + 1.23.
HCT.SC.I............................... 0.34 x TDA + 0.43.
VCS.SC.H............................... 0.0082 x V + 0.21.
VCS.SC.M............................... 0.02 x V + 0.54.
VCS.SC.L............................... 0.155 x V + 0.97.
VCS.SC.I............................... 0.25 x V + 0.88.
HCS.SC.M............................... 0.022 x V + 0.41.
HCS.SC.L............................... 0.043 x V + 0.81.
HCS.SC.I............................... 0.31 x V + 0.81.
SOC.SC.H............................... 0.17 x TDA + 0.33.
SOC.SC.M............................... 0.304 x TDA + 0.59.
SOC.SC.L............................... 1.1 x TDA + 2.1.
SOC.SC.I............................... 1.53 x TDA + 0.36.
CB.SC.M................................ 0.049 x V + 0.54.
CB.SC.L................................ 0.180 x V + 1.92.
PD.SC.M................................ 0.11 x V + 0.81.
VCT.RC.M.PT............................ 0.139 x TDA + 1.81.
VCT.SC.M.PT............................ 0.056 x V + 0.86.
VCT.SC.L.PT............................ 0.243 x V + 2.47.
VCS.SC.M.PT............................ 0.02 x V + 0.56.
VCS.SC.L.PT............................ 0.161 x V + 1.01.
VCT.RC.M.SD............................ 0.143 x TDA + 1.86.
VCT.SC.M.SD............................ 0.058 x V + 0.86.
VCT.RC.M.SDPT.......................... 0.149 x TDA + 1.93.
VCT.SC.M.SDPT.......................... 0.060 x V + 0.86.
VCT.RC.M.RI............................ 0.140 x TDA + 1.83.
VCT.SC.M.RI............................ 0.057 x V + 0.86.
VCS.SC.M.RI............................ 0.02 x V + 0.57.
VCS.SC.L.RI............................ 0.162 x V + 1.02.
VCT.RC.M.RT............................ 0.146 x TDA + 1.9.
VCT.SC.M.RT............................ 0.059 x V + 0.86.
VCS.SC.M.RT............................ 0.02 x V + 0.59.
VCS.SC.L.RT............................ 0.169 x V + 1.06.
HCS.SC.L.FA............................ 0.052 x V + 0.97.
------------------------------------------------------------------------
------------------------------------------------------------------------
Unique design characteristic Abbreviation
------------------------------------------------------------------------
Pass-through Door....................... PT.
Sliding Door............................ SD.
Sliding and Pass-through Doors.......... SDPT.
Roll-in Door............................ RI.
Roll-through Door....................... RT.
Forced Air Evaporator................... FA.
------------------------------------------------------------------------
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 2022$) of the
benefits from operating equipment that meet the proposed standards
(consisting primarily of operating cost savings from using less energy,
minus increases in equipment purchase costs), and (2) the annualized
monetary value of the climate and health benefits from emission
reductions.
Table V.84 shows the annualized values for CRE under TSL 5,
expressed in 2022$. 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 CRE is $335 million per year in increased
equipment costs, while the estimated annual benefits are $586 million
from reduced equipment operating costs, $174 million from climate
benefits, and $246 million from health benefits. In this case, the net
benefit amounts to $671 million per year.
Using a 3-percent discount rate for all benefits and costs, the
estimated cost of the proposed standards for CRE is $330 million per
year in increased equipment costs, while the estimated annual benefits
are $738 million in reduced operating costs, $174 million from climate
benefits, and $341 million from health benefits. In this case, the net
benefit amounts to $923 million per year.
Table V.84--Annualized Benefits and Costs of Proposed Energy Conservation Standards for CRE (TSL 5)
----------------------------------------------------------------------------------------------------------------
Million 2022$/year
-----------------------------------------------
Low-net- High-net-
Primary benefits benefits
estimate estimate estimate
----------------------------------------------------------------------------------------------------------------
3% discount rate
----------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings................................. 738 714 774
[[Page 70295]]
Climate Benefits *.............................................. 174 173 179
Health Benefits **.............................................. 341 340 350
-----------------------------------------------
Total Benefits [dagger]..................................... 1253 1227 1302
Consumer Incremental Equipment Costs............................ 330 338 328
-----------------------------------------------
Net Benefits................................................ 923 890 974
-----------------------------------------------
Change in Producer Cashflow (INPV [Dagger][Dagger])............. (17)-(3) (17)-(3) (17)-(3)
----------------------------------------------------------------------------------------------------------------
7% discount rate
----------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings................................. 586 569 613
Climate Benefits * (3% discount rate)........................... 174 173 179
Health Benefits **.............................................. 246 245 251
-----------------------------------------------
Total Benefits [dagger]..................................... 1006 987 1043
Consumer Incremental Equipment Costs............................ 335 342 334
-----------------------------------------------
Net Benefits................................................ 671 646 709
-----------------------------------------------
Change in Producer Cashflow (INPV[Dagger][Dagger]).............. (17)-(3) (17)-(3) (17)-(3)
----------------------------------------------------------------------------------------------------------------
Note: This table presents the costs and benefits associated with CRE shipped in 2028-2057. These include
consumer, climate, and health benefits that accrue after 2057 from the equipment shipped in 2028-2057. The
Primary, Low Net Benefits, and High Net Benefits Estimates utilize projections of energy prices from the
AEO2023 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 sections IV.F.1 and 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 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 sets of SC-GHG
estimates. To monetize the benefits of reducing GHG emissions this analysis uses the interim 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.
** 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 benefits for both the 3-percent and 7-percent cases are presented using the average SC-GHG with 3-
percent discount rate.
[Dagger][Dagger] Operating Cost Savings are calculated based on the life cycle costs analysis and national
impact analysis as discussed in detail below. See sections IV.F and IV.H of this document. DOE's NIA includes
all impacts (both costs and benefits) along the distribution chain beginning with the increased costs to the
manufacturer to manufacture the equipment and ending with the increase in price experienced by the consumer.
DOE also separately conducts a detailed analysis on the impacts on manufacturers (the MIA). See section IV.J
of this document. In the detailed MIA, DOE models manufacturers' pricing decisions based on assumptions
regarding investments, conversion costs, cashflow, and margins. The MIA produces a range of impacts, which is
the rule's expected impact on the INPV. The change in INPV is the present value of all changes in industry
cash flow, including changes in production costs, capital expenditures, and manufacturer profit margins. The
annualized change in INPV is calculated using the industry weighted average cost of capital value of 10.0
percent that is estimated in the MIA (see chapter 12 of the NOPR TSD for a complete description of the
industry weighted average cost of capital). For commercial refrigeration equipment, those values are -$16.65
million to -$3.23 million. DOE accounts for that range of likely impacts in analyzing whether a TSL is
economically justified. See section V.C of this document. DOE is presenting the range of impacts to the INPV
under two manufacturer markup scenarios: the Preservation of Gross Margin scenario, which is the manufacturer
markup scenario used in the calculation of Consumer Operating Cost Savings in this table, and the Preservation
of Operating Profit scenario, where DOE assumed manufacturers would not be able to increase per-unit operating
profit in proportion to increases in manufacturer production costs. DOE includes the range of estimated
annualized change in INPV in the above table, drawing on the MIA explained further in section IV.J of this
document, to provide additional context for assessing the estimated impacts of this proposal to society,
including potential changes in production and consumption, which is consistent with OMB's Circular A-4 and
E.O. 12866. If DOE were to include the INPV into the annualized net benefit calculation for this proposed
rule, the annualized net benefits would range from $907 million to $920 million at 3-percent discount rate and
would range from $655 million to $668 million at 7-percent discount rate. Parentheses () indicate negative
values.
D. Reporting, Certification, and Sampling Plan
Manufacturers, including importers, must use equipment-specific
certification templates to certify compliance to DOE. For CRE, the
certification template reflects the general certification requirements
specified at 10 CFR 429.12 and the equipment-specific requirements
specified at 10 CFR 429.42 DOE is not proposing to amend the equipment-
specific certification requirements for this equipment.
VI. Procedural Issues and Regulatory Review
A. Review Under Executive Orders 12866, 13563, and 14094
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.
[[Page 70296]]
21, 2011) and amended by E.O. 14094, ``Modernizing Regulatory Review,''
88 FR 21879 (April 11, 2023), 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 OMB has
emphasized that such techniques may include identifying changing future
compliance costs that might result from technological innovation or
anticipated behavioral changes. For the reasons stated in the preamble,
this proposed regulatory action is consistent with these principles.
Section 6(a) of E.O. 12866 also requires agencies to submit
``significant regulatory actions'' to OIRA for review. OIRA has
determined that this proposed regulatory action constitutes a
``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 as to 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 technical
support document 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, 2003, to ensure that the
potential impacts of its rules on small entities are properly
considered during the rulemaking process. 68 FR 7990. DOE has made its
procedures and policies available on the Office of the General
Counsel's website (www.energy.gov/gc/office-general-counsel). DOE has
prepared the following IRFA for the equipment that are the subject of
this proposed rulemaking.
For manufacturers of CRE, 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 CRE is
classified under NAICS 333415, ``Air-Conditioning and Warm Air Heating
Equipment and Commercial and Industrial Refrigeration Equipment
Manufacturing.'' The SBA sets a threshold of 1,250 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 new and amended energy conservation standards for
CRE. EPCA authorizes DOE to regulate the energy efficiency of a number
of consumer products and certain industrial equipment. Title III, part
C of EPCA, added by Public Law 95-619, title IV, section 441(a) (42
U.S.C. 6311-6317, as codified), established the Energy Conservation
Program for Certain Industrial Equipment, which sets forth a variety of
provisions designed to improve energy efficiency. This equipment
includes CRE, the subject of this document. (42 U.S.C. 6311(1)(E)) EPCA
established standards for certain categories of CRE (42 U.S.C.
6313(c)(2)-(4)) and directs DOE to conduct future rulemakings to
determine whether to amend these standards. (42 U.S.C. 6313(c)(6)(B))
On March 28, 2014, DOE published a final rule that prescribed the
current energy conservation standards for CRE manufactured on and after
March 27, 2017. 79 FR 17725. EPCA 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 equipment 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. 6316(e)(1); 42 U.S.C.
6295(m)(1)) This proposed 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
C of EPCA, added by Public Law 95-619, title IV, section 441(a) (42
U.S.C. 6311-6317, as codified), established the Energy Conservation
Program for Certain Industrial Equipment, which sets forth a variety of
provisions designed to improve energy efficiency. EPCA established
standards for certain categories of CRE (42 U.S.C. 6313(c)(2)-(4)) and
directs DOE to conduct future rulemakings to determine whether to amend
these standards. (42 U.S.C. 6313(c)(6)(B))
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
equipment 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. 6316(e)(1); 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 include definitions (42 U.S.C.
[[Page 70297]]
6311), test procedures (42 U.S.C. 6314), labeling provisions (42 U.S.C.
6315), energy conservation standards (42 U.S.C. 6313), and the
authority to require information and reports from manufacturers (42
U.S.C. 6316; 42 U.S.C. 6296).
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 assessment to
identify potential small manufacturers of CRE. DOE began its assessment
by compiling an equipment database of CRE models available in the
United States. To develop a comprehensive equipment database of CRE
basic models, DOE reviewed its Compliance Certification Database
(``CCD'') \110\ supplemented by information from California Energy
Commission's Modernized Appliance Efficiency Database System,\111\
individual company websites, and prior CRE rulemakings. To identify
chef bases, griddle stands, and high-temperature units, DOE reviewed
publicly available data from web scraping retail websites. DOE then
reviewed the comprehensive equipment database to identify the OEMs of
the CRE models identified. DOE consulted publicly available data, such
as manufacturer websites, manufacturer specifications and equipment
literature, import/export logs (e.g., bills of lading from Panjiva
\112\), and basic model numbers, to identify OEMs of CRE. DOE further
relied on public data and subscription-based market research tools
(e.g., Dun & Bradstreet reports \113\) 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 equipment
covered by this rulemaking, do not meet the SBA's definition of a
``small business,'' or are foreign-owned and operated.
---------------------------------------------------------------------------
\110\ 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 April 13, 2023.)
\111\ California Energy Commission's Modernized Appliance
Efficiency Database is available at: https://
cacertappliances.energy.ca.gov/Pages/Search/AdvancedSearch.aspx.
(last accessed February 2, 2022.)
\112\ S&P Global. Panjiva Market Intelligence. panjiva.com/import-export/United-States. (last accessed April 13, 2023.)
\113\ D&B Hoover's subscription login is accessible at:
app.dnbhoovers.com. (last accessed April 13, 2023.)
---------------------------------------------------------------------------
DOE initially identified 83 OEMs that sell CRE in the United
States. Of the 83 OEMs identified, DOE tentatively determined that 25
companies qualify as small businesses and are not foreign-owned and
operated.
4. Description and Estimate of Compliance Requirements Including
Differences in Cost, if Any, for Different Groups of Small Entities
Of the 25 small, domestic CRE OEMs, 24 OEMs manufacture vertical
equipment classes (i.e., vertical open (``VOP''), vertical closed
transparent (``VCT''), or vertical closed solid (``VCS'')), 8 OEMs
manufacture semi-vertical open (``SVO'') equipment classes (i.e.,
medium temperature remote condensing (``RC''; ``SVO.RC.M'') or medium
temperature self-contained (``SC''; ``SVO.SC.M'')), 7 OEMs manufacture
service-over-counter (``SOC'') equipment classes (i.e., SOC.RC.M or
SOC.SC.M), 10 OEMs manufacture horizontal equipment classes (i.e.,
horizontal open (``HZO''), horizontal closed transparent (``HCT''), or
horizontal closed solid (``HCS'')), and 3 OEMs manufacture chef bases.
For the purposes of this IRFA, DOE assumed that the industry
capital conversion costs would be evenly distributed across the OEMs
that manufacture each equipment class to avoid underestimating the
potential capital investments small manufacturers may incur as a result
of the proposed standard. As discussed in section IV.J.2.c of this
document, DOE scaled the industry capital conversion costs by the
number of OEMs offering models of the respective equipment class. For
product conversion costs, DOE assumed all small businesses would choose
to redesign or replace models that do not meet the proposed TSL 5
efficiency levels. DOE used basic model counts to scale the industry
product conversion costs, as discussed in section IV.J.2.c of this
document. DOE expects manufacturers would have to incorporate various
high-efficiency components to meet the TSL 5 efficiencies across their
CRE offerings. For certain transparent door equipment classes, capital
conversion costs may be necessary to incorporate improved door designs.
For self-contained equipment classes, many manufacturers would likely
have to incorporate VSCs into CRE designs. To incorporate VSCs, which
could be larger than existing single-speed compressors, manufacturers
may need new tools for the baseplate. Product conversion costs may be
necessary to qualify, source, and test new high-efficiency components
(e.g., electronically commutated motors).
Out of the 24 small OEMs of vertical equipment classes, DOE expects
23 OEMs would incur some conversion costs to redesign models that do
not currently the proposed efficiency levels. The remaining small OEM
would likely not incur conversion costs as a direct result of the
proposed standard as all of their vertical CRE models currently meet or
exceed the proposed levels. Vertical equipment classes account for
approximately 90.1 percent of industry shipments in 2027. All the VOP
and VCT equipment classes would likely require manufacturers to
incorporate occupancy sensors to meet TSL 5. DOE further expects VOP
equipment classes would also need to incorporate night curtains. DOE
expects manufacturers of VOP.SC.M would likely also need to incorporate
EC condenser fan motors, VSCs, and microchannel condensers. Some VCT
equipment classes would likely need to incorporate triple pane glass
with krypton fill. VCT.SC.M, and VCT.SC.L likely would further need to
incorporate EC condenser fan motors and VSCs. For most VCS equipment
classes, manufacturers would likely need to incorporate evaporator fan
controls, EC evaporator fan motors, EC condenser fan motors, VSCs, and
microchannel condensers.
DOE expects all 8 small OEMs of semi-vertical equipment classes
would incur some conversion costs to redesign models that do not
currently meet the proposed efficiency levels. Semi-vertical equipment
classes account for approximately 2.1 percent of industry shipments in
2027. All semi-vertical equipment classes would likely need to
incorporate occupancy sensors and night curtains. SVO.SC.M would also
likely require EC evaporator fan motors, EC condenser fan motors, VSCs,
and microchannel condensers.
Out of the 7 small OEMs of service-over-counter equipment classes,
DOE expects 6 OEMs would incur some conversion costs to redesign models
that do not currently the proposed efficiency levels. The remaining
small OEM would likely not incur conversion costs as a direct result of
the proposed standard as all of their service-over-counter CRE models
currently meet or exceed the proposed levels. Service-over-counter
equipment classes account for approximately 0.5 percent of industry
shipments in 2027. SOC.RC.M and SOC.SC.M would likely incorporate
occupancy sensors. SOC.RC.M would also likely require triple pane glass
doors with krypton fill. SOC.SC.M would also likely require VIG doors,
[[Page 70298]]
evaporator fan controls, EC evaporator fan motors, EC condenser fan
motors, VSCs, and microchannel condensers.
Out of the 10 small OEMs of horizontal equipment classes, DOE
expects 9 OEMs would incur some conversion costs to redesign models
that do not currently the proposed efficiency levels. The remaining
small OEM would likely not incur conversion costs as a direct result of
the proposed standard as all of their horizontal CRE models currently
meet or exceed the proposed levels. Horizontal equipment classes
account for approximately 5.9 percent of industry shipments in 2027.
For HZO equipment classes, manufacturers would likely incorporate
occupancy sensors. For HZO.SC.M and HZO.SC.L equipment classes,
manufacturers would likely incorporate EC evaporator fan motors, EC
condenser fan motors, VSCs, and microchannel condensers. DOE expects
that HCT.SC.I would likely need to incorporate VSCs and occupancy
sensors to meet TSL 5 levels. For HCS equipment classes, manufacturers
would likely incorporate EC condenser fan motors. HCS.SC.M would also
likely require evaporator fan controls and EC condenser fan motors.
DOE expects all 3 small OEMs offering chef base equipment classes
to incur some conversion costs to redesign models that do not meet
efficiency levels at TSL 5. Chef base equipment classes account for
approximately 1.4 percent of industry shipments in 2027. Manufacturers
would likely incorporate EC evaporator fan motors, EC condenser fan
motors, and VSCs for CB.SC.M. None of the small businesses offer
CB.SC.L.
Based on annual revenue estimates from market research tools (e.g.,
Dun & Bradstreet reports), the annual revenue of the small, domestic
OEMs identified range from approximately $2.8 million to $448.6
million, with an average annual revenue of approximately $112.9
million. DOE estimates that conversion costs could range from $0.0
million to $15.3 million, with the average per OEM conversion costs of
$2.8 million. The estimated total conversion costs as a percent of
company revenue over the 3-year conversion period range from
approximately 0.0 percent to 9.6 percent, with an average of 1.7
percent. See table VI.1 for additional details.
Table VI.1--Potential Small Business Impacts (TSL 5)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Conversion
Est. Est. annual costs as a %
Company conversion revenue ($ of conversion Vertical Semi- Service-over- Horizontal Chef base
costs ($ millions) period vertical counter
millions) revenue** (%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
A................................. 0.25 2.8 3.0 X ............ ............ ............ ............
B................................. 0.21 4.1 1.7 X ............ ............ ............ ............
C................................. 1.58 5.5 9.6 X X X ............ ............
D................................. 0.00 6.3 0.0 ............ ............ ............ X ............
E................................. 2.41 10.8 7.4 X X X ............ ............
F................................. 0.88 13.6 2.2 X ............ ............ X ............
G................................. 0.05 25.4 0.1 X ............ ............ ............ ............
H................................. 0.22 26.9 0.3 X ............ ............ ............ ............
I................................. 1.42 28.6 1.7 X X ............ ............ ............
J................................. 1.78 58.1 1.0 X ............ ............ ............ ............
K................................. 0.77 71.9 0.4 X ............ ............ X ............
L................................. 0.26 74.9 0.1 X ............ ............ ............ ............
M................................. 5.46 85.3 2.1 X ............ ............ X ............
N................................. 2.15 96.8 0.7 X ............ ............ ............ ............
O................................. 7.35 110.3 2.2 X X X X X
P................................. 15.31 131.1 3.9 X X X X ............
Q................................. 5.70 142.3 1.3 X X X X ............
R................................. 0.24 143.1 0.1 X ............ ............ ............ ............
S................................. 14.29 156.1 3.1 X ............ ............ X X
T................................. 2.35 156.3 0.5 X ............ ............ X X
U................................. 0.48 193.7 0.1 X ............ ............ ............ ............
V................................. 0.63 212.5 0.1 X ............ ............ ............ ............
W................................. 4.86 269.3 0.6 X X X X ............
X................................. 0.28 307.9 0.0 X ............ ............ ............ ............
Y................................. 0.56 488.6 0.0 X X X ............ ............
--------------------------------------------------------------------------------------------------------------------------------------------------------
* The ``X'' indicates that the manufacturer offers CRE models of the respective equipment family.
** This column is calculated by dividing the estimated conversion costs by the revenue during the three year the conversion period: (Est. Conversion
Costs) / [(Est. Annual Revenue) x 3 years].
*** All models of directly analyzed CRE equipment classes meet or exceed the proposed efficiency levels. Therefore, DOE tentatively does not expect this
manufacturer would incur conversion costs as direct result of the rule, if the standards were finalized as proposed.
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 equipment 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 67.0 percent lower energy savings compared to
the energy savings at TSL 5. TSL 2 achieves 43.7 percent lower energy
savings compared to the energy savings at TSL 5. TSL 3 achieves 41.0
percent lower energy savings compared to the energy savings at TSL 5.
TSL 4 achieves 10.6 percent lower energy savings as 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
[[Page 70299]]
CRE 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. 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 CRE must certify to DOE that their equipment
comply with any applicable energy conservation standards. In certifying
compliance, manufacturers must test their equipment according to the
DOE test procedures for CRE, including any amendments adopted for those
test procedures. DOE has established regulations for the certification
and recordkeeping requirements for all covered consumer equipment and
commercial equipment, including CRE. (See generally 10 CFR part 429).
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 equipment that are the subject of this proposed
rule. States can petition DOE for exemption from such preemption to the
extent, and based on criteria, set forth in EPCA. (See 42 U.S.C.
6316(a) and (b); 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 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
[[Page 70300]]
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 CRE 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 CRE,
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, DOE 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.
6316(e)(1) and 42 U.S.C. 6295(m), this proposed rule would establish
new and amended energy conservation standards for CRE 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. 6316(e)(1) and 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 proposed rule would not have any impact on the autonomy or
integrity of the family as an institution. Accordingly, DOE has
concluded that it is not necessary to prepare a Family Policymaking
Assessment.
I. Review Under Executive Order 12630
Pursuant to E.O. 12630, ``Governmental Actions and Interference
with Constitutionally Protected Property Rights,'' 53 FR 8859 (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 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 new and amended energy conservation standards for CRE, 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.\114\ 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
[[Page 70301]]
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.\115\
---------------------------------------------------------------------------
\114\ The 2007 ``Energy Conservation Standards Rulemaking Peer
Review Report'' is available at energy.gov/eere/buildings/downloads/energy-conservation-standards-rulemaking-peer-review-report-0 (last
accessed May 22, 2023).
\115\ The report is available at www.nationalacademies.org/our-work/review-of-methods-for-setting-building-and-equipment-performance-standards.
---------------------------------------------------------------------------
VII. Public Participation
In response to the June 2022 Preliminary Analysis, DOE received a
comment from NAMA requesting the Department to conduct an in person
public meeting. NAMA commented that it is requesting an in person
public meeting due to the webinar held on August 8, 2022, feeling
rushed and to allow time for full dialogue on these important subjects.
(NAMA, No. 37, p. 4)
After carefully considering NAMA's request, the Department has
decided to grant the request for an in-person public meeting.
Consequently, DOE will be hosting an in-person public meeting in
addition to the webinar. Please note that attendance will be limited
for the in-person public meeting due to room size capacity limits.
A. Participation in the Public Meeting and Webinar
The time, date, and location of the public meeting are listed in
the DATES and ADDRESSES sections at the beginning of this document. If
you plan to attend the public meeting, you must notify the Appliance
and Equipment Standards Program staff no later than November 1, 2023,
either by phone at (202) 287-1445 or by email:
[email protected]. Please note advance
registration is required and capacity in the meeting room will be
limited.
Please note that foreign nationals participating in the public
meeting are subject to advance security screening procedures which
require advance notice prior to attendance at the public meeting. If a
foreign national wishes to participate in the public meeting, please
inform DOE as soon as possible by contacting Ms. Regina Washington at
(202) 586-1214 or by email: [email protected] so that the
necessary procedures can be completed.
DOE requires visitors to have laptops and other devices, such as
tablets, checked upon entry into the building. Any person wishing to
bring these devices into the building will be required to obtain a
property pass. Visitors should avoid bringing these 5 devices, or allow
an extra 45 minutes to check in. Please report to the visitor's desk to
have devices checked before proceeding through security.
Due to the REAL ID Act implemented by the Department of Homeland
Security (``DHS''), there have been recent changes regarding ID
requirements for individuals wishing to enter Federal buildings from
specific States and U.S. territories. DHS maintains an updated website
identifying the State and territory driver's licenses that currently
are acceptable for entry into DOE facilities at www.dhs.gov/real-id-enforcement-brief. A driver's licenses from a State or territory
identified as not compliant by DHS will not be accepted for building
entry and one of the alternate forms of ID listed below will be
required. Acceptable alternate forms of Photo-ID include U.S. Passport
or Passport Card; an Enhanced Driver's License or Enhanced ID-Card
issued by States and territories as identified on the DHS website
(Enhanced licenses issued by these States and territories are clearly
marked Enhanced or Enhanced Driver's License); a military ID or other
Federal Government-issued Photo-ID card.
In addition, you can attend the public meeting via webinar. Webinar
registration information, participant instructions, and information
about the capabilities available to webinar participants will be
published on DOE's website at www.energy.gov/eere/buildings/public-meetings-and-comment-deadlines. Participants are responsible for
ensuring their systems are compatible with the webinar software.
B. Procedure for Submitting Prepared General Statements for
Distribution
Any person who has 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. anti-trust laws. After the public meeting and until
the end of the comment period, interested parties may submit further
comments on the proceedings and any aspect of the rulemaking.
The public meeting will be conducted in an informal, conference
style. DOE will 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 permit, as
time permits, other participants to comment briefly on any general
statements.
At the end of all prepared statements on a topic, DOE will permit
participants to clarify their statements briefly. Participants should
be prepared to answer questions by DOE and by other participants
concerning these issues. DOE representatives may also ask questions of
participants concerning other matters relevant to this 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 above 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. 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
[[Page 70302]]
information using any of the methods described in the ADDRESSES section
at the beginning of this document.
Submitting comments via www.regulations.gov. The
www.regulations.gov web page will require you to provide your name and
contact information. Your contact information will be viewable to DOE
Building Technologies staff only. Your contact information will not be
publicly viewable except for your first and last names, organization
name (if any), and submitter representative name (if any). If your
comment is not processed properly because of technical difficulties,
DOE will use this information to contact you. If DOE cannot read your
comment due to technical difficulties and cannot contact you for
clarification, DOE may not be able to consider your comment.
However, your contact information will be publicly viewable if you
include it in the comment itself or in any documents attached to your
comment. Any information that you do not want to be publicly viewable
should not be included in your comment, nor in any document attached to
your comment. Otherwise, persons viewing comments will see only first
and last names, organization names, correspondence containing comments,
and any documents submitted with the comments.
Do not submit to www.regulations.gov information for which
disclosure is restricted by statute, such as trade secrets and
commercial or financial information (hereinafter referred to as
Confidential Business Information (``CBI'')). Comments submitted
through www.regulations.gov cannot be claimed as CBI. Comments received
through the website will waive any CBI claims for the information
submitted. For information on submitting CBI, see the Confidential
Business Information section.
DOE processes submissions made through www.regulations.gov before
posting. Normally, comments will be posted within a few days of being
submitted. However, if large volumes of comments are being processed
simultaneously, your comment may not be viewable for up to several
weeks. Please keep the comment tracking number that www.regulations.gov
provides after you have successfully uploaded your comment.
Submitting comments via email, hand delivery/courier, or postal
mail. Comments and documents submitted via email, hand delivery/
courier, or postal mail also will be posted to www.regulations.gov. If
you do not want your personal contact information to be publicly
viewable, do not include it in your comment or any accompanying
documents. Instead, provide your contact information in a cover letter.
Include your first and last names, email address, telephone number, and
optional mailing address. The cover letter will not be publicly
viewable as long as it does not include any comments.
Include contact information each time you submit comments, data,
documents, and other information to DOE. If you submit via postal mail
or hand delivery/courier, please provide all items on a CD, if
feasible, in which case it is not necessary to submit 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 require that the
proposed standards, if adopted, would apply to all CRE listed in table
I.1 manufactured in, or imported into, the United States on or after
the date that is 3 years after the date on which the final new and
amended standards are published. More generally, DOE requests comment
on whether it would be beneficial to CRE manufacturers to align the
compliance date of any DOE amended or established standards as closely
as possible with the refrigerant prohibition dates proposed by the
December 2022 EPA NOPR.
(2) DOE requests comment on the impacts to CRE manufacturers and
consumers from the Inflation Reduction Act (IRA) and the Infrastructure
Investment and Jobs Act (IIJA).
(3) DOE requests comment on the proposed definitions for ``cold-
wall evaporator,'' ``forced-air evaporator,'' ``pass-through doors,''
``roll-in door,'' ``roll-through doors,'' ``sliding door,'' and
``rating temperature.''
(4) DOE requests comment on blast chiller or freezer design
options, design specifications, and energy consumption data tested per
the DOE test procedure located in appendix D of 10 CFR 431.64.
(5) DOE requests comment on refrigerated buffet/preparation table
design options, design specifications, and energy consumption data
tested per the DOE test procedure located in appendix C of 10 CFR
431.64.
(6) DOE requests comment on publicly available market data on CRE
manufacturers or identification of any CRE manufacturers with large
market shares not identified in Chapter 3 of the TSD NOPR.
(7) DOE requests comment on the decision to screen out increased
insulation thickness, vacuum-insulated panels, linear compressors, and
air curtain design as design options for improving the energy
efficiency of CRE.
(8) DOE requests comment on its proposal to use baseline levels for
CRE equipment based upon the anticipated design changes that will be
made by manufacturers in response to the December 2022 EPA NOPR.
(9) DOE further requests comment on its estimates of energy-use
reduction associated with the design changes made by manufacturers in
response to the December 2022 EPA NOPR.
(10) DOE requests comment on its proposal to apply an energy use
multiplier to certain equipment classes that contain CRE with unique
utility and energy use characteristics. DOE additionally requests
comment on the proposed multiplier values and equipment classes for
which these multipliers would be applied.
[[Page 70303]]
(11) DOE seeks comment on the method for estimating manufacturing
production costs.
(12) DOE requests comment on the CRE distribution channels and
overall on the markups analysis.
(13) DOE requests comment on its approach for the energy use
analysis.
(14) DOE requests comment on its price learning assumptions and
methodology.
(15) DOE requests comment and data to inform how any of the
analyzed design options would require additional installation time,
training, or other related skills compared to the baseline equipment.
(16) DOE requests comment and data on its assumptions and approach
regarding consideration of repair and maintenance costs in the LCC and
PBP analyses. Specifically, DOE requests data on the expected lifetimes
and repair and maintenance frequencies of the considered design options
in this NOPR.
(17) DOE requests comment and data regarding the CRE lifetime
assumptions and methodology.
(18) DOE requests comment and data on the assumed business types
and the corresponding CRE lifetimes at which refurbishment may occur.
(19) DOE requests comment on its methodology and data to better
inform the no-standards-case efficiency distribution for CRE.
(20) DOE requests comment on the price elasticity assumptions for
the CRE shipments analysis as they relates to the overall CRE market
and the market for refurbished CRE.
(21) DOE requests comment on its assumption of no efficiency trend
for CRE and seeks historical CRE efficiency data, ideally by equipment
class or alternatively by equipment family, or overall for the CRE
market as a whole.
(22) DOE seeks comment on the use of a 1.40 manufacturer markup for
all CRE equipment classes analyzed in this proposed rule. DOE also
seeks comment on the estimated manufacturer markups and incremental
MSPs that result from the analyzed energy conservation standards.
(23) DOE requests detailed comment and information on the capital
investments associated with each analyzed design option. In particular,
DOE requests detailed comment and feedback on the specific changes in
equipment and tooling required to incorporate microchannel heat
exchangers, as DOE currently models microchannel heat exchangers as a
purchased part that can be substituted for tube and fin heat exchangers
with minor production line changes.
(24) DOE requests comment on the availability of computer chips and
other electrical components used in CREs and specifically if these
components are used to achieve higher efficiency levels.
(25) DOE seeks comments, information, and data on the capital
conversion costs and product conversion costs estimated for each TSL.
(26) DOE seeks comment on whether manufacturers expect that
manufacturing capacity constraints, engineering resource constraints,
or laboratory constraints would limit equipment availability to
consumers in the timeframe of the new and amended standards compliance
date (2028).
(27) DOE requests information regarding the impact of cumulative
regulatory burden on manufacturers of CRE associated with multiple DOE
standards or equipment/product-specific regulatory actions of other
Federal agencies.
(28) DOE requests comments on the magnitude of costs associated
with transitioning CRE designs and production facilities to accommodate
low-GWP refrigerants that would be incurred between the publication of
this NOPR and the proposed compliance date of new and amended
standards. Quantification and categorization of these costs, such as
engineering efforts, testing lab time, certification costs, and capital
investments (e.g., new charging equipment), would enable DOE to refine
its analysis.
(29) 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 equipment class. DOE also requests comment
on the potential impacts of the proposed standards on small
manufacturers.
(30) 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 431
Administrative practice and procedure, Confidential business
information, Energy conservation test procedures, and Reporting and
recordkeeping requirements.
Signing Authority
This document of the Department of Energy was signed on September
28, 2023, by Jeffrey Marootian, Principal Deputy Assistant Secretary
for Energy Efficiency and Renewable Energy, pursuant to delegated
authority from the Secretary of Energy. That document with the original
signature and date is maintained by DOE. For administrative purposes
only, and in compliance with requirements of the Office of the Federal
Register, the undersigned DOE Federal Register Liaison Officer has been
authorized to sign and submit the document in electronic format for
publication, as an official document of the Department of Energy. This
administrative process in no way alters the legal effect of this
document upon publication in the Federal Register.
Signed in Washington, DC, on September 29, 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 431 of chapter II of title 10 of the Code of Federal Regulations,
as set forth below:
PART 431--ENERGY EFFICIENCY PROGRAM FOR CERTAIN COMMERCIAL AND
INDUSTRIAL EQUIPMENT
0
1. The authority citation for part 431 continues to read as follows:
Authority: 42 U.S.C. 6291-6317; 28 U.S.C. 2461 note.
0
2. Amend Sec. 431.62 by:
0
a. Adding, in alphabetical order, definitions for ``Cold-wall
evaporator'', ``Forced-air evaporator'', and ``Pass-through doors'';
0
b. Revising the definition of ``Rating temperature''; and
0
c. Adding, in alphabetical order, definitions for ``Roll-in door'',
``Roll-through doors'', and ``Sliding door''.
The additions and revision read as follows:
Sec. 431.62 Definitions concerning commercial refrigerators, freezers
and refrigerator-freezers.
* * * * *
Cold-wall evaporator means an evaporator that comprises a portion
or all of the commercial refrigerator, freezer, and refrigerator
freezer cabinet's interior surface that transfers heat through means
other than fan-forced convection.
* * * * *
Forced-air evaporator means an evaporator that employs the use of
fan-
[[Page 70304]]
forced convection to transfer heat within the commercial refrigerator,
freezer, and refrigerator freezer cabinet.
* * * * *
Pass-through doors means doors located on both the front and rear
of the commercial refrigerator, freezer, and refrigerator freezer.
* * * * *
Rating temperature means the integrated average temperature a unit
must maintain during testing, as determined in accordance with section
2.1. or section 2.2. of appendix B to subpart C of this part, as
applicable.
* * * * *
Roll-in door means a door that includes a door sweep to seal the
bottom of the door and may include a ramp that allows wheeled racks of
product to be rolled into the commercial refrigerator, freezer, and
refrigerator freezer.
Roll-through doors means doors located on both the front and rear
of the commercial refrigerator, freezer, and refrigerator freezer, that
includes a door sweep to seal the bottom of the door and may include a
ramp that allows wheeled racks of product to be rolled into and through
the commercial refrigerator, freezer, and refrigerator freezer.
* * * * *
Sliding door means a door that opens when a portion of the door
moves in a direction generally parallel to its surface.
* * * * *
0
3. Revise Sec. 431.66 to read as follows:
Sec. 431.66 Energy conservation standards and their effective dates.
(a) In this section--
(1) The term ``V'' means the volume of a commercial refrigerator,
freezer, and refrigerator-freezer, as determined in accordance with
section 3.1. of appendix B to subpart C of this part.
(2) The term ``TDA'' means the total display area of a commercial
refrigerator, freezer, and refrigerator-freezer, as determined in
accordance with section 3.2. of appendix B to subpart C of this part.
(b) Each commercial refrigerator, freezer, and refrigerator-
freezer, except as specified in paragraph (d) of this section,
manufactured on or after March 27, 2017 and before [Date 3 Years after
publication of the final rule in the Federal Register], shall have a
daily energy consumption (in kilowatt-hours per day or ``kWh/day''),
when measured in accordance with the DOE test procedure at Sec.
431.64, that does not exceed the following:
(1) For commercial refrigerators, freezers, and refrigerator-
freezers other than commercial hybrids, commercial refrigerator-
freezers, or wedge cases:
--------------------------------------------------------------------------------------------------------------------------------------------------------
Rating Operating
Condensing unit configuration Equipment family temperature temperature Equipment class Maximum daily energy consumption
([deg]F) ([deg]F) designation * (kWh/day)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Remote Condensing (RC).............. Vertical Open (VOP)... 38.0 (M) >=32.0 VOP.RC.M............... 0.64 x TDA + 4.07.
0.0 (L) <32.0 VOP.RC.L............... 2.2 x TDA + 6.85.
-15.0 (I) <=-5.0 VOP.RC.I............... 2.79 x TDA + 8.7.
Semivertical Open 38.0 (M) >=32.0 SVO.RC.M............... 0.66 x TDA + 3.18.
(SVO). 0.0 (L) <32.0 SVO.RC.L............... 2.2 x TDA + 6.85.
-15.0 (I) <=-5.0 SVO.RC.I............... 2.79 x TDA + 8.7.
Horizontal Open (HZO). 38.0 (M) >=32.0 HZO.RC.M............... 0.35 x TDA + 2.88.
0.0 (L) <32.0 HZO.RC.L............... 0.55 x TDA + 6.88.
-15.0 (I) <=-5.0 HZO.RC.I............... 0.7 x TDA + 8.74.
Vertical Closed 38.0 (M) >=32.0 VCT.RC.M............... 0.15 x TDA + 1.95.
Transparent (VCT). 0.0 (L) <32.0 VCT.RC.L............... 0.49 x TDA + 2.61.
-15.0 (I) <=-5.0 VCT.RC.I............... 0.58 x TDA + 3.05.
Horizontal Closed 38.0 (M) >=32.0 HCT.RC.M............... 0.16 x TDA + 0.13.
Transparent (HCT). 0.0 (L) <32.0 HCT.RC.L............... 0.34 x TDA + 0.26.
-15.0 (I) <=-5.0 HCT.RC.I............... 0.4 x TDA + 0.31.
Vertical Closed Solid 38.0 (M) >=32.0 VCS.RC.M............... 0.1 x V + 0.26.
(VCS). 0.0 (L) <32.0 VCS.RC.L............... 0.21 x V + 0.54.
-15.0 (I) <=-5.0 VCS.RC.I............... 0.25 x V + 0.63.
Horizontal Closed 38.0 (M) >=32.0 HCS.RC.M............... 0.1 x V + 0.26.
Solid (HCS). 0.0 (L) <32.0 HCS.RC.L............... 0.21 x V + 0.54.
-15.0 (I) <=-5.0 HCS.RC.I............... 0.25 x V + 0.63.
Service Over Counter 38.0 (M) >=32.0 SOC.RC.M............... 0.44 x TDA + 0.11.
(SOC). 0.0 (L) <32.0 SOC.RC.L............... 0.93 x TDA + 0.22.
-15.0 (I) <=-5.0 SOC.RC.I............... 1.09 x TDA + 0.26.
Self-Contained (SC)................. Vertical Open (VOP)... 38.0 (M) >=32.0 VOP.SC.M............... 1.69 x TDA + 4.71.
0.0 (L) <32.0 VOP.SC.L............... 4.25 x TDA + 11.82.
-15.0 (I) <=-5.0 VOP.SC.I............... 5.4 x TDA + 15.02.
Semivertical Open 38.0 (M) >=32.0 SVO.SC.M............... 1.7 x TDA + 4.59.
(SVO). 0.0 (L) <32.0 SVO.SC.L............... 4.26 x TDA + 11.51.
-15.0 (I) <=-5.0 SVO.SC.I............... 5.41 x TDA + 14.63.
Horizontal Open (HZO). 38.0 (M) >=32.0 HZO.SC.M............... 0.72 x TDA + 5.55.
0.0 (L) <32.0 HZO.SC.L............... 1.9 x TDA + 7.08.
-15.0 (I) <=-5.0 HZO.SC.I............... 2.42 x TDA + 9.
Vertical Closed 38.0 (M) >=32.0 VCT.SC.M............... 0.1 x V + 0.86.
Transparent (VCT). 0.0 (L) <32.0 VCT.SC.L............... 0.29 x V + 2.95.
-15.0 (I) <=-5.0 VCT.SC.I............... 0.62 x TDA + 3.29.
Vertical Closed Solid 38.0 (M) >=32.0 VCS.SC.M............... 0.05 x V + 1.36.
(VCS). 0.0 (L) <32.0 VCS.SC.L............... 0.22 x V + 1.38.
-15.0 (I) <=-5.0 VCS.SC.I............... 0.34 x V + 0.88.
Horizontal Closed 38.0 (M) >=32.0 HCT.SC.M............... 0.06 x V + 0.37.
Transparent (HCT). 0.0 (L) <32.0 HCT.SC.L............... 0.08 x V + 1.23.
-15.0 (I) <=-5.0 HCT.SC.I............... 0.56 x TDA + 0.43.
[[Page 70305]]
Horizontal Closed 38.0 (M) >=32.0 HCS.SC.M............... 0.05 x V + 0.91.
Solid (HCS). 0.0 (L) <32.0 HCS.SC.L............... 0.06 x V + 1.12.
-15.0 (I) <=-5.0 HCS.SC.I............... 0.34 x V + 0.88.
Service Over Counter 38.0 (M) >=32.0 SOC.SC.M............... 0.52 x TDA + 1.
(SOC). 0.0 (L) <32.0 SOC.SC.L............... 1.1 x TDA + 2.1.
-15.0 (I) <=-5.0 SOC.SC.I............... 1.53 x TDA + 0.36.
Pull-Down (PD)........ 38.0 (M) >=32.0 PD.SC.M................ 0.11 x V + 0.81.
--------------------------------------------------------------------------------------------------------------------------------------------------------
* The meaning of the letters in this column is indicated in the columns to the left.
(2) For commercial hybrids and commercial refrigerator-freezers,
the maximum daily energy consumption (MDEC) for each model shall be the
sum of the MDEC values for all of its compartments. For each
compartment, measure the TDA or volume of that compartment, and
determine the appropriate equipment class based on that compartment's
equipment family, condensing unit configuration, and designed operating
temperature. The MDEC limit for each compartment shall be the
calculated value obtained by entering that compartment's TDA or volume
into the standard equation in paragraph (b)(1) of this section for that
compartment's equipment class. Measure the calculated daily energy
consumption (CDEC) or total daily energy consumption (TDEC) for the
model:
(i) For commercial hybrids and commercial refrigerator-freezers
where two or more independent remote condensing units are each
connected to separate, individual compartments, measure the total
refrigeration load of each compartment separately according to appendix
B to subpart C of this part. The CDEC for the model shall be the sum of
the compressor energy consumption (CEC) for each compartment, fan
energy consumption (FEC), lighting energy consumption (LEC), anti-
condensate energy consumption (AEC), defrost energy consumption (DEC),
condensate evaporator pan energy consumption (PEC), and other
applicable energy consumption (OEC).
(ii) For commercial hybrids and commercial refrigerator-freezers
where two or more compartments are connected to one remote condensing
unit, measure the total refrigeration load of the model according to
appendix B to subpart C of this part.
(A) Calculate a weighted adjusted dew point temperature for the
model by:
(1) Multiplying the adjusted dew point temperature of each
compartment by the volume of that compartment,
(2) Summing the resulting values for all compartments; and
(3) Dividing the resulting total by the total volume of all
compartments.
(B) Calculate the CEC for the model using the total refrigeration
load and the weighted average adjusted dew point temperature. The CDEC
for the model shall be the sum of the CEC, FEC, LEC, AEC, DEC, PEC, and
OEC.
(iii) For commercial hybrids and commercial refrigerator-freezers
connected to a self-contained condensing unit, measure the TDEC for the
model according to appendix B to subpart C of this part.
(3) For wedge cases, measure the CDEC or TDEC according to appendix
B to subpart C of this part. For wedge cases in equipment classes for
which a volume metric is used, the MDEC shall be the amount derived
from the appropriate standards equation in paragraph (b)(1) of this
section. For wedge cases of equipment classes for which a TDA metric is
used, the MDEC shall be the amount derived from the appropriate
standards equation in paragraph (b)(1) of this section incorporating a
value for the TDA that is the product of:
(i) The vertical height of the air-curtain (or glass in a
transparent door) and
(ii) The largest overall width of the case, when viewed from the
front.
(c) Each commercial refrigerator, freezer, and refrigerator-
freezer, except as specified in paragraph (d) of this section,
manufactured on or after [Date 3 years after publication of the final
rule in the Federal Register], shall have a daily energy consumption
(in kilowatt-hours per day or ``kWh/day''), when measured in accordance
with the DOE test procedure at Sec. 431.64, that does not exceed the
following:
(1) For commercial refrigerators, freezers, and refrigerator-
freezers other than commercial hybrids, commercial refrigerator-
freezers, or wedge cases:
--------------------------------------------------------------------------------------------------------------------------------------------------------
Rating Operating
Condensing unit configuration Equipment family temperature temperature Equipment class Maximum daily energy
([deg]F) ([deg]F) designation* consumption (kWh/day)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Remote Condensing (RC)................ Vertical Open (VOP).......... 55.0 (H) >40.0 VOP.RC.H 0.31 x TDA + 1.99
38.0 (M) 40.0>= x VOP.RC.M 0.56 x TDA + 3.57
>=32.0
0.0 (L) <32.0 VOP.RC.L 2.04 x TDA + 6.36
-15.0 (I) <=-13.0 VOP.RC.I 2.59 x TDA + 8.08
Semivertical Open (SVO)...... 55.0 (H) >40.0 SVO.RC.H 0.32 x TDA + 1.55
38.0 (M) 40.0>= x SVO.RC.M 0.58 x TDA + 2.79
>=32.0
0.0 (L) <32.0 SVO.RC.L 2.04 x TDA + 6.36
-15.0 (I) <=-13.0 SVO.RC.I 2.59 x TDA + 8.08
Horizontal Open (HZO)........ 55.0 (H) >40.0 HZO.RC.H 0.19 x TDA + 1.56
38.0 (M) 40.0>= x HZO.RC.M 0.34 x TDA + 2.81
>=32.0
0.0 (L) <32.0 HZO.RC.L 0.54 x TDA + 6.81
-15.0 (I) <=-13.0 HZO.RC.I 0.69 x TDA + 8.64
Vertical Closed Transparent 55.0 (H) >40.0 VCT.RC.H 0.07 x TDA + 0.97
(VCT).
38.0 (M) 40.0>= x VCT.RC.M 0.134 x TDA + 1.74
>=32.0
VCT.RC.M.PT 0.139 x TDA + 1.81
VCT.RC.M.SD 0.143 x TDA + 1.86
VCT.RC.M.SDPT 0.149 x TDA + 1.93
VCT.RC.M.RI 0.140 x TDA + 1.83
[[Page 70306]]
VCT.RC.M.RT 0.146 x TDA + 1.9
0.0 (L) <32.0 VCT.RC.L 0.47 x TDA + 2.51
-15.0 (I) <=-13.0 VCT.RC.I 0.56 x TDA + 2.97
Horizontal Closed Transparent 38.0 (M) >=32.0 HCT.RC.M 0.16 x TDA + 0.13
(HCT).
0.0 (L) <32.0 HCT.RC.L 0.34 x TDA + 0.26
-15.0 (I) <=-13.0 HCT.RC.I 0.38 x TDA + 0.29
Vertical Closed Solid (VCS).. 55.0 (H) >40.0 VCS.RC.H 0.06 x V + 0.14
38.0 (M) 40.0>= x VCS.RC.M 0.1 x V + 0.26
>=32.0
0.0 (L) <32.0 VCS.RC.L 0.21 x V + 0.54
-15.0 (I) <=-13.0 VCS.RC.I 0.25 x V + 0.63
Horizontal Closed Solid (HCS) 38.0 (M) >=32.0 HCS.RC.M 0.1 x V + 0.26
0.0 (L) <32.0 HCS.RC.L 0.21 x V + 0.54
-15.0 (I) <=-13.0 HCS.RC.I 0.25 x V + 0.63
Service Over Counter (SOC)... 55.0 (H) >40.0 SOC.RC.H 0.22 x TDA + 0.05
38.0 (M) 40.0>= x SOC.RC.M 0.39 x TDA + 0.1
>=32.0
0.0 (L) <32.0 SOC.RC.L 0.83 x TDA + 0.2
-15.0 (I) <=-13.0 SOC.RC.I 1.04 x TDA + 0.25
Chef Base (CB)............... 38.0 (M) >=32.0 CB.RC.M 0.03 x V + 0.39
0.0 (L) <32.0 CB.RC.L 0.13 x V + 1.37
Self-Contained (SC)................... Vertical Open (VOP).......... 55.0 (H) >40.0 VOP.SC.H 0.69 x TDA + 1.94
38.0 (M) 40.0>= x VOP.SC.M 1.25 x TDA + 3.48
>=32.0
0.0 (L) <32.0 VOP.SC.L 3.29 x TDA + 9.15
-15.0 (I) <=-13.0 VOP.SC.I 4.18 x TDA + 11.63
Semivertical Open (SVO)...... 55.0 (H) >40.0 SVO.SC.H 0.65 x TDA + 1.77
38.0 (M) 40.0>= x SVO.SC.M 1.18 x TDA + 3.18
>=32.0
0.0 (L) <32.0 SVO.SC.L 3.25 x TDA + 8.78
-15.0 (I) <=-13.0 SVO.SC.I 4.13 x TDA + 11.16
Horizontal Open (HZO)........ 55.0 (H) >40.0 HZO.SC.H 0.27 x TDA + 2.06
38.0 (M) 40.0>= x HZO.SC.M 0.48 x TDA + 3.71
>=32.0
0.0 (L) <32.0 HZO.SC.L 1.48 x TDA + 5.5
-15.0 (I) <=-13.0 HZO.SC.I 1.97 x TDA + 7.34
Vertical Closed Transparent 55.0 (H) >40.0 VCT.SC.H 0.053 x V + 0.85
(VCT).
38.0 (M) 40.0>= x VCT.SC.M 0.054 x V + 0.86
>=32.0
VCT.SC.M.PT 0.056 x V + 0.86
VCT.SC.M.SD 0.058 x V + 0.86
VCT.SC.M.SDPT 0.060 x V + 0.86
VCT.SC.M.RI 0.057 x V + 0.86
VCT.SC.M.RT 0.059 x V + 0.86
0.0 (L) <32.0 VCT.SC.L 0.234 x V + 2.38
VCT.SC.L.PT 0.243 x V + 2.47
-15.0 (I) <=-13.0 VCT.SC.I 0.6 x TDA + 3.2
Vertical Closed Solid (VCS).. 55.0 (H) >40.0 VCS.SC.H 0.0082 x V + 0.21
38.0 (M) 40.0>= x VCS.SC.M 0.02 x V + 0.54
>=32.0
VCS.SC.M.PT 0.02 x V + 0.56
VCS.SC.M.RI 0.02 x V + 0.57
VCS.SC.M.RT 0.02 x V + 0.59
0.0 (L) <32.0 VCS.SC.L 0.155 x V + 0.97
VCS.SC.L.PT 0.161 x V + 1.01
VCS.SC.L.RI 0.162 x V + 1.02
VCS.SC.L.RT 0.169 x V + 1.06
-15.0 (I) <=-13.0 VCS.SC.I 0.25 x V + 0.88
Horizontal Closed Transparent 38.0 (M) >=32.0 HCT.SC.M 0.06 x V + 0.37
(HCT).
0.0 (L) <32.0 HCT.SC.L 0.08 x V + 1.23
-15.0 (I) <=-13.0 HCT.SC.I 0.34 x TDA + 0.43
Horizontal Closed Solid (HCS) 38.0 (M) >=32.0 HCS.SC.M 0.022 x V + 0.41
0.0 (L) <32.0 HCS.SC.L 0.043 x V + 0.81
HCS.SC.L.FA 0.052 x V + 0.97
-15.0 (I) <=-13.0 HCS.SC.I 0.31 x V + 0.81
Service Over Counter (SOC)... 55.0 (H) >40.0 SOC.SC.H 0.17 x TDA + 0.33
38.0 (M) 40.0>= x SOC.SC.M 0.304 x TDA + 0.59
>=32.0
0.0 (L) <32.0 SOC.SC.L 1.1 x TDA + 2.1
-15.0 (I) <=-13.0 SOC.SC.I 1.53 x TDA + 0.36
Chef Base (CB)............... 38.0 (M) >=32.0 CB.SC.M 0.049 x V + 0.54
0.0 (L) <32.0 CB.SC.L 0.180 x V + 1.92
Pull-Down (PD)............... 38.0 (M) >=32.0 PD.SC.M 0.11 x V + 0.81
--------------------------------------------------------------------------------------------------------------------------------------------------------
* The meaning of the letters in this column are indicated in the columns to the left or as follows: ``.PT'' represents pass-through doors; ``.SD''
represents sliding doors; ``.SDPT'' represents sliding and pass-through doors; ``.RI'' represents roll-in doors; ``.RT'' represents roll-through
doors; and ``.FA'' represents forced air evaporators.
(2) For commercial hybrids and commercial refrigerator-freezers,
the MDEC for each model shall be the sum of the MDEC values for all of
its compartments. For each compartment, measure the TDA or volume of
that compartment, and determine the appropriate equipment class based
on that compartment's equipment family, condensing unit configuration,
and designed operating temperature. The MDEC limit for each compartment
shall be the calculated value obtained by entering that compartment's
TDA or volume into the standard equation in paragraph (c)(1) of this
section for that compartment's equipment class. Measure the CDEC or
TDEC for the model:
(i) For commercial hybrids and commercial refrigerator-freezers
where two or more independent remote
[[Page 70307]]
condensing units are each connected to separate, individual
compartments, measure the total refrigeration load of each compartment
separately according to appendix B to subpart C of this part. The CDEC
for the model shall be the sum of the CEC for each compartment, FEC,
LEC, AEC, DEC, PEC, and OEC.
(ii) For commercial hybrids and commercial refrigerator-freezers
where two or more compartments are connected to one remote condensing
unit, measure the total refrigeration load of the model according to
appendix B to subpart C of this part.
(A) Calculate a weighted adjusted dew point temperature for the
model by:
(1) Multiplying the adjusted dew point temperature of each
compartment by the volume of that compartment,
(2) Summing the resulting values for all compartments, and
(3) Dividing the resulting total by the total volume of all
compartments.
(B) Calculate the CEC for the model using the total refrigeration
load and the weighted average adjusted dew point temperature. The CDEC
for the model shall be the sum of the CEC, FEC, LEC, AEC, DEC, PEC, and
OEC.
(iii) For commercial hybrids and commercial refrigerator-freezers
connected to a self-contained condensing unit, measure the TDEC for the
model according to appendix B to subpart C of this part.
(3) For wedge cases, measure the CDEC or TDEC according to appendix
B to subpart C of this part. For wedge cases in equipment classes for
which a volume metric is used, the MDEC shall be the amount derived
from the appropriate standards equation in paragraph (c)(1) of this
section. For wedge cases of equipment classes for which a TDA metric is
used, the MDEC shall be the amount derived from the appropriate
standards equation in paragraph (c)(1) of this section incorporating a
value for the TDA that is the product of:
(i) The vertical height of the air-curtain (or glass in a
transparent door) and
(ii) The largest overall width of the case, when viewed from the
front.
(d) The energy conservation standards in paragraph (b) of this
section do not apply to chef bases or griddle stands. The energy
conservation standards in paragraphs (b) through (c) of this section do
not apply to buffet tables or preparation tables, blast chillers, blast
freezers, or mobile refrigerated cabinets.
[FR Doc. 2023-21987 Filed 10-6-23; 8:45 am]
BILLING CODE 6450-01-P