[Federal Register Volume 90, Number 12 (Tuesday, January 21, 2025)]
[Rules and Regulations]
[Pages 7464-7648]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-31214]
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Vol. 90
Tuesday,
No. 12
January 21, 2025
Part IV
Department of Energy
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10 CFR Part 431
Energy Conservation Program: Energy Conservation Standards for
Commercial Refrigerators, Freezers, and Refrigerator-Freezers; Final
Rule
Federal Register / Vol. 90 , No. 12 / Tuesday, January 21, 2025 /
Rules and Regulations
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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: Final rule.
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SUMMARY: The Energy Policy and Conservation Act, as amended (``EPCA''),
prescribes energy conservation standards for various consumer products
and certain commercial and industrial equipment, including commercial
refrigerators, freezers, and refrigerator-freezers (``commercial
refrigeration equipment'' or ``CRE''). EPCA also requires the U.S.
Department of Energy (``DOE'') to periodically review its existing
standards to determine whether more-stringent standards would be
technologically feasible and economically justified and would result in
significant energy savings. In this final rule, DOE is adopting new and
amended energy conservation standards for CRE. It has determined that
the new and amended energy conservation standards for this equipment
would result in significant conservation of energy and are
technologically feasible and economically justified.
DATES: The effective date of this rule is March 24, 2025. Compliance
with the new and amended standards established for commercial
refrigerators, freezers, and refrigerator-freezers in this final rule
is required on and after Monday, January 22, 2029. The incorporation by
reference of certain material listed in this rule was approved by the
Director of the Federal Register as of March 10, 2009 and October 23,
2013.
ADDRESSES: The docket for this rulemaking, which includes Federal
Register notices, public meeting attendee lists and transcripts,
comments, and other supporting documents/materials, is available for
review at www.regulations.gov. All documents in the docket are listed
in the www.regulations.gov index. However, not all documents listed in
the index may be publicly available, such as information that is exempt
from public disclosure.
The docket web page can be found at www.regulations.gov/docket/EERE-2017-BT-STD-0007. The docket web page contains instructions on how
to access all documents, including public comments, in the docket.
For further information on how to review the docket, contact the
Appliance and Equipment Standards Program staff at (202) 287-1445 or by
email: [email protected].
FOR FURTHER INFORMATION CONTACT:
Mr. 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) 586-4798. Email:
[email protected].
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Synopsis of the Final 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 Commercial Refrigerators,
Freezers, and Refrigerator-Freezers
3. Applicability of this Final Rule to Large-Capacity CRE
III. General Discussion
A. General Comments
1. General Support
2. General Opposition
a. Proposed Compliance Date
b. Proposed Standards
c. Rulemaking Process
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 Products
e. Impact of Any Lessening of Competition
f. Need for National Energy Conservation
g. Other Factors
2. Rebuttable Presumption
IV. Methodology and Discussion of Related Comments
A. Market and Technology Assessment
1. Equipment Classes and Definitions
a. Current Equipment Classes and Definitions
b. Modifications to Equipment Classes and Definitions
c. Equipment Without Standards Proposed in the October 2023 NOPR
d. Pull-Down Equipment
2. CRE Market
3. Technology Options
a. High-Efficiency Single-Speed Compressors
b. Expansion Valves
c. Doors for Open Units
B. Screening Analysis
1. Screened-Out Technologies
a. Increased Insulation Thickness and Other Technologies That
Affect Internal or External Dimensions
b. Vacuum-Insulated Panels
c. Linear Compressors
d. Air-Curtain Design
e. Permanent Magnet Synchronous AC Motors
f. Evaporator Fan Control
g. Microchannel Condensers
2. Remaining Technologies
a. Other Technologies Not Screened-Out
C. Engineering Analysis
1. Efficiency Analysis
a. Baseline Energy Use
b. Higher Efficiency Levels
c. Equipment Classes With Unique Energy Use Characteristics
d. DOE Test Data
e. Development of Standard Equations
f. Engineering Spreadsheet
g. Capacity Metrics
2. Cost Analysis
a. General Approach of the Cost Analysis
b. Costs of Specific Components
c. Variable-Speed Compressor
d. Doors With Krypton Gas Fill
e. Cost-Efficiency Results
f. Manufacturer Markup
D. Markups Analysis
E. Energy Use Analysis
F. Life-Cycle Cost and Payback Period Analysis
1. Equipment Cost
2. Installation Cost
3. Annual Energy Consumption
4. Energy Prices
5. Maintenance and Repair Costs
6. Equipment Lifetime
7. Residual Value for Refurbished CRE
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
a. Sensitivity Analysis for Equipment With Unique Energy Use
Characteristics
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
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d. Manufacturer Markup Scenarios
3. Discussion of MIA Comments
a. Conversion Costs
b. Impacts on Direct Employment
c. Laboratory Resource Constraints
d. Supply Chain
e. Cumulative Regulatory Burden
f. Refrigerant Transition
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. National 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 Adopted Standards
3. Removal of Obsolete Provisions
VI. Procedural Issues and Regulatory Review
A. Review Under Executive Orders 12866, 13563, and 14094
B. Review Under the Regulatory Flexibility Act
1. Need for, and Objectives of, Rule
2. Significant Issues Raised by Public Comments in Response to
the IRFA
3. Response to Comments Filed by Chief Counsel for Advocacy of
the Small Business Administration
4. Description and Estimated Number of Small Entities Affected
5. Description of Reporting, Recordkeeping, and Other Compliance
Requirements
6. Significant Alternatives Considered and Steps Taken To
Minimize Significant Economic Impacts on Small Entities
C. Review Under the Paperwork Reduction Act
D. Review Under the National Environmental Policy Act of 1969
E. Review Under Executive Order 13132
F. Review Under Executive Order 12988
G. Review Under the Unfunded Mandates Reform Act of 1995
H. Review Under the Treasury and General Government
Appropriations Act, 1999
I. Review Under Executive Order 12630
J. Review Under the Treasury and General Government
Appropriations Act, 2001
K. Review Under Executive Order 13211
L. Information Quality
M. Congressional Notification
VII. Approval of the Office of the Secretary
I. Synopsis of the Final Rule
EPCA, Public Law 94-163, as amended,\1\ authorizes DOE to regulate
the energy efficiency of a number of consumer products and certain
industrial equipment. (42 U.S.C. 6291-6317, as codified) Title III,
Part C of EPCA,\2\ added by Public Law 95-619, Title IV, section
441(a), established the Energy Conservation Program for Certain
Industrial Equipment, which sets forth a variety of provisions designed
to improve energy efficiency. (42 U.S.C. 6311-6317, as codified) Such
equipment includes CRE, the subject of this rulemaking. (42 U.S.C.
6311(1)(E))
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\1\ All references to EPCA in this document refer to the statute
as amended through the Energy Act of 2020, Public Law 116-260 (Dec.
27, 2020), which reflects the last statutory amendments that impact
Parts A and A-1 of EPCA.
\2\ For editorial reasons, upon codification in the U.S. Code,
Part C was redesignated Part A-1.
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Pursuant to EPCA, DOE is required to review its existing energy
conservation standards for covered equipment no later than 6 years
after issuance of any final rule establishing or amending a standard.
(42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(m)(1)) Pursuant to that statutory
provision, DOE must publish either a notification of determination that
standards for the product do not need to be amended, or a notice of
proposed rulemaking (``NOPR'') including new proposed energy
conservation standards (proceeding to a final rule, as appropriate).
(Id.) 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 significant conservation of energy. (42
U.S.C. 6316(e)(1); 42 U.S.C. 6295(o)(3)(B)) DOE has conducted this
review of the energy conservation standards for CRE under EPCA's 6-
year-lookback authority described herein. (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 of this document, DOE
has determined that TSL 3 represents the maximum improvement in energy
efficiency that is technologically feasible and economically justified.
The adopted standards, which are expressed in maximum daily energy
consumption (``MDEC'') as a function of the volume or total display
area (``TDA''), are shown in table I.1. These standards apply to all
equipment listed in table I.1 and manufactured in, or imported into,
the United States starting on the date 4 years after the publication of
the final rule for this rulemaking. As discussed in section II.B.3 of
this document, DOE is not, at this time, amending standards for the
large-capacity CRE ranges presented in table IV.6 for the VOP.SC.M,
SVO.SC.M, HZO.SC.L, SOC.SC.M, VCT.SC.M, VCT.SC.L, and VCS.SC.L
equipment classes.
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ARI Standard 1200-2006 and AHRI Standard 1200 (I-P)-2010 are
referenced in the amendatory text of this document and were previously
approved for Sec. 431.66.
A. Benefits and Costs to Consumers 3
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\3\ All monetary values in this document are expressed in 2023
dollars unless indicated otherwise. For purposes of discounting
future monetary values, the present year in the analysis was 2024.
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Table I.3 summarizes DOE's evaluation of the economic impacts of
the adopted standards on consumers of CRE, as measured by the average
life-cycle cost (``LCC'') savings and the simple payback period
(``PBP'').\4\ The average LCC savings are positive for all equipment
classes, and the PBP is less than the average lifetime of CRE, which is
estimated to be 14.0 years (see section IV.F of this document).
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\4\ The average LCC savings refer to consumers that are affected
by a standard and are measured relative to the efficiency
distribution in the no-new-standards case, which depicts the market
in the compliance year in the absence of new or amended standards
(see section IV.F.9 of this document). The simple PBP, which is
designed to compare specific efficiency levels, is measured relative
to the baseline product (see section IV.C of this document).
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DOE's analysis of the impacts of the adopted standards on consumers
is described in section IV.F of this document.
B. Impact on Manufacturers
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 (2024-2058). 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 $3,022.3 million in
2023$. Under the adopted standards, DOE estimates the change in INPV to
range from -2.6 percent to -1.7 percent, which is approximately -$77.8
million to -$51.3 million. In order to bring equipment into compliance
with new and amended standards, it is estimated that industry will
incur total conversion costs of $117.7 million.
DOE's analysis of the impacts of the adopted 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 adopted energy conservation
standards for CRE would save a significant amount of energy. The
adopted TSL is TSL 3. Relative to the case without new and amended
standards, the lifetime energy savings for CRE purchased during the 30-
year period that begins in the anticipated year of compliance with the
new and amended standards (2029-
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2058) amount to 1.11 quadrillion British thermal units (``Btu''), or
quads.\5\ This represents a savings of 6.5 percent relative to the
energy use of this equipment in the case without new and amended
standards (referred to as the ``no-new-standards case'').
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\5\ The quantity refers to full-fuel-cycle (``FFC'') energy
savings. FFC energy savings includes the energy consumed in
extracting, processing, and transporting primary fuels (i.e., coal,
natural gas, petroleum fuels), and, thus, presents a more complete
picture of the impacts of energy efficiency standards. For more
information on the FFC metric, see section IV.H.2 of this document.
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The cumulative net present value (``NPV'') of total consumer
benefits of the standards for CRE ranges from $1.32 billion 2023$ (at a
7-percent discount rate) to $3.43 billion 2023$ (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 during the period 2029-2058.
In addition, the adopted standards for CRE are projected to yield
significant environmental benefits. DOE estimates that the standards
will result in cumulative emission reductions (over the same period as
for energy savings) of 19.7 million metric tons (``Mt'') \6\ of carbon
dioxide (``CO2''), 6.0 thousand tons of sulfur dioxide
(``SO2''), 36.9 thousand tons of nitrogen oxides
(``NOX''), 168 thousand tons of methane
(``CH4''), 0.2 thousand tons of nitrous oxide
(``N2O''), and 0.04 tons of mercury (``Hg'').\7\
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\6\ A metric ton is equivalent to 1.1 short tons. Results for
emissions other than CO2 are presented in short tons.
\7\ DOE calculated emissions reductions relative to the no-new-
standards case, which reflects key assumptions in the Annual Energy
Outlook 2023 (``AEO2023''). AEO2023 represents current federal and
state legislation and final implementation of regulations as of the
time of its preparation. See chapter 13 of this final rule TSD for
further discussion of AEO2023 assumptions that affect air pollutant
emissions.
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DOE estimates the value of climate benefits from a reduction in
greenhouse gases (``GHG'') using different estimates of the social cost
of CO2 (``SC-CO2''), the social cost of methane
(``SC-CH4''), and the social cost of nitrous oxide (``SC-
N2O''). Together these represent the social cost of GHG
(``SC-GHG''). DOE used an updated set of SC-GHG estimates (in terms of
benefit per ton of GHG avoided) published in 2023 by the Environmental
Protection Agency (``EPA'') (``2023 SC-GHG''), as well as the interim
SC-GHG values developed by an Interagency Working Group on the Social
Cost of Greenhouse Gases (``IWG'') in 2021 (``2021 Interim SC-GHG''),
which DOE used in the notice of proposed rulemaking for this rule
before the updated values were available.\8\ These values are discussed
in section IV.L of this document. The climate benefits associated with
the average SC-GHG at a 2-percent near-term Ramsey discount rate using
the 2023 SC-GHG estimates are estimated to be $4.6 billion, and the
climate benefits associated with the average 2021 Interim SC-GHG
estimates at a 3-percent discount rate are estimated to be $1.12
billion. DOE notes, however, that the adopted standards would be
economically justified even without inclusion of the estimated
monetized benefits of reduced GHG emissions.
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\8\ 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
https://www.epa.gov/system/files/documents/2023-12/eo12866_oil-and-gas-nsps-eg-climate-review-2060-av16-final-rule-20231130.pdf;
https://www.epa.gov/system/files/documents/2023-12/epa_scghg_2023_report_final.pdf (last accessed July 3, 2024).
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DOE estimated the monetary health benefits of SO2 and
NOX emissions reductions using benefit-per-ton estimates
from the EPA's Benefits Mapping and Analysis Program \9\ as discussed
in Section IV.L of this document. DOE did not monetize the change in
mercury emissions because the quantity is very small. DOE estimated the
present value of the health benefits would be $0.86 billion using a 7-
percent discount rate, and $2.19 billion using a 3-percent discount
rate.\10\ 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 (NOX),
but will continue to assess the ability to monetize other effects such
as health benefits from reductions in direct PM2.5
emissions.
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\9\ 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.
\10\ DOE estimates the economic value of these emissions
reductions resulting from the considered TSLs for the purpose of
complying with the requirements of Executive Order 12866.
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Table I.4 summarizes the monetized benefits and costs expected to
result from the new and amended 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.
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The benefits and costs of the adopted 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.\11\
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\11\ To convert the time-series of costs and benefits into
annualized values, DOE calculated a present value in 2024, 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., 2020 or 2030), and then discounted the present value from
each year to 2024. 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.
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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
during the period 2029-2058. The benefits associated with reduced
emissions achieved as a result of the adopted standards are also
calculated based on the lifetime of CRE shipped during the period 2029-
2058. Total benefits for both the 3-percent and 7-percent cases are
presented using the average SC-GHG with a 2 percent near-term Ramsey
discount rate for the 2023 SC-GHG estimates and the average SC-GHG with
3-percent discount rate for the 2021 interim SC-GHG estimates.\12\
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\12\ DOE notes that using consumption-based discount rates
(e.g., 2 or 3 percent) is appropriate when discounting the value of
climate impacts. Combining climate effects discounted at an
appropriate consumption-based discount rate with other costs and
benefits discounted at a capital-based rate (i.e., 7 percent) is
reasonable because of the different nature of the types of benefits
being measured.
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Table I.5 presents the total estimated monetized benefits and costs
associated with the adopted standard, expressed in terms of annualized
values. The results under the primary estimates are as follows.
Using a 7-percent discount rate for consumer benefits and costs and
health benefits from reduced NOX and SO2
emissions, and either the 2-percent near-term Ramsey discount rate case
or the 3-percent discount rate case for climate benefits from reduced
GHG emissions, the estimated cost of the standards adopted in this rule
is $71 million per year in increased equipment costs, while the
estimated annual benefits are $210 million in reduced equipment
operating costs, $222 million per year in climate benefits (using the
2023 SC-GHG estimates) or $64 million per year in climate benefits
(using the 2021 interim SC-GHG estimates), and $90 million in health
benefits. In this case, the net benefit would amount to $452 million
per year (using the 2023 SC-GHG estimates) or $294 million per year
(using the 2021 interim SC-GHG estimates).
Using a 3-percent discount rate for consumer benefits and costs and
health benefits from reduced NOX and SO2
emissions, and either the 2-percent near-term Ramsey discount rate case
or the 3-percent discount rate case for climate benefits from reduced
GHG emissions, the estimated cost of the standards is $68 million per
year in increased equipment costs, while the estimated annual benefits
are $265 million in reduced operating costs, $222 million in climate
benefits (using the 2023 SC-GHG estimates) or $64 million in climate
benefits (using the 2021 interim SC-GHG estimates), and $126 million in
health benefits. In this case, the net benefit would amount to $545
million per year (using the 2023 SC-GHG estimates) or $387 million per
year (using the 2021 interim SC-GHG estimates).
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DOE's analysis of the national impacts of the adopted standards is
described in sections IV.H, IV.K, and IV.L of this document.
D. Conclusion
DOE concludes that the standards adopted in this final rule
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 final rule. As for economic justification,
DOE's analysis shows that the benefits of the standards exceed, to a
great extent, the burdens of the standards.
Using a 7-percent discount rate for consumer benefits and costs and
NOX and SO2 reduction benefits, and a 2-percent
near-term Ramsey discount rate case or the 3-percent discount rate case
for GHG social costs, the estimated cost of the standards for CRE is
$71 million per year in increased equipment costs, while the estimated
annual benefits are $210 million in reduced equipment operating costs,
$222 million in climate benefits (using the 2023 SC-GHG estimates) or
$64 million in climate benefits (using the 2021 interim SC-GHG
estimates), and $90 million in health benefits. The net benefit amounts
to $452 million per year (using the 2023 SC-GHG estimates) or $294
million per year (using the 2021 interim SC-GHG estimates). DOE notes
that the net benefits are substantial even in the absence of the
climate benefits,\13\ and DOE would adopt the same standards in the
absence of such benefits.
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\13\ The information on climate benefits is provided in
compliance with Executive Order 12866.
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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 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 the
impacts of equipment with relatively constant demand. Accordingly, DOE
evaluates the significance of energy savings on a case-by-case basis.
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\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).
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As previously mentioned, the standards are projected to result in
estimated national energy savings (``NES'') of 1.11 quad full-fuel-
cycle (``FFC''), the equivalent of the primary annual energy use of 7.4
million homes. Based on these findings, DOE has determined the energy
savings from the
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standard levels adopted in this final rule are ``significant'' within
the meaning of 42 U.S.C. 6295(o)(3)(B). A more detailed discussion of
the basis for these conclusions is contained in the remainder of this
document and the accompanying technical support document (``TSD'').
II. Introduction
The following section briefly discusses the statutory authority
underlying this final 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 products and certain industrial equipment. (42 U.S.C. 6291-
6317, as codified) Title III, Part C of EPCA,\15\ added by Public Law
95-619, Title IV, section 441(a), established the Energy Conservation
Program for Certain Industrial Equipment, which sets forth a variety of
provisions designed to improve energy efficiency. (42 U.S.C. 6311-6317)
EPCA specifies a list of equipment that constitutes covered equipment
(hereafter referred to as ``covered equipment'').\16\ This equipment
includes commercial refrigerators, freezers, and refrigerator-freezers,
the subject of this document. (42 U.S.C. 6311(1)(E))
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\15\ As noted previously, for editorial reasons, upon
codification in the U.S. Code, Part C was redesignated Part A-1.
\16\ ``Covered equipment'' means one of the following types of
industrial equipment: Electric motors and pumps; small commercial
package air-conditioning and heating equipment; large commercial
package air-conditioning and heating equipment; very large
commercial package air-conditioning and heating equipment;
commercial refrigerators, freezers, and refrigerator-freezers;
automatic commercial ice makers; walk-in coolers and walk-in
freezers; commercial clothes washers; packaged terminal air
conditioners and packaged terminal heat pumps; warm air furnaces and
packaged boilers; and storage water heaters, instantaneous water
heaters, and unfired hot water storage tanks. (42 U.S.C. 6311(1)(A)-
(K))
---------------------------------------------------------------------------
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(e)(1); 42 U.S.C. 6296(a), (b), and (d)).
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(e)(2)-(3); 42 U.S.C. 6297(a)-(c)) DOE may, however, grant
waivers of Federal preemption in limited circumstances for particular
State laws or regulations, in accordance with the procedures and other
provisions set forth under EPCA. (42 U.S.C. 6316(e)(2)-(3); 42 U.S.C.
6297(d))
Subject to certain criteria and conditions, DOE is required to
develop test procedures to measure the energy efficiency, energy use,
or estimated annual operating cost of 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 certifying to DOE that their equipment complies with
the applicable energy conservation standards and as the basis for any
representations regarding the energy use or energy efficiency of the
equipment. (42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(s); 42 U.S.C.
6314(d)). Similarly, DOE must use these test procedures to evaluate
whether a basic model complies with the applicable energy conservation
standard(s). (42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(s)). The DOE test
procedures for CRE appear at 10 CFR 431, subpart C, appendix B
(``appendix B'').
EPCA prescribed energy conservation standards for CRE (42 U.S.C.
6313(c)) and directs DOE to conduct future rulemakings to determine
whether to amend these standards. (42 U.S.C. 6313(c)(6)) Not later than
six years after the issuance of any final rule establishing or amending
a standard, DOE must publish either a notice of determination
(``NOPD'') 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)) DOE must make the analysis on which a NOPD or NOPR
is based publicly available and provide an opportunity for written
comment. (42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(m)(2)) Not later than
two years after a NOPR is issued, DOE must publish a final rule
amending the energy conservation standard for the equipment. (42 U.S.C.
6316(e)(1); 42 U.S.C. 6295(m)(3)(A))
DOE must follow specific statutory criteria for prescribing new or
amended standards for covered equipment, including CRE. Any new or
amended standard for covered equipment must be designed to achieve the
maximum improvement in energy efficiency that the Secretary of Energy
(``Secretary'') determines is technologically feasible and economically
justified. (42 U.S.C. 6316(e)(1); 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)(B))
Moreover, DOE may not prescribe a standard if: (1) for certain
equipment, including CRE, no test procedure has been established for
the product; or (2) DOE determines by rule that the establishment of
such standard will not result in significant conservation of energy
(or, for certain products, water), or 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 considers relevant.
(42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(o)(2)(B)(i)(I)-(VII))
Further, EPCA, as codified, 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 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))
[[Page 7476]]
EPCA, as codified, also contains what is known as an ``anti-
backsliding'' provision, which prevents the Secretary from prescribing
any amended standard that either increases the maximum allowable energy
use or decreases the minimum required energy efficiency of covered
equipment. (42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(o)(1)) Also, the
Secretary may not prescribe an amended or new standard if interested
persons have established by a preponderance of the evidence that the
standard is likely to result in the unavailability in the United States
in any covered 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 covered equipment that has two or more
subcategories. A rule prescribing an energy conservation standard for a
type (or class) of equipment 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) consumes a
different kind of energy from that consumed by other covered equipment
within such type (or class); or (B) has a capacity or other
performance-related feature which other products within such type (or
class) do not have and such feature justifies a higher or lower
standard. (42 U.S.C. 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 considers such factors as the utility to
the consumer of such a 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))
DOE is publishing this final rule pursuant to the six-year-lookback
review requirement in EPCA described herein.
B. Background
1. Current Standards
DOE most recently completed a review of its CRE standards in a
final rule published in the Federal Register on March 28, 2014 (``March
2014 Final Rule''), through which DOE prescribed the current energy
conservation standards for CRE manufactured on and after March 27,
2017. 79 FR 17725. These standards are set forth in DOE's regulations
at 10 CFR 431.66(e) and are shown in table II.1.
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). Certain exclusions to the standards at 10 CFR
431.66(e)(1) are specified at 10 CFR 431.66(f).
BILLING CODE 6450-01-P
[[Page 7477]]
[GRAPHIC] [TIFF OMITTED] TR21JA25.098
[[Page 7478]]
BILLING CODE 6450-01-C
2. History of Standards Rulemaking for Commercial Refrigerators,
Freezers, and Refrigerator-Freezers
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 RFI, 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 TSD 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.
---------------------------------------------------------------------------
\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.
---------------------------------------------------------------------------
On October 10, 2023, DOE published in the Federal Register a NOPR
to establish and amend energy conservation standards for CRE (``October
2023 NOPR''). 88 FR 70196. DOE also sought comment on the analytical
framework, models, and tools that DOE used to evaluate the proposed
standards for CRE, the results of the NOPR analyses performed, and the
proposed new and amended energy conservation standard levels derived
from these analyses, which DOE presented in the accompanying NOPR TSD
(``October 2023 NOPR TSD'').\18\ Id. DOE held a public meeting related
to the October 2023 NOPR on November 7, 2023 (hereafter, the ``November
2023 Public Meeting'').
---------------------------------------------------------------------------
\18\ The October 2023 NOPR TSD is available in the docket for
this rulemaking at www.regulations.gov/document/EERE-2017-BT-STD-0007-0051.
---------------------------------------------------------------------------
DOE received comments in response to the October 2023 NOPR from the
interested parties listed in table II.2.
BILLING CODE 6450-01-P
[[Page 7479]]
[GRAPHIC] [TIFF OMITTED] TR21JA25.099
BILLING CODE 6450-01-C
To the extent that interested parties have provided written
comments that are substantively consistent with any oral comments
provided during the
[[Page 7480]]
November 2023 Public Meeting, DOE cites the written comments throughout
this document. Any oral comments provided during the November 2023
Public Meeting that are not substantively addressed by written comments
are summarized and cited separately throughout this document.
On August 28, 2024, DOE published in the Federal Register a notice
of data availability (``NODA'') to provide updated analytical results
that reflect updates to the analysis that DOE is considering based on
feedback received in response to the October 2023 NOPR (``August 2024
NODA''). 89 FR 68788. DOE also sought comment, data, and information
regarding the updated analyses. Id.
DOE received comments in response to the August 2024 NODA from the
interested parties listed in table II.3.
[[Page 7481]]
[GRAPHIC] [TIFF OMITTED] TR21JA25.100
[[Page 7482]]
[GRAPHIC] [TIFF OMITTED] TR21JA25.101
A parenthetical reference at the end of a comment quotation or
paraphrase provides the location of the item in the public record.\19\
---------------------------------------------------------------------------
\19\ 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).
---------------------------------------------------------------------------
3. Applicability of This Final Rule to Large-Capacity CRE
As discussed in section I of this document, DOE is establishing and
amending standards in this final rule for the classes of equipment
shown in table I.1. This includes all classes of CRE currently subject
to energy conservation standards, and DOE is additionally establishing
standards for chef bases or griddle stands. However, DOE is not, at
this time, amending standards for large-capacity CRE ranges presented
in table IV. for the VOP.SC.M, SVO.SC.M, HZO.SC.L, SOC.SC.M, VCT.SC.M,
VCT.SC.L, and VCS.SC.L equipment classes. Large-capacity CRE in these
classes would remain subject to the current energy conservation
standards applicable to those classes for which compliance was required
beginning on March 27, 2017.
DOE has summarized the comments it received in response to the
October 2023 NOPR and August 2024 NODA specific to the large-capacity
analysis as follows. Zero Zone, ASAP et. al., AHRI, and Hussmann
commented in support of DOE's decision to separate self-contained units
into two groups, and of DOE's updated assumption that larger self-
contained equipment will use an A2L refrigerant, such as R-454C, when
the refrigeration cooling load of the case is more than can be achieved
using an allowable R-290 charge size. (Zero Zone, No. 114 at p. 1,
(ASAP et al., No. 106 at pp. 1-2, AHRI, No. 104 at p. 9, Hussmann, No.
108 at p. 3) Hussmann and AHRI additionally agreed with DOE's finding
that compressors using R-454C and R-455A have performance similar to
compressors with refrigerants already in use (e.g., R-404A) in larger
equipment. (Hussmann, No. 108 at p. 3, AHRI, No. 104 at p. 9)
Hillphoenix agreed with DOE's A2L compressor cost assumptions.
(Hillphoenix, No. 110 at p. 3). Hussmann, AHRI, and Continental
disagreed with DOE's A2L compressor cost assumptions and stated that
the price of an A2L compressor is similar to an R-404A compressor at
the same cooling capacity. (Hussmann, No. 108 at p. 3; AHRI, No. 104 at
p. 9; Continental, No. 107 at p. 2). Hussmann and Due North commented
with concerns that large volume units would be susceptible to
discontinuation as they face some of the most severe proposed energy
use reductions. (Hussmann, No. 80 at p. 7, Due North, No. 87, at pp. 1-
2) The CA IOUs recommended that DOE reconsider how it defines `large'
and `non-large' capacity equipment, and that DOE reconsider its
assumption that all `large' units will require A2L refrigerants. (CA
IOUs, No. 113 at p. 4)
For all comments received in response to the October 2023 NOPR and
August 2024 NODA, DOE appreciates the comments and continues to analyze
the large-capacity ranges presented in table IV.5 for the VOP.SC.M,
SVO.SC.M, HZO.SC.L, SOC.SC.M, VCT.SC.M, VCT.SC.L, and VCS.SC.L
equipment classes.
Further, DOE is not addressing nor discussing any analytical
methodologies or results for the large-capacity ranges of these
equipment classes in this document as DOE continues to consider the
comments submitted in response to the October 2023 NOPR and August 2024
NODA.
III. General Discussion
DOE developed this final rule after considering all oral and
written comments, data, and information from interested parties that
represent a variety of interests. This document addresses issues raised
by these commenters.
A. General Comments
This section summarizes general comments received from interested
parties regarding rulemaking timing and process.
1. General Support
In response to the October 2023 NOPR, Ravnitzky, ASAP et al.,
NYSERDA, NEEA and NWPCC, and Killin supported the October 2023 NOPR,
citing large national energy savings and considerable savings for
businesses. (Ravnitzky, No. 57 at p. 1; ASAP et al., No. 79 at p. 1;
NYSERDA, No. 88 at pp. 1-2; NEEA and NWPCC, No. 89 at p. 3; Killin, No.
59 at p. 1) Ravnitzky commented that the proposed rule would have
significant environmental and public health benefits and that the net
economic benefits for consumers and manufacturers would outweigh the
costs of complying with the proposed rule. (Ravnitzky, No. 57 at p. 1)
In response to the October 2023 NOPR, Ravnitzky also commented that
the rule creates a level playing field for manufacturers by harmonizing
standards across different types and classes of CRE. (Ravnitzky, No. 57
at p. 1) Ravnitzky urged DOE to finalize and implement the rule as soon
as possible,
[[Page 7483]]
while also continuing to monitor and evaluate its impacts and outcomes
and to seek feedback and input from stakeholders and experts. (Id. at
p. 5)
In response to the October 2023 NOPR, NEEA and NWPCC supported the
proposal of TSL 5 as it represents the highest standard level that is
technically feasible and economically justified and provides a large
amount of cost-effective energy savings for the Nation. (NEEA and
NWPCC, No. 89 at p. 3)
In response to the August 2024 NODA, ASAP et al. supported DOE's
updates to the analysis presented in the NODA and believe the updated
analysis provides a strong basis for finalizing amended CRE standards,
and encourages the adoption of the highest efficiency levels (``ELs'')
that have positive life-cycle cost savings. (ASAP et al., No. 106 at p.
1) Based on DOE's updated analysis for the NODA, ASAP et al. estimated
that amended standards meeting this criteria would yield about 1.5
quads of energy savings and up to about $4.5 billion in net present
value savings for purchasers based on DOE's updated analysis for the
August 2024 NODA. (Id.)
An anonymous commenter expressed general support for adopting the
max-tech level. (Anonymous, No. 105 at p. 1)
Lepak commented in support of the rulemaking because, while it may
increase costs for consumers, without these regulations innovation
would not occur and consumers rely on regulations like this one to
ensure that they have access to quality, energy efficient products.
(Lepak, No. 116, at p. 1; Lepak, No. 117, at p. 1) Lepak added that
energy efficiency measures help the county to meet its climate goals.
(Id.)
2. General Opposition
DOE also received comments, in response to the October 2023 NOPR
and the August 2024 NODA, outlining numerous concerns with the proposed
new and amended energy conservation standards. These included concerns
about other cumulative regulatory changes the industry is currently
addressing, including a final rule published by the EPA regarding
refrigerant prohibitions in certain equipment, leading to requests to
delay the rulemaking and/or extend the compliance date of the proposed
standards; questions about the economic justification; technical
feasibility and cost-effectiveness of the proposed standards; potential
inaccuracies in the supporting analysis; potential issues regarding
food safe temperatures; and concerns with certain rulemaking processes,
including the public comment period. These comments are included and
discussed throughout section III of this document.
a. Proposed Compliance Date
In the October 2023 NOPR, DOE estimated the publication of a final
rule regarding amended energy conservation standards for CRE in the
second half of 2024; therefore, for purposes of the October 2023 NOPR,
DOE modeled a 3-year compliance period and 2028 as the first full year
of compliance with any amended standards, consistent with the
requirements of EPCA (see 42 U.S.C. 6313(c)(6)(C)(i)). 88 FR 70196,
70237.
In response to the October 2023 NOPR, FMI and NACS, NAFEM, ITW, and
NAMA recommended DOE extend its compliance deadline to 5 years due to
the requirements of the AIM Act and the significant investment and
redesign associated with the ongoing EPA rulemakings. (FMI and NACS,
No. 78 at p. 2; NAFEM, No. 83 at p. 2; ITW, No. 82 at p. 6; NAMA, No.
85 at p. 34)
In response to the August 2024 NODA, NAFEM, NAMA, and Hillphoenix
commented in support of additional time for compliance, and suggested a
5 year compliance period. (NAFEM, No. 101 at pp. 4-5; NAMA, No. 112 at
p. 3; Hillphoenix, No. 110 at p. 12) In response to the August 2024
NODA, Continental stated that adopting standards with a 3 year
compliance period would force them to exit the market for many
equipment configurations. (Continental, No. 107 at p. 3) Hoshizaki
commented that more than 100 of its CRE models would be affected by the
energy conservation standards proposed in the October 2023 NOPR, and
corresponding UL safety and NSF sanitation testing will be difficult or
impossible to complete within the 3-year compliance period. (Hoshizaki,
No. 76 at pp. 6-7)
In response to the October 2023 NOPR, NAMA recommended that DOE
increase the time of compliance to recoup investments and alleviate the
stress of staffing, supply chain issues, and platform changes to use
low GWP refrigerants. (Id. at p. 18) NAMA suggested that DOE allow the
industry 2-3 years after the effective date of EPA's final rule
published in the Federal Register on October 24, 2023, to address HFCs
through the AIM Act (``October 2023 EPA Final Rule''; 88 FR 73098) to
absorb the costs of the refrigerant transition before redesigning their
products to the next CRE energy conservation standards. (Id. at pp. 19,
27)
DOE acknowledges the concerns raised by manufacturers regarding the
cumulative regulatory burden from the October 2023 EPA Final Rule and
DOE energy conservation standards rulemakings, which is compounded by
changes to Underwriters Laboratories (``UL'') safety standards for the
equipment covered by this rulemaking. DOE notes that it has some
flexibility under EPCA to delay the effective date of new and amended
standards: if the Secretary determines that a 3-year period is
inadequate, the Secretary may establish an effective date that would
apply to CRE on or after a date that is not later than 5 years after
the final rule is published in the Federal Register. (See 42 U.S.C.
6313(c)(6)(C)) Based on stakeholder comments and DOE's assessment of
the overlapping Federal refrigerant regulations and recent changes to
UL safety standards for CRE, DOE is extending the compliance period
from the 3-years analyzed in the October 2023 NOPR (modeled as a 2028
compliance year) to 4-years (modeled as a 2029 compliance year) for
this final rule.
Generally, DOE understands that aligning compliance dates to avoid
multiple successive redesigns can help to reduce cumulative regulatory
burden. However, stakeholder comments indicate and make clear that the
rulemaking timelines and compliance periods for DOE and EPA regulations
make it challenging to redesign and retest CRE simultaneously to meet
both the October 2023 EPA Final Rule and new and amended DOE standards.
As discussed in more detail in section IV.J.3.c of this document,
manufacturers indicated that testing facilities and engineering
resources are currently fully consumed by the transition to low-GWP
refrigerants and new UL safety standards. Many manufacturers expressed
concern that third-party laboratories already have backlogs and are
experiencing delays, meaning that requiring new and amended standards
for CRE within a short time period could exacerbate the issue. DOE has
determined that a 4-year compliance period to redesign CRE to meet the
adopted standards will help alleviate manufacturers' concerns about
engineering and laboratory resource constraints. Furthermore, the
longer compliance period will help mitigate cumulative regulatory
burden by allowing manufacturers more flexibility to spread investments
across 4 years instead of 3 years. Manufacturers will also have more
time to recoup any investments made to redesign CRE to comply with the
October 2023 EPA Final Rule as compared to a 3-year compliance period.
Regarding manufacturers' requests to extend the compliance period
to 5 years,
[[Page 7484]]
DOE notes that much of the CRE market has already transitioned to low-
GWP refrigerants and the portion of the market that has not
transitioned will likely complete the conversion to low-GWP
refrigerants 2 to 4 years prior to when compliance is required for new
and amended energy conservation standards. Furthermore, as compared to
the October 2023 NOPR, DOE is adopting generally less stringent
efficiency levels in this final rule. As such, DOE expects that a 4-
year compliance period (compliance with adopted standards required in
2029) provides industry sufficient time to redesign CRE to comply with
new and amended standards.
In the notice of proposed rulemaking published in the Federal
Register on December 15, 2022 (``December 2022 EPA NOPR''), EPA
proposed a January 1, 2025, compliance date for the refrigeration
categories that apply to CRE. 87 FR 76738, 76773-76774 (Dec. 15, 2022).
For self-contained CRE, which account for approximately 86 percent of
industry CRE shipments covered by this final rule, the October 2023 EPA
Final Rule finalized the compliance date as proposed. 88 FR 73098,
73150. For remote-condensing CRE, which account for the remaining 14
percent of industry CRE shipments covered by this final rule, the
October 2023 EPA Final Rule finalized a compliance date of January 1,
2026 or January 1, 2027, depending on the category. Id. As discussed in
the October 2023 EPA Final Rule, EPA considered updates to UL standard
60335-2-89 and the subsequent incorporation of those updates by
electing to extend the compliance dates for many subsectors in retail
food refrigeration, including remote-condensing CRE. However, EPA
determined that self-contained CRE would not require a delayed
compliance date because low-GWP refrigerants such as R-290 have been
used in self-contained CRE applications for years, and, therefore, the
industry is much further along in the transition to low-GWP
refrigerants compared to other refrigeration subsectors. Id. at 88 FR
73154. DOE agrees with EPA and notes that it has observed, and
manufacturers concur,\20\ that a significant number of CRE models have
already been transitioned to refrigerants that comply with the October
2023 EPA Final Rule. For example, 93 percent of CRE models currently
rated to ENERGY STAR[supreg]'s CRE database use either R-290 or R-
600a.\21\ This is supported by NAFEM members and CRE industry
statements captured in the comments from NAFEM, which stated that
``most self-contained CRE today, in the commercial bar space, already
uses alternate refrigerants, (almost exclusively R-290),'' and ``we
already made the change to R-290 from R-134a more than 5 years ago.''
(NAFEM, No. 83 at pp. 3-5) This demonstrates that data and technology
are currently known and available for manufacturers to understand
performance impacts of this refrigerant transition.
---------------------------------------------------------------------------
\20\ See Storemasters, No. 68 at pp. 1-2.
\21\ See www.energystar.gov/productfinder/product/certified-commercial-refrigerators-and-freezers/results (last accessed Oct.
23, 2024).
---------------------------------------------------------------------------
As previously mentioned, compared to the October 2023 NOPR, DOE is
adopting generally less stringent efficiency levels (in terms of
percent energy use below the analyzed baseline) for 22 out of the 28
directly analyzed equipment classes. DOE notes that there were several
changes made to the analysis in response to comments and data submitted
on the October 2023 NOPR and the August 2024 NODA that resulted in DOE
adopting generally less stringent standards, including but not limited
to, the updates made to single-speed and variable-speed compressors,
screening out design options such as evaporator fan controls and
microchannel condensers, and updated baseline design options. Due to
these updates and other considerations detailed throughout this final
rule, DOE is adopting generally less stringent standards than the
standards proposed in the October 2023 NOPR. As such, DOE expects fewer
CRE models would require redesign to meet the levels adopted in this
final rule compared to the levels proposed in the October 2023 NOPR.
For example, DOE estimated that approximately 11 percent of shipments
would meet the proposed TSL in the October 2023 NOPR by the analyzed
compliance date. Comparatively, DOE estimates that approximately 49
percent of shipments would meet the TSL adopted in this final rule by
the analyzed compliance date. Furthermore, DOE expects that the
investment and redesign effort required to meet the adopted standards
would be lower since fewer models would require redesign at the adopted
standard level.
As permitted under EPCA and discussed in the preceding paragraphs,
DOE is extending the compliance period from the three years analyzed in
the October 2023 NOPR (modeled as a 2028 compliance year) to four years
(modeled as a 2029 compliance year) for this final rule. (See 42 U.S.C.
6313(c)(6)(C))
b. Proposed Standards
In response to the October 2023 NOPR, FMI and NACS commented that
the proposed energy conservation standards are neither required nor
justified under EPCA. (FMI and NACS, No. 78 at p. 2) FMI and NACS
commented that DOE has not adequately demonstrated that these standards
would be technologically feasible and cost-effective, adding that, in
many cases, the proposed standards would require design elements and
technology that is not economically justified or technically feasible.
(Id.) FMI and NACS commented that DOE significantly underestimates the
costs of compliance with the proposed rule and provided an example that
one FMI member's analysis showed an increased case cost of 20-25
percent to comply with the proposed rule as well as more difficult and
costly servicing. (FMI and NACS, No. 78 at p. 4). FMI and NACS
commented that with more accurate cost and benefit information, it is
likely that DOE's rebuttable payback period analysis will result in
much longer payback periods. (Id.)
In response to the comments from FMI and NACS, DOE notes that for
the proposed levels in the October 2023 NOPR, the analyzed cost
increases were consistent with FMI and NACS' comment (i.e., up to the
20 to 25 percent increase), thus it is not clear that there is a
disconnect on technologies required to get to the proposed levels. DOE
further notes that the finalized standard levels presented in this
final rule (i.e., TSL 3) are generally less stringent and the cost
increases to attain the finalized levels are less, on average, than the
levels proposed in the October 2023 NOPR and were determined to be
cost-effective. DOE further notes that in its analysis, the servicing
costs were set proportional to the equipment cost (i.e., higher cost
for more efficient equipment--see section IV.F.5 of this document and
chapter 8 of the final rule TSD for more details on these costs).
An anonymous commenter stated that the cost benefits of the October
2023 NOPR are inflated by the assumption of social and health benefits,
which are speculative, and added that higher costs from the October
2023 NOPR will render CRE unaffordable for consumers and industry.
(Anonymous, No. 73 at p. 1)
In response to the anonymous commenter, DOE notes that the October
2023 NOPR stated that the estimated total NPV is provided for
additional information; however, DOE primarily relies upon the NPV of
consumer benefits when determining whether a
[[Page 7485]]
proposed standard level is economically justified. See 88 FR 70196,
70292.
In response to the August 2024 NODA, Bice commented that she
opposes the October 2023 NOPR, citing concerns with the multitude of
proposals being published by the DOE. (Bice, No. 92 at p. 1) Bice
commented also that these proposals are adding burdensome energy
conservation standards to products that Americans use on a regular
basis. (Id.) Bice stated her belief that the proposed standards would
increase production costs for manufacturers and retail prices for
consumers and small businesses, costing millions of dollars with few
long-term benefits. (Id.) Bice commented that past rules published by
the DOE are an unnecessary overreach of the Federal government, and
that these regulations limit consumer choice, drive up prices, and
impose onerous regulations on American manufacturers, many of whom
being small businesses. (Id.)
In response to Bice, as discussed in section II.A of this document,
EPCA authorizes DOE to regulate the energy efficiency of a number of
consumer products and certain industrial equipment; this equipment
includes commercial refrigerators, freezers, and refrigerator-freezers.
(42 U.S.C. 6291-6317, as codified; 42 U.S.C. 6311(1)(E)) EPCA also
includes a lookback period which directs DOE to conduct future
rulemakings to determine whether to amend standards not later than six
years after the issuance of any final rule establishing or amending a
standard. (42 U.S.C. 6313(c)(6); 42 U.S.C. 6316(e)(1); 42 U.S.C.
6295(m)(1)) DOE notes that as compared to the October 2023 NOPR, DOE is
extending the compliance period from the three years analyzed in the
October 2023 NOPR to four years for this final rule, which would allow
manufacturers an additional year to redesign equipment and comply with
the new or amended standards. Additionally, as discussed in III.A.2.a
of this document, DOE is adopting generally less stringent standards
than what DOE proposed in the October 2023 NOPR. DOE discusses the
benefits and burdens of each TSL considered in section V.C of this
document. Regarding the impacts to small businesses, DOE analyzes the
impacts to small business consumers in section V.B.1.b of this document
and small business manufacturers in section VI.B of this document.
In response to the August 2024 NODA, Zycher commented that energy
savings analyzed as a result of the proposed standards are about 2
tenths of one percent of the energy consumed in 2023 by the
residential, commercial, and industrial sectors and are trivial.
(Zycher, No. 97 at p. 3) Zycher further commented that, accordingly the
reduction in GHG emissions and resulting decline in global temperatures
are negligible. (Id. at pp. 3-4)
In response to Zycher's comment, DOE notes that CRE are one of many
regulated products and equipment within DOE's authority to set
efficiency standards, and that the appliance standards program has
helped the United States avoid 2.6 billion tons of carbon dioxide
emissions.\22\ Additionally, DOE notes that the energy savings analyzed
as a result of new and amended standards in this final rule are
compared to the overall energy use of the CRE market, not the overall
energy consumed by the residential, commercial, and industrial sectors.
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\22\ See www.energy.gov/eere/buildings/about-appliance-and-equipment-standards-program.
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In response to the October 2023 NOPR and the August 2024 NODA,
commenters expressed concern regarding the stringency of proposed
standards, requesting no-new standards or alternate levels, citing
technological feasibility, and expressing concern about equipment
elimination, as discussed in the following sections.
No-New-Standards
In response to the October 2023 NOPR and August 2024 NODA,
Storemasters, Kirby, Continental, NAFEM, Hoshizaki, ITW, AHRI, NAMA,
and Hussmann recommended that DOE issue a no-new-standards rule at this
time. (Storemasters, No. 68 at p. 2; Kirby, No. 66 at p. 2;
Continental, No. 86 at p. 7; NAFEM, No. 83 at p. 2; NAFEM, No. 101 at
p. 5; Hoshizaki, No. 76 at p. 1; ITW, No. 82 at p. 1; AHRI, No. 81 at
p. 5; NAMA, No. 112 at p. 3; Hussmann, No. 80 at p. 13)
In response to the August 2024 NODA, Continental stated that while
the August 2024 NODA revises some analysis and provides support
documents, it does not provide updated standards levels, and
Continental could not adequately conclude whether the updated
determinations are sufficient to establish proposed energy standards
that are technologically feasible and economically justified.
(Continental, No. 107 at p. 3) Continental stated its understanding
that DOE has statutory obligations and a court mandate however requests
DOE not rush into adopting more stringent standards, and leave new
energy savings for future rulemakings. (Id.)
AHRI commented that no significant technologies have been developed
since 2017 to bring about the additional energy efficiency that DOE
expects in the October 2023 NOPR. (AHRI, No. 81 at p. 11) AHRI
commented that a no-new-standards rule would allow time to collect data
on products in the market, evaluate safety mitigation measures
associated with the refrigerant transition, reduce the burden on
manufacturers and end-users, and increase time for product re-design.
(Id.)
In response to the October 2023 NOPR, ITW stated that a ``no new
standards'' decision at this time would give the industry and DOE time
to work together on analyzing the correct data and new data for the new
categories for which DOE has proposed energy use multipliers. (ITW, No.
82 at p. 6)
In response to the October 2023 NOPR, notwithstanding Hussmann's
comments regarding both a pause in the rulemaking and timing of the
rulemaking, Hussmann commented that while it requests that DOE impose
no new standards, the focus should not be on timing but rather on the
proposed energy limits themselves being unachievable. (Hussmann, No. 80
at p. 13)
Hussmann commented that they are currently amending to the UL/CSA
60335-1 and 60335-2-89 standards, which consumes laboratory resources,
space, and time. (Hussmann, No. 108 at p. 2). Hussmann asserted that
this shift requires new design modifications and the addition of new
components, which may take 1-3 years of laboratory time to fulfill.
(Id.) Hussmann stated that this limits their ability to fulfill new DOE
requirements. (Id.) Hussmann stated that there is significant benefit
to all stakeholders, the retailers, as well as the consumer to abstain
from additional DOE energy efficiency regulation at this time. (Id.)
In response to the August 2024 NODA Zycher commented that the CRE
standards analyzed in the August 2024 NODA are flawed and should not be
finalized. (Zycher, No. 97 at p. 10)
With regard to stakeholders' request for DOE to adopt a ``no-new-
standards'' determination to allow industry additional time to analyze
data related to the proposed energy use multipliers, DOE notes that
manufacturers and other commenters were provided with an additional
opportunity to provide feedback on the updated results presented in the
August 2024 NODA, which offered manufacturers approximately eight
months after the October 2023 NOPR comment period ended to analyze data
related to the proposed energy use multipliers. In response to
Continental's comment about not having a proposed standard
[[Page 7486]]
level in the August 2024 NODA, DOE notes that while one specific
standard level was not proposed in the August 2024 NODA, standard
equations at each efficiency level were presented in the August 2024
NODA. The August 2024 NODA provided stakeholders an additional
opportunity to comment on the revisions to the analysis from the
October 2023 NOPR, and the revised relationships between design, cost,
and efficiency that were the basis of DOE's analysis leading to the
standards established and amended in this final rule. Furthermore, EPCA
specifies that any new or amended energy conservation standard 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)) As discussed in section V.C
of this document, DOE has determined that TSL 3 represents the maximum
improvement in energy efficiency that is technologically feasible and
economically justified. However, DOE notes that, as discussed in
section III.A.2.a of this document, DOE is extending the compliance
period from the 3-years analyzed in the October 2023 NOPR to 4-years
for this final rule to mitigate concerns of commenters about cumulative
regulatory burden and associated engineering and laboratory resource
constraints, which have been exacerbated by the ongoing refrigerant
transition in response to the October 2023 EPA Final Rule and updated
safety standards (e.g., UL 60335-2-89).
Requested Alternate Levels
In response to the October 2023 NOPR, Continental commented that if
a no-new-standards determination is not possible, DOE should publish
new standards levels that align with the ENERGY STAR Product
Specification for Commercial Refrigerators and Freezers Version 5.0,
which will provide energy reductions at levels that have been
substantially evaluated by stakeholders. (Continental, No. 86 at p. 7)
In response to the October 2023 NOPR and the August 2024 NODA,
Delfield commented that, while it is reasonable for DOE to push
regulations toward the ENERGY STAR version 5.0 levels,\23\ in general,
DOE should limit reductions to no more than 20 percent compared to 2017
DOE levels. (Delfield, No. 71 at p. 1; Delfield, No. 99 at p. 1)
---------------------------------------------------------------------------
\23\ Available at: www.energystar.gov/products/spec/commercial_refrigerators_and_freezers_specification_version_5_0_pd
(last accessed October 3, 2024).
---------------------------------------------------------------------------
DOE appreciates the feedback from Continental and Delfield, and
notes that out of the 11 ESTAR equipment classes analyzed in this final
rule, the amended standards for 8 classes are at similar or less
stringent levels than ENERGY STAR version 5.0 levels. In addition, in
this final rule, of the 49 equipment classes analyzed, 28 equipment
classes did not have greater than 20 percent energy use reduction from
the current standard, as suggested by Delfield, and 36 equipment
classes did not have greater than 20 percent energy use reduction from
the baseline analyzed in this final rule. However, DOE disagrees that
all equipment classes should align with these comments. All results of
this analysis are based on DOE's final rule analysis, which shows that
for 22 equipment classes, energy conservation standards more stringent
than ENERGY STAR or 20% reduction from the current standard are
technologically feasible and economically justified. For the full list
of cost-efficiency results, see chapter 5 of the final rule TSD.
In response to the August 2024 NODA, the CA IOUs commented that DOE
should set standards at the highest EL with positive LCC savings for
all equipment classes for the final rule. (CA IOUs, No. 113 at p. 6)
As discussed in section III.F of this document, the potential
impacts to individual consumers such as the changes in LCC and PBP
associated with new or amended standards is one aspect of the seven
factors that DOE evaluates when 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)) As discussed in section V.C of
this document, DOE has determined that TSL 3 represents the maximum
improvement in energy efficiency that is technologically feasible and
economically justified. DOE has determined that establishing standards
at TSL 3 balances the benefits of the energy savings and impacts to
consumers at TSL 3 with the potential burdens placed on CRE
manufacturers. DOE notes that at TSL 3, affected purchasers for each
CRE equipment class experience an average LCC savings ranging from $8
to $1,868 with a payback period ranging from 0.9 years to 7.0 years.
Overall, approximately 91 percent of affected CRE purchasers would
experience a net benefit or not be affected at TSL 3.
Technological Feasibility
In response to the October 2023 NOPR, Hoshizaki, ITW, SCC, and
NAFEM commented that the proposal is not technologically feasible or
economically justified, and that many technologies analyzed are already
in use. (Hoshizaki, No. 76 at pp. 1, 3; ITW, No. 82 at p. 1; SCC, No.
74 at p. 1; NAFEM, No. 83 at p. 2)
Hoshizaki commented that the proposed energy standards would
require over 30-percent reductions to meet the amended standards--
VCS.SC.M, VCT.SC.M, VCS.SC.L, SOC.SC.M, and classi[filig]cations with
RT, PT, and RI doors. (Hoshizaki, No. 76 at p. 3)
In response to the October 2023 NOPR, Due North generally supported
the October 2023 NOPR but expressed concern regarding the severe
reductions of the proposed conservation standards to VCT.SC.L,
VCT.SC.M, VOP.SC.M, VCT.SC.M.PT, and VCT.SC.M.SDPT equipment classes.
(Due North, No. 87 at pp. 1-2) Due North commented that, based on its
analysis, the proposed energy conservation standards would reduce the
current threshold levels for VCT.SC.L by 19 percent, VCT.SC.M by 17-41
percent, depending on the unit refrigerated volume, and VOP.SC.M by 26
percent. (Id. at p. 1) Due North stated that these reductions are
severe and hard to achieve using present energy-saving technologies
such as variable-speed compressors, electronically commutated fan
motors, adaptive defrosts, efficient light-emitting diode (``LED'')
lighting, and smart controls. (Id.)
In response to the October 2023 NOPR, Hussmann stated that DOE's
proposed energy limits, that are up to 70 percent less than the current
DOE standard levels, are unattainable for Hussmann products. (Hussmann,
No. 80 at p. 6) Hussmann additionally commented that other Hussmann
models would be required to meet 20-to-40-percent drops in energy
limits while already using electronically commutated motors (``ECMs''),
LED lights, and optimized air curtains/doors and insulation, and, in
the face of these unattainable limits, Hussmann would need to weigh the
benefits between feasibility, increased cost, development time, and
consumer interest with the decision to discontinue certain product
lines entirely. (Id. at pp. 6-7)
In response to the October 2023 NOPR, Storemasters and FMI and NACS
stated their concern with the proposed changes set forth in the October
2023 NOPR on the grounds that DOE has overestimated the energy
efficiency benefits of its proposed rule because manufacturers may stop
offering certain cases in order to comply with the proposed standards.
(Storemasters, No.
[[Page 7487]]
68 at p. 1; FMI and NACS, No. 78 at p. 4).
In response to the comments from Hoshizaki, ITW, SCC, NAFEM, Due
North, Hussmann, and FMI and NACS, DOE notes that, in this final rule,
it updated its October 2023 NOPR engineering analysis based on testing
conducted, teardowns conducted, and stakeholder feedback received since
the October 2023 NOPR, including comments received from Hoshizaki, ITW,
SCC, NAFEM, Due North, Hussmann, and FMI and NACS. Furthermore, as
compared to the October 2023 NOPR, DOE is adopting generally less
stringent efficiency levels in this final rule.
NAFEM indicated its belief that DOE has made high-level changes
from the October 2023 NOPR to the August 2024 NODA and did not clearly
explain what changes result from the changes made, and if they resolve
the issues which were present in the October 2023 NOPR. (NAFEM, No. 101
at p. 2)
In response to the comment from NAFEM, DOE notes that the
engineering changes from the October 2023 NOPR to August 2024 NODA were
explained in section II.A of the August 2024 NODA and are further
detailed in section IV.C.1.a.iii of this document. 89 FR 68788, 68790-
68794. For example, in section II.A.3.a of the August 2024 NODA on
evaporator fan controls, DOE explained that ``recognizing current
uncertainty as to whether such food safety requirements could be
maintained in certain applications of self-contained, closed CRE with
the use of evaporator fan controls, DOE has tentatively screened out
evaporator fan control as a design option for CRE. As a result, this
NODA presents an updated engineering analysis that does not include
evaporator fan control as a design option.'' 89 FR 68788, 68793.
In this final rule analysis, DOE is adopting TSL 3. DOE discusses
the benefits and burdens of each TSL considered and DOE's conclusion in
section V.C of this document. As discussed in that section, TSL 3
represents the maximum energy savings that are technically feasible and
economically justified, as required by EPCA.
Food Safety
In response to the October 2023 NOPR, Hillphoenix, NAMA, and NAFEM
stated that most CRE are certified to National Sanitation Foundation
(``NSF'') 7 for food safe storage, which is required by U.S. and
Canadian food safety standards and local health codes. (Hillphoenix,
No. 77 at p. 3; NAMA, No. 85 at p. 16; NAFEM, No. 83 at pp. 10-11) ITW
and NAFEM commented that to meet the energy efficiency standard
proposed in the October 2023 NOPR, equipment would require design
downgrades that would make it unable to consistently meet food safety
standards, in which safe operating temperatures are required to be
between 33 [deg]F and 40 [deg]F inside the cabinet. (ITW, No. 82 at p.
6; NAFEM, No. 83 at p. 10) NAMA requested that design options be
reviewed not only for their efficiency but also for the ability to
maintain food safe performance. (NAMA, No. 85 at p. 16) ITW added that
the proposed levels threaten to mandate equipment that cannot keep food
at safe temperatures. (ITW, No. 82 at p. 1)
In response to the October 2023 NOPR, FMI and NACS commented that,
according to their members, the October 2023 NOPR does not evaluate the
potential impact of the standards on food safety, because CRE that meet
the proposed standards may be unable to consistently meet the
refrigeration necessary to meet food safety standards. (FMI and NACS,
No. 78 at p. 3)
In response to the October 2023 NOPR, NAFEM commented that DOE's
proposed energy limits would likely force manufacturers to make the
choice between a DOE-compliant product with a smaller refrigeration
system and a product designed with adequate capacity to maintain food
safety in the many different environmental conditions and general
product conditions. (NAFEM, No. 83 at p. 11)
In response to the October 2023 NOPR and the August 2024 NODA,
Hillphoenix suggested that DOE should categorize different CRE products
based on the type of product or food displayed, and in the August 2024
NODA stated that current energy limits for CRE displaying perishable
food products are too difficult to obtain while meeting NSF 7.
(Hillphoenix, No. 77 at p. 3 and No. 110 at p. 2) In response to the
October 2023 NOPR, Hillphoenix also commented that bottle coolers
operate at warmer temperatures than CRE displaying perishable products,
in order to maintain product temperatures at 41 [deg]F or less, but
both have the same energy limits established by a single equipment
class. (Hillphoenix No. No. 77 at p. 3)
In response to the October 2023 NOPR, Ravnitzky commented that the
October 2023 NOPR should consider the impacts of energy efficiency
standards on food quality and safety and balance the benefits of energy
savings with the costs of food loss and waste. (Ravnitzky, No. 57 at p.
3)
In response to comments about reviewing design options for
efficiency but also for the ability to maintain food safe performance,
and accounting for food loss and waste, DOE notes that in this final
rule, consistent with the August 2024 NODA, DOE screened out evaporator
fan controls after review of NSF 7 and other public comments stating
that evaporator fan controls could potentially lead to internal case
temperatures outside of NSF 7 tolerances, as further discussed in
section IV.B.1.f. DOE has reviewed all design options analyzed to
improve efficiency in this final rule and has determined, based on data
and information available to DOE at the time of this final rule, that
all other design options analyzed to improve efficiency would not
affect the ability of CRE equipment to maintain food safe temperatures.
In response to Hillphoenix's comment regarding categorizing
different CRE equipment based on the type of product or food displayed,
DOE notes that the CRE equipment classes do differentiate between
frozen merchandise (i.e., low-temperature freezers and ice-cream
freezers) and refrigerated merchandise (i.e., medium-temperature
refrigerators and high-temperature refrigerators).
In response to Hillphoenix's comment regarding bottle coolers
operating at warmer temperatures than CRE displaying perishable
products, DOE notes that all equipment certified to an equipment class
must test their equipment according to the rating temperature for that
equipment class, unless the equipment meets the definition of lowest
application product temperature. See 10 CFR 431.62.
Equipment Elimination
In response to the October 2023 NOPR, SCC and NAFEM expressed
concern that the October 2023 NOPR proposed standard level would force
manufacturers to discontinue products or exit the CRE space. (SCC, No.
74 at p. 4; NAFEM, No. 83 at p. 2) NAFEM and Continental added this
would harm consumers, reduce competition, and may increase energy
consumption. (NAFEM, No. 83 at p. 2; Continental, No. 86 at p. 6)
In response to the October 2023 NOPR, Due North commented that it
still found the energy standards for the VCT.SC.M.PT and VCT.SC.M.SDPT
classes to be too stringent, given their extensive installation at
store checkout counters. (Due North, No. 87 at p. 2) Due North called
this situation a potential threat to the future existence of these
classes on the market. (Id.)
With respect to these comments regarding the stringency of the
proposed standards in the October 2023 NOPR
[[Page 7488]]
and the equipment modifications needed to meet those standards,
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)) In the
October 2023 NOPR, DOE tentatively determined that TSL 5 represented
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. 88 FR 70196, 70197. In response to the October
2023 NOPR, DOE received feedback from commenters suggesting changes to
the October 2023 NOPR analysis. After consideration of this feedback
and a review of new test data, in this final rule, DOE has adjusted
certain aspects of the October 2023 NOPR analysis approach. In this
final rule, DOE is adopting new and amended energy conservation
standards(i.e., TSL 3) that DOE has determined represent the maximum
improvement in energy efficiency that is technologically feasible and
economically justified based on the numerous revisions to inputs and
the analysis, resulting in revised analytical outputs since the October
2023 NOPR, discussed throughout section IV of this final rule. Further
detail on changes to the engineering analysis from the October 2023
NOPR can be found in section IV.C of this document.
As stated, in the preceding paragraphs, the results presented in
this final rule are generally less stringent than the standards
proposed in the October 2023 NOPR. In the October 2023 NOPR, the PT and
SDPT multiplier values were 1.04 and 1.11 respectively. 88 FR 70196,
70231. In the August 2024 NODA, DOE analyzed a single multiplier with
value of 1.07. 89 FR 68788, 68794. In this final rule, consistent with
the August 2024 NODA, DOE is analyzing equipment classes with features
that allow for higher energy use. As discussed further in section
IV.C.1.c of this document, the adjusted maximum daily energy use
equation for equipment classes with features is equal to 1.07
multiplied by the corresponding equipment class equation (adjusted for
backsliding if needed). Although the multiplier analyzed in this final
rule is less than that in the October 2023 NOPR for the SDPT
multiplier, at the representative capacity the amended standard for
VCT.SC.M with feature is 24.8 percent less stringent than the
VCT.SC.M.PT equation and 18.3 percent less stringent than the
VCT.SC.M.SDPT equation proposed in the October 2023 NOPR.
Hussmann commented that, several of its models would be required to
meet energy levels with energy use reductions up to 40 percent compared
to 2017 DOE levels, and that Hussmann already put in work to meet the
2017 limits, limiting its ability to further improve energy
consumption. (Hussmann, No. 80 at p. 10) Hussmann commented that if
reduced energy limits reduce door and lighting options available for
case energy performance, it will delay the conversion and prolong the
use of open cases using far more energy than saved by tighter limits on
door cases, leading to the obsolescence of some VCT equipment and
driving customers to substitute products in the VOP classes that
consume more energy, and Hussmann provided a table with additional
detail. (Id. at pp. 10-11) Hussmann commented also that it has been
continuously innovating for years due to marketplace demand. (Id. at p.
11) Hussmann pointed to a graph depicting its highest-volume dairy case
from 1985 to 2023 and indicating that energy consumption has been
reduced by 46 percent over the time period. (Id. at p. 12)
In response to the comment from Hussmann regarding door and
lighting technology, DOE notes that the screening criteria in IV.B of
this document screens out any technology options that are determined to
have ``a significant adverse impact on the utility of the equipment to
subgroups of consumers, or result in the unavailability of any covered
equipment type with performance characteristics (including
reliability), features, sizes, capacities, and volumes that are
substantially the same as equipment generally available in the United
States at the time.'' See section IV.B of this document for more
details. Further, in response to Hussmann's comment regarding their
efficiency improvements, DOE notes that the typical new consumer
refrigerator uses one-quarter the energy than in 1973, despite offering
20 percent more storage capacity and being available at half the retail
cost since EPCA was established in 1975, showing that there could be
more potential savings than already achieved for the example cited by
Hussmann.\24\
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\24\ See www.energy.gov/eere/buildings/articles/appliance-and-equipment-standards-fact-sheet.
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NAMA recommended that DOE champion and celebrate the changes that
the industry has been making toward energy efficiency and reduce the
demands to make additional changes. (NAMA, No. 85 at p. 9) NAMA
commented that manufacturers have made changes that have further-
reaching, more immediate impacts on energy efficiency than the design
options being shown in the engineering analysis in the October 2023
NOPR TSD. (Id.) NAMA commented that the industry would appreciate some
acknowledgement of these improvements over the past 10 years. (Id.)
Kirby stated that changes made to comply with energy conservation
standards and low-GWP HFC restrictions that went into effect in 2017
have led to price increases. (Kirby, No. 66 at pp. 1-2)
In response to the August 2024 NODA, Storemasters commented that
equipment manufacturers have already made significant changes to
equipment to comply with the 2017 standards and much of the current
equipment incorporates new refrigerants, particularly self-contained
models that utilize R-290. (Storemasters, No. 68 at p. 1)
In response to NAMA's, Kirby's, and Storemasters' comments about
the industry improvements over the past 10 years (i.e., since the
publication of the March 2014 Final Rule), DOE does acknowledge that in
response to the March 2014 Final Rule, manufacturers generally made
several changes: changing from fluorescent to LED lighting; updating
compressors to either higher efficiency compressors using HFC
refrigerants, or compressors using hydrocarbon refrigerants; improved
evaporators and condensers; and, in some cases, higher-efficiency fan
motors. These changes are acknowledged in the October 2023 NOPR and
August 2024 NODA as DOE updated the baseline design specifications and
costs for each ``primary equipment class'' (i.e., directly analyzed
class, see IV.C.1 for further description) based on test data,
manufacturer feedback, and publicly available market data (e.g., spec
sheets). See 88 FR 70196, 70225-70231, 89 FR 68788, 68792.
Kirby and Storemasters commented that additional equipment
modifications to meet the proposed standards in the October 2023 NOPR
would represent a significant burden on their business because of
increased equipment complexity and costs coupled with the potential for
reduced equipment reliability, longevity, and consumer choice. (Kirby,
No. 66 at p. 2, Storemasters, No. 68 at p. 1)
[[Page 7489]]
Storemasters also stated that the new CRE it purchases includes
significant changes over the past 6 years to comply with the 2017
standards and low-GWP HFC restrictions. (Storemasters, No. 68 at p. 1)
An individual commenter further expressed concern with the new
technologies, stating components necessary to achieve the proposed
standards add cost, complexity to the designs, and result in limiting
availability and extended lead times. (Individual Commenter, No. 70 at
p.1)
In response to the comments from Kirby and Storemasters, DOE notes
that the commenters did not specify what design options may reduce
equipment reliability. DOE screens out technology options that would
result in the unavailability of any covered equipment type with
performance characteristics (including reliability), features, sizes,
capacities, and volumes that are substantially the same as equipment
generally available in the United States at the time.
In response to the comments from Kirby, Storemasters, and an
individual commenter regarding the potential for reduced equipment
longevity and consumer choice due to increased complexity, DOE is not
aware of any data on how the analyzed design options affect equipment
lifetime and consumer choice for consumers. See section IV.B of this
document for additional information on the screening analysis and
section IV.F.6 for a discussion on CRE lifetime.
In response to the individual commenter regarding limiting
availability and extended lead times, DOE notes that the screening
analysis screens out any technology options that result in the
unavailability of any covered equipment type with performance
characteristics (including reliability), features, sizes, capacities,
and volumes that are substantially the same as equipment generally
available in the United States at the time. See section IV.B of this
final rule.
c. Rulemaking Process
In response to the October 2023 NOPR, NAMA commented that while it
appreciates DOE's willingness to schedule face-to-face meetings on
these important rulemakings, questions posed by industry
representatives during the November 2023 Public Meeting went largely
unanswered by DOE and DOE consultants beyond providing information
already provided in the October 2023 NOPR TSD or the October 2023 NOPR.
(NAMA, No. 85 at p. 4) NAMA further commented that when industry
broached many of these issues at the November 2023 Public Meeting, DOE
read prepared answers but did not answer the original questions. (Id.)
NAMA stated that there does not appear to have been any contact
between DOE consultants and its manufacturing members. (Id. at p. 6)
NAMA commented that there are no records of manufacturer interviews, no
record of emails exchanged, and no attempts made to contact these
companies. (Id.) NAMA commented also that if DOE had conferred with
manufacturers, it is more likely that the information in the October
2023 NOPR TSD would be closer to accurate information and more
reflective of today's market. (Id at p. 6)
Hussmann recommended that, in future rulemakings, DOE engage
manufacturers, component suppliers, retailers, and other stakeholders
early in the process, because Hussmann alleged their equipment has
already implemented available technologies, which yielded slight
returns in energy savings with excessive cost. (Hussmann, No. 80 at p.
15)
In response to the August 2024 NODA, NAMA added that DOE turned
down its offer to work with them and DOE did not substantially change
the NODA support document based on NAMA's comments on the October 2023
NOPR TSD. (NAMA, No. 112 at p. 3, 7)
In response to the comment from NAMA about the November 2023 Public
Meeting, DOE responded to all questions asked during the November 2023
Public Meeting to the best of its ability. (See November 2023 Public
Meeting Transcript, No. 64). In response to the comment from NAMA
regarding contact with its manufacturing members and the comment from
Hussmann about engaging manufacturers, as stated in the October 2023
NOPR, DOE's contractors reached out to a range of representative
manufacturers and conducted formal manufacturer interviews with nine
manufacturers (representing approximately 60 percent of industry CRE
shipments) in advance of the October 2023 NOPR. 88 FR 70196, 70251.
During that process, DOE's contractors reached out to NAMA to inquire
about its members' interest in participating in formal manufacturer
interviews under a nondisclosure agreement but did not receive a
response from NAMA. After the October 2023 NOPR was published, DOE held
the November 2023 Public Meeting to receive comment on the standards
proposed in the October 2023 NOPR and associated analyses and results.
DOE has engaged with manufacturers through the rulemaking process,
including hosting two Ex Parte meetings with AHRI, NAMA, and NAFEM; the
first on Friday, January 27, 2023,\25\ and the second on Monday,
September 16, 2024,\26\ and the October 2023 NOPR, the November 2023
Public Meeting, and the August 2024 NODA provided opportunity for NAMA
and its members to provide comment, data, and information on the
proposals and supporting analyses.
---------------------------------------------------------------------------
\25\ See www.regulations.gov/document/EERE-2017-BT-STD-0007-0050.
\26\ See www.energy.gov/gc/ex-parte-communications.
---------------------------------------------------------------------------
The CA IOUs recommended that DOE consider an informal or
abbreviated negotiation to maximize energy savings for this rulemaking.
(CA IOUs, No. 84 at pp. 6-7) The CA IOUs commented that they will
support this rulemaking process by submitting test data for chef bases
or griddle stands and high-efficiency, vertical, self-contained
equipment in early 2024 and that the CA IOUs plan to send test results
for prep tables to help DOE establish energy conservation standards for
this equipment class in future rulemakings. (Id. at p. 7) In the
November 2023 Public Meeting, Continental and NAFEM recommended that
there be continued dialogue between DOE and stakeholders concerning
energy efficiency standards for CRE. (November 2023 Public Meeting
Transcript, No. 64 at pp. 150, 152) Hoshizaki similarly requested
negotiations with DOE to find realistic energy savings for this
rulemaking. (Id. at p. 21)
In response to the comments from the CA IOUs, Continental, NAFEM,
and Hoshizaki, DOE appreciates the recommendation but has not pursued a
negotiation for this rulemaking. Additionally, DOE welcomes test data
for any equipment category, including chef bases or griddle stands;
buffet tables or preparation tables; or high-efficiency, vertical,
self-contained equipment, submitted by the CA IOUs or any other
stakeholder for consideration in future rulemakings.
Continental commented that the proposed rulemaking will have a
major impact on its business and pointed out that section 3(a) of 10
CFR part 430, subpart C, appendix A (``Process Rule'') specifies a 75-
day comment period while DOE is providing only 60 days--which is
insufficient for a small business like Continental to review the
October 2023 NOPR, the 567-page October 2023 NOPR TSD, and the many
other supporting documents. (Continental, No. 86 at pp. 1-2)
Continental commented also that DOE deviated from the requirement in
the Process Rule that the amended test
[[Page 7490]]
procedures be finalized at least 180 days prior to the close of the
comment period for the October 2023 NOPR, instead providing an interval
of 76 days for review and evaluation prior to the deadline of the
comment period, which Continental stated is insufficient. (Id. at pp.
2-3)
In response to the comment from Continental, DOE notes that the
current Process Rule at Section 6(b)(2) specifies that there will be
not less than 60 days for public comment on the NOPR, which is
consistent with the comment period in the October 2023 NOPR. This 60-
day period is also consistent with EPCA requirements. (42 U.S.C.
6316(e)(1); 42 U.S.C. 6295(p)). Further, the October 2023 NOPR stated
that given that the analysis presented in the NOPR remained largely the
same as the June 2022 Preliminary Analysis, and in light of the 45-day
comment period DOE had already provided with the July 2021 RFI and the
60-day comment period DOE had already provided with its June 2022
Preliminary Analysis, DOE determined that a 60-day comment period was
appropriate and provided interested parties with a meaningful
opportunity to comment on the proposed rule. 88 FR 70196, 70205. DOE
appreciates the considerable volume of comments and information it
received in response to the October 2023 NOPR and the August 2024 NODA,
which contributed to significant revisions to the final rule analysis
and aided in DOE's ability to establish efficiency levels that would be
technologically feasible and economically justified.
DOE also notes that, in the October 2023 NOPR, DOE initially
determined that the requirement that the amended test procedures be
finalized at least 180 days prior to the close of the comment period
for the October 2023 NOPR was sufficiently met because, for the
equipment whose measured energy use was impacted by the CRE test
procedure final rule (``September 2023 Test Procedure Final Rule''; 88
FR 66152 (Sept. 26, 2023)), the CRE industry has thoroughly vetted both
Air Conditioning, Heating, and Refrigeration Institute (``AHRI'') 1200-
2023 and the proposed addendum B to American Society of Heating,
Refrigerating and Air-Conditioning Engineers (``ASHRAE'') 72-2022. Id.
at 88 FR 70205. Additionally, DOE believes that stakeholders have had
sufficient time for review and evaluation of the September 2023 Test
Procedure Final Rule, especially because commenters had an additional
opportunity to provide comment on this rulemaking through the August
2024 NODA, which was published more than 180 days after the publication
of the September 2023 Test Procedure Final Rule.
Rulemaking Timeline
In response to the October 2023 NOPR, ITW commented that if DOE
cannot issue a ``no new standards'' ruling, DOE should extend the
review period by 1 year to allow for sufficient time for manufacturers
to conduct verification tests to validate the proposed energy standards
for the various new equipment categories with different door
characteristics and to provide informed comments to DOE. (ITW, No. 82
at p. 2)
Hussmann, Hillphoenix, NAFEM, FMI and NACS, and Hoshizaki requested
a pause in DOE rulemakings due to the requirements of the AIM act and
other new regulations (Hussmann, No. 80 at p. 1; Hillphoenix, No. 77 at
p. 2; NAFEM, No. 83 at p. 26; FMI and NACS, No. 78 at pp. 2-3;
Hoshizaki, No. 76 at p. 1) In response to the August 2024 NODA,
Hillphoenix commented requesting a pause in rulemakings for CRE given
the ongoing efforts to transition to new refrigerants, pursuant to the
AIM Act. (Hillphoenix, No. 110 at p. 2) In response to the October 2023
NOPR, Hoshizaki, SCC, AHRI, ITW, NAFEM, and Hussmann commented that a
delay in the rulemaking would allow additional time for manufacturers
to complete the transition to low-GWP refrigerants (Hoshizaki, No. 76
at pp. 1-2, 7; SCC, No. 74 at p. 2; AHRI, No. 81 at p. 5; ITW, No. 82
at p. 1; NAFEM, No. 83 at p. 26; Hussmann, No. 80 at pp. 6-7, 10)
In response to comments requesting that DOE pause or delay the
rulemaking, DOE is statutorily required to publish either a NOPD, if it
finds that standards for the equipment do not need to be amended, or a
NOPR including new proposed energy conservation standards not later
than 6 years after the issuance of any final rule establishing or
amending a standard. (42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(m)(1)) Not
later than two years after a NOPR is issued, DOE must publish a final
rule amending the energy conservation standard for the equipment. (42
U.S.C. 6316(e)(1); 42 U.S.C. 6295(m)(3)(A)) The final rule that amended
the current standards for CRE was issued in 2014. DOE is conducting
this rulemaking pursuant to these statutory requirements. Additionally,
pursuant to a consent decree entered on September 20, 2022 and amended
on September 25, 2024, DOE has agreed to sign and post on DOE's
publicly accessible website a rulemaking document for CRE by December
30, 2024, that, when effective, would be DOE's final agency action for
standards for CRE.\27\ Regarding delaying compliance due to the
transition to low-GWP refrigerants, see sections III.A.2.a and IV.J.3.f
of this document.
---------------------------------------------------------------------------
\27\ Consent Decree, Nat. Res. Def. Council, Inc. v. Granholm,
No. 1:20-cv-09127 (S.D.N.Y.), Sept. 20, 2022).), Amend. Consent
Decree, State of N.Y. v. Granholm, No. 1:20-cv-09362 (S.D.N.Y. Sept.
25, 2024). See www.nrdc.org/sites/default/files/ee-standards-settlement-20220920.pdf. September 25, 2024 amendment available at
ecf.nysd.uscourts.gov/doc1/127136202802.
---------------------------------------------------------------------------
In response to the August 2024 NODA, GAAS, NAMA, and Zero Zone
commented that DOE did not allow sufficient time to review the
documents, with an updated support document version published 10 days
before the end of the comment period. (GAAS, No. 96 at p. 2; NAMA, No.
112 at p. 3; Zero Zone, No. 114 at p. 1) Zero Zone also commented that
DOE should have made a comparison of changes between the October 2023
NOPR TSD and NODA support document. (Zero Zone, No. 114 at p.1)
In response to these comments, DOE notes that updates to the NODA
support document were minor clarifications, and all changes were
detailed under ``Revision History'' in Section 8. With regards to Zero
Zone's request for a list of changes, DOE detailed any changes from the
October 2023 NOPR throughout the August 2024 NODA.
B. Scope of Coverage
This final rule covers the commercial refrigeration equipment that
meet the definition of ``commercial refrigerators, freezers, and
refrigerator-freezers,'' as codified at 10 CFR 431.62.
``Commercial refrigerators, freezers, and refrigerator-freezers''
means refrigeration equipment that: (1) is not consumer equipment (as
defined in section 430.2 of part 430); (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. 10 CFR 431.62.
In the October 2023 NOPR, DOE proposed establishing equipment
classes for high-temperature refrigerators and chef bases or griddle
stands. 88 FR 70196, 70214-70215. DOE
[[Page 7491]]
received several comments in response to the October 2023 NOPR
regarding this proposal.
In response to the October 2023 NOPR, NYSERDA and NEEA and NWPCC
supported DOE's addition of chef bases and high-temperature
refrigerators to the scope of coverage for the CRE energy conservation
standards, agreeing with DOE's assertion that there are technically
feasible opportunities for significant cost-effective energy savings
from these categories. (NYSERDA, No. 88 at p. 1; NEEA and NWPCC, No. 89
at pp. 4-5)
In response to the October 2023 NOPR, Continental disagreed with
DOE's proposal to include standards for refrigerated chef bases and
griddle stands at this time. (Continental, No. 86 at p. 2) Continental
commented that while it concurred with this decision in the September
2023 Test Procedure Final Rule to prescribe new test conditions for
refrigerated chef bases and griddle stands, actual testing has not been
conducted to form a basis for establishing standards efficiency levels
at the mandated conditions. (Id. at pp. 2-3)
In response to the comment from Continental comment about lack of
test data, as discussed in section IV.C.1.c of this document, DOE has
tested chef bases or griddle stands per the amended test procedure
prescribed by the September 2023 Test Procedure Final Rule. In
addition, manufacturers have had additional time to test chef bases and
submit data since the publication of the October 2023 NOPR, and the
August 2024 NODA provided additional opportunity to comment on the chef
base or griddle stand analysis. For example, the CA IOUs commented on
the August 2024 NODA stating that they conducted testing on CRE units,
including chef bases or griddle stands. (The CA IOUs, No. 113, at p.
2). The CA IOUs tested 15 vertical solid door units (9 VCS.SC.M, 6
VCS.SC.L) and 5 chef bases or griddle stands (3 CB.SC.M, 2 CB.SC.L) to
evaluate daily energy consumption and performance. Id. The CA IOUs
commented that with DOE's test data published in the August 2024 NODA,
the CA IOUs can confirm that the daily energy consumption values for
the units they tested are consistent with DOE's data, and that the CA
IOUs plan to share anonymized test results with the public once the CA
IOUs finalize their test report. Id.
Therefore, DOE continues to include high-temperature refrigerators
and chef bases and griddle stands within the scope of this final rule.
However, the scope of this final rule 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, mobile
refrigerated cabinets, refrigerated bottled- or canned-beverage vending
machines, and, as discussed in section II.B.3 of this document, the
large-capacity CRE ranges presented in table IV.6 for the VOP.SC.M,
SVO.SC.M, HZO.SC.L, SOC.SC.M, VCT.SC.M, VCT.SC.L, and VCS.SC.L
equipment classes.
See section IV.A.1 of this document for discussion of the equipment
classes analyzed in this final rule.
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 as
the basis for certifying to DOE that their product complies with the
applicable energy conservation standards and as the basis for any
representations regarding the energy use or energy efficiency of the
equipment. (42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(s); and 42 U.S.C.
6314(d)). Similarly, DOE must use these test procedures to evaluate
whether a basic model complies with the applicable energy conservation
standard(s). 10 CFR 429.110(e). The current test procedure for CRE is
codified at appendix B and includes provisions for determining daily
energy consumption, the metric on which current standards are based. 10
CFR 431.66(e) This test procedure was amended in the September 2023
Test Procedure Final Rule, in which DOE amended and established test
procedures for CRE as follows:
(1) Established new definitions for high-temperature
refrigerator, medium-temperature refrigerator, low-temperature
freezer, and mobile refrigerated cabinet, and amended the definition
for ice-cream freezer;
(2) Incorporated by reference the most current versions of
industry standards AHRI 1200, ASHRAE 72, and AHRI 1320;
(3) Established definitions and a new appendix C including test
procedures for buffet tables and preparation tables;
(4) Established definitions and a new appendix D including test
procedures for blast chillers and blast freezers;
(5) Amended the definition and certain test conditions for chef
bases or griddle stands;
(6) Specified refrigerant conditions for CRE that use R-744;
(7) Allowed for certification of compartment volumes based on
computer-aided design (``CAD'') models;
(8) Incorporated provisions for defrosts and customer order
storage cabinets specified in waivers and interim waivers;
(9) Adopted product-specific enforcement provisions;
(10) Clarified use of the lowest application product temperature
(``LAPT'') provisions;
(11) Removed the obsolete test procedure in appendix A; and
(12) Specified a sampling plan for volume and total display area
(``TDA'').
88 FR 66152, 66154.
In response to the October 2023 NOPR, Ravnitzky commented that the
proposed rule lacks clear and detailed guidance on the test conditions
and procedures for measuring energy consumption in CRE that use
alternative refrigerants, such as hydrocarbons or CO2.
(Ravnitzky, No. 57 at pp. 1-2) Ravnitzky added that these alternative
refrigerants have different performance characteristics than
conventional HFC refrigerants and may require different test methods to
ensure accurate and consistent results. (Id. at p. 2) Ravnitzky
suggested that DOE specify or reference the test conditions and
procedures for measuring the energy consumption of CRE that use
alternative refrigerants, and that these should be consistent with
ASHRAE or AHRI standards or best practices for testing CRE. (Id.)
In response to the comment from Ravnitzky, the DOE CRE test
procedure for CRE currently subject to energy conservation standards at
10 CFR 431.66(e) is located at appendix B and is applicable to CRE
using any type of refrigerant. DOE notes that, consistent with ASHRAE
72-2022 with Errata, testing for self-contained equipment with
hydrocarbon refrigerants (e.g., R-290), CO2 refrigerant
(i.e., R-744), or A2L refrigerants does not require a different test
method than for self-contained equipment using conventional
refrigerants. In appendix B, DOE provides specific instructions for CRE
connected to a direct-expansion remote-condensing unit with R-744,
which requires different liquid refrigerant measurements than direct-
expansion remote-condensing units specified in appendix A to ASHRAE 72-
2022 with Errata. Therefore, the appendix B is applicable to CRE using
any type of refrigerant and is consistent with industry standards.
NEEA and NWPCC expressed concern that the October 2023 NOPR misses
savings opportunities for the remote condensing equipment classes.
(NEEA and NWPCC, No. 89 at p. 4) Specifically, NEEA and NWPCC
recommended that remote condenser energy be accounted for in the
testing and rating of CRE so that these energy-saving features can be
assessed in the
[[Page 7492]]
energy use analysis. (Id.).\28\ NEEA and NWPCC explained that DOE's
present analysis does not test the remote condenser; therefore, the
energy-saving design options that impact the consumption of the remote
condenser do not impact the tested rating. (Id.) NEEA and NWPCC
commented that this approach fails to consider efficiency options such
as ECMs, evaporator fans, variable-speed compressors (``VSCs''), or
controls for remote condensing CRE--all of which create opportunities
for significant energy savings. (Id.)
---------------------------------------------------------------------------
\28\ Remote condenser energy use is addressed in the current
test procedure with standardized EER values rather than direct
measurement of remote condenser performance. See section 5.1 of AHRI
1200-2023.
---------------------------------------------------------------------------
In response to the comment from NEEA and NWPCC, the definition of
``commercial refrigerator, freezer, and refrigerator-freezer'' was
established in EPCA. See 42 U.S.C. 6311(9)(A). The definition requires
that the refrigeration equipment is connected to a self-contained
condensing unit or to a remote condensing unit. The self-contained
condensing unit is defined as an integral part of the refrigerated
equipment, whereas the remote condensing unit is defined as being
remotely located from the refrigerated equipment. Based on these
definitions, the remote condensing unit energy use is currently
accounted for by the DOE test procedure through a calculation approach
specified in section 5.1 of AHRI 1200-2023, which is incorporated by
reference in the DOE test procedure at appendix B. In the September
2023 Test Procedure Final Rule, DOE stated it is aware of remote
condensing CRE models for which specific dedicated condensing units are
intended for use with specific refrigerated cases. 88 FR 66152, 66205.
For CRE used with dedicated condensing units, the actual compressor
used during normal operation is known (i.e., the compressor in the
dedicated condensing unit). Id. Accordingly, testing the whole system
using the same approach as required for a self-contained CRE unit may
produce energy use results that are more representative of how this
equipment actually operates in the field. Id. DOE understands that
remote CRE are most commonly installed with rack condensing systems,
and that installations with dedicated condensing units represent a very
small portion of the remote CRE market. Id. DOE is not aware of any
remote CRE that are capable of installations only with a dedicated
remote condensing unit (i.e., DOE expects that all remote CRE may be
installed with rack condensing systems). Id. In the June 2022 NOPR, DOE
requested comment on its tentative determination not to propose amended
test procedures for dedicated remote condensing units. Id. DOE only
received comments agreeing with the June 2022 NOPR approach and DOE
determined not to adopt test provisions for dedicated remote condensing
units at this time. Id.
In response to the October 2023 NOPR, Continental commented that
designing commercial refrigerators and freezers with technology options
to meet energy limits in 75 [deg]F/55-percent relative humidity
(``RH'') ambient conditions has shown to cause performance issues when
these technologies are employed in real-world commercial kitchen
conditions. (Continental, No. 86 at p. 3)
In response to the August 2024 NODA, Continental disagreed with DOE
establishing test procedures and efficiency standards for commercial
refrigerators and freezers using ambient testing conditions of 75
[deg]F/55 percent RH, stating that these conditions do not correspond
with energy consumption during a representative average use period as
required by EPCA. (Continental, No. 107 at p. 2)
In response to the October 2023 NOPR and August 2024 NODA, Delfield
disagreed with the 86 [deg]F test ambient criteria for chef bases/
griddle stands because it conflicts with the recently established
Energy Star requirement, creating additional burden for manufacturers
by requiring different test rooms from other equipment that is tested
at 75/55 percent, and because it creates confusion for end-users when
comparing energy consumption between unit types. (Delfield, No. 71, p.
1; Delfield, No. 99 at p. 2) Delfield added that 75/55 percent has been
the primary ambient condition for CRE for around 40 years so they do
not see a reason that this should change. (Id.) Delfield requested that
DOE review this change and align with Energy Star version 5 regulations
for ambient conditions and energy usage. (Id. at pp. 2-3)
In response to the comments from Continental and Delfield, the test
procedure for equipment included in the scope of this rulemaking is
prescribed at 10 CFR 431.64 and appendix B, and was finalized in the
September 2023 Test Procedure Final Rule. As part of the test procedure
rulemaking process, DOE provided stakeholders opportunity to comment on
potential test procedure amendments, including on test conditions such
as ambient temperature and humidity for testing. The September 2023
Test Procedure Final Rule provides discussion of its deliberations in
finalizing test procedures, for example regarding test ambient
conditions for chef bases in section III.C.4 of the September 2023 Test
Procedure Final Rule. See 88 FR 66152, 66203 (Sept. 26, 2023). DOE
notes that the September 2023 Test Procedure Final Rule is consistent
with the proposed addendum B to ASHRAE 72-2022,\29\ which proposes the
same test conditions for chef bases or griddle stands as in the DOE
test procedure. In response to the comment from Delfield regarding end
users' comparisons of products, DOE noted in the September 2023 Test
Procedure Final Rule that manufacturers may not offer CRE in a
different CRE equipment class with similar designs to any chef base or
griddle stand, in which case end-users are likely concerned primarily
about comparing chef bases or griddle stands to each other at the same
ambient conditions. 88 FR 66152, 66200.
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\29\ See www.ashrae.org/file%20library/technical%20resources/standards%20and%20guidelines/standards%20addenda/72_2022_b_20240830.pdf.
---------------------------------------------------------------------------
Hoshizaki and AHRI disagreed that the DOE test procedure for
refrigerated buffet and preparation tables was a valid test procedure.
(Hoshizaki, No. 76 at p. 2; AHRI, No 81 at p.6) Hoshizaki encouraged
DOE to work with industry to make ASTM F2143, which is currently under
review for final changes and votes, a valid test procedure with changes
DOE requests. (Hoshizaki, No. 76 at p. 2)
In response to Hoshizaki and AHRI, DOE notes that the DOE test
procedure for refrigerated buffet and preparation tables, located at
appendix C to subpart C of part 431, already references the latest
version of ASTM F2143 as one of several references for the test
procedure for refrigerated buffet and preparation tables. As noted in
the September 2023 Test Procedure Final Rule, DOE evaluated ASTM F2143-
16 and identified the need for additional provisions or alternate
requirements. 88 FR 66152, 66175. DOE noted that NSF 7 is intended to
ensure refrigerating performance and food safety, not energy use; while
ASTM F2143-16 was developed to evaluate energy performance, and with
the additional requirements established in the September 2023 Test
Procedure Final Rule, DOE determined that referencing ASTM F2143-16 is
appropriate and meets the EPCA requirements. Id. DOE will consider any
updates to industry test standards that are currently incorporated by
reference, as well as any potential new industry test
[[Page 7493]]
standards relevant to refrigerated buffet and preparation tables in
future test procedure rulemakings.
See section IV.A.1.c for additional comments and responses on
refrigerated buffet or preparation tables and blast chillers and
freezers.
ITW and NAFEM also commented that DOE's current test procedure
tests CRE in given ambient temperature, humidity, and door opening
conditions that fall short of actual field conditions. (ITW, No. 82 at
p. 6; NAFEM, No. 83 at pp. 10-11) ITW and NAFEM commented that the
total door-open time that the ASHRAE 72 test calls for amounts to 0.6
percent of a commercial refrigerator's operating day, whereas based on
its empirical application data, a reach-in refrigerator in a 24-hour
quick-service restaurant kitchen is open nearly 25 percent of the time,
and a freezer is open nearly 12 percent of the time. (ITW, No. 82 at p.
6; NAFEM, No. 83 at p. 10) NAFEM also commented that most CRE are
certified to NSF 7 for food storage, which requires passing a test at
100 [deg]F. (NAFEM, No. 83 at p. 10) ITW commented that quickly
restoring safe operating temperatures inside the cabinet requires a
sizable refrigeration system and, unfortunately, this workload requires
more electricity than the proposed regulations would allow. (ITW, No.
82 at p. 6) NAFEM stated that CRE must be designed with enough capacity
to meet both NSF and customers' requirements, meaning large enough
refrigeration systems to operate in these environments. (NAFEM, No. 83
at p. 11) NAFEM commented that CRE may not be able to keep potentially
hazardous food products at safe temperatures when conditions are
unfavorable under the proposed standards. (Id.)
In response to ITW and NAFEM's comments on the DOE test procedure
not aligning with field conditions, EPCA sets forth the criteria and
procedures DOE must follow when prescribing or amending test procedures
for covered equipment. 42 U.S.C. 6314. EPCA requires that any test
procedures prescribed or amended under this section must be reasonably
designed to produce test results which reflect energy efficiency,
energy use, or estimated annual operating cost of a given type of
covered equipment during a representative average use cycle, and
requires that test procedures not be unduly burdensome to conduct. (42
U.S.C. 6314(a)(2)). With respect to CRE, EPCA requires DOE to use the
test procedures determined by the Secretary to be generally accepted
industry standards, or industry standards developed or recognized by
the American Society of Heating, Refrigerating, and Air-Conditioning
Engineers (``ASHRAE'') or American National Standards Institute
(``ANSI''). (42 U.S.C. 6314(a)(6)(A)(i)) With regard to self-contained
CRE to which statutory standards are applicable, the required initial
test procedure is the ASHRAE 117 test procedure in effect on January 1,
2005. (42 U.S.C. 6314(a)(6)(A)(ii)) Additionally, EPCA requires that if
ASHRAE 117 is amended, the Secretary shall, by rule, amend the test
procedure for the product as necessary to ensure that the test
procedure is consistent with the amended ASHRAE 117 test procedure,
unless the Secretary makes a determination, by rule, and supported by
clear and convincing evidence, that to do so would not meet the
statutory requirements regarding representativeness and burden. (42
U.S.C. 6314(a)(6)(E)) Finally, EPCA states that if a test procedure
other than the ASHRAE 117 test procedure is approved by ANSI, DOE must
review the relative strengths and weaknesses of the new test procedure
relative to the ASHRAE 117 test procedure and adopt one new test
procedure for use in the standards program. (42 U.S.C.
6314(a)(6)(F)(i)) In the September 2023 Test Procedure Final Rule, DOE
determined that the amended DOE test procedure, by reference to AHRI
1200-2023 and ASHRAE 72-2022 with Errata for conventional CRE, provides
a measure of energy use of CRE during a representative average use
cycle and is not unduly burdensome to conduct. 88 FR 66152, 66205. DOE
notes that the test procedure instructions in section 2.3 of appendix B
allow for the use of integrated average temperatures and ambient
conditions used for NSF testing in place of the DOE-prescribed
integrated average temperatures and ambient conditions provided they
result in a more stringent test.
In response to NAFEM and ITW's comments on refrigeration system
size, DOE notes that no specific information on the refrigeration size
to meet food safety requirements was received, and that DOE's
representative analysis accounts for a variety of equipment when
analyzing design specifications, including refrigeration system size.
DOE further discusses food safety in relation to design options in
section IV.B.1.f.
D. Technological Feasibility
1. General
As discussed, 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))
To determine whether potential amended standards would be
technologically feasible, DOE first develops a list of all known
technologies and design options that could improve the efficiency of
the products or equipment that are the subject of the rulemaking. DOE
considers technologies incorporated in commercially available products
or in working prototypes to be ``technologically feasible.'' 10 CFR
431.4; 10 CFR 430, subpart C, appendix A, sections 6(b)(3)(i) and
7(b)(1). Section IV.A.3 of this document discusses the technology
options identified by DOE for this analysis. For further details on the
technology assessment conducted for this final rule, see chapter 3 of
the final rule TSD.
After DOE has determined which, if any, technologies and design
options are technologically feasible, it further evaluates each
technology and design option in light of the following additional
screening criteria: (1) practicability to manufacture, install, and
service; (2) adverse impacts on product utility or availability; (3)
adverse impacts on health or safety; and (4) unique-pathway proprietary
technologies. 10 CFR 431.4; 10 CFR part 430, subpart C, appendix A,
sections 6(b)(3)(ii)-(v) and 7(b)(2)-(5). Those technology options that
are ``screened out'' based on these criteria are not considered
further. Those technology options that are not screened out are
considered as potential design options for the basis for higher
efficiency levels that DOE could consider for potential amended
standards. Section IV.B of this document discusses the results of this
screening analysis conducted for this final rule. For further details
on the screening analysis conducted for this final rule, see chapter 4
of the final rule TSD.
2. Maximum Technologically Feasible Levels
EPCA requires that for any proposed rule that prescribes an amended
or new energy conservation standard, or prescribes no amendment or no
new standard for a type (or class) of covered equipment, DOE must
determine the maximum improvement in energy efficiency or maximum
reduction in energy use that is technologically feasible for each type
(or class) of covered equipment. (42 U.S.C. 6316(e)(1); 42 U.S.C.
6295(p)(1)) Accordingly, in the engineering analysis, DOE identifies
the maximum efficiency level currently available on
[[Page 7494]]
the market. DOE also defines a ``max-tech'' efficiency level,
representing the maximum theoretical efficiency that can be achieved
through the application of all available technology options retained
from the screening analysis.\30\ In many cases, the max-tech efficiency
level is not commercially available because it is not currently
economically feasible.
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\30\ In applying these design options, DOE would only include
those that are compatible with each other that when combined, would
represent the theoretical maximum possible efficiency.
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The max-tech levels that DOE determined for this analysis are
described in section IV.C.1.b of this document and in chapter 5 of the
final rule TSD.
E. Energy Savings
1. Determination of Savings
For each TSL, DOE projected energy savings from application of the
TSL to CRE purchased during the 30-year period that begins in the year
of compliance with the new and amended standards (2029-2058).\31\ The
savings are measured over the entire lifetime of CRE purchased during
the 30-year analysis period. DOE quantified the energy savings
attributable to each TSL as the difference in energy consumption
between each standards case and the no-new-standards case. The no-new-
standards case represents a projection of energy consumption that
reflects how the market for a product would likely evolve in the
absence of new and amended energy conservation standards.
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\31\ DOE also presents a sensitivity analysis that considers
impacts for products shipped in a 9-year period.
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DOE used its national impact analysis (``NIA'') spreadsheet models
to estimate NES from amended or 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 products at the locations where they are used. For
electricity, DOE reports NES in terms of primary energy savings, which
is the savings in the energy that is used to generate and transmit the
site electricity. For natural gas, the primary energy savings are
considered to be equal to the site energy savings. 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.\32\
DOE's approach is based on the calculation of an FFC multiplier for
each of the energy types used by covered products or equipment. For
more information on FFC energy savings, see section IV.H.2 of this
document.
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\32\ The FFC metric is discussed in DOE's statement of policy
and notice of policy amendment. 76 FR 51282 (Aug. 18, 2011), as
amended at 77 FR 49701 (Aug. 17, 2012).
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2. Significance of Savings
To adopt any new or amended standards for a 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.\33\ For
example, some covered products and equipment have most of their energy
consumption occur during periods of peak energy demand. The impacts of
these products on the energy infrastructure can be more pronounced than
the impacts of products with relatively constant demand. Accordingly,
DOE evaluates the significance of energy savings on a case-by-case
basis, taking into account the significance of cumulative FFC national
energy savings, the cumulative FFC emissions reductions, and the need
to confront the global climate crisis, among other factors.
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\33\ The numeric threshold for determining the significance of
energy savings established in a final rule published on February 14,
2020 (85 FR 8626, 8670) was subsequently eliminated in a final rule
published on December 13, 2021 (86 FR 70892).
---------------------------------------------------------------------------
As stated, the standard levels adopted in this final rule are
projected to result in NES of 1.11 quad full-fuel-cycle (``FFC''), the
equivalent of the primary annual energy use of 7.4 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 determined
the energy savings from the standard levels adopted in this final rule
are ``significant'' within the meaning of 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 rulemaking.
a. Economic Impact on Manufacturers and Consumers
In determining the impacts of potential new or amended standards on
manufacturers, DOE conducts an MIA, as discussed in section IV.J of
this document. First, DOE uses an annual cash flow approach to
determine the quantitative impacts. This step includes both a short-
term assessment--based on the cost and capital requirements during the
period between when a regulation is issued and when entities must
comply with the regulation--and a long-term assessment over a 30-year
period. The industry-wide impacts analyzed include: (1) INPV, which
values the industry on the basis of expected future cash flows; (2)
cash flows by year; (3) changes in revenue and income; and (4) other
measures of impact, as appropriate. Second, DOE analyzes and reports
the impacts on different types of manufacturers, including impacts on
small manufacturers. Third, DOE considers the impact of standards on
domestic manufacturer employment and manufacturing capacity, as well as
the potential for standards to result in plant closures and loss of
capital investment. Finally, DOE takes into account cumulative impacts
of various DOE regulations and other regulatory requirements on
manufacturers.
For individual consumers, measures of economic impact include the
changes in LCC and PBP associated with new or amended standards. These
measures are discussed further in the following section. For consumers
in the aggregate, DOE also calculates the national NPV of the consumer
costs and benefits expected to result from particular standards. DOE
also evaluates the impacts of potential standards on identifiable
subgroups of consumers that may be affected disproportionately by a
standard.
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 analyses.
The LCC is the sum of the purchase price of an equipment (including
its installation) and the operating cost (including energy,
maintenance, and repair expenditures) discounted over
[[Page 7495]]
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 a 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 analyses, DOE assumes that consumers will
purchase the covered equipment in the first year of compliance with new
or amended standards. The LCC savings for the considered efficiency
levels are calculated relative to the case that reflects projected
market trends in the absence of new or amended standards. DOE's LCC and
PBP analyses are 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 IV.H of this document,
DOE uses the NIA spreadsheet models to project NES.
d. Lessening of Utility or Performance of Products
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
adopted in this document would not reduce the utility or performance of
the equipment under consideration in this rulemaking.
e. Impact of Any Lessening of Competition
EPCA directs DOE to consider the impact of any lessening of
competition, as determined in writing by the Attorney General, that is
likely to result from a 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 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)) To assist the Department of Justice
(``DOJ'') in making such a determination, DOE transmitted copies of its
proposed rule and the October 2023 NOPR TSD to the Attorney General for
review, with a request that DOJ provide its determination on this
issue. In its assessment letter responding to DOE, DOJ concluded that
the proposed energy conservation standards for CRE are unlikely to have
a significant adverse impact on competition. DOE is publishing the
Attorney General's assessment at the end of this final rule.
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 adopted 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 adopted 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(a);
42 U.S.C. 6295(o)(2)(B)(iii)) DOE's LCC and PBP analyses generate
values used to calculate the effect potential amended energy
conservation standards would have on the PBP for consumers. These
analyses include, but are not limited to, the 3-year PBP 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 document.
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 considered in this document. The first tool is a spreadsheet
that calculates the LCC savings and PBP of potential amended or new
energy conservation
[[Page 7496]]
standards. The NIA uses a second spreadsheet set that provides
shipments projections and calculates NES and NPV 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 rulemaking: www.energy.gov/eere/buildings/commercial-refrigeration-equipment. Additionally, DOE used output from
the latest version of the Energy Information Administration's
(``EIA's'') Annual Energy Outlook (``AEO'') 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) market and
industry trends, and (5) 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 final rule TSD for further discussion of the market and technology
assessment.
1. Equipment Classes and Definitions
When evaluating and establishing or amending energy conservation
standards, DOE establishes separate standards for a group of covered
equipment (i.e., establish a separate equipment class) based on the
type of energy used, or if DOE determines that an equipment'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 considers such factors as the utility of the feature to the
consumer and other factors DOE determines are appropriate. (Id.)
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. The October 2023 NOPR proposed some new equipment
classes. In this final rule, DOE is maintaining the equipment classes
and definitions proposed in the October 2023 NOPR as well as adopting
several new equipment class modifications and new definitions that were
introduced in the August 2024 NODA. The current equipment classes and
the new definitions and equipment class modifications being finalized
in this document and considered in the analysis are outlined as
follows.
a. Current Equipment Classes and Definitions
DOE currently separates CRE into 49 equipment classes, which are
categorized according to the following physical and functional
attributes and equipment efficiency:
(1) operating temperature--refrigerator (>=32 [deg]F), freezer
(<32 [deg]F), or ice-cream freezer (<=-5 [deg]F);
(2) presence of doors--open (without doors) or closed (with
doors);
(3) door type--solid or transparent;
(4) condensing unit--remote or self-contained;
(5) configuration--horizontal, vertical, semivertical, or
service over counter; and
(6) temperature pull-down capability.
Definitions supporting the current 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).
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 section 430.2 of
part 430);
(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, semivertically, 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.
Low-temperature freezer means a commercial freezer that is not an
ice-cream freezer.
Medium-temperature refrigerator means a commercial refrigerator
that is capable of an operating temperature at or below 40.0 [deg]F.
Pull-down temperature application means a commercial refrigerator
with doors that, when fully loaded with 12-ounce beverage cans at 90
[deg]F, can cool those beverages to an average stable temperature of 38
[deg]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 one or more refrigerant compressors, refrigerant
[[Page 7497]]
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 one 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) (incorporated by reference, see section
431.63), 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 the March 2014 Final Rule that
established the current equipment classes and corresponding standards
for CRE. 79 FR 17725. Table IV.1 shows the current CRE equipment
classes and standards.
BILLING CODE 6450-01-P
[[Page 7498]]
[GRAPHIC] [TIFF OMITTED] TR21JA25.102
[[Page 7499]]
BILLING CODE 6450-01-C
b. Modifications to Equipment Classes and Definitions
Since the publication of the March 2014 Final Rule, there have been
several proposed modifications to the equipment classes and definitions
for CRE.
Chef Bases or Griddle Stands and High-Temperature Refrigerators
In the September 2023 Test Procedure Final Rule amending and
establishing test procedures for CRE, 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 an integrated average temperature (``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 September 2023
Test Procedure Final Rule for chef bases or griddle stand and high-
temperature refrigerator 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.\34\
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\34\ The definition for ``chef base or griddle stand'' was
established in the April 2014 CRE Test Procedure Final Rule. 79 FR
222778, 22282 (April 24, 2014). However, DOE has not, prior to this
rulemaking, established standards for chef bases or griddle stands.
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High-temperature refrigerator means a commercial refrigerator that
is not capable of an operating temperature at or below 40.0 [deg]F.
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
indicated that it was considering establishing standards for chef bases
or griddle stands with operating temperatures of >= 32 [deg]F or < 32
[deg]F, because this equipment is currently excluded from energy
conservation standards.\35\ See chapter 3 of the June 2022 Preliminary
TSD.
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\35\ See 10 CFR 431.66(f).
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In the October 2023 NOPR, based on CRE models certified to DOE's
Compliance Certification Database (``CCD'') under the lowest
application product temperature \36\ (``LAPT'') designation for
commercial refrigerators, DOE proposed that high-temperature
refrigerators be categorized under the self-contained and remote
condensing unit configurations and under the VCT, VCS, SOC, VOP, SVO,
and HZO equipment families. 88 FR 70196, 70213. For these equipment
families with high-temperature equipment, DOE proposed to subcategorize
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). Id. DOE proposed to maintain a single class for both
medium and high temperature refrigerators, 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 base or griddle
stand (``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). Id. For the October
2023 NOPR, DOE directly analyzed high-temperature refrigerators in the
self-contained condensing unit configuration for the VCT and VCS
equipment families. Id.
---------------------------------------------------------------------------
\36\ Lowest application product temperature means the integrated
average temperature (or for buffet tables or preparation tables, the
average pan temperature of all measurements taken during the test)
at which a given basic model is capable of consistently operating
that is closest to the integrated average temperature (or for buffet
tables or preparation tables, the average pan temperature of all
measurements taken during the test) specified for testing under the
DOE test procedure. 10 CFR 431.62.
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In the October 2023 NOPR, DOE also tentatively determined that chef
bases or griddle stands can be categorized under the remote condensing
or self-contained condensing unit configurations and the >= 32 [deg]F
or < 32 [deg]F operating temperatures (i.e., commercial refrigerator or
low-temperature freezer, respectively). Id.
Therefore, in the October 2023 NOPR, DOE considered potential
equipment classes for high-temperature refrigerators and chef bases or
griddle stands and proposed potential equipment class structure
modifications as presented in table IV.2. Id. at 88 FR 70214.
[[Page 7500]]
[GRAPHIC] [TIFF OMITTED] TR21JA25.103
[[Page 7501]]
[GRAPHIC] [TIFF OMITTED] TR21JA25.104
In response to the October 2023 NOPR, ASAP et al. commented that
they supported DOE's proposed standards for chef bases or griddle
stands, which for medium- and low-temperature chef bases or griddle
stands (CB.SC.M, CB.SC.L) would reduce energy usage by over 50 percent
versus a baseline unit and provide significant cost savings for
purchasers. (ASAP et al., No. 79 at p. 2) ASAP et al. supported DOE's
proposed standards for high-temperature refrigerators, stating that by
moving away from existing medium-temperature standards, the new
procedure better accounts for expected differences in energy use
between medium- and high-temperature units. (Id.)
In this final rule, DOE is finalizing definitions and new equipment
classes as proposed in the October 2023 NOPR for high-temperature
refrigerators, medium-temperature refrigerators, ice-cream freezers,
low-temperature freezers, and chef bases or griddle stands. In this
final rule, DOE is also finalizing the same equipment class
modifications, as proposed in the October 2023 NOPR, outlined in table
IV.2.
New and Amended Definitions Adopted in This Final Rule
To account for the unique features and different energy use
characteristics of certain types of CRE, in the October 2023 NOPR, DOE
proposed to allow certain equipment classes that contain CRE with
unique design characteristics, such as forced-air evaporators, pass-
through doors, roll-in doors, roll-through doors, and sliding doors, to
use a higher amount of energy than the newly proposed standards for
their counterpart equipment without these features, defined using a
``multiplier'' value unique for each characteristic such that maximum
energy use for a model with the characteristic is equal to the
multiplier multiplied by the unadjusted maximum energy use for the
equipment class. As proposed in the October 2023 NOPR, this equipment
has the specified performance-related features and different maximum
energy use to represent separate additional equipment classes. The
multiplier values were selected with consideration that maximum allowed
energy use for these models would comply with EPCA's ``anti-
backsliding'' provision. 88 FR 70196, 70213. Therefore, in the October
2023 NOPR, DOE proposed definitions, to distinguish models with the
unique design features, for the terms ``cold-wall evaporator,''
``forced-air evaporator,'' ``pass-through doors,'' ``roll-in door,''
``roll-through doors,'' and ``sliding door,'' at 10 CFR 431.62. 88 FR
70196. Id. at 88 FR 70212-70213. These definitions, as proposed in the
October 2023 NOPR, are as follows:
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.
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
[[Page 7502]]
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.
Section IV.C.1.a of this document discusses energy use allowances
for CRE with the unique features defined in this section.
In the October 2023 NOPR, DOE also reviewed the current definitions
for CRE at 10 CFR 431.62 and proposed to revise the definition for
``rating temperature'' to update the reference to the required IAT or
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.
In response to the October 2023 NOPR, SCC agreed with DOE's
definitions for ``cold-wall evaporator,'' ``forced-air evaporator,''
``pass-through door,'' ``roll-in door,'' ``roll-through door,''
``sliding door,'' and ``rating temperature.'' (SCC, No. 74 at p. 3)
In response to the October 2023 NOPR, DOE received comments
suggesting additional design features that should be provided
additional energy use allowance, and definitions to distinguish them.
ITW and Delfield recommended that DOE add definitions and energy use
allowances for cabinets with drawers. (ITW, No. 82 at pp. 2, 4;
Delfield, No. 71 at p. 2)
Based on these comments and DOE's review of energy use differences
between door and drawer units--discussed in section IV.C.1.c of this
document--DOE is establishing a definition for ``drawer unit'' in this
final rule. Commenters did not provide specific suggestions regarding a
definition for drawer, hence DOE reviewed the definition of ``drawer
unit'' at 20 California Code of Regulations (``CCR'') Sec. 1602, and
DOE is establishing the following definition for ``drawer unit'' in
this final rule:
Drawer unit means a commercial refrigerator, freezer, or
refrigerator-freezer in which all the externally accessed compartments
are drawers.
In response to the October 2023 NOPR, SCC and AHRI commented that
rear-door definitions should be added for SVO and VOP models to allow
more energy for rear door options. (SCC, No. 74 at p. 3; AHRI, No. 81
at p. 5)
DOE notes that commenters did not provide data or other information
to suggest that SVO or VOP equipment with rear doors use more energy
than the representative unit. For this reason, DOE is not expanding the
definitions to include SVO or VOP equipment classes.
In summary, in this final rule, DOE is maintaining the definitions
proposed in the October 2023 NOPR for ``cold-wall evaporator,''
``forced-air evaporator,'' ``pass-through door,'' ``sliding door,''
``rating temperature,'' ``roll-in door,'' and ``roll-through door.'' In
this final rule, DOE is also establishing the ``drawer unit''
definition. Energy conservation standards, in terms of kWh/day,
established in this final rule for equipment of certain classes which
have these performance-related features allow for a higher maximum
energy consumption (i.e., less stringent) than the standards of the
corresponding classes without these performance-related features,
consistent with EPCA's requirements for establishing separate equipment
classes. (42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(q)) More detail
regarding these classes is provided in IV.C.1.c of this document.
Units Under 30 Cubic Feet
In response to the October 2023 NOPR, NAMA commented that DOE does
not fully account for the existence of smaller self-contained,
refrigerated single- and double-door beverage and food coolers. (NAMA,
No. 85 at p. 5) NAMA hypothesizes that inaccuracies in the October 2023
NOPR analysis (e.g., engineering, shipments, economic impact, and
utility impact) are due to DOE's focus on larger-capacity equipment
than 24-cubic-foot (ft\3\) CRE models that are typical of the market
for NAMA's members. (Id.) NAMA stated that what may apply in cost and
energy efficiency for a 60-ft\3\ unit may not apply to a 24-ft\3\ unit.
(Id. at p. 6) NAMA stated that doors, insulation, fan motors,
compressors, and evaporator coils would be different for 30-ft\3\
models compared to 60-ft\3\ models. (Id.) NAMA commented that, for
DOE's analysis, units under 30 ft\3\ should be considered as different
from those over 30 ft\3\ in refrigerated volume. (Id.) Furthermore,
NAMA commented that between the June 2022 Preliminary Analysis and
October 2023 NOPR, DOE changed the categories of products to include a
number of door types but did not acknowledge that the capacity also
causes a significant difference in cost and efficiency. (Id.)
Therefore, NAMA recommended that DOE split the VCT.SC.M units into two
categories because the characteristics are considerably different for
units under 30 cubic feet than for those over 30 ft\3\. (Id.) In
response the August 2024 NODA, NAMA commented that DOE did not address
its request to split VCT.SC.M, VOP.SC.M, and HZO.SC.L units under 30
cubic feet into separate categories, and that the NODA analysis has not
substantially changed the overall impact to reflect that these products
do not use as much energy as the larger units because the
characteristics are considerably different compared to larger units.
(NAMA, No. 112 at pp. 4-5)
In response to the October 2023 NOPR, NAMA and NAFEM commented that
some components that are available for large grocery store machines are
not available for smaller units using R-290 refrigerant. (Id.; NAFEM,
No. 83 at p. 16)
In response to similar comments regarding components for models
using R-290 refrigerant made by NAMA during the November 2023 public
meeting, True Manufacturing Company, Inc. (``True'') stated that, when
it comes to self-contained CRE, the component availability to
transition to R-290 is already there. (Public Meeting Transcript, No.
64 at p. 74) True added that even today, it is more expensive to buy a
shaded pole motor than an ECM, and ECMs available today all comply with
all the regulations needed for non-sparking. (Id. at p. 75)
In response to these comments, DOE notes that, based on currently
available compressors for small self-contained units, R-290 and R-600a
refrigerant compressors are the most widely available compressor types.
DOE also notes that the smallest model currently available in DOE's CCD
\37\ for VCT.SC.M uses R-600a. In addition, as described in section
IV.A.3.a, DOE analyzed an average compressor efficiency to account for
a wide range of use cases.
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\37\ See www.regulations.doe.gov/certification-data/#q=Product_Group_s%3A*.
---------------------------------------------------------------------------
In response to the comment from True, DOE agrees with True that R-
290 compatible components are currently available for self-contained
CRE, including CRE that have a volume of less than 30 ft\3\. DOE
conducted a review of the CRE market, based on directly analyzed units
and publicly available information (e.g., specification sheets), and
found no evidence of a difference in availability of R-290 compatible
components used in less- than- 30- ft\3\ models compared to larger
models. Therefore, without additional data, DOE disagrees that there is
a need for smaller equipment classes to analyze a different design
option pathway than larger R-290 units.
In response to NAMA's comments regarding the applicability of the
cost
[[Page 7503]]
and energy efficiency for a 60-ft\3\ unit compared to a 24-ft\3\ unit,
DOE notes that the representative analyzed volume for the VCT.SC.M
class in the October 2023 NOPR was 49 ft\3\, not 60 ft\3\, and the
representative volume has two doors (see table 5A.2.6 in the October
2023 NOPR TSD) which is within the range of number of doors that NAMA
commented is typical of the market for NAMA's members. DOE reviewed the
list of CRE manufacturers it identified as NAMA members in chapter 3,
section 3.2.3.1 of the final rule TSD and found that these
manufacturers have VCT.SC.M models with rated volumes of up to 63.32
ft\3\ and two doors. A majority of these manufacturers also have models
with certified volumes close to the VCT.SC.M representative volume
analyzed in this final rule (e.g., 43.75 ft\3\, 41.11 ft\3\, and 40.7
ft\3\).
DOE is maintaining the 49 ft\3\ representative volume for the
VCT.SC.M (V <= 100) class in this final rule. Using information
available to DOE at the time of this final rule regarding components
and dimensions that would be used in CRE models with approximately 24
ft\3\, DOE conducted an analysis using its engineering spreadsheet to
estimate the energy use of a CRE model with 24 ft\3\ and concluded that
the analysis is representative of test results for such a model. DOE
has determined that including a representative volume of 24 ft\3\ for
the VCT.SC.M class would not significantly affect results and
conclusions for the VCT.SC.M (V <= 100) class regarding efficiency
levels that would be cost-effective. Therefore, DOE has determined that
DOE's analysis accounts for CRE across the full capacity range of the
VCT.SC.M (V <= 100) class, not just at the representative capacity,
and, in the August 2024 NODA and this final rule, DOE did not present
an analysis for CRE models with a volume of less than 30 ft\3\.
c. Equipment Without Standards Proposed in the October 2023 NOPR
In the October 2023 NOPR, due to a lack of data and information
regarding performance and related design options of refrigerated buffet
tables and preparation tables and blast chillers and blast freezers,
DOE did not conduct an analysis of potential energy conservation
standards for these equipment categories. 88 FR 70196, 70215-70216. DOE
requested comment on refrigerated buffet and preparation tables and
blast chillers and blast freezer design options, design specifications,
and energy consumption data tested per the DOE test procedures located
in appendices C and D of 10 CFR 431.64. Id.
In response to the October 2023 NOPR, SCC, Hoshizaki, AHRI, and
Continental commented that manufacturers have not had time to test
their equipment and evaluate the test procedure and agreed with DOE's
tentative determination to not include energy conservation standards
for buffet and preparation tables in this rulemaking. (SCC, No. 74 at
p. 3; Hoshizaki, No. 76 at p. 2; AHRI, No. 81 at p. 6; Continental, No.
86 at p.2) Hoshizaki offered to make chef bases or griddle stands,
preparation tables, or other model samples available to DOE to help
create the most accurate rulemaking possible. (Hoshizaki, No. 76 at p.
7)
In contrast, in response to the October 2023 NOPR, NEEA and NWPCC
recommended that DOE include blast chillers and blast freezers and
buffet tables in the scope of CRE energy conservation standards,
develop a test procedure for blast chillers/freezers, and conduct
analysis on the energy-saving potential for blast chillers/freezers and
buffet tables. (NEEA and NWPCC, No. 89 at pp. 2-3) NEEA and NWPCC
commented that by developing a test procedure that is applicable for
their design intent, DOE could solve the issues of: (1) inadequate
performance data and information for blast chillers and freezers, and
(2) inapplicability of the established CRE test procedure for the
design intent of ``rapid temperature pull-down'' (versus other typical
CRE categories, which are intended for ``holding temperature
application''). (Id.) NEEA and NWPCC added that test procedures are
particularly important for these classes because they are key to
allowing the missing data to be collected, and NEEA and NWPCC
recommended that DOE gather information on test methodology from all
interested parties. (Id.) Regarding buffet tables, NEEA and NWPCC
commented that because an established test procedure exists, DOE should
gather performance data and then conduct an energy-savings analysis and
consider standards for these equipment classes. (Id.)
Consistent with the October 2023 NOPR and comments received in
response to that proposal, DOE has determined 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, 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 in this final rule.
With regard to buffet tables and preparation tables, while DOE
acknowledges that California Energy Commission's (``CEC's'') Modernized
Appliance Efficiency Database System (``MAEDbS'') contains data for
buffet and preparation tables, DOE notes that Title 20 of the CCR
requires refrigerated buffet and preparation tables to follow the
American National Standards Institute (``ANSI'')/American Society for
Testing and Materials (``ASTM'') F2143-01 test method.\38\ 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 stand-alone
test method, but it determined the approach based on ASTM F2143-16 with
additional requirements is representative for buffet and preparation
tables. 88 FR 66152, 66175. Therefore, in this final rule, 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 CEC's MAEDbS. Due to a
lack of data and information regarding performance and related design
options of refrigerated buffet and preparation tables, DOE has not
conducted an analysis of potential energy conservation standards for
these equipment categories in this final rule.
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\38\ See table A-1 in 20 CCR Sec. 1604.a.2 located at
govt.westlaw.com/calregs/Document/I132868504AC611EF8D0AD9C609AF9EC3?viewType=FullText&originationContext=documenttoc&transitionType=CategoryPageItem&contextData=(sc.Default
).
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In this final rule, consistent with the October 2023 NOPR, DOE is
not establishing energy conservation standards for buffet tables or
preparation tables, blast chillers, or blast freezers.
However, any representations, including for certification of
compliance, made with respect to the energy use or efficiency of buffet
tables
[[Page 7504]]
or preparation tables, blast chillers, and blast freezers must be made
in accordance with the results of testing pursuant to appendices C and
D of 10 CFR 431.64.
DOE will continue to evaluate buffet tables or preparation tables,
blast chillers, and blast freezers for potential future energy
conservation standards rulemakings, and DOE continues to request data
and information for this equipment.
d. Pull-Down Equipment
In response to the October 2023 NOPR, ASAP et al. encouraged DOE to
consider amended standards for PD equipment that are consistent with
the efficiency improvements required for other CRE equipment classes,
stating that while no PD.SC.M models are certified in DOE's CCD, a unit
could be certified as a PD unit in order to be subject to a less
stringent standard--a concern stated by ASAP et al. in the past. (ASAP
et al., No. 79 at p. 4) ASAP et al. commented that current standards
for a 49-ft\3\ unit (the VCT.SC.M representative volume in the October
2023 NOPR analysis) permit about 8 percent more energy usage (6.20 kWh/
day) for a PD.SC.M versus a VCT.SC.M unit of the same volume (5.76 kWh/
day). (Id.) ASAP et al. commented that under DOE's proposal in the
October 2023 NOPR, the 49-ft\3\ PD.SC.M unit would be permitted to use
nearly 80 percent more energy than a VCT.SC.M of the same volume (3.51
kWh/day). (Id.) ASAP et al. commented that manufacturers might design
equipment that meets the ``pull-down'' definition to be subject to less
stringent standards due to the September 2023 Test Procedure Final Rule
establishing verification provisions for PD temperature applications.
(Id.)
With respect to the comment from ASAP et al., 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).\39\ 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. See
88 FR 66152, 66187-66189. DOE anticipates that it is unlikely that
manufacturers would design equipment that meets the ``pull-down
temperature application'' definition to be subject to less stringent
standards because manufacturers do not appear to be doing so in
response to the current DOE CRE standards. For example, there are no
models currently certified to DOE's CCD in the PD.SC.M class,\40\ and
the PD.SC.M energy use standard is less stringent than the comparable
VCT.SC.M- class energy use standard above 5 ft\3\. Consistent with the
October 2023 NOPR, DOE did not directly analyze the pull-down, self-
contained, medium temperature equipment class as a primary equipment
class in this final rule. DOE has determined to maintain the current
standard level for PD.SC.M because DOE did not receive any data or
feedback regarding energy use characteristics and design options of PD
equipment. DOE will continue to monitor the PD.SC.M equipment class and
any models certified to this class, including assessment testing and
verification of any model's ability to meet the pull-down temperature
application definition.
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\39\ See 119 STAT. 639 at www.govinfo.gov/content/pkg/PLAW-109publ58/pdf/PLAW-109publ58.pdf.
\40\ See 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.
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2. CRE Market
In the October 2023 NOPR, DOE requested 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 October 2023 NOPR TSD. 88 FR 70196, 70218.
AHRI provided a list of known suppliers of CRE products for the
United States that are not listed on the CCD site: Amteko Industries,
Inc.; Atlantic Food Bars; Borgen Merchandising Systems; Buffalo
Outfront; Carrier; Cayuga Displays; Custom Deli's Inc.; Duke
Manufacturing Co.; Federal Industries; GTI Designs; MTL COOL, a Due
North brand; NAFCOOL; Picadeli; Pure Cold; USR Brands; Unity[supreg]
Commercial Refrigeration; and Vortex Refrigeration. (AHRI, No. 81 at p.
6)
As part of DOE's market assessment for the October 2023 NOPR and
this final rule, DOE compiled an equipment database of CRE models
available in the United States. To develop a comprehensive equipment
database of CRE basic models, DOE reviewed its CCD \41\ supplemented by
information from CEC's MAEDbS,\42\ individual company websites,
stakeholder comments (see AHRI, No. 81 at p. 6), and prior CRE
rulemakings. To identify chef bases or griddle stands and high-
temperature units, DOE reviewed publicly available data from web
scraping of retail websites. DOE then reviewed its comprehensive
equipment database to identify the original equipment manufacturers
(``OEMs'') of the CRE models identified. DOE compared the list of
suppliers provided by AHRI against its list of CRE manufacturers to
ensure completeness. Based on this comparison, DOE amended its market
assessment (see chapter 3 of the final rule TSD) to include two
additional small, domestic OEMs, Atlantic Food Bars and Borgen
Merchandising Systems, for this final rule. DOE determined that both
OEMs would qualify as small, domestic businesses. Therefore, for this
final rule, DOE updated its small business assessment and included
these companies in its small business manufacturer subgroup analysis
(i.e., ``regulatory flexibility analysis'') discussed in section VI.B
of this document.
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\41\ 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 Jan. 31, 2024).
\42\ California Energy Commission's Modernized Appliance
Efficiency Database is available at cacertappliances.energy.ca.gov/Pages/Search/AdvancedSearch.aspx (last accessed Jan. 31, 2024).
---------------------------------------------------------------------------
3. Technology Options
In the October 2023 NOPR market analysis and technology assessment,
DOE identified technology options initially determined to improve the
efficiency of CRE, as measured by the DOE test procedure and shown in
table IV.3.
BILLING CODE 6450-01-P
[[Page 7505]]
[GRAPHIC] [TIFF OMITTED] TR21JA25.105
BILLING CODE 6450-01-C
88 FR 70196, 70244.
DOE received several comments on the technology options presented
in the October 2023 NOPR. DOE received general comments regarding the
technology options along with comments specifically regarding single-
speed compressors, expansion valves, and doors for open units. These
are discussed in the following paragraphs.
In response to the October 2023 NOPR, and the August 2024 NODA,
Hillphoenix commented that the many other additional regulatory changes
underway have narrowed manufacturers' ability to explore new energy-
efficient technologies. (Hillphoenix, No. 77 at p. 2; Hillphoenix, No.
110 at p. 2)
DOE appreciates Hillphoenix's candor in indicating that they have
little quantitative information to provide regarding energy savings
potential for some of the newer technology options. In this final rule,
DOE has not analyzed technologies that fail the screening criteria,
including ``technologies that are not incorporated in commercial
equipment or in commercially viable, existing prototypes will not be
considered further''. DOE has undertaken its analysis based on the best
information available.
In response to the October 2023 NOPR, NAFEM commented that meeting
that the October 2023 NOPR's proposed standards may force reductions in
the capacity of certain CRE, which reduces its utility and may lead to
increased energy consumption. (NAFEM, No. 83 at pp. 22-23) NAFEM stated
that many of its members shared a concern that substantially bulking up
insulation may be the only way to meet many of the standards outlined
in the October 2023 NOPR, which eats into the capacity of CRE models
and may force customers to add more energy-using equipment to store the
same amount of product--equipment that impacts the environment. (Id. at
p. 23) NAFEM commented that this is another reason why refurbished
equipment might be the only choice for some customers. (Id.) NAFEM
added that its members fear that customers may ``tinker'' with products
to circumvent efficiency measures to achieve a better-performing
product, with the end result being that DOE's targeted energy-
efficiency gains will never materialize in practice, and that the
proposed standards may even cause an increase in energy consumption.
(Id.)
In response to this comment from NAFEM, DOE notes that the
screening criteria in section IV.B of this document screens out any
technology options that are determined to have ``a significant adverse
impact on the utility of the equipment to subgroups of consumers, or
result in the unavailability of any covered equipment type with
performance characteristics (including reliability), features, sizes,
capacities, and volumes that are substantially the same as equipment
generally available in the United States at the time,'' including
increased insulation thickness and other technologies that affect
internal or external dimensions. Additionally, the baseline insulation
thicknesses analyzed in this final rule were revised from the October
2023 NOPR, consistent with comments received in response to the October
2023 NOPR. See section IV.B.1.a of this document for more details on
the screening analysis for the increased insulation thickness
technology option and section IV.C.1.a.iii of this document for more
details on the revised baseline insulation thicknesses. Additionally,
see sections IV.F.7 and IV.G of this document for a detailed discussion
on refurbished equipment.
a. High-Efficiency Single-Speed Compressors
In the October 2023 NOPR, DOE considered the design option of
[[Page 7506]]
improved compressor efficiency, which would have consisted of applying
a compressor with improved energy efficiency in comparison to the
baseline compressor analyzed. 88 FR 70196, 70228. In the October 2023
NOPR, DOE presented a baseline for self-contained equipment based on R-
290 and expected the energy efficiency improvement associated with the
change to R-290 to be due to the compressor. Id. DOE did not directly
analyze an improved compressor efficiency design option beyond the R-
290 baseline. Id.
In the August 2024 NODA, DOE updated its analysis of R-290
compressor performance to reflect the average compressor efficiency
from the database of CRE compressors it has collected, instead of the
maximum compressor efficiency as considered in the October 2023 NOPR.
89 FR 68788, 68792-68793. DOE was able to incorporate into the August
2024 NODA compressor data that was not available to DOE for the October
2023 NOPR. Id. In the August 2024 NODA, DOE presented updated baseline
energy use associated with each equipment class, expressed as a
reduction in energy compared to the currently applicable standard. Id.
Additionally, in the August 2024 NODA, based on the AHRI January 2017
white paper, Tolerances and Uncertainties in Performance Data of
Refrigerant Compressors, which is referenced by the AHRI 540 compressor
performance rating standard (``AHRI 540''),\43\ DOE revised its
calculation of energy use for all compressors to be 5 percent higher
than calculated using compressor performance coefficients, to account
for the uncertainty associated with compressor energy performance
prediction using coefficients that are determined based on a limited
number of compressor tests. Id.
---------------------------------------------------------------------------
\43\ For the AHRI white paper see www.ahrinet.org/system/files/2023-06/compressors-white-paper.pdf.
---------------------------------------------------------------------------
In response to the October 2023 NOPR, the CA IOUs and ASAP et al.
recommended that DOE consider more efficient single-speed compressors
as a design option in the engineering analysis. (CA IOUs, No. 84 at pp.
2-3; ASAP et al., No. 79 at pp. 3-4) The CA IOUs commented that the
single-speed compressor efficiency upgrades may be more cost-effective
than variable-speed compressors. (CA IOUs, No. 84 at p. 3) The CA IOUs
further commented that the energy efficiency ratio (``EER'') for R-290
single-speed compressors varies between 5.8 to 7.4 Btu/kWh in the
capacity range of 5,000 to 6,000 Btu/h and between 6.0 to 7.5 Btu/kWh
in the capacity range of 4,000 to 5,000 Btu/h. (Id. at p. 2) The CA
IOUs additionally stated that upgrading to the most energy-efficient
single-speed compressors may add a minimal marginal cost to the unit's
price. (Id. at p. 3) ASAP et al. stated there appears to be a range of
R-290 single-speed compressor efficiencies available for a given
compressor type, capacity, input voltage, and power supply (i.e.,
single vs. polyphase) and asked DOE to further consider improved
single-speed compressor efficiency. (ASAP et al., No. 79 at pp. 3-4)
In response to the August 2024 NODA, ASAP et al. commented that
DOE's analysis overstates energy use of compressors due to increasing
energy use in the calculations by 5 percent, using the average
efficiency of available R-290 compressors (even though manufacturers
have the option to use the highest efficiency compressors), and the
expectation that additional high-efficiency compressors will be
introduced to the market in advance of the compliance date of amended
standards. (ASAP et al, No. 106 at p. 3)
The CA IOUs recommended that DOE reduce its Compressor Energy Use
Adjustment from 5% to no more than 2.5%. (CA IOUs, No. 113, at p. 4)
The CA IOUs commented that the AHRI white paper does not specify
whether these curve-fitting methodologies tend to overestimate or
underestimate compressor performance, so the uncertainty should not be
assumed to be biased in either direction. (Id.)
In response to the CA IOUs and ASAP et al., DOE notes that the R-
290 compressor market is still evolving due to the October 2023 EPA
Final Rule and other refrigerant related rulemakings associated with
the AIM Act. Because of this, DOE cannot confidently assert that all
manufacturers would be able to easily source the most efficient
compressors available for all equipment classes. DOE notes that the
most efficient compressor for a CRE unit varies based on many factors
such as temperature application (i.e., high, medium, low, or ice-cream
temperature), unit capacity (i.e., rated TDA or Volume), and physical
differences in the units (e.g., open versus closed, horizontal versus
vertical, compressor space constraints). As a result, in this final
rule, consistent with the August 2024 NODA, DOE has analyzed the
average compressor efficiency based on the compressor data available at
the time of this rulemaking. See section IV.C.1.a.ii for a discussion
of the results of this baseline energy use analysis.
In response to the ASAP et al. and CA IOUs comments on the 5
percent compressor adjustment that was applied for all compressors in
the August 2024 NODA, DOE notes that the August 2024 NODA analysis was
recalibrated to accommodate updates made since the October 2023 NOPR
analysis, including the 5 percent compressor adjustment, such that the
analyzed baseline energy use is representative of baseline equipment.
As discussed by commenters in the October 2023 NOPR, and the AHRI
January 2017 white paper, this 5 percent compressor adjustment is
appropriate based on the uncertainty tolerances for compressor
performance coefficients, and therefore DOE disagrees that the energy
use of the compressors are overstated.
In response to the August 2024 NODA, Storemasters commented that
equipment manufacturers have already made significant changes to
equipment to comply with the 2017 standards and much of the current
equipment incorporates new refrigerants, particularly self-contained
models that utilize R-290. (Storemasters, No. 68 at p. 1)
As discussed later in section IV.C.1.a.ii, DOE does acknowledge
that many CRE units have already transitioned to R-290 refrigerant.
However, for most equipment classes, R-290 refrigerant is used in units
that use less energy than the current standard allows. Therefore, DOE
conducted an analysis to determine an appropriate baseline for
equipment classes using R-290 refrigerant, which is discussed in detail
in section IV.C.1.a.ii.
b. Expansion Valves
As discussed in chapter 5 of the October 2023 NOPR TSD, higher-
efficiency expansion valves can control the flow of refrigerant to
adapt to varying loads and ambient conditions, reducing the energy
consumption in some CRE units. However, in the October 2023 NOPR
analysis, DOE did not consider improved thermal expansion valves as a
design option, because this technology is not likely to improve energy
efficiency across all equipment classes.
In response to the October 2023 NOPR, the CA IOUs recommended that
DOE consider thermal expansion valves (``TXVs'') as a technology option
over capillary tubes for self-contained refrigeration equipment. (CA
IOUs, No. 84 at p. 4) The CA IOUs commented that TXVs are more
efficient than simple fixed orifice capillary tubes at regulating
refrigerant flow under changing load conditions and save energy at the
compressor, especially at very low load conditions (e.g., an
infrequently opened door). (Id.) The CA IOUs additionally
[[Page 7507]]
stated that the DOE test procedure, based on ASHRAE 72, requires 16
hours with no door openings for refrigeration units and can capture the
energy savings of TXVs in self-contained units. (Id.)
The CA IOUs also recommended that DOE include electronic expansion
valves (``EEVs'') as a design option for remote condensing units, as
EEVs are a reliable and cost-effective technology that provide a lower
stable superheat than TXVs, allowing more of the evaporator surface to
be utilized in latent energy exchange, reducing compressor run times,
and resulting in a 10-to-20-percent reduction in energy use for these
units. (Id. at pp. 3-4)
In response to the comment from the CA IOUs regarding expansion
valves for self-contained equipment, DOE notes that many self-contained
refrigeration systems likely already use TXVs. In addition, the range
of conditions experienced by most self-contained refrigeration systems
during the DOE test procedure are very limited (IAT must be maintained
within 2 [deg]F), and the refrigerant mass flow is
determined more by the capacity of the compressors used in most models
than the thermal load. Also, the pressure available to move refrigerant
through the expansion device is mostly influenced by the ambient
temperature, which does not vary significantly during the DOE test
procedure. Finally, for closed cabinets the variation in evaporator
exit superheat, outside of the time that the door is actually open,
when the system can draw much warmer near-ambient-temperature air into
the evaporator, is dampened by the thermal mass of product typically in
a field-installed cabinet, which is simulated by the loads in the
cabinet during the DOE test procedure. Hence, DOE expects that savings
of TXVs as compared to optimized capillary tubes would be small, and
DOE has not seen data showing that this impact would be significant.
In response to the comment from the CA IOUs regarding expansion
valves for remote condensing equipment, although the CRE test procedure
does give credit for an increase in measured evaporator temperature
through the use of the AHRI 1200 EER table, similar to testing
associated with self-contained equipment described above, the
variations in expansion device inlet conditions and also of conditions
affecting the evaporator exit refrigerant state are sufficiently
limited that an EEV would save little energy.
c. Doors for Open Units
In response to the October 2023 NOPR, NEEA and NWPCC expressed
concern that DOE's proposal misses savings opportunities for the open
equipment classes. (NEEA and NWPCC, No. 89 at pp. 3-4) NEEA and NWPCC
stated that DOE's LCC analysis shows open equipment classes consume
three to eight times the energy of comparable closed transparent/solid
door-type units. (Id. at p. 4) NEEA and NWPCC commented that for some
open-equipment families (e.g., VOP.RC.M and VOP.RC.L), DOE only
considers occupancy sensors and night curtains and does not allow
efficiency increases beyond these design options (Id.) NEEA and NWPCC
commented also that it favors a standard for open-type equipment
classes that has parity with closed-door counterparts rather than
increasing the gap between the two equipment types. (Id.) NEEA and
NWPCC stated that if DOE raised the standard, some manufacturers may
add doors on their open units to decrease energy losses from the unit.
(Id.)
DOE understands NEEA and NWPCC's comment to mean that if DOE
amended the standard, manufacturers may add doors on their open units
to decrease energy losses from the unit; however, DOE notes that based
on equipment classes already established in the CFR, the addition of
doors would change the equipment class from being considered as an open
case to being considered a closed case. As DOE has previously stated in
the October 2023 NOPR, there are different physical and functional
attributes for open and closed cases, thus parity in standards is
likely not possible due to the increased air infiltration and radiation
loads on open units. See 88 FR 70196,70220. Therefore, in this final
rule, DOE considered all the technology options that are generally
known to be available in the engineering analysis for open cases.
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 equipment 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
equipment 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 equipment to
subgroups of consumers, or result in the unavailability of any
covered equipment type with performance characteristics (including
reliability), features, sizes, capacities, and volumes that are
substantially the same as equipment 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.
10 CFR 431.4; 10 CFR part 430, subpart C, appendix A, 6(c)(3) and 7(b).
In sum, if DOE determines that a technology, or a combination of
technologies, fails to meet one or more of the listed five criteria, it
will be excluded from further consideration in the engineering
analysis. The reasons for eliminating any technology are discussed in
the following sections.
The subsequent sections include comments from interested parties
pertinent to the screening criteria, DOE's evaluation of each
technology option against the screening analysis criteria, and whether
DOE determined that a technology option should be excluded (``screened
out'') based on the screening criteria.
1. Screened-Out Technologies
In the October 2023 NOPR, DOE tentatively determined to screen out
increased insulation thickness and vacuum-insulated panels (``VIPs'')
for ``impacts on product utility'' and linear compressors and air-
curtain design for ``practicability to manufacture, install, and
service.'' 88 FR 70196, 70222-70224. In the August 2024 NODA, DOE
additionally presented a revised analysis with microchannel condensers
screened out for ``practicability to manufacture, install, and
service'' and evaporator fan controls screened out for ``impacts on
product utility.'' 89 FR 68788, 68793.
DOE received several comments on the screening analysis in response
to the October 2023 NOPR and August 2024 NODA, as discussed in the
following sections.
a. Increased Insulation Thickness and Other Technologies That Affect
Internal or External Dimensions
In the October 2023 NOPR analysis, and the August 2024 NODA, DOE
screened out increased insulation thickness. See 88 FR 70196, 70222-
[[Page 7508]]
70223. Also, DOE did not consider increased-size evaporators or
condensers in its analysis. 88 FR 70196, 70220.
In response to the October 2023 NOPR, Hussmann, Hoshizaki, AHRI,
and SCC agreed with DOE's decision to screen out increased insulation
thickness as a design option. (Hussmann, No. 80 at p. 4; Hoshizaki, No.
76 at p. 2; AHRI, No. 81 at p. 7; SCC, No. 74 at p. 3)
In response to the October 2023 NOPR, Hoshizaki commented that
increased insulation will decrease volume due to set box sizes for
restaurants and institutions, and it stated that due to customer
demand, a smaller volume could result in lost sales for units that
changed to lower capacity. (Hoshizaki, No. 76 at p. 2)
In response to the October 2023 NOPR, NAMA commented that several
design options shown in the October 2023 NOPR TSD may have an impact on
the overall machine capacity and that any design option that requires
more space inside the machine must reflect the reduction of overall
capacity. (NAMA, No. 85 at p. 15) NAMA commented also that larger
condensers or evaporators, more insulation, and changes to type of
glass resulting in new structural components all affect the overall
capacity. (Id.) NAMA stated that the external dimensions of CRE are
limited by the height of the building structure in break rooms or
built-in areas, while the width and length are limited by the footprint
of the machine and integration with other machines (i.e., snack
machines) to which CRE are paired. (Id.)
In response to the October 2023 NOPR, AHRI, SCC, and NAMA commented
that DOE's NOPR analysis reflected consideration of increased
insulation thickness for baseline models analyzed in its analysis.
(AHRI, No. 81 at p. 7; SCC, No. 74 at p. 3; NAMA, No. 85 at pp. 28-29)
Specifically, AHRI commented that for a number of equipment classes,
the baseline insulation thicknesses used by DOE in its 2023 NOPR
analysis are thicker than the thicknesses associated with the
efficiency levels selected as energy conservation standards for those
same classes in the 2014 final rule analysis. (Id.) NAMA stated that
DOE did not discuss the resultant change in utility or performance in
the October 2023 NOPR TSD, highlighting that the best example of this
is the design option to add \1/2\ inch of insultation to each of the
product classes, which would result in smaller capacity, longer times
for consumers to keep the doors open, and more frequent restocking.
(Id.) NAMA further commented that DOE consultants reported at the
November 2023 Public Meeting that the baseline units had 1-1.5 inches
of foam, but that the NOPR TSD indicates use of 2-2.5 inches insulation
thickness used in the analysis. (NAMA, No. 85 at pp. 28-29)
DOE notes that, while the October 2023 NOPR analysis did screen out
insulation thickness increase (see 88 FR 70196, 70222-70223), the
comments from NAMA indicate that some clarification regarding
insulation thicknesses used in the analysis is appropriate. Tables
5A.2.5-5A.2.8 in the October 2023 NOPR TSD show the baseline insulation
thickness used in the analysis, which ranged from 2 inches to 2.5
inches depending on the equipment class. This was based on teardown
data that DOE had at the time the October 2023 NOPR analysis was
completed, and is thicker than the baseline insulation thickness of 1
inch to 1.5 inches used in the preliminary analysis. Additional
teardown information collected after the October 2023 NOPR analysis was
completed suggested the values used in the October 2023 NOPR analysis
were too large for some equipment classes. Hence, for the NODA
analysis, DOE updated the baseline insulation thicknesses to the
following representative values: 1.5 inches for medium- and high-
temperature equipment; 2.0 inches for low-temperature equipment; and
2.5 inches for ice-cream temperature equipment. These thicknesses were
also used for the final rule analysis. See section IV.C.1.a.iii for
more details.
Regarding the comment from NAMA that the baseline insulation
thickness is 1 to 1.5 inches, NAMA may be referring to an exchange
between True and DOE consultants at the November 2023 Public
Meeting,\44\ discussing the increased baseline insulation thickness
increases stated by AHRI, SCC, and NAMA between the June 2022
Preliminary Analysis and the October 2023 NOPR. DOE's consultants
responded in the November 2023 Public Meeting that the October 2023
NOPR baseline insulation thicknesses used in the NOPR analysis were
representative of the baseline insulation thickness from teardown data
available to DOE at the time of the October 2023 NOPR--as already noted
above, these insulation thickness values were changed in the August
2024 NODA and final rule analyses based on additional teardown
information and in consideration of stakeholder comments.
---------------------------------------------------------------------------
\44\ See November 2023 Public Meeting Transcript, No. 64 at pp.
59-60.
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As discussed in chapter 3 of the final rule 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. Therefore, this technology option
can reduce the energy use of CRE. However, consistent with comments
from Hoshizaki and NAMA, 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 determined that, for certain configurations of
CRE, increased insulation thickness meets the screening criterion of
``impacts on product utility.'' In this final rule, DOE has screened
out increased insulation thickness as a design option for improving the
energy efficiency of CRE.
DOE notes that, while increased insulation thickness has been
screened out in this final rule, DOE may consider updating the
representative baseline insulation thickness to reflect the current
market in any future DOE actions or rulemakings.
In response to the comment from NAMA regarding consideration of
larger condensers or evaporators as design options, DOE notes that
these design options were not analyzed in the cost-efficiency results
for the October 2023 NOPR or August 2024 NODA analysis, and is
maintaining that approach in this final rule. Also, in response to the
NAMA comment, design options associated with improvements to glass
doors did not meet the screening criteria in the October 2023 NOPR or
August 2024 NODA, and DOE maintains this approach for this final rule.
DOE notes that some CRE currently available on the market incorporate
the improved transparent door design options, which demonstrates the
ability of CRE to use this technology. DOE discusses these design
options in section IV.C.1 of this document and chapters 3 and 5 of the
final rule TSD.
b. Vacuum-Insulated Panels
In the October 2023 NOPR, and the August 2024 NODA, DOE tentatively
determined that vacuum-insulated panels meet the screening criterion of
``impacts on product utility'' and screened out vacuum-insulated panels
as a design option for improving the energy efficiency of CRE. 88 FR
70196, 70223.
In response to the October 2023 NOPR, Hussmann, Hoshizaki, AHRI,
and SCC agreed with DOE's decision to
[[Page 7509]]
screen out VIPs as a design option. (Hussmann, No. 80 at p. 4;
Hoshizaki, No. 76 at p. 2; AHRI, No. 81 at p. 7; SCC, No. 74 at p. 3)
In response to the October 2023 NOPR, NAMA recommended that DOE
remove VIPs from the rulemaking and from future rulemakings, due to the
reasoning given in its response to the June 2022 Preliminary Analysis.
(NAMA, No. 85 at p. 29)
In response to the October 2023 NOPR, Hoshizaki commented that VIPs
are not a good alternative due to susceptibility of breakage and
because the increased space needed to store VIPs for production
preparation would necessitate much larger production facilities,
resulting in larger capital expenditures. (Hoshizaki, No. 76 at p. 2)
As a confirmed by comments received in support of screening out
VIPs, DOE is not aware of any implementations of VIPs--either in
commercial equipment or in commercially viable, existing prototypes
that could accommodate these structural requirements specific to CRE.
As a result, DOE has determined that, at this time, vacuum-insulated
panels implemented in CRE meet the screening criterion of
``technological feasibility.'' In this final rule, DOE has screened out
vacuum-insulated panels as a design option for improving the energy
efficiency of CRE.
In response to the comment from NAMA about future rulemakings, DOE
notes that this screening analysis only applies to this final rule, and
not to future actions or rulemakings. EPCA's 6-year lookback provision
allows DOE to consider technological advances and new technologies in
future actions or rulemakings. Therefore, DOE may reconsider VIPs when
conducting the screening analysis in any future action or rulemaking.
c. Linear Compressors
In the October 2023 NOPR, DOE tentatively determined that linear
compressors meet the screening criterion of ``practicability to
manufacture, install, and service'' and screened out linear compressors
as a design option for improving the energy efficiency of CRE. 88 FR
70196, 70223.
In response to the October 2023 NOPR, Hussmann, Hoshizaki, AHRI,
and SCC agreed with DOE's decision to screen out linear compressors as
a design option. (Hussmann, No. 80 at p. 4; Hoshizaki, No. 76 at p. 2;
AHRI, No. 81 at p. 7; SCC, No. 74 at p. 3)
NAMA recommended that DOE remove linear compressors from the
rulemaking and from future rulemakings, due to the reasoning given in
its response to the June 2022 Preliminary Analysis. (NAMA, No. 85 at p.
29)
As a result of comments received in support of screening out linear
compressors, DOE has determined that linear compressors meet the
screening criterion of ``practicability to manufacture, install, and
service.'' In this final rule, DOE has screened out linear compressors
as a design option for improving the energy efficiency of CRE.
In response to the comment from NAMA about future rulemakings, DOE
notes that this screening analysis only applies to this final rule, and
not to future actions or rulemakings. EPCA's 6-year lookback provision
allows DOE to consider technological advances and new technologies in
future actions or rulemakings. Therefore, DOE may reconsider linear
compressors when conducting the screening analysis in any future action
or rulemaking.
d. Air-Curtain Design
In the October 2023 NOPR, DOE tentatively determined that air-
curtain design meets the screening criterion of ``practicability to
manufacture, install, and service'' and screened out air-curtain design
as a design option for improving the energy efficiency of CRE. 88 FR
70196, 70224.
In response to the October 2023 NOPR, Hussmann, Hoshizaki, AHRI,
and SCC agreed with DOE's decision to screen out air-curtain design as
a design option. (Hussmann, No. 80 at p. 4; Hoshizaki, No. 76 at p. 2;
AHRI, No. 81 at p. 7; SCC, No. 74 at p. 2)
As a result of comments received in support of screening out air-
curtain design, DOE has determined that air-curtain design meet the
screening criterion of ``practicability to manufacture, install, and
service.'' In this final rule, DOE has screened out air-curtain design
as a design option for improving the energy efficiency of CRE.
e. Permanent Magnet Synchronous AC Motors
In the October 2023 NOPR, DOE did not include permanent magnet
synchronous motors (``PMS motors'') as a design option in its October
2023 NOPR engineering analysis. 88 FR 70196, 70221.
In response to the October 2023 NOPR, the CA IOUs recommended that
DOE consider PMS motors as a design option for closed-door units. (CA
IOUs, No. 84 at p. 6) The CA IOUs commented that PMS motors are 30
percent more efficient than electronically commutated motors and are
considered the most efficient fan motor technology. (Id.) The CA IOUs
commented also that while some manufacturers report avoiding the use of
PMS motors in their equipment due to noise concerns, noise should not
be an issue for closed-door refrigeration units and there should be no
significant barrier to adoption. (Id.) The CA IOUs stated that although
DOE does not recommend PMS motors as a design option because specific
commercialized PMS designs of the appropriate size and airflow were not
identifiable, retrofit applications have used PMS motors in CRE
connected to a remote condensing unit, vertical, transparent and open
cases because of their appropriate size and airflow. (Id.)
With respect to the comment from the CA IOUs, DOE has observed that
PMS motors are available for retrofit applications from one
manufacturer,\45\ but has not observed them in any new CRE. While PMS
motors may be available for certain retrofit applications, DOE has not
observed specific commercialized designs with the appropriate size and
rated airflow for the range of equipment analyzed in support of this
final rule. Based on these observations, along with discussions with
manufacturers, DOE has determined that PMS motors meet the screening
criterion of ``practicability to manufacture, install, and service'' to
be excluded in the engineering analysis. Therefore, in this final rule,
DOE has screened out PMS motors as a design option for improving the
energy efficiency of CRE.
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\45\ See qmpower.com/products/.
---------------------------------------------------------------------------
f. Evaporator Fan Control
In the October 2023 NOPR, DOE assumed that evaporator fans of
baseline equipment runs continuously for 24 hours a day (except during
electric defrost). DOE considered in its analysis a design option,
``evaporator fan control,'' in which evaporator fans cycle off for a
portion of the compressor off cycles. DOE assumed for its analysis that
evaporator fan control allows the fan to run during compressor off
cycles 20-percent longer than the compressor on cycles, excluding the
time period when the unit is in defrost mode. See chapter 5 of the
October 2023 NOPR TSD. Based on testing of directly analyzed units, DOE
observed that evaporator fan control is already implemented in certain
models available on the market. DOE determined that 20-percent
additional run time compared to the compressor on cycles is
representative based on observation of its directly tested units that
incorporate evaporator fan control. Based on manufacturer feedback on
the June 2022 Preliminary Analysis, in the
[[Page 7510]]
October 2023 NOPR, DOE tentatively determined that evaporator fan
control would only be suitable for closed, self-contained equipment--
DOE limited the consideration of this design option in its October 2023
NOPR analysis to this equipment category.\46\
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\46\ See section 5.5.6 of the October 2023 NOPR TSD, located at
www.regulations.gov/document/EERE-2017-BT-STD-0007-0051.
---------------------------------------------------------------------------
In response to the October 2023 NOPR, Hillphoenix, ITW, NAMA,
NAFEM, and Ravnitzky commented with concern regarding the food safety
implications of incorporating evaporator fan controls in the proposed
standards. (Hillphoenix, No. 77 at p. 3; ITW, No. 82 at p. 6; NAMA, No.
85 at p. 16; NAFEM, No. 83 at pp. 10-11; Ravnitzky, No. 57 at p. 3)
In the November 2023 Public Meeting, Continental commented that it
concluded that evaporator fan control resulted in freeze-ups on coils
in the field, and it stopped using it for that reason. (November 2023
Public Meeting Transcript, No. 64 at pp. 68-69)
ITW commented that DOE should revise its October 2023 NOPR
engineering spreadsheet assumptions to better reflect the current state
of the industry in its application of fan control strategies. (ITW, No.
82 at p. 2) ITW stated that most manufacturers are already running fan
duty cycles lower than 100 percent, so it is inaccurate to consider
100-percent fan duty cycle as the current industry baseline. (Id.) ITW
also commented that to allow for proper off-cycle defrost and cabinet
thermal performance, DOE should increase the duty cycle runtime
multiplier to be a function of both compressor runtime and off-cycle
defrost time, while allowing for additional run time for cabinet
thermal destratification in the baseline calculation. (Id.)
ITW further commented that it disagrees with the fan control
assumptions in the October 2023 NOPR engineering spreadsheet
calculations, where the energy savings calculation for the ``fan
control strategy'' is based on the difference between EFC1 (no fan
control) and EFC2 (fan control), where the baseline EFC1 strategy
assumes current products have 100-percent fan duty cycle and the
improved EFC2 strategy assumes the fan duty cycle is equal to 120
percent of the compressor duty cycle. (Id. at p. 3) ITW stated that all
ITW products have already adopted some form of fan control strategy to
meet DOE's 2017 energy standards and that, based on a recent NAFEM
survey, 87.5 percent of the CRE manufacturers surveyed are already
utilizing some form of fan control strategy. (Id.) Furthermore, ITW
commented that the proposed EFC2 strategy does not properly account for
the need to run the evaporator fan during off-cycle defrost as well as
outside of compressor and defrost cycles in order to provide adequate
cooling and defrost performance and proper destratification of the
cabinet air temperatures. (Id.) ITW elaborated that outside the
compressor run period and off cycle defrost period is the only time
zone that the fan control strategy can be played. (Id. at pp. 8-9) ITW
stated that it conducted a study showing that 50 percent on, 50 percent
off for an evaporator fan during a compressor off period is a good
strategy to save energy while still maintaining a relatively uniform
air and product temperature. (Id.) ITW stated that the evaporator fan
run state during the compressor off period is irrelevant to compressor
run time, and it will be the percentage of compressor off time. (Id.)
ITW requested that for the EFC2 strategy, the fan duty cycle in the CRE
engineering spreadsheet be calculated considering the formula: RT +
OCDT + 50% x (24-CRT-OCDT), where RT = Compressor Runtime OCDT = Off-
Cycle Defrost Time. (Id. at pp. 3, 8) ITW provided an example for VCS.M
case, claiming that DOE's estimated evaporator fan run time is 7 hours
less than the real application. (Id. at p. 9)
The CA IOUs recommended that DOE consider evaporator fan control as
a design option for all closed, self-contained refrigeration equipment
classes and not just for solid-door refrigeration units. (CA IOUs, No.
84 at pp. 4-5) The CA IOUs commented that variable-speed evaporator fan
controls turn off the fans when the refrigeration door opens, reducing
hot- air infiltration and the equipment's energy use, and such controls
also save fan energy when the compressor is off. (Id. at p. 4) The CA
IOUs added that although evaporator frost buildup and temperature
stratification may occur, fan ``stir'' cycles can mitigate these
issues. (Id.)
In response to these comments, DOE reviewed the NSF 7 standard
mentioned by commenters and found that section 6.10, ``Performance--
storage refrigerators and refrigerated food transport cabinets,''
requires CRE to maintain an air temperature at or below 40 [deg]F for
all compartments; section 6.11, ``Performance--storage freezers,''
requires CRE to maintain an air temperature at or below 0 [deg]F for
all compartments; section 9.14, [Display Refrigerator] ``Performance,''
requires CRE to maintain an air temperature at or below 41 [deg]F for
display refrigerators intended to hold potentially hazardous foods;
section 9.15, [Display Refrigerator] ``Performance--temperature
recovery test,'' requires CRE with automatic lockout to restore the air
temperature in its food storage compartment to 41 [deg]F or below after
having its door open for 15 minutes; section 9.16, [Display
Refrigerator] ``Performance--automatic lockout,'' requires CRE with
automatic lockout to activate the door lock if the air temperature in
the food storage compartment is greater than 41 [deg]F for more than 30
minutes.
Evaporator fan control, as analyzed in the October 2023 NOPR, could
reduce air distribution and temperature uniformity in the refrigerated
compartment, potentially leading to temperatures outside of the NSF 7
tolerances. As mentioned in the comment from Continental, temperatures
outside of the NSF 7 tolerances could also occur if the evaporator coil
freezes up due to a lack of consistent airflow.
In response to the comment from ITW stating that most manufacturers
currently incorporate evaporator fan control, DOE notes that it is
unclear if the models referenced by ITW that meet DOE's 2017 standards
are units that have energy use at the current standard level, or at an
energy use level more efficient than the current standards.
Further, DOE received feedback during manufacturer interviews that
in CRE connected to remote condensing units, evaporator fans are always
on, due to constant refrigerant flow through the system. Additionally,
open CRE have evaporator fans on constantly to maintain the air
curtain.
Although some self-contained, closed CRE may be able to use
evaporator fan controls, there is insufficient information currently
available to conclude that a significant number of CRE can use this
approach and also comply with NSF 7 requirements. Therefore, in the
August 2024 NODA, DOE removed evaporator fan controls as a design
option. NAFEM, Continental, Hussmann, AHRI, Delfield, and Hillphoenix
all commented in support of this decision. (NAFEM, No. 101 at pp. 2-3;
Continental, No. 107 at p. 2; Hussmann, No. 108 at p. 2; AHRI, No. 104
at p. 8; Delfield, No. 99 at p.2; Hillphoenix, No. 110 at p. 4)
The CA IOUs recommended that DOE reevaluate evaporator fan control
as a design option for six CRE equipment classes: VCS.SC.H, VCS.SC.M,
VCS.SC.L, VCS.SC.I, SOC.SC.M, and HCS.SC.M. (CA IOUs, No. 113 at p. 3)
The CA IOUs commented that they subjected four commercially available
[[Page 7511]]
units with evaporator fan controls from two manufacturers (3 VCS.SC.M,
1 VCS.SC.L) to a modified, more stringent NSF 7 test. Id. The CA IOUS
added that they based the modified NSF 7 test on the formal NSF 7 test
for display coolers, with modifications to unit loading and ambient dry
bulb temperature. Id. The CA IOUs commented that, for cooler to pass
the modified NSF 7 test, the average temperature of the warmest
internal thermocouple must not exceed 41 [deg]F, and no individual
temperature readings shall exceed 43 [deg]F. Id. For freezers, the
integrated average temperature of all internal thermocouples must fall
within 0 2 [deg]F. Id. The CA IOUs commented that all four
units met the internal temperature criteria despite these stringent
test conditions. Id. The CA IOUs commented that, therefore, testing
conducted by the CA IOUs on VCS.SC.M and VCS.SC.L CRE units indicates
that units with evaporator fan controls can maintain internal
compartment temperatures consistent with NSF 7. Id. The CA IOUs
recommended that DOE gather more evidence related to these concerns to
reevaluate the inclusion of evaporator fan controls in its engineering
analysis, instead of simply removing a viable energy-saving technology
from the analysis due to `uncertainty.' Id.
ASAP et al. encouraged DOE to be less conservative in this
rulemaking. (ASAP et al., No. 106 at p. 2) ASAP et al. stated that DOE
screened out evaporator fan controls due to comments concerned about
food safety, however DOE discussed in the October 2023 NOPR that the
Department tested CRE units that incorporated evaporator fan controls,
and the Department acknowledges in the NODA that NSF 7 food safety
requirements do not preclude the use of evaporator fan controls, thus
ASAP et al. encouraged DOE to include the technology. (Id.)
DOE recognizes that some self-contained, closed, CRE are able to
use evaporator fan controls and comply with NSF 7 requirements,
however, there is not sufficient information currently available to
conclude that a significant number of CRE can use evaporator fan
controls and comply with NSF 7.
Consistent with the results presented in the August 2024 NODA, DOE
has determined that evaporator fan controls meet the screening
criterion of ``safety of technologies'' for self-contained, closed CRE
and ``impacts on product utility'' for CRE connected to remote
condensing units and open CRE for this final rule. In this final rule,
consistent with the results presented in the August 2024 NODA, DOE's
engineering analysis has the evaporator fan running constantly, except
during electric defrost, in the baseline and all efficiency levels.
This approach improves the ability of CRE to achieve better temperature
uniformity, which can assist in ensuring food safe temperatures inside
the unit.
g. Microchannel Condensers
In the October 2023 NOPR, DOE considered microchannel condensers as
a design option for self-contained CRE, having observed the use of
microchannel condensers in other commercial refrigeration equipment
such as automatic commercial ice makers (``ACIMs''), including ACIMs
that use R-290. 88 FR 70196, 70222.
In response to the October 2023 NOPR, SCC, NAFEM, and NAMA
mentioned that microchannel condensers have clogging issues in the
field. (SCC, No. 74 at p. 2; NAFEM, No. 83 at p. 7; NAMA, No. 85 at p.
12) Hoshizaki, NAMA, NAFEM, and Hussmann commented that microchannel
condensers need more frequent cleaning than tube and fin heat
exchangers. (Hoshizaki, No. 76 at p. 5; NAMA, No. 85 at p. 12;
Hussmann, No. 80 at p. 12; NAFEM, No. 83 at pp. 6-7) SCC commented that
clogging leads to increased energy consumption, while NAFEM and
Hussmann stated that microchannels have little to no energy savings
compared to tube and fin heat exchangers. (SCC, No. 74 at p. 2; NAFEM,
No. 83 at p. 5; Hussmann, No. 80 at p. 5) AHRI added that microchannel
condensers cannot always be substituted for fin and tube heat
exchangers. (AHRI, No. 81 at p. 12) AHRI also stated the following
microchannel condenser considerations: supplier tooling costs for
custom configurations; existing and potential tariffs on components;
significant lab testing to validate temperature and energy performance;
field testing for reliability; product line changeovers; consideration
for refrigerant charge; and air flow analysis to determine the impact
on the air curtain. (Id.) Hoshizaki commented that microchannel
condensers have shorter lifetimes than current condensers, and NAMA
added that when not maintained, microchannel condensers can cause
premature failure of the compressor. (Hoshizaki, No. 76 at p. 5; NAMA,
No. 85 at p. 12) NAMA and NAFEM commented that microchannel condensers
can have leaks, which is not acceptable with flammable refrigerants,
and are screened out in the household refrigeration rulemaking. (NAMA,
No. 85 at pp. 12, 34; NAFEM, No. 83 at pp. 6-7) NAMA further stated
that microchannels show greater likelihood of pinhole leaks, and thus
their use with flammable refrigerants could constitute a safety hazard.
(NAMA, No. 85 at pp. 25, 34) NAMA added that microchannel condensers
are not yet available in configurations for R-290 refrigerants, and
NAMA has no information to suggest that they will be in the years
ahead. (Id. at p. 25)
Hoshizaki commented that microchannel condensers would need time
for engineering personnel to determine the best circuit for the
refrigeration system and best way to join the piping. (Hoshizaki, No.
76 at p. 4) Hoshizaki stated that there will be a learning curve adding
more time compared to that of current condensers to make sure the
system is made in an optimal way and require value lost on increase of
labor time for installation and testing. (Id. at pp. 4-5)
NAMA commented that it identified an inconsistency in DOE's
acceptance of microchannel condensers. (NAMA, No. 85 at pp. 12-13) NAMA
and NAFEM pointed out that in the 2021 household refrigerator
rulemaking, DOE decided not to pursue a rulemaking design option based
on microchannel condensers.\47\ (Id. at p. 13; NAFEM, No. 83 at pp. 6-
7) NAMA requested clarification on whether microchannels are
unacceptable or whether the TSD for household refrigeration is
inaccurate. (NAMA, No. 85 at p. 13) NAMA recommended that DOE be
consistent and screen out microchannels in CRE because the 2021 DOE
household refrigeration appliances energy conservation standards
rulemaking on household refrigeration appliances screened out
microchannel condensers. (Id. at p. 34)
---------------------------------------------------------------------------
\47\ See section 5.5.2 of the Residential Refrigerator NOPR TSD
at www.regulations.gov/document/EERE-2017-BT-STD-0003-0045.
---------------------------------------------------------------------------
NAMA stated that microchannels require more frequent servicing and
cleaning and added that DOE underestimated the extra time and cost.
(Id. at p. 33) NAMA estimated the cost for fittings, machinery for
insertion, other capital improvements, and additional servicing to be
well over $100. (Id.)
In response to the comments regarding microchannel condensers, DOE
has observed microchannel condensers in other commercial refrigeration
equipment such as ACIMs, including ACIMs that use R-290. However, DOE
is not currently aware of microchannel condensers in use for CRE and
did not observe microchannel condensers in any of the equipment in the
teardown analysis. Even though
[[Page 7512]]
DOE tentatively determined in the October 2023 NOPR that microchannel
condensers would be technically feasible for use in CRE, feedback from
commenters in response to the October 2023 NOPR suggests that there is
current uncertainty as to the practicability to manufacturer, install,
or service this technology on the scale necessary to serve the CRE
market at the time of the effective date of any new or amended
standards. Recognizing this uncertainty, DOE tentatively screened out
microchannel condensers as a design option in the August 2024 NODA. 89
FR 68788, 68793.
In response to the August 2024 NODA, ITW supported DOE's
determination to screen-out microchannel condensers from consideration
as a design option. (ITW, No. 111 at p. 1) Hillphoenix, NAFEM,
Delfield, and Continental also commented in support of DOE's decision
to screen-out microchannel condensers. (Hillphoenix, No. 110 at p. 4;
NAFEM, No. 101 at pp. 2-3; ; Delfield, No. 99 at p.2; Continental, No.
107 at p. 2)
Based on the uncertainty associated with microchannel condensers,
and consistent with the August 2024 NODA, DOE screened-out microchannel
condensers as a design option in this final rule. See chapter 4 of the
final rule TSD for more information.
2. Remaining Technologies
Through a review of each technology, DOE concludes that all of the
other technologies listed in table IV.4 met all five screening criteria
to be examined further as design options in DOE's final rule analysis.
In summary, DOE did not screen out the following technology options:
[GRAPHIC] [TIFF OMITTED] TR21JA25.106
a. Other Technologies Not Screened-Out
In response to the August 2024 NODA, ITW commented that they
manufacture chef base and griddle stand models with both refrigerator
(CB.SC.M) and freezer (CB.SC.L) storage compartment temperatures, and
that these models have widths ranging from 36'' to 139'', and model
volumes ranging from 4.5 cu-ft to 30.5 cu-ft. (ITW, No. 111 at p. 2)
ITW commented that refrigerator models having widths great than
(CB.SC.M > 84'') and freezer models having widths great than (CB.SC.L >
60'') use two or more evaporator coils spread along the width of the
cabinet interior. (Id.) ITW commented that they currently do not
understand the implications associated with the application of variable
speed reciprocating compressors in self-contained refrigeration systems
with multiple evaporator circuits. (Id.) ITW urged DOE to provide
additional information to stakeholders, and suggested that DOE screen-
out EL3--``R-290 Variable Speed Reciprocating Compressor'' from the
list of available design options for both CB.SC.M and CB.SC.L CRE in
their energy analysis. (Id).
In response to the ITW comment, DOE notes that it had considered
variable-speed compressors in its preliminary analysis (see pages 5-51
and 5-52 of the Preliminary Analysis TSD) and for its October 2023 NOPR
analysis for chef bases (see pages 5-54 and 5-55 of the October 2023
NOPR TSD). Although DOE received many comments regarding setting of
standards for chef bases and regarding use of variable-speed
compressors, DOE received no comments specifically about use of
variable-speed compressors in this equipment class, nor use of
variable-speed compressors in systems with multiple evaporator
circuits. DOE also did not receive input regarding this topic in
manufacturer interviews. DOE notes that variable-capacity compressor
systems serving multiple evaporator circuits are quite common, e.g., in
supermarkets, where a single compressor rack can serve many individual
evaporators in cabinets distributed throughout the store. DOE concludes
that, while additional factors may need to be considered in the design
and development for such systems,
[[Page 7513]]
there is no available information that would be the basis of screening
the technology for the self-contained chef base equipment classes.
Hence, DOE has considered variable speed compressors as a design option
for these classes.
In response to the August 2024 NODA, NAFEM commented that DOE only
removed some of the technologies NAFEM had suggested screening out in
its comments in response to the October 2023 NOPR, and DOE did not
provide a clear reason for why some technologies were removed and not
others. (NAFEM, No. 101 at pp. 2-3)
NAFEM commented that it did not agree with DOEs decision to keep
insulation, lighting, improved transparent doors, compressors,
evaporators, condensers, fans, and other technologies including defrost
systems, expansion valve, night curtains, and liquid suction heat
exchangers in the analysis, as these are all already in-use
technologies. (Id. at p.3) Additionally, NAFEM stated that occupancy-
based lighting, microchannel condensers, and night curtains suffer from
technical shortcomings, as NAFEM previously identified in their
comments. (Id.)
DOE notes that in short, NAFEM commented that all identified
technology options remaining after the screening analysis should be
screened out. DOE notes that some of the technologies mentioned by
NAFEM (i.e., lighting, evaporators, and condensers) are analyzed in the
baseline for all applicable equipment classes and are not analyzed as
design options to improve efficiency (See appendix 5A of the October
2023 NOPR TSD for more details). In addition, some technologies were
not directly analyzed in the October 2023 NOPR or August 2024 NODA, and
continue to not be analyzed in this final rule (i.e., defrost systems,
expansion valves, and liquid suction heat exchangers) (See section
5.5.8 Design Options Not Directly Analyzed in the October 2023 NOPR
TSD). While these technologies did not, and continue to not meet the
screening criteria, DOE has not directly analyzed these design options
as discussed further in chapter 5 of the final rule TSD. Finally, DOE
did analyze design options in the October 2023 NOPR and August 2024
NODA for improved transparent doors, compressors, fans, occupancy
sensors, and night curtains for applicable equipment classes, but notes
that there are instances where DOE analyzed these technologies in the
baseline, and did not consider those technologies as design options to
improve efficiency (i.e., baseline EC condenser or evaporator fan motor
for certain equipment classes and R-290 baseline at the current
standard for certain equipment classes). For a full list of technology
options analyzed at the baseline, see appendix 5A of the final rule
TSD. DOE evaluated technology options to be implemented at and beyond
baseline on an equipment class basis based on testing, component/
equipment teardowns, manufacturer interviews, public comments, and
review of online sources (e.g., spec sheets), and therefore disagrees
with NAFEM that all technologies should be screened out. See section
IV.C.1 for further discussion on this topic.
DOE 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; do
not result in adverse impacts on consumer utility, product
availability, health, or safety; and do not utilize unique-pathway
proprietary technologies). For additional details, see chapter 4 of the
final rule TSD.
C. Engineering Analysis
The purpose of the engineering analysis is to establish the
relationship between the efficiency and cost of the equipment. 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 interpolate to define
``gap fill'' levels (to bridge large gaps between other identified
efficiency levels) and/or to extrapolate to the ``max-tech'' level
(particularly in cases where the ``max-tech'' level exceeds the maximum
efficiency level currently available on the market).
In the October 2023 NOPR, DOE relied on a design-option approach,
supported with the testing and reverse engineering of directly analyzed
CRE. 88 FR 70196, 70224. Consistent with the precedent set by March
2014 Final Rule analysis (see chapter 5 of the March 2014 Final Rule
TSD),\48\ DOE estimated the performance of design option combinations
using an engineering analysis spreadsheet model. Id. at 88 FR 70225.
This model estimates the daily energy consumption of CRE in kWh/day at
various performance levels based on design details. Id. DOE generally
relied on test data, CCD information, feedback from manufacturer
interviews and public comments, publicly available component
information, and reverse engineering to support and calibrate the
engineering analysis spreadsheet model and the values of inputs to the
models, such as compressor performance information, insulation
thickness and thermal resistance, air infiltration, etc. Id. The model
calculates energy consumption at each efficiency level separately for
each analysis configuration. Id.
---------------------------------------------------------------------------
\48\ 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,
selecting a representative capacity (defined by refrigerated volume or
TDA, depending on the class), to analyze using the engineering
analysis. DOE has used the term ``directly analyze'' to refer to use of
the engineering spreadsheet to calculate energy use for the
representative unit of a given primary
[[Page 7514]]
equipment class. Analyses or energy use levels of so-called
``secondary'' equipment classes were based on the analysis results
determined for the primary equipment classes (see chapter 5 of the
March 2014 Final Rule TSD).\49\ In the October 2023 NOPR analysis, DOE
followed a similar approach of directly analyzing 28 primary equipment
classes. Id. DOE directly analyzed the same primary equipment classes
as the March 2014 Final Rule, with the following changes: the PD.SC.M
equipment class was not included, and DOE directly analyzed 4 new
equipment classes, including VCT.SC.H, VCS.SC.H, chef base or griddle
stand self-contained medium temperature (``CB.SC.M''), and chef base or
griddle stand self-contained low temperature (``CB.SC.L''). Id.
---------------------------------------------------------------------------
\49\ See www.regulations.gov/document/EERE-2010-BT-STD-0003-0102.
---------------------------------------------------------------------------
In response to the October 2023 NOPR, ASAP et al. supported DOE's
approach for the engineering analysis, which was supported by testing,
physical and catalog teardowns, and manufacturer feedback and estimated
both the energy use and the manufacturer production cost (``MPC'') from
use of additional design options in CRE that increase efficiency. (ASAP
et al., No. 79 at p. 2) ASAP et al. commented that DOE's design option
approach represents a robust method for estimating the incremental cost
and expected efficiency improvements associated with specific design
options for CRE and stated that this approach is consistent with DOE's
analysis for other rulemakings. (Id.)
In this final rule analysis, DOE has followed the same methodology
as the October 2023 NOPR, except for the updates outlined in the
following sections. In this final rule, consistent with the analysis in
the August 2024 NODA, DOE analyzed a different representative capacity
for the SOC.SC.M equipment class that assumes the use of R-290. DOE
also made changes to the baseline analysis, including updating the R-
value and thickness of insulation, updating the compressor performance
assumptions, updating certain baseline components, and updating
baseline design specifications for some equipment classes. Additionally
in this final rule, DOE removed some design options (as discussed in
section IV.B of this document) and updated the analysis approach or key
performance characteristics of some design options (as discussed in
section IV.C of this document).
Also consistent with the August 2024 NODA, DOE made updates to the
multiplier approach, as discussed in section IV.C.1.c of this document.
a. Baseline Energy Use
For each equipment class, DOE generally selects a baseline model as
a reference point for each class, and measures anticipated changes
resulting from potential energy conservation standards against the
baseline model. The baseline model in each product/equipment class
represents the characteristics of a product/equipment typical of that
class (e.g., capacity, physical size). Generally, a baseline model is
one that just meets current energy conservation standards, or, if no
standards are in place, the baseline is typically the most common or
least efficient unit on the market.
i. Representative Unit Capacity
In performing the engineering analysis for CRE, DOE selected
representative units for each primary equipment class to serve as
analysis points in the development of cost-efficiency curves. In the
October 2023 NOPR, DOE directly analyzed 28 primary equipment classes,
at a single representative capacity for each CRE equipment class. 88 FR
70196, 70225.
Few of the NOPR comments explicitly addressed the DOE approach of
conducting analysis at a single representative capacity for each class.
Some comments regarding selection of the slope or intercept of the
energy conservation standard line as a function of volume or TDA are
related to the single-capacity approach--this is because determination
of appropriate slope could potentially be evaluated on the basis of
conducting analysis for two representative capacities. Such comments
are discussed in section IV.C.1.d of this document. For some equipment
classes, the topic of representative capacity is also affected by
refrigerant transition--this is discussed in more detail in section
IV.C.1.a.ii of this document. Finally, NAMA submitted a comment
regarding VCT.SC.M models with refrigerated volume less than 30 cu.ft.
(NAMA, No. 85 at pp. 5-6). This comment addresses both the potential
for establishing a separate class for such models, as well as the
representativeness of DOE's selected representative capacity. Hence,
this comment is addressed in section IV.A.1.b of this document and is
not discussed here.
In response to the August 2024 NODA, ITW commented that after
reviewing table 1.2 in the NODA support document, it would appear DOE's
analysis focused on models with interior volumes <10 cu-ft for
refrigerators and <12 cu-ft for freezers, and that the engineering
spreadsheet used an example model of 9.5 cu-ft. (ITW, No. 111 at p. 2)
ITW commented expressed concern for the proposed standards encompassing
models with volumes greater than 12 cu-ft employing technology at an
energy efficiency level of EL3. Id.
In response to this comment from ITW, DOE notes that it not only
considered the test data presented in table 1.2 of the NODA support
document, but also reviewed information publicly available online, as
well as information gathered through manufacturer interviews and
comments in response to the October 2023 NOPR and August 2024 NODA.
While DOE acknowledges there are chef bases or griddle stands larger
than the units DOE directly tested, based on the additional chef base
or griddle stand data DOE received and reviewed for larger volumes, DOE
determined that this data was consistent with the analysis for DOE's
representative unit volumes.
No other comments were submitted related to use of a single
representative capacity for each class in the analysis.
ii. Addressing Refrigerant Transition
In the October 2023 NOPR analysis, DOE addressed the ongoing
refrigerant transition mandated by the AIM Act and EPA regulations.
70196, 70226-70228. Specifically, DOE noted that, pursuant to the AIM
Act, EPA proposed in the December 2022 EPA NOPR that all commercial
refrigeration equipment would have to transition to refrigerants with
GWP less than 150 or less than 300, depending on equipment
characteristics (e.g., self-contained vs. operating with a remote
condenser), by January 1, 2025. Id. After publication of the October
2023 NOPR, EPA published a final rule, ``Phasedown of
Hydrofluorocarbons: Restrictions on the Use of Certain
Hydrofluorocarbons Under the American Innovation and Manufacturing Act
of 2020'' (``October 2023 EPA Final Rule''), which extended the
compliance date for equipment operating with a remote condenser to
January 1, 2026, for remote-condensing equipment used in supermarkets
to January 1, 2027, for refrigerated food processing and dispensing
equipment except for equipment within the scope of UL 621 to January 1,
2027, and for refrigerated food processing and dispensing equipment
within the scope of UL 621 to January 1, 2028. 88 FR 73098, 73209
(October 24, 2023). See table IV.5 for a list of all GWP limits and
compliance dates applicable to CRE that
[[Page 7515]]
were finalized in the October 2023 EPA Final Rule.
BILLING CODE 6450-01-P
[GRAPHIC] [TIFF OMITTED] TR21JA25.107
[[Page 7516]]
BILLING CODE 6450-01-C
As discussed in the October 2023 NOPR, DOE assumed that
manufacturers would convert self-contained CRE models to R-290. 88 FR
70196, 70227-70228. The use of R-290 is generally expected to provide
higher efficiency performance at the baseline level (compared to
current refrigerants), such that the baseline efficiency levels defined
in the October 2023 NOPR for each self-contained class generally
reflected a lesser energy use than the currently applicable DOE
standards for CRE. Id. In the October 2023 NOPR, DOE's analysis
considered that these efficiency improvements, equipment costs, and
manufacturer investments required to comply with the December 2022 EPA
NOPR would be in effect prior to the time of compliance for the amended
CRE standards for all equipment classes and sizes as proposed in the
October 2023 NOPR. Id. Therefore, in the October 2023 NOPR, DOE noted
that the October 2023 NOPR analysis did not consider benefits and costs
resulting from the December 2022 EPA NOPR. Id. DOE clarifies that DOE
has not double counted any energy savings from the October 2023 EPA
Final Rule in the October 2023 NOPR, in the August 2024 NODA, or in
this final rule.
In the October 2023 NOPR, DOE requested 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. Id.
DOE received numerous comments indicating that R-290 may not be
suitable for use in large-capacity self-contained equipment--these
comments are addressed in the section below discussing large-capacity
self-contained equipment using A2L refrigerant. DOE also received
comments addressing analysis for smaller self-contained equipment that
do not have an issue using R-290--these are addressed in the following
section for non-large self-contained equipment using R-290. Additional
more general comments regarding the refrigerant transition are
discussed in the following paragraphs.
AHRI commented that the new refrigerants must conform to safety
standards now being updated and revised, such as ASHRAE 15 and UL
60335-2-89, and these refrigerants are not universally compatible with
all end uses covered in EPA's proposed Significant New Alternatives
Policy (``SNAP'') approvals, requiring further refinement and other
regulatory actions to clear the path forward. (AHRI, No. 81 at p. 2)
AHRI cited as an example UL 60335-2-89 Second Edition (2021), which has
been proposed for most end uses of A2Ls and a replacement for UL 471.
(Id.)
AHRI commented that some product types have not switched to R-290,
especially large CRE products that require larger charges of R-290,
exceeding 150g. (AHRI, No. 81 at p. 8) AHRI commented that technology
is just becoming available for larger units as manufacturers are
working on preliminary designs to meet the proposed SNAP 26 rule and UL
60335-2-89; AHRI added that until these go into effect, larger charge
quantities of R-290 cannot be used. (Id.)
Hussmann also pointed out that even though UL 60335-2-89 ed. 2
allows an increased 494 g R-290 charge size, this is not yet approved
by SNAP. (Hussmann, No. 80 at p. 5)
In response to the October 2023 NOPR, SCC and AHRI commented that
EPA has not published the SNAP Program Rule 26, which approves larger
charges for R-290 products and that, currently, the charge limit for R-
290 products is 150 grams, which limits the size of these products.
(SCC, No. 74 at p. 2; AHRI, No. 81 at p. 5)
Hussmann stated that, because SNAP Rule 26 is still in the proposal
stage, Hussmann has been unable to release equipment that uses higher-
charge R-290 refrigerant or new A2L refrigerants and, therefore, how
these refrigerants impact energy consumption is not yet known.
(Hussmann, No. 80 at p. 2)
Hussmann and AHRI commented that DOE should refrain from new
rulemakings until SNAP 26 and building codes are updated, and the
transition to low-GWP refrigerants is completed, for a better
understanding of baseline energy use. (Hussmann, No. 80 at pp. 2-3;
AHRI, No. 81 at p. 5) AHRI stated that two key factors in lowering GWP
and developing new systems--increased R-290 charge limits and SNAP
approval of A2L--are not yet finalized by EPA and these technologies
are representative of products retailers will use in 2027. (Id.) AHRI
commented that, for self-contained products, these options will reduce
the number of condensing units per display case (larger model display
cases). (Id.)
In response, DOE notes that many of the ongoing regulatory and
standards processes that were not finalized by the time of publication
of the October 2023 NOPR have in the interim been finalized. Most
notably, EPA finalized the October 2023 EPA Final Rule and the SNAP 26
Final Rule, which harmonizes with UL Standard 60335-2-89, Edition 2 and
ASHRAE 15. 89 FR 50410 (June 13, 2024). Also relevant for the full
capacity range of self-contained CRE, SNAP 26 increased the allowable
charge of R-290 from 150 grams in self-contained CRE to 304 grams for
closed equipment and 494 grams for open equipment and allows the use of
certain A2L refrigerants, such as R-454C and R-455A.
FMI and NACS commented that DOE's assumption that the market will
have transitioned to the October 2023 EPA Final Rule in its baseline is
overly speculative and that there are challenges related to technical
feasibility, availability of installers and service technicians, local
codes, and more that will make it impossible for industry to comply
with AIM Act regulations within the allotted compliance timeframe. (FMI
and NACS, No. 78 at p. 2)
In response to comments about additional time needed for out-of-
date building codes to be updated, ACHR News \50\ stated that ``in the
U.S., states usually adopt mechanical codes from either the
International Code Council (``ICC'') or the International Association
of Plumbing and Mechanical Officials (``IAMPO'').'' In May 2024, the
ICC published the 2024 I-Codes,\51\ including the 2024 International
Mechanical Code (``2024 IMC'').\52\ The 2024 IMC includes provisions
for refrigeration equipment building codes that are commonly adopted by
most states, and in the May 2024 version, section 1101.2.1, ``Group
A2L, A2, A3 and B1 high probability equipment,'' states that equipment
using Group A2L, A2, A3 or B1 refrigerant shall comply with UL 484, UL/
CSA 60335-2-40, or UL/CSA 60335-2-89. Therefore, DOE expects that all
States will have updated their building codes to reference the ICC or
other equivalent standards to reference updated safety standards by the
2029 compliance year.
---------------------------------------------------------------------------
\50\ See www.achrnews.com/articles/147113-finalizing-the-a2l-provisions-in-2024-mechanical-codes.
\51\ See http://codes.iccsafe.org/codes/i-codes/2024-icodes.
\52\ See http://codes.iccsafe.org/content/IMC2024V1.0/chapter-11-refrigeration.
---------------------------------------------------------------------------
In response to the comment from FMI and NACS about market
transition to alternative refrigerants, as discussed in section
III.A.2.a of this document, NAFEM commented that most self-contained
CRE today, in the commercial bar space, already uses alternate
refrigerants, (almost exclusively R-290) and stated that they already
made the change to R-290 from R-134a more than 5 years ago. (NAFEM, No.
83 at pp. 3-5) Kirby also commented that much of the current equipment
incorporates new refrigerants, particularly self-contained models that
utilize R-290. (Kirby, No.
[[Page 7517]]
66 at p. 2) Additionally, DOE notes that over 93 percent of ENERGY STAR
equipment have already transitioned to low GWP, hydrocarbon
refrigerants.\53\ In response to FMI and NACs comment, DOE assumes that
manufacturers will comply with applicable regulations. As a result, DOE
does not anticipate that the challenges referenced by FMI and NACS will
make it impossible for industry to comply with AIM Act regulations
within the allotted compliance timeframe.
---------------------------------------------------------------------------
\53\ www.energystar.gov/productfinder/product/certified-commercial-refrigerators-and-freezers/results (last accessed Oct.
23, 2024).
---------------------------------------------------------------------------
Large-Capacity Self-Contained Equipment Using A2L Refrigerants
This sub-section addresses large-capacity self-contained CRE.
In response to the October 2023 NOPR, Hussmann commented that DOE
applied a design option of R-290 variable-speed compressor to classes
such as SVO.SC.M that contain some very large models, such as a 12-ft-
long by 6-ft-wide shop-around island case with a refrigeration load of
approximately 24,000 Btu/hr that Hussmann manufactures. (Hussmann, No.
80 at p. 5) Hussmann stated that not all self-contained product types
have been switched over to R-290 yet, especially large CRE that require
larger charges of R-290 or an A2L refrigerant. (Hussmann, No. 80 at p.
6) Hussmann recommended that DOE establish baselines with what is
currently available in the market. (Id.) Hussmann further stated that
these models will have to be transitioned to a new A2L refrigerant by
January 1, 2025 to comply with the October 2023 EPA Final Rule, so the
assumed R-290 energy efficiency improvement in DOE's analysis does not
apply. (Id.) Hussmann commented that, regarding the self-contained
equipment that will transition to an A2L refrigerant, Hussmann
anticipates that there is no appreciable reduction in energy
consumption based on preliminary lab testing. (Id. at p. 6)
Zero Zone stated that DOE only evaluated and tested equipment with
relatively small volume, adding that the smaller-volume equipment is
not representative of the entirety of the market with self-contained
equipment available over 200 ft\3\ of volume. (Zero Zone, No. 75 at p.
3)
Zero Zone, Hussmann, and SCC commented that larger volume CRE would
require multiple condensing units for R-290. (Zero Zone, No. 75 at p.
3; Hussmann, No. 80 at p. 5; SCC, No. 74 at p. 2) SCC further commented
that this would result in compressors with lower EER, given that
compressors with lower capacity tend to be less efficient. (SCC, No. 74
at p. 2) Hussmann added that R-290 is not a practical refrigerant to
use because multiple separate condensing units/refrigerant circuits
would be needed, which is prohibited by a lack of physical space and by
product cost constraints. (Hussmann, No. 80 at p. 5)
Zero Zone commented that the use of larger charge propane systems
is not as simple as buying and attaching larger units because the
safety standards will require additional testing to confirm the larger
charge will not be a safety issue for larger charge propane systems.
(Zero Zone, No. 75 at p. 4) Zero Zone also commented that equipment
with larger charges will need additional mitigation components,
including sensors, controls, and fans. (Id.) Zero Zone stated that
instead of the additional complexity and higher costs of the larger-
charge propane systems, end users may want to purchase larger-charge
A2L self-contained equipment, and DOE should set energy levels that
would allow the use of other refrigerants. (Id.)
In the August 2024 NODA, DOE updated its approach for selecting
representative units for the engineering analysis from the October 2023
NOPR. 89 FR 68788, 68790. The updated approach was based on feedback,
such as the comments summarized in the preceding paragraphs, received
from manufacturers and additional analysis conducted since the October
2023 NOPR. This updated approach indicated that larger CRE units, which
contain more refrigerant than smaller units, would require more R-290
refrigerant than the maximum allowable charge size specified by UL
60335-2-89. Id. For such equipment, manufacturers will likely instead
need to implement other low-GWP refrigerant options to comply with the
GWP limits in the October 2023 EPA Final Rule. Id. In the August 2024
NODA, DOE identified R-454C and R-455A as alternatives that are mildly
flammable (designated ``A2L'') refrigerants currently available and
could be used for units with cooling capacities greater than would be
achievable using an allowable R-290 charge size. Id.
In recognition of this, DOE evaluated the volume or TDA limit which
corresponded to the UL standard charge limits based on refrigeration
load per cabinet size and refrigerant charge per refrigeration system
capacity. Based on the results, in the August 2024 NODA, DOE analyzed
two different representative capacities for the following seven
equipment classes: VOP.SC.M, SVO.SC.M, HZO.SC.L, SOC.SC.M, VCT.SC.M,
VCT.SC.L, and VCS.SC.L.\54\ Id. For each of these seven classes, DOE
assumed the use of an A2L refrigerant for the large capacities and R-
290 for the non-large capacities in the August 2024 NODA. Id.
---------------------------------------------------------------------------
\54\ The equipment classes are designated 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.
---------------------------------------------------------------------------
Also, in the August 2024 NODA, DOE analyzed a smaller
representative capacity using R-290 refrigerant for the SOC.SC.M
equipment class, as compared to the representative capacity proposed in
the October 2023 NOPR. Id. DOE concluded that the representative
capacity analyzed for the SOC.SC.M equipment class in the October 2023
NOPR using R-290 refrigerant exceeds the likely capacity limit for R-
290 based on the 304 g charge limit. Instead, DOE analyzed an A2L
refrigerant in the August 2024 NODA. Id. Updating the representative
capacity for SOC.SC.M is consistent with the precedent the March 2014
Final Rule where DOE changed the representative total display area for
HCT.SC.I from 5.12 ft\2\ in the 2013 NOPR to 4.78 ft\2\ in the March
2014 Final Rule.\55\
---------------------------------------------------------------------------
\55\ The 2013 NOPR TSD and 2014 Final Rule TSD are available at:
www.regulations.gov/document/EERE-2010-BT-STD-0003-0051;
www.regulations.gov/document/EERE-2010-BT-STD-0003-0102.
---------------------------------------------------------------------------
Table IV.6 presents the seven equipment classes for which DOE
analyzed two representative capacities in the August 2024 NODA. In the
August 2024 NODA, DOE presented analytical results of this approach for
each of these seven equipment classes. Id. at 89 FR 68790-68791.
BILLING CODE 6450-01-P
[[Page 7518]]
[GRAPHIC] [TIFF OMITTED] TR21JA25.108
BILLING CODE 6450-01-C
DOE received no comments indicating that the suggested refrigerated
volume or TDA levels delineating transition to the large-capacity range
should be changed for any of the seven identified classes, nor that
additional classes should have separate large-capacity ranges. Hence,
DOE is finalizing these ranges as presented in the August 2024 NODA.
DOE notes that while DOE is amending the standards in this final
rule for the non-large capacity ranges for the seven equipment classes
listed in table IV., DOE is continuing to analyze the large capacity
ranges for these classes. Therefore, DOE is not discussing comment
specific to the analysis for the large capacity ranges and is not
amending the standards for the large capacity ranges in this final
rule.
Therefore, for the seven large self-contained equipment classes,
the standards presented in this rulemaking remain the same as the
current standards for each respective class. DOE has addressed all cost
related comments, including comments about the cost of A2L equipment in
section II.B.3 of this document.
Non-Large Self-Contained Equipment Using R-290 Refrigerant
This sub-section addresses comments and issues specific to analysis
for the self-contained classes determined to be in the smaller capacity
range for which R-290 refrigerant is appropriate.
To account for the December 2022 EPA NOPR, DOE proposed that all
manufacturers would be able to convert self-contained CRE to R-290 and,
therefore, proposed a more stringent efficiency level than the current
DOE standard as the analyzed baseline in the October 2023 NOPR. 88 FR
70196, 70227-70228. DOE initially determined the energy use associated
with the defined baseline efficiency levels for each equipment class
assuming use of single-speed R-290 compressors, and selecting for the
analysis of each representative unit the more-efficient suitably-sized
compressor based on data available at the time of the analysis from two
commonly used compressor manufacturers. Id. at 88 FR 70228. The
equipment daily energy use reduction determined for the use of R-290 in
baseline models presented in the October 2023 NOPR is shown below in
table IV.7. Baseline efficiency levels used in the analysis for these
classes were equal to the current DOE energy conservation standard
level for the class, expressed in kWh per day, reduced by these
percentages, to account for the refrigerant transition.
[[Page 7519]]
[GRAPHIC] [TIFF OMITTED] TR21JA25.109
In response to the October 2023 NOPR, DOE received several comments
on the proposed baseline levels for self-contained equipment.
NEEA and ASAP et al. supported the adoption of R-290 as the new
baseline for self-contained CRE. (NEEA, No. 89 at p. 5; ASAP et al.,
No. 79 at p. 4) Kirby commented that much of the current equipment
incorporates new refrigerants, particularly self-contained models that
utilize R-290. (Kirby, No. 66 at p. 2)
ASAP et al., agreed with DOE's approach but expressed concern that
DOE could be underestimating the efficiency improvements, noting that,
in the November 2023 Public Meeting, Zero Zone referenced a 40-percent
reduction in energy usage for the VCT.SC.M equipment class when using
propane compared to 18.8 percent in DOE's analysis. (ASAP et al., No.
79 at p. 4) ASAP et al., commented that underestimating the efficiency
gains yielded by switching to propane refrigerant would result in CRE
standards that are less stringent (i.e., requiring less additional
design options) than anticipated by the engineering analysis. (Id.)
In response to the comment from ASAP et al. about DOE
underestimating energy savings, DOE notes that this was a
misunderstanding by Zero Zone that was explained during the November
2023 Public Meeting. (See November 2023 Public Meeting Transcript, No.
64 at pp. 88-89) Zero Zone's comment suggested that they thought that
the percentage energy use reduction of the proposed TSL level (roughly
40 percent) was due only to conversion to R-290, when reduction for the
R-290 conversion alone was 18.8 percent.
Zero Zone and AHRI disagreed with DOE's decision to reevaluate
energy levels based only on R-290. (Zero Zone, No. 75 at p. 3; AHRI,
No. 81 at p. 8) AHRI stated that the engineering analysis worksheet
used R-404A as the pre-baseline with the new baseline of EL 0 based on
R-290. (Id. at p. 8) However, AHRI stated that EL 0 (i.e., the baseline
efficiency level) should have been based on R-404A refrigerant and DOE
should not assume that all CRE products have been converted to R-290
because this is not yet allowed by the EPA. (Id.) AHRI commented that
other options currently used include R-450A, R-513A, and R-600a. (Id.)
AHRI stated that DOE's analysis does not align with UL safety
requirements as R-290 cannot be used in cases with shaded pole fan
motors. (Id.) AHRI added that the speculation in the DOE analysis does
not reflect current models; therefore, DOE cannot expand on what
options are available. (Id.)
NAMA recommended against using baseline levels for CRE based on
anticipated manufacturer design changes made in response to the
December 2022 EPA NOPR, as design changes for the EPA regulation are
not the baseline for an energy efficiency rulemaking. (NAMA, No. 85 at
p. 29) NAMA commented that the EPA-proposed regulation requires
reductions in GWP, not an automatic effective date for every unit, for
every platform, and the December 2022 EPA NOPR is not final;
consequently, it would be impossible for NAMA to provide empirical data
on the amount of energy savings assigned to meeting the EPA proposed
regulation. (Id.)
In response to AHRI suggestions to analyze additional refrigerants
other than R-290 for self-contained equipment classes, DOE notes that
its analysis assumes prior conversion of refrigerant to meet the
October 2023 EPA Final Rule, which requires GWP less than 150. 88 FR
73098, 73149. Both R-450A and R-513A have higher GWPs (601 and 630
respectively),\56\ thus they would not be appropriate options to
represent an EPA-compliant baseline. DOE also notes that R-600a has
similar compressor efficiencies to R-290, and therefore the performance
of units using R-290 should be similar to that of those using R-600a.
Regarding the comment that not all models have transitioned to R-290,
as indicated, the analysis assumption was that a transition to a
refrigerant with GWP less than 150 would be required by January 1,
2025--and this requirement was finalized in the October 2023 EPA Final
Rule. Consistent with comments that many models have already converted
to R-290 (see, e.g., NAFEM, No. 83 at p. 5) and feedback in
manufacturer interviews that manufacturers expect the market to
transition to R-290 for models for which the charge limits are
sufficient, DOE has finalized its analysis assuming conversion to R-290
to meet EPA regulations when charge limits prescribed by UL-60335-2-89
and SNAP would not be exceeded.
---------------------------------------------------------------------------
\56\ The values included in the text have been calculated as
prescribed by the EPA in 40 CFR 64.64.
---------------------------------------------------------------------------
NAFEM commented that, as stated during the November 2023 Public
[[Page 7520]]
Meeting, there are several components that must be flame-resistant or
spark-proof and available in a number of applications, particularly in
fan motors and both the condenser and the evaporator fan motors, as
well as other remote sensing equipment. (NAFEM, No. 83 at p. 16) NAFEM
pointed out that, for its small manufacturers, parts are not available
for being spark-proof and available at R-290, and volumes are so low
that they do not intend to put those products in. (Id.) NAFEM commented
that DOE assumes a complete conversion to R-290, especially in self-
contained units, and advised DOE to slow down its process for CRE until
the industry has a better understanding of how to meet AIM Act
requirements, which do not require R-290. (Id.)
In response to the comment from NAFEM about spark-proof components,
DOE notes that, in this final rule and consistent with the October 2023
NOPR and August 2024 NODA, DOE has accounted for the cost of spark-
proof components. Because DOE has analyzed R-290 as the baseline for
all non-large self-contained classes in response to the October 2023
EPA Final Rule, the costs associated with additional components
necessary to comply with safety standards for R-290 are incorporated
into the core case cost. In addition, DOE has tested units as small as
7 ft\3\ utilizing R-290 refrigerant and observed units utilizing R-290
as small as 2.34 ft\3\.\57\ Based on that testing, DOE disagrees that
parts are not available at low volumes. Further, during the November
2023 Public Meeting, True Manufacturing commented that the technology
for self-contained refrigeration to transition to R-290 is already
available. (November 2023 Public Meeting Transcript, No. 64 at pp. 74-
75)
---------------------------------------------------------------------------
\57\ See www.regulations.doe.gov/certification-data/CCMS-4-
Refrigeration_Equipment_-
_Commercial__Single_Compartment.html#fq=Chilled_or_Frozen_Volume_in_c
ubic_feet__ft3if_Applicable_d%3A%5B0.33%20TO%202.29%5D&fq=modelNumber
%3A''UCF20HC%5C-25''&fq=Basic_Model_Number_m%3A''UCF20HC%5C-
25''&q=Product_Group_s%3A''Refrigeration%20Equipment%20-
%20Commercial%2C%20Single%20Compartment''.
---------------------------------------------------------------------------
Hoshizaki and Hussmann disagreed with DOE's approach of accounting
for only one refrigerant in the baseline. (Hoshizaki, No. 76 at p. 3;
Hussmann, No. 80 at p. 6) Hoshizaki commented after reviewing the
ENERGY STAR website it found that the top 25 percent of the market uses
multiple refrigerants and recommended that DOE should review
refrigerants used in each category and size and analyze energy savings
for each refrigerant type for each machine type and size. (Hoshizaki,
No. 76 at p. 3)
In response to the comments from Hoshizaki and Hussmann, DOE notes
that after reviewing the ENERGY STAR website,\58\ only two refrigerants
used in rated equipment meet the GWP limit finalized in the October
2023 EPA Final Rule: R-600a and R-290. As previously noted in the
October 2023 NOPR TSD, DOE is aware of small CRE equipment using R-
600a; however, DOE has 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. Therefore, in this
final rule analysis, DOE has determined that the R-290 baseline in
response to the October 2023 EPA Final Rule is representative of the
alternative refrigerants that may be used in non-large self-contained
equipment.
---------------------------------------------------------------------------
\58\ See www.energystar.gov/productfinder/product/certified-commercial-refrigerators-and-freezers/results.
---------------------------------------------------------------------------
Hillphoenix commented that, according to DOE's engineering
spreadsheet, the R-290 versus R-404A efficiency gains attributed to the
compressor are 34.7 percent for medium-temperature (``MT'') and 5.6
percent for low-temperature (``LT'') applications. (Hillphoenix, No. 77
at p. 7) Hillphoenix requested that Copeland, the largest U.S.-based
refrigeration compressor manufacturer, compare LT and MT compressor
efficiencies. (Id.) Hillphoenix commented that, based on Copeland's
actual compressor performance and EER data, the percentage in energy
savings for R-290 versus R-404A in LT applications averages
approximately 14 percent, compared to DOE's value of 5.7 percent, and
in MT applications it averages approximately 22 percent, compared to
DOE's value of 34.7 percent. (Id. at p. 8)
NAFEM commented that the CRE industry only saw an energy efficiency
improvement closer to 10 percent when switching from R-134a to R-290
more than 5 years ago. (NAFEM, No. 83 at p. 5) AHRI commented that,
looking at only the refrigerant, its members anticipate that no
appreciable reduction in energy consumption will result from
transitioning to low-GWP refrigerants. (AHRI, No. 81 at p. 8)
In response to comments from Hillphoenix, NAFEM, and confidential
comments received by DOE that the energy use reduction attributed in
the October 2023 NOPR analysis to conversion to R-290 may not be
appropriate, DOE reviewed new available compressor performance data and
updated its analysis. This is similar to DOE's action in the March 2014
Final Rule, in which DOE updated its compressor assumptions in response
to comments received on the 2013 NOPR. 79 FR 17725, 17760. Similarly,
in this rulemaking, DOE has updated its analysis for the R-290 baseline
energy use level. As described above, in the October 2023 NOPR, DOE
determined energy use reduction associated with R-290 transition based
on the more efficient appropriately-sized compressor option for which
performance data was available from two commonly used compressor
manufacturers. 88 FR 70196, 70228. However, based on updated compressor
data and feedback provided by commenters, in the August 2024 NODA and
this final rule, DOE added compressor data from an additional
compressor manufacturer and determined energy use reduction using the
average rather than best efficiency of appropriately-sized available
compressors. 89 FR 68788, 68792. Based on the updated data, on average,
the medium-temperature energy savings presented in this final rule are
smaller than in the October 2023 NOPR and the low-temperature energy
savings presented in this final rule are larger than in the October
2023 NOPR, an adjustment that is consistent with feedback from
Hillphoenix. These updated energy savings were presented in the August
2024 NODA and are also shown in table IV. of this final rule.
BILLING CODE 6450-01-P
[[Page 7521]]
[GRAPHIC] [TIFF OMITTED] TR21JA25.110
BILLING CODE 6450-01-C
In response to the August 2024 NODA, Delfield commented that it
agrees with DOE's updated compressor approach of using an average EER
rather than the best EER value, especially for new compressors whose
EER values have not been validated. (Delfield, No. 99 at p. 2)
Hillphoenix and the CA IOUs also supported DOE's updated approach.
(Hillphoenix, No. 110 at p. 3, CA IOUs, No. 113, at p. 2) Hillphoenix
commented that they support DOE's revised compressor energy savings for
low and medium temperature applications, and the CA IOUs commented that
the updated R-290 compressor efficiency approach provides a more
accurate representation of the baseline energy use for R-290
compressors. Id.
However, Delfield disagreed with DOE's inclusion of energy
efficiency improvements resulting from switching to R-290 refrigerant
in the baseline given that most of the industry has already switched to
R-290 refrigerant over 7 years ago. (Delfield, No. 99 at pp. 1-2)
Delfield further commented that the CRE models that DOE tested and
reverse engineered include a combination of HC and HFC/HFO. (Id.)
Delfield expressed concern that the HFC/HFO units would inflate the
baseline energy use. (Id.) Delfield requested further explanation of
how including R-290 single-speed compressor as an EL 0 for VCS.SC.M and
L classes is not double counting the energy savings attributed to
switching to R-290. (Id.)
In response to Delfield, the March 2014 Final Rule, which
established the current standards that became effective on March 27,
2017, was based on an analysis using the most commonly-used, industry-
standard refrigerants at the time of the March 2014 Final Rule. 79 FR
17725, 17754. DOE stated that it considered two refrigerants, R-134a
and R-404A, because these are the industry-standard choices for use in
the vast majority of commercial refrigeration equipment. 79 FR 17725,
17753. In support of this final rule, DOE reviewed models that are
representative of energy use at or near the current standard and found
that, for most analyzed equipment classes, R-134a and R-404A are
representative. Therefore, to account for the refrigerant transition
mandated by the October 2023 EPA Final Rule, DOE developed a baseline
for self-contained equipment subject to this final rule using R-290 as
the baseline. Because R-290 has a higher refrigeration-cycle efficiency
than R-134a and R-404A, DOE reviewed R-290 compressors currently
available for CRE and similarly found that R-290 compressors typically
have higher EERs than R-134a and R-404A. Therefore, the R-290 baseline
developed for this final rule uses less energy than the current
standard for most equipment classes. As noted in table IV.8, DOE has
analyzed the current standard as the R-290 baseline for the HCT.SC.M,
HCT.SC.L, HCS.SC.L, VCT.SC.I, and HCT.SC.I equipment classes based on
DOE's determination that R-290 is representative of baseline CRE for
these classes. These findings are also supported by a review of models
with these refrigerants certified to DOE's CCD and tested by DOE.
CRE in Public Spaces
In response to the October 2023 NOPR, NAMA commented that in order
to be compliant with ASHRAE, manufacturers are required to use no more
than 114 grams of R-290 for equipment placed in public hallways or
lobbies rather than up to 150 grams, and that a 114-gram refrigerant
charge will not allow a significant number of machine models to be
updated or enlarged, and the leak testing required by the new 60335-2-
89 version will likely require a very precise flammable refrigerant
sensor that does not exist. (NAMA, No. 85 at p. 7)
NAFEM relayed a comment from one of its members that manufacturers
are interested in converting to R-290, but if a piece of equipment is
used in a public space, it must meet ASHRAE 15, which limits the actual
charge amount to 114 grams, not 150 grams as stated in the October 2023
NOPR TSD and October 2023 NOPR. (NAFEM, No. 83 at p. 16) NAFEM
commented manufacturers are limited in size of equipment by that
[[Page 7522]]
conversion and cannot convert if the product cannot be sold. (Id.)
In response to the comments from NAMA and NAFEM, DOE notes that
this same restriction applies to refrigerated bottled- or canned-
beverage vending machines (``BVMs''), and DOE has tentatively
determined that the 114 g limit would not restrict any currently
available BVM units from transitioning to R-290 refrigerant. 88 FR
33968, 33976. While there are differences between the BVM and CRE test
procedures and cabinet construction, DOE anticipates that any CRE
designed to serve the same market as BVMs (e.g., in public hallways or
lobbies) would also be able to transition to R-290 compressors without
exceeding the 114g limit.
In addition, commenters did not provide examples of specific models
or types of models that are intended for areas of egress and would use
more than 114 grams of R-290 refrigerant. DOE reviewed the three
VCT.SC.M models under 30 ft\3\ using R-290 that it tested, based on
NAMA's request for separate consideration of these models, and found
that all three models used less than 114 grams of R-290. The volume of
these three models are 8.72 ft\3\, 12.98 ft\3\, and 23.90 ft\3\.
Remote Condensing Equipment
In the October 2023 NOPR, DOE noted that remote condensing CRE is
also impacted by the December 2022 EPA NOPR, however, in AHRI 1200 the
test procedure calculates an expected compressor energy consumption
based on the case refrigeration load, independent of the refrigerant
type of the compressor. 88 FR 70196, 7028870228. Hence, DOE initially
determined that alternative refrigerants in remote CRE cases do not
result in changes in measured energy consumption. Id.
DOE did not receive comments on this approach, and therefore,
consistent with the analysis in the August 2024 NODA, in this final
rule DOE is analyzing the current standard as the baseline for remote
condensing equipment.
Hussmann commented that, while EPA's effective date for self-
contained equipment classes is January 1, 2025, the effective date for
the same equipment classes for remote condensing products is January 1,
2026 or January 1, 2027, based on the type of connected refrigeration
system. (Hussmann, No. 80 at p. 6) Hussmann stated its belief that, for
these remote condensing classes, it is too soon to comment on energy
use reduction for equipment that will be transitioned to A2L
refrigerants not even yet allowed by EPA SNAP and many building codes
around the nation. (Id.)
In response to the comment from Hussmann on SNAP approval and
building codes, as noted in the previous section, SNAP 26 was finalized
to allow A2L refrigerants in accordance with UL 60335-2-89 and ASHRAE
15/34. In addition, based on a webinar by AHRI,\59\ as of June 2024,
only 6 states do not currently allow A2L refrigerants, far fewer than
in August 2022 when 36 states did not allow A2L refrigerants.
Therefore, DOE anticipates that by the compliance year of 2029 building
codes should not impact a manufacturer's ability to transition to A2L
refrigerants.
---------------------------------------------------------------------------
\59\ See www.youtube.com/watch?v=aETuPis5cAM.
---------------------------------------------------------------------------
iii. Engineering Assumptions
Appendix 5A of the October 2023 NOPR TSD itemized baseline design
details and key engineering assumptions regarding component performance
affecting energy use that were used in the engineering spreadsheet
analysis of primary equipment class representative units. The October
2023 NOPR notice provides additional discussion regarding baseline
designs. 70196, 70228-70230. DOE received comments in response to the
baseline engineering assumptions used in the October 2023 NOPR
analyses. Specifically, DOE received several comments regarding the
insulation R-value, insulation thickness, fan motors, anti-sweat heater
controls, lighting, and conduction loads in the engineering analysis
for the baseline. The August 2024 NODA and its accompanying support
document present revisions made to the analyses that DOE made in
response to the October 2023 NOPR comments. DOE received additional
comments on these topics in response to the August 2024 NODA. Both the
NOPR and NODA comments and DOE's final determinations regarding
baseline design details are discussed in the following paragraphs.
In response to the August 2024 NODA, The CA IOUs commented that
they supported the updated baseline design components because these
they more accurately reflect current baseline models in the CRE market.
(CA IOUs, No. 113, at p. 1)
Insulation R-Value
In the October 2023 NOPR engineering analysis, DOE assumed an R-
value for polyurethane foam of 8 (ft\2\- [deg]F-hr/Btu) per inch. DOE
received the following comments in response.
In response to the October 2023 NOPR, Hussmann commented that DOE's
assumption of the R-value per inch of the equipment insulation is
unrealistic, stating that R-values per inch of the foam itself for CRE
are much closer to 6.5 per inch than they are to the 8.0 shown in DOE's
engineering spreadsheet.\60\ (Hussmann, No. 80 at p. 5) Hussmann agreed
with DOE's determination in the October 2023 NOPR TSD to use an
adjusted R-value per inch of 4.0 for the finished foam panels to
account for edge effects and gasket heat losses. (Id.)
---------------------------------------------------------------------------
\60\ The October 2023 NOPR engineering analysis spreadsheet is
available at www.regulations.gov/document/EERE-2017-BT-STD-0007-0055.
---------------------------------------------------------------------------
ITW commented that DOE should revise its CRE engineering
spreadsheet assumptions to better reflect the current state of the
industry in terms of the thermal conductivity of the insulating foam
used in the construction of refrigerated cabinets. (ITW, No. 82 at p.
2) ITW commented that the average CRE industry R-value is between 6.3
and 7.1 and that this is backed up by data and a recent NAFEM survey in
which 71.5 percent of the CRE manufacturers surveyed reported an R-
value for their insulation between 6.4 and 7.4. (Id. at p. 3) Based on
ITW's product experience, competitive evaluations, technical data
points, and the responses from the NAFEM survey, ITW requested DOE
change the baseline R-value from 8 to 6.5. (Id. at p. 4)
NAFEM provided results of its manufacturer survey. Results of this
summary regarding insulation K factor are summarized in table IV.9.
(NAFEM, No. 83 at pp. 38-39)
BILLING CODE 6450-01-P
[[Page 7523]]
[GRAPHIC] [TIFF OMITTED] TR21JA25.111
BILLING CODE 6450-01-C
In response to the comment from Hussmann, DOE notes that the R-
value used in the October 2023 NOPR engineering analysis was 8 per
inch, not an adjusted R-value of 4.0 per inch. DOE believes that
Hussmann was referring to the June 2022 Preliminary TSD, which applied
a multiplier of 0.5 to the R-value per inch, resulting in an adjusted
R-value of 4.\61\ This adjustment was done to adjust the heat load in
addition to other adjustments to design specifications for heat load
adjustments (i.e., infiltrated air mass flow), however, in the October
2023 NOPR, based on comments in response to the June 2022 Preliminary
Analysis, DOE analyzed a revised R-value of 8 per inch with the
infiltrated air mass flow to be more consistent with the March 2014
Final Rule. 88 FR 70196, 70234.
---------------------------------------------------------------------------
\61\ See table 5.5.4 of the Preliminary Analysis TSD, available
at www.regulations.gov/document/EERE-2017-BT-STD-0007-0016.
---------------------------------------------------------------------------
In response to comments on the October 2023 NOPR analyzed R-value
of 8 per inch, DOE reviewed these comments, and based on this review
and consistent with commenter feedback, DOE presented a revised
analysis in the August 2024 NODA with the R-value of polyurethane foam
changed from 8 per inch to 6.5 per inch to represent the baseline R-
value used by CRE models. 89 FR 68788, 68792.
In response to the August 2024 NODA, Hussmann agreed with DOE's
update of the insulation R-value from 8 per inch to 6.5 per inch, as
this is in line with the R-value of polyurethane blown foams used in
the CRE market. (Hussmann, No. 108 at p. 2) Continental, AHRI,
Hillphoenix, Delfield, and ITW also commented in support of DOE's
updated R-values from 8 to 6.5 per inch. (Continental, No. 107 at p. 2;
AHRI, No. 104 at p. 8; Hillphoenix, No. 110 at p. 4; Delfield, No. 99
at p. 2; ITW, No. 111 at p. 1)
In this final rule, DOE is maintaining 6.5 per inch to represent
the baseline R-value used by CRE models.
Insulation Thickness
Several commenters expressed concerns with the insulation thickness
analyzed in the October 2023 NOPR. For ease of reference, Evaporator
Fan Control shows the insulation thickness assumed for each equipment
class in the March 2014 Final Rule, the June 2022 Preliminary Analysis,
and the October 2023 NOPR and the updated insulation thickness analyzed
in this final rule, which is the same as presented in the August 2024
NODA.
[[Page 7524]]
[GRAPHIC] [TIFF OMITTED] TR21JA25.112
In response to the October 2023 NOPR, AHRI, SCC, and Hillphoenix
stated that despite screening out increased insulation thickness as a
design option, DOE has increased the 2023 baseline insulation thickness
from the March 2014 Final Rule selected design levels. (AHRI, No. 81 at
p. 7; Hillphoenix, No. 77 at pp. 3-4; SCC, No. 74 at p. 3) Hillphoenix
also commented that equipment used to manufacture insulated structures
is typically used to produce products in multiple covered DOE classes,
therefore changes in insulation thickness of one equipment class would
require changes in multiple classes, resulting in an increase in
testing, recertification, and validation. (Hillphoenix, No. 77 at p. 4)
NAMA, Hussmann, and ITW commented that the insulation thickness
assumed in the October 2023 NOPR is not representative of CRE products
on the market today. (NAMA, No. 85 at p. 5; Hussmann, No. 80 at p. 4;
ITW, No. 82 at pp. 2, 5) ITW commented that it is contradictory that
DOE screened out increased insulation as a design option but have
included an additional 0.5 inches of insulation in the baseline
calculation for CRE in the October 2023 NOPR compared to the June 2022
Preliminary TSD. (ITW, No. 82, at p. 5)
NAMA stated that 1 inch to 1.5 inches is typical of nearly all
machines including VCT.SC.M equipment. (NAMA, No. 85 at pp. 5, 15)
Hussmann stated that the standard insulation thickness for medium-temp
commercial refrigeration equipment is 1.5 inches and for low-temp
equipment is 2.0 inches, and this should be considered when determining
the energy limits. (Hussmann, No. 80 at p. 4) ITW requested that DOE
change the baseline insulation thickness from 2.5 inches to 2.0 inches.
(ITW, No. 82, at pp. 2, 5)
NAFEM provided results of a survey of its manufacturers for the
insulation thickness in its units, which is presented in Table IV..
(NAFEM, No. 83 at pp. 36-37) DOE notes that the survey results provided
by NAFEM do not specify the operating temperature of the surveyed
equipment.
[[Page 7525]]
[GRAPHIC] [TIFF OMITTED] TR21JA25.113
DOE reviewed comments in response to the October 2023 NOPR that
requested that DOE review the baseline assumptions. Based on these
comments, DOE presented a revised analysis in the August 2024 NODA. 89
68788, 68792. DOE has revised the insulation thicknesses to be
consistent with the insulation thicknesses analyzed in the March 2014
Final Rule,\62\ which are also consistent with comments received in
response to the October 2023 NOPR, including the survey results
presented by NAFEM, and DOE's reverse engineering data. DOE's
engineering analysis is based on the following updated insulation
thicknesses: medium- and high-temperature equipment with an insulation
thickness of 1.5 inches, low-temperature equipment with an insulation
thickness of 2.0 inches, and ice cream temperature equipment with an
insulation thickness of 2.5 inches. See table IV.10 presented at the
beginning of this section for further details.
---------------------------------------------------------------------------
\62\ See Table 5A.2.2 Baseline Specifications in the March 2014
Final Rule TSD at www.regulations.gov/document/EERE-2010-BT-STD-0003-0102.
---------------------------------------------------------------------------
In response to these updates in the August 2024 NODA, Hillphoenix
and ITW agreed with DOE's decision to align insulation R-values and
thickness to reflect current industry offerings. (Hillphoenix, No. 110,
p. 4; ITW, No. 111 at p. 1) DOE has maintained these insulation
thickness values in this final rule.
Fan Motors
In the October 2023 NOPR, DOE assumed a combination of ECM, shaded
pole, and permanent split capacitor (``PSC'') evaporator, and condenser
fan motors in the baseline representative unit, depending on the
equipment class. For more details about the baseline evaporator and
condenser fan motor types assumed in the October 2023 NOPR, see tables
5A.2.1 through 5A.2.4 of the October 2023 NOPR TSD.
In response to the October 2023 NOPR, NAMA, AHRI, Hussmann, and SCC
commented that ECMs are already widely in use in the CRE industry since
the 2017 standards. (NAMA, No. 85 at pp. 14, 23; AHRI, No. 81 at pp. 4-
5; Hussmann, No. 80 at p. 4; SCC, No. 74 at p. 1) NAMA added that ECMs
have been used in CRE designs for at least 5 years and several of its
companies mentioned that they have been using ECM condenser and
evaporator fan motors since 2013. (NAMA, No. 85 at pp. 14, 23) Hussmann
and NAMA stated that DOE's baseline component assumptions should
reflect the widespread use of ECMs. (Hussmann, No. 80 at p. 4; NAMA,
No. 85 at p. 23) NAMA commented that this design option applies to
VCT.SC.M units, and also VOP, and HZO units. (NAMA, No. 85 at p. 23)
NAMA further commented that the savings achieved from transitioning to
ECMs was in the vicinity of 2-2.5-percent improvement when it was
introduced, adding that they agreed with DOE that the savings would be
in the vicinity of 0.139 kWh/day. (Id.)
With respect to the comments from NAMA, AHRI, Hussmann, and SCC,
DOE has reviewed the CRE teardown data it conducted on analysis units
in support of this rulemaking and observed that a significant number of
units, but not all units, contained ECM evaporator and condenser fan
motors. Therefore, based on DOE's teardown data and consistent with
commenters' feedback, DOE updated its assumptions regarding baseline
fan motors for certain equipment classes in the August 2024 NODA. The
analysis sets ECM as the baseline evaporator and condenser fan motor
type for most equipment classes, but not all classes, which is
consistent with the data available to DOE.
In response to the August 2024 NODA, Continental agreed with DOE's
revised use of ECMs as the baseline, and stated that this revision
should be applied to all equipment classes. (Continental, No. 107 at p.
2) Continental additionally stated that it does not utilize shaded pole
(``SP'') motors in any R-290 products due to safety concerns and
attempts to maximize product performance. (Id.)
ITW also commented in support of DOE's revised assumption that
current CRE already incorporates the use of electronically commutated
motors for evaporator and some condenser fan applications, and that
revised efficiency levels now take this into consideration. (ITW, No.
111 at p. 1)
Hussmann and AHRI also agreed with DOE's assumption that EC fan
motors should be the baseline fan motor assumption for the vast
majority, if not all, equipment classes. (Hussmann, No. 108 at p. 2;
AHRI, No. 104 at p. 8)
AHRI disagreed with DOE's assumption that shaded pole fan motors
are used as the baseline for self-contained equipment using R-290 as a
refrigerant, e.g., in the SOC.SC.M class, noting that SP motors are
considered potential ignition sources for a flammable mixture of R-290
and air that could be created in a leak scenario. (AHRI, No. 104 at p.
8) AHRI stated that it has always opted for EC fan motors for both the
evaporator and condenser when using R-290. (Id.) ARHI stated that the
additional cost of EC motors is worth the reduction in risk and
avoidance of additional safety testing required by the UL standards
when shaded pole motors are used with R-290. (Id.)
Delfield commented that several OEMs already use DC condenser fans
and expressed concern that DOE expects savings on something that is
already implemented to meet current energy regulations. (Delfield, No.
99 at p. 2) Delfield added that they have several units using DC fans
that barely make current regulations so any reduction
[[Page 7526]]
would likely prevent them from selling those products that are
currently in demand from customers. (Id.)
Regarding the comment from Delfield, in this final rule DOE has
analyzed ECM as the baseline evaporator and condenser fan motor type
for most, but not all, equipment classes, consistent with the data
available to DOE. In response to AHRI's comment about the use of shaded
pole motors with R-290 refrigerant, DOE notes that these motors can be
enclosed to be suitable for use with R-290, but agrees it may be more
cost-effective to switch to ECM motors. On the other hand, the switch
to ECM motors would make the model more efficient than simply
converting the refrigerant. Rather than assume a manufacturer would, in
response to the EPA October 2023 final rule requiring use of low-GWP
refrigerants, implement ECMs on top of converting the refrigerant, thus
achieving a higher efficiency as a post-refrigerant-transition
baseline, DOE instead assumed that the baseline should be based only on
the refrigerant conversion. For further details, see section 2,
``Design Specifications and Baseline Design Options'' in the NODA
support document (see EERE-2017-BT-0007-0090 at pp. 10-14).
Anti-Sweat
In response to the October 2023 NOPR, Hillphoenix commented that,
DOE utilized different amounts of anti-sweat heat for remote vs. self-
contained equipment classes for the equipment classes SOC.SC.M and
SOC.RC.M with the same case design options. (Hillphoenix, No. 77 at p.
4) Hillphoenix commented also that these two equipment classes are
identical products (with the exception of an added compressor) and
should use the same amount of anti-sweat wattage. (Id.) Hillphoenix
stated that in DOE's engineering spreadsheet for the October 2023 NOPR,
the self-contained class uses 90 watts of heat versus the remote
class's 200 watts, and the lower wattage in the self-contained class
will create sweating and condensation issues. (Id.) Hillphoenix stated
that this violates the prohibition in EPCA of adopting energy standards
that impair the functionality of a pre-existing product. (Id.) \63\
---------------------------------------------------------------------------
\63\ EPCA states the following at 42 U.S.C. 6295(o)(4): the
Secretary may not prescribe an amended or new standard under this
section if the Secretary finds (and publishes such finding) that
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 at the time of the
Secretary's finding and the failure of some types (or classes) to
meet this criterion shall not affect the Secretary's determination
of whether to prescribe a standard for other types (or classes). (42
U.S.C. 6316(e)(1); 42 U.S.C. 6295(o)(4))
---------------------------------------------------------------------------
In response to Hillphoenix, DOE notes that, in the section 5.5.2 of
the October 2023 NOPR TSD, DOE stated that the anti-sweat heater
assumptions were based on data from directly analyzed units and
manufacturer feedback. However, based on additional test data and
feedback from commenters, DOE has updated the anti-sweat heater power
for the SOC.SC.M class in this final rule, consistent with the August
2024 NODA. As indicated in the NODA support document, DOE revised its
anti-sweat wattage assumptions in the August 2024 NODA analysis such
that the wattages for the self-contained and remoted condensing
service-over-counter models with 51 sq.ft. TDA are nearly the same at
190 W and 200 W, respectively (see table 2.9 for SOC.RC.M table 2.10
for SOC.SC.M).
Zero Zone commented that reduced energy levels will result in
equipment designs with very low energy anti sweat heaters, which will
be more likely to have condensate on surfaces because many end users do
not have reliable humidity control on the store air conditioning. (Zero
Zone, No. 75 at p. 4) Zero Zone commented also that customers will
request anti-sweat heaters with higher power and, therefore,
manufacturers will need to apply anti-sweat heater controllers. (Id.)
Zero Zone stated that DOE should add the cost of anti-sweat controllers
to the equipment cost when DOE calculates payback and energy savings.
(Id.)
With respect to the comment from Zero Zone about additional costs
associated with anti-sweat heater controllers, DOE has revised the
anti-sweat heater powers assumed in the baseline for this final rule,
which are consistent with the CRE market and are designed to prevent
condensation buildup on surfaces. Therefore, DOE has determined that
anti-sweat heater controllers are not required for baseline equipment
in this final rule analysis. Additionally, DOE included neither anti-
sweat heater controllers nor anti-sweat heat wattage reduction as
design options in the August 2024 NODA analysis. DOE did not analyze
additional cost for anti-sweat heater controllers because this was not
considered as a design option.
DOE did not receive any comments in response to the August 2024
NODA which suggested alternative baseline anti-sweat heater wattages.
Thus, DOE used the same wattage values for the final rule analysis.
Lighting for the HZO Equipment Family
In the October 2023 NOPR, DOE updated the lighting design
specifications based on data available at that time to account for the
energy consumed per foot of LED lights.\64\ DOE received several
comments in response to this update for the HZO equipment class.
---------------------------------------------------------------------------
\64\ See section 5.5.8.2 and appendix 5A.2 of the October 2023
NOPR TSD.
---------------------------------------------------------------------------
In response to the October 2023 NOPR, NAMA and Hussmann stated that
DOE applied lighting control design options to HZO equipment, which
typically does not have lighting. (NAMA, No. 85 at p. 24; Hussmann, No.
80 at p. 5)
In response to the comments from NAMA and Hussmann, DOE reviewed
its CRE test data for HZO units and observed that lighting is not
included for them. Therefore, based on DOE's test data and commenter
feedback, DOE removed lighting from the baseline design specifications,
and the lighting control design option, for the HZO equipment class in
its August 2024 NODA analysis. For further details, see the August 2024
NODA support document, (Tables 2.6, 2.7, 2.10, 3.8, 3.9, 3.22, 3.23,
and 3.38). Additionally, DOE notes that updating the lighting design
specifications for the HZO equipment family is consistent with the
approach in the March 2014 Final Rule, where DOE updated the number of
bulbs in the conditioned space for PD.SC.M from 2 to 3.\65\
---------------------------------------------------------------------------
\65\ See tables 5.A.2.2 of the NOPR and March 2014 Final Rule
TSD available at www.regulations.gov/document/EERE-2010-BT-STD-0003-0102.
---------------------------------------------------------------------------
DOE did not receive comments regarding lighting design
specifications in response to the August 2024 NODA. Hence, DOE used the
same lighting design specifications for its final rule analysis.
Conduction Loads
In response to the October 2023 NOPR, ITW commented that DOE should
revise its CRE engineering spreadsheet assumptions to account for
ancillary transmission losses (i.e., conduction loads through thermal
breaks, drain tubes, refrigerant lines, screws, bolts, internal
assembly flanges, etc.). (ITW, No. 82 at p. 2) ITW stated that the
accounting for these ancillary losses was dropped out between the June
2022 Preliminary Analysis and the October 2023 NOPR versions of the CRE
engineering spreadsheet. (Id.) Specifically, ITW requested that DOE
revert to the assumptions from the June
[[Page 7527]]
2022 Preliminary Analysis engineering spreadsheet, where it included a
50-percent multiplier to calculate the adjusted R-value and, therefore,
more properly account for these ancillary losses. (Id.)
With respect to the comment from ITW, DOE notes that, in this final
rule analysis, DOE analyzed a revised R value of 6.5, which is on the
low end of survey results provided by NAFEM. In addition, DOE
calibrated the design specifications in the engineering spreadsheet to
be representative of all units in each equipment class and account for
a variety of factors that could affect energy use. Therefore, DOE has
determined that an adjustment factor to the insulation thickness is not
necessary for this final rule. As previously noted in the Insulation R-
Value section, while DOE did include a 0.5 adjustment factor for the R-
value in the June 2022 Preliminary Analysis, along with updates to
infiltrated air-mass flow, DOE received feedback disagreeing with the
infiltrated airflow approach in response to the June 2022 Preliminary
Analysis. 88 FR 70196, 70234. Based on this feedback and feedback
provided during manufacturer interviews, DOE re-evaluated the
infiltrated-air mass flow and insulation design specifications in the
October 2023 NOPR to be more consistent with the March 2014 Final Rule,
i.e. increasing the infiltrated air assumptions for the October 2023
NOPR analysis as compared to the June 2022 Preliminary Analysis. Id. As
a result, DOE determined that an R-value adjustment factor would have
resulted in calculation of energy use far higher than the baseline for
representative equipment designs in the October 2023 NOPR analysis. DOE
similarly determined that an R-value adjustment factor would have been
inappropriate for the August 2024 NODA analysis and did not apply such
a factor.
DOE did not receive comments regarding conduction loads in response
to the August 2024 NODA. Hence, DOE used the same input assumptions
affecting conductions loads for its final rule analysis.
Other Engineering Assumptions
In response to the October 2023 NOPR, DOE received comments on
several other proposed baseline engineering assumptions.
AHRI requested that DOE review the engineering analysis based on
current technology in the field. (AHRI, No. 81 at p. 7)
NAMA commented that the assumptions about efficiency options
outlined in the October 2023 NOPR TSD are deeply flawed, as are the
baseline efficiency levels. (NAMA, No. 85 at p. 5) NAMA stated that
current units at baseline already utilize LED lighting, higher
efficiency compressors, higher efficiency fan motors, a high-
performance door, and several other design options which have been used
for the last several years, and that the design option list is
therefore based on inaccurate baseline assumptions. (Id.) NAMA further
commented requesting that DOE conduct a complete revision of its
engineering analysis and all of the downstream analyses to show the
very real impacts of standards in the October 2023 NOPR as well as in
the August 2024 NODA. (Id. at p. 19) (NAMA, No. 112 at pp. 9) In
response to the August 2024 NODA, NAMA further commented that it was
disappointed in the accuracy of the design changes. (NAMA, No. 112 at
p. 7) NAMA added that DOE did not substantially change the August 2024
NODA TSD based on NAMA's comments on the October 2023 NOPR TSD (NAMA,
No. 112 at p. 7) NAMA added that DOE said that the August 2024 NODA
analysis was updated in response to NAMA's comments on the October 2023
NOPR, however, it is not clear where the cost or energy efficiency
pertaining to NAMA products has been updated. (Id.)
In addition, DOE received confidential comments requesting that DOE
review certain baseline assumptions in the October 2023 NOPR.
In response to the comments from AHRI, NAMA, and the anonymous
confidential commenter, in this final rule, DOE has revised certain
baseline components and design specifications not already discussed in
this section. Table IV.12 shows every baseline design specification
that was updated in this final rule, consistent with the August 2024
NODA. For more details, see appendix 5A of the final rule TSD.
BILLING CODE 6450-01-P
[[Page 7528]]
[GRAPHIC] [TIFF OMITTED] TR21JA25.114
BILLING CODE 6450-01-C
The updates to the final rule engineering assumptions outlined
above are consistent with the approach in the March 2014 Final Rule
where DOE
[[Page 7529]]
changed certain baseline design specifications between the NOPR and the
final rule. For example, in the March 2014 Final Rule, DOE updated: the
number of bulbs in the conditioned space for PD.SC.M from 2 to 3 and
the number of ballasts not in the conditioned space from 0 to 1, the
non-door anti-sweat power for VCS.SC.M from 0W to 20W, the evaporator
fan shaft power, condenser fan shaft power for VCT.SC.M from 6W to 9W
and from 6W to 16W respectively, the number of fans for VCT.SC.M from 2
condenser fans to 1 condenser fan, the infiltrated air mass flow rate
for VCT.SC.M from 10.61 lb/hr to 13.7 lb/hr, the evaporator temperature
conditions for VCT.SC.M from a baseline evaporator temperature of 27
[deg]F to 23 [deg]F, and the compressor oversize multiplier for
VCT.SC.M from 1.3 to 2.6.\66\
---------------------------------------------------------------------------
\66\ See tables 5.A.2.2 of the 2013 NOPR and 2014 Final Rule TSD
available at www.regulations.gov/document/EERE-2010-BT-STD-0003-0051
and www.regulations.gov/document/EERE-2010-BT-STD-0003-0102.
---------------------------------------------------------------------------
b. Higher Efficiency Levels
As part of DOE's analysis, the maximum available efficiency level
is the highest efficiency unit currently available on the market. DOE
also defines a ``max-tech'' efficiency level to represent the maximum
possible efficiency for a given product.
In response to the October 2023 NOPR, ASAP et al. generally
supported the engineering analysis but stated that there are some
equipment classes where the max-tech levels are exceeded by a
significant number of models on the market today. (ASAP et al., No. 79
at p. 1) Thus, ASAP et al. encouraged DOE to further investigate these
products and consider whether higher standards may be appropriate.
(Id.)
ASAP et al. encouraged DOE to evaluate max-tech levels that are at
least as high as the most efficient models available on the market.
(Id. at p. 3) ASAP et al. commented that for several of the equipment
classes analyzed, many models available on the market using R-290
refrigerant appear to exceed the max-tech efficiency level, including
many ENERGY STAR-rated models for the VCS.SC.L equipment class, which
represents 10 percent of CRE shipments. (Id.) ASAP et al. also pointed
to DOE's CCD, which shows available models for the SVO.SC.M, VOP.RC.M,
and SOC.RC.M that also exceed DOE's max-tech levels. (Id.) ASAP et al.
commented that for several of these equipment classes (e.g., VCS.SC.L,
SVO.SC.M, VOP.RC.M), DOE has proposed to adopt the max-tech level as
evaluated in the engineering analysis, suggesting that if DOE were to
evaluate higher efficiency levels for these equipment classes, it is
plausible that these higher levels would be cost-effective for
purchasers. (Id.)
In response to the comment from ASAP et al, DOE reviewed certified
CRE models currently available on the market that exceed the efficiency
of the max-tech levels proposed in the October 2023 NOPR and found
several potential explanations as to why certain models use less energy
than the proposed and final max-tech levels. DOE observed a range of
lighting powers for units with similar volumes, with some units using
very low light compared to the industry average. DOE also noted
differences in insulation thickness that exceeded the industry average.
Additionally, DOE noted examples of units rated to the CCD using
evaporator fan controls, particularly for units that are not intended
to store perishable food or beverages. Evaporator fan controls are not
considered as a design option in the final rule analysis, so they are
not considered in the final rule max-tech level (see section IV.B.1.f
of this document). DOE also found examples of units that exceed the
max-tech efficiency levels due to unique technologies which other
manufacturers may not be able to adopt. Based on this review, DOE has
not found higher standards to be appropriate.
In response to the October 2023 NOPR, NAMA disagreed with DOE's
energy saving estimates and design option levels for vertical, self-
contained, transparent doors, medium temperature, and other categories
using similar options. (NAMA, No. 85 at pp. 10, 11-12) NAMA commented
that, according to its screening analysis, DOE presents inaccurate
energy savings resulting from changes to more energy-efficient
condenser fan motors, variable-speed compressors, occupancy-based
lighting controls, triple-pane glass doors, insulation in door glass,
and microchannel condensers. (Id. at pp. 11-12) NAMA commented also
that DOE's estimate of 26.9-percent energy savings in the case of using
design options 2-7 is overstated by a factor of at least three. (Id. at
p. 12) NAMA stated that once design options that DOE has double counted
(e.g., DC condenser fan motors) are eliminated, the real estimate
should result in a minimum energy standard that returns at 9 percent
rather than 26.9 percent. (Id.) NAMA further commented that this also
applies to categories such as VOP, SC, M and HZO, SC, and L. (Id.)
In response to the October 2023 NOPR, AHRI and Hoshizaki stated
that it is unclear how DOE determined that manufacturers are able to
reach a 55-percent reduction in energy use in the energy use analysis
and DOE should clarify how this reduction can be achieved. (AHRI, No.
81 at p. 9; Hoshizaki No. 76 at p. 4)
In response to the October 2023 NOPR, Hoshizaki requested that DOE
review any section showing a reduction of 15 percent or more to verify
that these numbers are accurate due to the high requirement that must
be met. (Hoshizaki, No. 76 at p. 4)
In response to the October 2023 NOPR, Hillphoenix, Hoshizaki, and
NAFEM commented that the design options at the higher efficiency levels
are not technologically feasible or cost-effective. (Hillphoenix, No.
77 at p. 1; Hoshizaki, No. 76 at p. 4; NAFEM, No. 83 at pp. 7-8)
As discussed in section IV.C.1.a of this document, after
considering the comments received in response to the October 2023 NOPR,
DOE has considered revised set of baseline components and design
specifications in this final rule. In addition, DOE has also considered
changes to design options analyzed beyond baseline based on feedback as
discussed in the following sections.
Design Options Not Directly Analyzed
As described in section IV.B.2 of this document, defrost controls
and variable-speed fan motors did not meet the criteria for screening
them out. However, some design options are not considered in the
engineering analysis and are categorized as design options not directly
analyzed. As described in sections 5.5.8.7 and 5.5.8.10 of the October
2023 NOPR TSD, variable-speed fan motors and defrost controls,
respectively, were considered design options not directly analyzed. In
response to the October 2023 NOPR, DOE received several comments
regarding these design options.
i. Defrost Controls
As described in section 5.5.8.10 of the October 2023 NOPR TSD,
defrost controls were considered a design option not directly analyzed.
In response to the October 2023 NOPR, the CA IOUs recommended that
DOE consider adaptive defrost as a design option for CRE because it is
a cost-effective option that will reduce the energy consumption of
refrigeration units. (CA IOUs, No. 84 at pp. 5-6) The CA IOUs commented
that adaptive defrost saves energy by using less resistance heat and
reduces the need for refrigeration energy to cool down the unit
afterward. (Id. at p. 5) The CA IOUs commented that three major CRE
[[Page 7530]]
manufacturers offer low-temperature models with adaptive defrost and
that DOE's 24-hour test procedure based on ASHRAE 72 should demonstrate
the energy-saving benefits of adaptive defrost over standard automatic
timed defrost. (Id. at pp. 5-6) The CA IOUs commented that although
many manufacturers use timers for defrost initiation and air
temperature for defrost termination, this method differs from the
adaptive defrost method, which reduces the equipment's energy use by
decreasing the number of unnecessary defrost cycles. (Id. at p.6)
As discussed in chapter 5 of this final rule TSD, defrost cycle
control can reduce energy consumption by reducing the frequency of the
defrost period. While DOE considered variable defrost as a design
option in the June 2022 Preliminary Analysis, DOE tentatively
determined not to directly analyze this design option in the October
2023 NOPR. 88 FR 70196, 70232. Full defrost cycle control would involve
a method of detecting frost buildup, which can be accomplished through
an optical sensor or sensing the air temperature differential across
the evaporator coil, and initiating defrost only as often as required.
However, DOE understands that there is uncertainty for both of these
methods due to potential fouling of the coil with dust and other
surface contaminants, which becomes more of an issue as cases age. If
the sensor driving the adaptive defrost malfunctions, the resulting
freezing of the coils is difficult to reverse. Therefore, due to the
current uncertainty and lack of test data, DOE maintained the same
approach and did not consider variable approach as a design option in
this final rule. See chapter 5 of the final rule TSD for more
information.
ii. Variable Speed Fan Motors
As described in chapter 5, section 5.5.8.7 of the October 2023 NOPR
TSD, variable-speed fan motors were considered a design option not
directly analyzed.
In response to the October 2023 NOPR, the CA IOUs recommended that
DOE consider variable-speed condenser fan controls as a cost-effective
technology option for self-contained equipment classes. (CA IOUs, No.
84 at p. 5) The CA IOUs commented that variable-speed condenser fan
controls, like variable-speed compressors, can modulate capacity under
partial refrigeration load during compressor operations. (Id.) The CA
IOUs commented also that while variable-speed condenser fans may not
provide the same energy savings as variable-speed compressors, they are
much less expensive, and DOE has considered variable-speed condenser
fan control a viable and cost-effective technology option for walk-in
coolers and freezers (``WICFs.'') (Id.) The CA IOUs stated that the
energy savings and cost effectiveness of variable-speed condenser fan
control should be comparable between WICFs and CRE. (Id.) The CA IOUs
additionally commented that variable-speed condenser fan controls are
not applicable for remote condensed equipment classes because the rack
compressor systems are not covered products. (Id.)
With respect to the comment from the CA IOUs, DOE notes that, in a
Final Rule amending energy conservation standards for WICFs, variable-
speed condenser fans for WICF dedicated condensing units were
considered only for those dedicated condensing units located outdoors,
in which the fan speed is reduced during cool outdoor conditions when
less airflow is needed to cool the condensing refrigerant. See chapter
5 of the WICF Final Rule TSD for more details.\67\ The technology would
not achieve similar savings for self-contained systems located indoors,
where the fan speed is set appropriate for the relatively constant
difference in temperature between the condensing refrigerant and the
ambient air. For this reason, DOE has not considered variable-speed
condenser fans as a design option to improve the efficiency of CRE in
this final rule.
---------------------------------------------------------------------------
\67\ See section 5.7.2.8, Variable-Speed Condenser Fan Control,
at www.regulations.gov/document/EERE-2017-BT-STD-0009-0093 at pp. 5-
60.
---------------------------------------------------------------------------
Design Options Directly Analyzed
DOE received several comments stating that directly analyzed design
options in the October 2023 NOPR were already in use for baseline
equipment.
Hoshizaki, Hillphoenix, AHRI, NAFEM, SCC, Kirby, and an individual
commenter expressed concern that many of the technologies presented in
the October 2023 NOPR analysis have already been implemented in CRE to
meet the 2017 regulations. (Hoshizaki, No. 76 at p. 3; Hillphoenix, No.
77 at pp. 1, 11; AHRI, No. 81 at pp. 4-5; SCC, No. 74 at p. 2; Kirby,
No. 66 at pp. 1-2; Individual Commenter, No. 70 at p.1) Kirby, Zero
Zone, NAMA, and an individual commenter stated that DOE has
overestimated the achievable efficiency levels in the proposed rule
because many of the efficiency options are already in use. (Kirby, No.
66 at pp. 1-2; Zero Zone, No. 75 at pp. 3, 4; NAMA, No. 85 at p. 5;
Individual Commenter, No. 70 at p.1) NAMA commented that DOE is taking
additional credit for energy efficiency by adding certain technologies
(i.e., LED lighting, brushless DC evaporator fan motor, high-
performance door, and brushless DC condenser fan motor) beyond the
baseline to justify the proposed efficiency levels, essentially
doubling the energy efficiency benefits from technologies already in
use and the future design options in the October 2023 NOPR TSD. (NAMA,
No. 85 at p. 6) NAMA stated that following the removal of the design
options that are not technically feasible or were accomplished many
years ago, it becomes clear that the actual energy savings from the
remaining items might result in a baseline energy reduction of 5-10
percent, which is a significant deviation from the 41 percent estimated
by DOE. (Id. at p. 9)
Zero Zone commented that its large self-contained propane display
freezers and coolers (e.g., VCT-SC-L, VCT-SC-M), which already include
propane fixed-speed compressors, ECM evaporator and condenser fan
motors, triple-pane high-efficiency doors with no glass heat, and 2.5-
inch insulated panels and LED lights are able to meet current DOE
energy levels, and the addition of variable-speed motors and motions
sensors are unlikely to provide enough savings to meet the proposed
energy levels. (Zero Zone, No. 75 at p. 4)
Hoshizaki added that technologies including fan controls, improved
fan motors, improved glass doors, and occupancy sensors are already in
use and therefore the ensuing review cannot be economically justified.
(Hoshizaki, No. 76 at p. 3) SCC commented that ``enhanced'' coils are
already in place and designed to reduce charge for A3 flammable
refrigerants. (SCC, No. 74 at pp. 1-2) AHRI commented that technologies
including the use of LED lighting, R-290 for self-contained units, and
ECM evaporator fan motors are already in use. (AHRI, No. 81 at pp. 4-5)
During the November 2023 Public Meeting, AHRI additionally stated that
its members are already using adaptive defrost systems, increased
insulation thickness, and improved evaporator coil design. (November
2023 Public Meeting Transcript, No. 64 at p. 19) NAFEM commented that
CRE manufacturers already use most of the screened-in technologies
listed in the October 2023 NOPR, including: insulation; lighting;
improved transparent doors (low-emissivity coatings, inert gas, and
additional panes); compressors (improved efficiency, alternative
refrigerants, and variable-speed
[[Page 7531]]
compressors); evaporators (increased surface area and evaporator coil
design); condensers (increased surface area and tube and fin
enhancements); fans (fan motors controls); and ``other'' (defrost
systems and liquid suction heat exchangers). (NAFEM, No. 83 at p. 3)
NAFEM and NAMA requested that DOE revise the October 2023 NOPR and
accompanying NOPR TSD to address NAFEM and NAMA's comments. (NAFEM, No.
83 at p. 26; NAMA, No. 85 at pp. 19-20)
NAFEM commented that the proposed standards in the October 2023
NOPR would substantially increase manufacturing costs because many of
the design options analyzed in the October 2023 NOPR are already in
place, and other screened-in technologies have substantial
shortcomings, leaving the CRE industry no other available and feasible
technologies to meet the standards. (Id. at p. 18) Therefore, NAFEM
commented that its members will turn to proposed technologies such as
variable-speed compressors, which have shown promise in certain
applications to reduce energy consumption but have not proven to be
economically a viable option for many CRE within the timeline of this
rulemaking. (Id.)
In response to commenters requesting DOE review the design options
assumed in the baseline, DOE reviewed the design options identified in
this final rule and determined that ECM evaporator and condenser fan
motors in most equipment classes and LED lighting in all equipment
classes are typically present in baseline units. Therefore, for the
final rule analysis DOE assumed that ECM evaporator and condenser fan
motors would be used in baseline equipment in most classes and LED
lighting would be used in baseline equipment in all classes and thus
could not be considered as energy-saving design options for those
classes. DOE's reverse-engineering showed that many units at baseline
do not use the design options that the above commenters have claimed
are already widely in use (i.e., occupancy sensors, variable-speed
compressors, and improved transparent doors). DOE has also observed a
range of cabinet wall thicknesses in its reverse engineering analysis.
Therefore, DOE has determined that the baseline assumptions in this
final rule are representative of baseline CRE currently available in
the market, and DOE disagrees that energy savings are being double
counted in this final rule. See appendix 5A of the final rule TSD for a
full list of baseline components analyzed for each equipment class.
AHRI resubmitted data collected from AHRI, NAFEM, and NAMA in
response to the June 2022 Preliminary Analysis, which showed that data
used for the analysis was outdated and did not align with current
market conditions. (AHRI, No. 81 at pp. 3-4) NAFEM commented that many
of the proposed technologies are widely used in VCS equipment. (NAFEM,
No. 83 at p. 5) AHRI commented that, after reviewing the June 2022
Preliminary TSD, AHRI, NAFEM, and NAMA conducted a survey of members
that manufacture CRE in an effort to share with DOE up-to-date
information (``Trade Associations Survey''). (AHRI, No. 81 at p. 3)
AHRI submitted survey results in an attachment to its comment detailing
that the June 2022 Preliminary TSD design options include many that are
currently in use to meet existing standards and others that raise
concerns regarding applicability, as well as some design options that
manufacturers could support. (Id.) AHRI commented that, according to
the Trade Associations Survey, the efficiency levels proposed by DOE
raise questions and concerns and there is uncertainty that implementing
anticipated design options would result in energy efficiency
improvements. (Id. at pp. 3-4)
Continental commented that the design options included in DOE's
analysis are not technically feasible and/or economically justified to
achieve the proposed reductions in energy use for all product
configurations within each covered equipment type in the October 2023
NOPR. (Continental, No. 86 at pp. 3-6) Continental commented that
development of its new line of R-290 products required entire redesign
of all cooling systems--including new compressors, evaporator coils,
and condenser coils--along with new electrical components for
compatibility with flammable refrigerants. (Id. at p. 3)
In response to the August 2024 NODA, NAMA commented that the NODA
design options for VCT.SC.M, VOP.SC.M, and HZO.SC.L contain engineering
solutions that have been part of the production of CRE products for
more than 10 years. (NAMA, No. 112 at p. 4) NAMA commented also that
DOE has double counted the energy savings from the design options in
the baseline so the improvement in energy efficiency based on the
August 2024 NODA and October 2023 NOPR are much greater than reality.
(Id.)
DOE acknowledges that the Trade Associations Survey may indicate
the use by some manufacturers of certain technologies proposed as
design options in the October 2023 NOPR. However, the survey results do
not provide information regarding the efficiency levels achieved by the
specific equipment using those technologies, so the results do not
indicate which technologies are used at baseline and which technologies
are used in equipment that exceed the baseline. For this reason, DOE
cannot assume based on the survey results that all technologies
mentioned are already in use at baseline. For the survey results to be
useful for DOE's analysis, the survey would need to provide information
of the correlation of the design options with efficiency levels.
In response to the comment from Continental on technological
feasibility, DOE notes that all technology options considered in this
final rule were initially determined to pass the screening criteria,
which includes technological feasibility. While not all technology
options that pass the screening criteria are directly analyzed in this
final rule, the technology options are all considered technologically
feasible based on DOE's screening criteria. In addition, DOE does not
remove design options based on cost-effectiveness. Rather, DOE analyzes
the cost-effectiveness through the cost-efficiency curves (presented in
chapter 5 of the final rule TSD) and other analyses presented in
section IV.F of this document.
In response to the October 2023 NOPR, DOE also received more
extensive comments on specific design options analyzed in the October
2023 NOPR, including night curtains, variable-speed compressors,
occupancy sensors, and door design changes. These comments are
discussed in the following paragraphs.
iii. Night Curtains
In the October 2023 NOPR and the August 2024 NODA,\68\ DOE
considered night curtains as a design option in its analyses. 88 FR
70196, 70224.
---------------------------------------------------------------------------
\68\ See www.regulations.gov/document/EERE-2017-BT-STD-0007-0090.
---------------------------------------------------------------------------
In response to the October 2023 NOPR, NAFEM commented that its
members report substantial customer resistance to night curtains
because of the difficulty for customers to access items behind the
curtains, especially shoppers who are not using a basket or cart and
are carrying multiple items. (NAFEM, No. 83 at pp. 6-7) Hussmann
commented DOE's assumption that night curtains and lighting controls
will lead to new energy savings for VOP.RC.M and SVO.RC.M equipment
classes is flawed. (Hussmann, No. 80 at pp. 5-6) Hussmann also stated
that
[[Page 7532]]
these equipment options have been available to order on Hussmann's
merchandisers for nearly 20 years in the case of night curtains and 15
years for lighting controls, and if retailers are not ordering these
options now, they do not want them and will not use them in their
stores, even if they are automatically applied to the merchandisers
they purchase. (Id.) Hillphoenix commented that it did not implement
night curtains on CRE to meet the 2017 energy requirements and it has
reduced energy consumption using other technology design options.
(Hillphoenix, No. 77 at p. 5) Hillphoenix also stated that night
curtains should not be considered a preferred option to achieve lower
energy consumption. (Id.)
In response to the comment from NAFEM, DOE notes that the CRE test
procedure accounts for 6 hours of night curtain use per 24-hour period,
and, in this final rule, DOE analyzes energy savings based on the DOE
test procedure. DOE assumes that night curtains would not be in use
when customers are in the store, and therefore, they would not need to
access items behind the curtain as described in NAFEM's comment.
In response to the comment from Hillphoenix, DOE notes that if
night curtains were not implemented to meet the 2017 energy
conservation standards, then it is appropriate for DOE to consider this
design option as a potential pathway to decrease energy use.
In response to the comment from Hussmann, DOE notes that, as stated
by Hillphoenix, not all manufacturers have implemented this design
option (other than as an optional feature), and it is therefore still
appropriate to consider as a design option to improve efficiency.
In response to the August 2024 NODA, Zero Zone commented that the
majority of grocers do not specify night curtains, and that the life
span is only 1-3 years, making pay back on energy savings unlikely.
(Zero Zone, No. 114 at p. 2)
Hillphoenix commented that while night curtains promote energy
reduction, they also negatively impact the refrigeration system by
causing short cycling of the compressor, refrigerant oil logging, or in
the worst case, liquid slugging of the compressor. (Hillphoenix, No.
110 at p. 10) Hillphoenix commented that this increases stress on start
components of fixed speed compressor units on self-contained models.
(Id.)
DOE responds that neither the October 2023 NOPR nor the August 2024
NODA comments provide clear justification for screening out night
curtains. Specifically, Hussmann indicates that they have been
available for use for 20 years, despite potential for short cycling.
Although Hussmann claims that savings estimates are flawed, they have
not provided explanation or data that would allow DOE to adjust its
analysis of night curtain savings. DOE notes that, in response to Zero
Zone's comment regarding night curtain life span, the life-cycle cost
and payback period analysis has considered replacement costs for night
curtains prior to the equipment end of life, see section IV.F.5 of this
document for details.
iv. Variable-Speed Compressors
In the October 2023 NOPR, DOE used performance data for variable-
speed R-290 compressors currently available on the market in DOE's
engineering spreadsheet to estimate the performance impacts of
transitioning to a variable-speed compressor. 88 FR 70196, 70219. DOE
assumed that variable-speed compressors would operate at the minimum
speed under steady-state operation, and 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). Id. Overall, DOE estimated a 0.5-25 percent energy
consumption reduction when implementing variable-speed compressors,
with savings varying depending on equipment class. Id.
In response to the October 2023 NOPR, Zero Zone stated that DOE
makes a very specific assumption on the energy efficiency gains of a
variable-speed motor, but according to its supplier, it is very
difficult to predict the efficiency gains of a variable-speed motor.
(Zero Zone, No. 75 at p. 4) Zero Zone added that the improvement
depends on the duty cycle of the compressor, which depends on the size
of the fixed-speed compressor compared to the size of the variable-
speed compressor. (Id.) Zero Zone commented that it doubts the
efficiency gains listed by DOE, and Zero Zone requested that DOE remove
variable-speed motors from the analysis until data can be gathered and
reviewed. (Id.)
NAMA stated that a change to a VSC would not save 13.4 percent of
the baseline. (NAMA, No. 85 at pp. 11-12) NAMA added that variable-
speed compressors would save 0.1 kWh/day, in comparison to DOE's
estimate of 0.625 kWh/day for the VCT.SC.M equipment class. (Id. at p.
14) NAMA further stated that for many models of smaller bottle coolers
(< 30 ft\3\), these variable-speed compressor motors are not available
for units using R-290 refrigerant. (Id. at p. 23) NAMA added that the
October 2023 NOPR energy savings of 0.625 kWh/day is five times more
savings than NAMA has seen in its experiments with variable-speed
compressors. (Id.) NAMA stated that this may be the improvement of the
part in a bench test, but this is not the result in the actual unit
tested to the DOE test procedure. (Id.) NAMA stated also a discrepancy
between the VSC energy savings found in the June 2022 Preliminary
Analysis and the October 2023 NOPR. (Id.)
Hoshizaki commented that VSCs will require design controls to
perfect the cycles for optimum energy use, adding time for staff to
prepare the compressors and fans for the control features to make sure
each unit has its own controls based on the defrost and run time.
(Hoshizaki, No. 76 at p. 5) Hoshizaki commented that VSCs and fan motor
lifetimes may be less than current components. (Id.) Hoshizaki stated
that the warranties for VSCs may be closer to 3-5 years compared to the
5-7-year warranties for compressors that is currently common in the
market, due to increased repairs if manufacturers are forced to
transition to VSCs without adequate time for full-life testing at many
ambient and humidity conditions. (Id.) Hoshizaki added that, if the
defrost settings are incorrect, freeze-ups may occur due to true-to-
life door-opening conditions. (Id.)
Hillphoenix commented that VSC technology can have an approximately
15-percent minimum efficiency improvement to the overall CRE product's
energy due to fewer starts and stops and continuous compressor speed
control to match the load requirement. (Hillphoenix, No. 77 at p. 8)
Hillphoenix commented that Copeland reported that the variable-speed
compressor motor itself only adds approximately 5 percent efficiency
gain due to compressor motor enhancements, whereas the calculated
compressor energy reduction from DOE's engineering spreadsheet shows a
44.9-percent energy savings when comparing an R-290 reciprocating with
an R-290 variable-speed compressor. (Id.) Hillphoenix stated that the
energy values DOE used to represent the impact of changing refrigerants
to R-290 with VSCs are broad assumptions and are not reflective of
actual tested values. (Id.) Hillphoenix commented that to estimate the
performance impacts of transitioning to a variable-speed compressor,
DOE should use values established by testing physical units. (Id.)
[[Page 7533]]
In support of the August 2024 NODA, DOE reviewed variable-speed
compressors on the market at the time of the analysis, updated its
database of variable-speed compressor performance, and updated its
variable-speed compressor analysis. 89 FR 68788, 68793
Specifically, DOE observed that some manufacturers have updated
their VSC coefficients since publication of the October 2023 NOPR. Due
to these updates, and to maintain a methodology consistent with that
used for single-speed compressors, DOE has updated results in this
final rule based on the average efficiency of the market for variable-
speed compressors if three or more compressor brands have available
variable-speed compressors at the appropriate capacity, and selecting
the lower-efficiency compressor if only two compressor brands are
available at a specific cooling capacity. DOE also adjusted the
calculation for the evaporator and condenser temperatures when
operating at part load using variable-speed compressors. DOE used in
the analysis an evaporator temperature 3 [deg]F higher than for single-
speed compressor operation, and a condenser temperature 5 [deg]F lower
to represent the benefit of operation at part load. This simplified the
analysis as compared to the approach taken in the October 2023 NOPR, in
which DOE based the evaporator and condenser temperature differences on
a logarithmic mean temperature difference (``LMTD'') calculation that
was adjusted based on the change in duty cycle when switching from
single- speed to variable-speed compressors.\69\ Based on these
updates, in the August 2024 NODA analysis, DOE estimated that the
energy consumption reduction from implementing variable-speed R-290
compressors would range from approximately 2.5 to 19.2 percent,
depending on the equipment class and the representative capacity.
Comparatively, in the October 2023 NOPR, DOE estimated approximately
0.5 to 25 percent energy consumption reduction when implementing
variable-speed R-290 compressors.\70\ In the March 2014 Final Rule,
precedent was established for an update to the analysis approach for
compressors, where DOE updated the single-speed compressor assumptions
in response to commenter feedback on the NOPR. See 79 FR 17725, 17760.
For further details of the calculations, see the August 2024 NODA
engineering spreadsheet.\71\ DOE notes that its updated approach
provides a conservative estimate of energy use reduction associated
with conversion to variable-speed R-290 compressors, due to use of the
average or lower performance levels of available compressor models, and
no consideration of potential additional savings associated with fan
speed reductions.
---------------------------------------------------------------------------
\69\ See the calculations tab of the engineering spreadsheet at
www.regulations.gov/document/EERE-2017-BT-STD-0007-0055.
\70\ See section 5.5.3.1 of the October 2023 NOPR TSD at
www.regulations.gov/document/EERE-2017-BT-STD-0007-0051.
\71\ See www.regulations.gov/document/EERE-2017-BT-STD-0007-0091.
---------------------------------------------------------------------------
In addition to updating the variable-speed compressor performance
analysis, DOE updated the baseline assumption costs to include
electronic controls at the baseline for all equipment classes in
response to commenter feedback and based on observation of the CRE
units torn down by DOE. While there would be development costs to
program controls for variable-speed operation, there would be
insignificant control hardware costs (other than the compressor motor
inverter, which was included in the cost analysis), since baseline
models would already have electronic controls. DOE notes that the
development costs to optimize variable-speed compressors are accounted
for the MIA, see section IV.J.2.c of this document for additional
details on DOE's conversion cost methodology and section V.B.2.a of
this document for the estimated conversion costs at each analyzed TSL.
See section IV.F.5 for discussion on maintenance and repair costs.
In response to the comment from Hillphoenix, DOE reiterates that
DOE estimated that the range of energy use reduction associated with
implementing variable-speed compressors was between approximately 0.5
and 25 percent in the October 2023 NOPR. This was reduced to a range of
up to 19.2 percent in the August 2024 NODA analysis. DOE is not aware
of any equipment class where the October 2023 NOPR engineering
spreadsheet showed a 44.9 percent reduction in energy use attributed to
implementing variable-speed R-290 compressors.
In response to the August 2024 NODA, Continental continued to
oppose the inclusion of VSCs as a design option to be incorporated over
the next 3 years given their complexity and increased costs.
(Continental, No. 107 at pp. 2-3) Continental argued that VSCs are
currently only used in specialty configurations, and more time is
needed to determine long-term savings as well as train staff on
repairs. (Id.) Continental commented that they have extended product
warranties in recent years, covering parts and service for 5, 6 or 7
years from first use, which presents exposure to any risks from
premature introduction of new features or components that have not been
fully vetted. (Continental, No. 107 at p. 3)
In response, DOE notes that it is adopting a 4-year compliance
period in this final rule, which provides an additional year for
manufacturers to redesign CRE models to meet new and amended standards
as compared to the October 2023 NOPR. Additionally, DOE notes that it
considers the development costs associated with implementing variable-
speed technology in its MIA (see section IV.J.2.c of this document for
additional information on DOE's conversion cost methodology). See
section IV.F.5 for discussion on maintenance and repair costs.
Hillphoenix commented that they agree with the temperature
reduction values when applying variable-speed compressors, but does not
agree with the max energy reduction of 19.2 percent, and stated that
test data from the VCS.SC.L class reflects approximately 13 percent max
energy savings. (Hillphoenix, No. 110 at p. 4,) Since variable speed
compressor technology is new, test data is not available for VCS.SC.M
models, but based on industry knowledge Hillphoenix estimated the
savings will be similar to the low temperature class. (Id. at pp. 4-5)
DOE notes that 19.2 percent energy use reduction associated with
the variable-speed compressor design option is the maximum energy
savings of all the analyzed classes and that for the VCS.SC.L and
VCS.SC.M classes, the analyzed energy savings are 15.7 percent and 10.6
percent, respectively, which aligns well with Hillphoenix's statement
of expectations for the VCS.SC.L and VCS.SC.M classes.
Delfield commented they have tested their own units and found that
the energy consumption of CRE with a variable-speed compressor compared
to a well-designed system with a fixed-speed compressor is essentially
the same because the efficiency gained by using a variable-speed
compressor is offset by increased runtime of fans and heaters.
(Delfield, No. 99 at p. 2) Delfield further commented that the cost of
a variable-speed compressor and the required inverter is double the
cost of an efficient fixed-speed compressor. (Id.) Delfield requested
that DOE remove this technology from the analysis. (Id.)
In response, DOE notes that its analysis for variable-speed
technology did consider increased run time of fans, but did not
consider additional improvement that could be achieved
[[Page 7534]]
through the use of fan speed reduction during compressor part-load
operation. Further, Delfield's mention of heater runtime increase
suggests that they control the antisweat heaters to run when the
compressor is energized and did not adjust antisweat heater wattage
during variable-speed compressor testing to arrive at the same heater
runtime and therefore the same antisweat heater energy use as without a
variable-speed compressor. Since a variable-speed compressor runs
longer than a single-speed compressor, if Delfield's antisweat heater
is energized whenever the compressor is energized then it runs longer
than it would otherwise with a single-speed compressor. Therefore,
Delfield claims its testing using a variable-speed compressor shows
little difference in energy use despite the energy savings from the
variable-speed compressor because the antisweat heater was not adjusted
to have the same runtime and energy use as without a variable-speed
compressor. It is not clear why heater energy use should be increased
for a variable-speed compressor, so it is not clear that their testing
represents an optimized variable-speed system. DOE notes that
Delfield's statement regarding variable-speed compressor costs are
consistent with DOE's estimates. DOE concludes that insufficient
evidence has been provided to justify removing variable speed
compressor technology from the analysis.
v. Occupancy Sensors
In response to the October 2023 NOPR, Zero Zone, Hussmann, and
NAFEM commented that occupancy sensors have been available for purchase
and use for more than 10 years and were initially used by customers.
(Zero Zone, No. 75 at p. 4; Hussmann, No. 80 at pp. 5-6; NAFEM, No. 83
at p. 6) However, Zero Zone, Hussmann, NAFEM, Hillphoenix, and NAMA
commented that food retail establishments have stopped purchasing
occupancy sensors on units or they turn off the motion sensors because
their customers may think the unit is malfunctioning, which has a
negative impact on sales and the utility of the unit. (Zero Zone, No.
75 at p. 4; Hussmann, No. 80 at pp. 5-6; NAFEM, No. 83 at p. 6;
Hillphoenix, No. 77 at p. 6; NAMA, No. 85 at p. 24) NAMA also stated
that occupancy sensors are more expensive and do not save as much
energy as analyzed in the October 2023 NOPR and that with newer LED
lighting technology available, occupancy sensors may become outdated.
(NAMA, No. 85 at pp. 12, 24) Hussmann added that if a store is closed
during nighttime hours, it is a widely used practice to separately wire
all the display case lighting to dedicated electrical circuits that can
be turned off on a fixed schedule, which is a more cost-effective way
of saving lighting energy than individual lighting controllers on each
display case. (Hussmann, No. 80 at p. 5)
In response to the August 2024 NODA, Zero Zone commented that the
majority of their customers do not request motion sensors, and some
removed it from their specifications, as having lights off indicates to
customers that the case is broken. (Zero Zone, No. 114 at p. 2)
Continental disagreed with DOE's statement that 75 percent of products
would benefit from the use of occupancy sensors, and argued that this
is not a viable feature due to mis-application which would result in
service issues, and requested the removal of the design option.
(Continental, No. 107 at p. 2)
ASAP et al. commented that while they understand the reduced
savings from the occupancy sensors, they state that manufacturers will
be able to utilize occupancy sensors to meet any amended standards.
(ASAP et al., No. 106 at p. 3) ASAP et al. added that CRE test
procedure does not include any comparable assumption about de-
activation (i.e., the test procedure gives full credit to occupancy
sensors). (Id.)
In response to comments about occupancy sensors either not being
desired by certain end users, or certain end users using their own on-
site control system, DOE has revised the energy use analysis for
occupancy sensors to consider that they would not be used by all end-
use customers. Specifically, the revised energy use analysis assumes
only 75 percent of end users would use occupancy sensors, as discussed
in section IV.E of this document. However, although DOE has considered
partial non-use of occupancy sensors in the energy use analysis, it has
not revised the engineering assumptions related to the occupancy
sensors in this final rule because the engineering analysis is based on
the DOE test procedure, which does not consider potential non-use of
the technology. The DOE test procedure is not intended to anticipate
how end users may modify the unit in the field, including de-activation
of occupancy sensors. Further, DOE did not revise its MPCs for
occupancy sensors, as suggested by NAMA, because DOE did not receive
any data from commenters to suggest an alternative MPC would be more
representative. Also, DOE notes that it does not expect manufacturers
would need to incorporate occupancy sensors with dimming capability to
meet the adopted TSL (i.e., TSL 3).
vi. Door Design Changes
In response to the October 2023 NOPR, Hillphoenix commented that
vacuum-insulated glass (``VIG'') is not applicable for low-temperature
applications due to the glass bending in the extreme temperature
difference. (Hillphoenix, No. 77 at p. 7) Hillphoenix commented that,
more importantly, all suppliers of VIG stopped production for CRE
products due to the low demand and refused to supply the market. (Id.)
Hillphoenix stated that DOE referenced information in the October 2023
NOPR TSD that is no longer valid and that Anthony International
discontinued VIG in 2019.\72\ (Id.)
---------------------------------------------------------------------------
\72\ See www.buildinggreen.com/product-review/saving-energy-supermarkets-vacuum-insulated-glass.
---------------------------------------------------------------------------
NAMA expressed concern with the safety hazard presented by the
additional weight from increased panes in doors together with noble gas
insulation, which could make the product excessively top heavy. (NAMA,
No. 85 at pp. 24-25) NAMA further commented that the June 2022
Preliminary Analysis results for door design options are no longer
relevant. (Id. at p. 25)
SCC commented that VIG would eliminate any curved glass models as
this technology simply does not exist except in flat structural glass.
(SCC, No. 74 at p. 2) SCC commented that, on SOC models, the glass is
lifted and held by gas cylinders for ease of loading product, not a
swing door like VCT units, and the extra weight and constant opening
would severely degrade the reliability of the equipment and may
constitute a safety issue for merchandisers. (Id.)
Hillphoenix commented that medium-temperature doors are currently
manufactured with double-pane glass that is filled with argon gas and
low-temperature doors are currently manufactured with triple-pane glass
that is filled with argon gas. (Hillphoenix, No. 77, p. 6) Hillphoenix
stated that the cost of krypton gas is more than double the cost of
argon gas and there is a limited supply of krypton gas available to the
market. (Id.) Hillphoenix commented that triple-pane glass on medium-
temperature CRE would increase cost for a minimal efficiency gain. (Id.
at p. 7)
In response to the comments regarding increased cost, DOE does not
screen out a technology based on its cost-effectiveness. In response to
[[Page 7535]]
comments about weight concerns, DOE notes that low-temperature freezers
already primarily use triple-pane glass packs, which demonstrates the
ability of CRE to use this technology. In response to comments with
concerns about VIG supply and application in low-temperature
applications, DOE notes that there are examples of manufacturers that
continue to offer VIG doors on commercial freezers.\73\ And in response
to comments regarding the cost of krypton gas, DOE has revised its MPC
for this design option based on commenter feedback. As discussed in
section V.C.1 of this document, DOE does not expect manufacturers would
need to implement VIG doors or triple-pane glass doors with krypton
fill to meet the adopted TSL. In response to the comment from SCC about
VIG not being suitable for curved glass, DOE notes that the analyzed
SOC classes in this final rule only considered multiple-glass-layer or
VIG design options for the flat glass rear doors and not the non-door
glass area. Furthermore, it is DOE's understanding that the upward-
lifting front glass mentioned by SCC for SOC models can be curved, but
because DOE's analysis does not consider an increase in glass layers
for the non-door glass area, SCC's comment about the impact on
durability of the gas cylinders used to support the curved glass when
open is not relevant. Also, DOE notes that it does not expect
manufacturers would need to incorporate vacuum-insulated glass doors to
meet the adopted TSL (i.e., TSL 3).
---------------------------------------------------------------------------
\73\ See valprorefrigeration.com/glass-door-merchandisers/glass-door-freezer-merchandisers/two-swing-glass-door-merchandiser-freezer-vp2f-48hc/.
---------------------------------------------------------------------------
NAMA commented that the savings from increased door panes together
with noble gas insulation are more likely to be 0.3-0.6 kWh/day, rather
than the projected 1.270 kWh/day. (NAMA, No. 85 at p. 25)
In response to the comment from NAMA, it appears that NAMA is
referencing the VCT.SC.M results provided in the June 2022 Preliminary
Analysis, for which the ``high performance door'' design option for
VCT.SC.M saved 1.270 kWh/day compared to the previous design option
step; \74\ however, section 5.8 of the October 2023 NOPR TSD presents
savings based on the revised analysis, which result in less than 0.1
kWh/day of savings. Therefore, DOE has revised the analysis addressed
by NAMA's comment in the August 2024 NODA and in this final rule,
resulting in comparable results to NAMA's comment.
---------------------------------------------------------------------------
\74\ See chapter 5, section 5.8 of the June 2022 Preliminary TSD
at www.regulations.gov/document/EERE-2017-BT-STD-0007-0013.
---------------------------------------------------------------------------
c. Equipment Classes With Unique Energy Use Characteristics
In the October 2023 NOPR, DOE proposed additional energy use
allowances for certain equipment classes having unique features. DOE
also proposed definitions to clarify which features are eligible (see
section IV.A.1.b for more description regarding the definitions). 88 FR
70196, 70230-70231. DOE determined potential energy use allowances for
these features 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. Id. at 88 FR 70230.
As proposed in the October 2023 NOPR, these equipment have the
specified performance-related features and different maximum energy use
to represent separate additional equipment classes.
In the October 2023 NOPR, DOE tentatively developed multipliers for
pass-through, sliding, roll-in doors, and roll-through features. Id. at
88 FR 70231. See table IV.13 for additional details on what was
proposed in the October 2023 NOPR.
[GRAPHIC] [TIFF OMITTED] TR21JA25.115
In the October 2023 NOPR, DOE additionally tentatively developed
multipliers for forced-air evaporators. Id. at 88 FR 70212. 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 tentatively
[[Page 7536]]
developed an energy use multiplier for equipment classes that were
directly analyzed in the October 2023 NOPR as CRE with a cold-wall
evaporator and for which DOE observed models with forced-air
evaporators in those equipment classes on the market. Id. at 88 FR
70231. DOE tentatively developed this multiplier to account for the
additional energy use associated with a forced-air evaporator as
compared to a cold-wall evaporator. Id. See table IV.14 for additional
details of what was proposed in the October 2023 NOPR.
[GRAPHIC] [TIFF OMITTED] TR21JA25.116
In response to the October 2023 NOPR, SCC and AHRI commented that
they appreciate that DOE is applying the definitions to VCT and VCS
equipment classes to allow for more energy for rear-door options. (SCC,
No. 74, p. 3; AHRI, No. 81 at pp. 5-6) Due North supported DOE's
proposal to separate out the newly introduced VCT.SC.M.PT and
VCT.SC.M.SDPT classes from the VCT.SC.M class to address their
construction uniqueness and the related increased energy use. (Due
North, No. 87 at p. 2)
ITW, the CA IOUs, and Continental supported DOE's proposal to add
provisions for non-traditional door designs including sliding, rolling,
and pass-through doors; Continental expressed support for the
provisions proposed for horizontal closed low-temperature models with
forced air evaporators. (ITW, No. 82 at p. 6; CA IOUs, No. 84 at p. 1;
Continental, No. 86 at p. 2) Continental commented that these equipment
types have differentiating characteristics that impact energy
consumption. (Continental, No. 86 at p. 2) The CA IOUs commented that
creating separate standards for these designs acknowledges the energy
impact of non-traditional door designs on specialty refrigeration
equipment. (CA IOUs, No. 84 at p. 1)
SCC, AHRI, Hoshizaki, and Hussmann agreed in principle to the use
of an energy use multiplier for certain equipment classes but stated
DOE has not allowed enough time for manufacturers to test and validate
the multipliers. (SCC, No. 74 at p. 4; AHRI, No. 81 at p. 8; Hoshizaki,
No. 76 at p. 3; Hussmann, No. 80 at p. 6) AHRI and Hussmann commented
that they require 1 year of testing, and Hoshizaki requested time in
the first quarter of 2024 to access its test room and validate the
numbers in the October 2023 NOPR. (AHRI, No. 81 at p. 8; Hussmann, No.
80 at p. 6; Hoshizaki, No. 76 at p. 3) ITW also commented that it would
like to conduct laboratory evaluations of the new equipment categories
and provide DOE with test data to validate the differences in
performance for these new categories. (ITW, No. 82 at p. 6) SCC and
NEEA and NWPCC commented that they would like to see the data and
analysis around how the energy use multipliers have been developed.
(SCC, No. 74 at p. 4; NEEA and NWPCC, No. 89 at p. 1) NEEA and NWPCC
stated that while they understand DOE's intent for the energy use
multipliers, DOE's explanation for how the energy use multipliers were
developed is not clear. (NEEA and NWPCC, No. 89 at p. 2) NEEA and NWPCC
added that stakeholders cannot provide comment on whether the
multipliers are too conservative or too aggressive without knowing what
information or data the multipliers are based on and expressed concern
that these multipliers are creating an insufficiently justified
loophole for less efficient equipment to be manufactured. (Id. at p. 2)
NAMA commented that it does not understand the concept of using a
``multiplier'' within the CRE rulemaking and the information given in
the October 2023 NOPR does not contain enough information for NAMA
members to comment on. (NAMA, No. 85 at p. 30)
NEEA and NWPCC stated that ENERGY STAR currently certifies sliding,
roll-in, and pass-through units that meet the energy use requirements
of their respective equipment classes, which would indicate that there
may be no need for an energy multiplier solely based on these door
types, as equipment already exists that meets a higher efficiency
threshold than DOE's current standard without a separate threshold from
their single-door counterparts. (NEEA and NWPCC, No. 89 at p. 2)
Delfield commented that the suggested allowances for most
categories of specialty cabinets are not reasonable and that any
additional allowances should consider the refrigerated volume of the
cabinet rather than a fixed number, as proposed in some of the
categories. (Delfield, No. 71 at p. 1) Delfield recommended that DOE
implement a 20-percent allowance for pass-throughs, sliding doors, and
roll-ins used in VCS.SC.M, VCS.SC.L, VCT.SC.M, and VCT.SC.L equipment
classes, as well as an additional 20 percent for roll-throughs and also
for pass-throughs with sliding doors . (Id.) Delfield added that these
low-volume, specialty cabinets have very little impact on national
energy consumption and the environment. (Id.)
ITW recommended that DOE create an additional category for cabinets
with drawers and Delfield recommended an additional category
specifically for freezers with drawers. (ITW, No. 82 at pp. 2, 4;
Delfield, No. 71 at p. 2) Delfield commented that freezer drawers
require additional heater wires and gaskets, which contribute to
increased energy consumption and suggested a 20-percent additional
allowance for freezers with drawers to be classified as VCS.SC.L.DRW.
(Delfield, No. 71 at p. 2) ITW commented that its test data shows that
the energy use is measurably greater in equipment with drawers versus
equipment with doors, thus meriting DOE's creation of a separate
category for this type of equipment. (ITW, No. 82 at p. 2) ITW
commented that it had conducted testing on the same cabinet with both
drawer and door configuration, and test results showed that there is a
27-percent higher energy consumption on the drawer freezer compared to
same- size door freezer. (Id. at p. 4)
In the August 2024 NODA, DOE presented revised analysis results for
a range of potential efficiency levels. 89 FR 68788. 68802-68825. As
part the August 2024 NODA, DOE applied a simplified multiplier approach
to the eligible equipment classes discussed in the October 2023 NOPR,
evaluating the use of a single multiplier for all evaluated equipment
classes and feature groupings, including pass-through, sliding door,
sliding-door pass-through, roll-in, roll-through, forced-air
evaporator, and drawers. Id. at 89 FR
[[Page 7537]]
68794. To select a single multiplier representative of the range of
features analyzed, DOE used an equipment class shipment-weighted
average of the eligible equipment class unweighted average multiplier
values based on the features applicable for each class. Id. The result
of this single multiplier analysis yielded a multiplier of 1.07. Id.
DOE applied this multiplier to the representative energy use at each
efficiency level for each eligible class and presented the resulting
energy use equations in the August 2024 NODA. Id.
In response to the August 2024 NODA, ITW commented that it supports
the concept of a ``simplified multiplier'' for eligible equipment
classes and feature groupings, including pass-through, sliding door,
sliding-door pass-through, roll-in, roll-through and drawers. (ITW, No.
111, pp. 1-2) ITW commented that they do not support DOE's proposed
1.07 multiplier, because their analysis indicates a multiplier value
significantly higher associated with some features and recommends a
compromise for the ``simplified multiplier'' of 1.11 to 1.15 rather
than 1.07. (Id. at p. 2) ITW's analysis yielded a multiplier of 1.07
for pass-through classes and sliding classes, 1.11 for pass-through and
sliding classes, 1.06 for roll-in classes, 1.14 for roll-through
classes, and 1.27 for drawer classes. Id.
ITW commented that they appreciate DOE's understanding that
ancillary losses are significantly higher in equipment with drawers
versus equipment with doors to merit their inclusion in the grouping of
CRE with features that affect energy use. (Id.)
Hillphoenix commented that the forced-air evaporator configuration
proposed in the October 2023 NOPR only applied to equipment class
HCS.SC.L. (Hillphoenix, No. 110 at p. 6) Hillphoenix commented also
that in the October 2023 NOPR engineering analysis spreadsheet for
HCT.SC.M, L, and I product classes, there was no energy included for
the evaporator fans motors or anti-sweat heat, which assumes that all
products in this class are considered by DOE to utilize cold wall
evaporators. (Id.) Hillphoenix stated that this assumption does not
accurately reflect the larger units in this class which utilize
evaporators and fans. (Id.) Hillphoenix commented that the forced air
evaporator configuration needs to be included in the HCT.SC class, and
that this class must include evaporator fans and anti-sweat energy.
(Id). Hillphoenix stated its belief that HCT.RC, HCT.SC, HZO.RC, HZO.SC
with glass sides are not suitable for cold wall evaporators because the
refrigerant piping cannot be installed in the glass which surrounds the
product. (Id.)
Delfield supported the need for new classifications on specialty
cabinets, however, they found that the suggested allowances for most of
these categories are not reasonable. (Delfield, No. 99 at p. 2)
Delfield commented that any additional allowances for these categories
should consider the refrigerated volume of the cabinet rather than a
fixed number as proposed in some of the categories. (Id.) Delfield
disagreed that a single use multiplier can be used effectively on pass-
through doors, sliding doors and roll-ins since these categories have
different challenges with widely different energy consumptions. (Id.)
Delfield recommend either leaving these categories at DOE 2017 levels
or moving forward with a 20 percent allowance for pass-through doors,
sliding doors and roll-ins versus VCS.SC.M, VCS.SC.L, VCT.SC.M and
VCT.SC.L classifications and an additional 20 percent for roll-throughs
and pass-throughs with sliding doors. (Id.)
Delfield also suggested that DOE add an additional classification
for freezers with drawers stating they require additional heater wires
and gaskets which contribute to increased energy consumption. (Id. at
p. 3) Delfield ultimately recommended that DOE stays at 2017 DOE levels
for freezers with drawers. (Id.)
In response to ITW's and Delfield's comments requesting an
alternative single multiplier, DOE notes that neither ITW, Delfield,
nor any other commenter, provided data to support a multiplier
different from the multiplier presented in the August 2024 NODA. DOE
conducted a review of the data that supported the August 2024 NODA
multiplier and has determined that it continues to be representative of
the eligible features included in the August 2024 NODA and this final
rule.
In response to Hillphoenix's comment, DOE notes that it is not
aware of any models certified to DOE's CCD in the HCT.SC class which
use forced-air evaporators, including the HCT.SC models Hillphoenix has
certified to DOE.\75\ Further, the HCT.SC and HCT.RC models that
Hillphoenix has certified to the CCD are all medium-temperature
refrigerators and low-temperature freezers. In this final rule, DOE is
not amending the standards for HCT.SC.M, HCT.SC.L, HCT.RC.M, and
HCT.RC.L. In regards to the HZO.RC and HZO.SC classes, in the October
2023 NOPR analysis, the August 2024 NODA analysis, and this final rule,
DOE has assumed that the HZO.RC and HZO.SC classes use forced air
evaporators, which is consistent with Hillphoenix's feedback.
Therefore, DOE has determined that its analysis is representative of
the current market.
---------------------------------------------------------------------------
\75\ See www.regulations.doe.gov/certification-data/CCMS-4-Refrigeration_Equipment_-_Commercial__Single_Compartment.html#fq=%7B!tag%3DBrand_Name_s__s%7DBrand_Name_s__s%3AHillphoenix&fq=%7B!tag%3DEquipment_Family_Description_s%7DEquipment_Family_Description_s%3A%22Horizontal%20Closed%20Transparent%20%5C(HCT%5C)%22&fq=%7B!tag%3DCondensing_Unit_Configuration_De
scription_s%7DCondensing_Unit_Configuration_Description_s%3A%22Self%5
C-
Contained%20%5C(SC%5C)%22&q=Product_Group_s%3A%22Refrigeration%20Equi
pment%20-%20Commercial%2C%20Single%20Compartment%22. Accessed on 10/
30/24.
---------------------------------------------------------------------------
In response to Delfield's comment, the multiplier equations
presented in the August 2024 NODA do vary by capacity (i.e., volume or
TDA). Additionally, based on the data supporting the development of the
multipliers in this final rule, DOE has determined that a single energy
use multiplier is representative of the entire capacity range of the
equipment class. In support of this final rule, DOE is not aware and
has not received any data to support different multipliers for
different capacity ranges within an equipment class.
In response to these comments and consistent with the August 2024
NODA analysis, in this final rule, DOE is adopting a single 1.07
multiplier for all equipment classes proposed in the October 2023 NOPR
with qualifying features, including pass-through doors, sliding door,
sliding-door pass-through doors, roll-in door, roll-through doors,
forced-air evaporator, and drawer units. These performance-related
features may have interdependencies that affect energy performance,
and, therefore, DOE has determined that a single, consolidated 1.07
multiplier for all equipment classes is representative of the energy
use characteristics of these features. DOE is adopting separate
equipment classes for certain equipment categories with one or more
qualifying performance-related features. Table IV.15 indicates for
which equipment classes and features this distinction (and the allowed
additional energy use) is applicable. DOE is establishing these
equipment classes with features with an energy conservation standard
(in kWh/day) that equals 1.07 multiplied by the equation for the
related equipment class that does not contain these features. With
respect to comments from ITW and Delfield regarding the inclusion of
units with drawers in the multiplier, DOE notes that the August 2024
NODA
[[Page 7538]]
and this final rule include units with drawers in the list of
qualifying features. Id. at 89 FR 68793, 68795
[GRAPHIC] [TIFF OMITTED] TR21JA25.117
DOE notes that EPCA, as codified, contains what is known as an
``anti-backsliding'' provision, which prevents the Secretary from
prescribing any amended standard that either increases the maximum
allowable energy use or decreases the minimum required energy
efficiency of a covered product. (42 U.S.C. 6316(e)(1); 42 U.S.C.
6295(o)(1)) Therefore, any equipment classes with features in this
final rule may be limited or adjusted due to the anti-backsliding
provision. In this final rule, the energy use of the selected
efficiency level in TSL 3 is adjusted accordingly, if needed, to avoid
backsliding against the current standard.
Due North commented that the proposed conservation standards in the
October 2023 NOPR do not provide an energy use allowance for smart
technology accessories, such as connectivity devices for remote control
and monitoring; inventory management smart shelves, image recognition
cameras, and associated computers; pay terminals; and similar
technology-based accessories. (Due North, No. 87 at p. 2) Due North
added that the advent of smart technologies, including artificial
intelligence, will result in rapidly growing demand for these types of
accessories, and DOE energy conservation standards may serve as
obstacles for new technologies and innovation. (Id.)
In response to the comment from Due North regarding smart
technologies, DOE did not propose an energy use allowance for smart
technology accessories in the October 2023 NOPR. DOE notes that neither
Due North, nor any other commenter, has provided data on the energy use
of these technologies for CRE currently available on the market.
Therefore, in this final rule, DOE is not including an energy use
allowance for smart technologies. DOE welcomes any data stakeholders
can provide on the energy use and adoption of these technologies in CRE
for consideration in any potential future rulemaking.
Supporting Data
DOE found drawer units in CCD and compared them to analogous units
with doors to analyze the increase in daily energy consumption
associated with drawer units, taking into account volume differences.
Characteristics shared between the pairs of analogous units include
manufacturer, basic model line, and approximate dimensions. Differences
in rated refrigerated volume were normalized by dividing the rated
energy consumption of each unit by the rated volume, using that value
to compare units in a pair with each other. The CCD data used for this
analysis is compiled in table IV.16, and the average of these results
is 9.9 percent increase in energy use, corresponding to a multiplier of
1.099.
[[Page 7539]]
[GRAPHIC] [TIFF OMITTED] TR21JA25.118
d. DOE Test Data
In response to the October 2023 NOPR, AHRI commented it did not
find any specific information on when DOE tested products or conducted
physical teardowns specific to the October 2023 NOPR. (AHRI No. 81 at
p. 10) AHRI listed the sections that include discussion of the
``teardown analysis,'' which include 2.4.2 Cost Analysis, 5.1
Introduction, 5.6 Core Case Costs, and Energy Consumption Model. (Id.)
AHRI, NAMA, NAFEM, SCC, and Hoshizaki requested that DOE make data
related to CRE units tested and torn down for this rulemaking
available, while maintaining manufacturer confidentiality, as concerns
have been raised about the age of the units. (AHRI, No. 65 at pp. 1-2 ;
NAMA, No. 85 at p. 7; NAFEM, No. 83 at pp. 8-9; Hoshizaki, No. 76 at p.
3; SCC, No. 74 at p. 2) AHRI and NAFEM expressed concern that DOE may
be using units in the CRE teardowns that fail to align with those
currently on the market, as significant changes were made with the
energy conservation standards that went into effect in 2017. (AHRI, No.
65 at p. 2; NAFEM, No. 83 at pp. 8-9) AHRI and NAFEM added that changes
in refrigerants have also taken place, such as the switch from R-134a
and R-404A to low-GWP R-290 in self-contained equipment. (AHRI, No. 65
at p. 2; NAFEM, No. 83 at p. 9)
AHRI requested that DOE add to the docket all documents and data
referenced in the October 2023 CRE NOPR for stakeholder review and
input; AHRI further requested that DOE add an additional 60 days to the
public comment period for stakeholders to have adequate time to review
the data and provide meaningful comments. (AHRI, No. 65 at pp. 1-2)
AHRI added that DOE has failed to make available to interested parties
all data it relied upon for calculations and conclusions in this
rulemaking, as required by the Administrative Procedure Act (``APA'').
(AHRI, No. 81 at p. 4) AHRI commented that DOE's failure to provide the
technical materials and analysis for its calculations does not align
with precedence from the courts \76\ on this issue. (Id.)
---------------------------------------------------------------------------
\76\ AHRI specifically referenced American Public Gas
Association v U.S. Department of Energy, 72 F. 4th 124, July 7,
2023.
---------------------------------------------------------------------------
NAMA commented in support of these comments made by AHRI. (NAMA,
No. 85 at pp. 9-10). NAMA added that several instances in the October
2023 NOPR do not appear to present the data DOE utilized to arrive at
the provided conclusions and that this is a violation of the U.S. Court
of Appeal for the District of Columbia's statement that an agency is
required to allow the public to review and analyze any technical
materials that it relies upon in a proposed rule. (Id. at p. 9)
NAMA commented it was concerned that DOE had tested units using a
computer rather than actual units and requested that DOE provide
detailed information on the analysis. (Id. at p. 8)
Zero Zone stated that DOE's description of how baseline levels are
established in the October 2023 NOPR does not indicate that equipment
was tested, and that baselines were established solely using data from
the CCD. (Zero Zone, No. 75 at p. 1) Zero Zone questioned how DOE
determined the efficiency increase of the technology options proposed
without testing. (Id.) Zero Zone commented that if testing was not
completed, DOE should reevaluate the assumptions for design options.
(Id.) Zero Zone stated that competitors in the database already employ
most of the design features proposed by DOE, and Zero Zone asked for
additional detail on how DOE determined the energy reduction of the
design options if no testing was performed. (Id. at p. 5)
NAMA stated that, to the industry, the fact that many of the
efficiency options
[[Page 7540]]
have already been in use for years serves as additional proof that the
teardowns, analysis, and reverse engineering were performed on machines
that were not representative of today's production and did not follow
the final test procedure for CRE. (NAMA, No. 85 at p. 5)
Hoshizaki commented that, if given the opportunity, it could
accurately guide DOE on which Hoshizaki models were manufactured before
and after the 2017 rulemaking based on model numbers. (Hoshizaki, No.
76 at p. 3) Hoshizaki commented that if DOE included units produced
before the 2017 rulemaking, this would explain why many of the design
factors mentioned in the October 2023 TSD were not identified as
already in use. (Id.)
In response to the August 2024 NODA, AHRI commented that DOE had
not made available the data that it relied upon in the NOPR, and
continues to request DOE provide access to all information, technical
studies, and data that it used for this commercial refrigeration
equipment rulemaking. (AHRI, No. 104 at p. 6) AHRI commented that the
Administrative Procedure Act and recent case law requires that all
information used be publicly available. (Id.)
NAMA commented that DOE stated in the November 2023 public hearing
that they would make available more information on the tear-down and
testing of units, however, the NODA does not contain any new
information on this. NAMA commented that all of the testing was done on
older machines: VCT.SC.M units were purchased in 2020 with R-290
refrigerant, VOP.SC.M unit was purchased in 2019 at 13 cu ft with R-
404A refrigerant, no HZO.SC.L units were purchased or tested. (NAMA,
No. 112 at p. 5)
Zero Zone commented that DOEs provided list of tear down equipment
points to years of standards development that was not based on actual
test data, and that DOE should have tested remote equipment. (Zero
Zone, No. 114 at p. 1) Zero Zone requested that DOE postpone release of
the rule until it has tested a more representative group of equipment.
(Id.) Zero Zone stated that the standards are set at the average energy
value, however manufacturers must develop equipment that has an average
energy consumption below the standard so all the equipment found in a
normal distribution of manufacturing would meet the standard. Zero Zone
suggests that DOE should increase the allowed energy by 3 standard
deviations. (Id.)
NAFEM commented that there was new information analyzed in the
August 2024 NODA, for which the data had not been shared publicly.
(NAFEM, No. 101 at pp. 4-5) NAFEM stated that this includes
specifically the update of R-290 compressor performance to reflect that
of the database of CRE compressors, as well as that DOE conducted
additional teardown tests to reduce the R-value from 8 to 6.5 per inch,
baseline fan motor assumptions and use of electronic controls. (Id. at
p.5)
NAFEM additionally referenced the comment from AHRI in response to
the October 2023 NOPR which requested DOE's teardown information, which
has not been provided. (NAFEM, No. 101 at p. 5) NAFEM stated that this
contravenes well settled law and provided the examples of the decisions
in Am. Pub. Gas Ass'n v. U.S. Dep't of Energy, 72 F.4th 1324, 1337
(D.C. Cir. 2023) (``Generally, the technical studies and data upon
which the agency relies must be revealed for public evaluation. . .
.).'' and Conn. Light & Power Co. v. Nuclear Regulatory Comm'n Com.,
673 F.2d 525, 530-31 (1982) (``An agency commits serious procedural
error when it fails to reveal portions of the technical basis for a
proposed rule in time to allow for meaningful commentary.'') (Id.)
In response to the comments regarding units tested, DOE provided
information on the CRE units tested in this rulemaking cycle in table
IV.17 of the August 2024 NODA. DOE notes that Section 1.2 of the NODA
support document DOE stated the year the test unit was purchased.
Teardowns were conducted after purchase (i.e., between 2017-2024). In
the August 2024 NODA, DOE stated that, based on feedback in response to
the October 2023 NOPR and November 2023 Public Meeting and additional
test and teardown data conducted since the October 2023 NOPR, DOE
updated certain design specifications and components assumed to be used
in models at the baseline efficiency level in the NODA. 89 FR 68788,
68792. As stated in the August 2024 NODA, DOE conducted additional
component teardowns and reviewed the teardown data it compiled in
support of this rulemaking and observed that a significant number of
units contained electronically commutated motor (ECM) evaporator and
condenser fan motors. Id. Therefore, based on DOE's teardown data, DOE
presents a revised analysis in the August 2024 NODA with updated
baseline fan motor components for certain equipment classes. Id.
Additionally, DOE provided the supporting spreadsheets that the
analyses were based on for the June 2022 Preliminary Analysis, the
October 2023 NOPR, the August 2024 NODA, and this final rule.
With respect to comments regarding the APA, DOE has met the APA's
requirements as DOE has provided throughout this final rule, the final
rule TSD, and the final rule supporting documents all of the details of
the analysis conducted by DOE and the information relied upon in
conducting that analysis.
In response to Zero Zone's comment regarding CRE connected to a
remote condensing unit, as stated in section 1.2 of the August 2024
NODA support document, DOE did not conduct any testing on CRE with
remote condensing units in support of this rulemaking. Instead, the
analysis for directly analyzed remote equipment classes was based on
the engineering spreadsheet model methodology of the March 2014 Final
Rule, and DOE updated certain design specifications and design options
for this rulemaking with current information, based on models currently
available on the market, and supporting data and information provided
during manufacturer interviews conducted during this rulemaking
process. This approach was also supported by calibrations conducted on
the self-contained CRE analysis for inputs that apply to both the self-
contained analysis and the remote-condensing analysis.
When compiling the list of tested units for the August 2024 NODA
and this final rule, DOE refined the October 2023 NOPR list of tested
CRE that were used to support the engineering analysis, which resulted
in a total of 64 units. DOE has provided anonymized data with the year
purchased, refrigerant type, equipment class, volume or TDA, and daily
energy consumption in table IV.17. DOE used the results of this testing
as well as market research and manufacturer interviews to inform its
engineering analysis spreadsheet for this final rule.
[[Page 7541]]
[GRAPHIC] [TIFF OMITTED] TR21JA25.119
[[Page 7542]]
[GRAPHIC] [TIFF OMITTED] TR21JA25.120
Chef Base or Griddle Stand Test Data
In response to the October 2023 NOPR regarding the amended test
conditions for chef bases or griddle stands in the September 2023 Test
Procedure Final Rule, NAFEM commented that DOE has provided no
empirical data in support of the conclusion 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. (NAFEM, No. 83 at p. 13) NAFEM stated that, in the November
2023 Public Meeting, DOE stated it tested chef bases or griddle stands
at the 75 [deg]F ambient temperature and calibrated the engineering
analysis to that condition, then cross walked that condition to the 86
[deg]F condition. (Id.) NAFEM commented that when DOE was asked about
test data at 86 [deg]F, DOE stated it did not receive any data for that
condition. (Id.) Continental and NAFEM disagreed with DOE's decision to
use simulated estimates of energy consumption for chef base or griddle
stand units under the newly instated conditions as a crosswalk in lieu
of actual test results. (Continental, No. 86 at p. 3; NAFEM, No. 83 at
pp. 13-14) In response to the August 2024 NODA, Continental stated that
it disagrees with the inclusion of chef bases and griddle stands until
sufficient testing has been conducted at prescribed conditions, and
properly vetted. (Continental, No. 107 at p. 2)
In response to the comment from NAFEM, DOE notes that chef bases or
griddle stands are not currently subject to energy conservation
standards, therefore, NAFEM's comment about the September 2023 Test
Procedure Final Rule not altering the measured efficiency of CRE
currently subject to energy conservation standards is not applicable to
chef bases or griddle stands.
In response to the comments from NAFEM and Continental about test
data versus modeling energy consumption in the engineering spreadsheet,
DOE performed additional testing on chef bases or griddle stands at an
86 [deg]F ambient dry-bulb temperature, as summarized in table IV., in
accordance with the amended test conditions for chef bases and griddle
stands prescribed in the September 2023 Test Procedure Final Rule.
In response to the October 2023 NOPR, Hoshizaki, NAFEM,
Continental, and Delfield commented requesting more information on how
standards for chef bases or griddle stands were established because the
amended test procedure requires a different ambient temperature than
other CRE and whether testing had been conducted on chef base or
griddle stand units. (Hoshizaki, No. 76 at p. 4; NAFEM, No. 83 at pp.
13-14; Continental, No. 86 at pp 2-3; Delfield, No. 71 at p. 1)
In response to the October 2023 NOPR, Hoshizaki requested that DOE
allow manufacturers to send chef bases or griddle stands to third-party
labs for testing over a 2-year period to see where energy levels should
be set, and then grant manufacturers 3 years to make necessary changes
to meet this new standard. (Hoshizaki, No. 76 at p. 4)
While DOE initially tested chef bases or griddle stands at a 75
[deg]F ambient dry-bulb temperature to inform the October 2023 NOPR
analysis, the September 2023 Test Procedure Final Rule amended the
tested ambient dry-bulb temperature for chef bases or griddle stands
from 75 [deg]F to 86 [deg]F; therefore, in the October 2023 NOPR DOE
revised the chef bases or griddle stand analysis using the CRE
engineering spreadsheet model to calculate the energy use at an 86
[deg]F ambient dry-bulb temperature. In the October 2023 NOPR analysis,
DOE had analyzed a saturated condensing temperature (``SCT'') of 95
[deg]F for all equipment classes, a 20-degree temperature difference
with the 75 [deg]F ambient temperature. To maintain a 20-degree
temperature difference with the amended 86 [deg]F ambient temperature
for chef bases or griddle stands, in the analysis presented in the
August 2024 NODA and this final rule, DOE analyzed a SCT of 106 [deg]F
for chef base or griddle stand equipment.\77\
---------------------------------------------------------------------------
\77\ See Section 1.3 of the NODA support document at https://www.regulations.gov/document/EERE-2017-BT-STD-0007-0090.
---------------------------------------------------------------------------
In response to the August 2024 NODA, The CA IOUs commented that,
changing engineering assumptions from
[[Page 7543]]
75.2 [deg]F to 86.0 [deg]F ambient dry bulb temperature in the NODA
engineering spreadsheet increases modeled energy use by 20.3% for chef
base coolers (CB.SC.M) and 9.5% for chef base freezers (CB.SC.L). (CA
IOUs, No. 113, at p. 5) The CA IOUs commented that they tested popular
models of chef bases based on DOE's current test procedure at 75.2
[deg]F and 86.0 [deg]F. (Id.) The CA IOUs commented that their test
data and DOE's test data from the NOPR TSD show significantly higher
energy consumption increases than those indicated in the NODA
engineering spreadsheet at 86 [deg]F compared to 75 [deg]F. (Id.) The
CA IOUs commented that, since DEC is a function of refrigerated volume
for chef bases, the percent difference in DEC from 75 [deg]F to 86
[deg]F should also be a function of refrigerated volume. (Id.) The CA
IOUs commented that DOE should update its engineering analysis and use
available test data to validate its engineering model, ensuring more
accurate predictions of standard levels and energy savings. (Id.)
In response to the CA IOUs comment, DOE notes that the analysis
supporting the August 2024 NODA and this final rule for chef bases or
griddle stands was not based on a percent difference of tested energy
use from 75 [deg]F to 86 [deg]F. The chef base or griddle stand test
data conducted at 86 [deg]F and the subsequent teardown information
from those test units were used to inform the engineering spreadsheet
assumptions and calculations used to conduct this analysis. DOE did not
use the test data conducted at 75 [deg]F to inform the August 2024 NODA
or this final rule analysis. Therefore, the CA IOUs request that DOE
make the percent difference in DEC from 75 [deg]F to 86 [deg]F a
function of refrigerated volume is irrelevant to this analysis. DOE
agrees with the CA IOUs comment in response to the August 2024 NODA
that the daily energy consumption values for the units the CA IOUs
tested are consistent with DOE's data. (The CA IOUs, No. 113, at p. 2).
Since the October 2023 NOPR, DOE has updated certain baseline
design specifications for chef bases or griddle stands including: the
number of evaporator fans for CB.SC.L, the infiltrated air mass flow
rate assumption for CB.SC.M and CB.SC.L, the discharge air temperature
(``DAT'') for CB.SC.M, and the baseline evaporator temperature
(``SET'') for CB.SC.L. For more details, see appendix 5A of the final
rule TSD. As previously discussed in section IV.C.1.a.iii of this
document, updating certain baseline design specifications is consistent
with the approach in the March 2014 Final Rule.\78\
---------------------------------------------------------------------------
\78\ See tables 5.A.2.2 of the NOPR and March 2014 Final Rule
TSD, available at .regulations.gov/document/EERE-2010-BT-STD-0003-
0051 and www.regulations.gov/document/EERE-2010-BT-STD-0003-0102.
---------------------------------------------------------------------------
e. Development of Standard Equations
In the October 2023 NOPR, in three directly analyzed equipment
classes, VCT.SC.M, VCS.SC.I, and HCT.SC.I, DOE tentatively determined
to maintain the current standard equation intercept and calculated a
slope based on the current standard intercept and the proposed energy
use level at the representative volume or TDA. 88 FR 70196, 70216-70217
This approach was consistent with the approach taken in the March 2014
Final Rule for certain classes, in which DOE retained the offset
factors for classes DOE had calculated the offset factor for in the
March 2009 CRE final rule, as DOE stated in the March 2014 Final Rule
that it believed that those figures continued to represent the end
effects inherent in the operation of those equipment types.\79\
---------------------------------------------------------------------------
\79\ See section 5.8 at www.regulations.gov/document/EERE-2010-BT-STD-0003-0102.
---------------------------------------------------------------------------
In response to the October 2023 NOPR, Zero Zone commented that it
believes that DOE's approach in the October 2023 NOPR to keep the
current standard equation intercept and calculate a new slope based on
proposed use level and representative volume approach is incorrect,
resulting in a close to 50-percent reduction in allowable energy use.
(Zero Zone, No. 75 at p. 2)
Hoshizaki stated that equations for the model families result in
curves that do not accurately give a levelized curve that provides
nominal energy reduction across the full range of volumes. (Hoshizaki,
No. 76 at p. 3) Hoshizaki commented that areas of the curve show a 10-
20-percent reduction and some areas range from 30-60 percent
reductions, which are not feasible based on the technology available
today. (Id.)
In response to Zero Zone's and Hoshizaki's comments regarding the
slope, DOE notes that in the October 2023 NOPR, consistent with the
analysis described in the March 2014 Final Rule TSD for certain classes
in which DOE retained the offset factors for classes DOE had calculated
the offset factor for in the March 2009 CRE final rule, for all classes
except VCT.SC.M, VCS.SC.I, and HCT.SC.I, DOE adjusted both the slope
and intercept based on the percent reduction for the selected EL to
maintain an equal percent reduction across the volume or TDA range. 88
FR 70196, 70217. DOE has updated its methodology in this final rule,
consistent with the equations presented in the August 2024 NODA, to
apply the energy use reduction percentage to the baseline energy use
equation's slope and intercept for all classes. For VCT.SC.M, this is
consistent with the March 2014 Final Rule TSD, where DOE adjusted the
slope and intercept for the EPACT 2005 equipment classes. See section
5.8 of the March 2014 Final Rule TSD for more details. Additionally, as
discussed in section IV.A.1.b, DOE is maintaining the 49 ft\3\
representative volume for the VCT.SC.M (V <= 100) class in this final
rule, which is supported by an analysis conducted by DOE to confirm
that the representative analysis at 49 ft\3\ is also representative for
volumes less than 49 ft\3\.
Updating the standard line intercept for certain classes is
consistent with the approach in the March 2014 Final Rule, where DOE
adjusted the offset factors, or y-intercept, for certain classes in
response to comments received on the NOPR. See 79 FR 17725, 17742.
Furthermore, as compared to the October 2023 NOPR, DOE is adopting
less stringent efficiency levels in this final rule for the majority of
equipment classes.
Zero Zone recommended that DOE review the EPA ENERGY STAR approach
and the resulting multiple slope equations for different volumes. (Zero
Zone, No. 75 at p. 2) Zero Zone commented this approach would consider
the additional compressor units required to maintain safe food product
temperatures in medium-temperature self-contained equipment. (Id.) Zero
Zone added that EPA did not identify significant energy improvements
for commercial refrigerators and freezers in its November 2022 ENERGY
STAR 5.0 Commercial Refrigerators and Freezers Specification,\80\ and
Zero Zone recommended that DOE should follow EPA's analysis and not
change the efficiency level for this product. (Id.)
---------------------------------------------------------------------------
\80\ See www.energystar.gov/products/commercial_refrigerators_freezers/partners?_gl=1*mzqc33*_ga*MTkwMzQyNTg3LjE3MDU0MjQ1OTk.*_ga_S0KJTVVLQ6*MTcxNDA4Mzg1MC4xNy4xLjE3MTQwODM4NTMuMC4wLjA.
---------------------------------------------------------------------------
In response to the August 2024 NODA, Zero Zone commented that DOE
should not use a single line, 2-point formula, as energy use in large
self-contained equipment is not strictly proportional to the volume of
the unit. (Zero Zone, No. 114 at p. 2) Zero Zone requested DOE review
EPA's ENERGY STAR levels for SC.M for an example of energy level
variation as equipment volume increases. (Id.)
[[Page 7544]]
In response to the comment from Zero Zone, the standard lines for
the analyzed classes and capacity ranges in this final rule reflect an
even application of the energy use percent reduction of the
representative capacity across the capacity range of each equipment
class. DOE notes that DOE's current, new, and amended standards do
allow for more energy use as capacity increases, and DOE is continuing
to analyze the large capacities of the seven self-contained equipment
classes as discussed in section II.B.3 of this document.
f. Engineering Spreadsheet
In response to the October 2023 NOPR, ITW commented that DOE's
October 2023 NOPR engineering spreadsheet should account for component
performance variability. (ITW, No. 82 at p. 5) ITW provided the example
of compressors, which are subject to variability in their EER due to
variations in motor efficiency, copper slot fill, magnetic properties
of lamination steel, machining tolerances, etc. (Id.) ITW commented
that the extent of this normal variation was well documented in a joint
study conducted by AHRI and the Association of European Refrigeration
Component Manufacturers (``ASERCOM'') in 2017, which reported a normal
expected variation of between 5 and 10 percent in the compressor EER.
(Id.) Based on the above-mentioned considerations for variability, ITW
requested that DOE account for a 5-10 percent discount factor to the
system energy efficiency as part of any baseline or energy improvement
scenario calculation. (Id.)
In the March 2014 Final Rule, DOE updated its compressor
assumptions in response to comments received on the NOPR. 79 FR 17725,
17760. In this final rule, DOE is also updating its compressor
assumptions in response to commenter feedback. With respect to the
comment from ITW, DOE reviewed the white paper ITW provided, which is
also referenced by the AHRI 540 compressor performance rating standard
(``AHRI 540''), and DOE is applying a 5- percent increase in energy use
for all compressors to account for the performance prediction
uncertainty as a result of curve-fitting compressor performance maps in
this final rule. This adjustment is made by increasing the overall
compressor power by 5 percent in the engineering spreadsheet and aligns
with commenters' feedback that a 5-10 percent increase in energy use
for all compressors should be included to account for the potential
variability in compressor performance. See the final rule engineering
spreadsheet for further details.
Hillphoenix commented that the engineering spreadsheet contains an
error for calculating the efficiency of variable-speed compressors.
(Id. at p. 11) Hillphoenix commented also that all except three classes
that used the CP4 code as a selected option show ``VALUE'' in the kWh
cell for evaporator fan motors, condenser fan motors, and compressors
for the selected TSL 5 energy level. (Id.) Hillphoenix stated that
classes with CP4 code and ``VALUE'' showing in Excel include VOP.SC.M,
SVO.SC.M, HZO.SC.M, HZO.SC.L, SOC.SC.M, VCT.SC.L, VCS.SC.H, VCS.SC.L,
and VCS.SC.I. (Id.)
With respect to the comment from Hillphoenix regarding errors in
the engineering spreadsheet, DOE recommends that manufacturers follow
the instructions in the engineering spreadsheet on enabling iterative
calculations and refreshing calculations after changing equipment
classes. Without more detailed information, DOE is unable to further
assist in a response to the comment from Hillphoenix.
Hillphoenix commented that the VCT.SC.M equipment class selected EL
in the October 2023 NOPR does not pass the proposed energy limit.
(Hillphoenix, No. 77 at p. 11) Hillphoenix commented that the formula
for this error from the October 2023 NOPR is (0.05 * 49 ft\3\ + 0.9)
and equals a 3.35 kWh calculated energy limit, and EL 3 was selected
for this class and has an energy consumption of 3.52 kWh, which is ~ 5
percent over the proposed energy limit. (Id.)
In response to the comment from Hillphoenix, in the October 2023
NOPR, the proposed maximum energy use formula for the VCT.SC.M
equipment class was 0.054 x V + 0.86. Using the representative volume
for that equipment class, 49.00 ft\3\, to calculate the maximum energy
use proposed in the October 2023 NOPR for that class results in 3.506
kWh/day. In the October 2023 NOPR, DOE proposed EL 3 for the VCT.SC.M
class, which was associated with an energy use of 3.515 kWh/day. These
values are 0.3 percent different from each other. The equation and
values that Hillphoenix cited are different from the values in the
October 2023 NOPR.
g. Capacity Metrics
In response to the October 2023 NOPR, Zero Zone stated that some
manufacturers have taken advantage of the energy formula's use of
refrigerated volume and increased their equipment's volume in order to
have more allowable energy. (Zero Zone, No. 75 at p. 3) Zero Zone
stated its belief that this approach offers limited value to the end
user and does not address the goal of energy efficiency. (Id.) Zero
Zone recommended the use of TDA for energy calculations of product
classes that have transparent doors or no doors. (Id.)
While DOE acknowledges that some equipment with unique designs
could have more or less TDA than the TDA of the representative unit
analyzed at a specific volume, DOE currently assumes that these designs
are manufactured for specific end-use cases and are not representative
of the equipment class. DOE considers all models when developing the
representative design specifications and has presented updated design
specifications in this final rule. As stated in the October 2023 NOPR,
given the mixed response regarding revising the capacity metrics for
equipment classes, DOE has not evaluated revising the capacity metrics
for any equipment classes. 88 FR 70196, 70217. In the absence of clear
data to support a change in metric, it is not appropriate for DOE to
make a change at this time.
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, the availability and timeliness of purchasing the equipment
on the market. The cost approaches are summarized as follows:
[squ] 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.
[squ] Catalog teardowns: In lieu of physically deconstructing
equipment, DOE identifies each component using parts diagrams
(available from manufacturer websites or appliance repair websites, for
example) to develop the bill of materials for the equipment.
[squ] 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), cost-prohibitive, or 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
[[Page 7545]]
soliciting prices from distributors and other commercial channels.
In the present case, DOE conducted the analysis using physical and
catalog teardowns. Except for updates presented in this section that
are consistent with the August 2024 NODA, the cost analysis used in
this final rule is the same as the cost analysis in the October 2023
NOPR. See chapter 5 of the final rule TSD for additional details.
The resulting bill of materials provides the basis for the MPC
estimates for equipment at various efficiency levels spanning the full
range of efficiencies from the baseline to max-tech.
In the October 2023 NOPR, DOE requested comment on the method for
estimating manufacturer production costs. 88 FR 70196, 70236. In the
August 2024 NODA, DOE also requested comment on the updated analysis
that was presented. 89 FR 68788, 68832.
a. General Approach of the Cost Analysis
In response to the October 2023 NOPR, Hussmann and AHRI requested
that DOE clarify its question about the method for estimating
manufacturer production costs and asked if DOE is referring to 2014 or
2023 cost information. (AHRI, No. 81 at p. 8; Hussmann, No. 80 at p. 6)
In response to the October 2023 NOPR, Hoshizaki requested more
information on price-learning models that were reviewed with specific
manufacturers and model numbers, as well as the parts that were
evaluated for efficiency gains with manufacturer names, part numbers,
and 2023 costs to verify that the parts analyzed were from 2022 and not
2014. (Hoshizaki, No. 76 at p. 4) Hoshizaki commented that DOE
mentioned in the November 2023 public meeting that costs were adjusted
for inflation, but the last 3 years have not been a normal inflation
track, with parts and materials shortages that have led to vast price
increases and longer lead times. (Id.) Hoshizaki commented that
verification of costs to 2023 figures would be helpful to validate cost
to change to higher energy efficiency. (Id.)
As discussed in the October 2023 NOPR, DOE updated the October 2023
NOPR analysis to reflect current inflation rates at the time of the
analysis, which reflects 2022 dollars. 88 FR 70196, 70235. DOE
acknowledges that there have been abnormal price trends, but notes that
DOE uses inflation indices specific to the materials included in CRE to
update its cost analysis in order to account for any abnormal price
trends. DOE also notes that for raw metal materials, DOE uses the 5-
year average prices, further described in chapter 5 of the final rule
TSD. In response to Hussmann and AHRI, DOE's request for comment on
manufacturer production costs in the October 2023 NOPR was referring to
the 2022 dollar year analyzed in the October 2023 NOPR.
In response to the October 2023 NOPR, Zero Zone requested that if
DOE maintains the current proposed levels, DOE should reevaluate the
case cost analysis to account for redesign and new foam fixtures, as
Zero Zone will need to make these investments to achieve a compliant
product. (Zero Zone, No. 75 at p. 3) Zero Zone further requested that
DOE reevaluate the engineering analysis and the proposed energy
conservation standard for the VCT.SC.M product class, as well as the
cost analysis for product classes anticipated to switch to R-290. (Id.)
In response to the comment from Zero Zone, in this final rule, DOE
analyzed design option steps based on what is most representative of
the current market, and DOE does not anticipate manufacturers needing
to increase insulation thickness to meet the current standard and has
screened out increased insulation thickness as described in section
IV.B.1.a. In this final rule, DOE reviewed the cost analysis to ensure
that the costs reflected R-290 designs for equipment classes in which
the representative baseline was based on R-290. For further details on
the cost analysis, see chapter 5 of the final rule TSD. In addition to
accounting for the switch to R-290 in its cost analysis, DOE also
analyzed investments required by the industry to make the switch. For
details on those conversion costs, see section IV.J.3.a of this
document.
In response to the October 2023 NOPR, NAMA commented that there
were significant discrepancies in design option costs across equipment
classes, and included a table of design options for four different
equipment classes that had different costs for design options including
condenser fan motors, occupancy sensors, microchannel heat exchangers,
improved-insulation doors, and variable speed compressors. (NAMA, No.
85 at pp. 13-14) NAMA also recommended that DOE check the accuracy of
estimates for machines under 30 cubic feet in capacity. (Id. at p. 14)
In response to the comment from NAMA, DOE did not receive data to
suggest that machines under 30 ft\3\ in capacity would use design
options significantly different than larger equipment; therefore, DOE
has not considered different costs for machines under 30 ft\3\ in the
analysis in this final rule. In response to NAMA's comment on design
option cost differences, DOE notes that the costs for the design
options that NAMA listed differ for each equipment class due to their
representative units' different design specifications, including unit
dimensions, capacity, and power requirements. For example, there is
significant difference between costs for improved-insulation door
design options for each equipment class because each equipment class
representative unit has a different sized door. For further discussion
on how DOE determined representative unit design specifications, see
section IV.C.1 of this document and chapter 5 of the final rule TSD.
In response to the October 2023 NOPR, NAMA recommended that DOE
refer to labor cost data from 2021-2023, not 2018, because the latter
does not reflect overtime wages in a labor shortage, which contributes
to the financial burden on manufacturers. (NAMA, No. 85 at p. 15)
DOE notes that at the NOPR stage, the unburdened fabrication and
assembly wages--factors that affect the labor component of the MPC--
were determined to be $16.00 per hour based on previous feedback from
manufacturer interviews. DOE is unclear about NAMA's reference to using
labor cost data from 2018. After reviewing recent data from the Bureau
of Labor Statistics (``BLS''),\81\ DOE updated its labor rates for the
final rule engineering analysis to $22.00 per hour for unburdened
assembly wages and $24.00 per hour for unburdened fabrication process
wages. This update in the final rule analysis results in higher labor
costs to make CREs of all efficiencies. Additionally, DOE accounts for
fully burdened labor costs by estimating additional costs to employers
associated with providing employee benefits. See chapter 5 of the final
rule TSD for further details.
---------------------------------------------------------------------------
\81\ Occupational wage statistics data are available at
www.bls.gov/oes/.
---------------------------------------------------------------------------
As discussed in the October 2023 NOPR, DOE updated the NOPR
analysis to reflect current inflation rates at the time of the
analysis, which reflects 2022 dollars. 88 FR 70196, 70235. In this
final rule, DOE uses 2023 dollars.
b. Costs of Specific Components
In response to the October 2023 NOPR, NAMA stated that DOE
significantly underestimates the cost of components that comprise a CRE
unit. (NAMA, No. 85 at pp. 10-11, 13-14) NAMA commented that DOE should
not base the cost of design options on one
[[Page 7546]]
product category to another with spreads of 400 percent. (Id. at p. 13)
In response to the October 2023 NOPR, NAMA also commented that it
does not agree with the cost of the change in DC condenser fan options
as shown in the October 2023 NOPR TSD, as NAMA found that the cost for
the motors was greater than $20 based on what its companies paid for
the motor, the installation, and the capital costs. (NAMA, No. 85 at p.
23)
In response to the comment from NAMA regarding the cost of DC
condenser fan motors, DOE notes that, in the final rule engineering
analysis, DOE analyzed costs for brushless DC fan motors ranging
between $23.71 and $28.80, depending on the rated wattage of the motor.
In response to the comment from NAMA regarding the accuracy of
component costs, DOE notes that costs were obtained from teardown
analyses as well as data from manufacturer feedback. For further
details on the cost analysis, see chapter 5 of the Final Rule TSD.
In response to the October 2023 NOPR, NAMA commented that for the
2022 preliminary analysis, DOE estimated a cost increase of $167 for
improved insulated doors; however, NAMA estimated that the cost today
is expected to be over $500, which would result in a negative payback
for over 20 years. (NAMA, No. 85 at p. 25)
Regarding the comment from NAMA about the cost increase for
improved insulated doors, NAMA has not provided information, such as
the size, number of panes, and fill type, about the door referenced in
their comment, making it difficult to provide an accurate comparison.
DOE also notes it appears that NAMA is referencing the VCT.SC.M results
provided in the June 2022 Preliminary Analysis, for which the ``high
performance door'' design option for VCT.SC.M costs approximately $167
more than the previous design option step, and comparing that cost
increase to the total cost of the door. In this final rule, consistent
with the August 2024 NODA, DOE revised the door cost estimates
resulting in a total cost (i.e., not incremental cost) of around $380
for triple pane, argon filled glass packs on the VCT.SC.M
representative unit analyzed in this final rule. DOE notes that triple
pane, argon filled glass packs were the most efficient door design
option analyzed at the TSL level finalized in this final rule (TSL 3),
and that at TSL 3 for the VCT equipment class, the subject of NAMA's
comment, DOE did not analyze a door design option beyond the baseline
to improve efficiency. In this final rule analysis, DOE has updated the
cost of the door design but adjusted for differences in market size and
purchasing volume.
In response to the October 2023 NOPR, NAMA commented that when
estimating costs for microchannel condenser coils, DOE did not include
a fully burdened, amortized cost of engineering, design, creation of
test models, testing, tooling, factory assembly line upgrades,
fixtures, molding changes, packaging for larger and heavier machines,
and other costs. (NAMA, No. 85 at p. 26)
With respect to the comment from NAMA regarding microchannel
condenser coils, DOE is no longer considering microchannel condenser
coils as a design option in this final rule, and has screened out this
design option as discussed in section IV.B.1.g.
In response to the August 2024 NODA, NAMA commented that, while DOE
did adjust some of the NOPR costs in the NODA TSD, several design
options (e.g., krypton filled doors, brushless DC condenser fan motors,
argon filled triple pane doors, occupancy sensors with dimming) are
shown as improving efficiency by amounts not proven in NAMAs testing,
and the cost is significantly higher than what is shown. (NAMA, No. 112
at p. 6)
With regards to the comment from NAMA, DOE maintains its position
that its door costs are representative of the industry based on
commercial available door designs, performance of commercial available
door designs, current costs of various door technologies, as well as
feedback directly from manufacturers. NAMA did not provide additional
detail to support their complains including the testing they reference
in the comment. Therefore, DOE has not made any adjustments to the
engineering analysis from the August 2024 NODA.
c. Variable-Speed Compressor
In response to the October 2023 NOPR, NAMA commented that the
estimated cost of a VSC, $200, has not changed since its response to
the June 2022 Preliminary Analysis, except for a 10-percent increase
due to compressor manufacturer pricing. (NAMA, No. 85 at p. 24) NAMA
commented that DOE underestimates the purchase price, the cost of the
other parts necessary to make a VSC work (i.e., computer controls), and
the changes to the cooler. (Id.)
DOE disagrees with the comment from NAMA that DOE is
underestimating the cost of the variable-speed compressors. In the
October 2023 NOPR, DOE proposed that the MPC of a VSC at the
representative volume for VCT.SC.M class was $220.52, consistent with
NAMA's comment that the estimated cost of a VSC is $200 plus a 10-
percent increase. $94 represents the cost differential between the cost
of the single-speed compressor and a variable-speed compressor. In this
final rule, DOE is maintaining the cost differential of $94.
DOE notes that NAMA did not elaborate on what it meant by
``computer controls.'' NAMA may have been referring to the need for
electronic controls to set appropriate compressor speeds. DOE has
determined that the cost to add additional hardware to implement
variable-speed control as compared to single-speed control using an
electronic control platform would be minimal (i.e., the required
sensors would already be in place, and the cost of any required
additional microprocessor capacity would be minimal).
In addition, DOE received confidential comments related to the
electronic controls assumed in the baseline in response to the October
2023 NOPR.
In response to the August 2024 NODA, Hillphoenix commented that one
of the largest North American manufacturers of compressors estimates
that the variable-speed compressor controller cost would be a 100
percent increase over fixed speed compressor cost, and that DOE
neglected to account for cost increase of a required variable-speed
compressor controller and additional components. (Hillphoenix, No. 110
at p. 4) Hillphoenix stated that there are additional costs associated
with variable speed compressors, such as programming, installation,
training, and the increased time for ``end of line'' testing that are
not reflected in the engineering analysis. (Id.at p. 4-5)
Based on the preponderance of CRE units DOE tested and tore down in
support of this CRE rulemaking that are currently using electronic
controls, DOE determined that CRE already have the other parts
necessary to make a variable-speed compressor work (e.g., electronic
controls are already present in existing CRE). Therefore, the main
difference between single-speed and variable-speed compressors that
would contribute significantly to cost is the inclusion of an inverter
drive to control the speed of the compressor, which DOE has accounted
for in the VSC design option MPC.
Further, in response to commenter feedback and based on the CRE
units DOE tested and tore down, DOE has updated the analysis to reflect
the use of electronic controls at the baseline
[[Page 7547]]
efficiency level for all equipment classes in this final rule.
In response to the comment from Hillphoenix that DOE neglected to
account for additional costs associated with programming, installation,
training, and increased testing time, DOE notes that it accounts for
non-production costs (i.e., selling, general and administrative
expenses (``SG&A''), research and development (``R&D'') expenses, and
interest) as part of the manufacturer markup, described in section
IV.C.2.f of this document and chapter 12 of this final rule TSD.
Additionally, research and development investments associated with
variable-speed compressors were accounted for as part of the product
conversion costs in the manufacturing impact analysis, as discussed in
section IV.J.3.a of this document.
d. Doors With Krypton Gas Fill
In response to the October 2023 NOPR, Zero Zone stated that 40
percent of krypton gas is manufactured in Ukraine and the war makes
obtaining krypton gas difficult. (Zero Zone, No. 75 at pp. 3-4) Zero
Zone commented that its suppliers estimate krypton would increase the
cost of a door by $35, whereas DOE estimated a cost increase of $5-6.
(Id. at p. 4)
DOE reviewed current krypton gas prices and has observed that a
cost increase of approximately $30, based on the representative unit
sizes analyzed for self-contained VCT units, is representative of the
current market, consistent with the comment from Zero Zone, and DOE has
presented updated costs for doors with krypton gas fill in this final
rule that are consistent with the August 2024 NODA. This change is
similar with the March 2014 Final Rule, where DOE updated the cost
assumptions for certain door design options.\82\
---------------------------------------------------------------------------
\82\ See the NOPR and March 2014 Final Rule engineering
spreadsheets available at www.regulations.gov/document/EERE-2010-BT-STD-0003-0098 and www.regulations.gov/document/EERE-2010-BT-STD-0003-0059, respectively.
---------------------------------------------------------------------------
In response to the August 2024 NODA, Hillphoenix, Continental,
Hussmann, AHRI, and Zero Zone agreed with DOE's observation that
triple-pane doors with krypton gas are significantly more costly than
with argon. (Hillphoenix, No. 110 at p. 5; Continental, No. 107 at p.
2; Hussmann, No. 108 at p. 3; AHRI, No. 104 at p. 8; Zero Zone, No. 114
at p. 2)
Therefore, in this final rule, consistent with commenters, DOE has
maintained the August 2024 NODA values for its pricing of triple-pane
doors with krypton gas.
e. 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). DOE presents these results in chapter 5 of the final
rule TSD. See chapter 5 of the final rule TSD for additional details on
the engineering analysis and appendix 5B of the final rule TSD for
complete cost-efficiency results.
Design Option Ordering
Based on all the comments received in response to the October 2023
NOPR and August 2024 NODA, and consistent with the precedent set by the
March 2014 Final Rule, DOE has reordered the design options in the
cost-efficiency results based on cost-effectiveness and likely order of
implementation.\83\ For more details on the updated design option
ordering, see chapter 5 of the final rule TSD.
---------------------------------------------------------------------------
\83\ See the NOPR TSD and the March 2014 Final Rule TSD for more
details on changes to the design option ordering in the 2014 Final
Rule. The NOPR TSD is available at www.regulations.gov/document/EERE-2010-BT-STD-0003-0051 and the March 2014 Final Rule TSD is
available at www.regulations.gov/document/EERE-2010-BT-STD-0003-0102.
---------------------------------------------------------------------------
f. Manufacturer Markup
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 \84\ filed by publicly traded manufacturers primarily engaged
in commercial refrigeration manufacturing and whose combined equipment
range includes CRE. 79 FR 17725, 17758. As discussed in the following
paragraphs, DOE revised the industry average manufacturer markup for
this final rule analysis based on stakeholder comments. See section
IV.J.2.d of this document and chapter 12 of the final rule TSD for
additional information on the manufacturer markup.
---------------------------------------------------------------------------
\84\ SEC's Electronic Data Gathering, Analysis, and Retrieval
system is available at www.sec.gov/edgar/searchedgar/companysearch
(last accessed April 15, 2024).
---------------------------------------------------------------------------
In response to the October 2023 NOPR, Hillphoenix commented that
the manufacturer markup of 1.40 used in the October 2023 NOPR is high
based on competitive market conditions. (Hillphoenix, No. 77 at p. 7)
Hillphoenix commented that the NOPR Engineering Analysis Spreadsheet
Model \85\ referenced a manufacturer markup of 1.42. (Id.) In response
to the August 2024 NODA, Hillphoenix commented that DOE's suggested
manufacturer markup value of 1.38 used in the August 2024 NODA was
still too high based on the current competitive market pricing
conditions and not representative of the CRE industry. (Hillphoenix,
No. 110 at p. 5)
---------------------------------------------------------------------------
\85\ Available at www.regulations.gov/document/EERE-2017-BT-STD-0007-0055.
---------------------------------------------------------------------------
With respect to the comments from Hillphoenix, DOE developed the
industry average manufacturer markup of 1.40 used in the October 2023
NOPR by reviewing prior CRE rulemakings, SEC Form 10-K reports,
feedback gathered during confidential manufacturer interviews conducted
in advance of the October 2023 NOPR, and market share weights. For the
August 2024 NODA, DOE reassessed its manufacturer markup in response to
stakeholder comments and adjusted its estimate using manufacturer
feedback and market share weights. As a result, DOE used a manufacturer
markup of 1.38 for the August 2024 NODA. DOE notes that the
manufacturer markup of 1.38 is meant to represent the overall CRE
industry, on average. DOE understands that manufacturer markups can
vary by manufacturer, model, feature, etc. Based on the information
available, DOE maintains an industry average manufacturer markup of
1.38 for all CRE equipment classes in this final rule analysis (i.e.,
the manufacturer markup used in the LCC and PBP analyses and MIA),
consistent with the August 2024 NODA. The Engineering Analysis
Spreadsheet Model developed for this final rule also reflects a
manufacturer markup of 1.38.\86\
---------------------------------------------------------------------------
\86\ The Final Rule Engineering Analysis Spreadsheet Model is
available at www.regulations.gov/docket/EERE-2017-BT-STD-0007/document.
---------------------------------------------------------------------------
NAMA stated that DOE's method for estimating manufacturing
production costs is inaccurate, due to lack of inclusion of costs for
testing, outside certification of energy, outside certification of
safety, tooling, and amortization of other factory costs,
[[Page 7548]]
along with inaccurate estimation of units over which tooling and
manufacturing fixtures are spread. (NAMA, No. 85 at p. 30) NAMA
recommended that DOE restructure the system for estimating energy
savings and cost analysis. (Id.)
NAMA commented also that many of the analyzed design options, such
as specialized glass doors, microchannel condensers, occupancy sensors
with dimmer controls, and variable speed compressors, would result in
additional installation time, training, and many other skill
considerations compared with baseline equipment. (NAMA, No. 85 at p.
31)
Regarding the comments on testing and certification costs, DOE
accounts for manufacturers' non-production costs, including selling,
general and administrative expenses, and research and development
expenses (e.g., testing, certification, marketing costs) in its MSP
through the application of a manufacturer markup to the MPCs. As such,
DOE notes that the MSPs derived in the engineering analysis, which are
then used in the LCC and PBP analyses and MIA, incorporate industry
average research and development expenses (and other non-production
costs, along with profit). DOE also accounts for the one-time, upfront
investments in research, development, testing, marketing, and other
non-capitalized costs necessary to make product designs comply with new
or amended energy conservation standards (i.e., product conversion
costs) in its MIA. See section IV.J.2.c of this document or chapter 12
of the final rule TSD for additional information on conversion costs.
Regarding the comment on tooling and equipment costs, DOE accounts
for manufacturing equipment, tooling, and building depreciation in its
MPCs and the one-time, upfront investments in property, plant, and
equipment necessary to adapt or change existing production facilities
(i.e., capital conversion costs) in its MIA. As such, DOE notes that
the depreciation component of the MPCs in the engineering analysis
require estimates of capital investments (e.g., tooling, fixtures,
equipment). To estimate those capital investments for the engineering
analysis, DOE uses data collected from teardowns and manufacturer
interviews and estimated annual production volumes for each equipment
class to model a ``greenfield'' facility--using brand-new equipment
that has not depreciated through use--which includes the equipment,
tooling, and space requirements necessary to carry out the
manufacturing processes on a representative unit. See chapter 5 of the
final rule TSD for additional details on the cost model and estimation
of MPCs.
D. Markups Analysis
The markups analysis develops appropriate markups (e.g.,
distributor markups, retailer 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.
As part of the analysis, DOE identifies key market participants and
distribution channels. In the October 2023 NOPR, 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
3a. National account channel: Manufacturer [rarr] Consumer
3b. National account channel with general contractor: Manufacturer
[rarr] General Contractor [rarr] Consumer
88 FR 70196, 70236.
In response to the October 2023 NOPR, AHRI suggested that DOE
update channel 1a and 1b, create additional channels for reused or
refurbished equipment, and refer to consumers as ``end-users'' because
the term ``consumer'' may imply individuals or families. (AHRI, No. 81
at p. 9) AHRI also recommended that DOE include other CRE purchaser
categories, such as buyers' clubs, restaurant consortia, food service
consultants, and governmental bids. (Id.)
In consideration of the feedback from AHRI, DOE determined that the
slight update to channels 1a and 1b does not impact the overall markup
estimation for those channels. With regard to the suggested addition of
distribution channels for reused or refurbished equipment, DOE notes
that such equipment is not subject to new standards; therefore, DOE did
not consider such distribution channels in the markups analysis.
However, refurbishments were considered in the LCC analysis by
adjusting the mean lifetime distribution assumptions and assigning a
credit equivalent to the residual value of the used equipment at the
selling year (see section IV.F of this document for details). DOE
clarifies that it considers all purchasers of CRE in its analyses and
is using the terms CRE ``purchaser'' and ``consumer'' interchangeably
in this document.
NAMA recommended that DOE consider additional channels that involve
the brand owner who specifies the performance of the equipment and then
sells the equipment to a bottling company, which then passes the
equipment down to a local retailer. (NAMA, No. 85 at p. 30) DOE
appreciates the comment submitted by NAMA. DOE understands that NAMA is
referring to the situation in which CRE are manufactured or packaged
for sale under the name of a third-party company (i.e., the brand
owner) rather than that of the OEM. As part of its market and
technology assessment, DOE reviews public equipment databases to
identify the companies that import, private label, produce, or
manufacture covered CRE. DOE identified OEMs by reviewing information
from manufacturer websites, import and export data (e.g., bills of
lading from ImportYeti),\87\ and basic model numbers. As part of that
process, DOE also determined the owner of each brand listed in DOE's
CCD, using the U.S. Patent and Trademark Office's Trademark Search \88\
and other public sources (e.g., trademark information from JUSTIA).\89\
Based on a review of DOE's CCD, DOE estimates that approximately 10 to
12 percent of individual CRE model listings in its CCD are certified
and marketed under a trademarked brand not owned by the actual OEM. See
chapter 3 of the final rule TSD for additional information on DOE's
market review.
---------------------------------------------------------------------------
\87\ ImportYeti, LLC. ``ImportYeti.'' Available at:
www.importyeti.com/ (Last accessed April 25, 2024).
\88\ The U.S. Patent and Trademark Office's Trademark Search is
available at tmsearch.uspto.gov/search/search-information (last
accessed Sept. 9, 2024).
\89\ JUSTIA, ``Trademarks.'' Available at trademarks.justia.com/
(last accessed Sept. 9, 2024).
---------------------------------------------------------------------------
DOE developed baseline and incremental markups for each actor in
the distribution chain. Baseline markups are applied to the price of
equipment with baseline efficiency, while incremental markups are
applied to the difference in price between baseline and higher-
efficiency models (the incremental cost increase). The incremental
markup is typically less than the baseline markup and is designed to
maintain similar per-unit operating profit before and after new or
amended standards.\90\
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\90\ Because the projected price of standards-compliant
equipment is typically higher than the price of baseline equipment,
using the same markup for the incremental cost and the baseline cost
would result in higher per-unit operating profit. While such an
outcome is possible, DOE maintains that in markets that are
reasonably competitive it is unlikely that standards would lead to a
sustainable increase in profitability in the long run.
---------------------------------------------------------------------------
[[Page 7549]]
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.
Chapter 6 of the final rule TSD provides details on DOE's
development of markups 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 new or amended standards.
For the October 2023 NOPR, DOE calculated CRE energy consumption as
part of the engineering analysis. 88 FR 70196, 70237. DOE used average
single-point energy use values for each design option, as described in
the October 2023 NOPR engineering analysis (see chapter 5 of the
October 2023 NOPR TSD). These values consider field energy use factors
prescribed in the CRE test procedure, such as typical door-opening
schedules, ambient conditions, typical food and beverage loads, etc.
Also, as discussed in chapter 7 of the October 2023 NOPR TSD, during
the analysis for the 2009 final rule for CRE (74 FR 1092 (Jan. 9,
2009)), DOE conducted an energy use analysis for certain remote
condensing equipment and concluded that the results agreed reasonably
well with those calculated by the energy consumption model used in the
engineering analysis.
In response to the October 2023 NOPR, Ravnitzky suggested that DOE
should account for uncertainty and variability in the energy
consumption of CRE due to factors such as ambient temperature, door
openings, defrost cycles, load patterns, maintenance practices, and
user behavior. (Ravnitzky, No. 57 at p. 4) Ravnitzky provided examples
of how widely these factors can vary in the field and recommended DOE
provide sensitivity analyses or confidence intervals showing the range
of possible outcomes under different scenarios and conditions, using
probabilistic methods such as Monte Carlo simulations or Bayesian
inference. (Id.) NAFEM commented that CRE operate at various
conditions, which can be more extreme than the conditions specified by
the ASHRAE 72 test conditions, on which DOE is basing its analysis.
(NAFEM, No. 83 at p. 24) Similarly, Continental stated that testing CRE
at 75 [deg]F/55-percent RH does not accurately represent average real-
world conditions and, as a result, the energy consumption levels
evaluated for this rulemaking do not reflect actual usage conditions
for this equipment. (Continental, No. 86 at p. 3) ITW commented that
ambient temperature, humidity, and door-opening frequency and durations
in the field differ from the CRE test procedure. (ITW, No. 82 at p. 6)
Specifically, regarding door-opening frequency, ITW suggested that,
based on data from a quick-service restaurant kitchen, a reach-in
refrigerator opens more than 400 times per day for more than 50 seconds
per opening and a freezer opens about 500 times per day for more than
20 seconds per opening. (Id.) ITW added that such conditions would
require more electricity use in the field than what would be required
by the proposed standard. (Id.)
In response to the August 2024 NODA, Continental restated that
using test procedure ambient conditions of 75 [deg]F/55 percent RH does
not reflect real-world ambient conditions, leading to a flawed energy
use analysis and corresponding standard levels. (Continental, No. 107
at p. 2)
For this final rule, DOE calculated CRE energy consumption as part
of the engineering analysis, which estimates the daily energy
consumption in kWh/day at each analyzed efficiency level at the
representative equipment volumes or TDAs for each equipment class (see
chapter 5 of the final rule TSD). DOE calculated the annual energy
consumption by multiplying the daily energy consumption by the number
of days in a year. With respect to the comments regarding the
variability in the energy consumption of CRE, DOE acknowledges that
using a single-point estimate to characterize the energy use of each
efficiency level in each equipment class may not capture the wide range
of ways CRE are used in the field and the varying conditions at which
CRE operate (e.g., ambient temperature and humidity; door opening time
and frequency; amount, temperature and distribution of food products
inside CRE). DOE has the technical capability to include a distribution
of values weighted by different factors, including the aforementioned
environmental conditions and user behaviors; however, DOE does not have
either data or information with enough detail from which to construct a
meaningful distribution to accurately and properly characterize both
the variability of the aforementioned factors and the effect those
factors may have on the energy use of each analyzed equipment class.
For example, DOE does not have data on how door opening frequency and
duration vary among purchasers and their associated effect on CRE
energy consumption in the field. DOE notes that it also considered
typical CRE behavior practices in this analysis, such as the
replacement of lighting fixtures, a typical maintenance practice
considered also in the March 2014 Final rule. In addition, DOE
accounted for typical user behavior in CRE lifetime estimates, which
are driven primarily from store renovations. DOE notes that it accounts
for uncertainty and variability in the LCC analysis by using a CRE
purchaser sample based on the EIA 2018 Commercial Buildings Energy
Consumption Survey (``2018 CBECS''),\91\ which allows for regional
variations in electricity prices and sales tax, and incorporating
uncertainty into other parameters, such as discount rates.
Additionally, DOE emphasizes that its energy usage analysis adopts a
conservative approach in cases where purchaser's door-opening
frequency, ambient temperatures, or food and beverage thermal loads
surpass those assumed in the CRE test procedure. This is because
increased energy consumption would typically result in increased
operating cost savings for higher efficiency equipment compared to CRE
at baseline.
---------------------------------------------------------------------------
\91\ 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 Sept. 9, 2024).
---------------------------------------------------------------------------
In response to the October 2023 NOPR, NAFEM commented that its
members report that night curtains are often viewed as an unwanted
``accessory'' by their customers and, even if purchased, are not
consistently used. (NAFEM, No. 83 at p. 7) NAFEM also stated that
internal testing performed to DOE guidelines of night curtains being
drawn for 6 hours resulted in only a 12-percent reduction of energy
usage over a 24-hour period. (Id.) Additionally, SCC commented that
stores open 24 hrs/day are not suitable for night curtains. (SCC, No.
74 at p. 2)
DOE notes that the current energy use assumptions for night
curtains are based on the CRE test procedure, which
[[Page 7550]]
assumes that night curtains are used for 6 hours per day (``hrs/day'')
and attributes less than a 12 percent energy use reduction associated
with this design option. Furthermore, DOE acknowledges that night
curtains may not be consistently used across CRE purchasers, whether
due to staff behavior or store business hours, but DOE is not aware of
data on the distribution of average daily usage of night curtains that
could serve as an alternative to the assumption used in the test
procedure, which uses a single-point estimate. DOE also clarifies that
night curtain daily operating hours in the field may vary from zero
hrs/day, for establishments continuously open to the public, to 24 hrs/
day, for establishments that close certain days of the week.
In response to the October 2023 NOPR, as discussed in section
IV.C.1.b of this document, several commenters stated that occupancy
sensors are not a desired feature by most purchasers of CRE because
consumers may perceive CRE with deactivated lighting (when LED
occupancy sensors are not activated) as malfunctioning and, therefore,
they may not use this feature. (NAFEM, No. 83 at p. 6; Zero Zone, No.
75 at p. 4; Hillphoenix, No. 77 at p. 6; Hussmann, No. 80 at pp. 5-6;
AHRI, No. 81 at p. 10)
In response to these comments, DOE performed additional research
but found no data on field usage patterns of occupancy sensors. DOE
acknowledges that some consumers may select to deactivate CRE occupancy
sensors and thus forgo energy savings associated with this design
option. Accordingly, for the August 2024 NODA, DOE updated its energy
use analysis for CRE at efficiency levels with occupancy sensors so
that the benefit of an occupancy sensor is applied to only 75 percent
of purchasers of this feature. 89 FR 68788, 68794. The remaining 25
percent would incur the increased equipment cost but not the associated
energy savings.\92\ Id. In the August 2024 NODA, DOE also requested
comments, data, and information on the fraction of CRE purchasers that
may choose to deactivate their CRE occupancy sensors. Id.
---------------------------------------------------------------------------
\92\ DOE selected 25 percent as a reasonable estimation of the
fraction of CRE purchasers that may choose to deactivate their
occupancy sensors despite purchasing this feature.
---------------------------------------------------------------------------
In response to the August 2024 NODA, Hillphoenix, Continental, and
Zero Zone commented that CRE end-users may believe the equipment to be
malfunctioning if the equipment lights are off. (Hillphoenix, No. 110
at p. 8; Continental, No. 107 at p. 2; Zero Zone, No. 114 at p. 2)
Hillphoenix added that, for this reason, open case CRE are not sold
with lighting occupancy sensors to food retail buildings, such as
supermarkets, while Continental stated that lighting occupancy sensors
are not viable for food service buildings, such as busy commercial
kitchens. (Hillphoenix, No. 110 at p. 8; Continental, No. 107 at p. 2)
AHRI commented that its members are unable to determine the fraction of
CRE purchasers that buy and then deactivate lighting occupancy sensors.
AHRI suggested that lighting occupancy sensors only save energy in
terms of lighting power consumption reduction and not via refrigeration
cooling load reduction because the CRE setpoint temperature cannot be
changed due to food regulations. (AHRI, No. 104 at p. 7-8) ASAP et al.
commented that DOE is taking a conservative approach by considering
that only 75 percent of consumers benefit from lighting occupancy
sensors, noting that manufacturers will be able to utilize occupancy
sensors to meet any amended standards because the test procedure does
not include any comparable assumption about de-activation and, as a
result, will give full credit for occupancy sensors. (ASAP et al., No.
106 at p. 3) ASAP et al. also stated that, after the August 2024 NODA
updates, VCT.SC.M and VCT.SC.I equipment classes no longer include this
design option in the highest cost-effective efficiency level. Id.
In response to August 2024 NODA comments, DOE clarifies that its
energy use analysis is based on the engineering analysis and the CRE
test procedure, which consider that lighting occupancy sensors reduce
direct component energy use as well as cabinet heat load for equipment
that has lighting inside the refrigerated space (see section 5.1.1 of
the final rule TSD for more details). For this final rule, DOE retained
the use of 25 percent as a reasonable estimate for the fraction of
purchasers of CRE with LED occupancy sensors that choose to deactivate
this feature. However, to account for the uncertainty regarding this
estimate and its effect on the energy use and LCC analysis, DOE also
performed a sensitivity analysis using 50 percent for the fraction of
purchasers of CRE with lighting occupancy sensors that choose to
deactivate this feature. The results of this analysis show that for the
selected TSL (TSL 3), the LCC savings for all equipment classes with
occupancy sensors remain positive at both 75 percent and 50 percent
usage. See appendix 8D for more details on this sensitivity analysis.
Chapter 7 of the final rule TSD provides details on 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 or amended energy conservation standards on
individual consumers usually involves a reduction in operating cost and
an increase in purchase cost. DOE used the following two metrics to
measure consumer impacts:
[ballot] The LCC is the total consumer expense of 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.
[ballot] 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 or
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. As stated previously, DOE developed
commercial buildings samples from the 2018 CBECS. For each sample
building, DOE determined the energy consumption for the CRE and the
appropriate energy price. By developing a representative sample of
buildings, the analysis captured the variability in energy consumption
and energy prices associated with the use of CRE.
Inputs to the LCC calculation include the installed cost to the
consumer, operating expenses, the lifetime of the equipment, and a
discount rate. Inputs to the calculation of total installed cost
[[Page 7551]]
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.
Inputs to the PBP calculation include the installed cost to the
consumer and first year operating expenses. 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, which is a standard analytical technique used in many
academic disciplines, to incorporate uncertainty and variability into
the analysis. The Monte Carlo simulations sample input values from the
probability distributions and CRE user samples. For this rulemaking,
DOE conducted probability analyses by 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, 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 4 years after the date on which any new or amended
standard is published in the Federal Register. 42 U.S.C.
6313(a)(6)(C)(iv)(I) or (C)(iv)(II) Therefore, DOE used 2029 as the
first full year of compliance with any new and amended standards for
CRE.
Table IV. summarizes the approach and data DOE used to derive
inputs to the LCC and PBP calculations. The subsections that follow
provide further discussion. Details of the spreadsheet model, and of
all the inputs to the LCC and PBP analyses, are contained in chapter 8
of the final rule TSD and its appendices.
---------------------------------------------------------------------------
\93\ For further information, see the ``Assumptions to AEO2023''
report that sets forth the major assumptions used to generate the
projections in the AEO2023. Available at www.eia.gov/outlooks/aeo/assumptions/ (last accessed Sept. 9, 2024).
[GRAPHIC] [TIFF OMITTED] TR21JA25.121
[[Page 7552]]
1. Equipment Cost
To calculate consumer equipment costs, DOE multiplied the MPCs
developed in the engineering analysis by the markups described
previously (along with sales taxes). DOE used different markups for
baseline equipment and higher-efficiency equipment, because DOE applies
an incremental markup to the increase in MSP associated with higher-
efficiency equipment.
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 (2023) and the assumed compliance date of the
rulemaking (2029). The price trend was derived from a price learning
factor experience curve that computes changes in price as a function of
cumulative LED lighting lamp shipments. See chapter 8 of the final rule
TSD for more details on how price learning for LED lighting was
applied.
As discussed in the engineering analysis (see section IV.C of this
document), DOE included variable-speed compressors as a technology
option for higher efficiency levels in certain self-contained equipment
classes. To develop future prices specific to 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.\94\ The analysis used an
exponential curve to model the data and found that the trend closely
matches the data (R-square = 0.99). This suggests prices are dropping
around 6 percent per year on average. See chapter 8 of the final rule
TSD for further details on this topic.
---------------------------------------------------------------------------
\94\ Semiconductors and related device manufacturing PPI series
ID: PCU334413334413; available at www.bls.gov/ppi/ (last accessed
Sept. 9, 2024).
---------------------------------------------------------------------------
2. Installation Cost
Installation cost includes labor, overhead, and any miscellaneous
materials and parts needed to install the equipment. In response to the
October 2023 NOPR, several stakeholders commented that increased
installation costs would occur for design options with electronic
controllers, such as lighting controllers, due to additional programing
time and higher technician skill requirements. (Hillphoenix, No. 77 at
p. 6; FMI and NACS, No. 78 at pp. 2-3; Hussmann, No. 80 at p. 8; AHRI,
No. 81 at p. 10) FMI and NACS also commented that increasing energy
efficiency would lead to increased installation costs due to additional
floor space rearrangement needs. (FMI and NACS, No. 78 at p. 3)
Based on these comments, DOE conducted additional research and
found no evidence that any of the analyzed design options considered in
this final rule require additional installation time, as electronic
controls for variable-speed compressors and LED lighting occupancy
sensors are typically factory-finished with pre-set configurations that
do not require additional setup time by field technicians compared to
baseline equipment. DOE also estimated 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 the necessary skills were lacking. DOE clarifies that CRE external
dimensions do not vary by efficiency level within each equipment class.
Therefore, in this final rule, as in the October 2023 NOPR, DOE assumed
that installation costs do not vary by efficiency level (within the
same equipment class), and DOE did not account for installation costs
in the LCC and PBP analyses.
For further information on installation costs, see chapter 8 of the
final rule TSD.
3. Annual Energy Consumption
For each sampled equipment class, DOE determined the energy
consumption for CRE at different efficiency levels using the approach
described previously in section IV.E of this document.
4. Energy Prices
Because marginal electricity price more accurately captures the
incremental savings associated with a change in energy use from higher
efficiency, it provides a better representation of incremental change
in consumer costs than average electricity prices. Therefore, DOE
applied average electricity prices for the energy use of the 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 2023 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).\95\
---------------------------------------------------------------------------
\95\ 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 Sept. 9, 2024).
---------------------------------------------------------------------------
To estimate energy prices in future years, DOE multiplied the 2023
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.\96\ To estimate price trends after 2050,
the 2046-2050 average was used for all years.
---------------------------------------------------------------------------
\96\ EIA. Annual Energy Outlook 2023. Available at www.eia.gov/outlooks/aeo/ (last accessed Sept. 9, 2024).
---------------------------------------------------------------------------
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 IOUs and
publicly owned utilities, as the latter are not included in the EEI
data set. See chapter 8 of the final rule TSD for details.
5. Maintenance and Repair Costs
Repair costs are associated with repairing or replacing equipment
components that have failed; 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.
In the October 2023 NOPR, DOE calculated repair costs by
considering the typical failure rate of refrigeration system components
(compressor, lighting, and evaporator and condenser
[[Page 7553]]
fan motors), component MPCs and associated markups, and the labor cost
of repairs, which is assumed to be performed by private vendors. 88 FR
70196, 70239. 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. Id.
In response to the October 2023 NOPR, Hussmann and NAFEM commented
that EEVs, lighting controllers, and anti-sweat energy controllers
require ongoing maintenance and servicing throughout the equipment
lifespan. (Hussmann, No. 80 at p. 8; NAFEM, No. 83 at pp. 5, 7, 21, 22)
AHRI also stated that the programming of these components requires
higher technician skill and that variable-speed compressors, variable-
speed condenser and evaporator fan motors, three pane glass for medium
temperature reach-in cases can lead to higher maintenance and repair
costs. (AHRI, No. 81 at pp. 5, 10) AHRI and Hussmann expressed concern
regarding the use of technologies in CRE applications that do not have
an established lifetime estimation, such as variable-speed compressors.
(AHRI, No. 81 at p. 10; Hussmann, No. 80 at p. 9) Hoshizaki also
indicated that variable-speed compressors could have lower lifespans
than single-speed compressors. (Hoshizaki, No. 76 at p. 5) NAFEM
commented that leak detection is required for some refrigerants, such
as A2L and R-290, and impact maintenance and repair costs, that
technicians would replace rather than repair electronic controllers in
case of failure, that increasing the number of components in CRE leads
to higher failure probability, and that CRE repair downtime would
increase for equipment with electronic controls. (NAFEM, No. 83 at pp.
21-22) Hoshizaki stated that incorrect defrost settings could result in
increased maintenance costs due to the frequency of door-opening in
real-world conditions. (Hoshizaki, No. 76 at p. 5) Additionally,
Hoshizaki stated a similar possibility for fan motors compared to less
efficient components. (Id.) NAMA commented that DOE underestimated
repair and maintenance costs. (NAMA, No. 85 at p. 31)
In response to these comments, DOE clarifies that EEVs and anti-
sweat energy controllers are not design options considered in this
final rule, that refrigerant type does not vary by efficiency level
within each equipment class, and that only repair and maintenance costs
that vary by CRE efficiency level are included in the LCC and PBP
analyses. DOE also clarifies that the energy use analysis assumes CRE
to be in operation continuously (24 hrs/day, 365 days per year).
Therefore, DOE does not consider energy savings resulting from downtime
for CRE repairs or any other related operational impacts, as they would
have a negligible impact in the LCC and PBP analyses. Regarding
concerns on the lifetime of variable-speed compressors, DOE notes that
this technology option has been available in the CRE market for over a
decade. DOE is also not aware of data differentiating compressor and
fan motor lifetime by efficiency level or technology type. DOE did not
find data suggesting that LED lighting occupancy sensors require
ongoing maintenance. As stated in section IV.F.2 of this document, DOE
estimates that technician workers may already have the required skills
to maintain the analyzed design options or would adjust their labor
rates equally across all efficiency levels if the necessary skills were
lacking. Therefore, as in the October 2023 NOPR, DOE assumed that
maintenance costs do not vary by efficiency level (within the same
equipment class), and DOE did not account for maintenance costs in the
LCC and PBP analyses in this final rule.
In response to the October 2023 NOPR, regarding the use of night
curtains in CRE, DOE received comments from Zero Zone, Hillphoenix,
Hussmann, NAFEM, and AHRI stating that these devices incur associated
operating expenses, maintenance costs, and need to be replaced before
the end of the CRE lifetime. (Zero Zone, No. 75 at p. 4; Hillphoenix,
No. 77 at p. 5; Hussmann, No. 80 at p. 8; NAFEM, No. 83 at p. 7; AHRI,
No. 81 at p. 10) Zero Zone stated that it contacted a major national
store chain that purchases night curtains, who indicated the maximum
lifespan to be 3 years but estimated an average lifetime of 18 months.
(Zero Zone, No. 75 at p. 4) AHRI stated that night curtains have a 3-
year lifetime. (AHRI, No. 81 at p. 10) NAFEM commented that night
curtains tend to wear out within 1-2 years, requiring additional
maintenance or repair during the lifetime of the CRE. (NAFEM, No. 83 at
p. 7) Hillphoenix commented that night curtains are not typically
ordered by customers due to their shorter lifespan and the additional
costs of installation, maintenance, and operating expense due to the
labor or power to close the curtains each night. (Hillphoenix, No. 77
at p. 5)
In response to the August 2024 NODA, Hillphoenix commented that CRE
night curtains can lead to increased repair and maintenance costs as
they contribute to short cycling of the compressor, refrigerant oil
logging, or, at worse, liquid slugging of the compressor, and increased
stress on start components of fixed speed compressor units on self-
contained models. (Hillphoenix, No. 110 at p. 10) The CA IOUs commented
that they agree with DOE's approach of considering night curtain
replacement before the end of CRE lifetime. (CA IOUs, No. 113 at p. 2)
Zero Zone stated that the life expectancy of night curtains can be 1 to
3 years. (Zero Zone, No. 114 at p. 2)
In light of the comments received, DOE reviewed data on night
curtain lifespans, operational expenses, maintenance, and repair costs,
assessing their potential influence on the analytical results of the
LCC and PBP analysis. As stated in the August 2024 NODA, DOE also
contacted retailers and manufacturers of night curtains of similar cost
to the ones contained in the engineering analysis. 89 FR 68788, 68795-
68796. These manufacturers and sellers reported lacking information on
night curtain lifespan but stated that the lifetime varies according to
user care. Id. One manufacturer reported a recent replacement from a
unit that lasted 10 years. Id.
Regarding the comment by Hillphoenix stating that CRE night
curtains could lead to increased repair and maintenance costs, it is
unlikely that night curtains would cause short-cycling of the
compressor because night curtains offer extra insulation against
ambient conditions, which reduces the rate of temperature increase
within the refrigerated spaces. This results in shorter on-cycles and
longer off-cycles, reducing overall compressor run time and,
potentially, wear on CRE components. In terms of the other potential
effects mentioned (i.e., liquid slugging of the compressor, refrigerant
oil logging, or increased stress on start components of fixed speed
compressor units on self-contained models), DOE found no literature or
data reporting field use patterns of night curtains and whether the use
of night curtains has a positive or negative effect on CRE compressors
and components. However, in a DOE report prepared by the National
Renewable Energy Laboratory
[[Page 7554]]
(``NREL''),\97\ a study on the energy performance of grocery stores
evaluating the effect of night curtains on 103 open refrigerated cases
found positive operation and maintenance savings resulting from the
installation of night curtains.
---------------------------------------------------------------------------
\97\ See Advanced Energy Retrofit Guides for Grocery Stores,
available at www.nrel.gov/docs/fy13osti/54243.pdf (last accessed
Sept. 9, 2024).
---------------------------------------------------------------------------
In any case, whether positive or negative, DOE did not account for
the potential repair and maintenance impacts associated with the daily
operation of night curtains due to the lack of specific data. In light
of the NREL report, DOE understands this is a likely conservative
approach. DOE also assumed that the daily operation of night curtains
may be part of the regular job duty of existing employees. DOE
reasonably expects new equipment sold with night curtains to come
properly balanced and configured upon installation.
In this final rule, consistent with the August 2024 NODA approach
and based on commenter feedback and DOE's additional research, DOE
retained the following assumptions on the repair costs of night
curtains. First, DOE used 5 years as a reasonable estimate for the
average lifetime of all night curtains. As a result, depending on the
lifetime associated with each CRE and the building type it may be
installed in, night curtains may be replaced once or several times
during the CRE lifetime. Second, DOE assumed a half-hour night curtain
replacement labor duration at the same labor rates (according to
RSMeans 2023) as other CRE components assumed to be replaced during the
CRE lifetime (e.g., compressors) in the LCC analysis. DOE assigned
these labor rates according to each purchaser's census division to
better account for national labor cost variability.
6. Equipment Lifetime
For CRE, DOE used a lifetime distribution to characterize the
probability equipment will be retired from service at a given age. For
the October 2023 NOPR, DOE estimated an average lifetime of 10 years
for CRE in large buildings and 20 years for CRE in small buildings,
with a maximum lifetime of 40 years for each. 88 FR 70196, 70240. DOE
also assumed that the probability function for the annual survival of
CRE would take the form of a Weibull distribution. Id. A Weibull
distribution is a probability distribution commonly used to measure
failure rates.\98\ In response to the October 2023 NOPR, AHRI and
Hussmann agreed with DOE's CRE lifetime assumptions. (AHRI, No. 81 at
p. 10; Hussmann, No. 80 at p. 9) NAMA also agreed with DOE's lifetime
assumptions but stated that they do not accurately reflect the
lifetimes of refurbished equipment. (NAMA, No. 85 at p. 32)
Storemasters commented that additional CRE modifications could increase
equipment complexity and cost, thus potentially reducing CRE lifetime.
(Storemasters, No. 68 at p. 1) Hussmann stated that smaller food-
retailers use their CRE longer than large food-retailers and that
smaller food-retailers may attempt to expand CRE lifetimes through
repairs. (Hussmann, No. 80 at p. 9) NAFEM and Hussmann commented that
purchasers may attempt to expand CRE lifetimes through repairs. (NAFEM,
No. 83 at p. 23; Hussmann, No. 80 at p. 9)
---------------------------------------------------------------------------
\98\ Weibull distributions are commonly used to model appliance
and equipment lifetimes.
---------------------------------------------------------------------------
In this final rule, DOE retained the lifetime assumptions from the
October 2023 NOPR: the mean lifetime distribution assumption for CRE
was assumed to be 10 years for large-size buildings and 20 years for
small-size buildings, with a maximum lifetime of 40 years for each.
With respect to the comments regarding the lifetimes of refurbished
CRE, 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 companies
that refurbish CRE 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 of
this document) for details on the residual value approach.
See chapter 8 of the final rule TSD for more information on
equipment lifetime.
7. Residual Value for Refurbished CRE
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. In the October 2023 NOPR, DOE estimated that
refurbishments would occur at 5 years for small-size food-service
buildings (e.g., restaurants) and 10 years for small-size food-sales
and other commercial buildings. 88 FR 70196, 70240. 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. Id. This credit
was applied to a fraction of self-contained CRE, totaling about 10
percent of all CRE in the LCC sample. Id.
In response to the October 2023 NOPR, Hussmann commented estimating
that remote cases are typically refurbished after 10-12 years of use,
while self-contained CRE are refurbished less frequently but sooner,
after 7-9 years of use. (Hussmann, No. 80 at p. 9) During the November
2023 Public Meeting, True commented that the CRE manufacturers have
little knowledge and data about the refurbishment market but suggested
that restaurant chains typically buy new CRE and, after usage, resell
them, while, small-business restaurants tend to buy refurbished
equipment due to the lower cost associated with refurbished units.
(November 2023 Public Meeting Transcript, No. 64 at pp. 126-128)
Hussmann also commented that smaller independent retailers are more
likely to refurbish their CRE compared to other businesses due to
having less capital available to purchase new units. (Hussmann, No. 80
at p. 9) However, NAFEM commented that larger restaurant chains can
also buy refurbished equipment when opening a new store and could later
replace them with new equipment if the store remains open. (November
2023 Public Meeting Transcript, No. 64 at pp. 128-129) Hillphoenix
stated that refurbished equipment are usually 50 percent the cost of
new equipment. (Hillphoenix, No. 77 at p. 2)
Following the August 2024 NODA, the CA IOUs commented in support of
the NODA analysis update that expanded the self-contained CRE
refurbishment market to include all businesses, regardless of size. (CA
IOUs, No. 113 at p. 2) Several commenters stated that, in addition to
self-contained CRE, remote-condensing CRE are also subject to
refurbishments when stores close or undergo remodeling. (AHRI, No. 104
at p. 8; Hillphoenix, No. 110 at p. 11; Hussmann, No. 108 at p. 2)
In response to these comments, DOE acknowledges that remote-
condensing CRE may also be subject to refurbishments when stores close
or undergo remodeling. However, the refurbishment schedule of remote-
condensing CRE is more likely to coincide with the estimated
corresponding CRE lifetimes in the LCC analysis. As discussed in the
previous section, CRE in large-size buildings (in which remote-
condensing CRE are typically installed) are estimated to have a 10-year
average lifetime -primarily reflecting store renovations or closures.
Therefore, in the LCC analysis, DOE did not account for a refurbishment
credit to CRE purchasers. Nonetheless, as
[[Page 7555]]
discussed in the following section (IV.G of this document), DOE applied
price elasticity to all CRE (including remote-condensing units) as part
of a sensitivity analysis. The results of this analysis can be found in
Appendix 10C of the final rule TSD.
In this final rule, consistent with the August 2024 NODA approach,
DOE applied a credit to about 10 percent of all CRE in the sample. This
credit may apply to any self-contained equipment regardless of building
size, based on the premise that if the refurbishment market offers a
favorable economic opportunity, it could be utilized by all businesses,
not just businesses in small-size buildings. DOE retained the same
assumptions as in the October 2023 NOPR regarding the average CRE
lifetimes at the time of refurbishment, occurring after 5 years for
food-service buildings (e.g., restaurants) and after 10 years for food-
sales, and other building types (e.g., grocery stores).
8. Discount Rates
In the calculation of LCC, DOE applies discount rates appropriate
to commercial consumers to estimate the present value of future
expenditures and 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.\99\ The weighted-average discount rate for the
commercial sector for CRE is 6.4 percent.
---------------------------------------------------------------------------
\99\ Damodaran, A. Data: Cost of Capital by Industry Sector,
United States. 2023. Available at pages.stern.nyu.edu/~adamodar/
(last accessed Sept. 9, 2024).
---------------------------------------------------------------------------
See chapter 8 of the final rule 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) in the compliance year. This approach reflects
the fact that some consumers may purchase equipment with efficiencies
greater than the baseline levels in the absence of new or amended
standards.
To estimate the energy efficiency distribution of CRE for 2029, 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 CCD, accessed in
February 2024.\100\
---------------------------------------------------------------------------
\100\ U.S. Department of Energy. Compliance Certification
Database (``CCD'') for Refrigeration Equipment--Commercial, Single
Compartment. Available at www.regulations.doe.gov/certification-data/ (last accessed February. 9, 2024).
---------------------------------------------------------------------------
In response to the October 2023 NOPR, NEEA and NWPCC commented that
DOE uses R-290 as the no-new-standards case (i.e., baseline) for self-
contained CRE because the proposed standard compliance dates will occur
after EPA refrigerant restriction compliance dates that require R-290
or another low-GWP refrigerant. (NEEA and NWPCC, No. 89 at p. 5) NEEA
and NWPCC commented that R-290 is expected to improve efficiency
compared to current refrigerants because of its higher refrigeration-
cycle efficiency over current refrigerants, so accounting for this
ensures DOE is not overestimating savings from increased standards.
(Id.) As discussed in the engineering analysis (section IV.C.1.a.i of
this document), DOE assumed that all manufacturers will switch to R-290
for self-contained CRE in response to the December 2022 EPA NOPR. The
EPA compliance date is 2025, which is earlier than the expected DOE CRE
energy conservation standards compliance date of 2029. This approach
reduces the potential maximum energy savings below the baseline
compared to the June 2022 Preliminary Analysis. The October 2023 EPA
Final Rule maintained a 2025 compliance date for self-contained CRE. As
such, DOE maintains its approach from the October 2023 NOPR for self-
contained CRE within the scope of this rulemaking.
To create a robust sample for the energy efficiency distribution
used in the LCC analysis, DOE separated the analyzed CRE equipment
classes into 20 separate groups. For the equipment classes that DOE
relied on CCD model count data 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 CCD. DOE compared energy
use data from the CCD 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..
See chapter 8 of the final rule TSD for further information on the
derivation of the efficiency distributions.
In advance of the October 2023 NOPR, DOE conducted manufacturer
interviews and collected shipments data for several equipment classes.
88 FR 70196, 70241. The equipment classes for which data was collected
account for 75 percent of total shipments and are marked with an
asterisk in table IV.\101\ Id. For the remainder of the equipment
classes for which DOE was not able to collect representative shipments
data from manufacturers due to low sample sizes, DOE utilized the CCD
database to estimate the no-new-standards-case efficiency distribution.
Id. DOE followed this same approach for this final rule.
---------------------------------------------------------------------------
\101\ For some of these classes, such as chef bases or griddle
stands and high-temperature refrigerators, DOE also developed the
efficiency distributions based on DOE's test data, data submitted by
manufacturers, ENERGY STAR certified data, and data from DOE's CCD.
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[[Page 7556]]
[GRAPHIC] [TIFF OMITTED] TR21JA25.122
The LCC Monte Carlo simulations draw from the efficiency
distributions and assign an efficiency to the CRE purchased by each
sample consumer in the no-new-standards case. The resulting percent
shares within the sample match the market shares in the efficiency
distributions. For further details on probability analysis and Monte
Carlo simulation, see appendix 8B of the final rule TSD.
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.\102\ The study found that multiple
[[Page 7557]]
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 office buildings,\103\
supermarkets,\104\ and the electric motor market.\105\
---------------------------------------------------------------------------
\102\ DeCanio, S. J. (1998). ``The Efficiency Paradox:
Bureaucratic and Organizational Barriers to Profitable Energy-Saving
Investments,'' Energy Policy, 26(5), 441-454.
\103\ 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.
\104\ 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.
\105\ 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 Sept. 9,
2024).
---------------------------------------------------------------------------
While this literature is not specific to CRE, DOE finds that the
method of assignment simulates behavior in the CRE market, where market
failures and other consumer preferences result in purchasing decisions
not being perfectly aligned with economic interests, more realistically
than relying only on apparent cost-effectiveness criteria derived from
the limited information in CBECS.\106\ DOE further emphasizes that its
approach does not assume that all purchasers of CRE make economically
irrational decisions (i.e., the lack of a correlation is not the same
as a negative correlation). As part of the sample assignment, some
buildings with high refrigeration load will be assigned higher
efficiency CRE, and some buildings with particularly low refrigeration
energy use will be assigned baseline CRE. By using this approach, DOE
acknowledges the variety of market failures and other consumer
behaviors present in the CRE market, and does not assume certain market
conditions unsupported by the available evidence.
---------------------------------------------------------------------------
\106\ CBECS identifies CRE in each representative building (and
further breaks down to `open' and `closed' refrigeration cases in
each building with CRE). Also, as discussed in section IV.F.6,
building size and category (i.e., food sales, food service, or other
building categories) are correlated with CRE lifetimes, which are
sampled using probability distributions.
---------------------------------------------------------------------------
First, consumers are motivated by more than simple financial trade-
offs. There are consumers who are willing to pay a premium for more
energy-efficient equipment because they are environmentally
conscious.\107\ There are also several behavioral factors that can
influence the purchasing decisions of complicated multi-attribute
products, such as CRE. For example, consumers (or decision makers in an
organization) are highly influenced by choice architecture, defined as
the framing of the decision, the surrounding circumstances of the
purchase, the alternatives available, and how they're presented for any
given choice scenario.\108\ The same consumer or decision maker may
make different choices depending on the characteristics of the decision
context (e.g., the timing of the purchase, competing demands for
funds), which have nothing to do with the characteristics of the
alternatives themselves or their prices. Consumers or decision makers
also face a variety of other behavioral phenomena including loss
aversion, sensitivity to information salience, and other forms of
bounded rationality.\109\ R.H. Thaler, who won the Nobel Prize in
Economics in 2017 for his contributions to behavioral economics, and
Sunstein point out that these behavioral factors are strongest when the
decisions are complex and infrequent, when feedback on the decision is
muted and slow, and when there is a high degree of information
asymmetry.\110\ These characteristics describe almost all purchasing
situations of appliances and equipment, including CRE. The installation
of a new or replacement CRE is done infrequently, as evidenced by their
mean lifetime. Further, if the purchaser of the CRE is not the entity
paying the energy costs (e.g., a building owner and tenant), there may
be little to no feedback on the purchase.
---------------------------------------------------------------------------
\107\ Ward, D. O., Clark, C. D., Jensen, K. L., Yen, S. T., &
Russell, C. S. (2011): ``Factors influencing willingness-to pay for
the ENERGY STAR[supreg] label,'' Energy Policy, 39(3), 1450-1458.
(Available at: www.sciencedirect.com/science/article/abs/pii/S0301421510009171) (Last accessed January 5, 2024).
\108\ Thaler, R.H., Sunstein, C.R., and Balz, J.P. (2014).
``Choice Architecture'' in The Behavioral Foundations of Public
Policy, Eldar Shafir (ed).
\109\ Thaler, R.H., and Bernartzi, S. (2004). ``Save More
Tomorrow: Using Behavioral Economics in Increase Employee Savings,''
Journal of Political Economy 112(1), S164-S187. See also Klemick,
H., et al. (2015) ``Heavy-Duty Trucking and the Energy Efficiency
Paradox: Evidence from Focus Groups and Interviews,'' Transportation
Research Part A: Policy & Practice, 77, 154-166. (providing evidence
that loss aversion and other market failures can affect otherwise
profit-maximizing firms).
\110\ Thaler, R.H., and Sunstein, C.R. (2008). Nudge: Improving
Decisions on Health, Wealth, and Happiness. New Haven, CT: Yale
University Press.
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10. Payback Period Analysis
The PBP 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.
PBPs 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.
In response to the October 2023 NOPR, Hussmann commented that
retailers purchasing equipment will not consider PBPs greater than 3
years for design options and prefer payback periods under 2 years.
(Hussmann, No. 80 at p. 8) Hussmann further commented that DOE's
payback periods at the proposed standard levels for many of the
equipment classes are above the rebuttable presumption threshold of 3
years according to EPCA. (Id.) In response to the October 2023 NOPR,
Hillphoenix commented that the reported payback periods are beyond the
industry standard of 2-3 years. (Hillphoenix, No. 77 at p. 5)
Hillphoenix added that these increased costs will be passed onto
consumers, and particularly low-income consumers, by citing a 2023
study by the U.S. Government Accountability Office (``GAO'') \111\ (Id.
at pp. 5-6) NAFEM commented that many payback periods are longer than
the equipment lifetime; thus, consumers will never enjoy the economic
benefit of the more expensive
[[Page 7558]]
CRE. (NAFEM, No. 83 at p. 17) NAFEM suggested that PBPs above 3-7.6
years will cause consumers to turn to cheaper refurbished equipment.
(Id. at pp. 17-18) In response to the October 2023 NOPR, Zero Zone
commented suggesting that DOE should use a maximum payback of 3 years
and eliminate any TSLs that exceed 3 years. (Zero Zone, No. 75 at p. 3)
Kirby commented that the proposed standards will significantly require
excessive payback periods for redesigning equipment and refrigeration.
(Kirby, No. 66 at p. 2) In addition, in the November 2023 Public
Meeting, Arneg USA commented that, in its experience, customers are not
interested in anything with a payback period of more than 3 years.
(November 2023 Public Meeting Transcript, No. 64 at pp. 112-113)
---------------------------------------------------------------------------
\111\ Available at www.gao.gov/assets/gao-23-105846.pdf (last
accessed Sept. 9, 2024).
---------------------------------------------------------------------------
In response to the August 2024 NODA, Zero Zone commented that the
CRE industry invests in features that have a 1-2 year payback period,
thus DOE should include design components that have a relatively
shorter payback. (Zero Zone, No. 114 at p. 2) Hillphoenix also
commented reiterating their NOPR comment. (Hillphoenix, No. 110 at p.
9)
In response to the comments from Hussmann, Hillphoenix, NAFEM, Zero
Zone, and Kirby, and Arneg USA, DOE acknowledges that the estimated
payback periods in the October 2023 NOPR are longer than the 2-3 years
typically expected for voluntary efficiency upgrades in some equipment
classes. However, while DOE strives to propose standards that encourage
adoption by industry stakeholders, when deciding whether a proposed
standard is economically justified, DOE determines whether the benefits
of the standard exceed its burdens by considering the seven statutory
factors discussed in section II.A of this document ((1) economic
impact; (2) operating cost savings; (3) energy savings; (4) utility
impact; (5) competition; (6) the need of the nation to conserve; (7)
other factors). DOE considers the seven statutory factors when
evaluating a TSL and provides a detailed comparative discussion and
rigorous justification on that TSL (see section V.C of this document
for a detailed discussion on the adopted TSL for this final rule). DOE
notes that, for most of the analyzed equipment classes, the payback
period at the selected TSL in the October 2023 NOPR is below the
equipment's lifetime, or within the range suggested by NAFEM. In
addition, the shipment-weighted average PBP for all equipment classes
at the selected TSL (TSL 3) is 3.5 years. Regarding the GAO study cited
by Hillphoenix, the report mentions many factors that affect the food
supply chain and can affect retail food prices to consumers but it does
not cite the cost increase of CRE, or any other grocery store equipment
capital cost, as a relevant factor influencing food price inflation.
DOE also clarifies that, according to 42 U.S.C. 6316(e)(1) and 42
U.S.C. 6295(o)(2)(B)(iii), when the rebuttable presumption criterion is
not met, this criterion is not taken into consideration when
determining whether a standard is economically justified.
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.\112\
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.
---------------------------------------------------------------------------
\112\ 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.
---------------------------------------------------------------------------
For the shipments analysis conducted for this final rule, DOE
followed the same approach as the October 2023 NOPR, with the exception
of CRE that may be subject to refurbishment, as discussed in the
following paragraphs.
DOE categorized CRE based on the building types in which they are
used as food sales, food service, and all other building types,
according to the 2018 CBECS, as discussed earlier in this document. DOE
also used the 2018 CBECS to further differentiate CRE into open and
closed refrigeration units. DOE estimates demand for these equipment
categories by calculating demand coming from new construction as well
as the replacement of retiring units for each year.
To calculate new demand for CRE in each category, DOE combined new
and existing floorspace projections from AEO2023 with saturation
estimates based on 2018 CBECS and AEO2023. DOE also collected shipments
data during manufacturer interviews and re-estimated the market shares
for each equipment class based on the collected data. DOE scaled the
shipment and stock estimates from the floorspace and saturations
calculations to the data obtained from 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 final rule, DOE assumed that
shipments of VCT.SC.H are 1 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 final rule TSD. DOE also
compared its shipments data with numbers reported by ENERGY STAR in its
unit shipment and market penetration report for the calendar year
2022.\113\ DOE's shipment results are generally consistent with the
figures provided by ENERGY STAR, which reported 50-percent market
penetration for the reported year. Shipments for CRE categories in each
application are then disaggregated across the analyzed CRE classes,
using fixed market shares derived from data collected during
manufacturer interviews.
---------------------------------------------------------------------------
\113\ ENERGY STAR[supreg]. ENERGY STAR Unit Shipment and Market
Penetration Report Calendar Year 2022 Summary. 2023. U.S.
Environmental Protection Agency and U.S. Department of Energy.
Available at www.energystar.gov/sites/default/files/2022%20Unit%20Shipment%20Data%20Summary%20Report.pdf (last accessed
July 29, 2024).
---------------------------------------------------------------------------
Historically, the annual amount of CRE capacity shipped has been
depicted in linear feet, which is also an alternative way to express
shipments data. The linear feet shipped for any given year can be found
by multiplying each unit shipped by its associated average length and
then summing all the linear footage values. Chapter 9 of the final rule
TSD presents the representative equipment-class lengths used for the
conversion of per-unit shipments to linear footage within each
equipment class.
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 October 2023 NOPR, several stakeholders provided
comments related to CRE
[[Page 7559]]
refurbishments. AHRI commented that energy efficiency gains are lost
when consumers refurbish CRE and argued that refurbished CRE could cost
up to 45 percent less than new CRE, causing the refurbished market to
grow. (AHRI, No. 81 at pp. 8, 11-12) According to AHRI, their surveyed
suppliers of refurbished equipment reported double-digit growth in the
past few years. (Id. at p. 12) Hussmann emphasized the growth of the
refurbishment market due to increased costs and payback periods and
commented that the compound annual growth rate (``CAGR'') of the
refurbishment industry in FY20, FY21, FY22 was 23 percent, 25 percent,
and 11 percent, respectively. (Hussmann, No. 80 at p. 9) Further,
Hussmann estimated a 10 percent annual growth in this market since
2015. (Id. at pp. 9-10) Hillphoenix commented that the cost of
refurbished equipment is usually 50 percent less than the cost of new
CRE, and that two large U.S. retailers are currently considering
establishing their own in-house refurbishment program. (Hillphoenix,
No. 77 at p. 2) Hillphoenix emphasized the growth of the refurbished
market due to supply chain shortage and component cost increases, and
stated there are at least 20 companies that refurbish CRE and suggested
DOE reach out to those companies. (Id.) NAFEM commented that increased
equipment prices are leading to refurbishment in all business sizes.
(NAFEM, No. 83 at pp. 18, 23) NAMA also requested that DOE evaluate the
energy use of refurbished machines and estimate the impact that
equipment price increases associated with new standards may have on
delaying purchase of new CRE or incentivizing purchase of refurbished
CRE. (NAMA, No. 85 at pp. 16-17) NAMA added that any changes in the
design options will cause significant increases in the cost of the
machines, which will cause the purchaser to consider other alternatives
including delaying the purchase of new equipment, purchasing
refurbished machines, and importing machines from overseas, all of
which will delay energy savings from being realized. (NAMA, No. 85 at
p. 19) Furthermore, Storemasters commented that increased equipment
prices would lead to fewer independent retailers opening new branches
or remodeling existing ones. (Storemasters, No. 68 at p. 1)
In response to the August 2024 NODA, several stakeholders
reiterated their concern about the growth of the refurbishment market,
and its impact on energy savings as an unregulated industry.
Hillphoenix commented that the lower cost of refurbished CRE drives the
growth of the refurbishment market and suggested that DOE reach out to
the more than 20 retailers dealing in refurbished equipment for data on
the size and growth of the refurbishment industry. (Hillphoenix, No.
110 at p. 2) NAMA commented that the design options analyzed would
significantly increase equipment costs, which could result in consumers
purchasing refurbished CRE or delaying the purchase of new CRE. (NAMA,
No. 112 at p. 6) AHRI restated their concern that the new standards
will increase CRE costs, causing customers to buy less energy
efficient, refurbished CRE. (AHRI, No. 104 at p. 8)
To account for the effect of a potential increase in refurbished
CRE as a result of increased prices from CRE standards, in the October
2023 NOPR, DOE had assumed a price elasticity effect for a small
fraction of CRE shipments, which was limited to small-sized buildings.
88 FR 70196, 70242. In response to the stakeholder comments on
refurbished CRE, in the August 2024 NODA, DOE modified its price
elasticity approach based on the premise that if the refurbishment
market offers a favorable economic opportunity, it could be utilized by
all businesses. Accordingly, for the August 2024 NODA DOE applied price
elasticity to all self-contained units, regardless of the building size
where those units are installed. DOE notes that the price elasticity
effect and a resulting reduction in CRE shipments is dependent on the
price difference between the price consumers pay in the no-new-
standards case and the standards case. DOE applied an elasticity
constant of -0.5 to shipments for self-contained CRE and scaled this
constant down to -0.15 over a period of 20 years (then constant
thereafter) from the current year of calculations. DOE also
acknowledges that, while a CRE refurbishment market may well exist and
its magnitude may have recently increased due to supply chain and
equipment price increases, this phenomenon applies to the CRE market
overall and is not a result of energy efficiency standards on CRE. With
regard to self-contained units, DOE estimates that their market share
is approximately 86 percent of the new (i.e., not refurbished) CRE
market within the scope of this final rule. DOE notes that decision
makers consider many other factors aside CRE purchase price when
evaluating business openings or expansions, including the operating
cost of CRE over the lifetime of the equipment, as well as other
business factors. Nonetheless, because more efficient CRE would
actually lead to increased shipments in the standards cases if DOE were
to account for efficiency elasticity, DOE followed a conservative
approach and did not account for efficiency elasticity in its shipments
analysis. In response to the comment from NAMA regarding importing
machines from overseas, DOE notes that 10 CFR 429.5(a) states that any
person importing any covered product or covered equipment into the
United States shall comply with the provisions of this part, and parts
430 and 431, and is subject to the remedies of this part.
As discussed in section IV.F.7, following the August 2024 NODA,
AHRI, Hillphoenix and Hussmann commented that, in addition to self-
contained CRE, remote-condensing CRE are also subject to refurbishments
when stores close or undergo remodeling. (AHRI, No. 104 at p. 8;
Hillphoenix, No. 110 at p. 11; Hussmann, No. 108 at p. 2)
In response to these comments, DOE acknowledges that remote-
condensing CRE may also be subject to refurbishments when stores close
or undergo remodeling, potentially rendering such CRE subject to price
elasticity, in addition to self-contained CRE. To account for the
potential impact in the NIA and MIA of all CRE being subject to
refurbishments, DOE applied price elasticity to all CRE shipments as
part of a sensitivity analysis. The results of this analysis show that
at the selected TSL (TSL 3), there is a 0.39 percent decrease in the
cumulative shipments compared to the no-new standards case, in the
first 5 years after the rulemaking compliance year (2029). See appendix
10C of the final rule TSD for more details. The MIA results of the
sensitivity analysis indicate a minimal impact in the change in INPV at
TSL 3 as compared to the change in INPV at TSL 3 for the reference
scenario. See chapter 12 of the final rule TSD for the MIA results of
the price elasticity sensitivity analysis. Consistent with the August
2024 NODA, in this final rule, DOE continues to apply price elasticity
to all-self-contained CRE as its reference scenario. At the selected
TSL for the reference scenario, there is a 0.37 percent decrease in the
cumulative shipments compared to the no-new standards case, in the
first 5 years after the rulemaking compliance year (2029).
In response to the October 2023 NOPR and the August 2024 NODA,
Hillphoenix commented that the proposed standards for many of the
closed equipment classes (e.g., HCT, VCT, and VCS) are concerning, as
the industry continues to transition to
[[Page 7560]]
closed cases for additional energy savings. (Hillphoenix, No. 77 at p.
1; Hillphoenix, No. 110 at p. 1) Hillphoenix commented that the cost
increase of closed cases required to implement the design changes
necessary will slow the transition from open cases to more energy-
efficient closed-door models. (Id.) Hillphoenix stated that any CRE
with lids or doors saves approximately 60-percent energy over their
open-display counterparts. (Id.) Hillphoenix stated that many retailers
have converted their VOP/HZO open cases to VCT/HCT classes by
retrofitting doors in existing installations to capture the
aforementioned energy savings, but requirements for further energy
reduction will lead to many closed products being discontinued from the
market, which is counter to the goal of reducing energy consumption.
(Id.)
Regarding the transition from open to closed cases and how
standards may affect this transition, DOE reviewed the first cost
increase of open cases (VOP and HZO equipment families) relative to
corresponding door cases (VCT and HCT equipment families, respectively)
between the no-new-standards case and the standards-cases evaluated by
DOE and determined that, overall, the increase in first cost for door
case equipment classes is smaller than that for open case equipment
classes at the considered standard levels. Therefore, DOE concludes
that the transition from open to closed cases will not be affected by
standards.
In response to the October 2023 NOPR, NAMA commented that DOE's
shipments estimates are incorrect and may be off by as much as 50
percent and added that there is no specific information on shipments by
category in the October 2023 NOPR TSD. (NAMA, No. 85 at p. 3)
Furthermore, NAMA commented that while most of the projections on cost,
capital, and utility concerns in the October 2023 NOPR TSD refer to CRE
connected to a refrigerant supply system, the impact on self-contained
units is much greater and stated that this is not acknowledged in the
October 2023 NOPR TSD or the October 2023 NOPR. (Id. at p. 10) NAMA
recommended that DOE review data from ENERGY STAR regarding shipments
with which to modify the percentages according to sales-weighted
numbers, which would likely result in a significant effect on the
equipment within NAMA's scope. (Id.) NAMA also requested that DOE use
shipment data of new rather than a collection of new and refurbished
units. (Id. at p. 20)
In response to the August 2024 NODA, NAMA reiterated the claim that
DOE's shipments estimates are off by as much as 50 percent, and that
refurbished units have not been accounted for in this data. (NAMA, No.
112 at p. 5) NAMA also repeated their request for information on
shipments. (Id. at p. 6-7)
In response to the comments from NAMA, DOE notes that shipment
estimates by equipment class are available in chapter 9 of the October
2023 NOPR TSD, as well as chapter 9 of this final rule TSD. In this
final rule, total CRE shipments in 2029 are estimated to be 1.42
million units. DOE clarifies that all data inputs for shipments
estimates are associated with new units. Also, as discussed earlier in
this section, DOE reviewed historical CRE ENERGY STAR shipments data to
estimate CRE shipments and self-contained units specifically. For self-
contained units, DOE used estimates based on manufacturer interviews in
2022 to determine that their market share is approximately 86 percent
of the CRE market covered by this final rule.
Chapter 9 of the final rule 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 or amended standards at specific efficiency levels.\114\
(``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 2029 through 2058.
---------------------------------------------------------------------------
\114\ The NIA accounts for impacts in the United States and U.S.
territories.
---------------------------------------------------------------------------
DOE evaluates the impacts of new or amended standards by comparing
a case without such standards with standards-case projections. The no-
new-standards case characterizes energy use and consumer costs for each
equipment class in the absence of new or amended energy conservation
standards. For this projection, DOE considers historical trends in
efficiency and various forces that are likely to affect the mix of
efficiencies over time. DOE compares the no-new-standards case with
projections characterizing the market for each equipment class if DOE
adopted new or amended standards at specific energy efficiency levels
(i.e., the TSLs or standards cases) for that class. For the standards
cases, DOE considers how a given standard would likely affect the
market shares of equipment with efficiencies greater than the standard.
DOE utilized the Python programming language for its NIA to
calculate the energy savings and the national consumer costs and
savings for each TSL. The final results of this analysis are available
in the NIA spreadsheet, 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. summarizes the inputs and methods DOE used for the NIA
analysis for this final rule. Discussion of these inputs and methods
follows table IV. See chapter 10 of the final rule TSD for further
details.
[[Page 7561]]
[GRAPHIC] [TIFF OMITTED] TR21JA25.123
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 year of anticipated compliance
with an amended or new standard.
For the standards cases, DOE used a ``roll-up'' scenario to
establish the shipment-weighted efficiency for the year that standards
are assumed to become effective (2029). 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 October 2023 NOPR, due to an 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. 88 FR 70196, 70244.
For a given equipment class, market shares by efficiency level were
held fixed to their estimated distribution in 2029.\115\ Id.
---------------------------------------------------------------------------
\115\ 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 the compliance year (2029).
---------------------------------------------------------------------------
In response to the October 2023 NOPR, AHRI recommended that DOE
review its CCD for efficiency data and trends. (AHRI, No. 81 at p. 12)
Hussmann provided data on the efficiency improvement of one of its
highest volume cases in the VOP.RC.M equipment class and showed a 46-
percent reduction in energy use between 1985 and 2023. (Hussmann, No.
80 at p. 11-12) Hussmann further stated that other equipment classes,
such as VCT.RC.L, have shown similar trends. (Id.) DOE appreciates the
comments and data provided by AHRI and Hussmann. DOE reviewed CCD data
between 2017 and 2024 and did not identify a significant pattern in CRE
efficiency trends. Furthermore, DOE notes that the energy efficiency
improvement from the March 2014 Final rule and the energy efficiency
improvement reported by Hussmann for the VOP.RC.M class between 2012
and 2023 are similar. Therefore, the efficiency improvement provided by
Hussmann in recent years may be a result of the March 2014 Final Rule,
and not an efficiency improvement trend in the absence of standards.
Hence, for this final rule, DOE continued to assume no trend in
efficiency in the no-new-standards and the standards cases.
2. National Energy Savings
The NES analysis involves a comparison of national energy
consumption of the considered equipment between each potential
standards case (i.e., TSL) and the case with no new or amended energy
conservation standards. DOE calculated the national energy consumption
by multiplying the number of units (i.e., stock) of 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.
Use of higher-efficiency equipment is sometimes associated with a
direct rebound effect, which refers to an increase in utilization of
the equipment due to the increase in efficiency and reduction in
operating cost. DOE did not find any data on the rebound effect
specific to CRE that would indicate 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 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 GHG
and other emissions in the NIA and emissions analyses included in
future energy conservation standards
[[Page 7562]]
rulemakings. 76 FR 51281 (August 18, 2011). After evaluating the
approaches discussed in the August 18, 2011 notice, DOE published a
statement of amended policy in which DOE explained its determination
that EIA's National Energy Modeling System (``NEMS'') is the most
appropriate tool for its FFC analysis and its intention to use NEMS for
that purpose. 77 FR 49701 (August 17, 2012). NEMS is a public domain,
multi-sector, partial equilibrium model of the U.S. energy sector \116\
that EIA uses to prepare its AEO. The FFC factors incorporate losses in
production and delivery in the case of natural gas (including fugitive
emissions) and additional energy used to produce and deliver the
various fuels used by power plants. The approach used for deriving FFC
measures of energy use and emissions is described in appendix 10B of
the final rule TSD.
---------------------------------------------------------------------------
\116\ For more information on NEMS, refer to The National Energy
Modeling System: An Overview 2018, DOE/EIA-0581(2019), April 2019.
Available at www.eia.gov/outlooks/aeo/nems/overview/pdf/0581(2018).pdf (last accessed July 22, 2024).
---------------------------------------------------------------------------
At the November 2023 Public Meeting, EEI suggested that DOE
consider modifying its analysis to account for the captured energy
approach that EIA is now using and/or the zero emissions approach by
ASHRAE for noncombustible renewables as alternative FFC factors.
(November 2023 Public Meeting Transcript, No. 64 at p. 149) EEI also
requested that DOE review the NREL Cambium databases \117\ and conduct
a sensitivity analysis using alternative FFC factors. (Id. at pp. 149-
150) With respect to the comment from EEI, it has been DOE's practice
for many years to rely on EIA's AEO for deriving site-to-primary and
FFC energy factors. DOE is aware that, starting with the September 2023
Monthly Energy Review, EIA began converting electricity generation from
noncombustible renewables into primary energy using the captured energy
approach rather than the fossil fuel equivalency approach that it had
previously used. However, the AEO2023 that DOE used for this final rule
still reflects the fossil fuel equivalency approach. DOE will consider
conducting a sensitivity analysis using the captured energy approach,
as well as a sensitivity analysis using a scenario with a high level of
renewable energy market share for any future rulemakings.
---------------------------------------------------------------------------
\117\ See www.nrel.gov/docs/fy23osti/84916.pdf for more
information (last accessed July 22, 2024). The Cambium datasets
include alternative projections on the U.S. electric sector under
different scenarios.
---------------------------------------------------------------------------
In response to the August 2024 NODA, NAMA commented that DOE
addressed their request to separate some equipment classes into two
categories based on size being above or below 30 cubic feet. (NAMA, No.
112 at pp. 4-5) However, NAMA stated that this change is not reflected
in DOE's national impacts analysis to show lesser projected energy
savings for smaller units. Id. In response, DOE notes that the energy
savings shown in the NIA depend not only on the energy savings of a
single unit, but also on its market share and shipment numbers over the
analysis period. A unit with lesser energy savings might register
higher savings on a national level due to its larger volume of
shipments. For example, VCT.SC.M (non-large) is shown to have 0.09
quads of FFC savings while VCT.SC.M (large) is shown to have 0.02 quads
of FFC savings at max EL (EL 6) in the August NODA. While the average
daily energy consumption of the large representative unit is more than
three times higher than that of the non-large representative unit, the
ratio of their market shares (shipments) is approximately 1:9.
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 (which include 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 equipment shipped during the projection period.
As discussed in section IV.F.1 of this document, DOE developed
price trends for CRE of each equipment class containing variable-speed
compressors and/or LED lighting. By 2058, 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 decrease by approximately 85 percent,
relative to projected 2029 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 4.0 percent by 2058 relative to 2029. 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 final rule TSD.
The operating cost savings are energy cost savings, which are
calculated using the estimated energy savings in each year and the
projected price of the appropriate form of energy. To estimate energy
prices in future years, DOE multiplied the average regional energy
prices by the projection of annual national-average 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, as
discussed in section IV.F.5 of this document, 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 compared to the
Reference case. In addition, the low economic benefits scenario
reflects a no-price-learning approach to calculate the equipment costs.
NIA results based on these cases are presented in appendix 10C of the
final rule TSD.
In calculating the NPV, DOE multiplies the net savings in future
years by a discount factor to determine their present value. For this
final rule, 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.\118\ The discount rates for the determination of
NPV are in contrast to the discount rates used in the LCC analysis,
which are designed to reflect a consumer's perspective. The 7-percent
real value is an estimate of the average before-tax rate of return to
private capital in the U.S. economy. The 3-percent real value
represents the ``social rate of time preference,'' which is the rate at
which society discounts future consumption flows to their present
value.
---------------------------------------------------------------------------
\118\ U.S. Office of Management and Budget. Circular A-4:
Regulatory Analysis. Available at www.whitehouse.gov/omb/information-for-agencies/circulars (last accessed Aug. 19, 2024).
DOE used the prior version of Circular A-4 (September 17, 2003) in
accordance with the effective date of the November 9, 2023 version.
Available at www.whitehouse.gov/wp-content/uploads/legacy_drupal_files/omb/circulars/A4/a-4.pdf (last accessed Aug. 19,
2024).
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[[Page 7563]]
a. Sensitivity Analysis for Equipment With Unique Energy Use
Characteristics
As discussed in section IV.C.1.c of this document, to account for
CRE with certain features (e.g., pass-through, sliding door, sliding-
door pass-through, roll-in, roll-through, forced-air evaporator, and
drawers), DOE applied a single multiplier of 1.07 to the energy use of
CRE with these features. To evaluate the impact of such CRE on the NIA,
DOE conducted a sensitivity analysis in this final rule and estimated
the NES and NPV by applying a 1.07 energy use multiplier to CRE with
these features.
Given a lack of market data regarding CRE with these unique energy
use characteristics, DOE modeled two sensitivities, each with a
different approach to assumptions regarding market shares. In the first
approach, DOE relied on CCD model counts to estimate market shares of
CRE with unique energy use characteristics. In the second approach, DOE
assumed that these CRE hold a flat 5 percent market share within their
equipment class.
To model this sensitivity, DOE assumed that the efficiency
distribution of the equipment with unique features is the same as that
of the overall equipment class. DOE assumed an increased energy
consumption for the affected equipment by a factor of 7 percent. The
results of these sensitivity analyses are shown in Appendix 10C of the
final rule TSD.
I. Consumer Subgroup Analysis
In analyzing the potential impact of new or amended energy
conservation standards on consumers, DOE evaluates the impact on
identifiable subgroups of consumers that may be disproportionately
affected by a new or amended national standard. The purpose of a
subgroup analysis is to determine the extent of any such
disproportional impacts. DOE evaluates impacts on particular subgroups
of consumers by analyzing the LCC impacts and PBP for those particular
consumers from alternative standard levels. In response to the October
2023 NOPR, an individual commenter submitted a confidential comment
that expressed support for the proposed rule but also stated concern
that the standards could impose a significant financial burden on small
and medium-sized businesses. (Individual Commenter, No. 58 at pp. 1-2)
Kirby commented that the proposed purchase prices will limit the growth
of small and midsize companies. (Kirby, No. 66 at p. 2) NAMA stated
that the cost of the new and amended standards will be significantly
higher, with lower energy savings than DOE's estimates, and added that
this will affect NAMA's members in ``food deserts.'' (NAMA, No. 85 at
p. 2)
For this final rule, DOE analyzed the impacts of the considered
standard levels on small businesses. Regarding the comment from NAMA on
this rulemaking's impact on ``food deserts'' (i.e., areas where
consumers have limited access to healthy and affordable food options),
DOE does not have specific data on the businesses that operate in such
areas but assumes that most of them are small businesses. For this
subgroup, DOE applied discount rates and electricity prices specific to
small businesses to the same consumer sample that was used in the
standard LCC analysis. DOE used the LCC and PBP spreadsheet model to
estimate the impacts of the considered efficiency levels on these
subgroups. Chapter 11 in the final rule TSD describes the consumer
subgroup analysis and provides detailed results. See also section
V.B.1.b of this document for a summary of the subgroup analysis
results.
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, unit 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 new
and amended standards, the GRIM estimates a range of possible impacts
under different manufacturer markup 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 final rule 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,\119\ corporate
annual reports, the U.S. Census Bureau's Annual Survey of Manufactures
(``ASM''),\120\ the U.S. Census Bureau's Economic Census,\121\ the U.S.
Census Bureau's Quarterly
[[Page 7564]]
Survey of Plant Capacity Utilization,\122\ and reports from Dun &
Bradstreet.\123\
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\119\ U.S. Securities and Exchange Commission. Electronic Data
Gathering, Analysis, and Retrieval system. Available at www.sec.gov/edgar/searchedgar/companysearch (last accessed April 11, 2024).
\120\ U.S. Census Bureau. Annual Survey of Manufactures. (2012-
2021). Available at www.census.gov/programs-surveys/asm/data.html
(last accessed April 11, 2024).
\121\ U.S. Census Bureau. Economic Census. (2012 and 2017).
Available at www.census.gov/programs-surveys/economic-census.html
(last accessed April 15, 2024).
\122\ 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 April 11, 2024).
\123\ Dun & Bradstreet Hoovers. Subscription login accessible at
app.dnbhoovers.com/(last accessed March 15, 2024).
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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 product and capital conversion costs, and to gather
additional information on the anticipated effects of energy
conservation standards on revenues, direct employment, capital assets,
industry competitiveness, and 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. 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 final rule 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, manufacturer markups, shipments, and
industry financial information as inputs. The GRIM models changes in
costs, distribution of shipments, investments, and manufacturer margins
that could result from a new or amended energy conservation standard.
The GRIM spreadsheet uses the inputs to arrive at a series of annual
cash flows, beginning in 2024 (the base year of the analysis) and
continuing to 2058. 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
and public comments in response to the October 2023 NOPR. 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 final rule 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 final rule, DOE
relied on a design-option approach, supported with testing and reverse
engineering of directly analyzed CRE, similar to the approach in the
August 2024 NODA and October 2023 NOPR. 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 final rule 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 2024 (the base year) to 2058 (the end year of
the analysis period). See section IV.G of this document and chapter 9
of the final rule 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 the product
development effort--including engineer, laboratory technician, and
marketing resources--associated with each design option and scaled the
costs based on the number of basic models (or model
[[Page 7565]]
platforms, depending on the nature of the design option). The 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 that an 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 equipment
platforms that would require redesign. DOE used its CCD \124\ and CEC's
MAEDbS \125\ to identify CRE models covered by this rulemaking. To
identify chef bases or griddle stands and high-temperature CRE models,
DOE further relied on publicly available data aggregated from the web
scraping of retail websites. DOE used the no-new-standards case
efficiency distribution from the shipments analysis to estimate the
model efficiency distribution for chef bases, griddle stands, and high-
temperature CRE. DOE also included the estimated cost of testing to the
DOE test procedure for chef bases, griddle stands, 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.
---------------------------------------------------------------------------
\124\ 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 Jan. 31, 2024).
\125\ California Energy Commission's Modernized Appliance
Efficiency Database System is available at
cacertappliances.energy.ca.gov/Pages/Search/AdvancedSearch.aspx
(last accessed Jan. 31, 2024).
---------------------------------------------------------------------------
For this final rule, DOE used its product conversion cost
methodology from the October 2023 NOPR and updated data sources from
the August 2024 NODA. Specifically, DOE incorporated the most recent
Department of Labor's BLS Occupational Employment and Wage Statistics
wage data \126\ into its product conversion cost estimates and
refreshed its equipment database to reflect current model listings.
Furthermore, in response to stakeholder comments to the October 2023
NOPR regarding the increase in testing and certification costs
associated with new safety standards (i.e., UL 60335-2-89) and industry
test standards (see Hoshizaki, No. 76 at p. 2), DOE doubled product
conversion costs associated with UL testing and industry certification
for this final rule, consistent with the August 2024 NODA.
---------------------------------------------------------------------------
\126\ U.S. Department of Labor, ``Occupational Employment and
Wage Statistics,'' (May 2023). Available at www.bls.gov/oes/2023/may/oes_nat.htm#17-0000 (last accessed May 22, 2024). See National
median annual wages for ``17-2071 Electrical Engineers,'' ``17-2141
Mechanical Engineers,'' ``17-3027 Mechanical Engineering
Technologists and Technicians,'' and ``13-1082 Project Management
Specialists.''
---------------------------------------------------------------------------
In addition to the sources used to derive product conversion costs,
DOE relied on additional sources of information such as the Trade
Associations Survey,\127\ submitted in advance of the October 2023
NOPR, 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 tooling changes required by the considered design
options. 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 CRE
that achieve higher efficiency levels through component swaps, which
are typically associated with lower efficiency levels). 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.
---------------------------------------------------------------------------
\127\ See Trade Associations Survey, No. 50 at pp. 16-18.
Available at 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. (Trade Association Survey, No. 50 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 condensers, additional
panes of glass, and variable-speed compressors. Although DOE analyzed
microchannel condensers as a design option to improve efficiency in the
October 2023 NOPR, DOE notes that it did not analyze microchannel
condensers as a design option in the August 2024 NODA or this final
rule analysis. DOE compared feedback from the Trade Associations Survey
with information from the equipment teardown analysis and manufacturer
interviews and incorporated the feedback where applicable.
Consistent with the August 2024 NODA, DOE adjusted its capital
conversion cost estimates from 2022$ to 2023$ for this final rule but
otherwise maintained its capital conversion cost methodology from the
October 2023 NOPR.
In general, DOE assumes all conversion-related investments occur
between the year of publication of the final rule and the year by which
manufacturers must comply with the new standard. The conversion cost
figures used in the GRIM can be found in section V.B.2.a of this
document. For additional information on the estimated capital and
product conversion costs, see chapter 12 of the final rule TSD.
d. Manufacturer Markup Scenarios
MSPs include direct manufacturing production costs (i.e., labor,
materials, and overhead estimated in DOE's MPCs) and all non-production
costs (i.e., SG&A, R&D, and interest), along with profit. To calculate
the MSPs in the GRIM, DOE applied manufacturer markups to the MPCs
estimated in the engineering analysis for each 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
[[Page 7566]]
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'' across all
efficiency levels and equipment classes, 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. In the
October 2023 NOPR, DOE used a gross-margin percentage of 29 percent for
all equipment classes.\128\ 88 FR 70196, 70247. In the August 2024 NODA
and this final rule, DOE used a gross-margin percentage of 28 percent
for all equipment classes based on comments in response to the October
2023 NOPR and market share weights.\129\ 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 a high bound of industry profitability under new
and amended energy conservation standards. To address manufacturer
concerns about reduced margins and profitability under potential
amended standards, DOE also analyzes a preservation-of-operating-profit
scenario.
---------------------------------------------------------------------------
\128\ The gross-margin percentage of 29 percent is based on a
manufacturer markup of 1.40.
\129\ The gross-margin percentage of 28 percent is based on a
manufacturer markup of 1.38.
---------------------------------------------------------------------------
Under the preservation-of-operating-profit scenario, as the cost of
production goes up under a standards case, manufacturers are generally
required to reduce their manufacturer markups to a level that maintains
base-case operating profit. DOE implemented this scenario in the GRIM
by lowering the manufacturer markups at each TSL to yield approximately
the same earnings before interest and taxes in the standards case as in
the no-new-standards case in the year after the expected compliance
date of the 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.
A comparison of industry financial impacts under the two
manufacturer markup scenarios is presented in section V.B.2.a of this
document.
3. Discussion of MIA Comments
a. Conversion Costs
In response to the October 2023 NOPR, NAMA commented the industry
would incur hundreds of thousands to millions in capital costs when
incorporating increased insulation, VIPs, heavier doors, and
microchannel coils, which will take place in an environment with rising
interest rates. (NAMA, No. 85 at p. 10) NAMA requested that DOE
consider fully burdened conversion costs for the following areas: mold
cost for plastic parts; production of the molds in molding machines;
fixtures for production of metal parts; fixtures to hold the components
in place; engineering design changes; manufacturing changes; building
of prototypes to test internally; testing of prototypes; building of
pre-production units from production parts and fixtures (sometimes
called a pilot lot); safety certification for pre-production units;
safety certification costs from U.S. Department of Labor Occupational
Safety and Health Administration (``OSHA'') nationally recognized test
laboratories (``NRTLs''); internal costs for performance testing;
external costs for performance testing; internal energy testing; energy
testing from outside laboratories for confirmation; training of
production employees; training of service personnel; equipment for
service personnel; and capital costs amortized over 3 to 5 years. (Id.
at p. 22)
NAFEM stated some CRE models can be redesigned to achieve a lower
energy limit within the 3-year timeline, while others (primarily self-
contained products) have unknown design challenges and variable-speed
evaporators and/or condenser fan motors and variable-speed compressors
and all the extra electronic controls required for these variable-speed
components will require extensive testing to accommodate the proposed
limits to increase energy efficiency. (NAFEM, No. 83 at p. 12)
AHRI commented that microchannel condensers should include supplier
tooling costs, existing and potential tariffs, laboratory testing,
field testing, product line changeovers, refrigerant charge, and air
flow analysis. (AHRI, No. 81 at p. 12) Hoshizaki commented that
changing condensers requires manufacturers to purchase new jigs for
brazing patterns where the cost of the jigs depends on the size and
complexity. (Hoshizaki, No. 76 at p. 5) Hoshizaki stated jigs for
brazing can cost thousands and costs for new condensing units are
amortized over the first 3 years of purchase. (Id.) Hoshizaki commented
that there are increased labor costs for variable-speed compressors
because they require fine-tuning of design controls for optimum energy
use. (Id.)
NAFEM commented that each foam fixture can cost between $250,000
and $750,000 depending on size and complexity, so new foam fixtures are
multi-million-dollar investments. (NAFEM, No. 83 at p. 19) NAFEM also
stated complex control systems require wiring, sensors, and additional
assembly. (Id.)
In response to these comments, DOE notes that it incorporates
investments in research, development, testing and certification,
marketing, and other non-capitalized costs necessary to make equipment
designs comply with standards (i.e., product conversion costs) and
investments in property, plant, and equipment necessary to adapt or
change existing production facilities (i.e., capital conversion costs)
into its MIA. For the October 2023 NOPR, DOE analyzed incorporating a
range of design options, including microchannel condensers, variable-
speed compressors, and improved door designs (i.e., moving to double-
pane, triple-pane, or vacuum-insulated glass for CRE equipment classes
with transparent doors). However, DOE did not consider increased
insulation thickness or VIPs as design options in its engineering
analysis as DOE had tentatively screened out those technology options
due to ``impacts on product utility''. See section IV.B of this
document for additional information.
For this final rule, DOE maintains the approach used in the August
2024 NODA. Specifically, based on stakeholder comments to the October
2023 NOPR, DOE revised its baseline component assumptions and revised
its assessment of representative insulation thickness for the August
2024 NODA and this final rule to align with the insulation thickness
assumptions used in the March 2014 Final Rule.\130\ As such, DOE did
not incorporate estimates associated with increasing insulation
[[Page 7567]]
thickness or VIPs in its conversion costs for this final rule. As
discussed in section IV.B.1.g of this document, DOE screened out the
use of microchannel condensers as a design option to improve efficiency
in this final rule analysis. Thus, consistent with the August 2024
NODA, DOE does not consider investments associated with implementing
microchannel condensers in its MIA for this final rule. Consistent with
both the August 2024 NODA and 2023 October NOPR, DOE assumed that
implementing variable-speed compressors takes an additional level of
engineering effort and testing time compared to other design options
based on manufacturer feedback from confidential interviews. See
chapter 12 of the final rule TSD for industry conversion costs by
efficiency level for each directly analyzed equipment class.
---------------------------------------------------------------------------
\130\ See Table 5A.2.2 Baseline Specifications in the March 2014
Final Rule TSD at www.regulations.gov/document/EERE-2010-BT-STD-0003-0102. DOE updated the following insulation thicknesses: 1.5 in.
for medium- and high-temperature equipment, 2.0 in. for low-
temperature equipment, and 2.5 in. for ice-cream temperature
equipment. Table IV.11 in this document.
---------------------------------------------------------------------------
Hussmann commented that design changes may lead to incorporating
additional components (e.g., EEVs, case controllers, lighting controls,
anti-sweat heater controllers), which would negatively impact
production rates and plant capacity if equipment becomes more difficult
to assemble. (Hussmann, No. 80 at p. 8) Hussmann and AHRI commented
that manufacturers would also have to develop new training materials
and programs to educate existing technicians on the integration of
these additional electronic components. (Id. at p. 8; AHRI, No. 81 at
p. 10)
DOE understands that incorporating additional components could
require additional sub-assembly stations and increase per-unit
production time, potentially impacting plant capacity. DOE clarifies
that EEVs, case controllers, and anti-sweat heater controls are not
design options analyzed in this final rule, although DOE understands
that manufacturers can choose to meet the adopted standards using a
variety of different technologies. Furthermore, DOE does not expect
that TSL 3 efficiencies would necessitate the use of occupancy sensors
with dimming capability. Additionally, DOE notes that manufacturers
have 4 years after this final rule publishes in the Federal Register to
update CRE designs and production facilities to comply with the adopted
standards. As such, DOE does not expect the CRE industry would face
long-term capacity constraints as a direct result of the standards
adopted in this final rule. As discussed in section V.B.2.c of this
document, DOE assesses potential impacts of standards on manufacturing
capacity. Manufacturers primary concern was about the dual development
needed to comply with both new and amended energy conservation
standards and EPA refrigerant regulations over a similar timeframe,
however, DOE expects that extending the compliance period from the 3-
years analyzed in the October 2023 NOPR to 4-years in this final rule
will help mitigate these concerns about laboratory and engineering
resource constraints. Regarding developing new training material for
technicians, DOE's product conversion costs are intended to encompass
investments in marketing and other non-capitalized expenses that
directly result from meeting new or amended standards.
NAMA commented that DOE's consultants did not account for the
enormous capital costs of most design options or the enormous
cumulative burden that results from the transition from high-GWP
refrigerants to low-GWP refrigerants. (NAMA, No. 85 at p. 10) NAMA also
commented that the practice of burying capital costs in a separate
category and not accounting for them in the true cost of design options
is unrealistic. (Id. at p. 11)
In response to the comment from NAMA, DOE notes that it accounts
for the capital investments required to implement the design options
analyzed in the engineering analysis in its industry cash flow model,
the GRIM. DOE also notes that it does not expect manufacturers would
incur significant capital conversion costs as a result of the standards
in this final rule as DOE is not analyzing capital-intensive design
options such as increasing insulation thickness or implementing VIPs in
its analysis. See section IV.J.2.c of this document for a discussion of
conversion cost methodology and section V.B.2.a of this document for
estimated capital conversion costs required to meet each TSL.
Regarding DOE's accounting of the investments required to
transition to low-GWP refrigerants in response to Federal and State
regulations, DOE accounts for the investments required to transition to
low-GWP refrigerants in its GRIM in the no-new-standards case and
standards case. DOE did not consider these investments as ``conversion
costs'' as they are considered as part of the analytical baseline. In
other words, the CRE industry would incur refrigerant transition
expenses to comply with the October 2023 EPA Final Rule regardless of
whether DOE amends energy conservation standards for CRE. Although
refrigerant transition costs are not attributable to this DOE
rulemaking, DOE incorporates these expenses into its GRIM to better
reflect the state of industry finances and annual cash flow.
For the October 2023 NOPR, DOE relied on manufacturer feedback in
confidential interviews, a report prepared for EPA,\131\ 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. 88 FR 70196, 70284. 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.) from 2023 to 2025.\132\ Id.
DOE estimates industry would incur approximately $13.6 million in R&D
and $17.7 million in capital expenditures from 2024 to 2027 for this
final rule.\133\ These values reflect the estimated refrigerant
transition expenses incurred during the period analyzed in this final
rule (i.e., 2024-2058), and not the cumulative industry investments
associated with transitioning to low-GWP refrigerants. DOE addresses
stakeholder comments about the costs associated with the refrigerant
transition in section IV.J.3.f of this document. These stakeholder
comments relate to concerns about underestimating the costs associated
with the refrigerant transition. For more detailed information on how
DOE accounts for the refrigerant transition in its MIA, see section
V.B.2.e of this document.
---------------------------------------------------------------------------
\131\ 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.
\132\ At the time of the October 2023 NOPR analysis, the
December 2022 EPA NOPR proposed a compliance date of January 1, 2025
for all subsectors relevant to CRE covered by this rulemaking.
\133\ The October 2023 EPA Final rule maintained a January 1,
2025 compliance date for stand-alone units but delayed compliance to
January 1, 2026 or January 1, 2027 for other subsectors relevant to
CRE covered by this rulemaking.
---------------------------------------------------------------------------
NAFEM asserted that DOE did not account for the substantial and
unprecedented inflation and cost-of-capital issues that are plaguing
all private enterprise at this time, including the CRE industry, in its
October 2023 NOPR. (NAFEM, No. 83 at p. 14) NAFEM emphasized that the
current macroeconomic environment makes short-term or long-term
borrowing for capital improvements impossible. (Id. at p. 17) NAMA
similarly commented that high interest rates make large investments--
such as the expenses required to transition to low-GWP refrigerants in
response to Federal and State refrigerant regulation--very expensive.
(NAMA, No. 85 at p. 3)
[[Page 7568]]
For the October 2023 NOPR, DOE used the discount rate (i.e., the
weighted average cost of capital) from the March 2014 Final Rule as a
starting point for the MIA. The March 2014 Final Rule financial
parameters were vetted by multiple manufacturers in confidential
interviews and went through public notice and comment. DOE then
compared the discount rate developed for the prior CRE rulemaking to
recent financial data from four publicly traded CRE manufacturers to
ensure relevance. DOE presented the discount rate and other financial
parameters to manufacturers during confidential interviews conducted in
January 2023 in advance of the October 2023 NOPR. See chapter 12 of the
October 2023 NOPR TSD.\134\ Based on feedback, DOE used a discount rate
of 10.0 percent in its MIA conducted for the October 2023 NOPR. 88 FR
70196, 70246. As DOE did not receive quantitative feedback from
manufacturers on the discount rate in response to the October 2023
NOPR, DOE maintained a discount rate of 10.0 percent for the August
2024 NODA and for this final rule. Regarding DOE's accounting of
inflation, for this final rule, DOE updated its engineering analysis to
incorporate up-to-date cost estimates by way of 5-year moving averages
for materials and the most up-to-date costs for purchased parts.
---------------------------------------------------------------------------
\134\ Available at www.regulations.gov/document/EERE-2017-BT-STD-0007-0051.
---------------------------------------------------------------------------
In response to the October 2023 NOPR, Hillphoenix commented that
the standards proposed in the October 2023 NOPR, if adopted, would
force OEMs to discontinue equipment, noting that the March 2014 Final
Rule standards (which went into effect in 2017) eliminated less-
efficient models that were offered as part of tiered efficiency-based
pricing. (Hillphoenix, No. 77 at p. 1) In response to the October 2023
NOPR and August 2024 NODA, Hillphoenix commented that proposed
standards may lead to equipment commoditization where equipment can
only compete on price rather than value-added options and features.
(Hillphoenix, No. 77 at p. 1; Hillphoenix, No. 110 at p. 1) In response
to August 2024 NODA, Hillphoenix similarly commented that the proposed
standards would force OEMs to discontinue models, which would have
negative business impacts, stifle innovation, lead to commoditization,
and lead to a disadvantage selling in foreign markets. (Hillphoenix,
No. 110 at p. 1)
With respect to the comment from Hillphoenix, DOE acknowledges that
not all models on the market would meet the efficiency levels proposed
in the October 2023 NOPR or the efficiency levels adopted in this final
rule. As discussed in section IV.J.2.c of this document, DOE used its
CCD as a key input to its conversion cost methodology to estimate the
number of unique basic models that would require redesign for each
directly analyzed equipment class at each efficiency level. To avoid
underestimating the potential investments, DOE assumed manufacturers
would redesign all models that would not currently meet each analyzed
efficiency level. As such, industry conversion costs reflect the
redesign effort required to update the portion of CRE models that do
not meet each efficiency level.
In the October 2023 NOPR, DOE estimated that approximately 11
percent of shipments would meet the proposed levels by the analyzed
compliance year. However, DOE estimates that approximately 49 percent
of shipments would meet the levels adopted in this final rule (i.e.,
TSL 3). Therefore, compared to the October 2023 NOPR, fewer models
would require redesign to meet the adopted TSL in this final rule.
Furthermore, compared to the October 2023 NOPR, manufacturers will have
an additional year to redesign CRE to meet new and amended standards.
Based on stakeholder feedback, DOE is extending the compliance period
from the 3 years analyzed in the October 2023 NOPR to 4 years. DOE also
notes that in the October 2023 NOPR, DOE proposed energy use
multipliers for certain features (e.g., pass-through doors, sliding
doors, roll-in doors, roll-through doors, and forced air evaporators).
88 FR 70196, 70231. As presented in the August 2024 NODA, in this final
rule, DOE is adopting a simplified multiplier of 1.07 to the eligible
equipment classes discussed in the October 2023 NOPR. See section
IV.C.1.a of this document for a discussion of equipment classes with
unique energy use characteristics. As such, DOE expects that these
types of features and others would remain prevalent in the market and
could offer means for equipment differentiation, minimizing the risk of
equipment commoditization. Additionally, DOE notes that it is not
adopting the max-tech efficiency level for most directly analyzed
equipment classes. Out of the 28 directly analyzed equipment classes,
DOE is adopting efficiency levels below max-tech for 18 classes, which
account for approximately 84 percent of industry shipments covered by
this rulemaking. DOE expects that manufacturers would still be able to
differentiate their models and product lines by various factors (e.g.,
price, technologies, consumer features, energy efficiency) rather than
just price as Hillphoenix contended in its comment. Furthermore, as
discussed in section IV.C.1.b of this document, there are a range of
models on the market and certified in DOE's CCD that exceed the
analyzed max-tech efficiency levels. Possible explanations for the
variability in energy usage could be due to a range of lighting powers,
differences in insulation thickness, and use of evaporator fan
controls, among other reasons.
b. Impacts on Direct Employment
In response to the October 2023 NOPR, Continental commented it may
discontinue equipment, potentially affecting Continental employees, if
the standards proposed in the October 2023 NOPR were implemented.
(Continental, No. 86 at p. 6) AHRI commented that proposed standards in
the October 2023 NOPR would force domestic manufacturers to exit the
market, effectively lessening consumer choice. (AHRI, No. 81 at p. 15)
NAMA commented that a large CRE manufacturer recently closed a factory
and reduced company output, resulting in job loss. (NAMA, No. 85 at p.
4)
NAFEM added that the costs and complexity of adopting technology
like variable-speed compressors would lead to cost and price increases,
which in turn would impede the ability to compete against other
equipment, particularly from foreign manufacturers who benefit from
government subsidies. (NAFEM, No. 83 at p. 18) NAFEM commented its
members continue to share their concerns about the substantial
manufacturing costs and investments necessary to comply with the
October 2023 NOPR. (Id. at p. 19)
In response to the August 2024 NODA, Delfield commented that if
standards reduce equipment offerings, manufacturers may reduce their
workforce, negatively impacting local communities where manufacturers
are major employers. (Delfield, No. 99 at p. 1)
With respect to these comments, DOE notes that it analyzes the
potential impacts to domestic manufacturing employment in section
V.B.2.b of this document. DOE's direct employment analysis explores the
potential reduction in employment under the standards cases (i.e., each
TSL) relative to the estimated employment absent standards (i.e., the
no-new-standards case). As discussed in section V.B.2.b of this
document, DOE estimates that the potential change in domestic direct
employment could range from -4,404 to -93 in 2029 at TSL 3. The upper
[[Page 7569]]
bound of domestic employment represents the potential change in
domestic production and non-production workers if manufacturers
continue to produce the same scope of CRE in the United States after
compliance. The lower bound estimate conservatively assumes that some
domestic manufacturing either is eliminated or moves abroad at more
stringent efficiency levels. DOE estimates that approximately 77
percent of CRE covered by this rulemaking are produced domestically.
DOE notes that, compared to the October 2023 NOPR, the levels adopted
are less stringent (in terms of percent energy use reduction from the
analyzed baseline) for 22 out of the 28 directly analyzed equipment
classes. These 22 equipment classes account for approximately 96
percent of industry shipments covered by this final rule. In the
October 2023 NOPR, DOE estimated that approximately 11 percent of CRE
shipments would meet the proposed standards by 2028, a year before the
analyzed compliance year. Comparatively, DOE estimates that
approximately 49 percent of CRE shipments would meet the standards
adopted in this final rule by the analyzed compliance date. Based on a
review of its CCD and market research conducted in support of its
direct employment analysis, DOE understands that a range of OEMs with
domestic CRE manufacturing facilities already offer models that meet
the efficiency levels adopted in this final rule. Specifically, DOE
identified 30 OEMs with domestic manufacturing facilities that sell the
five highest shipments volume equipment classes (VCS.SC.L, VCS.SC.M,
VCT.RC.M, VCT.SC.L, and VCT.SC.M). Of those 30 OEMs, only 3
manufacturers do not have any models that meet TSL 3. Approximately
half of these 30 OEMs, including the largest CRE manufacturer (in terms
of sales volume), currently make CRE exclusively in domestic production
facilities.
c. Laboratory Resource Constraints
In response to the October 2023 NOPR, NAFEM, Hoshizaki, SCC,
Hillphoenix, Hussmann, and AHRI all expressed concerns that third-party
laboratories already have backlogs and are experiencing delays, meaning
that new and amended standards for CRE could exacerbate the issue and
require more internal testing and third-party testing. (NAFEM, No. 83
at pp. 12-13; Hoshizaki, No. 76 at p. 2; SCC, No. 74 at p. 1;
Hillphoenix, No. 77 at p. 3; Hussmann, No. 80 at p. 1; AHRI, No. 81 at
p. 2) SCC stated that there is a 3-to-6-month backlog at NRTLs from the
October 2023 EPA Final Rule and UL safety standards. (SCC, No. 74 at p.
1) SCC commented that estimates are up to several years just for
certification of a manufacturer's full catalog, and testing for UL
60335-2-89 will extend the time needed to test and comply for each CRE
model family using new refrigerants. (Id. at pp. 1, 2)
In response to the August 2024 NODA, Hussmann commented amendments
to UL/CSA 60335-1 and 60335-2-89 requires critical resources,
laboratory space, and time. Hussmann stated that these amendments would
potentially extend UL approval time by up to 14 weeks. (Hussmann, No.
108 at p. 2) In response to the October 2023 NOPR and August 2024 NODA,
Hussmann commented that the backlog at NRTLs will lead to certification
delays both for its equipment and components from its suppliers.
(Hussmann, No. 80 at p. 1; Hussmann, No. 108 at p. 1) Hillphoenix
stated that changes to CRE designs require OEMs to retest to standards
from DOE, UL, NSF, ASHRAE, and AHRI. (Hillphoenix, No. 77 at p. 3) In
response to the August 2024 NODA, Hillphoenix commented the industry is
concerned with the availability of NRTLs to meet proposed standard,
regulations from EPA AIM Act, and safety standard UL 60335-2-89, and
manufacturers are using significant portions of engineering, supply
chain resources, manufacturing, and marketing to meet regulations.
(Hillphoenix, No. 110 at p. 2) In response to the October 2023 NOPR,
Hoshizaki commented that the refrigerant changes required by 2026,
energy conservation standards for ACIMs and CRE by 2027-2028, the new
UL safety standard, and NSF sanitation testing for new ice-making
systems will push its testing laboratories to capacity, requiring
Hoshizaki to rely on third-party laboratories for safety testing.
(Hoshizaki, No. 76 at p. 6)
AHRI stated that manufacturers are currently switching to low-GWP
refrigerants, and DOE rulemakings increase pressure on laboratory
availability, testing capacity, and component availability. (AHRI, No.
81 at p. 2) AHRI stated manufacturers are facing regulatory burdens of
DOE rulemakings for ACIMs and WICFs, the October 2023 EPA Final Rule,
UL 60335-89-2 and UL 60335-4-40 safety standards, and PFAS regulations,
all of which constrain manufacturers' engineering resources, testing
validation, verification time, and sourcing components, and constrain
independent laboratory testing from low-GWP refrigerants. (Id. at pp.
2, 5) AHRI further asserted that EPA and DOE rulemakings regulations
pose a high risk for manufacturers to be unable to meet all
requirements in the required timeframes. (Id. p. 2) AHRI commented that
conversion of CRE to larger refrigerant charges over 150 grams is a
significant, design-intensive process spanning multiple years and
requiring project management, product management, industrial
engineering, maintenance, quality, finance, marketing, design
engineering, and compliance. (Id. at p. 14) AHRI commented that, as of
September 29, 2024, new CRE can only be certified to UL 60335-2-89 and
any significant equipment modifications for each model family must be
certified to UL 60335-2-89--including to CRE using A2L refrigerant or
an A3 refrigerant with charge larger than 150 grams. (Id. at pp. 2, 5)
AHRI stated that manufacturers' third-party national laboratories for
UL 60335-2-89 require special sensory equipment that will further limit
laboratory capabilities and double the testing time of larger units.
(Id. at p. 14) Specifically, AHRI commented that laboratory testing
time for larger-charged units will double from less than 1 week to
nearly 2 weeks, with additional testing required, including end-use
lower-flammability limit component testing, annex CC testing, and
vibration testing. (Id. pp. 14-15)
Hoshizaki commented that UL safety standard 60335-2-89 requires
extensive review of refrigeration equipment, which will increase
testing and approval time for each model. (Hoshizaki, No. 76 at p. 2)
Hoshizaki elaborated that manufacturers will need more testing
equipment, testing time, and training for engineers. (Id.) Hoshizaki
commented that changes to safety and energy testing have more than
doubled the testing time for each model family as a result of UL safety
standards, Intertek safety certification, and ASHRAE 29 and 72
standards. (Id. at p. 6) Hoshizaki requested that DOE investigate if
NRTLs are expanding to meet the higher testing demand for the use of
flammable refrigerants. (Id.) Hoshizaki commented that manufacturers
will need additional time to complete all the necessary testing
involved for CRE that require redesign as a result of new and amended
standards due to the existing ``backlog'' of third-party laboratories.
(Id. at pp. 1-2) Hoshizaki commented that more than 100 of its CRE
models will be affected by the energy conservation standards proposed
in the October 2023 NOPR, and corresponding UL safety and NSF
sanitation testing will be difficult or impossible to complete within
the 3-year compliance period. (Id. at pp. 6-7)
[[Page 7570]]
In response to the August 2024 NODA, NAMA acknowledged DOE's assessment
of the increased testing costs associated with new UL safety standards.
(NAMA, No. 112 at p. 5) NAMA asserted that the cost of DOE testing for
energy efficiency will increase noting that 2 units need to be tested.
(Id at p. 6).
Hussmann commented that compliance to UL 60335-2-89 uses critical
resources, laboratory space, and time for new components and design
modifications. (Hussmann, No. 80 at p. 2) Hussmann asserted that its
testing laboratories and personnel are at capacity. (Id. at p. 1) In
the October 2023 NOPR and August 2024 NODA, Hussmann commented
manufacturers will commit 1 to 3 years of laboratory time and
significant resource investment to test to UL standards when evaluating
the performance of new A3 or A2L components from the October 2023 EPA
Final Rule. (Id. at p. 2; Hussmann, No. 108 at p. 1) Hillphoenix
commented that UL 60335-2-89 requires all new CRE to be certified if
using most end-uses of A2Ls and larger charges or R-290, which requires
more testing, equipment markings, instructions, and modifications to
meet the safety requirements. (Hillphoenix, No. 77 at p. 3) Hillphoenix
commented that UL 60335-2-89 requires significantly more testing
potentially and substantial modifications to meet the safety
requirements. (Id.) Hillphoenix commented that each time equipment
changes, OEMs must retest to all of these regulations and specific test
standards, and there is substantial industry concern over the
availability of NRTLs to meet the evolving regulatory landscape. (Id.)
Hillphoenix stated that a significant portion of engineering, supply
chain, manufacturing, and marketing resources are being consumed just
to meet these evolving regulations. (Id.)
NAFEM commented that the standards proposed in the October 2023
NOPR would require extensive testing for the CRE industry, which is
problematic due to bottlenecks related to changing safety and
environmental regulations at third-party testing laboratories. (NAFEM,
No. 83 at p. 12)
With respect to these comments, DOE understands that complying with
concurrent EPA and DOE regulations, compounded by changes to UL safety
standards and industry test standards, requires a significant amount of
engineering and laboratory resources for CRE manufacturers. Regarding
the redesign, testing, and certification required to develop CRE
designs that comply with the October 2023 EPA Final Rule, DOE accounts
for those refrigerant transition expenses incurred during the analysis
period (2024 to 2058) in its MIA. DOE recognizes that many CRE
manufacturers also manufacture WICFs and ACIMs, as shown in table V. in
section V.B.2.e of this document. DOE notes that the compliance dates
in the October 2023 EPA Final Rule are staggered for these equipment
categories across multiple years, rather than having a single January
1, 2025 compliance date as proposed in the December 2022 EPA NOPR.
Staggering compliance dates could lessen potential bottlenecks in the
transition to manufacture new equipment, such as testing and
certification of equipment by an NRTL. See 88 FR 73098, 73133. For
WICFs, the October 2023 EPA Final Rule established GWP restrictions for
refrigeration systems with remote condensing units in retail food
refrigeration systems and cold storage warehouses with less than 200
pounds (``lbs'') of charge, effective January 1, 2026. See id. at 88 FR
73209. The October 2023 EPA Final Rule established GWP restrictions for
ACIMs effective January 1, 2026 or January 1, 2027, depending on the
ACIM equipment category. See id. at 88 FR 73165. Regarding potential
DOE standards for WICFs and ACIMs, DOE notes that it issued a final
rule amending standards for WICFs on November 29, 2024, with compliance
required for WICF refrigeration systems starting December 31, 2028
(approximately 1 year later than what was proposed, see 88 FR
60746).\135\ At this time, DOE has proposed but has not finalized new
and amended standards for ACIMs. See 88 FR 30508. In this final rule,
DOE is adopting a 4-year compliance period (modeled as a 2029
compliance year), providing manufacturers an additional year compared
to the October 2023 NOPR to complete the necessary testing and redesign
needed to meet the adopted standards. As such, DOE expects that any
energy conservation standards compliance dates for CRE, WICFs, and
ACIMs (should DOE adopt more stringent standards) will be staggered.
---------------------------------------------------------------------------
\135\ At the time of issuance of this final rule, the WICFs
final rule has been issued and is pending publication in the Federal
Register. Once published, the final rule pertaining to WICFs will be
available at: www.regulations.gov/docket/EERE-2017-BT-STD-0009.
---------------------------------------------------------------------------
Regarding stakeholders' comments on the increase in per-unit
testing burden as a result of the transition to UL 60335-2-89, DOE
updated its product conversion costs to reflect the increase in testing
burden. As discussed in section IV.J.2.c of this document, DOE doubled
the costs associated with testing and certifying to the new UL safety
standard in response to written comments and secondary research.
d. Supply Chain
In response to the October 2023 NOPR, NAMA asserted that DOE has
not addressed the lack of available components in the supply chain.
(NAMA, No. 85 at p. 15) Hoshizaki, Hussmann, and AHRI commented that
manufacturers experience long lead times and shortages of components,
including electronic controls, fan motors, compressors, sheet metal,
and plastic resin. (Hoshizaki, No. 76 at pp. 5-6; Hussmann, No. 80 at
p. 13; AHRI, No. 81 at pp. 12-13) Hussmann and AHRI commented that
COVID-19 impacted the supply chain for computer chips and, while the
situation is improving, shortages and long lead times for electrical
components, materials, and parts remain. (Hussmann, No. 80 at p. 13;
AHRI, No. 81 at pp. 12-13) In response to the August 2024 NODA,
Hussmann commented that the industry faces supply chain issues related
to A2L components, standard supply chain issues prevalent since COVID-
19, time constraints, resource constraints, and laboratory capacity
limitations, and a learning curve to understand new baseline energy
usage. (Hussmann, No. 108 at p. 2) In response to the October 2023
NOPR, AHRI commented that supply chain issues for electrical components
requires that CRE OEMs continually redesign equipment to adapt to new
electronic controls. (AHRI, No. 81 at p. 13) AHRI added that
manufacturers experience high component prices; uncertainty around PFAS
regulations; long lead times for variable-speed compressors, variable-
speed fans, variable-speed drives, system controllers, and ECMs;
electronic component redesign; backlogs for components to certify to
both UL 60335-2-40 and UL 60335-2-89; time for sourcing alternative
components; and additional reliability testing of new components. (Id.)
Hussmann commented that electronic component shortages forced a
supplier to discontinue several fan motors and assemblies, abandon
adjustable-speed motors in ``Insight Merchandisers'',\136\ and source
EEVs and case controllers, taking several months, which constrains
engineering resources. (Hussmann, No. 80 at p. 13) Hussmann also
commented that computer chips and controller shortages have resulted in
$10,000 in
[[Page 7571]]
laboratory costs to conduct reliability testing, performance validation
testing on CRE cases, and UL and NSF testing and validation. (Id. at
pp. 1, 13) Hussmann stated that more shortages may occur if more
controllers or computer chips are required to meet proposed standards,
particularly if the United States imposes a ban on semi-conductors from
China (Section 5949 of the National Defense Authorization Act). (Id. at
p. 13)
---------------------------------------------------------------------------
\136\ www.hussmann.com/en/products/display-cases/insight-merchandisers#p=48. (Last accessed October 8, 2024).
---------------------------------------------------------------------------
In response to the August 2024 NODA, Delfield commented the
proposed standards would have a significant impact on manufacturers in
terms of testing, development, and overall business resources, which
may negatively impact equipment availability. (Delfield, No. 99 at p.
1) Delfield stated that if the supply chain is not equipped for all
most manufacturers to move to new tooling and components, it could
result in production delays. (Id.)
In response to comments about supply chain issues, DOE notes that
for the August 2024 NODA and this final rule, DOE updated its
engineering analysis to incorporate up-to-date cost estimates.
Increased costs associated with recent supply chain challenges stemming
from the COVID-19 pandemic have been incorporated into the cost
analysis by way of 5-year moving averages for materials and up-to-date
costs for purchased parts. DOE expects manufacturers would most likely
incorporate design options that require more electronic components
(e.g., ECMs, variable-speed compressors) to meet the standards adopted
in this final rule. However, based on the engineering and teardown
analyses as well as comments from manufacturers (see AHRI, No. 81 at
pp. 4-5; Delfield, No. 71 at p. 1; Hussmann, No. 80 at p. 10), DOE
understands that the use of advanced electronics (e.g., EC fan motors
and controls for fans) is already prevalent in the CRE industry. For
this final rule, DOE expects that 10 directly analyzed equipment
classes, which account for 50 percent of self-contained CRE shipments
(approximately 43 percent of total industry shipments), would likely
need to incorporate variable-speed compressors to meet TSL 3. However,
for those 10 equipment classes, 30 percent of shipments already meet
TSL 3 efficiencies. Additionally, as discussed in section III.A.2.a of
this document, DOE is extending the compliance period from 3-years
analyzed in the October 2023 NOPR to 4-years for this final rule. The
4-year compliance period provides some economic and regulatory
certainty to component suppliers and manufacturers, which eases supply
constraints on components that manufacturers may need in order to meet
the new and amended standards.
e. Cumulative Regulatory Burden
In response to the October 2023 NOPR, AHRI appreciated that DOE
recognizes the cumulative regulatory burden associated with regulatory
initiatives of multiple Federal agencies and standards-setting bodies,
which includes DOE energy conservation standards for CRE, WICF, and
ACIM rulemakings occurring simultaneously with refrigerant regulation
such as the October 2023 EPA Final Rule, and changes to UL safety
standards, State regulations, etc. (AHRI, No. 81 at pp. 13-14) AHRI
commented that all these regulatory actions entail costs, engineering
design time, testing validation and verification time, establishment of
new supply chains, and independent laboratory testing. (Id. at p. 14)
AHRI commented also that DOE's proposed changes to medium electric
motors and expanded-scope electric motors (``ESEMs'')--formerly named
small non-small electric motors--in 2027 would also have an impact on
CRE manufacturers and may require equipment changes to account for
larger motors, additional testing, safety agency approval, backward
compatibility for the replacement market, and cost increases for
higher-efficiency motors. (Id.) AHRI stated that these factors make
DOE's 3-year compliance period analyzed in the October 2023 NOPR
infeasible, as meeting the standards would require substantial
investment, resources, and innovation by manufacturers. (Id.) Hussmann
commented that it incorporated by reference AHRI's comment that there
is a cumulative regulatory burden associated with the October 2023
NOPR. (Hussmann, No. 80 at p. 14) Hussmann similarly emphasized that
the motors rulemakings could also impact CRE manufacturers. (Id.)
Hoshizaki commented that ACIM and CRE regulations have converging
compliance dates for new safety regulations, the refrigerant
transition, and DOE energy conservation standards. (Hoshizaki, No. 76
at p. 6) Hoshizaki added that industry is still trying to understand
the scope of change needed for the transition to UL 60335-2-89, which
is required for most commercial refrigeration categories starting in
September 2024. (Id.) Hoshizaki commented that it is also tracking the
development of chemical (e.g., PFAS) regulations. (Id. at p. 7)
SCC similarly commented that the cumulative regulatory burden from
EPA refrigerant regulations, new safety standards, DOE's ACIM and WICF
energy conservation standards rulemakings, and PFAS reporting make it
challenging to analyze and comply with these regulations within the
required timeframes. (SCC, No. 74 at pp. 1, 4) SCC emphasized that each
rulemaking requires significant engineering time, capital costs,
testing validation, and independent laboratory certification. (Id. at
p. 4) SCC commented that 3 years is an insufficient amount of time to
comply with the standards proposed in the October 2023 NOPR, given the
cumulative regulatory burden from overlapping rulemakings. (Id.)
Hussmann highlighted that many State and local building codes
prohibit the use of A2Ls and must be updated outside of the normal
cycle of building code revisions, which commonly take 2 to 5 years to
complete. (Hussmann, No. 80 at p. 2) Hussmann commented only eight
States have updated their codes to allow A2L refrigerants in CRE, and
more than 20 States and all U.S. territories have not yet passed
legislation authorizing the use of A2L refrigerants for CRE. (Id.)
Hussmann commented that manufacturers currently face uncertainty around
the use of A2L but stated that AHRI is dedicating resources to allow
A2Ls in CRE in all States and territories to allow A2Ls in building
codes by mid-2024. (Id.; see also AHRI, No. 81 at p. 2) In response to
the August 2024 NODA, NAMA requested that DOE consider the regulatory
burden associated with changing State and local building codes. NAMA
commented that National, State, and local building codes may not be
finalized before the proposed compliance date for CRE. (NAMA, No. 112
at pp. 4, 9) If building codes are not updated, NAMA asserted that
manufacturers may build two versions of models with either R-290
refrigerants or a blend of low-GWP refrigerants and higher-GWP
refrigerants. (Id. at p. 4)
In response to the October 2023 NOPR and August 2024 NODA, Hussmann
commented that it faces simultaneous UL 60335-2-89, NSF, FDA, EPA, and
DOE rulemakings, as well as issues related to A2L supply chain, other
supply chain issues, time constraints, resource constraints, retooling
costs, investments for R&D for CRE and walk-in refrigerators and
freezers, and laboratory and capacity limitations. (Hussmann, No. 80 at
p. 2 and Hussmann, No. 108 at p. 1) NAFEM commented that its members
face overlapping regulations from Federal,
[[Page 7572]]
State, local, and industrial authorities: the October 2023 EPA Final
Rule will have an impact on energy efficiency, UL 60335-2-89 will have
a multi-year impact, equipment must meet NSF sanitation requirements,
and all equipment must comply with ASHRAE safety requirements. (NAFEM,
No. 83 at p. 16) NAFEM commented that many CRE manufacturers must also
accommodate changes in ACIMs during a similar timeframe. (Id. at p. 13)
NAMA commented the industry has experienced regulatory pressure for 5
years, citing DOE's March 2014 Final Rule with compliance in 2017, new
ENERGY STAR levels, State-level refrigerant regulations, COVID-19,
inflation, and labor shortages for skilled workers. (NAMA, No. 85 at
pp. 3-4) In response to the October 2023 NOPR and August 2024 NODA,
NAMA commented that cumulative regulatory burden should include changes
necessary to adhere to local and State building codes. (NAMA, No. 85 at
p. 18 and NAMA, No. 112 at p. 7) NAMA stated California, Oregon,
Washington, and other States have changed refrigerant regulations,
including retiring HFC refrigerants. (NAMA, No. 85 at p. 17)
With respect to comments regarding the regulatory burden, DOE
recognizes that the CRE industry faces overlapping regulations from
Federal, State, local, and industrial entities. DOE analyzes and
considers the impact on manufacturers of multiple product/equipment-
specific Federal regulatory actions. DOE analyzes cumulative regulatory
burden pursuant to section 13(g) of the Process Rule. 10 CFR 431.4; 10
CFR 430, subpart C, appendix A, section 13(g). DOE notes that
regulations not yet finalized (e.g., DOE energy conservation standards
for ACIMs and BVMs) are not considered as cumulative regulatory burden,
as the timing, cost, and impacts of unfinalized rules are speculative.
However, to aid stakeholders in identifying potential cumulative
regulatory burden, DOE does list rulemakings that have proposed rules
with tentative compliance dates, compliance levels, and compliance cost
estimates. The results of this analysis can be found in section V.B.2.e
of this document. As shown in table V.67 in section V.B.2.e of this
document, DOE considers the potential cumulative regulatory burden from
other DOE energy conservation standards rulemakings for a range of DOE
rulemakings, including WICFs, in this final rule analysis. DOE also
considers the cost to comply with the October 2023 EPA Final Rule in
its analysis. DOE estimates industry will need to invest $13.6 million
in R&D and $17.7 million in capital expenditures to transition to low-
GWP refrigerants over the next 2 years.
Regarding the comments about EPA's 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 updates to State and local building codes allowing A2L
refrigerants in CRE, DOE understands that building codes can limit
refrigerants available for use in certain end-uses, including CRE,
based on their flammability, the charge size of the equipment, and
other relevant safety factors. Building codes are established at the
subnational level and can differ greatly across jurisdictions. DOE
understands that, in some cases, jurisdictions still need to update
their building codes for some substitutes to be available for certain
uses. Subsection (i)(4)(B) of the AIM Act, codified at 42 U.S.C. 7675,
directs EPA, to the extent practicable, to take building codes into
account in its consideration of availability of substitutes when
establishing refrigerant restrictions. As such, the October 2023 EPA
Final Rule considered whether current building codes permit the
installation and use of equipment and systems using substitutes,
particularly with respect to setting compliance dates for refrigerant
restrictions. As discussed in the October 2023 EPA Final Rule, EPA
found it reasonable to consider that jurisdictions will prioritize
completing the necessary updates with the October 2023 EPA Final Rule
compliance dates in mind. 88 FR 73098, 73135-73136. For many
subsectors, including remote condensing CRE equipment classes, the
October 2023 EPA Final Rule provided additional time to comply with
refrigerant restrictions as compared to the December 2022 EPA NOPR to
enable jurisdictions to update their building codes or legislation
accordingly. Id. at 88 FR 73136. DOE notes that the compliance dates
detailed in the October 2023 EPA Final Rule for categories relevant to
CRE are 2 to 4 years earlier than the compliance date for new and
amended CRE energy conservation standards. As such, DOE anticipates
that building codes should not impact a manufacturer's ability to
transition to A2L refrigerants by the DOE compliance year. See section
IV.C.1.a of this document for additional discussion on building codes.
Regarding the ESEM proposed rule published on December 15, 2023,
DOE expects that CRE covered by the ESEM rulemaking would not be
directly impacted because the motors used in CRE are typically below
0.25 horsepower, and, thus, are outside the scope of the ESEM
rulemaking. See 88 FR 87062. Furthermore, as DOE did not identify any
CRE manufacturers that also manufacture ESEMs, DOE did not include CRE
manufacturers in the ESEM proposed rule in its cumulative regulatory
burden analysis. Regarding potential PFAS regulations restricting the
use of certain A2L refrigerants, DOE notes that EPA has not yet
proposed any regulations concerning the use of PFAS in refrigerants.
DOE notes that EPA's ``PFAS Strategic Roadmap'' sets timelines for
specific actions and outlines EPA's commitments to new policies to
safeguard public health, protect the environment, and hold polluters
accountable.\137\
---------------------------------------------------------------------------
\137\ U.S. Environmental Protection Agency, ``Per- and
Polyfluoroalkyl Substances (PFAS).'' Available at: www.epa.gov/pfas
(last accessed October 23, 2024).
---------------------------------------------------------------------------
Regarding State refrigerant regulations, those transition costs are
reflected in the refrigerant transition costs estimated in this final
rule (see section V.B.2.e of this document). DOE notes that two States
have established GWP limits for certain remote-condensing CRE that are
lower (i.e., more restrictive) than the October 2023 EPA Final Rule for
some CRE categories. Specifically, California and Washington prohibited
refrigerants with a GWP of 150 or greater for new retail food
refrigeration equipment containing more than 50 lbs refrigerant, which
includes certain self-contained and remote-condensing CRE, as of
January 1, 2022 in California \138\ and as of January 1, 2025 in the
State of Washington.\139\ Because CRE connected to a remote condensing
unit can be connected to multiple types of remote condensing systems
with varying refrigerant charge sizes (e.g., dedicated condensing unit
or compressor rack system), and State regulations align with the most
restrictive GWP limit in the October 2023 EPA Final Rule for CRE, DOE
does not expect that individual State refrigerant regulations would
further contribute to refrigerant transition costs beyond what was
assessed for the October 2023 EPA Final Rule for the equipment covered
by this final rule. DOE is already basing its engineering analysis on
the most restrictive GWP
[[Page 7573]]
limit (i.e., 150 GWP) to account for the potential variation in remote
condensing system refrigerant charge sizes.
---------------------------------------------------------------------------
\138\ California Air Resource Board, ``California Significant
New Alternatives Policy (SNAP).'' Available at ww2.arb.ca.gov/our-work/programs/california-significant-new-alternatives-policy-snap/retail-food-refrigeration (last accessed May 23, 2024).
\139\ State of Washington Department of Ecology, WAC 173-443-
040. Available at app.leg.wa.gov/WAC/default.aspx?cite=173-443-040
(last accessed May 23, 2024).
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In response to the October 2023 NOPR and August 2024 NODA, NAMA
commented that DOE should investigate the cumulative burden of the
ongoing BVM rulemaking and combine the costs of compliance with
multiple regulations into the product conversion costs and GRIM
spreadsheets to reflect the costs of responding to and monitoring
regulations. (NAMA, No. 85 at pp. 17-18; NAMA, No. 112 at p. 8) NAMA
added the GRIM does not show recoupment of investments from multiple
product regulations within the six-year lock-in period and recommends
DOE consolidate analysis for multiple regulations. (NAMA, No. 112 at p.
8)
Regarding incorporating the combined product conversion costs from
the BVM rulemaking into the CRE GRIM (and vice versa), DOE is concerned
that combined results would make it more difficult to discern the
direct impact of a new or amended standard on covered manufacturers,
particularly for rulemakings where there is only partial overlap of
manufacturers, which is the case for BVMs and CRE. The GRIM prepared
for this rulemaking is specific to the CRE industry. Inputs to the GRIM
such as annual shipments, production costs, conversion costs, cost
structure, discount rate, etc., reflect the CRE industry. As such, MIA
results only encompass industry revenue and annual cash flow associated
with shipments of CRE covered by this specific rulemaking. If DOE were
to combine the conversion costs from multiple regulations into the CRE
GRIM, as requested, it would be appropriate to also include the
combined revenues of the relevant regulated products or equipment. For
rulemakings with only a partial overlap of manufacturers, conversion
costs would be spread over a larger revenue base and result in less
severe INPV impacts when evaluated on a percent change basis. For
instance, of the 5 BVM manufacturers and of the 103 CRE manufacturers,
only 1 manufacturer makes both BVMs and CRE.
In response to the October 2023 NOPR, Zero Zone expressed concern
about the third segment of the AIM Act, which regards managing HFC use
and reuse. (Zero Zone, No. 75 at p. 1) Zero Zone commented that this
proposed regulation has requirements for leak detection and repair that
would increase the purchase and operating cost of refrigerating
equipment, and the phasedown of HFC refrigerant will increase the cost
of equipment for stores. (Id.) Zero Zone commented that those cost
changes in addition to the costs of design changes to meet the proposed
energy conservation standard will reduce overall industry sales volume,
which would be detrimental to manufacturers. (Id.)
On October 19, 2023, EPA published a proposed rule in the Federal
Register to address and control certain activities regarding the
servicing, repair, disposal, or installation of equipment that involves
HFCs or their substitutes. 88 FR 72216. On October 11, 2024, EPA
finalized its proposed rule. 89 FR 82682. DOE anticipates that EPA's
rule may necessitate additional components or design changes (e.g.,
automatic leak detection) in certain CRE covered by this rulemaking.
Zero Zone's comment did not quantify the increase in cost to CRE within
the scope of this final rule. However, DOE expects that any costs
associated with complying with EPA's rule would apply to relevant CRE
models at all efficiency levels regardless of the energy conservation
standard adopted in this final rule. Because the cost impacts from
EPA's rule are not efficiency-related costs but rather would be
incurred due to EPA requirements that are applicable at all efficiency
levels, DOE has not considered the impacts of these changes on MPCs in
this final rule. See section IV.C.2 of this document for additional
information on DOE's cost analysis.
f. Refrigerant Transition
In response to the October 2023 NOPR, NAFEM commented that the
October 2023 NOPR fundamentally ignores the context of other
significant changes impacting the CRE industry at this time. (NAFEM,
No. 83 at p. 16) NAFEM commented that DOE is not accounting for the
significant capital and other investments that were made, and continue
to be made, in the shift to new refrigerants under the AIM Act. (Id. at
p. 15) NAFEM asserted that DOE's analysis does not account for
manufacturers trying to recover the costs of these substantial
investments made to comply with the October 2023 EPA Final Rule. (Id.)
NAFEM commented that, contrary to the information in the October 2023
NOPR, the changeover to natural refrigerants is underway but not
complete in the CRE industry, mostly because necessary capital
improvements are extremely expensive, far more than those listed in the
October 2023 NOPR TSD. (Id.)
AHRI commented that manufacturers have delayed their refrigerant
transition due to COVID-19, component shortages, and long lead times.
(AHRI, No. 81 at p. 8) AHRI stated that equipment designs will be
impacted by the October 2023 EPA Final rule, which will go into effect
in 2025 for self-contained equipment classes and 2026 or 2027 for
remote condensing equipment classes. (Id.) AHRI commented that DOE did
not include any increase in capital costs for the conversion from R-
404A to R-290 refrigerant in the baseline assessment. (AHRI, No. 81 at
p. 7)
In response to both the October 2023 NOPR and August 2024 NODA,
NAMA commented that the CRE industry is burdened by the ongoing
transition to low-GWP refrigerants and new safety standards, which
require capital improvements to factories, changes to service, and
training of factory employees. (NAMA, No. 85 at p. 4; NAMA, No. 112 at
p. 5) In particular, NAMA commented that DOE underestimated the capital
costs associated with transitioning to low-GWP refrigerants. (Id. at
pp. 4, 8) NAMA commented also that while the October 2023 NOPR TSD
acknowledges the need to change multiple components, the product and
capital costs shown are far below what manufacturers must incur to
fully implement the use of A3 refrigerants. (NAMA, No. 85 at pp. 7-8)
NAMA stated that the costs of converting to alternative, low-GWP
refrigerants has cost millions of dollars for its members, which has
been particularly challenging since sales have been down and labor and
materials costs have increased. (NAMA, No. 85 at p. 35) NAMA stated its
belief that the cost of the refrigerant transition has diverted
business resources. (Id. at p. 3) NAMA asserted that the cost of the
refrigerant transition is higher than the estimated amount in the
October 2023 NOPR TSD, especially due to current interest rates, which
increase the cost of short-term and long-term borrowing. (Id.) NAMA
commented that new or amended energy conservation standards from DOE
would increase the time to transition CRE to low-GWP refrigerants due
to supply chain issues and limited staffing for some manufacturers.
(Id. at p. 8)
In response to the October 2023 NOPR and August 2024 NODA, Hussmann
commented that complying with the October 2023 EPA Final rule
necessitates changes to its manufacturing processes, retooling of
equipment, and R&D investment. (Hussmann, No. 80 at p. 1; Hussmann No.
108 at p. 1) Hussmann commented that there are supply chain constraints
surrounding sourcing components for CRE using A2L refrigerants since
components are pending third-party regulatory compliance. (Id.)
Hussmann stated that because A2L components are
[[Page 7574]]
new, components must be purchased, designed, installed in models, and
undergo performance and safety validation. (Id.) Hussmann stated A2L
components also require UL certification. (Hussmann, No. 108 at p. 1)
Hussmann commented that its costs of transitioning one factory to low-
GWP refrigerants included: $700,000 for engineering resources, $500,000
in testing, $600,000 in laboratory equipment, $10,000 in certification
costs, $300,000 in manufacturing efforts for self-contained equipment,
and $500,000 for manufacturing equipment for self-contained equipment.
(Hussmann, No. 80 at p. 15) In response to the August 2024 NODA, the CA
IOUs agreed with DOE's analysis that manufacturer R&D costs will
increase due to the revised compliance dates for CRE from the October
2023 EPA final rule. (CA IOUs, No. 113 at p. 2)
In response to the comments from NAFEM, AHRI, NAMA, the CA IOUs and
Hussmann, DOE recognizes that redesigning CRE models to comply with
EPA's refrigerant regulation and DOE's new and amended energy
conservation standards requires significant engineering resources and
capital investment. DOE analyzed the potential impacts of the December
2022 EPA NOPR in its October 2023 NOPR. Based on the December 2022 EPA
NOPR, DOE modeled the CRE industry transitioning to low-GWP
refrigerants prior to EPA's proposed January 1, 2025 compliance date.
However, EPA has since finalized refrigerant restrictions affecting CRE
(i.e., the October 2023 EPA Final rule). The October 2023 EPA Final
rule prohibits the manufacture or import of self-contained CRE with
HFCs and HFC blends with GWPs of 150 or greater starting January 1,
2025 (for the CRE covered by this rulemaking). For other CRE covered by
this rulemaking, the October 2023 EPA Final rule adopted later
compliance dates of January 1, 2026 or January 1, 2027 based on
equipment type.
DOE notes that it accounts for industry refrigerant transition
expenses in its GRIM in the no-new-standards case and standards cases
because investments required to transition to low-GWP refrigerants in
response to the October 2023 EPA Final Rule likely necessitates a level
of investment beyond typical annual R&D and capital expenditures. DOE
incorporates these expenses into its GRIM as part of the analytical
baseline to better reflect the state of industry finances and annual
cash flow. For the October 2023 NOPR, DOE relied on a range of sources,
including feedback gathered during confidential manufacturer interviews
and investment estimates submitted by NAMA and AHRI in response to the
June 2022 Preliminary Analysis. In response to written comments to the
October 2023 NOPR, DOE revised its refrigerant transition R&D estimates
(see Hussmann, No. 80 at p. 15). DOE did not revise its estimates of
refrigerant transition capital expenditures as stakeholder feedback
aligned with the methodology used in the October 2023 NOPR. Based on
these sources, DOE modeled the transition to low-GWP refrigerants would
require industry to invest approximately $13.6 million in R&D and $17.7
million in capital expenditures (e.g., investments in new charging
equipment, leak detection systems, etc.) from 2024 (the final rule
reference year) and 2027 (the latest EPA compliance date for CRE
covered by this rulemaking). However, DOE acknowledges that many
manufacturers have made significant investments to transition to low-
GWP refrigerants prior to 2024, which would not reflected in the GRIM
as those costs were incurred outside of the analysis period for this
rulemaking (2024-2058). See section V.B.2.e of this document for
additional discussion of how DOE accounts for cumulative regulatory
burden in its analysis. DOE incorporated the potential redesign costs
(i.e., product conversion costs) and capital investment (i.e., capital
conversion costs) needed to meet various standard levels in its MIA.
See section IV.J.2.c of this document for additional discussion of
conversion costs.
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 GHG, CH4 and N2O, as
well as the reductions in 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 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 final rule 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
EPA.\140\
---------------------------------------------------------------------------
\140\ Available at www.epa.gov/sites/production/files/2021-04/documents/emission-factors_apr2021.pdf (last accessed July 22,
2024).
---------------------------------------------------------------------------
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 final rule TSD.
The emissions intensity factors are expressed in terms of physical
units per MWh or MMBtu of site energy savings. For power sector
emissions, specific emissions intensity factors are calculated by
sector and end use. Total emissions reductions are estimated using the
energy savings calculated in the NIA.
1. Air Quality Regulations Incorporated in DOE's Analysis
DOE's no-new-standards case for the electric power sector reflects
the AEO, which incorporates the projected impacts of existing air
quality regulations on emissions. 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.\141\
---------------------------------------------------------------------------
\141\ 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 July 20, 2024).
---------------------------------------------------------------------------
SO2 emissions from affected electric generating units
(``EGUs'') are subject to nationwide and regional emissions cap-and-
trade programs. Title IV of the Clean Air Act sets an annual emissions
cap on SO2 for affected EGUs in the 48 contiguous States and
the District of Columbia (``DC''). (42 U.S.C. 7651 et seq.)
SO2 emissions from numerous States in the eastern half of
the United States are also limited under the Cross-State Air Pollution
Rule (``CSAPR''). 76 FR 48208 (Aug. 8, 2011). CSAPR requires these
States to reduce certain emissions, including annual SO2
emissions, and went into effect as of January 1, 2015.\142\ The AEO
[[Page 7575]]
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, for States subject to SO2
emissions limits under CSAPR, 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.
---------------------------------------------------------------------------
\142\ CSAPR requires States to address annual emissions of
SO2 and NOX, precursors to the formation of
fine particulate matter (``PM2.5'') pollution, in order
to address the interstate transport of pollution with respect to the
1997 and 2006 PM2.5 National Ambient Air Quality
Standards (``NAAQS''). CSAPR also requires certain States to address
the ozone season (May-September) emissions of NOX, a
precursor to the formation of ozone pollution, in order to address
the interstate transport of ozone pollution with respect to the 1997
ozone NAAQS. 76 FR 48208 (Aug. 8, 2011). EPA subsequently issued a
supplemental rule that included an additional five States in the
CSAPR ozone season program, 76 FR 80760 (Dec. 27, 2011)
(Supplemental Rule), and EPA issued the CSAPR Update for the 2008
ozone NAAQS. 81 FR 74504 (Oct. 26, 2016).
---------------------------------------------------------------------------
However, beginning in 2016, SO2 emissions began to fall
as a result of the Mercury and Air Toxics Standards (``MATS'') for
power plants.\143\ 77 FR 9304 (Feb. 16, 2012). The final rule
establishes power plant emission standards for mercury, acid gases, and
non-mercury metallic toxic pollutants. 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 will generally reduce
SO2 emissions. DOE estimated SO2 emissions
reduction using emissions factors based on AEO2023.
---------------------------------------------------------------------------
\143\ 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. Depending on the configuration of the power sector in the
different regions and the need for allowances, however, NOX
emissions might not remain at the limit in the case of lower
electricity demand. That would mean that 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. 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 final rule, for the purpose of
complying with the requirements of Executive Order 12866, DOE
considered the estimated monetary benefits from the reduced emissions
of CO2, CH4, N2O, NOX, and
SO2 that are expected to result from each of the TSLs
considered. In order to make this calculation analogous to the
calculation of the NPV of consumer benefit, DOE considered the reduced
emissions expected to result over the lifetime of equipment shipped
during 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 final rule.
1. Monetization of Greenhouse Gas Emissions
To monetize the climate benefits of reducing GHG emissions, the
October 2023 NOPR used the interim social cost of greenhouse gases
(``SC-GHG'') 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
Interagency Working Group on the SC-GHG (``IWG'') (``2021 Interim SC-
GHG estimates''). As a member of the IWG involved in the development of
the February 2021 SC-GHG TSD, DOE agreed that the 2021 interim SC-GHG
estimates represented the most appropriate estimate of the SC-GHG until
revised estimates were developed reflecting the latest, peer-reviewed
science. See 87 FR 78382, (Dec. 21, 2022) 78406-78408 for discussion of
the development and details of the 2021 interim SC-GHG estimates. The
IWG has continued working on updating the interim estimates but has not
published final estimates.
Accordingly, in the regulatory analysis of its December 2023 Final
Rule, ``Standards of Performance for New, Reconstructed, and Modified
Sources and Emissions Guidelines for Existing Sources: Oil and Natural
Gas Sector Climate Review,'' the Environmental Protection Agency
(``EPA'') estimated climate benefits using a new, updated set of SC-GHG
estimates (``2023 SC-GHG estimates''). EPA documented the methodology
underlying the new estimates in the RIA for the December 2023 Final
Rule and in greater detail in a technical report entitled ``Report on
the Social Cost of Greenhouse Gases: Estimates Incorporating Recent
Scientific Advances'' (``Final Report'') that was presented as
Supplementary Material to the RIA. The 2023 SC-GHG estimates address
the recommendations of the National Academies of Science, Engineering,
and Medicine (National Academies) by incorporating recent research and
responses to public comments. The public comments include those on an
earlier sensitivity analysis contained in EPA's December 2022 proposal
in the oil and natural gas sector standards of performance rulemaking
along with comments on a 2023 external peer review of the accompanying
technical report.
On December 22, 2023, the IWG issued a memorandum directing that
when agencies ``consider applying the SC-GHG in various contexts . . .
agencies should use their professional judgment to determine which
estimates of the SC-GHG reflect the best available evidence, are most
appropriate for particular analytical contexts, and best facilitate
sound decision-making'' consistent with OMB Circular A-4 and applicable
law.
DOE has been extensively involved in the IWG process and related
work on the SC-GHGs for over a decade. This involvement includes DOE's
role as the Federal technical monitor for the seminal 2017 report on
the SC-GHG issued by the National Academies, which provided extensive
recommendations on how to strengthen and update the SC-GHG estimates.
DOE has also participated in the IWG's work since 2021. DOE technical
experts involved in this work reviewed the 2023 SC-GHG methodology and
report in light of the National Academies' recommendations and DOE's
[[Page 7576]]
understanding of the state of the science.
Based on this review, in the August 2024 NODA, DOE proposed for
public comment its preliminary determination that the updated 2023 SC-
GHG estimates, including the approach to discounting, represent a
significant improvement in estimating the SC-GHG through incorporating
the most recent advancements in the scientific literature and by
addressing recommendations on prior methodologies. That NODA presented
climate benefits using both the 2023 SC-GHG estimates and the 2021
interim SC-GHG estimates. In this final rule, DOE has not made a final
decision regarding that preliminary assessment or adoption of the
updated 2023 SC-GHG estimates, as such a decision is not necessary for
purposes of this rule. In this final rule, DOE is presenting estimates
using both the updated 2023 SC-GHG values and the 2021 interim SC-GHG
estimates, as DOE believes it is appropriate to give the public more
complete information regarding the benefits of this rule. DOE notes,
however, that the adopted standards would be economically justified
using either set of SC-GHG values, and even without inclusion of the
estimated monetized benefits of reduced GHG emissions. In future
rulemakings, DOE will continue to evaluate the applicability in context
and use our professional judgment to apply the SC-GHG estimates that
are most appropriate to use at that time.
The 2023 EPA technical report presents SC-GHG values for emissions
years through 2080; therefore, DOE did not monetize the climate
benefits of GHG emissions reductions occurring after 2080 when using
the 2023 estimates for the SC-GHG. DOE expects additional climate
impacts to accrue from GHG emissions changes post 2080, but due to a
lack of readily available SC-GHG estimates for emissions years beyond
2080 and the relatively small emission effects expected from those
years, DOE has not monetized these additional impacts in this analysis.
Similarly, the 2021 interim SC-GHG estimates include values through
2070. DOE expects additional climate benefits to accrue for products
still operating after 2070, but a lack of available SC-GHG estimates
published by the IWG for emissions years beyond 2070 prevents DOE from
monetizing these potential benefits in this analysis.
The overall climate benefits are generally greater when using the
higher, updated 2023 SC-GHG estimates, compared to the climate benefits
using the older 2021 interim SC-GHG estimates, which were used in the
July 2023 NOPR. The net benefits of the rule are positive, however,
under either SC-GHG calculation methodology; in fact, the net benefits
of the rule are positive without including any monetized climate
benefits at all. The adopted standards would be economically justified
even without inclusion of the estimated monetized benefits of reduced
GHG emissions using either methodology, therefore the conclusions of
the analysis (as presented in section V.C of this document) are not
dependent on which set of estimates of the SC-GHG are used in the
analysis or on the use of the SC-GHG at all. The adopted standard level
would remain the same under either SC-GHG calculation methodology (or
without using the SC-GHG at all).
DOE received several comments regarding its preliminary
determination on the use of the 2023 SC-GHG methodologies in the August
2024 NODA. As noted above, DOE is not making a final determination
regarding which of the two sets of SC-GHG is most appropriate to apply
here. Accordingly, DOE is not addressing in this rule comments
regarding such a final determination. Because DOE is presenting results
using both sets of estimates, however, to the extent that commenters
raised concerns about any reference to the 2023 SC-GHG methodologies,
DOE is responding to that limited set of comments here.
Commenter Pacific Gas & Electric (PG&E) et al. expressed support
for the 2023 update on SC-GHG methodologies and for use of these
estimates in DOE policy analysis. (PG&E et al., No. 113 at p. 2). PG&E
et al. stated that the use of the 2023 SC-GHG methodologies is
consistent with the Office of Management and Budget (OMB)
recommendations to use the best and most recent available estimates for
calculating the social cost of carbon. (PG&E et al., No. 113 at p. 2).
Commenters Hussman Corporation, American Lighting Association (ALA)
et al., Competitive Enterprise Institute (CEI), and National
Association of Home Builders (NAHB) expressed general opposition to the
use of a metric that monetizes carbon emissions, and they criticized
especially the use of the 2023 SC-GHG methodologies. (Hussman
Corporation, No. 108 at p. 3; ALA et al., No. 109 at p. 2; NAHB, No.
103 at p. 4). NAHB stated that, ``the monetized value of [SC-GHG] is
highly esoteric, is not tied to tangible outcomes, and will not lead to
real change intended in the EERE mission and priorities.'' NAHB further
requested that DOE limits its use of SC-GHG in the future and not use
it as a metric for setting minimum efficiency criteria. (NAHB, No. 103
at p. 4) Commenter (CEI) stated that SC-GHG is not a valid approach to
monetizing impacts from emissions.
DOE acknowledges the comments expressing general opposition to the
2023 SC-GHG methodologies and their use in these policy analyses. In
this final rule, DOE is presenting SC-GHG results using both the
interim 2021 SC-GHG estimates and the updated 2023 SC-GHG estimates.
DOE notes again that it would promulgate the same standards in these
final rules even in the absence of the benefits of the GHG reductions
achieved by the rule.
Some commenters (NAHB, ALA, et al., and the U.S. Chamber of
Commerce et al.) argued that there is a significant lack of clarity as
to how the methodology was applied and how the results were produced.
Overall, commenters requested more transparency within the modeling
process. Commenter (ALA et al.) affirmed that it may be appropriate for
DOE to examine the SC-GHG and monetization of other emissions
reductions benefits as informational if the underlying analysis is
transparent and vigorous and reviewed by properly qualified peer
reviewers. However, ALA maintained that the benefits calculated with
the SC-GHG should not be used to justify a rule given the uncertain and
ever-evolving nature of those estimates. (ALA et al., No. 109 at pp. 3-
4)
Commenter (U.S. Chamber of Commerce et al.) stated that the
December 22, 2023, IWG memo ``lacked any discussion of the
methodologies, assumptions, or models used by the EPA in revising the
estimates.'' U.S. Chamber of Commerce further criticized that while EPA
provided some technical documentation in support of its new SG-GHG
estimates, the overall lack of transparency within the decision-making
process undermines the credibility of the estimates. The group also
stated that the IWG memo does not direct agencies which values to use,
allowing agencies to use any estimate, which would lead to inconsistent
use of the SC-GHG estimates across the government. (U.S. Chamber of
Commerce et al., No. 115 at p. 3)
Because DOE is presenting climate benefits using both the 2021
interim SC-GHG estimates and the 2023 SC-GHG estimates without relying
on either set of values to justify its standards, we do not address the
substance of these comments insofar as they assess the relative merits
of the two sets of estimates. Insofar as these comments object to DOE
even referring to the 2023 SC-GHG estimates and using them for
informational purposes, DOE notes that
[[Page 7577]]
EPA made documentation available in support of the draft updated 2023
SC-GHG estimates used in the sensitivity analysis in EPA's December
2022 Regulatory Impact Analysis, as well as in support of the final
updated SC-GHG estimates used in EPA's Dec. 2023 Final Rule. This
includes the final technical report explaining the methodology
underlying the new set of SC-GHG estimates, files to support
independent replication of the SC-GHG estimates, a workbook to support
members of the public in applying the SC-GHG estimates in their own
analyses, public comments relating to SC-GHG estimates as part of the
December 2022 RIA, EPA responses to those public comments, and
extensive documentation on the peer review process, including
information about the public input opportunities in the peer review
panel selection process, the selected peer reviewers, a recording of
the peer review meeting, the peer reviewers' report, and EPA's
responses to the peer reviewers' report. EPA additionally provided
copies of all studies and reports cited in the analysis in the public
docket. (EPA RTC A-7-4).
Regarding commenter's concerns regarding IWG's lack of discussion
of the 2023 SC-GHG methodologies, insofar as this comment objects to
DOE even referring to the 2023 SC-GHG estimates and using them for
informational purposes, DOE notes that the methodologies were not
introduced in the IWG memo, but rather in an EPA proposed and final
rule and a Final Report. The IWG's lack of discussion does not appear
to be relevant.
With respect to the commenter's concern about the potential for
different agencies to use different and therefore inconsistent
estimates of the SC-GHG, this comment is not directly relevant because
DOE is presenting both the 2021 interim SC-GHG estimates and the 2023
SC-GHG estimates for this rule.
Several commenters (CEI, AHRI, and U.S. Chamber of Commerce et al.)
questioned the accuracy of the estimates produced by the 2023 SC-GHG
methodologies and called attention to uncertainties in the calculation
process. Commenters argue that due to what they view as substantial
inaccuracies and uncertainties in the methodologies, they should not be
used to justify new and more stringent energy conservation standards.
Commenter (CEI) criticizes the 2023 SC-GHG methodologies as ``too
speculative, too prone to user manipulation, and too reliant on dubious
assumptions to either justify regulatory decisions or estimate their
net benefits to the public.'' (CEI1, No. 100 at p. 2; CEI2, No. 102 at
p. 10)
Commenter (AHRI) stated that the methodology fails to acknowledge
uncertainties and extrapolations regarding the climate modeling and
interaction of the four modules. Additionally, AHRI criticized the
quantification of the benefits claimed by DOE as ``speculative and
tangential at best.'' (AHRI, No. 104 at p. 2)
Commenter (U.S. Chamber of Commerce et al.) identified the
scientific underpinnings of the methodologies as a key area of concern.
The U.S. Chamber of Commerce claimed that the SC-GHG values are
``inherently uncertain because they depend on complex modeling of
future economic and environmental impacts--and not just near-term
forecasts, but forecasts that project hundreds of years into the
future.'' (U.S. Chamber of Commerce et al., No. 115 at p. 4)
Because DOE is presenting climate benefits using both the 2021
interim SC-GHG estimates and the 2023 SC-GHG estimates without relying
on either set of values to justify its standards, we do not address
comments on the uncertainty in the 2023 SC-GHG estimates insofar as
they assess the relative merits of the two sets of estimates. Insofar
as these comments object to DOE even referring to the 2023 SC-GHG
estimates and using them for informational purposes, DOE notes that
some measure of uncertainty is inherent in all complex cost estimates
that quantify physical impacts and translate them into dollar values.
Moreover, DOE notes that EPA discussed the uncertainty in various
aspects of the 2023 SC-GHG estimates, including how it is directly
accounted for in each of the modules, in the Final SC-GHG Report, and
pointed to discussions of uncertainty in the supporting academic
literature. (See, e.g., EPA Report at p. 77; EPA RTC A-1-7). EPA
discussed factors not accounted for in the SC-GHG, such as those
represented in table 3.2.1, explicitly acknowledged that there are
limits on which damages and impacts the analysis can capture due to
data and modeling limitations, and analyzed the omitted damages and
modeling limitations, including the net directional changes of the
omitted impacts.
Commenter (CEI) criticized the EPA report's lack of ``table, chart,
or paragraph explaining which factors contribute what percentage of the
more than threefold increase in social cost--despite the more than two-
thirds reduction in emission baselines.'' CEI noted that the reduced
discount rate is one factor, but not the entire explanation for the
increase in SC-GHG values. (CEI2, No. 102 at p. 8)
Because DOE is presenting climate benefits using both the 2021
interim SC-GHG estimates and the 2023 SC-GHG estimates without relying
on either set of values to justify its standards, we do not address the
substance of this comment insofar as it calls for a comparison of the
relative merits between the two sets of estimates. For informational
purposes, DOE notes that EPA stated in the Final Report that the
increases in the 2023 SC-GHG estimates are due to the combined effect
of multiple methodological updates, and because some of these updates
are integrated, a complete decomposition of the incremental
contribution of each change is difficult for all three damage functions
used in the damage module. (EPA Report at p. 102; EPA RTC A-5-25).
Multiple commenters (National Automatic Merchandising Association
(NAMA) and U.S. Chamber of Commerce et al.) raised concerns about
whether the new methodologies were sufficiently peer-reviewed by
independent experts before DOE utilized them in its analyses. Commenter
(NAMA) argued that the updated SC-GHG methodologies deserve an ``open
discussion'' with increased transparency before they are used in
regulatory action. NAMA specifically claimed that ``the updated IWG
report'' that the DOE cites in its analyses was never fully peer-
reviewed and was not part of an open process. (NAMA, No. 112 at p. 4)
Commenter (U.S. Chamber of Commerce et al.) similarly criticized the
IWG's lack of transparency and stated that it undermined the
credibility of the updated methodologies and raised questions as to
whether the estimates were subject to appropriate scrutiny and review.
(U.S. Chamber of Commerce et al., No. 115 at pp. 2-3)
Insofar as commenters were referring to the EPA report--and further
insofar as this comment objects to DOE even referring to the 2023 SC-
GHG estimates and using them for informational purposes--DOE notes that
these commenters referred to the SC-GHG methodologies ``in the IWG
report,'' but DOE is not aware of any report by the IWG concerning the
2023 SC-GHG estimates. There is a December 2023 IWG memo referencing
developments in the scientific literature, as well as a February 2021
IWG Technical Support Document that provided Interim SC-GHG estimates,
but the December 2023 memo does not introduce any new methodologies.
The 2023 SC-GHG estimates were not introduced in the IWG memo but
rather in an EPA rule and Final Report.
[[Page 7578]]
EPA stated that the 2023 SC-GHG methodologies were subjected to
independent peer review in line with EPA's Peer Review Handbook 4th
Edition, 2015 and described the process. (EPA RTC A-7-10).
Several commenters (CEI, NAHB, AHRI, U.S. Chamber of Commerce et
al., and American Enterprise Institute (AEI)) raised concerns with the
discount rates employed in the 2023 SC-GHG methodologies and the
substantial consequences of utilizing such rates. Commenters (CEI,
NAHB, and AEI) criticized the disproportionate impact that the choice
of a lower discount rate had on the end SC-GHG estimates. Commenter
(AEI) specifically denounced the ``artificially low'' rates and
maintained that the rates are a result of prioritizing only climate
effects and not wealth aggregation, which would more realistically
reflect the objectives of each generation. (CEI2, No. 102 at p. 9;
NAHB, No. 103 at p. 4; AEI at pp. 8-9) Commenters (AHRI and U.S.
Chamber of Commerce et al.) further criticized the rate choices in the
methodologies as inconsistent throughout the cost-benefit analysis.
Commenters also questioned why such rates were chosen for each context,
especially with such significant impact. (AHRI, No. 104 at p. 4; U.S.
Chamber of Commerce et al., No. 115 at p. 4)
Because DOE is presenting climate benefits using both the 2021
interim SC-GHG estimates and the 2023 SC-GHG estimates without relying
on either set of values to justify its standards, we do not address
comments on the discounting approach used in the 2023 SC-GHG estimates
insofar as they assess the relative merits of the two sets of
estimates. Insofar as these comments object to DOE even referring to
the 2023 SC-GHG estimates and using them for informational purposes,
DOE notes that EPA stated that the introduction of a Ramsey approach
rather than a constant interest rate ensures internal consistency
within the modeling between the socio-economic scenarios and the
discount rate and allows for a more complete accounting of uncertainty.
(EPA Report at pp. 63-64; EPA RTC A-5-13). EPA further stated that it
selected the rates based on multiple lines of evidence: historical real
rates of returns, empirical studies of equilibrium real interest rates,
future projections of real interest rates, and surveys of economists
and technical experts. (EPA Report at p. 2; EPA RTC A-5-24).
Commenter (CEI2) offered support for the updates to the emissions
baseline utilized in the 2023 SC-GHG methodologies. Commenter noted
that the new baseline of reduced carbon emissions is more realistic for
climate modeling and the SC-GHG metric (CEI2, No. 102 at p. 3)
Multiple commenters (CEI and AEI) stated that the 2023 SC-GHG
methodologies improperly continue to rely on Representative
Concentration Pathway 8.5 (RCP 8.5) for climate models, despite EPA's
switch to more realistic emissions baselines elsewhere in the analysis.
Commenter (CEI) specifically stated that the 2023 SC-GHG updates rely
on three damage functions based on RCP 8.5 and thus assume
substantially greater warming and damage despite otherwise utilizing a
lower emissions baseline. (CEI2, No. 102 at p. 9) Commenter (CEI) also
noted concerns with the use of SSP3 and SSP5 as ``wildly implausible''.
Commenter (AEI) similarly opposed the continued use of RCP 8.5 for
damage functions and climate models and further criticized the
inaccuracy of RCP 8.5 in general. Commenter stated that calculations
relying on RCP 8.5 are so extreme, they are realistically impossible.
(AEI, No. 97 at p. 4)
Because DOE is presenting climate benefits using both the 2021
interim SC-GHG estimates and the 2023 SC-GHG estimates without relying
on either set of values to justify its standards, we do not address the
substance of these comments on the emissions baseline insofar as they
assess the relative merits of the two sets of estimates. Insofar as
these comments object to DOE even referring to the 2023 SC-GHG
estimates and using them for informational purposes, DOE notes that
EPA's Final Report states that the updated 2023 SC-GHG estimates use a
new methodology (not RCPs or SSPs (Shared Socio-economic Pathways)), to
project future emissions scenarios. Per EPA, the new methodology is an
internally consistent set of probabilistic projections of population,
GDP, and GHG emissions to 2300, developed by expert elicitation
(Rennert et al., ``The social cost of carbon: Advances in long-term
probabilistic projections of population, GDP, emissions, and discount
rates,'' 2022).
Commenters (Gas Analytics and Advocacy Services (GAAS) and AEI)
stated that the 2023 SC-GHG methodologies fail to incorporate the
environmental benefits of carbon emissions into the analyses.
Commenters include planetary greening, increased agricultural
productivity, increased water use efficiency, and reduced mortality
from cold as potential benefits from increased GHG emissions. (GAAS,
No. 96 at p. 6; AEI, No. 97 at pp. 7-8)
Because DOE is presenting climate benefits using both the 2021
interim SC-GHG estimates and the 2023 SC-GHG estimates without relying
on either set of values to justify its standards, we do not address
this comment insofar as it assesses the relative merits of the two sets
of estimates. Insofar as this comment objects to DOE even referring to
the 2023 SC-GHG estimates and using them for informational purposes,
DOE notes that the Final Report states that carbon fertilization and
changes to both heat and cold mortality are represented in the updated
2023 SC-GHG estimates (see EPA Report, table 3.2.1 at p. 87). EPA
acknowledged that the analysis is not able to capture all impacts of
GHG emissions (both positive and negative) due to data and modeling
limitations.
Commenter (CEI) criticized the 2023 SC-GHG methodologies'
integration of the mortality effects of climate change through metrics
such as ``Value of Statistical Life'' (VSL). Commenter specifically
took issue with the fact that VSL does not account for
intergenerational externalities and instead focused on individuals as
opposed to society as a whole. As a result, Commenter stated that the
use of the metric encourages consumption at the expense of productive
investment. (CEI1, No. 100 at pp. 2-3)
Because DOE is presenting climate benefits using both the 2021
interim SC-GHG estimates and the 2023 SC-GHG estimates without relying
on either set of values to justify its standards, we do not address
this comment insofar as it assesses the relative merits of the two sets
of estimates. Insofar as this comment objects to DOE even referring to
the 2023 SC-GHG estimates and using them for informational purposes, we
note that in its cost-benefit guidance for Federal agencies, OMB
endorses VSL as an approach to monetizing reductions in fatality risks,
notes that for decades Federal agencies have consistently used VSL
estimates, and cites EPA's VSL guidelines as an example. (OMB, Circular
No. A-4, 49-50 (Nov. 9, 2023)). EPA's VSL methodology was also peer
reviewed by its Science Advisory Board (EPA Report at pp. 1633-167; EPA
RTC A-4-11). As an additional point of reference, DOE's methodology for
determining the monetized benefits of reductions in SOX and
SO2 emissions, as described in the TSDs accompanying the
rule, are also based upon the EPA's benefit-per-ton (BPT) analysis of
emissions reduction benefits that in turn are based upon the VSL
approach. DOE also notes that the commenter incorrectly asserted that
the incorporation of mortality effects is new
[[Page 7579]]
to the 2023 SC-GHG estimates. Previous estimates of SC-GHG also reflect
willingness to pay to reduce mortality risk and in some cases also use
VSL specifically.
A commenter (CEI1) stated that the characterization of SC-GHG
estimates as monetized is misleading. Commenter asserted that
calculations are measured in ``welfare'' rather than money and cannot
be compared with other dollar values. Commenter also stated that SC-GHG
estimates are ordinal rather than cardinal and therefore don't express
degree of relative benefit. (CEI1, No. 100 at p. 4)
This comment goes to any SC-GHG estimates, not the 2023 SC-GHG
estimates specifically. SC-GHG is a measure of aggregate willingness to
pay, rather than utility as the commenter suggests. It does not measure
how much utility changes as a result of additional emissions. Instead,
SC-GHG measures how much income society could forgo today with a given
emission reduction and be as well off as it would have been without
such a reduction (EPA Report at p. 5, 94, and 163). This is a standard
economic method for valuing nonmarket goods, and the calculations yield
a dollar value, correctly labeled in dollars, for the benefits of
emission reductions. This is a cardinal measure that can be compared
with any other dollar value as part of a cost benefit analysis.
Commenter (CEI1) stated that because SC-GHG estimates were
developed using a normative approach, specifically optimizing utility
using a social welfare function, with a social planner framework, to
determine how intergenerational impacts should be weighted, they are
inconsistent with economic efficiency. (CEI1, No. 100 at p. 4)
This comment goes to all SC-GHG estimates, not the 2023 SC-GHG
estimates. specifically.. DOE acknowledges that there are inherent
uncertainties in capturing trade-offs over extended time periods. Both
the interim 2021 SC-GHG estimates and the 2023 SC-GHG estimates are
based on empirical evidence as described by the peer-reviewed
literature (EPA Report at pp. 19-76), and both rely on a descriptive,
rather than normative, approach to inform discount rate choices, which
the IWG has found to be the most defensible and transparent (IWG,
February 2010 Technical Support Document at p. 19; see EPA Report at
pp. 62-64 for further discussion). This allows for discount rates to be
chosen that are consistent with empirical evidence.
Commenter (AEI) stated that the Biden administration
mischaracterizes the GDP effects of rising GHG concentrations in its
2023 SC-GHG methodologies. Commenter instead maintains that GDP data
supports the contention that the prospective financial risks of
anthropogenic climate change, at least in the aggregate, are much
smaller than the SC-GHG estimates suggest. (AEI, No. 97 at p. 9)
As DOE is presenting climate benefits using both the interim 2021
SC-GHG estimates and the 2023 SC-GHG estimates without relying on
either set of values to justify its standards, DOE does not address
this comment insofar as it assesses the relative merits of the two sets
of estimates. Insofar as this comment objects to DOE even referring to
the 2023 SC-GHG estimates and using them for informational purposes, we
note that Figure 2.1.2 in the EPA Final Report shows the projections of
per capita GDP growth rate over the period 2020-2300, with the RFF-SP
projections used in the 2023 SC-GHG estimates remaining at rates under
2 percent and the other scenarios ranging to just over 4 percent (EPA
Report at p. 30). DOE further notes that GDP projections are not
equivalent to total social cost, as they only measure economic output,
while social cost aims to measure well-being, including many non-market
factors that are impacted by climate change, such as human health.
Commenters (AHRI and ALA et al.) cited the requirement in EPCA section
6295(o)(2)(B) for DOE to consider seven separate factors when
evaluating whether a new or amended energy conservation standard is
economically justified. Commenters stated that DOE's use of the SC-GHG
metric dominated the economic justification analysis of the rule,
effectively disregarding the other factors in violation of the statute.
Commenter (AHRI) stated that the statutory text provides no indication
one factor should be given more weight than others. (AHRI, No. 104 at
p. 3) Commenter (ALA et al.) objected to DOE's ``reliance'' on the
economic benefits produced by the 2023 SC-GHG methodologies and
reiterated that DOE is required to balance EPCA's seven factors
together. (ALA et al., No. 109 at pp. 3-4)
These comments largely go to use of any estimate of SC-GHG in this
rulemaking. DOE has long included SC-GHG estimates in its economic
justification analyses pursuant to section 6295(o)(2)(B)(i) of EPCA. In
deciding if an energy conservation standard is economically justified
under EPCA, DOE must consider, to the greatest extent practicable,
seven statutory factors, including the need for national energy and
water conservation. (42 U.S.C. 6295(o)(2)(B)(i)(I)-(VII)). Under that
requirement, DOE estimates environmental and public health benefits
associated with the more efficient use of energy. The adopted standards
are likely to result in environmental benefits in the form of reduced
emissions of air pollutants and greenhouse gases associated with energy
production and use. DOE conducts an emissions analysis to estimate how
potential standards may affect these emissions and estimates the
economic value of emissions reductions. DOE disagrees with commenters'
assertion that the agency failed to adequately balance the other six
factors in its analysis or that the SC-GHG metric (under either
estimate) overpowers the other factors. DOE found that the standards
would be economically justified--i.e., meet the section
6295(o)(2)(B)(i) criteria--without taking any of the benefits of GHG
emissions reductions (as calculated by either the 2023 SC-GHG estimates
or the interim 2021 SC-GHG estimates) into account. DOE reiterates that
the SC-GHG values are not determinative in this rulemaking as DOE would
promulgate the same standards even in the absence of the estimated
climate benefits (using either the 2021 or the 2023 calculation
methodology).
Multiple commenters (NAHB, AHRI, and AEI) highlighted the global
nature of the impacts and benefits represented in the 2023 SC-GHG
estimates and deemed this inappropriate in the context of U.S. domestic
policy and rulemaking.
Commenters (NAHB and AEI) criticized conflation of global and
domestic metrics in the 2023 SC-GHG methodologies and stated that the
inclusion of global metrics will incorrectly incentivize international
and domestic climate measures. Commenters further predicted that the
inclusion of global metrics will impose unnecessary costs on U.S.
consumers and the domestic economy. Commenter (NAHB) asserted that this
is a disproportional distribution of costs and benefits and is
effectively a tax through regulation. (NAHB, No. 103 at p. 3; AEI, No.
97 at p. 7). Commenter (AHRI) stated that EPCA has a domestic focus and
argued that to reframe EPCA into a globally oriented statute would
ignore its legislative history and contradict its focus on benefits
accruing solely within the United States. (AHRI, No. 104 at p. 2)
These comments go to both the interim 2021 SC-GHG estimates and the
2023 SC-GHG estimates. Both sets of
[[Page 7580]]
SC-GHG estimates reflect the global cost of climate change impacts
given the distinctive global nature of the climate change problem.
Numerous impacts of global climate change occur outside of U.S.
territories that directly affect U.S. residents, U.S. companies, the
U.S. economy, and U.S. national security and geopolitical interests.
Also, if each country were to design emissions policies accounting for
only the burdens inflicted on their own citizens and residents, none of
the ``foreign'' impacts of emissions would be accounted for by any
country and so all countries would under-regulate GHG emissions. This
would, in turn, cause significant harm to U.S. citizens and residents.
DOE disagrees with commenter's contention that EPCA restricts DOE's
estimates of the benefits of avoiding GHG emissions only to direct
domestic benefits. The economic justification analysis under EPCA
contains no such limiting language regarding consideration of global or
domestic emissions benefits and burdens. (42 U.S.C.
6295(o)(2)(B)(i)(I)-(VII)). Also see Zero Zone, Inc. v. United States
DOE, 832 F.3d 654, 678-79 (7th Cir. 2016) in which the Seventh Circuit
Court of Appeals rejected a petitioner's challenge to DOE's use of a
global social cost of carbon in setting an efficiency standard under
EPCA and upheld DOE's consideration of global impacts in its climate
analysis. In any event, comments on DOE's consideration of
transboundary climate impacts are not ultimately relevant because, as
stated above, the SC-GHG values are not determinative in this
rulemaking and DOE would promulgate the same standards even in the
absence of any climate benefits (domestic or global).
Commenter (AHRI) argued that DOE's use of the SC-GHG violates the
Major Questions Doctrine. The commenter asserts that as the impact for
the SC-GHG resulting from the proposed commercial refrigeration
equipment rule was estimated at $671.4 million, the rule asserts a
claim of authority concerning vast economic significance that Congress
has not provided to it. AHRI maintained that EPCA did not provide DOE
with clear authority to regulate emissions when evaluating new or
amended standards and thus the inclusion of such analysis in the
rulemaking violates the Major Questions Doctrine. (AHRI, No. 104 at p.
4)
Commenter (GAAS) similarly incorporated a ``Science Matters''
article into its comment citing a 2022 court case challenging the
Federal government's use of SC-GHG as a violation of the Major
Questions Doctrine. (GAAS, No. 96 at p. 4)
These comments go to any estimate of SC-GHG in the rule. DOE
disagrees with commenters' assertion that the use of SC-GHG
methodologies violates the Major Questions Doctrine. First, DOE
reiterates that the rule does not rely on the monetized climate
benefits and would be economically justified regardless of the
inclusion of the climate benefits that DOE projects would result from
the standards. Second, through EPCA, Congress has directed DOE to set
energy conservation standards applicable to covered products and has
explicitly required DOE to determine whether a standard is economically
justified by determining ``whether the benefits of the standard exceed
its burdens'' based on listed considerations. (42 U.S.C. 6295(o)) The
economic benefit of pollution reductions is a standard metric in cost
benefit analysis of actions that significantly affect emissions, as
appliance efficiency standards typically do due to their statutory
focus on energy conservation (and both grid electricity and natural gas
combustion have associated emissions of GHGs and other air pollutants).
All presidential administrations since the Reagan Administration have
required agencies to conduct cost benefit analyses in their rulemakings
and have strongly encouraged the monetization of impacts where
possible. The interagency working group developed Federal SC-GHG
estimates in 2010, and SC-GHG estimates have been used in Federal
agencies rulemakings for over a decade. DOE itself has used SC-GHG
estimates in its rulemakings and other analyses since 2009. It is, in
fact, difficult to see how DOE could justify not calculating such
benefits where possible. DOE's use of SC-GHG estimates to provide a
monetary estimate of the benefits of the GHG emissions reductions that
are projected to result from the adoption of these efficiency standards
is consistent with the statutory requirements, best economic practices,
government-wide cost benefit analysis guidance, longstanding Federal
agency practices, data quality requirements, and current science.
Additionally, it does not in any way assert a claim of authority
concerning vast economic significance.
Regarding the comment about $671.4 million in SC-GHG benefits, the
commenter appears to have misinterpreted this value as the benefits of
SC-GHGs reductions of the proposed rule. In the proposed rule, at a 3%
discount rate, the total benefits were estimated to be $1.25 billion,
of which $174.4 million was attributed to climate benefits (calculated
using the 2021 interim SC-GHG), $738 million was from consumer
operating cost savings, and the remainder was health benefits of other
emissions reductions. At a 7% discount rate, the total benefits were
estimated to be $1 billion, of which $174.4 million was attributed to
climate benefits (calculated using the 2021 interim SC-GHG),, $586
million was from consumer operating cost savings, and the remainder was
health benefits from other emissions. The climate benefits were thus
not even the rule's largest monetized impact, and this rulemaking would
be economically justified regardless of the inclusion of either set of
estimates of the GHG emissions reductions.
Several commenters (Hussman Corporation, ALA et al., NAMA, and
GAAS) criticized DOE's decision to first include the 2023 SC-GHG
estimates in a NODA for an individual rule. Commenters criticized DOE
for not dedicating a separate and comprehensive rulemaking to the use
of the new methodologies in future agency analyses. Commenter (Hussman
Corporation) opposed the metric being added in a NODA with a final rule
due in four months and advocated that any SC-GHG considerations
``should be handled by DOE as a discussion item for all appliances and
not simply added during a proposed rulemaking for one product
category.'' (Hussman Corporation, No. 108 at p. 3)
Commenter (ALA et al.) also urged DOE to evaluate its use of the
2023 SC-GHG methodologies in the anticipated rulemaking dedicated to
reviewing and updating DOE's analytical methodology. ALA reiterated
that vetting analytical method changes on issues as complex as SC-GHG
is better done in a focused rulemaking rather than as part of a
product-specific rulemaking on standards. (ALA et al., No. 109 at p. 2)
Commenter (NAMA) stated that the new methodologies deserve an open and
transparent discussion on how they will be applied before they are
utilized in regulatory action. (NAMA, No. 112 at p. 4).
Commenter (GAAS) claimed that DOE's introduction of the SC-GHG
within an electric appliance docket was an attempt to implement it
without wide recognition or objection from other stakeholders that may
be adversely impacted by the new methodologies. GAAS further deemed
this decision, along with alleged policies of forced societal
electrification, the ``energy equivalent of ethnic cleansing.'' (GAAS,
No. 96 at p. 6) Commenter (NAHB) stated that the DOE should increase
transparency with regards to the process used to develop the new
metric, stating
[[Page 7581]]
that the process used to develop these estimates only involved parties
invited to participate and that the choices made by these participants
heavily affect the results. (NAHB, No. 103 at p. 4)
While DOE proposed in the August 2024 NODA to shift to the updated
estimates, in this final rule, DOE is presenting climate benefits using
both the 2021 interim SC-GHG estimates and the 2023 SC-GHG estimates
without relying on either set of values to justify its standards. By
presenting both sets of estimates, DOE is simply providing additional
information to the public regarding the estimated benefits of the final
rule. Furthermore, DOE uses modeled estimates of values based on data
inputs and analytical assumptions in its analyses all the time, from
EIA projections of future energy supplies and prices, to estimates of
costs of technologies over time. Here, DOE determined that public
notice and comment is appropriate given the substantial interest in
this topic, differences of opinion around various methodological
choices, and the importance of the methodological updates underlying
the new estimates. Multiple commenters did in fact comment on the
August NODA solely on this topic, indicating that the public received
notice of and had opportunity to comment on DOE's proposed preliminary
decision to use the updated 2023 SC-GHG estimates.
Commenter (AEI) stated that the 2023 SC-GHG methodologies
incorporate the co-benefits of regulating criteria and hazardous air
pollutants in its calculations despite those pollutants being regulated
independently under the Clean Air Act. Commenter raised concerns that
accounting for the benefits of regulating these pollutants when they
are already regulated improperly inflates the health benefits of GHG
policies. (AEI, No. 97 at p. 8)
Both the 2021 interim SC-GHG estimates and the 2023 SC-GHG
estimates account for the avoided harms of GHG emissions. Neither of
the SC-GHG estimates incorporate the co-benefits of regulating fine
particulates, other criteria air pollutants, or hazardous air
pollutants. In its energy conservation rules, DOE separately estimates
the resulting air pollution emissions reductions. DOE calculates the
benefits from the reductions in sulfur dioxide, nitrogen oxides,
nitrous oxide, and mercury, as well as greenhouse gases that result
from the final rule. The benefits for each air pollutant are calculated
separately, and none of the calculations include co-benefits from
reducing the other pollutants.
Commenter (U.S. Chamber of Commerce et al.) stated that the
significantly higher 2023 SC-GHG values could lead to overly stringent
regulations and increased compliance costs for industries. Commenter
further asserted that higher SC-GHG values could have a chilling effect
on economic activity and that the change in methodologies could produce
uncertainty that challenges businesses and investors. Commenter noted
concerns with the 2021 interim SC-GHG estimates also, but ultimately
recommended applying those values as opposed to the 2023 SC-GHG
estimates. (U.S. Chamber of Commerce et al., No. 115 at pp. 5-6)
As stated previously, the standards in this rule do not rely on the
monetized climate benefits and would be economically justified
regardless of their use. Further, these standards would be economically
justified using either the 2023 SC-GHG estimates or the 2021 interim
SC-GHG estimates. As such, compliance costs for industries would be the
same regardless of which SC-GHG metric is utilized and even if SC-GHG
were not accounted for at all.
V.CDOE's derivations of the SC-CO2, SC-N2O, and SC-CH4 values used
for this final rule 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 final rule are presented
using two sets of SC-GHG estimates. One set is the 2023 SC-GHG
estimates published by the EPA, which are shown in table IV.21 in 5-
year increments from 2020 to 2050. The full set of annual values that
DOE used is presented in appendix 14A of the final rule TSD. These
estimates include values out to 2080. DOE expects additional climate
benefits to accrue for equipment still operating after 2080, but a lack
of available SC-CO2 estimates for emissions years beyond
2080 prevents DOE from monetizing these potential benefits in this
analysis.
[GRAPHIC] [TIFF OMITTED] TR21JA25.124
DOE also presents results using interim SC-CO2 values
based on the values developed for the February 2021 SC-GHG TSD, which
are shown in table IV. in 5-year increments from 2020 to 2050. The set
of annual values that DOE used, which was adapted from estimates
published by EPA in 2021,\144\ is presented in appendix 14A of the
final rule TSD. These estimates are based on
[[Page 7582]]
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.
---------------------------------------------------------------------------
\144\ See EPA, Revised 2023 and Later Model Year Light-Duty
Vehicle GHG Emissions Standards: Regulatory Impact Analysis,
Washington, DC, December 2021. Available at https://nepis.epa.gov/Exe/ZyPDF.cgi?Dockey=P1013ORN.pdf (last accessed Dec. 3, 2024).
[GRAPHIC] [TIFF OMITTED] TR21JA25.125
DOE multiplied the CO2 emissions reduction estimated for
each year by the SC-CO2 value for that year in all cases.
DOE adjusted the values to 2023$ 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 all 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
final rule are presented using two sets of SC-GHG estimates. One set is
the 2023 SC-GHG estimates published by the EPA. Table IV.23 shows the
updated sets of SC-CH4 and SC-N2O estimates in 5-
year increments from 2020 to 2050. The full set of annual values used
is presented in appendix 14A of the final rule TSD. These estimates
include values out to 2080.
[GRAPHIC] [TIFF OMITTED] TR21JA25.126
DOE also presents results using interim SC-CH4 and SC-
N2O values based on the values developed for the February
2021 SC-GHG TSD. Table IV.24 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 unrounded values used in the calculations is presented in
appendix 14A of the final rule TSD. These estimates include values out
to 2070.
[[Page 7583]]
[GRAPHIC] [TIFF OMITTED] TR21JA25.127
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 2023$ 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 final rule, DOE estimated the monetized value of
NOX and SO2 emissions reductions from electricity
generation using benefit-per-ton estimates for that sector from EPA's
Benefits Mapping and Analysis Program.\145\ Table 5 of the EPA TSD
provides a summary of the health impact endpoints quantified in the
analysis. 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, 2035, 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 (rather than extrapolated) to be conservative. 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 final rule TSD).
---------------------------------------------------------------------------
\145\ 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.
Available at www.epa.gov/benmap/estimating-benefit-ton-reducing-directly-emitted-pm25-pm25-precursors-and-ozone-precursors. (last
accessed August 29, 2024).
---------------------------------------------------------------------------
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 chapter 15 of the final
rule TSD.
The output of this analysis is a set of time-dependent coefficients
that capture the change in electricity generation, primary fuel
consumption, installed capacity and power sector emissions due to a
unit reduction in demand for a given end use. These coefficients are
multiplied by the stream of electricity savings calculated in the NIA
to provide estimates of selected utility impacts of potential new or
amended energy conservation standards.
N. Employment Impact Analysis
DOE considers employment impacts in the domestic economy as one
factor in selecting a standard. Employment impacts from new or amended
energy conservation standards include both direct and indirect impacts.
Direct employment impacts are any changes in the number of employees of
manufacturers of the 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
[[Page 7584]]
sector generally create fewer jobs (both directly and indirectly) than
expenditures in other sectors of the economy.\146\ Bureau of Economic
Analysis input-output multipliers also show a lower labor intensity per
million dollars of activity for utilities as compared to other
industries.\147\ 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, these
data suggest that net national employment may increase due to shifts in
economic activity resulting from energy conservation standards.
---------------------------------------------------------------------------
\146\ See U.S. Bureau of Labor Statistics. Industry Output and
Employment. Available at www.bls.gov/emp/data/industry-out-and-emp.htm (last accessed Aug. 19, 2024).
\147\ See Regional Input-Output Modeling System (RIMS II) User's
Guide. U.S. Department of Commerce--Bureau of Economic Analysis.
Available at bea.gov/resources/methodologies/RIMSII-user-guide (last
accessed Aug. 19, 2024).
---------------------------------------------------------------------------
DOE estimated indirect national employment impacts for the standard
levels considered in this final rule using an input/output model of the
U.S. economy called Impact of Sector Energy Technologies version 4
(``ImSET'').\148\ 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.
---------------------------------------------------------------------------
\148\ 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's 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 overestimate actual job
impacts over the long run for this rule. Therefore, DOE used ImSET only
to generate results for near-term timeframes (2029-2033), where these
uncertainties are reduced.
For more details on the employment impact analysis, see chapter 16
of the final rule 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 adopting in this final rule.
Additional details regarding DOE's analyses are contained in the final
rule 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 interactions, and price elasticity of
consumer purchasing decisions that may change when different standard
levels are set.
In the analysis conducted for this final rule, DOE analyzed the
benefits and burdens of five 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 final rule TSD.
Table V.1 presents the TSLs and the corresponding efficiency levels
that DOE has identified for potential amended energy conservation
standards for CRE. TSL 5 represents the maximum technologically
feasible (``max-tech'') energy efficiency for all equipment classes.
TSL 4 represents an intermediate TSL representing less stringent
efficiency levels for approximately one-third of the equipment classes
analyzed compared to TSL 5. TSL 3 represents less stringent efficiency
levels for 12 equipment classes compared to TSL 4. TSL 2 represents
another intermediate TSL, representing less stringent efficiency levels
for 11 equipment classes, compared to TSL 3. TSL 1 represents the
minimum efficiency level for most analyzed equipment classes. DOE
considered all efficiency levels as part of its analysis.\149\
Analytical results broken down by EL and equipment class are presented
in chapters 8 and 10 of the final rule TSD.
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\149\ Efficiency levels that were analyzed for this final rule
are discussed in section IV.C.1 of this document. Results by
efficiency level are presented in chapters 8 and 10 of the final
rule TSD.
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[[Page 7585]]
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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 final
rule TSD provides detailed information on the LCC and PBP analyses.
Table V.2 through table V.57 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, the 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 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.
BILLING CODE 6950-01-P
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b. Consumer Subgroup Analysis
In the consumer subgroup analysis, DOE estimated the impact of the
considered TSLs on small businesses. Table V.58 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 final rule TSD presents the complete LCC
and PBP results for the subgroup.
[[Page 7601]]
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BILLING CODE 6450-01-C
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 CRE that
meets the standard is less than three times the value of the first-year
energy savings resulting from the standard. In calculating a rebuttable
presumption payback period for each of the considered TSLs, DOE used
discrete values, and, as required by EPCA, based the energy use
calculation on the DOE test procedures 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.59 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 this rule 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.
[[Page 7604]]
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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 next section
describes the expected impacts on manufacturers at each considered TSL.
Chapter 12 of the final rule TSD explains the analysis in further
detail.
a. Industry Cash Flow Analysis Results
In this section, DOE provides GRIM results from the analysis, which
examines changes in the industry that would result from a standard.
Table V.60 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 scenario; and (2) the preservation-of-
operating-profit scenario, as discussed in section IV.J.2.d of this
document. The preservation-of-gross-margin percentage scenario applies
a ``gross-margin percentage'' of 28 percent for all equipment classes
across all efficiency levels.\150\ 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.
---------------------------------------------------------------------------
\150\ The gross-margin percentage of 28 percent is based on a
manufacturer markup of 1.38.
---------------------------------------------------------------------------
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 or 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
[[Page 7605]]
through the end of the analysis period (2024-2058). 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 and amended standards. The
conversion costs can have a significant impact on the short-term cash
flow in the industry and generally result in lower free cash flow in
the period between 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.
[GRAPHIC] [TIFF OMITTED] TR21JA25.189
The following cash flow discussion refers to the TSLs as detailed
in section V.A of this document. Table V. table V.61 through table V.64
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 final rule TSD for additional information
on the engineering analysis.
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At TSL 5, the standard represents the max-tech efficiencies for all
equipment classes. The change in INPV is expected to range from -$221.7
million to $55.2 million, which represents a change in INPV of -7.3
percent to 1.8 percent, respectively. At this level, free cash flow is
estimated to decrease by 33.8 percent compared to the no-new-standards
case value of $262.6 million in the year 2028, the year before
compliance would be required. In 2028, approximately 30.5 percent of
covered CRE shipments are expected to meet the efficiencies required at
TSL 5. See table V. for the percent of equipment class shipments that
would meet or exceed the efficiencies required at each TSL in 2028 (a
year before the modeled compliance year).
The design options DOE analyzed at TSL 5 included the max-tech
technologies for all equipment classes. For all semi-vertical and
vertical open and transparent door equipment classes, DOE expects
manufacturers would likely incorporate occupancy sensors with dimming
capability. Open equipment classes would also likely necessitate the
use of night curtains. For equipment classes with transparent doors,
DOE expects manufacturers would likely need to incorporate
[[Page 7609]]
vacuum-insulated glass doors. For most self-contained equipment
classes, DOE expects manufacturers would need to incorporate BLDC
condenser fan motors and variable-speed compressors. Of the 28 directly
analyzed equipment classes, 5 equipment classes (VSC.SC.L, VCS.SC.M,
VCT.RC.M, VCT.SC.L, and VCT.SC.M) account for approximately 81.5
percent of industry shipments covered by this final rule. For VCS.SC.L,
TSL 5 corresponds to EL 3. For VCS.SC.M, TSL 5 corresponds to EL 2. For
VCT.RC.M, TSL 5 corresponds to EL 4. For VCT.SC.L, TSL 5 corresponds to
EL 5 and VCT.SC.M, TSL 5 corresponds to EL 6. See section 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. At this level, DOE
estimates that approximately 55 percent of analyzed equipment class
model listings (10,957 out of 19,902 unique basic models) do not meet
the efficiency levels required.\151\ Self-contained CRE equipment
classes account for approximately 86 percent of industry shipments
covered by this final rule. 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 baseplate tooling if additional modifications are
required to accommodate a larger compressor system.
---------------------------------------------------------------------------
\151\ DOE's Compliance Certification Database, ``Refrigeration
Equipment--Commercial, Single Compartment'' is available at:
www.regulations.doe.gov/certification-data/#q=Product_Group_s%3A*.
Model count estimates discussed throughout section V.B.2.a and
section V.C of this document refer to unique basic models of the
directly analyzed equipment classes only. (Last accessed Jan. 31,
2024).
---------------------------------------------------------------------------
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 41 percent
of model listings. For the 84 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 and
public comments, some manufacturers raised concerns about standards
requiring a widespread adoption of vacuum-insulated glass as it is
still a relatively new technology in the commercial refrigeration
market. Manufacturers pointed to the very limited industry experience
with implementing vacuum-insulated glass in CRE applications.
Manufacturers expressed concerns about their ability 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 within the
required compliance period (i.e., between the publication of the final
rule and the compliance date of the new and amended energy conservation
standards). DOE estimates capital conversion costs of $30.6 million and
product conversion costs of $223.5 million. Conversion costs total
$254.1 million.
DOE acknowledges that most CRE manufacturers offer an exhaustive
range of model offerings to appeal to the unique requirements of each
CRE consumer. Within a model family, manufacturers offer numerous
options to customize CRE to the specifications of restaurant,
supermarket, and retail chains and other bulk purchasers of CRE (e.g.,
Coca-Cola, Pepsi). In interviews, many manufacturers noted that
offering a wide-range of models with a high-level of customization and
optionality (e.g., different evaporator setups, different lighting
arrangements, different door configurations, etc.) is critical to
succeed in the CRE market. Many manufacturers prioritize offering a
breadth of model offerings and specialty CRE, even if sales of each
individual model are low. As such, manufacturers still offer hundreds
of basic models for equipment classes with low annual shipments. For
example, SOC.RC.M accounts for approximately 5 percent of model
listings (over 1,000 unique basic models certified in DOE's CCD) even
though SOC.RC.M only accounts for 0.1 percent of industry shipments
(less than 2,000 units sold in 2024). As discussed in section IV.J.2.c
of this document, to avoid underestimating the potential industry
investment, DOE's conversion cost model assumes manufacturers would
redesign models that do not meet each considered TSL. However, if
manufacturers do not have sufficient resources to redesign models
within the compliance period, manufacturers would likely discontinue
low-volume equipment designs and prioritize redesigning high-volume
model offerings.
At TSL 5, the shipment-weighted average MPC for all CRE is expected
to increase by 14.2 percent relative to the no-new-standards case
shipment-weighted average MPC for all CRE in 2029. Given the projected
increase in production costs, DOE expects an estimated 4.1-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 cash flow from the higher MSP outweighs
the $254.1 million in conversion costs, causing a small increase 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 2029, the analyzed compliance
year. This reduction in the manufacturer markup and the $254.1 million
in conversion costs incurred by manufacturers cause a negative change
in INPV at TSL 5 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 4, the standard represents an intermediate level with less
stringent efficiencies required for 10 directly analyzed equipment
classes compared to max-tech. The change in INPV is expected to range
from -$160.1 million to -$63.5 million, which represents a change in
INPV of -5.3 percent to -2.1 percent, respectively. At this level, free
cash flow is estimated to decrease by 28.9 percent compared to the no-
new-standards case value of $262.6 million in the year 2028, the year
before compliance is required. In 2028, approximately 33.4 percent of
covered CRE shipments are expected to meet the efficiencies required at
TSL 4.
The design options DOE analyzed at TSL 4 are similar to the design
options analyzed at TSL 5 except fewer equipment classes with
transparent doors would need to incorporate improved door designs and
fewer self-contained equipment classes would necessitate the use of
variable-speed compressors. DOE estimates that a similar portion of
models would require redesign at TSL 4 and TSL 5. DOE estimates that
approximately 53 percent of analyzed equipment class model listings
(10,574 out of a total of 19,902
[[Page 7610]]
unique basic models) do not meet the TSL 4 efficiency levels. Self-
contained equipment classes that may incorporate variable-speed
compressors represent approximately 90 percent of self-contained CRE
model listings. For the five highest-volume equipment classes, TSL 4
corresponds to lower efficiency levels for 2 equipment classes:
VCT.RC.M and VCT.SC.M. For VCS.SC.M, VCS.SC.L, and VCT.SC.L, the
efficiencies required at TSL 4 are the same as TSL 5. For VCT.RC.M, TSL
4 corresponds to EL 3. For VCT.SC.M, TSL 4 corresponds to EL 4. At this
level, DOE expects that VCT.RC.M and VCT.SC.M would incorporate triple-
pane glass with krypton fill and argon fill, respectively. The 4 self-
contained equipment classes with the highest-volume shipments
(VCS.SC.L, VCS.SC.M, VCT.SC.L, and VCT.SC.M) would likely necessitate
the use of variable-speed compressors.
Similar to TSL 5, DOE expects manufacturers would spend development
time updating equipment designs to incorporate high-efficiency
components. Manufacturers of CRE with transparent doors may need to
invest in new fixtures to accommodate additional panes of glass into
CRE designs. Unlike at TSL 5 where DOE expects all transparent door CRE
equipment classes would incorporate vacuum-insulated glass doors to
meet the efficiency levels required, only two directly analyzed
equipment classes, SOC.SC.M and VCT.SC.L, (which represent
approximately 9 percent of transparent door CRE model listings) would
likely necessitate vacuum-insulated glass doors to meet at TSL 4.
However, DOE expects that manufacturers of VCT.RC.L, VCT.RC.M, and
SOC.RC.M (which represent approximately 63 percent of transparent door
CRE model listings) would likely incorporate triple-pane glass doors
with krypton fill and manufacturers of HCT.SC.I and VCT.SC.M (which
represent approximately 25 percent of transparent door CRE model
listings) would incorporate triple-pane glass doors with argon fill. As
previously discussed, many manufacturers raised concerns about the
widespread adoption of vacuum-insulated glass because the industry does
not have widescale experience integrating this technology into their
designs. In interviews and public comments, some manufacturers also
raised concerns about the limited supply of krypton gas available to
the market. Currently, few CRE designs have triple-pane glass doors
with krypton fill as nearly all CRE with double-pane or triple-pane
doors are manufactured with argon fill, and single-pane doors do not
have an inert gas fill. DOE estimates capital conversion costs of $27.5
million and product conversion costs of $196.4 million. Conversion
costs total $223.9 million.
As previously discussed with TSL 5, if manufacturers do not have
sufficient resources to redesign models within the compliance period,
manufacturers would likely discontinue low-volume equipment designs and
prioritize redesigning high-volume model offerings.
At TSL 4, the shipment-weighted average MPC for all CRE is expected
to increase by 4.8 percent relative to the no-new-standards case
shipment-weighted average MPC for all CRE in 2029. Given the projected
increase in production costs, DOE expects an estimated 1.8-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 cash flow from the higher MSP is outweighed
by the $223.9 million in conversion costs, causing a 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 2029, the analyzed compliance
year. This reduction in the manufacturer markup and the $223.9 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 an intermediate level with less
stringent efficiencies required for 12 directly analyzed equipment
classes compared to TSL 4. The change in INPV is expected to range from
-$78.7 million to -$51.3 million, which represents a change in INPV of
-2.6 percent to -1.7 percent, respectively. At this level, free cash
flow is estimated to decrease by 15.9 percent compared to the no-new-
standards case value of $262.6 million in the year 2028, the year
before compliance is required. In 2028, approximately 49.0 percent of
covered CRE shipments are expected to meet the efficiencies required at
TSL 3.
At TSL 3, the efficiency levels required for most open (i.e.,
equipment classes without doors) and transparent door equipment classes
are lower than the efficiency levels required at TSL 4. DOE estimates
that notably fewer models would require redesign at TSL 3 compared to
TSL 4 and TSL 5. At this level, approximately 37 percent of analyzed
equipment class model listings (7,306 out of 19,902 unique basic
models) do not meet the efficiency levels required. DOE expects
manufacturers could meet TSL 3 without implementing occupancy sensors
with dimming capability, triple-pane doors with krypton fill, or
vacuum-insulated glass doors, alleviating industry concerns about the
availability and supply of krypton gas and vacuum-insulated glass. At
this level, the same equipment classes as TSL 4--except for VSC.SC.M,
which represents 37 percent of self-contained CRE model listings-would
likely incorporate variable-speed compressors. At this level, only 2
equipment classes, HCT.SC.I and SOC.SC.M (together representing 7
percent of transparent door CRE model listings), would likely
incorporate improved door designs compared to 7 equipment classes that
would likely incorporate improved door designs at TSL 4 (together
representing 97 percent of transparent door CRE model listings). For
the 5 highest-volume equipment classes, TSL 3 corresponds to lower
efficiency levels for 4 equipment classes: VCS.SC.M, VCT.RC.M,
VCT.SC.L, and VCT.SC.M. For VCS.SC.M, TSL 3 corresponds to EL 1. For
VCT.RC.M, TSL 3 corresponds to baseline efficiency (i.e., EL 0). For
VCT.SC.L, TSL 3 corresponds to EL 2. For VCT.SC.M, TSL 3 corresponds to
EL 2. For VCS.SC.L, the efficiencies required at TSL 3 are the same as
TSL 4. At this level, product conversion costs may be necessary to
source, qualify, and test high-efficiency components--but to a lesser
extent than at higher TSLs. Some manufacturers of self-contained
equipment classes may need to invest in new baseplate tooling if
incorporating variable-speed compressors requires additional
modifications to CRE designs. Manufacturers of CRE with transparent
doors may need to invest in new fixtures to accommodate additional
panes of glass into CRE designs. DOE estimates capital conversion costs
of $19.1 million and product conversion costs of $98.5 million.
Conversion costs total $117.7 million.
At TSL 3, the shipment-weighted average MPC for all CRE is expected
to increase by 1.4 percent relative to the no-new-standards case
shipment-weighted average MPC for all CRE in 2029. Given the relatively
small projected increase in production costs, DOE does not project a
notable drop in shipments in the year the standard takes
[[Page 7611]]
effect. In the preservation-of-gross-margin-percentage scenario, the
increase in cash flow from the higher MSP is slightly outweighed by the
$117.7 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 2029, the analyzed compliance year.
This reduction in the manufacturer markup and the $117.7 million in
conversion costs incurred by manufacturers cause a small negative
change in INPV at TSL 3 under the preservation-of-operating-profit
scenario.
At TSL 2, the standard represents an intermediate level with less
stringent efficiencies required for 11 directly analyzed equipment
classes compared to TSL 3. The change in INPV is expected to range from
-$27.5 million to -$23.1 million, which represents a change in INPV of
-0.9 percent to -0.8 percent, respectively. At this level, free cash
flow is estimated to decrease by 6.0 percent compared to the no-new-
standards case value of $262.6 million in the year 2028, the year
before compliance is required. In 2028, approximately 60.7 percent of
covered CRE shipments are expected to meet the efficiencies required at
TSL 2.
At this level, the efficiency levels required are lower than TSL 3
for less than half of the directly analyzed equipment classes, which
represent approximately 19 percent of industry shipments. DOE estimates
that a similar portion of models would require redesign at TSL 2 and
TSL 3. At this level, approximately 33 percent of analyzed equipment
class model listings (6,631 out of 19,902 unique basic models) do not
meet the efficiency levels required. DOE does not expect manufacturers
would incorporate variable-speed compressors to meet efficiencies at
TSL 2. At this level, DOE expects manufacturers would implement BLDC
condenser fan motors for all self-contained equipment classes. Only
HCT.SC.I would likely need to incorporate improved door designs. Open
equipment classes would likely necessitate the use of night curtains.
For the five highest-volume equipment classes, TSL 2 corresponds to
lower efficiency levels for 3 equipment classes: VCS.SC.L, VCT.SC.L,
and VCT.SC.M. For VCS.SC.L, TSL 2 corresponds to EL 2. For VCT.SC.L and
VCT.SC.M, the TSL 2 corresponds to EL 1. For VSC.SC.M and VCT.RC.M, 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 2 equipment classes--VCS.SC.L and
VCT.SC.M--drive the drop in product conversion costs at this level. For
VCS.SC.L and VCT.SC.M, DOE believes manufacturers could meet TSL 2
efficiencies by incorporating more efficient condenser fan motors with
minimal development effort, unlike at TSL 3, which may necessitate
implementing variable-speed compressors. DOE estimates capital
conversion costs of $0.3 million and product conversion costs of $46.4
million. Conversion costs total $46.7 million.
At TSL 2, the shipment-weighted average MPC for all CRE is expected
to increase by 0.2 percent relative to the no-new-standards case
shipment-weighted average MPC for all CRE in 2029. Given the relatively
small projected 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 increase in cash
flow from the higher MSP is slightly outweighed by the $46.7 million in
conversion costs, causing a slight 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 $46.7 million in
conversion costs incurred by manufacturers cause a small 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 -
$24.7 million to -$20.8 million, which represents a change in INPV of -
0.8 percent to -0.7 percent, respectively. At this level, free cash
flow is estimated to decrease by 5.4 percent compared to the no-new-
standards case value of $262.6 million in the year 2028, the year
before compliance is required. In 2028, approximately 64.1 percent of
covered CRE shipments are expected to meet the efficiencies required at
TSL 1.
At this level, the efficiency levels correspond to baseline for 8
directly analyzed equipment classes, EL 1 for 19 equipment classes, and
EL 2 for 1 equipment class (VCS.SC.H). DOE estimates that a similar
portion of models would require redesign at TSL 1, TSL 2, and TSL 3. At
this level, approximately 33 percent of analyzed equipment class model
listings (6,504 out of 19,902 unique basic models) do not meet the
efficiency levels required. DOE expects most self-contained equipment
classes would need to incorporate higher-efficiency fan motors (i.e.,
BLDC evaporator or condenser fan motors or PSC evaporator fan motors
for chef bases). HCT.SC.I may necessitate the use of double-pane argon-
fill doors to meet TSL 1 efficiencies. DOE expects manufacturers could
TSL 1 efficiencies without investing in new tooling or equipment.
Product conversion costs are driven by incorporating high-efficiency
components into CRE designs. DOE estimates product conversion costs of
$42.0 million.
At TSL 1, the shipment-weighted average MPC for all CRE is expected
to increase by 0.2 percent relative to the no-new-standards case
shipment-weighted average MPC for all CRE in 2029. Given the relatively
small projected 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
cash flow from the higher MSP slightly outweighs the $42.0 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 2029, the analyzed compliance year.
This reduction in manufacturer markup and the $42.0 million in
conversion costs incurred by manufacturers cause a minor negative
change in INPV at TSL 1 under the preservation-of-operating-profit
scenario.
[[Page 7612]]
[GRAPHIC] [TIFF OMITTED] TR21JA25.195
b. Direct Impacts on Employment
To quantitatively assess the potential impacts of 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,\152\ BLS employee
compensation data,\153\ results of the engineering analysis, and
manufacturer interviews.
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\152\ 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 April 11, 2024).
\153\ U.S. Bureau of Labor Statistics. Employer Costs for
Employee Compensation--March 2024. June 18, 2024. Available at
www.bls.gov/bls/news-release/ecec.htm#current (last accessed Aug.
22, 2024).
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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 ASM inputs: Production
Workers Annual Wages, Production Workers Annual Hours, Production
Workers for Pay Period, and Number of Employees. DOE
[[Page 7613]]
also relied on BLS employee compensation data to determine the fully
burdened wage ratio. The fully burdened wage ratio factors in paid
leave, supplemental pay, insurance, retirement and savings, and legally
required benefits.
The total production employees number 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 CRE covered by this final rule 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.\154\ DOE's estimates only account for
production workers who manufacture the specific equipment covered by
this final rule.
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\154\ 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 April 11, 2024).
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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.\155\ 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.
---------------------------------------------------------------------------
\155\ Id.
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Using the GRIM, DOE estimates that in the absence of new energy
conservation standards, there would be 11,792 domestic production and
non-production workers for CRE in 2029. shows the range of 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 table V.66.
[GRAPHIC] [TIFF OMITTED] TR21JA25.196
The direct employment impacts in represent the potential domestic
employment changes that could result following the compliance date for
CRE in this final rule. 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. For the lower bound
estimate, DOE maintained its methodology from the August 2024 NODA for
this final rule. 89 FR 68788, 68828-68829.
The lower bound estimate conservatively assumes that some domestic
manufacturing either is eliminated or moves abroad at more stringent
efficiency levels. For levels that require capital investment or higher
per-unit labor content, DOE assumed that some manufacturing could move
abroad as relocating production to lower-labor cost countries could
become increasingly attractive. At relevant TSLs, DOE used results of
the shipments analysis (i.e., the percent of shipments that would not
meet the standard) to estimate the portion of domestic production that
would shift to foreign countries. However, DOE notes that 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. As in the August 2024
NODA, for this final rule, DOE modeled an incremental increase in labor
costs associated with implementing improved door designs (i.e., moving
to double-pane, triple-pane, or VIG door designs). 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. At the adopted TSL (i.e., TSL 3), DOE projects that nearly
half of industry shipments will meet the required efficiency levels by
the 2029 compliance date in the no-new-standards case. Additionally,
DOE notes that only two directly analyzed equipment classes would
likely incorporate improved door designs. As such, DOE does not expect
TSL 3 will necessitate large capital costs or significantly higher per-
unit labor content. Furthermore, DOE notes that most basic models (63
percent of model listings) meet TSL 3.
Additional detail on the analysis of direct employment can be found
in chapter 12 of the final rule TSD. Additionally, the employment
impacts discussed in this section are
[[Page 7614]]
independent of the employment impacts from the broader U.S. economy,
which are documented in chapter 16 of the final rule TSD.
c. Impacts on Manufacturing Capacity
In interviews conducted in advance of the October 2023 NOPR, 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 final rule. Furthermore, DOE revised its
baseline insulation thickness assumptions used in the October 2023 NOPR
in response to stakeholder comments. The revised insulation thicknesses
analyzed in the August 2024 NODA and this final rule generally align
with the insulation thicknesses analyzed in the March 2014 Final
Rule,\156\ which are also consistent with stakeholder comments and
DOE's test data.
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\156\ DOE assumed an insulation thickness of 1.5 inches for
medium- and high-temperature equipment, 2.0 inches for low-
temperature equipment, and 2.5 inches for ice cream temperature
equipment. See Table 5A.2.2 Baseline Specifications in the 2014
Final rule TSD at www.regulations.gov/document/EERE-2010-BT-STD-0003-0102.
---------------------------------------------------------------------------
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 new and amended energy conservation standards.
However, multiple manufacturers in confidential interviews and public
comments in response to the October 2023 NOPR and August 2024 NODA
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 and industry standards and the various regulations necessitating
the transition to low-GWP refrigerants. In confidential interviews and
comments in response to the October 2023 NOPR and August 2024 NODA,
some manufacturers stated that they are already experiencing testing
laboratory shortages, which would be further exacerbated by DOE energy
conservation standards if DOE adopts 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.
At the adopted TSL (i.e., TSL 3), DOE estimates that approximately
63 percent of analyzed equipment class model listings (12,596 out of
19,902 unique basic models) meet the efficiency levels required.
Furthermore, DOE is extending the compliance period from the 3-years
analyzed in the October 2023 NOPR to 4-years in this final rule to help
mitigate concerns about laboratory and engineering resource
constraints.
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 Small
Business Administration (``SBA'') defines a ``small business'' as
having 1,250 employees or fewer 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 20 domestic
OEMs 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 final rule 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 and States 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 3 years before or after
the estimated 2029 compliance date of any new and amended energy
conservation standards for CRE (2026-2032).
The DOE energy conservation standards regulations potentially
contributing to cumulative regulatory burden are presented in table
V.67. In addition to the proposed and adopted energy conservation
standards rulemakings identified, DOE also considers refrigerant
regulations, such as the October 2023 EPA Final Rule, in its cumulative
regulatory burden analysis. DOE discusses these refrigerant regulations
in the subsection ``Refrigerant Regulations'' included in this section.
[[Page 7615]]
[GRAPHIC] [TIFF OMITTED] TR21JA25.197
[[Page 7616]]
[GRAPHIC] [TIFF OMITTED] TR21JA25.198
Refrigerant Regulations
The October 2023 EPA Final Rule restricts the use of HFCs in
specific sectors or subsectors, including use in certain CRE covered by
this rulemaking. Consistent with the October 2023 NOPR, DOE considered
the impacts of the refrigerant transition in this final rule 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. Compliance with the October
2023 EPA Final Rule ranges from January 1, 2025 to January 1, 2027 for
categories relevant to CRE covered by this rulemaking (see table IV.5
for a list of compliance dates for the October 2023 EPA Final Rule
applicable to CRE). Therefore, DOE expects manufacturers will complete
the transition to low-GWP refrigerants in compliance with EPA
regulation prior to the expected 2029 DOE compliance date for CRE. As
discussed in section IV.C.1.a of this document, DOE expects CRE
manufacturers will transition self-contained CRE covered by this
rulemaking to R-290 to comply with anticipated refrigeration
regulations. See section IV.C.1 of this document for additional
information on refrigerant assumptions in the engineering analysis.
Consistent with the October 2023 NOPR and August 2024 NODA, in this
final rule, 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
part of the analytical baseline. In other words, manufacturers would
need to comply with the October 2023 EPA Final Rule regardless of
whether or not DOE amends standards. Therefore, DOE incorporated the
refrigerant transition expenses into both the no-new-standards case and
standards cases. For the October 2023 NOPR, DOE relied on manufacturer
feedback in confidential interviews, a report prepared for EPA,\157\
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. 88 FR 70196, 70284.
For the August 2024 NODA, DOE updated its R&D estimate to reflect
feedback from written comments in response to the October 2023 NOPR. 89
FR 68788, 68800. DOE also adjusted the timeline of when manufacturers
would need to make investments related to the refrigerant transition to
align with the revised compliance dates for CRE in the October 2023 EPA
Final Rule. Id. DOE maintained the approach from the August 2024 NODA
for this final rule, however, as this final rule only analyzes non-
large self-contained CRE (see table IV. for the TDA/volume ranges for
the seven relevant equipment classes) and remote-condensing CRE, DOE
excluded the investments associated with large self-contained CRE in
its GRIM.
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\157\ 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/2019-9/documents/nonco2_methodology_report.pdf.
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Based on feedback, DOE assumed that the transition to low-GWP
refrigerants would require industry to invest approximately $13.6
million in R&D and $17.7 million in capital expenditures (e.g.,
investments in new charging equipment, leak detection systems, etc.)
from 2024 (the final rule reference year) and 2027 (the latest EPA
compliance date for CRE covered by this rulemaking). Consistent with
the October 2023 NOPR, DOE notes that its refrigerant transition
estimates of $13.6 million in R&D and $17.7 million capital
expenditures reflect an estimate of future (2023-2025 for the October
2023 NOPR and 2024-2027 for this final rule) investments industry would
incur to comply with Federal or State refrigerant regulations. DOE
acknowledges that manufacturers have already invested a significant
amount of time and capital into transitioning CRE to low-GWP
refrigerants. However, as the GRIM developed for this rulemaking only
analyzes future cash flows, starting with the reference year of the
analysis (2024) and continuing 30 years after the analyzed compliance
year, the MIA conducted for this final rule only reflects changes in
annual cash flow and associated refrigerant transition expenses
starting in 2024.
3. National Impact Analysis
This section presents DOE's estimates of the NES and the NPV of
consumer benefits that would result from each of the TSLs considered as
potential amended standards.
a. National 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
[[Page 7617]]
their anticipated energy consumption under each TSL. The savings are
measured over the entire lifetime of equipment purchased during the 30-
year period that begins in the year of anticipated compliance with new
and amended standards (2029-2058). Table V. presents DOE's projections
of the NES for each TSL considered for CRE. The savings were calculated
using the approach described in section IV.H.2 of this document.
[GRAPHIC] [TIFF OMITTED] TR21JA25.199
OMB Circular A-4 \158\ 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.\159\ 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..
The impacts are counted over the lifetime of CRE purchased during the
period 2029-2037.
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\158\ U.S. Office of Management and Budget. Circular A-4:
Regulatory Analysis. Available at www.whitehouse.gov/omb/information-for-agencies/circulars (last accessed July 1, 2024). DOE
used the prior version of Circular A-4 (September 17, 2003) in
accordance with the effective date of the November 9, 2023 version.
Available at www.whitehouse.gov/wp-content/uploads/legacy_drupal_files/omb/circulars/A4/a-4.pdf (last accessed July 20,
2024).
\159\ 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.
[GRAPHIC] [TIFF OMITTED] TR21JA25.200
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 Circular A-4, DOE calculated NPV using both a 7-
percent and a 3-percent real discount rate. Table V. shows the consumer
NPV results with impacts counted over the lifetime of equipment
purchased during the period 2029-2058.
[GRAPHIC] [TIFF OMITTED] TR21JA25.201
The NPV results based on the aforementioned 9-year analytical
period are presented in table V.71. The impacts are counted over the
lifetime of equipment purchased during the period 2029-2058. As
mentioned previously, such results are presented for informational
purposes only and are not indicative of any change in DOE's
[[Page 7618]]
analytical methodology or decision criteria.
[GRAPHIC] [TIFF OMITTED] TR21JA25.202
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
where CRE prices were assumed to remain constant over the analysis
period. This analysis was considered as a part of the low economic
benefits scenario, which is based on low economic growth with lower
electricity price declines and lower floorspace projections for
shipments. See Appendix 10C of the final rule TSD for full results of
all NIA sensitivities conducted.
c. Indirect Impacts on Employment
DOE estimates that amended energy conservation standards for CRE
will 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 (2029-2033), where these
uncertainties are reduced.
The results suggest that the adopted standards are 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 final rule TSD presents detailed results
regarding anticipated indirect employment impacts.
4. Impact on Utility or Performance of Equipment
As discussed in section III.F.1.d of this document, DOE has
concluded that the standards adopted in this final rule will not lessen
the utility or performance of the CRE under consideration in this
rulemaking. Manufacturers of this equipment generally already offer
units that meet or exceed the adopted standards.
5. Impact of Any Lessening of Competition
DOE considered any lessening of competition that would be likely to
result from new or amended standards. As discussed in section III.F.1.e
of this document, EPCA directs the Attorney General of the United
States (``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 in writing 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. To assist the Attorney General
in making this determination, DOE provided the Department of Justice
(``DOJ'') with copies of the October 2023 NOPR and the October 2023
NOPR TSD for review. In its assessment letter responding to DOE, DOJ
concluded that the proposed energy conservation standards for CRE are
unlikely to have a significant adverse impact on competition. DOE is
publishing the Attorney General's assessment at the end of this final
rule.
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 of the final rule TSD
presents the estimated impacts on electricity-generating capacity,
relative to the no-new-standards case, for the TSLs that DOE considered
in this rulemaking.
Energy conservation resulting from potential energy conservation
standards for CRE is expected to yield environmental benefits in the
form of reduced emissions of certain air pollutants and GHGs. Table V.
provides DOE's estimate of cumulative emissions reduction expected to
result from the TSLs considered in this rulemaking. The emissions were
calculated using the multipliers discussed in section IV.K of this
document. DOE reports annual emissions reductions for each TSL in
chapter 13 of the final rule TSD.
[[Page 7619]]
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As part of the analysis for this rule, 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 two separate sets of estimated SC-
CO2 values that DOE used. Table V.73 and table V.74 presents
the value of CO2 emissions reductions at each TSL for each
of the SC-CO2 cases. The time-series of annual values is
presented for the selected TSL in chapter 14 of the final rule TSD.
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[[Page 7620]]
[GRAPHIC] [TIFF OMITTED] TR21JA25.205
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.75 and table V.76 presents the value of the
CH4 emissions reduction at each TSL for each of the SC-
CH4 cases. Table V. and table V.78 presents the value of the
N2O emissions reduction at each TSL for each of the SC-
N2O cases. The time-series of annual values is presented for
the selected TSL in chapter 14 of the final rule TSD.
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[[Page 7621]]
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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, however, that the adopted standards would be economically
justified even without inclusion of monetized benefits of reduced GHG
emissions.
DOE also estimated the monetary value of the economic 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.79 presents the present value for NOX
emissions reduction for each TSL calculated using 7-percent and 3-
percent discount rates, and table V.80 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 selected TSL in chapter 14 of the final rule TSD.
[GRAPHIC] [TIFF OMITTED] TR21JA25.210
[[Page 7622]]
[GRAPHIC] [TIFF OMITTED] TR21JA25.211
Not all the public health and environmental benefits from the
reduction of GHG, 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, in determining whether a standard is economically
justified, may consider any other factors that the Secretary deems to
be relevant. (42 U.S.C. 6295(o)(2)(B)(i)(VII), 42 U.S.C. 6316(e)(1)) No
other factors were considered in this analysis.
8. Summary of Economic Impacts
Table V.81 and table V.82 presents the NPV values that result from
adding the estimates of the 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 during the period 2029-
2058. 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 during the period 2029-
2058.
[GRAPHIC] [TIFF OMITTED] TR21JA25.212
[[Page 7623]]
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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)(i))
For this final rule, 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
business owners and renters). Having less than perfect foresight and a
high degree of uncertainty about the future, consumers may trade off
these types of investments at a higher-than-expected rate between
current consumption and uncertain future energy cost savings.
In DOE's current regulatory analysis, potential changes in the
benefits and costs of a regulation due to changes in consumer purchase
decisions are included in two ways. First, if consumers forgo the
purchase of CRE in the standards case, this decreases sales for
manufacturers, and the impact on manufacturers attributed to lost
revenue is included in the MIA. Second, DOE accounts for energy savings
attributable only to equipment actually used by consumers in the
standards case; if a standard decreases the number of equipment
purchased by consumers, this decreases the potential energy savings
from an energy conservation standard. DOE provides estimates of
shipments and changes in the volume of CRE purchases in chapter 9 of
the final rule TSD.
1. Benefits and Burdens of TSLs Considered for CRE Standards
Table V.83 and table V.84 summarize the quantitative impacts
estimated for each TSL for CRE. The national impacts are measured over
the lifetime of CRE purchased during the 30-year period that begins in
the anticipated year of compliance with amended standards (2029-2058).
The energy savings, emissions reductions, and value of emissions
reductions refer to full-fuel-cycle results. DOE is presenting
monetized benefits of GHG emissions reductions in accordance with the
applicable Executive orders, and DOE would reach the same conclusion
presented in this notice in the absence of the SC-GHG, including the
2023 SC-GHG. The efficiency levels contained in each TSL are described
in section V.A of this document.
[[Page 7624]]
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[[Page 7625]]
[GRAPHIC] [TIFF OMITTED] TR21JA25.215
[[Page 7626]]
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[[Page 7627]]
[GRAPHIC] [TIFF OMITTED] TR21JA25.217
This section discusses DOE's conclusions regarding CRE connected to
a remote condensing unit and non-large CRE connected to a self-
contained unit. As discussed previously in sections I and II.B.3 of
this document, DOE is
[[Page 7628]]
continuing to analyze the large-capacity ranges presented in table IV.
for the VOP.SC.M, SVO.SC.M, HZO.SC.L, SOC.SC.M, VCT.SC.M, VCT.SC.L, and
VCS.SC.L equipment classes.
DOE first considered TSL 5, which represents the max-tech
efficiency levels for all equipment classes. The design options DOE
analyzed at this level include the max-tech technologies for all
equipment classes. DOE expects manufacturers would likely need to
incorporate occupancy sensors with dimming capability for all vertical
and semi-vertical open and all transparent door equipment classes.
Vertical and semi-vertical open equipment classes would also likely
necessitate the use of night curtains. For equipment classes with
transparent doors, DOE expects manufacturers would likely need to
incorporate vacuum-insulated glass doors. For most self-contained
equipment, DOE expects manufacturers would likely need to incorporate
variable-speed compressors. For all self-contained equipment classes,
DOE expects manufacturers would likely incorporate EC evaporator and
condenser fan motors.
TSL 5 would save an estimated 1.61 quads of FFC energy over 30
years of shipments (2029 to 2058), an amount DOE considers significant.
Under TSL 5, the NPV of consumer benefits would be -$5.36 billion using
a discount rate of 7 percent, and -$8.45 billion using a discount rate
of 3 percent for the same 30-year period.
The cumulative emissions reductions at TSL 5 are 28.6 Mt of
CO2, 8.71 thousand tons of SO2, 53.5 thousand
tons of NOX, 0.06 tons of Hg, 243 thousand tons of
CH4, and 0.28 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 2023 SC-GHG
estimates at a 2-percent, near-term Ramsey discount rate) at TSL 5 is
$6.66 billion, and the climate benefits associated with the average
2021 Interim SC-GHG estimates at a 3-percent discount rate are
estimated to be $1.62 billion. The estimated monetary value of the
health benefits from reduced SO2 and NOX
emissions at TSL 5 is $1.24 billion using a 7-percent discount rate and
$3.17 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 either the 2-percent near-term Ramsey discount rate case
for climate benefits from reduced GHG emissions, or the 3-percent
discount rate case for climate benefits from reduced GHG emissions, the
estimated total NPV at TSL 5 is $2.54 billion (using the 2023 SC-GHG
estimates) or -$2.51 billion (using the 2021 interim SC-GHG estimates).
Using a 3-percent discount rate for consumer benefits and costs and
health benefits from reduced NOx and SO2 emissions, and
either the 2-percent discount rate case for climate benefits from
reduced GHG emissions or 3-percent discount rate case for, the
estimated total NPV at TSL 5 is $1.39 billion (using the 2023 SC-GHG
estimates) or -$3.66 billion (using the 2021 interim SC-GHG estimates).
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 of CRE experience average LCC savings
ranging from -$3,333 to $1,946 with a payback period ranging from 1.6
years to 114.9 years. The LCC savings are negative for 12 of the 28
analyzed equipment classes, representing 78 percent of annual
shipments. For example, the equipment class with the highest annual
shipments volume (VCS.SC.M), representing approximately 36 percent of
annual CRE shipments, has negative LCC savings of -$42 with 52 percent
of consumers experiencing a net cost, and a PBP of 9.6 years. The
second-highest equipment class in terms of annual units shipped
(VCT.SC.M), representing about 25 percent of annual CRE shipments, has
negative LCC savings of -$1,422 with 61 percent of consumers
experiencing a net cost, and a PBP of 55.6 years. Overall, almost half
of CRE purchasers (48 percent) experience a net cost. Furthermore, the
shipment-weighted-average PBP is estimated at 27.8 years, which is
generally higher than the average CRE lifetime, while the shipment-
weighted-average LCC savings is negative, at -$608.
At TSL 5, the projected change in INPV ranges from a decrease of
$221.7 million to an increase of $55.2 million, which corresponds to a
decrease of 7.3 percent and an increase of 1.8 percent, respectively.
DOE estimates that manufacturers would need to invest $254.1 million to
update equipment designs and source, qualify, and test high-efficiency
components across their entire CRE portfolio. DOE estimates that
approximately 55 percent of analyzed equipment class model listings in
its CCD (10,957 unique basic models out of a total of 19,902) do not
meet the max-tech efficiency levels required.
At this level, although most design options would not necessitate
purchasing new equipment or significant capital investment, nearly all
manufacturers would need to spend notable development time
incorporating the analyzed max-tech design options across their entire
CRE portfolio. For the 84 manufacturers that offer CRE with transparent
doors (which account for approximately 41 percent of model listings),
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 new technology in the commercial refrigeration
market. Manufacturers pointed to the very limited industry experience
with implementing vacuum-insulated glass in CRE applications. In
addition to incorporating vacuum-insulated glass into transparent door
CRE designs, DOE expects most manufacturers would have to invest in
extensive redesign and development to incorporate variable-speed
compressors across nearly all self-contained CRE models.
Based on this analysis, the Secretary concludes that at TSL 5 for
CRE, the benefits of energy savings, 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 impacts 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. Almost half of CRE purchasers (48
percent) experience a net cost. Furthermore, the shipment-weighted
average LCC savings are negative (-$608) and the shipment-weighted
average PBP exceeds the average CRE lifetime, at 27.8 years.
Consequently, the Secretary has concluded that TSL 5 is not
economically justified.
DOE then considered TSL 4, an intermediate TSL representing less
stringent efficiency levels for approximately one-third of the
equipment classes analyzed compared to TSL 5. DOE expects manufacturers
would likely need to incorporate occupancy sensors with dimming
capability for all vertical and semi-vertical open and most transparent
door equipment classes. Vertical and semi-vertical open equipment
classes would also likely necessitate the use of night
[[Page 7629]]
curtains. For most equipment classes with transparent doors, DOE
expects manufacturers would incorporate triple-pane, argon-filled glass
doors, triple-pane, krypton-filled glass doors, or vacuum-insulated
glass doors. For most self-contained equipment classes, DOE expects
manufacturers would likely need to incorporate variable-speed
compressors. For all self-contained equipment classes, DOE expects
manufacturers would likely incorporate EC evaporator and condenser fan
motors.
TSL 4 would save an estimated 1.50 quads of full fuel cycle energy
over 30 years of shipments (2029 to 2058), an amount DOE considers
significant. Under TSL 4, the NPV of consumer benefit would be $0.22
billion using a discount rate of 7 percent, and $1.89 billion using a
discount rate of 3 percent.
The cumulative emissions reductions at TSL 4 are 26.7 Mt of
CO2, 8.14 thousand tons of SO2, 50 thousand tons
of NOX, 0.06 tons of Hg, 228 thousand tons of
CH4, and 0.26 thousand tons of N2O. The estimated
monetary value of the climate benefits from reduced GHG emissions at
TSL 4 is $6.23 billion (using the 2023 SC-GHG estimates at a 2-percent
near-term Ramsey discount rate) or $1.51 billion (using 2021 interim
SC-GHG estimates at an average 3-percent discount rate). The estimated
monetary value of the health benefits from reduced SO2 and
NOX emissions at TSL 4 is $1.16 billion using a 7-percent
discount rate and $2.97 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 either the 2-percent near-term Ramsey discount rate case
or the 3-percent discount rate case for climate benefits from reduced
GHG emissions, the estimated total NPV at TSL 4 is $7.61 billion (using
the 2023 SC-GHG estimates) or $2.89 billion (using the 2021 interim SC-
GHG estimates). Using a 3-percent discount rate for consumer benefits
and costs and health benefits from reduced NOX and
SO2 emissions, and the 2-percent near-term Ramsey discount
rate case or the 3-percent discount rate case for climate benefits from
reduced GHG emissions, the estimated total NPV at TSL 4 is $11.08
billion (using the 2023 SC-GHG estimates) or $6.36 billion (using the
2021 interim SC-GHG estimates). 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 4, affected purchasers for each CRE equipment class
experience average LCC savings ranging from -$810 to $1,946 with a
payback period ranging from 1.6 years to 19.8 years. The LCC savings
are negative for 5 of the 28 analyzed equipment classes, representing
75 percent of annual shipments. For example, the equipment class with
the highest annual shipments volume (VCS.SC.M), representing
approximately 36 percent of annual CRE shipments, has negative LCC
savings of -$42 with 52 percent of consumers experiencing a net cost,
and a PBP of 9.6 years. The second-highest equipment class in terms of
annual units shipped (VCT.SC.M), representing about 25 percent of
annual CRE shipments, has negative LCC savings of -$66 with 45 percent
of consumers experiencing a net cost, and a PBP of 11.6 years. Overall,
approximately 40 percent of affected CRE purchasers would experience a
net cost, while 27 percent would experience a net benefit, and the
remaining purchasers would be unaffected at TSL 4. In addition, the
estimated shipment-weighted average LCC savings for all CRE is $8 and
the shipment-weighted average PBP is 9.5 years.
At TSL 4, the projected change in INPV ranges from a decrease of
$160.1 million to a decrease of $63.5 million, which correspond to
decreases of 5.3 percent and 2.1 percent, respectively. DOE estimates
that industry would need to invest $223.9 million to comply with
standards set at TSL 4. Similar to TSL 5, DOE estimates that over half
of CRE models would require redesign to meet standards set at TSL 4.
Specifically, DOE estimates that approximately 53 percent of analyzed
equipment class model listings in its CCD (10,574 unique basic models
out of a total of 19,902) do not meet the TSL 4 efficiency levels.
Similar to TSL 5, DOE expects manufacturers would need to dedicate
notable engineering resources and time to update equipment designs and
source, qualify, and test high-efficiency components. DOE also expects
some manufacturers would need to invest in new tooling to accommodate
the additional door thickness associated with incorporating additional
panes of glass into CRE designs. At this level, DOE expects 7 out of
the 11 directly analyzed transparent door equipment classes would
likely necessitate vacuum-insulated glass doors or other improved door
designs. Specifically, DOE expects SOC.SC.M and VCT.SC.L (which
represent approximately 9 percent of transparent door CRE model
listings) would incorporate vacuum-insulated glass doors, SOC.RC.M,
VCT.RC.L, and VCT.RC.M (which represent approximately 63 percent of
transparent door CRE model listings) would incorporate triple-pane
glass doors with krypton fill, and HCT.SC.I and VCT.SC.M (which
represent approximately 25 percent of transparent door CRE model
listings) would incorporate triple-pane glass doors with argon fill at
this level. As previously discussed, many manufacturers raised concerns
about the widespread adoption of vacuum-insulated glass because the
industry does not have widescale experience integrating this technology
into their designs. In interviews and public comments, some
manufacturers also raised concerns about the limited supply of krypton
gas available to the market. (Hillphoenix, No. 77 at p. 6; Zero Zone,
No. 75 at pp. 3-4) Currently, few CRE designs have triple-pane glass
doors with krypton fill as nearly all CRE with double-pane or triple-
pane doors are manufactured with argon fill, and single-pane doors do
not have an inert gas fill. At this level, DOE expects most self-
contained equipment classes (representing approximately 90 percent of
self-contained CRE model listings) would likely necessitate the use of
variable-speed compressors. Therefore, DOE expects most manufacturers
would still have to invest in significant redesign and development time
to optimize variable-speed compressors to ensure energy efficiency
benefits across the majority of self-contained CRE designs.
Most CRE manufacturers offer an exhaustive range of model offerings
to appeal to the unique requirements of each CRE consumer. Within a
model family, manufacturers offer numerous options to customize CRE to
the specifications of restaurant, supermarket, and retail chains and
other bulk purchasers of CRE (e.g., Coca-Cola, Pepsi). In interviews,
many manufacturers noted that offering a wide-range of models with a
high-level of customization and optionality (e.g., different evaporator
setups, different lighting arrangements, different door configurations,
etc.) is critical to succeed in the CRE market. Many manufacturers
prioritize offering a breadth of model offerings and specialty CRE,
even if sales of each individual model are low. As such, manufacturers
still offer hundreds of basic models for equipment classes with low
annual shipments. For example, SOC.RC.M accounts for approximately 5
percent of model listings (over 1,000 unique basic models certified in
DOE's CCD) even though SOC.RC.M only accounts for 0.1 percent of
industry shipments (less than 2,000 units sold in 2024).
[[Page 7630]]
Multiple stakeholders raised concerns about the risk that stringent
standards and limited laboratory and engineering resources would force
manufacturers to discontinue certain equipment designs and prioritize
redesigning high-volume model offerings. (Continental, No. 107 at p. 3;
Continental, No. 86 at p. 6; NAFEM, No. 87 at p. 2; Structural
Concepts, No. 74 at p. 4) Some manufacturers expressed concern that the
discontinuation of model offerings could lead to equipment
commoditization where equipment can only compete on price rather than
value-added options and features. In addition to the impacts that
extensive redesign and testing may have on CRE manufacturers overall,
it would also disproportionately impact small businesses, which
typically have limited personnel, engineering, and laboratory resources
relative to larger CRE manufacturers and account for approximately 20
percent of CRE manufacturers (20 out of 103 OEMs).
Based on this analysis, the Secretary concludes that at TSL 4 for
CRE, the benefits of energy savings, emission reductions, and the
estimated monetary value of the emissions reductions would be
outweighed by the economic burden on a large fraction of CRE
purchasers, the risk of reduced customization and optionality if
manufacturers have insufficient resources to redesign their full
portfolio of models within the compliance period, the impacts on
manufacturers including small businesses, including the conversion
costs that could result in a reduction in INPV, and limited industry
experience with vacuum-insulated glass doors in commercial
applications. If manufacturers do not have sufficient resources to
redesign models within the compliance period, manufacturers would
likely discontinue low-volume equipment designs and prioritize
redesigning high-volume model offerings, potentially leading to
equipment commoditization. Finally, although the shipments-weighted
average LCC savings for all CRE are marginally positive (at $8),
overall the LCC savings are negative for five equipment classes
representing 75 percent of annual shipments. Consequently, the
Secretary has concluded that TSL 4 is not economically justified.
DOE then considered TSL 3, an intermediate TSL representing less
stringent efficiency levels for 12 equipment classes compared to TSL 4.
In contrast to TSL 4 and TSL 5, DOE expects that manufacturers could
meet TSL 3 efficiencies without incorporating occupancy sensors with
dimming capability into vertical and semi-vertical open and transparent
door CRE designs, and without use of vacuum-insulated-glass or triple-
pane glass with krypton fill into transparent door CRE designs. For
vertical and semi-vertical open equipment classes, DOE expects
manufacturers would likely require the use of night curtains. For some
equipment classes with transparent doors, DOE expects manufacturers
would incorporate triple-pane, argon-filled glass doors. For all self-
contained equipment classes, DOE expects manufacturers would
incorporate EC evaporator and condenser fan motors. For most self-
contained equipment classes, DOE expects manufacturers would likely
need to incorporate variable-speed compressors. DOE also expects that,
given the reduced number of models requiring redesign at this TSL and
the lower overall cost to implement this level compared with TSL 4,
manufacturers would be able to continue to offer numerous options to
customize CRE to the specifications of restaurant, supermarket, and
retail chains and other bulk purchasers of CRE (e.g., Coca-Cola, Pepsi)
and offer a wide-range of models with a high-level of customization and
optionality (e.g., different evaporator setups, different lighting
arrangements, different door configurations, etc.) which is critical to
succeed in the CRE market.
TSL 3 would save an estimated 1.11 quads of full fuel cycle energy
over 30 years of shipments (2029 to 2058), an amount DOE considers
significant. Under TSL 3, the NPV of consumer benefit would be $1.32
billion using a discount rate of 7 percent, and $3.43 billion using a
discount rate of 3 percent.
The cumulative emissions reductions at TSL 3 are 19.7 Mt of
CO2, 6.02 thousand tons of SO2, 36.9 thousand
tons of NOX, 0.04 tons of Hg, 168 thousand tons of
CH4, and 0.19 thousand tons of N2O. At TSL 3, the
estimated monetary value of the climate benefits from reduced GHG
emissions is $4.6 billion (using the SC-GHG estimates at a 2-percent
near term Ramsey discount rate) or $1.12 billion (using the 2021
interim SC-GHG estimates at an average 3-percent discount rate) . The
estimated monetary value of the health benefits from reduced
SO2 and NOX emissions at TSL 3 is $0.86 billion
using a 7-percent discount rate and $2.19 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 either the 2-percent near term Ramsey discount rate case
or the 3-percent discount rate case for climate benefits from reduced
GHG emissions, the estimated total NPV at TSL 3 is $6.78 billion (using
the 2023 SC-GHG estimates) or $3.29 billion (using the 2021 interim SC-
GHG estimates). Using a 3-percent discount rate for consumer benefits
and costs and health benefits from reduced NOX and
SO2 emissions, and either the 2-percent near-term Ramsey
discount rate case or the 3-percent discount rate case for climate
benefits from reduced GHG emissions, the estimated total NPV at TSL 3
is $10.2 billion (using the 2023 SC-GHG estimates) or $6.74 billion
(using the 2021 interim SC-GHG estimates). 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 3, affected purchasers for each CRE equipment class
experience an average LCC savings ranging from $8 to $1,868 with a
payback period ranging from 0.9 years to 7.0 years. For example, for
equipment classes VCS.SC.M, VCT.SC.M, VCS.SC.L, and VCT.SC.L, which
account for 77 percent of annual CRE shipments, there is a net LCC
savings of $29, $33, $471, and $437 and a PBP of 3.0, 6.5, 2.2, and 3.5
years, respectively. Overall, approximately 91 percent of affected CRE
purchasers would experience a net benefit or not be affected at TSL 3.
Furthermore, the estimated shipment-weighted-average LCC savings is
$116 and PBP is 3.5 years, which is lower than the average CRE
lifetime.
At TSL 3, the projected change in INPV ranges from a decrease of
$78.7 million to a decrease of $51.3 million, which correspond to
decreases of 2.6 percent and 1.7 percent, respectively. DOE estimates
that industry must invest $117.7 million to comply with standards set
at TSL 3. At this level, notably fewer models would require redesign
compared to TSL 4 and TSL 5. DOE estimates that approximately 37
percent of analyzed equipment class model listings in its CCD (7,306
unique basic models out of a total of 19,902) do not meet the TSL 3
efficiency levels required.
Similar to TSL 4 and TSL 5, DOE expects manufacturers would spend
development time updating equipment designs to incorporate high-
efficiency components. However, DOE expects manufacturers could meet
TSL 3 without implementing triple-pane doors with krypton fill or
vacuum-insulated glass doors, alleviating industry concerns about the
availability and supply of krypton gas and vacuum-
[[Page 7631]]
insulated glass. Additionally, DOE expects fewer equipment classes
would necessitate the use of variable-speed compressors. At TSL 3,
approximately 63 percent of self-contained CRE model listings may need
to incorporate variable-speed compressors, significantly less than at
TSL 4 where DOE expects 90 percent of self-contained CRE model listings
would necessitate the use of variable-speed compressors. Since the
majority of basic models (63 percent of model listings) already meet
TSL 3 efficiencies, the estimated industry investment and strain on
manufacturers' testing facilities and engineering resources would be
less at TSL 3 than at TSL 4 and TSL 5, reducing the risk that
manufacturers would need to prioritize resources and discontinue low-
volume CRE designs.
After considering the analysis and weighing the benefits and
burdens, the Secretary has concluded that a standard set at TSL 3 for
CRE would be economically justified. At this TSL, the average LCC
savings for all affected purchasers are positive. An estimated 42
percent of purchasers experience a net benefit, while 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 3, the NPV
of consumer benefits, even measured at the more conservative discount
rate of 7 percent is over 16 times higher than the maximum estimated
manufacturers' loss in INPV. The standard levels at TSL 3 are
economically justified even without weighing the estimated monetary
value of emissions reductions. When those emissions reductions are
included--representing $4.6 billion in climate benefits (associated
with the average SC-GHG at a 2-percent near-term Ramsey discount rate),
and $2.19 billion (using a 3-percent discount rate) or $0.86 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
amended energy conservation standards, DOE notes that as compared to
TSL 5 and TSL 4, TSL 3 has a lower maximum decrease in INPV and lower
manufacturer conversion costs. Furthermore, DOE notes that notably more
basic models meet TSL 3 compared TSL 4 and TSL 5, reducing the amount
of time and investment associated with redesigning and testing CRE
models.
Finally, compared to TSL 5 and TSL 4, TSL 3 results in the highest
consumer NPV and positive LCC savings for all CRE equipment classes,
while PBPs for each equipment class are considerably less than the
average CRE lifetime. In addition, DOE has determined that a 4-year
compliance period to redesign CRE to meet the adopted standards will
help alleviate manufacturers' concerns about engineering and laboratory
resource constraints. Furthermore, the longer compliance period will
help mitigate cumulative regulatory burden by allowing manufacturers
more flexibility to spread investments across 4 years instead of 3
years. Manufacturers will also have more time to recoup any investments
made to redesign CRE to comply with the October 2023 EPA Final Rule as
compared to a 3-year compliance period.
Therefore, based on the previous considerations, DOE adopts the
energy conservation standards for CRE at TSL 3. The new and amended
energy conservation standards for CRE, which are expressed as kWh/day,
are shown in table V.85.
BILLING CODE 6450-01-P
[[Page 7632]]
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[[Page 7633]]
[GRAPHIC] [TIFF OMITTED] TR21JA25.219
[[Page 7634]]
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\1\ The equation for VOP.SC.H was written incorrectly in the
August 2024 NODA Support Document and has been corrected here which
is consistent with the secondary mapping in Table 4.1 of the August
2024 NODA.
[GRAPHIC] [TIFF OMITTED] TR21JA25.220
BILLING CODE 6950-01-C
2. Annualized Benefits and Costs of the Adopted Standards
The benefits and costs of the adopted standards can also be
expressed in terms of annualized values. The annualized net benefit is:
(1) the annualized national economic value (expressed in 2023$) of the
benefits from operating equipment that meet the adopted 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.
Table V.87 shows the annualized values for CRE under TSL 3,
expressed in million 2023$. 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 health benefits, and a 2-percent near-
term Ramsey discount rate case or the 3-percent discount rate case for
climate benefits from reduced GHG emissions,, the estimated cost of the
adopted standards for CRE is $71 million per year in increased
equipment installed costs, while the estimated annual benefits are $210
million from reduced equipment operating costs, $222 million in climate
benefits (using the 2023 SC-GHG estimates) or $64 million in climate
benefits (using the 2021 interim SC-GHG estimates), and $90 million
from reduced NOX and SO2 emissions. In this case,
the net benefit amounts to $452 million per year (using the 2023 SC-GHG
estimates) or $294 million per year (using the 2021 interim SC-GHG
estimates).
Using a 3-percent discount rate for consumer benefits and costs and
health benefits from reduced NOx and SO2 emissions, and
either the 2-percent near-term Ramsey discount rate case or the 3-
percent discount rate case for climate benefits from reduced GHG
emissions, the estimated cost of the standards is $68 million per year
in increased equipment costs, while the estimated annual benefits are
$265 million in reduced operating costs, $222 million in climate
benefits (using the 2023 SC-GHG estimates) or $64 million in climate
benefits (using the 2021 interim SC-GHG estimates), and $126 million in
health benefits. In this case, the net benefit would amount to $545
million per year (using the 2023 SC-GHG estimates) or $387 million per
year (using the 2021 interim SC-GHG estimates).
[[Page 7635]]
[GRAPHIC] [TIFF OMITTED] TR21JA25.221
[[Page 7636]]
[GRAPHIC] [TIFF OMITTED] TR21JA25.222
3. Removal of Obsolete Provisions
The energy conservation standards for CRE, located at 10 CFR
431.66, currently contain provisions in paragraphs (b) through (d) for
equipment manufactured before March 27, 2017. As such, the provisions
in paragraphs (b) through (d) are now obsolete for any CRE manufactured
on or after March 27, 2017. In this final rule, DOE is removing these
obsolete provisions.
In addition, paragraph (a) of 10 CFR 431.66 currently contains
definitions for the terms ``AV'', ``V'', and ``TDA,'' which are
similarly obsolete. The term ``AV'' is referenced only in paragraph
(b)(1), which is now obsolete (as discussed in the previous paragraph).
The definitions for the terms ``V'' and ``TDA'' are obsolete because
the measurement instructions for volume and total display area were
updated in the September 2023 Test Procedure Final Rule and are
separately codified within appendix B to Subpart C of part 431. For
these reasons, in this final rule, DOE is removing paragraph (a) of 10
CFR 431.66.
Given the removal of paragraphs (a) through (d) of 10 CFR 431.66,
this final rule redesignates paragraph (e)--which contains the
currently applicable standards--as paragraph (a). DOE is codifying the
new and amended standards enacted by this final rule at paragraph (b).
Finally, this final rule redesignates paragraph (f) (``Exclusions'') as
paragraph (c).
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. 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 the Office
of Management and Budget has emphasized that such techniques may
include identifying changing future compliance costs that might result
from technological
[[Page 7637]]
innovation or anticipated behavioral changes. For the reasons stated in
the preamble, this final regulatory action is consistent with these
principles.
Section 6(a) of E.O. 12866 also requires agencies to submit
``significant regulatory actions'' to OIRA for review. OIRA has
determined that this final regulatory action constitutes a
``significant regulatory action'' within the scope of section 3(f)(1)
of E.O. 12866, as amended by E.O. 14094. 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 final regulatory action, together with, to the
extent feasible, a quantification of those costs; and an assessment,
including the underlying analysis, of costs and benefits of potentially
effective and reasonably feasible alternatives to the planned
regulation, and an explanation why the planned regulatory action is
preferable to the identified potential alternatives. These assessments
are summarized in this preamble and further detail can be found in the
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'')
and a final regulatory flexibility analysis (``FRFA'') 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 FRFA for the equipment that are the subject of this
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. Need for, and Objectives of, Rule
DOE is adopting 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 Pub. L. 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 six
years after the issuance of any final rule establishing or amending a
standard, DOE must publish either a notice of determination that
standards for the 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))
2. Significant Issues Raised by Public Comments in Response to the IRFA
In response to the October 2023 NOPR, AHRI provided a list of known
suppliers of CRE sold in the United States that are not listed on the
CCD site: Amtecko Industries, Inc.; Atlantic Food Bars; Borgen
Merchandising Systems; Buffalo Outfront; Carrier; Cayuga Displays;
Custom Deli's Inc.; Duke Manufacturing Co.; Federal Industries; GTI
Designs; MTL Cool, a Due North brand; NAFCool; Picadeli; Pure Cold; USR
Brands; Unity[supreg] Commercial Refrigeration; and Vortex
Refrigeration. (AHRI, No. 81, at p. 6)
As part of DOE's market assessment for the October 2023 NOPR and
this final rule, DOE compiled an equipment database of CRE models
available in the United States. To develop a comprehensive equipment
database of CRE basic models, DOE reviewed its CCD \161\ supplemented
by information from CEC's MAEDbS,\162\ company websites, and prior CRE
rulemakings. To identify chef bases or griddle stands and high-
temperature units, DOE reviewed publicly available data from web
scraping of company websites. DOE then reviewed its comprehensive
equipment database to identify the OEMs of the CRE models identified.
DOE compared the list of suppliers provided by AHRI against its list of
CRE manufacturers to ensure completeness. Based on this comparison, DOE
amended its manufacturer assessment to include 10 additional
manufacturers, including 2 additional OEMs, Atlantic Food Bars and
Borgen Merchandising Systems, for this final rule.
---------------------------------------------------------------------------
\161\ 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 Jan. 31, 2024).
\162\ California Energy Commission's Modernized Appliance
Efficiency Database is available at cacertappliances.energy.ca.gov/Pages/Search/AdvancedSearch.aspx (last accessed Jan. 31, 2024).
---------------------------------------------------------------------------
In response to the October 2023 NOPR and August 2024 NODA, NAMA
commented the refrigerant transition is a large burden for smaller
manufacturers investing in safety compliance to low-GWP refrigerants,
capital improvements to factories, changes to service, and training of
factory employees and service providers. (NAMA, No. 85 at p. 4; NAMA,
No. 112 at p. 5)
In response to NAMA, DOE notes that it considered the October 2023
EPA Final Rule and the expenses associated with the refrigerant
transition in the analytical baseline of the October 2023 NOPR, August
2024 NODA, and this final rule analysis. 88 FR 70196, 70284; 88 FR
70247, 68800. Although refrigerant transition costs associated with the
October 2023 EPA Final Rule are not attributed to this rulemaking, DOE
accounted for these refrigerant transition costs in the no-new-
standards case and standards cases to better reflect industry finances
and cash flow over the analysis period. Since industry would incur
costs associated with the refrigerant transition regardless of any DOE
rulemaking, this FRFA assesses the potential small business investments
incurred as a direct result of this DOE rulemaking. DOE reviewed this
final rule under the provisions of the Regulatory Flexibility Act and
the
[[Page 7638]]
procedures and policies published on February 19, 2003. 68 FR 7990,
7993. See section V.B.2.e of this document for additional discussion of
how DOE accounts for cumulative regulatory burden in its analysis.
In response to the October 2023 NOPR, Continental stated that
adopting the standards proposed in the October 2023 NOPR with a 3-year
lead-in would force them to exit in the market for many equipment
configurations, which could negatively impact domestic employment and
small businesses. (Continental, No. 86 at p. 6)
In response to the comment from Continental, DOE understands that
small businesses could be affected disproportionately by amended
standards. DOE analyzes the potential impacts of this final rule on
small business manufacturers of CRE in section VI.B.5 of this document.
As discussed in section III.A.2.a of this document, based on
stakeholder comments and DOE's assessment of the overlapping Federal
refrigerant regulations and recent changes to UL safety standards for
CRE, DOE is extending the compliance period from the 3-years analyzed
in the October 2023 NOPR (modeled as a 2028 compliance year) to 4-years
(modeled as a 2029 compliance year) for this final rule. Furthermore,
DOE notes that compared to the October 2023 NOPR, DOE is adopting less
stringent standards for 22 out of the 28 directly analyzed equipment
classes. See section VI.B.5 of this document for an analysis of the
estimated conversion costs small businesses may incur as a result of
this final rule.
3. Response to Comments Filed by Chief Counsel for Advocacy of the
Small Business Administration
The SBA's Chief Counsel for Advocacy did not submit public comments
on this rulemaking.
4. Description and Estimated Number of Small Entities Affected
DOE reviewed this final 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. As discussed in section VI.B.2 of this document, to develop a
comprehensive equipment database of CRE basic models, DOE reviewed its
CCD \163\ supplemented by information from CEC's MAEDbS,\164\
individual company websites, stakeholder comments (AHRI, No. 81 at p.
6), and prior CRE rulemakings. 79 FR 17725. To identify chef bases or
griddle stands and high-temperature units, DOE reviewed publicly
available data from web scraping of retail websites. DOE then reviewed
the comprehensive equipment database to identify the companies that
sell the CRE models identified. DOE then consulted publicly available
data, such as manufacturer websites, manufacturer specifications and
equipment literature, import/export logs (e.g., bills of lading from
ImportYeti \165\), and basic model numbers, to identify OEMs of CRE
covered by this rulemaking. DOE further relied on public data and
subscription-based market research tools (e.g., Dun & Bradstreet
reports \166\) to determine company, location, headcount, and annual
revenue. DOE also asked industry representatives if they were aware of
any small OEMs 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.
---------------------------------------------------------------------------
\163\ 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 Jan. 31, 2024).
\164\ California Energy Commission's Modernized Appliance
Efficiency Database is available at cacertappliances.energy.ca.gov/Pages/Search/AdvancedSearch.aspx (last accessed Jan. 31, 2024).
\165\ ImportYeti, LLC. ``ImportYeti.'' www.importyei.com (last
accessed March 15, 2024).
\166\ D&B Hoover's subscription login is accessible at
app.dnbhoovers.com.
---------------------------------------------------------------------------
For the October 2023 NOPR, DOE initially identified 83 OEMs that
sell CRE in the United States. For this final rule, DOE refreshed its
database of model listings to include the most up-to-date information
on CRE models currently available on the U.S. market. Through its
comprehensive review of its updated equipment database, other public
sources, and stakeholder comments in response to the October 2023 NOPR,
DOE identified 43 additional OEMs selling CRE in the United States (2
of which were identified as small, domestic businesses). DOE also
determined 23 OEMs (7 of which were identified as small domestic
businesses in the October 2023 NOPR) do not currently produce covered
CRE for the U.S. market (i.e., they do not manufacture CRE in-house).
Therefore, of the 103 OEMs identified in this final rule, DOE
determined that 20 companies qualify as small businesses and are not
foreign-owned and operated.
5. Description of Reporting, Recordkeeping, and Other Compliance
Requirements
Of the 20 small domestic CRE OEMs, 19 OEMs manufacture vertical
equipment classes (i.e., vertical open (``VOP''), vertical closed
transparent (``VCT''), or vertical closed solid (``VCS'')); 7 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'')); 6 OEMs manufacture
service-over-counter (``SOC'') equipment classes (i.e., SOC.RC.M or
SOC.SC.M); 8 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
or griddle stands.
For the purposes of this FRFA, 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 adopted standard. As discussed in section IV.J.2.c of this
document, DOE scaled the industry capital conversion costs by the
number of relevant 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 TSL 3
efficiency levels. DOE used unique basic model counts to scale the
industry product conversion costs.
DOE expects manufacturers could meet TSL 3 without implementing
occupancy sensors with dimming capability, triple-pane doors with
krypton fill, or vacuum-insulated glass doors. At this level, only 2
self-contained equipment classes, HCT.SC.I and SOC.SC.M (together
accounting for approximately 3 percent of transparent door CRE
shipments), would likely incorporate improved door designs, which may
necessitate new fixtures. For some self-contained equipment classes
totaling approximately 50 percent of self-contained CRE shipments,
manufacturers would likely have to incorporate variable-speed
compressors into CRE designs. To incorporate variable-speed
compressors, which could be larger than existing single-speed
compressors, manufacturers may need new tools for the baseplate.
[[Page 7639]]
Product conversion costs may be necessary to qualify, source, and test
new high-efficiency components (e.g., BLDC fan motors, variable-speed
compressors).
Of the 19 small OEMs of vertical equipment classes, DOE expects 15
OEMs would incur some conversion costs to redesign models that do not
currently meet the efficiency levels adopted in this final rule. The
remaining 4 small OEMs would likely not incur conversion costs as a
direct result of the standard as all their vertical CRE models
currently meet or exceed TSL 3. Vertical equipment classes account for
approximately 90 percent of industry shipments. Manufacturers will
likely incorporate night curtains for all VOP equipment classes and
BLDC condenser fan motors for nearly all vertical self-contained
equipment classes. DOE further expects manufacturers to implement
variable-speed compressors into some self-contained vertical equipment
classes.
DOE expects all 7 small OEMs of semi-vertical equipment classes
would incur some conversion costs to redesign models that do not
currently meet the efficiency levels adopted in this final rule. Semi-
vertical equipment classes account for approximately 2 percent of
industry shipments in 2028. For SVO.SC.M, manufacturers will likely
incorporate night curtains, BLDC condenser fan motors, and variable-
speed compressors to meet TSL 3. For SVO.RC.M, manufacturers will
likely incorporate night curtains to meet TSL 3.
Out of the 6 small OEMs of service-over-counter equipment classes,
DOE expects 5 OEMs would incur some conversion costs to redesign models
that do not currently meet the efficiency levels adopted in this final
rule. The remaining small OEM would likely not incur conversion costs
as a direct result of the standard as all their service-over-counter
CRE models currently meet or exceed TSL 3. Service-over-counter
equipment classes account for less than 1 percent of industry
shipments. Manufacturers will likely incorporate BLDC evaporator and
condenser fan motors, variable-speed compressors, and triple-pane doors
with argon fill for SOC.SC.M to meet TSL 3. For SOC.RC.M, TSL 3
corresponds to the baseline efficiency level.
Out of the 8 small OEMs of horizontal equipment classes, DOE
expects 7 OEMs would incur some conversion costs to redesign models
that do not currently meet the efficiency levels adopted in this final
rule. The remaining small OEM would likely not incur conversion costs
as a direct result of the standard as all their horizontal CRE models
currently meet or exceed TSL 3. Horizontal equipment classes account
for approximately 6 percent of industry shipments. Manufacturers will
likely implement BLDC condenser fan motors in both HCS equipment
classes to meet TSL 3. Manufacturers will likely incorporate triple-
pane doors with argon fill for HCT.SC.I. Manufacturers will likely
incorporate BLDC condenser fan motors and variable-speed compressors
for some HZO equipment classes to meet TSL 3. For HCT.SC.L, HCT.SC.M,
HZO.RC.L, and HZO.RC.M, TSL 3 corresponds to the baseline efficiency
levels.
DOE expects all 3 small OEMs offering chef base or griddle stand
equipment to incur some conversion costs to redesign models that do not
meet efficiency levels at TSL 3. Chef bases or griddle stands account
for approximately 1 percent of industry shipments. Manufacturers would
likely incorporate BLDC condenser fan motors and variable-speed
compressors for CB.SC.M. None of the small businesses identified
manufacture CB.SC.L models.
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 $2.3 million to $307.9
million, with an average annual revenue of approximately $74.8 million.
DOE estimates that conversion costs could range from $0.0 million to
$12.9 million, with the average per OEM conversion costs of $1.5
million. The estimated total conversion costs as a percent of company
revenue over the 4-year conversion period range from approximately 0.0
percent to 5.0 percent, with an average of 1.0 percent. See table VI.1
for additional details.
[[Page 7640]]
[GRAPHIC] [TIFF OMITTED] TR21JA25.223
6. Significant Alternatives Considered and Steps Taken To Minimize
Significant Economic Impacts on Small Entities
The discussion in the previous section analyzes impacts on small
businesses that would result from the adopted standards, represented by
TSL 3. In reviewing alternatives to the adopted standards, DOE examined
energy conservation standards set at lower efficiency levels. While TSL
1 and TSL 2 would reduce the impacts on small business manufacturers,
it would come at the expense of a reduction in energy savings.
TSL 1 achieves 78 percent lower energy savings compared to the
energy savings at TSL 3. TSL 2 achieves 74 percent lower energy savings
compared to the energy savings at TSL 3.
Establishing standards at TSL 3 balances the benefits of the energy
savings at TSL 3 with the potential burdens placed on CRE
manufacturers, including small business manufacturers. Accordingly, DOE
is not adopting 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 final rule TSD.
Additionally, DOE notes that statutory provisions under EPCA state
that should the Secretary determine that a 3-year period is inadequate,
the Secretary may provide that the amended standard can apply to CRE
manufactured on or after the date that is not later than 5 years after
the date on which the final rule is published in the Federal Register.
(See 42 U.S.C. 6313(c)(6)(C)(ii)) Pursuant to this EPCA provision, DOE
is extending the compliance period from the 3-years analyzed in the
October 2023 NOPR (modeled as a 2028 compliance year) to 4-years
(modeled as a 2029 compliance year) for this final rule. DOE has
determined that a longer compliance period for CRE is warranted based
on stakeholder comments and DOE's assessment of the overlapping Federal
refrigerant regulations and recent changes to UL safety standards for
CRE. DOE understands that the longer compliance period will help
mitigate cumulative regulatory burden by allowing manufacturers of CRE,
including small businesses, more flexibility to spread investments
across 4 years instead of 3 years. Manufacturers, including small
businesses, will also have more time to recoup any investments made to
redesign CRE models in compliance with the October 2023 EPA Final Rule
as compared to a 3-year compliance period. 88 FR 73098.
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
1003 for additional details.
C. Review Under the Paperwork Reduction Act
Manufacturers of CRE must certify to DOE that their products comply
with
[[Page 7641]]
any applicable energy conservation standards. In certifying compliance,
manufacturers must test their products 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 products 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
Pursuant to the National Environmental Policy Act of 1969
(``NEPA''), DOE has analyzed this rule in accordance with NEPA and
DOE's NEPA implementing regulations (10 CFR part 1021). DOE has
determined that this rule qualifies for categorical exclusion under 10
CFR part 1021, subpart D, appendix B5.1 because it is a rulemaking that
establishes energy conservation standards for consumer products or
industrial equipment, none of the exceptions identified in B5.1(b)
apply, no extraordinary circumstances exist that require further
environmental analysis, and it meets the requirements for application
of a categorical exclusion. See 10 CFR 1021.410. Therefore, DOE has
determined that promulgation of this rule is not a major Federal action
significantly affecting the quality of the human environment within the
meaning of NEPA, and does not require an environmental assessment or an
environmental impact statement.
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 rule and has determined
that it would not have a substantial direct effect on the States, on
the relationship between the national government and the States, or on
the distribution of power and responsibilities among the various levels
of government. EPCA governs and prescribes Federal preemption of State
regulations as to energy conservation for the equipment that are the
subject of this final rule. States can petition DOE for exemption from
such preemption to the extent, and based on criteria, set forth in
EPCA. (42 U.S.C. 6316(e)(2)-(3); 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 (February 7, 1996). Regarding the review required by section 3(a),
section 3(b) of E.O. 12988 specifically requires that Executive
agencies make every reasonable effort to ensure that the regulation:
(1) clearly specifies the preemptive effect, if any; (2) clearly
specifies any effect on existing Federal law or regulation; (3)
provides a clear legal standard for affected conduct while promoting
simplification and burden reduction; (4) specifies the retroactive
effect, if any; (5) adequately defines key terms; and (6) addresses
other important issues affecting clarity and general draftsmanship
under any guidelines issued by the Attorney General. Section 3(c) of
E.O. 12988 requires Executive agencies to review regulations in light
of applicable standards in section 3(a) and section 3(b) to determine
whether they are met or it is unreasonable to meet one or more of them.
DOE has completed the required review and determined that, to the
extent permitted by law, this final 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. Pub. L. 104-4, sec. 201 (codified at 2 U.S.C. 1531).
For a regulatory action likely to result in a rule that may cause the
expenditure by State, local, and Tribal governments, in the aggregate,
or by the private sector of $100 million or more in any one year
(adjusted annually for inflation), section 202 of UMRA requires a
Federal agency to publish a written statement that estimates the
resulting costs, benefits, and other effects on the national economy.
(2 U.S.C. 1532(a), (b)) 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 ``significant
intergovernmental mandate,'' and requires an agency plan for giving
notice and opportunity for timely input to potentially affected small
governments before establishing any requirements that might
significantly or uniquely affect them. On March 18, 1997, DOE published
a statement of policy on its process for intergovernmental consultation
under UMRA. 62 FR 12820. DOE's policy statement is also available at
www.energy.gov/sites/prod/files/gcprod/documents/umra_97.pdf.
DOE has concluded that this final rule 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 final rule. (2 U.S.C. 1532(c)) The content requirements
of section 202(b) of UMRA relevant to a private sector
[[Page 7642]]
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 document and the TSD for this
final 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 rule unless DOE publishes an
explanation for doing otherwise, or the selection of such an
alternative is inconsistent with law. As required by 42 U.S.C. 6295(m)
or a product-specific directive in 6295, and 42 U.S.C. 6316(e)(1), and
6313(c)(6), this final rule establishes 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
sections 6316(e)(1), 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 final 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 proposed rule or policy that may affect
family well-being. When developing a Family Policymaking Assessment,
agencies must assess whether: (1) the action strengthens or erodes the
stability or safety of the family and, particularly, the marital
commitment; (2) the action strengthens or erodes the authority and
rights of parents in the education, nurture, and supervision of their
children; (3) the action helps the family perform its functions, or
substitutes governmental activity for the function; (4) the action
increases or decreases disposable income or poverty of families and
children; (5) the proposed benefits of the action justify the financial
impact on the family; (6) the action may be carried out by State or
local government or by the family; and whether (7) the action
establishes an implicit or explicit policy concerning the relationship
between the behavior and personal responsibility of youth, and the
norms of society. In evaluating the above factors, DOE has concluded
that it is not necessary to prepare a Family Policymaking Assessment as
none of the above factors are implicated. Further, this proposed
determination would not have any financial impact on families nor any
impact on the autonomy or integrity of the family as an institution.
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 proposed rule or policy that may affect
family well-being. Although this final rule would not have any impact
on the autonomy or integrity of the family as an institution as
defined, this final rule could impact a family's well-being. When
developing a Family Policymaking Assessment, agencies must assess
whether: (1) the action strengthens or erodes the stability or safety
of the family and, particularly, the marital commitment; (2) the action
strengthens or erodes the authority and rights of parents in the
education, nurture, and supervision of their children; (3) the action
helps the family perform its functions, or substitutes governmental
activity for the function; (4) the action increases or decreases
disposable income or poverty of families and children; (5) the proposed
benefits of the action justify the financial impact on the family; (6)
the action may be carried out by State or local government or by the
family; and whether (7) the action establishes an implicit or explicit
policy concerning the relationship between the behavior and personal
responsibility of youth, and the norms of society.
DOE has considered how the benefits of this final rule compare to
the possible financial impact on a family (the only factor listed that
is relevant to this rule). As part of its rulemaking process, DOE must
determine whether the energy conservation standards enacted in this
final rule are economically justified. As discussed in section V.C.1 of
this document, DOE has determined that the standards enacted in this
final rule are economically justified because the benefits to consumers
would far outweigh the costs to manufacturers. Customers will also see
LCC savings as a result of this final rule. Moreover, as discussed
further in section V.B.1 of this document, DOE has determined that for
small businesses, average LCC savings and PBP at the considered
efficiency levels are similar compared to those for all purchasers.
Further, the standards will also result in climate and health benefits
for all businesses.
I. Review Under Executive Order 12630
Pursuant to E.O. 12630, ``Governmental Actions and Interference
with Constitutionally Protected Property Rights,'' 53 FR 8859 (March
18, 1988), DOE has determined that this 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 (February 22, 2002), and DOE's guidelines were published at 67
FR 62446 (Oct. 7, 2002). Pursuant to OMB Memorandum M-19-15, Improving
Implementation of the Information Quality Act (April 24, 2019), DOE
published updated guidelines which are available at www.energy.gov/sites/prod/files/2019/12/f70/DOE%20Final%20Updated%20IQA%20Guidelines%20Dec%202019.pdf. DOE has
reviewed this final rule 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 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 is likely to have a
significant adverse effect on the supply, distribution, or use of
energy; or (2) is designated by the Administrator of OIRA as a
significant energy action. For any significant energy action, the
agency must give a detailed statement of any adverse effects on energy
supply, distribution, or use should the proposal be implemented, and of
reasonable alternatives to the action and their expected benefits on
energy supply, distribution, and use.
[[Page 7643]]
DOE has concluded that this regulatory action, which sets forth new
and amended energy conservation standards for CRE, is not a significant
energy action because the 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 final 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 prepared a report describing that peer
review.\167\ Generation of this report involved a rigorous, formal, and
documented evaluation using objective criteria and qualified and
independent reviewers to make a judgment as to the technical/
scientific/business merit, the actual or anticipated results, and the
productivity and management effectiveness of programs and/or projects.
Because available data, models, and technological understanding have
changed since 2007, DOE has engaged with the National Academy of
Sciences to review DOE's analytical methodologies to ascertain whether
modifications are needed to improve DOE's analyses. DOE is in the
process of evaluating the resulting report.\168\
---------------------------------------------------------------------------
\167\ 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 April 15, 2024).
\168\ The report is available at www.nationalacademies.org/our-work/review-of-methods-for-setting-building-and-equipment-performance-standards.
---------------------------------------------------------------------------
M. Congressional Notification
As required by 5 U.S.C. 801, DOE will report to Congress on the
promulgation of this rule prior to its effective date. The Office of
Information and Regulatory Affairs has determined that this rule meets
the criteria set forth in 5 U.S.C. 804(2).
VII. Approval of the Office of the Secretary
The Secretary of Energy has approved publication of this final
rule.
List of Subjects in 10 CFR Part 431
Administrative practice and procedure, Confidential business
information, Energy conservation test procedures, Incorporation by
reference, and Reporting and recordkeeping requirements.
Signing Authority
This document of the Department of Energy was signed on December
20, 2024, 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 December 20, 2024.
Treena V. Garrett,
Federal Register Liaison Officer, U.S. Department of Energy.
For the reasons set forth in the preamble, DOE amends part 431 of
chapter II, subchapter D, 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,'' ``Drawer unit,'' and ``Forced-air evaporator;''
0
b. Revising the definition of ``Ice-cream freezer;''
0
c. Adding in alphabetical order a definition for ``Pass-through
doors;''
0
d. Revising the definition of ``Rating temperature;'' and
0
e. Adding in alphabetical order definitions for ``Roll-in door,''
``Roll-through doors,'' and ``Sliding door.''
The additions and revisions 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.
* * * * *
Drawer unit means a commercial refrigerator, freezer, or
refrigerator-freezer in which all the externally accessed compartments
are drawers.
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.
* * * * *
Ice-cream freezer means:
(1) Prior to Monday, January 22, 2029, 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) On or after Monday, January 22, 2029, 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.
* * * * *
Pass-through doors mean 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
[[Page 7644]]
2.1. or section 2.2. of appendix B to this subpart, 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) Each commercial refrigerator, freezer, and refrigerator-freezer
with a self-contained condensing unit designed for holding temperature
applications and with solid or transparent doors; commercial
refrigerator with a self-contained condensing unit designed for pull-
down temperature applications and with transparent doors; commercial
refrigerator, freezer, and refrigerator-freezer with a self-contained
condensing unit and without doors; commercial refrigerator, freezer,
and refrigerator-freezer with a remote condensing unit; and commercial
ice-cream freezer manufactured on or after March 27, 2017, and before
Monday, January 22, 2029, shall have a daily energy consumption (in
kilowatt-hours per day or ``kWh/day'') that does not exceed the levels
specified:
(1) For equipment other than hybrid equipment, refrigerator/
freezers, or wedge cases:
Table 1 to Paragraph (a)(1)--Maximum Daily Energy Consumption Standards
--------------------------------------------------------------------------------------------------------------------------------------------------------
Maximum daily
Equipment category Condensing unit Equipment family Rating temp. Operating Equipment class energy consumption
configuration [deg]F temp. [deg]F designation * ** (kWh/day)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Remote Condensing Commercial Remote (RC)......... Vertical Open (VOP). 38 (M) >=32 VOP.RC.M............ 0.64 x TDA + 4.07
Refrigerators and Commercial 0 (L) <32 VOP.RC.L............ 2.2 x TDA + 6.85
Freezers.
Semivertical Open 38 (M) >=32 SVO.RC.M............ 0.66 x TDA + 3.18
(SVO). 0 (L) <32 SVO.RC.L............ 2.2 x TDA + 6.85
Horizontal Open 38 (M) >=32 HZO.RC.M............ 0.35 x TDA + 2.88
(HZO). 0 (L) <32 HZO.RC.L............ 0.55 x TDA + 6.88
Vertical Closed 38 (M) >= 32 VCT.RC.M............ 0.15 x TDA + 1.95
Transparent (VCT). 0 (L) <32 VCT.RC.L............ 0.49 x TDA + 2.61
Horizontal Closed 38 (M) >=32 HCT.RC.M............ 0.16 x TDA + 0.13
Transparent (HCT). 0 (L) <32 HCT.RC.L............ 0.34 x TDA + 0.26
Vertical Closed 38 (M) >=32 VCS.RC.M............ 0.1 x V + 0.26
Solid (VCS). 0 (L) < 32 VCS.RC.L............ 0.21 x V + 0.54
Horizontal Closed 38 (M) >=32 HCS.RC.M............ 0.1 x V + 0.26
Solid (HCS). 0 (L) <32 HCS.RC.L............ 0.21 x V + 0.54
Service Over Counter 38 (M) >=32 SOC.RC.M............ 0.44 x TDA + 0.11
(SOC). 0 (L) <32 SOC.RC.L............ 0.93 x TDA + 0.22
Self-Contained Commercial Self-Contained (SC). Vertical Open (VOP). 38 (M) >=32 VOP.SC.M............ 1.69 x TDA + 4.71
Refrigerators and Commercial 0 (L) <32 VOP.SC.L............ 4.25 x TDA + 11.82
Freezers Without Doors.
Semivertical Open 38 (M) >=32 SVO.SC.M............ 1.7 x TDA + 4.59
(SVO). 0 (L) <32 SVO.SC.L............ 4.26 x TDA + 11.51
Horizontal Open 38 (M) >=32 HZO.SC.M............ 0.72 x TDA + 5.55
(HZO). 0 (L) <32 HZO.SC.L............ 1.9 x TDA + 7.08
Self-Contained Commercial Self-Contained (SC). Vertical Closed 38 (M) >=32 VCT.SC.M............ 0.1 x V + 0.86
Refrigerators and Commercial Transparent (VCT). 0 (L) <32 VCT.SC.L............ 0.29 x V + 2.95
Freezers With Doors.
Vertical Closed 38 (M) >=32 VCS.SC.M............ 0.05 x V + 1.36
Solid (VCS). 0 (L) <32 VCS.SC.L............ 0.22 x V + 1.38
Horizontal Closed 38 (M) >=32 HCT.SC.M............ 0.06 x V + 0.37
Transparent (HCT). 0 (L) <32 HCT.SC.L............ 0.08 x V + 1.23
Horizontal Closed 38 (M) >=32 HCS.SC.M............ 0.05 x V + 0.91
Solid (HCS). 0 (L) <32 HCS.SC.L............ 0.06 x V + 1.12
Service Over Counter 38 (M) >=32 SOC.SC.M............ 0.52 x TDA + 1
(SOC). 0 (L) <32 SOC.SC.L............ 1.1 x TDA + 2.1
Self-Contained Commercial Self-Contained (SC). Pull-Down (PD)...... 38 (M) >=32 PD.SC.M............. 0.11 x V + 0.81
Refrigerators with Transparent
Doors for Pull-Down Temperature
Applications.
Commercial Ice-Cream Freezers.... Remote (RC)......... Vertical Open (VOP). -15 (I) <=-5 VOP.RC.I............ 2.79 x TDA + 8.7
Semivertical Open SVO.RC.I............ 2.79 x TDA + 8.7
(SVO).
Horizontal Open HZO.RC.I............ 0.7 x TDA + 8.74
(HZO).
Vertical Closed VCT.RC.I............ 0.58 x TDA + 3.05
Transparent (VCT).
Horizontal Closed HCT.RC.I............ 0.4 x TDA + 0.31
Transparent (HCT).
[[Page 7645]]
Vertical Closed VCS.RC.I............ 0.25 x V + 0.63
Solid (VCS).
Horizontal Closed HCS.RC.I............ 0.25 x V + 0.63
Solid (HCS).
Service Over Counter SOC.RC.I............ 1.09 x TDA + 0.26
(SOC)
Self-Contained (SC). Vertical Open (VOP). VOP.SC.I............ 5.4 x TDA + 15.02
Semivertical Open SVO.SC.I............ 5.41 x TDA + 14.63
(SVO).
Horizontal Open HZO.SC.I............ 2.42 x TDA + 9
(HZO).
Vertical Closed VCT.SC.I............ 0.62 x TDA + 3.29
Transparent (VCT).
Horizontal Closed HCT.SC.I............ 0.56 x TDA + 0.43
Transparent (HCT).
Vertical Closed VCS.SC.I............ 0.34 x V + 0.88
Solid (VCS).
Horizontal Closed HCS.SC.I............ 0.34 x V + 0.88
Solid (HCS).
Service Over Counter SOC.SC.I............ 1.53 x TDA + 0.36
(SOC).
--------------------------------------------------------------------------------------------------------------------------------------------------------
* The meaning of the letters in this column is indicated in the columns to the left.
** ``V'' is the volume, expressed in ft\3\, as determined in appendix B to this subpart. ``TDA'' is the total display area, expressed in ft\2\, as
determined in appendix B to this subpart.
(2) For commercial refrigeration equipment with two or more
compartments (i.e., hybrid refrigerators, hybrid freezers, hybrid
refrigerator-freezers, and non-hybrid 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 (a)(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
entire case:
(i) For remote condensing commercial hybrid refrigerators, hybrid
freezers, hybrid refrigerator-freezers, and non-hybrid refrigerator-
freezers, where two or more independent condensing units each
separately cool only one compartment, measure the total refrigeration
load of each compartment separately according to AHRI Standard 1200 (I-
P)-2010 test procedure (incorporated by reference, see Sec. 431.63).
Calculate compressor energy consumption (CEC) for each compartment
using table 1 in ARI Standard 1200-2006 (incorporated by reference, see
Sec. 431.63) or AHRI Standard 1200 (I-P)-2010 (incorporated by
reference, see Sec. 431.63) using the saturated evaporator temperature
for that compartment. The CDEC for the entire case shall be the sum of
the CEC for each compartment, fan energy consumption (FEC), lighting
energy consumption (LEC), anti-condensate energy consumption (AEC),
defrost energy consumption (DEC), and condensate evaporator pan energy
consumption (PEC) (as measured in AHRI Standard 1200 (I-P)-2010).
(ii) For remote condensing commercial hybrid refrigerators, hybrid
freezers, hybrid refrigerator-freezers, and non-hybrid refrigerator-
freezers, where two or more compartments are cooled collectively by one
condensing unit, measure the total refrigeration load of the entire
case according to the AHRI Standard 1200 (I-P)-2010 test procedure
(incorporated by reference, see Sec. 431.63). Calculate a weighted
saturated evaporator temperature for the entire case by:
multiplying the saturated evaporator temperature of each
compartment by the volume of that compartment (as measured in AHRI
Standard 1200 (I-P)-2010 (incorporated by reference, see Sec.
431.63)),
summing the resulting values for all compartments; and
dividing the resulting total by the total volume of all
compartments.
Calculate the CEC for the entire case using table 1 in ARI Standard
1200-2006 (incorporated by reference, see Sec. 431.63) or AHRI
Standard 1200 (I-P)-2010 (incorporated by reference, see Sec. 431.63),
using the total refrigeration load and the weighted average saturated
evaporator temperature. The CDEC for the entire case shall be the sum
of the CEC, FEC, LEC, AEC, DEC, and PEC.
(iii) For self-contained commercial hybrid refrigerators, hybrid
freezers, hybrid refrigerator-freezers, and non-hybrid refrigerator-
freezers, measure the TDEC for the entire case according to the AHRI
Standard 1200 (I-P)-2010 test procedure (incorporated by reference, see
Sec. 431.63).
(3) For remote condensing and self-contained wedge cases, measure
the CDEC or TDEC according to the AHRI Standard 1200 (I-P)-2010 test
procedure (incorporated by reference, see Sec. 431.63). 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 (a)(1) of this section. For wedge cases of equipment classes
for which a TDA metric is used, the MDEC for each model shall be the
amount derived by incorporating into the standards equation in
paragraph (a)(1) of this section for the equipment class 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.
(b) Each commercial refrigerator, freezer, and refrigerator-
freezer, except as specified in paragraph (c) of this section,
manufactured on or after Monday, January 22, 2029, shall have a daily
energy consumption (in kilowatt-hours per day or ``kWh/day''), when
measured in accordance with the DOE
[[Page 7646]]
test procedure at appendix B to this subpart, that does not exceed the
following:
(1) For commercial refrigerators, freezers, and refrigerator-
freezers other than commercial hybrids or commercial refrigerator-
freezers:
Table 2 to Paragraph (b)(1)--Maximum Daily Energy Consumption Standards for Equipment Connected to Remote Condensing Units
--------------------------------------------------------------------------------------------------------------------------------------------------------
Rating Operating Maximum daily energy
Condensing unit configuration Equipment family temperature temperature Equipment class consumption ** (kWh/
([deg]F) ([deg]F) designation * day)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Remote Condensing (RC)............... Vertical Open (VOP)..... 55.0 (H) >40.0 VOP.RC.H 0.551 x TDA + 3.506
38.0 (M) <=40.0 and >=32.0 VOP.RC.M 0.591 x TDA + 3.758
0.0 (L) <32.0 VOP.RC.L 2.079 x TDA + 6.472
-15.0 (I) <=-13.0 VOP.RC.I 2.637 x TDA + 8.222
Semivertical Open (SVO). 55.0 (H) >40.0 SVO.RC.H 0.572 x TDA + 2.756
38.0 (M) <=40.0 and >=32.0 SVO.RC.M 0.611 x TDA + 2.944
0.0 (L) <32.0 SVO.RC.L 2.079 x TDA + 6.473
-15.0 (I) <=-13.0 SVO.RC.I 2.637 x TDA + 8.222
Horizontal Open (HZO)... 55.0 (H) >40.0 HZO.RC.H 0.350 x TDA + 2.880
38.0 (M) <=40.0 and >=32.0 HZO.RC.M 0.350 x TDA + 2.880
0.0 (L) <32.0 HZO.RC.L 0.550 x TDA + 6.880
-15.0 (I) <=-13.0 HZO.RC.I 0.700 x TDA + 8.740
Vertical Closed 55.0 (H) >40.0 VCT.RC.H 0.150 x TDA + 1.950
Transparent (VCT). 38.0 (M) <=40.0 and >=32.0 VCT.RC.M 0.150 x TDA + 1.950
0.0 (L) <32.0 VCT.RC.L 0.490 x TDA + 2.610
-15.0 (I) <=-13.0 VCT.RC.I 0.580 x TDA + 3.050
Horizontal Closed 38.0 (M) >=32.0 HCT.RC.M 0.160 x TDA + 0.130
Transparent (HCT). 0.0 (L) <32.0 HCT.RC.L 0.340 x TDA + 0.260
-15.0 (I) <=-13.0 HCT.RC.I 0.356 x TDA + 0.276
Vertical Closed Solid 55.0 (H) >40.0 VCS.RC.H 0.100 x V + 0.260
(VCS). 38.0 (M) <=40.0 and >=32.0 VCS.RC.M 0.100 x V + 0.260
0.0 (L) <32.0 VCS.RC.L 0.210 x V + 0.540
-15.0 (I) <=-13.0 VCS.RC.I 0.250 x V + 0.630
Horizontal Closed Solid 38.0 (M) >=32.0 HCS.RC.M 0.100 x V + 0.260
(HCS). 0.0 (L) <32.0 HCS.RC.L 0.210 x V + 0.540
-15.0 (I) <=-13.0 HCS.RC.I 0.250 x V + 0.630
Service Over Counter 55.0 (H) >40.0 SOC.RC.H 0.440 x TDA + 0.110
(SOC). 38.0 (M) <=40.0 and >= 32.0 SOC.RC.M 0.440 x TDA + 0.110
0.0 (L) <32.0 SOC.RC.L 0.930 x TDA + 0.220
-15.0 (I) <=-13.0 SOC.RC.I 0.970 x TDA + 0.231
Chef Base (CB).......... 38.0 (M) >=32.0 CB.RC.M 0.050 x V + 0.686
0.0 (L) <32.0 CB.RC.L 0.194 x V + 1.693
--------------------------------------------------------------------------------------------------------------------------------------------------------
* The meaning of the letters in this column is indicated in the columns to the left.
** ``V'' is the volume, expressed in ft\3\, as determined in appendix B to this subpart. ``TDA'' is the total display area, expressed in ft\2\, as
determined in appendix B to this subpart.
Table 3 to Paragraph (b)(1)--Maximum Daily Energy Consumption Standards for Equipment Connected to Self-Contained Units
--------------------------------------------------------------------------------------------------------------------------------------------------------
Rating Operating Maximum daily
Condensing unit configuration Equipment family temperature temperature Capacity range Equipment class energy consumption
([deg]F) ([deg]F) designation * ** (kWh/day)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Self-Contained (SC)............. Vertical Open (VOP) 55.0 (H) >40.0 All TDAs........... VOP.SC.H........... 0.890 x TDA +
2.480
38.0 (M) <=40.0 and >=32.0 TDA <=17 ft\2\..... VOP.SC.M (<=17).... 1.230 x TDA +
3.428
TDA >17 ft\2\...... VOP.SC.M (>17)..... 1.69 x TDA + 4.71
0.0 (L) <32.0 All TDAs........... VOP.SC.L........... 3.092 x TDA +
8.598
-15.0 (I) <=-13.0 VOP.SC.I........... 3.928 x TDA +
10.926
Semivertical Open 55.0 (H) >40.0 All TDAs........... SVO.SC.H........... 1.045 x TDA +
(SVO). 2.822
38.0 (M) <=40.0 and >=32.0 TDA <=15 ft\2\..... SVO.SC.M (<=15).... 1.207 x TDA +
3.258
TDA >15 ft\2\...... SVO.SC.M (>15)..... 1.7 x TDA + 4.59
0.0 (L) <32.0 All TDAs........... SVO.SC.L........... 3.024 x TDA +
8.169
-15.0 (I) <=-13.0 SVO.SC.I........... 3.840 x TDA +
10.384
Horizontal Open 55.0 (H) >40.0 All TDAs........... HZO.SC.H........... 0.546 x TDA +
(HZO). 4.211
38.0 (M) <=40.0 and >=32.0 HZO.SC.M........... 0.532 x TDA +
4.100
0.0 (L) <32.0 TDA <=35 ft\2\..... HZO.SC.L (<=35).... 1.490 x TDA +
5.554
TDA >35 ft\2\...... HZO.SC.L (>35)..... 1.9 x TDA + 7.08
-15.0 (I) <=-13.0 All TDAs........... HZO.SC.I........... 1.900 x TDA +
7.065
Vertical Closed 55.0 (H) >40.0 All TDAs........... VCT.SC.H........... 0.047 x V + 0.493
Transparent (VCT).
38.0 (M) <=40.0 and >=32.0 V <=100 ft\3\...... VCT.SC.M (<=100)... 0.073 x V + 0.630
VCT.SC.M (<=100) 0.078 x V + 0.674
with Feature ***.
V >100 ft\3\....... VCT.SC.M (>100).... 0.1 x V + 0.86
0.0 (L) <32.0 V <=70 ft\3\....... VCT.SC.L (<=70).... 0.233 x V + 2.374
VCT.SC.L (<=70) 0.249 x V + 2.540
with Feature ***.
V >70 ft\3\........ VCT.SC.L (>70)..... 0.29 x V + 2.95
-15.0 (I) <=-13.0 All Volumes........ VCT.SC.I........... 0.620 x TDA +
3.290
[[Page 7647]]
Vertical Closed 55.0 (H) >40.0 All Volumes........ VCS.SC.H........... 0.021 x V + 0.793
Solid (VCS).
38.0 (M) <=40.0 and >=32.0 All Volumes........ VCS.SC.M........... 0.038 x V + 1.039
VCS.SC.M with 0.041 x V + 1.112
Feature ***.
0.0 (L) <32.0 V <=100 ft\3\...... VCS.SC.L (<=100)... 0.169 x V + 1.059
VCS.SC.L (<=100) 0.181 x V + 1.133
with Feature ***.
V >100 ft\3\....... VCS.SC.L (>100).... 0.22 x V + 1.38
-15.0 (I) <=-13.0 All Volumes........ VCS.SC.I........... 0.264 x V + 0.683
Horizontal Closed 38.0 (M) >=32.0 All Volumes........ HCT.SC.M........... 0.060 x V + 0.370
Transparent (HCT).
0.0 (L) <32.0 HCT.SC.L........... 0.080 x V + 1.230
-15.0 (I) <=-13.0 HCT.SC.I........... 0.498 x TDA +
0.383
Horizontal Closed 38.0 (M) >=32.0 All Volumes........ HCS.SC.M........... 0.037 x V + 0.675
Solid (HCS).
0.0 (L) <32.0 HCS.SC.L........... 0.055 x V + 1.033
HCS.SC.L with 0.059 x V + 1.105
Feature ***.
-15.0 (I) <=-13.0 HCS.SC.I........... 0.313 x V + 0.811
Service Over 55.0 (H) >40.0 All TDAs........... SOC.SC.H........... 0.304 x TDA +
Counter (SOC). 0.584
38.0 (M) <=40.0 and >=32.0 TDA <=40 ft\2\..... SOC.SC.M (<=40).... 0.356 x TDA +
0.685
TDA >40 ft\2\...... SOC.SC.M (>40)..... 0.52 x TDA + 1
0.0 (L) <32.0 All TDAs........... SOC.SC.L........... 1.100 x TDA +
2.100
-15.0 (I) <=-13.0 SOC.SC.I........... 1.530 x TDA +
0.360
Chef Base (CB)..... 38.0 (M) >=32.0 All Volumes........ CB.SC.M............ 0.081 x V + 1.117
0.0 (L) <32.0 CB.SC.L............ 0.297 x V + 2.591
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.
** ``V'' is the volume, expressed in ft\3\, as determined in appendix B to this subpart. ``TDA'' is the total display area, expressed in ft\2\, as
determined in appendix B to this subpart.
*** For equipment classes designated ``with Feature,'' refer to table 4 to this paragraph for the list of qualifying features applicable to each class.
Table 4 to Paragraph (b)(1)--Qualifying Features for Equipment Classes
Designated ``with Feature''
------------------------------------------------------------------------
Equipment class Qualifying feature(s)
------------------------------------------------------------------------
VCT.SC.M (<=100).......................... Pass-through doors.
Sliding doors.
Both pass-through and
sliding doors.
Roll-in doors.
Roll-through doors.
VCT.SC.L (<=70)........................... Pass-through doors.
VCS.SC.M.................................. Pass-through doors.
Roll-in doors.
Roll-through doors.
Drawer units.
VCS.SC.L (<=100).......................... Pass-through doors.
Roll-in doors.
Roll-through doors.
Drawer units.
HCS.SC.L.................................. Forced air evaporator.
------------------------------------------------------------------------
(2) For commercial hybrids and commercial refrigerator-freezers,
for each compartment, measure the TDA or volume of that compartment.
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. The total MDEC limit for each model shall be the sum
of the MDEC values for all of its compartments. Measure the CDEC or
TDEC for the model as follows:
(i) For commercial hybrids and commercial refrigerator-freezers
where two or more independent remote condensing units are each
connected to a separate, individual compartment, measure the total
refrigeration load of each compartment separately according to appendix
B to this subpart. 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 this subpart. Calculate a weighted average adjusted dew
point temperature for the model by: multiplying the adjusted dew point
temperature of each compartment by the volume of that compartment;
summing the resulting values for all compartments; and dividing the
resulting total by the total volume of all compartments. 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 this subpart.
(c) The energy conservation standards in paragraph (a) of this
section do not apply to chef bases or griddle stands, buffet tables or
preparation tables, blast chillers, blast freezers, or mobile
refrigerated cabinets. The energy conservation standards in paragraph
(b) of this section do not apply to buffet tables or preparation
tables, blast chillers, blast freezers, or mobile refrigerated
cabinets.
Note: The following appendix will not appear in the Code of
Federal Regulations.
November 27, 2023
Ami Grace-Tardy,
Assistant General Counsel for Litigation, Regulation and Energy
Efficiency, U.S. Department of Energy, Washington, DC 20585.
Re: Commercial Refrigerators, Freezers, and Refrigerator-Freezers
Energy Conservation Standards DOE Docket No. EERE-2017-BT-STD-0007
Dear Assistant General Counsel Grace-Tardy:
I am responding to your October 10, 2023 letter seeking the
views of the Attorney
[[Page 7648]]
General about the potential impact on competition of proposed energy
conservation standards for commercial refrigerators, freezers, and
refrigerator-freezers (collectively ``CRF'').
Your request was submitted under Section 325(o)(2)(B)(i)(V) of
the Energy Policy and Conservation Act, as amended (ECPA), 42 U.S.C.
6295(o)(2)(B)(i)(V), which requires the Attorney General to make a
determination of the impact of any lessening of competition that is
likely to result from the imposition of proposed energy conservation
standards. The Attorney General's responsibility for responding to
requests from other departments about the effect of a program on
competition has been delegated to the Assistant Attorney General for
the Antitrust Division in 28 CFR 0.40(g). The Assistant Attorney
General for the Antitrust Division has authorized me, as the Policy
Director for the Antitrust Division, to provide the Antitrust
Division's views regarding the potential impact on competition of
proposed energy conservation standards on his behalf.
In conducting its analysis, the Antitrust Division examines
whether a proposed standard may lessen competition, for example, by
substantially limiting consumer choice, by placing certain
manufacturers at an unjustified competitive disadvantage, or by
inducing avoidable inefficiencies in production or distribution of
particular products. A lessening of competition could result in
higher prices to manufacturers and consumers.
We have reviewed the proposed standards contained in the Notice
of proposed rulemaking and announcement of public meeting (88 FR
70196, October 10, 2023) and the related Technical Support
Documents. We have also reviewed public comments and information
provided by industry participants and have attended and reviewed
information presented at the Webinar of the Public Meeting held on
November 7, 2023.
Based on this review, our conclusion is that the proposed energy
conservation standards for CRF are unlikely to have a significant
adverse impact on competition.
Sincerely,
David G.B. Lawrence,
Policy Director.
[FR Doc. 2024-31214 Filed 1-17-25; 8:45 am]
BILLING CODE 6450-01-P