Energy Conservation Program for Commercial and Industrial Equipment: Energy Conservation Standards for Commercial Ice-Cream Freezers; for Self-Contained Commercial Refrigerators, Commercial Freezers, and Commercial Refrigerator-Freezers without Doors; and for Remote Condensing Commercial Refrigerators, Commercial Freezers, and Commercial Refrigerator-Freezers, 41162-41210 [07-3640]
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Federal Register / Vol. 72, No. 143 / Thursday, July 26, 2007 / Proposed Rules
Office of Energy Efficiency and
Renewable Energy
10 CFR Part 431
[Docket No. EE–2006–STD–0126]
RIN 1904–AB59
Energy Conservation Program for
Commercial and Industrial Equipment:
Energy Conservation Standards for
Commercial Ice-Cream Freezers; for
Self-Contained Commercial
Refrigerators, Commercial Freezers,
and Commercial Refrigerator-Freezers
without Doors; and for Remote
Condensing Commercial Refrigerators,
Commercial Freezers, and Commercial
Refrigerator-Freezers
Office of Energy Efficiency and
Renewable Energy, Department of
Energy.
ACTION: Advance notice of proposed
rulemaking and notice of public
meeting.
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AGENCY:
SUMMARY: The Energy Policy and
Conservation Act (EPCA) authorizes the
Department of Energy (DOE) to establish
energy conservation standards for
various consumer products and
commercial and industrial equipment,
including commercial ice-cream
freezers; self-contained commercial
refrigerators, commercial freezers, and
commercial refrigerator-freezers without
doors; and remote condensing
commercial refrigerators, commercial
freezers, and commercial refrigeratorfreezers, if DOE determines that energy
conservation standards would be
technologically feasible and
economically justified, and would result
in significant energy savings. DOE
publishes this Advance Notice of
Proposed Rulemaking (ANOPR) to
consider establishing energy
conservation standards for the
categories of commercial refrigeration
equipment mentioned above, and to
announce a public meeting to receive
comments on a variety of issues.
DATES: DOE will hold a public meeting
on August 23, 2007, from 9 a.m. to 5
p.m. in Washington, DC. DOE must
receive requests to speak at the public
meeting no later than 4 p.m., August 3,
2007. DOE must receive a signed
original and an electronic copy of
statements to be given at the public
meeting no later than 4 p.m., August 9,
2007. DOE will accept comments, data,
and information regarding this ANOPR
no later than October 9, 2007. See
section IV, ‘‘Public Participation,’’ of
this ANOPR for details.
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The public meeting will be
held at the U.S. Department of Energy,
Forrestal Building, Room 1E–245, 1000
Independence Avenue, SW.,
Washington, DC. Please note that
foreign nationals visiting DOE
Headquarters are subject to advance
security screening procedures, requiring
a 30-day advance notice. If you are a
foreign national and wish to participate
in the public meeting, please inform
DOE of this fact as soon as possible by
contacting Ms. Brenda Edwards-Jones at
(202) 586–2945 so that the necessary
procedures can be completed.
You may submit comments identified
by docket number EE–2006–STD–0126
and/or Regulatory Information Number
(RIN) 1904–AB59 using any of the
following methods:
• Federal eRulemaking Portal: https://
www.regulations.gov. Follow the
instructions for submitting comments.
• E-mail: commercial
refrigeration.rulemaking@ee.doe.gov.
Include EE–2006–STD–0126 and/or RIN
1904–AB59 in the subject line of your
message.
• Postal Mail: Ms. Brenda EdwardsJones, U.S. Department of Energy,
Building Technologies Program,
Mailstop EE–2J, 1000 Independence
Avenue, SW., Washington, DC 20585–
0121. Telephone: (202) 586–2945.
Please submit one signed paper original.
• Hand Delivery/Courier: Ms. Brenda
Edwards-Jones, U.S. Department of
Energy, Building Technologies Program,
Room 1J–018, 1000 Independence
Avenue, SW., Washington, DC 20585–
0121. Please submit one signed original
paper copy.
For detailed instructions on
submitting comments and additional
information on the rulemaking process,
see section IV, ‘‘Public Participation,’’ of
this document.
Docket: For access to the docket to
read background documents or
comments received, go to the U.S.
Department of Energy, Forrestal
Building, Room 1J–018 (Resource Room
of the Building Technologies Program),
1000 Independence Avenue, SW.,
Washington, DC, (202) 586–2945,
between 9 a.m. and 4 p.m., Monday
through Friday, except Federal holidays.
Please call Ms. Brenda Edwards-Jones at
the above telephone number for
additional information regarding
visiting the Resource Room. Please note:
DOE’s Freedom of Information Reading
Room (Room 1E–190 at the Forrestal
Building) no longer houses rulemaking
materials.
FOR FURTHER INFORMATION CONTACT: Mr.
Charles Llenza, U.S. Department of
Energy, Building Technologies Program,
ADDRESSES:
DEPARTMENT OF ENERGY
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EE–2J, 1000 Independence Avenue,
SW., Washington, DC 20585–0121, (202)
586–2192. E-mail:
Charles.Llenza@ee.doe.gov, or Ms.
Francine Pinto, Esq., U.S. Department of
Energy, Office of General Counsel, GC–
72, 1000 Independence Avenue, SW.,
Washington, DC 20585, (202) 586–9507.
E-mail: Francine.Pinto@hq.doe.gov.
SUPPLEMENTARY INFORMATION:
I. Introduction
A. Purpose of the Advance Notice of
Proposed Rulemaking
B. Summary of the Analysis
1. Engineering Analysis
2. Markups To Determine Equipment Price
3. Energy Use Characterization
4. Life-Cycle Cost and Payback Period
Analyses
5. National Impact Analysis
C. Authority
D. Background
1. History of Standards Rulemaking for
Commercial Refrigeration Equipment
2. Rulemaking Process
3. Miscellaneous Rulemaking Issues
a. Federal Preemption
b. State Exemptions from Federal
Preemption
c. Equipment Class Prioritization
4. Test Procedure
II. Commercial Refrigeration Equipment
Analyses
A. Market and Technology Assessment
1. Definitions of Commercial Refrigeration
Equipment Categories
a. Coverage of Equipment Excluded From
American National Standards Institute/
Air-Conditioning and Refrigeration
Institute Standard 1200–2006
b. Coverage of Equipment Not Designed for
Retail Use
c. Remote Condensing Commercial
Refrigerators, Commercial Freezers, and
Commercial Refrigerator-Freezers
d. Secondary Coolant Applications
e. Self-Contained Commercial
Refrigerators, Commercial Freezers, and
Commercial Refrigerator-Freezers
Without Doors
f. Commercial Ice-Cream Freezers
2. Equipment Classes
3. Normalization Metric
4. Extension of Standards
5. Market Assessment
6. Technology Assessment
B. Screening Analysis
C. Engineering Analysis
1. Approach
2. Equipment Classes Analyzed
3. Analytical Models
a. Cost Model
b. Energy Consumption Model
4. Baseline Models
5. Cost-Efficiency Results
D. Markups To Determine Equipment Price
E. Energy Use Characterization
F. Rebuttable Presumption Payback Periods
G. Life-Cycle Cost and Payback Period
Analyses
1. Approach
2. Life-Cycle Cost Analysis Inputs
3. Baseline Manufacturer Selling Price
4. Increase in Selling Price
5. Markups
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6. Installation Costs
7. Energy Consumption
8. Electricity Prices
9. Electricity Price Trends
10. Repair Costs
11. Maintenance Costs
12. Lifetime
13. Discount Rate
14. Payback Period
15. Life-Cycle Cost and Payback Period
Results
H. Shipments Analysis
I. National Impact Analysis
1. Approach
2. Base Case and Standards Case
Forecasted Efficiencies
3. National Impact Analysis Inputs
4. National Impact Analysis Results
J. Life-Cycle Cost Sub-Group Analysis
K. Manufacturer Impact Analysis
1. Sources of Information for the
Manufacturer Impact Analysis
2. Industry Cash Flow Analysis
3. Manufacturer Sub-Group Analysis
4. Competitive Impacts Assessment
5. Cumulative Regulatory Burden
6. Preliminary Results for the Manufacturer
Impact Analysis
L. Utility Impact Analysis
M. Employment Impact Analysis
N. Environmental Assessment
O. Regulatory Impact Analysis
III. Candidate Energy Conservation Standards
Levels
IV. Public Participation
A. Attendance at Public Meeting
B. Procedure for Submitting Requests to
Speak
C. Conduct of Public Meeting
D. Submission of Comments
E. Issues on Which DOE Seeks Comment
1. Equipment Class Prioritization and
Extending Analyses
2. Air-Curtain Angle
3. Door Angle
4. Equipment Classes for Equipment With
Doors
5. Equipment Classes
6. Case Lighting Operating Hours
7. Operation and Maintenance Practices
8. Equipment Lifetime
9. Life-Cycle Cost Baseline Level
10. Characterizing the National Impact
Analysis Base Case
11. Base Case and Standards Case Forecasts
12. Differential Impact of New Standards
on Future Shipments by Equipment
Classes
13. Selection of Candidate Standard Levels
for Post-Advance Notice of Proposed
Rulemaking Analysis
14. Approach to Characterizing Energy
Conservation Standards
15. Standards for Commercial RefrigeratorFreezers
V. Regulatory Review and Procedural
Requirements: Executive Order 12866
VI. Approval of the Office of the Secretary
I. Introduction
A. Purpose of the Advance Notice of
Proposed Rulemaking
The purpose of this Advance Notice
of Proposed Rulemaking (ANOPR) is to
provide interested persons with an
opportunity to comment on:
1. The equipment classes that the
Department of Energy (DOE) is planning
to analyze in this rulemaking;
2. The analytical framework, models,
and tools (e.g., life-cycle cost (LCC) and
national energy savings (NES)
spreadsheets) that DOE has been using
to perform analyses of the impacts of
energy conservation standards for
commercial ice-cream freezers; selfcontained commercial refrigerators,
commercial freezers, and commercial
refrigerator-freezers without doors; and
remote condensing commercial
refrigerators, commercial freezers, and
commercial refrigerator-freezers; 1
3. The results of the preliminary
engineering analyses, the markups
analysis to determine equipment price,
the energy use characterization, the LCC
and payback period (PBP) analyses, and
the NES and national impact analyses as
presented in the ANOPR Technical
Support Document (TSD): Energy
Efficiency Standards for Commercial
41163
and Industrial Equipment: Commercial
Ice-Cream Freezers; Self-Contained
Commercial Refrigerators, Freezers, and
Refrigerator-Freezers without Doors; and
Remote Condensing Commercial
Refrigerators, Freezers, and RefrigeratorFreezers, and summarized in this
ANOPR; and
4. The candidate energy conservation
standard levels that DOE has developed
from these analyses.
B. Summary of the Analysis
The Energy Policy and Conservation
Act, as amended, (EPCA) authorizes
DOE to establish minimum energy
conservation standards for various
consumer products and commercial and
industrial equipment, including
commercial refrigeration equipment,
which are the subject of this ANOPR.
(42 U.S.C. 6291 et seq.) DOE conducted
in-depth technical analyses for this
ANOPR in the following areas:
engineering, markups to determine
equipment price, energy use
characterization, LCC and PBP, and NES
and net present value (NPV). The
ANOPR discusses the methodologies
and assumptions for each of these
analyses. Table I.1 identifies the
sections in this document that contain
the results of each of the analyses, and
summarizes the methodologies, key
inputs and assumptions for the
analyses. DOE consulted with interested
parties and stakeholders in developing
these analyses, and invites further input
from interested parties and stakeholders
on these topics. Obtaining that input is
a primary purpose of this ANOPR. Thus,
the results of the preliminary analyses
presented in this ANOPR are subject to
revision following review and input
from stakeholders and other interested
parties. The final rule will contain the
results of the final analyses.
TABLE I.1.—IN-DEPTH TECHNICAL ANALYSES CONDUCTED FOR THE ADVANCE NOTICE OF PROPOSED RULEMAKING
Methodology
Key inputs
Engineering (TSD Chapter 5).
Efficiency level approach supplemented
with design option
analysis.
Component cost data
and performance values.
Markups to Determine
Equipment Price (TSD
Chapter 6).
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Analysis area
Key assumptions
Assessment of company
financial reports to develop markups to
transform manufacturer prices into customer prices.
Distribution channels;
market shares across
the different channels;
State sales taxes; and
shipments to different
States.
Component performance improvements
are estimated using
ANSI/ARI Standard
1200–2006.
Markups for baseline
and more efficient
equipment are different.
ANOPR section for
results
TSD section
for results
Section II.C.5 .............
Chapter 5,
section
5.10, and
appendix
B.
Chapter 6,
section
6.7.
Section II.D ................
1 These types of equipment are referred to
collectively hereafter as ‘‘commercial refrigeration
equipment.’’
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Federal Register / Vol. 72, No. 143 / Thursday, July 26, 2007 / Proposed Rules
TABLE I.1.—IN-DEPTH TECHNICAL ANALYSES CONDUCTED FOR THE ADVANCE NOTICE OF PROPOSED RULEMAKING—
Continued
Analysis area
Methodology
Key inputs
Key assumptions
ANOPR section for
results
TSD section
for results
Energy Use Characterization (TSD Chapter
7).
Energy use estimates
from the engineering
analysis, validated
using whole-building
annual simulation for
selected climates.
Analysis of a representative sample of commercial customers by
building-type and location.
Component energy use
and refrigerant load
(from engineering
analysis); and condenser rack performance data.
Manufacturer selling
prices; markups (including sales taxes);
installation price; energy consumption;
electricity prices and
future trends; maintenance costs; repair
costs; equipment lifetime; and discount
rate.
Case lighting operates
for 24 hours a day;
and supermarket is
used as building prototype.
Section II.E ................
Chapter 7,
section
7.4.4, and
appendix
D.
Section II.G.15 ..........
Chapter 8,
section
8.4, and
appendix
G.
Shipments (TSD Chapter 9).
Projection of linear footage of total sales by
equipment class for
new and replacement
markets.
Baseline efficiency level
is Level 1; average
electricity prices are
by customer-type and
State; Annual Energy
Outlook (AEO) 2006
is used as reference
case for future trends;
equipment lifetime is
10 years; and discount rate is estimated by weighted
average cost of capital by customer type.
Market shares by equipment class are constant; saturation by
building type is constant; and shipments
do not change in response to standards.
Section II.H ................
Chapter 9,
section
9.4.
National Impact (TSD
Chapter 10).
Forecasts of commercial
refrigeration equipment costs, annual
energy consumption
and operating costs to
the year 2042.
Wholesaler markups
from company balance-sheet data and
mechanical markups
from U.S. Census Bureau data; current
shipments data by
equipment class; average equipment lifetime; construction
forecasts for food
sales buildings; and
shipments by equipment size.
Shipments; effective
Annual shipments are
date of standard;
from shipments
base case effimodel; annual weightciencies; shipmented-average energy efweighted market
ficiency and installed
shares; annual energy
cost are a function of
consumption, total inenergy efficiency
stalled cost and repair
level; annual weight& maintenance costs,
ed-average repair and
all on a per linear foot
maintenance costs
basis; escalation of
are constant with enelectricity prices; elecergy consumption
tricity site-to-source
level; AEO2006 is
conversion; discount
used for electricity
rate; and present year.
price escalation; National Energy Modeling System (NEMS)
is used for site-tosource conversion;
discount rates are 3
percent and 7 percent
real; and future costs
are discounted to
present year: 2007.
Section II.I.4 ..............
Chapter 10,
section
10.4, and
appendix
I.
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LCC and Payback Period (TSD Chapter 8).
1. Engineering Analysis
The engineering analysis establishes
the relationship between the cost and
efficiency of commercial refrigeration
equipment. This relationship serves as
the basis for cost and benefit
calculations for individual commercial
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consumers, manufacturers, and the
Nation. The engineering analysis
identifies representative baseline
equipment, which is the starting point
for analyzing technologies that provide
energy efficiency improvements.
Baseline equipment here refers to a
model or models having features and
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technologies typically found in
equipment currently offered for sale.
The baseline model in each equipment
class represents the characteristics of
equipment in that class. After
identifying baseline models, DOE
estimated manufacturer selling prices
(MSPs) through an analysis of
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manufacturer costs and manufacturer
markups. Manufacturer markups are the
multipliers used to determine the MSPs
based on manufacturing cost.
The engineering analysis uses 4
industry-supplied cost-efficiency
curves, which are based on an
efficiency-level approach, and 15 costefficiency curves derived from DOE
analysis, which are based on a designoptions approach.2 3 DOE also discusses
in the engineering analysis the
equipment classes analyzed, the
methodology used to extend the
analysis to equipment classes that have
low volumes of shipments, an analysis
of sensitivity to material prices, and the
use of alternative refrigerants.
2. Markups To Determine Equipment
Price
DOE determines customer prices for
commercial refrigeration equipment
from MSP and equipment price
markups using industry balance sheet
data and U.S. Census Bureau data. To
determine price markups, DOE
identifies distribution channels for
equipment sales and determines the
existence and amounts of markups
within each distribution channel. For
each distribution channel, DOE
distinguishes between ‘‘baseline
markups’’ applied to the MSP for
baseline equipment and ‘‘incremental
markups’’ applied to the incremental
increase in MSP for higher efficiency
equipment. Overall baseline and overall
incremental markups are calculated
separately based on the product of all
baseline markups at each step within a
distribution channel or the product of
all incremental markups at each step
within a distribution channel,
respectively. The combination of the
overall baseline markup applied to the
baseline MSP and the incremental
markups applied to the incremental
increase in MSP for higher efficiency
equipment, including sales tax,
determines the final customer price.
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3. Energy Use Characterization
The energy use characterization
provides estimates of annual energy
2 An efficiency-level approach establishes the
relationship between manufacturer cost and
increased efficiency at predetermined efficiency
levels above the baseline. Under this approach,
manufacturers typically provide incremental
manufacturer cost data for incremental increases in
efficiency.
3 A design-options approach uses individual or
combinations of design options to identify increases
in efficiency. Under this approach, estimates are
based on manufacturer or component supplier data,
or through the use of engineering computer
simulation models. Individual design options, or
combinations of design options, are added to the
baseline model in ascending order of costeffectiveness.
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consumption for commercial
refrigeration equipment, which are used
in the subsequent LCC and PBP analyses
and the national impact analysis (NIA).
DOE developed energy consumption
estimates for the 15 classes of
equipment analyzed in the engineering
analysis. DOE validated these estimates
with simulation modeling of energy
consumption on an annual basis for
selected equipment classes and
efficiency levels.
4. Life-Cycle Cost and Payback Period
Analyses
The LCC and PBP analyses determine
the economic impact of potential
standards on individual commercial
consumers. The LCC is the total
consumer expense for a piece of
equipment over the life of the
equipment. The LCC analysis compares
the LCCs of equipment designed to meet
more stringent energy conservation
standards with the LCC of the
equipment likely to be installed in the
absence of standards. DOE determines
LCCs by considering: (1) Total installed
cost to the purchaser (which consists of
MSP, sales taxes, distribution channel
markups, and installation cost), (2) the
operating expenses of the equipment
(energy cost and maintenance and repair
cost), (3) equipment lifetime, and (4) a
discount rate that reflects the real
consumer cost of capital and puts the
LCC in present value terms. The PBP
represents the number of years needed
to recover the increase in purchase price
(including installation cost) of more
efficient equipment through savings in
the operating cost of the equipment. The
PBP is the increase in total installed cost
due to increased efficiency divided by
the (undiscounted) decrease in annual
operating cost from increased efficiency.
5. National Impact Analysis
The NIA estimates the NES, and the
NPV of total national customer costs
and savings, expected to result from
new standards at specific efficiency
levels. DOE calculated the NES and
NPV for each standard level for
commercial refrigeration equipment as
the difference between a base case
forecast (without new standards) and
the standards case forecast (with new
standards). For the NES, DOE
determined national annual energy
consumption by multiplying the
number of commercial refrigeration
equipment units in use (by vintage) by
the average unit energy consumption
(also by vintage). DOE then computed
cumulative energy savings, which is the
sum of each annual NES determined
from the year 2012 to 2042. The national
NPV is the sum over time of the
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discounted net savings each year, which
consists of the difference between total
operating cost savings and the increase
in total installed costs. Critical inputs to
the NIA include shipments projections,
rates at which users retire equipment
(based on estimated equipment
lifetimes), and estimates of changes in
shipments and retirement rates in
response to changes in equipment costs
due to new standards.
C. Authority
Title III of EPCA, 42 U.S.C. 6311–
6317, as amended by the Energy Policy
Act of 2005 (EPACT 2005), Pub. L. 109–
58, provides an energy conservation
program for certain commercial and
industrial equipment. Further, EPACT
2005 prescribes new or amended energy
conservation standards and test
procedures, and directs DOE to
undertake rulemakings to promulgate
such requirements. In particular, section
136(c) of EPACT 2005 directs DOE to
prescribe energy conservation standards
for commercial refrigeration equipment.
(42 U.S.C. 6313(c)(4)(A))
Before DOE prescribes any such
standards, however, it must first solicit
comments on proposed standards.
Moreover, DOE must design each new
standard for commercial refrigeration
equipment to achieve the maximum
improvement in energy efficiency that is
technologically feasible and
economically justified, and will result
in significant conservation of energy.
(42 U.S.C. 6295(o)(2)(A), (o)(3)) To
determine whether a standard is
economically justified, DOE must, after
receiving comments on the proposed
standard, determine whether the
benefits of the standard exceed its
burdens to the greatest extent
practicable, considering the following
seven factors:
(1) The economic impact of the
standard on manufacturers and
consumers of each of the products
subject to the standard;
(2) The savings in operating costs
throughout the estimated average life of
the covered products in the type (or
class) compared with any increase in
the price, initial charges, or
maintenance expenses for the covered
products which are likely to result from
the imposition of the standard;
(3) The total projected amount of
energy savings likely to result directly
from the imposition of the standard;
(4) Any lessening of the utility or the
performance of the covered products
likely to result from the imposition of
the standard;
(5) The impact of any lessening of
competition, as determined in writing
by the Attorney General, that is likely to
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result from the imposition of the
standard;
(6) The need for national energy
conservation; and
(7) Other factors the Secretary of
Energy (Secretary) considers relevant.
(42 U.S.C. 6295(o)(2)(B)(i)).
Other statutory requirements are set
forth in 42 U.S.C. 6295 (o)(1)–(2)(A),
(2)(B)(ii)–(iii), and (3)–(4), and 42 U.S.C.
6316(e).
D. Background
1. History of Standards Rulemaking for
Commercial Refrigeration Equipment
Section 136(c) of EPACT 2005
amended section 342 of EPCA, in part,
by adding new subsection 342(c)(4)(A),
(42 U.S.C. 6313(c)(4)(A)) which directs
the Secretary to issue, by rule, no later
than January 1, 2009, energy
conservation standards for the following
equipment, manufactured on or after
January 1, 2012: commercial ice-cream
freezers; self-contained commercial
refrigerators, commercial freezers, and
commercial refrigerator-freezers without
doors; and remote condensing
commercial refrigerators, commercial
freezers, and commercial refrigeratorfreezers. This equipment, which has
never before been regulated at the
Federal level, is the subject of this
rulemaking.
Section 136(a)(3) of EPACT 2005
amended section 340 of EPCA, in part
by adding the definitions for
‘‘commercial refrigerator, freezer, and
refrigerator-freezer,’’ ‘‘holding
temperature application,’’ ‘‘pull-down
temperature application,’’ ‘‘remote
condensing unit,’’ and ‘‘self-contained
condensing unit.’’ 4
EPCA does not explicitly define the
terms ‘‘self-contained commercial
refrigerator, freezer, or refrigeratorfreezer’’ and ‘‘remote condensing
commercial refrigerator, freezer, or
refrigerator-freezer,’’ which delineate
two of the categories of equipment
covered by this rulemaking. DOE
construes these two terms to mean
‘‘commercial refrigerator, freezer, or
refrigerator-freezer that is connected to
a self-contained condensing unit’’ and
‘‘commercial refrigerator, freezer, or
refrigerator-freezer that is connected to
a remote condensing unit,’’ respectively.
On April 25, 2006, DOE published in
the Federal Register a notice of public
meeting and availability of the
Rulemaking Framework for Commercial
Refrigeration Equipment Including IceCream Freezers; Self-Contained
Commercial Refrigerators, Freezers, and
Refrigerator-Freezers without doors; and
Remote Condensing Commercial
Refrigerators, Freezers, and RefrigeratorFreezers (Framework Document) that
describes the procedural and analytical
approaches that DOE anticipates using
to evaluate energy conservation
standards for commercial refrigeration
equipment. 71 FR 23876. This
document is available at https://
www.eere.energy.gov/buildings/
appliance_standards/commercial/
refrigeration_equipment.html. DOE held
a Framework public meeting on May 16,
2006, to discuss the procedural and
analytical approaches for use in the
rulemaking, and to inform and facilitate
stakeholders’ involvement in the
rulemaking process. The analytical
framework presented at the public
meeting described different analyses,
such as LCC and PBP, the proposed
methods for conducting them, and the
relationships among the various
analyses. The ANOPR TSD describes the
analytical framework in detail.
Statements received after publication
of the Framework Document and at the
May 16, 2006, Framework public
meeting helped identify issues involved
in this rulemaking and provided
information that has contributed to
DOE’s proposed resolution of these
issues. Many of the statements are
quoted or summarized in this ANOPR.
A parenthetical reference at the end of
a quotation or passage provides the
location index in the public record.
2. Rulemaking Process
Table I.2 sets forth a list of the
analyses DOE has conducted and
intends to conduct in its evaluation of
standards for commercial refrigeration
equipment. Until recently, DOE
performed the manufacturer impact
analysis (MIA) in its entirety between
the ANOPR and notice of proposed
rulemaking (NOPR) during energy
conservation standards rulemakings. As
noted in the table, DOE has performed
a preliminary MIA for this ANOPR. DOE
believes this change will improve the
rulemaking process.
TABLE I.2.—COMMERCIAL REFRIGERATION EQUIPMENT ANALYSIS
ANOPR
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•
•
•
•
•
•
•
•
NOPR
Market and technology assessment .............
Screening analysis ........................................
Engineering analysis .....................................
Energy use characterization ..........................
Markups to determine equipment price ........
Life-cycle cost and payback period analyses
Shipments analysis .......................................
National impact analysis.
4 ‘‘(9)(A) The term ‘commercial refrigerator,
freezer, and refrigerator-freezer’ means refrigeration
equipment that—
(i) Is not a consumer product (as defined in
section 321 of EPCA [42 U.S.C. 6291(1)]);
(ii) Is not designed and marketed exclusively for
medical, scientific, or research purposes;
(iii) Operates at a chilled, frozen, combination
chilled and frozen, or variable temperature;
(iv) Displays or stores merchandise and other
perishable materials horizontally, semivertically, or
vertically;
(v) Has transparent or solid doors, sliding or
hinged doors, a combination of hinged, sliding,
transparent, or solid doors, or no doors;
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•
•
•
•
•
•
•
Final Rule *
Revised ANOPR analyses ............................
Life-cycle cost sub-group analysis.
Manufacturer impact analysis.
Utility impact analysis.
Employment impact analysis.
Environmental assessment.
Regulatory impact analysis.
(vi) Is designed for pull-down temperature
applications or holding temperature applications;
and
(vii) Is connected to a self-contained condensing
unit or to a remote condensing unit.’’ (42 U.S.C.
6311(9)(A)).
‘‘(B) The term ‘holding temperature application’
means a use of commercial refrigeration equipment
other than a pull-down temperature application,
except a blast chiller or freezer.’’ (42 U.S.C.
6311(9)(B)).
‘‘(D) The term ‘pull-down temperature
application’ means a commercial refrigerator with
doors that, when fully loaded with 12 ounce
beverage cans at 90 degrees Fahrenheit (F), can cool
those beverages to an average stable temperature of
38 degrees F in 12 hours or less.’’ (42 U.S.C.
6311(9)(D)).
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• Revised NOPR analyses.
‘‘(E) The term ‘remote condensing unit’ means a
factory-made assembly of refrigerating components
designed to compress and liquefy a specific
refrigerant that is remotely located from the
refrigerated equipment and consists of 1 or more
refrigerant compressors, refrigerant condensers,
condenser fans and motors, and factory supplied
accessories.’’ (42 U.S.C. 6311(9)(E)).
‘‘(F) The term ‘self-contained condensing unit’
means a factory-made assembly of refrigerating
components designed to compress and liquefy a
specific refrigerant that is an integral part of the
refrigerated equipment and consists of 1 or more
refrigerant compressors, refrigerant condensers,
condenser fans and motors, and factory supplied
accessories.’’ (42 U.S.C. 6311(9)(F)).
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TABLE I.2.—COMMERCIAL REFRIGERATION EQUIPMENT ANALYSIS—Continued
ANOPR
NOPR
Final Rule *
• Preliminary manufacturer impact analysis.
* During the Final Rule phase, DOE considers the comments submitted by the U.S. Department of Justice in the NOPR phase concerning the
impact of any lessening of competition that is likely to result from the imposition of the standard. (42 U.S.C. 6295(o)(2)(B)(v)).
The analyses in Table I.2 include the
development of economic models and
analytical tools. If timely new data,
models, or tools that enhance the
development of standards become
available, DOE will incorporate them
into this rulemaking.
3. Miscellaneous Rulemaking Issues
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a. Federal Preemption
During the Framework public
meeting, the Air-Conditioning and
Refrigeration Institute (ARI) stated that
it interpreted EPACT 2005 as
authorizing DOE to conduct a
rulemaking for commercial refrigeration
equipment, and to exempt certain
categories from the standards DOE
adopts. (Public Meeting Transcript, No.
3.4 at p. 80) 5 The Appliance Standards
Awareness Project (ASAP) responded
that setting a ‘‘no-standard’’ standard
that preempts the States is problematic.
(Public Meeting Transcript, No. 3.4 at
pp. 81–82) However, ASAP agrees with
ARI’s basic view that DOE should
address opportunities for energy
savings, and should not necessarily
have standards for every unit in the
marketplace, because the objective is to
save energy in a cost-effective way. Id.
The American Council for an EnergyEfficient Economy (ACEEE), in apparent
agreement with ARI and ASAP,
expressed doubt that States would seek
to set energy conservation standards for
equipment that are truly niche
equipment. (Public Meeting Transcript,
No. 3.4 at p. 82) The Alliance to Save
Energy, ACEEE, ASAP, Natural
Resources Defense Council (NRDC),
Northeast Energy Efficiency
Partnerships (NEEP), and Northwest
Power and Conservation Council
(hereafter ‘‘Joint Comment’’) strongly
opposed any suggestion that States be
preempted from setting standards for
equipment for which DOE does not
5 A notation in the form ‘‘Public Meeting
Transcript, No. 3.4 at p. 80’’ identifies an oral
comment that DOE received during the May 16,
2006, Framework public meeting and which was
recorded in the public meeting transcript in the
docket for this rulemaking (Docket No. EE–2006–
STD–0126), maintained in the Resource Room of
the Building Technologies Program This particular
notation refers to a comment (1) made during the
public meeting, (2) recorded in document number
3.4, which is the public meeting transcript that is
filed in the docket of this rulemaking, and (3) which
appears on page 80 of document number 3.4.
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itself set standards. (Joint Comment, No.
9 at p. 3) 6
DOE is evaluating all commercial
refrigeration equipment—i.e., all
commercial ice-cream freezers, selfcontained commercial refrigerators,
commercial freezers, and commercial
refrigerator-freezers without doors, and
remote condensing commercial
refrigerators, commercial freezers, and
commercial refrigerator-freezers—for the
development of standards. DOE will
evaluate all relevant equipment classes
during this evaluation. This equipment
has a large number of classes, however,
and DOE intends to prioritize the
technical analyses based on shipment
data and only to conduct a full technical
analysis on classes with the highest
numbers of shipments for this ANOPR.
In accordance with 42 U.S.C. 6316(e)(1),
DOE intends to adopt standards for all
equipment for which standards would
satisfy the criteria in 42 U.S.C. 6295(o).
DOE is not aware of any basis for it to
exclude from this rule any commercial
refrigeration equipment for which a
standard would meet the statutory
criteria above. Furthermore, the extent
to which States will be barred from
regulating the efficiency of any
commercial refrigeration equipment for
which the final rule in this rulemaking
omits standards, will be governed by the
relevant provisions of EPCA as to
preemption, 42 U.S.C. 6297 and
6316(e)(3)–(4).
b. State Exemptions From Federal
Preemption
Southern Company Services
(Southern Company) and Edison
Electric Institute (EEI) believe that the
standards for commercial refrigeration
equipment should be a ‘‘50-state’’ rule
without exemptions from Federal
preemption. They claim that
exemptions would complicate the
regulation of this equipment and
increase costs to both manufacturers
and consumers. (Southern Company,
No. 6 at p. 1 and EEI, No. 8 at p. 1)
6 A notation in the form ‘‘Joint Comment’’, No. 9
at p. 3’’ identifies a written comment that DOE has
received and has included in the docket of this
rulemaking. This particular notation refers to (1) A
joint comment, (2) in document number 9 in the
docket of this rulemaking, and (3) appearing on
page 3 of document number 9.
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DOE fully intends that any standards
it adopts in this rulemaking will apply
uniformly in all of the States. In
addition, any such Federal standards
would, on the date of publication of the
final rule, preempt any State standards
that apply to the equipment covered by
the Federal standards. In the event any
State or local standard is issued before
the date of publication of the final rule
by the Secretary, that State or local
standard shall not be preempted until
the Federal standards take effect. (42
U.S.C. 6297 and 6316(e)(3)(A))
However, EPCA allows the States to
petition DOE for waivers of preemption
with regard to specific State standards,
and DOE to grant such waiver
applications if the statutory criteria are
met. (42 U.S.C. 6297(d)) DOE does not
have the authority to preclude States
from seeking waivers or to decree in
advance that it will not grant them,
either generally or for any particular
type of equipment.
c. Equipment Class Prioritization
ARI stated that it strongly
recommends that DOE focus its
rulemaking efforts on the commercial
refrigeration equipment classes with the
highest energy savings potential, and
not spend its scarce resources
establishing standards for equipment
with limited shipment volume and/or
energy consumption. (ARI, No. 7 at p. 1)
Because of the large number of
equipment classes included in this
rulemaking, for the ANOPR phase of the
rulemaking DOE has focused on
conducting a thorough examination of
the equipment classes with the greatest
energy savings potential. To determine
which equipment classes have the
greatest energy savings potential, DOE
relied on industry-supplied shipment
data and addressed equipment classes
with the highest shipment values first.
To address low-shipment equipment
classes, DOE could, for the NOPR phase
of the rulemaking, either conduct a full
technical analysis of these equipment
classes, or develop correlations to
extend analyses or standard levels. DOE
explored the approach of developing
correlations by conducting a ‘‘focused
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matched-pair analysis.’’ 7 This
methodology is described in further
detail in chapter 5 of the TSD. DOE
specifically seeks feedback on its
approach to equipment-class
prioritization and the approach to
extend the technical analysis from highshipment equipment classes to lowshipment equipment classes. This is
identified as Issue 1 under ‘‘Issues on
Which DOE Seeks Comment’’ in section
IV.E of this ANOPR.
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4. Test Procedure
A test procedure outlines the method
by which manufacturers will determine
the efficiency of their commercial
refrigeration equipment, and thereby
assess compliance with an energy
conservation standard.
Section 136(f)(1)(B) of EPACT 2005
amended section 343 of EPCA (42
U.S.C. 6314) by adding new subsections
343(a)(6)(A)–(D) (42 U.S.C.
6314(a)(6)(A)–(D)), which direct the
Secretary to develop test procedures for
commercial refrigeration equipment. On
December 8, 2006, DOE published a
final rule (the December 2006 final rule)
in which it adopted American National
Standards Institute (ANSI)/ARI
Standard 1200–2006, Performance
Rating of Commercial Refrigerated
Display Merchandisers and Storage
Cabinets, with one modification, as the
DOE test procedure for this equipment.
71 FR 71340, 71369–70.8 ANSI/ARI
Standard 1200–2006 contains rating
temperature specifications of 38 °F
(±2 °F) for commercial refrigerators and
refrigerator compartments, 0 °F (±2 °F)
for commercial freezers and freezer
compartments, and ¥5 °F (±2 °F) for
commercial ice-cream freezers, and
requires performance tests to be
conducted according to the American
Society of Heating, Refrigerating, and
Air-Conditioning Engineers (ASHRAE)
Standard 72–2005, Method of Testing
Commercial Refrigerators and Freezers,
test method. The one modification DOE
made in adopting ANSI/ARI Standard
1200–2006 was to adopt in the final rule
¥15 °F (±2 °F) as the rating temperature
for commercial ice-cream freezers,
instead of ¥5 °F (±2 °F). 71 FR 71370.
In addition, DOE adopted ANSI/
Association of Home Appliance
Manufacturers (AHAM) Standard HRF–
7 The ‘‘focused matched-pair analysis’’ establishes
a correlation between rating temperature levels and
energy consumption by quantifying the differences
in energy consumption for matched pairs of
equipment classes that are very similar in features
and dimensions, but have different operating
temperatures.
8 DOE incorporated by reference the ANSI/ARI
Standard 1200–2006 test procedure in section
431.64 of 10 CFR Part 431. 71 FR 71340 (December
8, 2006).
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1–2004, Energy, Performance and
Capacity of Household Refrigerators,
Refrigerator-Freezers and Freezers, for
determining compartment volumes for
this equipment. 71 FR 71369–70.
As mentioned above, on April 25,
2006, DOE published a Framework
Document that describes the procedural
and analytical approaches to evaluate
energy conservation standards for
commercial refrigeration equipment and
presented this analytical framework to
stakeholders during the Framework
public meeting held on May 16, 2006.
During the Framework public meeting,
the Food Products Association (FPA)
suggested, in lieu of climate-adjusted
standards, climate conditions be part of
the test method. FPA stated that DOE
should specify the range of conditions
that are expected for efficiency testing,
and pointed out that most grocery stores
across the country operate in a 65 °F to
70 °F range. (Public Meeting Transcript,
No. 3.4 at pp. 158–159) ANSI/ARI
Standard 1200–2006 requires that
testing be in accordance with ASHRAE
Standard 72–2005, which requires
ambient conditions during testing of
75.2 °F (±1.8 °F) for dry bulb
temperature and 64.4 °F (±1.8 °F) for
wet bulb temperature. Although this is
not the range recommended by FPA, it
is close to FPA’s recommended range,
these temperatures have been widely
used for testing commercial refrigeration
equipment, and they provide ambient
test temperatures that are typical of the
conditions in which this equipment
generally operates. Therefore, DOE’s test
procedure for commercial refrigeration
equipment does include ambient rating
conditions that represent normal
operation conditions for commercial
refrigeration equipment.
During the Framework public meeting
and Framework comment period, DOE
received comments on the inclusion of
‘‘application temperatures’’ for
commercial refrigeration equipment,
which are rating temperatures other
than the standard rating temperatures
prescribed by DOE’s test procedures (38
°F for commercial refrigerators, 0 °F for
commercial freezers, and ¥15 °F for
commercial ice-cream freezers). Hill
Phoenix stated that manufacturers of
commercial refrigeration equipment
occasionally produce a piece of
equipment (usually at the customer’s
request) that is designed to operate at a
temperature significantly different from
one of the three standard temperatures.
(Public Meeting Transcript, No. 3.4 at
pp. 74–76) ARI commented that DOE
should analyze the shipment data and
determine whether it would be worth
regulating equipment that operates at
application temperatures if shipments
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for these units are very low. (Public
Meeting Transcript, No. 3.4 at p. 79) ARI
also asserted that allowing for an
application temperature category is
essential because operating temperature
plays a key role in equipment energy
consumption. (ARI, No. 7 at p. 4) The
Joint Comment pointed out that the
application temperature category should
be reserved for equipment that cannot
operate at 0 °F or at 38 °F, that DOE
should not regulate equipment that has
a small shipments volume, and that
appropriate Federal standards and
rating temperatures should be
developed if shipments are large. (Joint
Comment, No. 9 at p. 3)
DOE analyzed the shipments data
provided by ARI during the Framework
comment period. Excluding equipment
for which EPACT 2005 amended EPCA
to set standards (self-contained
commercial refrigerators and
commercial freezers with doors), there
were 170,949 units of remote
condensing commercial refrigerators
and commercial freezers, self-contained
commercial refrigerators and
commercial freezers without doors, and
commercial ice-cream freezers shipped
in 2005. Shipments of commercial
refrigerator-freezers were not reported,
but are considered to be very small. Of
the total shipments (both self-contained
and remote condensing), only 1.7
percent were equipment that operate at
45 °F, 20 °F, 10 °F, or ¥30 °F
(application temperatures), and 98.3
percent were equipment that operate at
38 °F, 0 °F, or ¥15 °F. By far, the
application temperature with the largest
number of units shipped is the 45 °F
category (typically ‘‘wine chillers’’), and
these were predominately remote
condensing equipment. There were
1,834 units of remote condensing wine
chillers shipped in 2005.
Comparatively, in 2005 there were
85,001 units of remote condensing
refrigerators that operate at 38 °F.
As stated above, DOE’s test procedure
for commercial refrigeration equipment
requires that all equipment, including
equipment designed to operate at
application temperatures, be tested at
one of the three rating temperatures:
38 °F for refrigerators, 0 °F for freezers,
and ¥15 °F for ice-cream freezers. Given
the relatively low shipment volumes of
equipment that operates at application
temperatures, as well as DOE’s
understanding that some of this
equipment already can operate and be
tested at one of the standard rating
temperatures and that manufacturers
might be able to redesign other
equipment in relatively minor ways to
have these capabilities, DOE believes
this requirement will not place an
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unreasonable burden on manufacturers.
In addition, if necessary, manufacturers
could seek waivers from the DOE test
procedure, pursuant to 10 CFR 431.401.
For these reasons, DOE does not intend
to develop separate standards for
equipment that operates at application
temperatures.
II. Commercial Refrigeration
Equipment Analyses
This section addresses the analyses
DOE has performed and intends to
perform for this rulemaking. A separate
subsection addresses each analysis, and
contains a general introduction that
describes the analysis and a discussion
of comments received from interested
parties.
A. Market and Technology Assessment
When DOE begins a standards
rulemaking, it develops information that
provides an overall picture of the
market for the equipment concerned,
including the nature of the equipment,
the industry structure, and the market
characteristics for the equipment. This
activity consists of both quantitative and
qualitative efforts based primarily on
publicly available information. The
subjects addressed in the market and
technology assessment for this
rulemaking include definitions,
equipment classes, manufacturers and
market shares, shipments of covered
equipment, regulatory and nonregulatory programs, and technologies
that could be used to improve the
efficiency of covered commercial
refrigeration equipment. This
information serves as resource material
for use throughout the rulemaking.
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1. Definitions of Commercial
Refrigeration Equipment Categories
Section 136(c) of EPACT 2005
amended section 342 of EPCA to
include new subsection (c)(4)(A), which
mandates that DOE issue standards for
three categories of commercial
refrigerators, commercial freezers, and
commercial refrigerator-freezers.9
Accordingly, pursuant to this provision,
the three categories of equipment
addressed by this rulemaking are:
9 ‘‘Commercial refrigerators, commercial freezers,
and commercial refrigerator-freezers’’ is a type of
covered commercial equipment. For purposes of
discussion only in this proceeding, DOE uses the
term ‘‘categories’’ to designate groupings of
‘‘commercial refrigeration equipment.’’ The
categories of equipment are: self-contained
commercial refrigerators, commercial freezers, and
commercial refrigerator-freezers without doors;
remote condensing commercial refrigerators,
commercial freezers, and commercial refrigeratorfreezers; and commercial ice-cream freezers. DOE
will analyze specific equipment classes that fall
within these general categories and set appropriate
standards.
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remote condensing commercial
refrigerators, commercial freezers and
commercial refrigerator-freezers; selfcontained commercial refrigerators,
commercial freezers, and commercial
refrigerator-freezers without doors; and
commercial ice-cream freezers. These
categories of equipment are referred to
collectively as ‘‘commercial
refrigeration equipment.’’
a. Coverage of Equipment Excluded
From American National Standards
Institute/Air-Conditioning and
Refrigeration Institute Standard 1200–
2006
During the Framework comment
period, ARI stated that the ANSI/ARI
Standard 1200–2006 test procedure
specifically excludes ice-cream
‘‘dipping cabinets,’’ but recommended
that DOE include this equipment under
this rulemaking as commercial freezers.
(ARI, No. 7 at p. 3) ARI also appeared
to suggest, however, that this and
certain other equipment excluded from
ANSI/ARI Standard 1200–2006, such as
floral merchandisers, are excluded from
coverage under EPCA because they are
not considered commercial display
merchandisers or storage cabinets. (ARI,
No. 7 at p. 7)
EPCA directs DOE to set standards for
commercial refrigeration equipment
(i.e., the three categories of equipment
identified above). Any equipment that
meets the EPCA definition of a
‘‘commercial refrigerator, freezer, or
refrigerator-freezer’’ (see section I.D and
the preceding section) and falls under
one of these three categories will be
covered by this rulemaking. In the
December 2006 final rule, DOE
incorporated by reference certain
sections of ANSI/ARI Standard 1200–
2006 as the test procedure for
commercial refrigeration equipment, but
did not reference section 2.2, which
provides exclusions for certain
equipment such as ice-cream dipping
cabinets and floral display
merchandisers. The equipment
excluded in this section of ANSI/ARI
Standard 1200–2006 will only be
excluded from this rulemaking if they
do not meet the EPACT 2005 definition
of a ‘‘commercial refrigerator, freezer, or
refrigerator-freezer.’’
b. Coverage of Equipment Not Designed
for Retail Use
During the Framework comment
period, several stakeholders commented
on whether this rulemaking applies to
equipment not designated for retail use.
FPA commented that DOE needs to
distinguish between ‘‘industrial’’ and
‘‘commercial.’’ FPA believes that the
EPCA requirements for commercial
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41169
refrigeration equipment were intended
for ‘‘point-of-sale’’ equipment that is
found in convenience stores and
supermarkets. FPA continued that, in
the food industry, ‘‘refrigeration’’
includes the industrial equipment found
in manufacturing and processing
facilities, not just the equipment in
retail stores. (Public Meeting Transcript,
No. 3.4 at pp. 23–24) Southern
Company stated that the language
‘‘storing or displaying or dispensing’’ in
DOE’s definition of ‘‘ice-cream freezer’’
is ambiguous because it could include
some industrial equipment the size of a
tractor-trailer compartment. Southern
Company believes there needs to be
language to clarify that this rulemaking
covers equipment used at the retail
level. (Public Meeting Transcript, No.
3.4 at pp. 35–36) Southern Company
and EEI both stated that a literal reading
of DOE’s proposed equipment classes
appears to include industrial
refrigeration equipment, which is not
used for the display of merchandise for
sale to the consumer. Southern
Company and EEI believe that the
inclusion of this equipment would
unnecessarily complicate the analysis
and the development of test procedures.
They also stated that this equipment is
not covered by EPCA and only
commercial equipment is covered. They
suggest that DOE define which
equipment is for commercial purposes
and which is for industrial purposes.
Southern Company and EEI suggest that
DOE define commercial refrigeration
equipment as ‘‘refrigeration equipment
which would normally be used in a
commercial business which sells
products to ultimate consumers.’’
Further, the definition ‘‘should not
include equipment which is normally
used only in refrigerated warehouses or
manufacturing facilities.’’ (Southern
Company, No. 6 at pp. 1–2; EEI, No. 8
at p. 1)
DOE understands that industrial
refrigeration equipment consists of
equipment used to process,
manufacture, transport, or store chilled
or frozen food and other perishable
items. Industrial refrigeration
equipment used to process or
manufacture chilled or frozen food
primarily includes equipment used to
flash-freeze or chill food on an assembly
line or in a batch manufacturing
process. Industrial refrigeration
equipment used to transport chilled or
frozen food or other perishable items
primarily includes refrigerated rail cars
and tractor-trailers. In industrial
buildings, temporary storage of chilled
or frozen food is also necessary, as the
manufactured product is often held at
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the manufacturing facility for processing
or while awaiting transport. Industrial
refrigeration equipment used to store
chilled or frozen food is accomplished
with refrigerated warehouses and/or
refrigerated walk-in rooms (‘‘walk-ins’’).
The term ‘‘commercial refrigerator,
freezer, and refrigerator-freezer’’ is
defined as refrigeration equipment that,
in part, ‘‘displays or stores merchandise
and other perishable materials’’ (see
section I.D of this ANOPR). DOE
interprets this language to mean that
equipment used in the processing,
manufacture or transport of chilled or
frozen food is not considered
commercial refrigeration equipment
because it is not used to ‘‘display or
store.’’ However, equipment that is used
to store chilled or frozen food is
considered covered equipment. This
language does not make mention of the
intended destination of the equipment,
so DOE believes that walk-ins are
covered under the definition because
they store chilled or frozen food,
regardless of whether the application is
commercial or industrial. However, it is
unclear whether this rulemaking would
be the appropriate place to address
walk-ins. The test procedures for selfcontained commercial refrigerators,
commercial freezers, and commercial
refrigerator-freezers with doors specified
in EPCA section 343(a)(6)(A)(ii)
specifically exclude walk-ins and
therefore DOE believes that the
standards in EPCA sections 342(c)(2)
and (3) do not apply to walk-ins. Since
the test procedures DOE adopted for
equipment covered under this
rulemaking also specifically exclude
walk-ins, DOE believes that the
standards being developed in this
rulemaking under EPCA section
342(c)(4)(A) also do not apply to walkins.10 DOE could, however, address
walk-ins under EPCA section
342(c)(4)(B), which states that DOE may
issue standard levels, by rule, for other
categories of commercial refrigerators,
commercial freezers and commercial
refrigerator-freezers.
c. Remote Condensing Commercial
Refrigerators, Commercial Freezers, and
Commercial Refrigerator-Freezers
Under EPCA, this equipment includes
commercial refrigerators, commercial
freezers, and commercial refrigeratorfreezers that have a remote condensing
unit, except for any remote condensing
equipment that would meet DOE’s
definition of ‘‘ice-cream freezer’’ as set
forth at 10 CFR 431.62, 71 FR 71369.11
10 Test
procedures are found at 10 CFR 431.64.
EPCA provision that requires this
rulemaking identifies ‘‘ice-cream freezers’’
11 The
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This equipment is typically used to
store and display merchandise for direct
sale to the consumer, and referred to as
‘‘display cases,’’ ‘‘display cabinets,’’ or
‘‘merchandisers.’’ The remote
condensing unit has at least one
compressor and a condenser coil, and
most remote condensing units consist of
multiple compressors (a compressor
‘‘rack’’) that serve multiple display
cases.
EPCA does not specifically define the
term ‘‘commercial refrigerator-freezer,’’
nor is DOE aware of an existing, written
definition for such equipment.
Therefore, in its Framework Document,
DOE sought feedback on use of the
definition of ‘‘electric refrigeratorfreezer’’ for consumer products (set
forth in 10 CFR 430.2) as a basis for
defining the term ‘‘remote condensing
commercial refrigerator-freezer.’’ (As
discussed below, DOE also sought input
on using this definition as a basis for
defining self-contained commercial
refrigerator-freezers.) The consumer
product definition in 10 CFR 430.2
states that ‘‘electric refrigerator-freezer
means a cabinet which consists of two
or more compartments with at least one
of the compartments designed for the
refrigerated storage of food at
temperatures above 32°F. [sic] and with
at least one of the compartments
designed for the freezing and storage of
food at temperatures below 8°F. [sic]
which may be adjusted by the user to a
temperature of 0°F. [sic] or below. The
source of refrigeration requires single
phase, alternating current [(AC)] electric
energy input only.’’ During the
Framework comment period, three
stakeholders commented on this
definition. (ARI, No. 7 at p. 3; Public
Meeting Transcript, No. 3.4 at p. 45; and
Public Meeting Transcript, No. 3.4 at
pp. 50–53) ARI and Zero Zone believe
the definition is inappropriate for
commercial equipment. ARI proposed
that a remote condensing commercial
refrigerator, freezer, or refrigeratorfreezer be defined as ‘‘a cabinet cooled
by a remote refrigerating system for
displaying and/or storing chilled and/or
frozen food to be maintained within
prescribed temperature limits. The
cabinet is connected to one or more
separately from ‘‘self-contained commercial
refrigerators, commercial freezers, and commercial
refrigerator-freezers without doors’’ and ‘‘remote
condensing commercial refrigerators, commercial
freezers, and commercial refrigerator-freezers.’’ (42
U.S.C. 6313(c)(4)(A), added by EPACT 2005, section
136(c)) Since the Act neither specifies nor indicates
that ‘‘ice-cream freezers’’ are limited to equipment
with a particular type of condensing unit (i.e.,
remote or self-contained), equipment that has a
remote condensing unit and also meets DOE’s
definition of ‘‘ice-cream freezer’’ would be
considered an ‘‘ice-cream freezer.’’
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power sources ranging from 120 to 240
volts AC.’’ (ARI, No. 7 at p. 3) During
the Framework public meeting, ASAP
indicated that DOE should look at the
detailed definition given in EPACT 2005
for refrigerator-freezers. (Public Meeting
Transcript, No. 3.4 at p. 53)
Based on the comments, DOE now
believes that it need not adopt a
definition of ‘‘remote condensing
commercial refrigerator-freezer.’’ The
comments by Zero Zone indicate the
difficulties of adapting the residential
product definition of refrigerator-freezer
to the commercial setting. ARI did not
comment on the need for a definition of
commercial refrigerator-freezer discrete
from definitions of refrigerator and
freezer, and its suggested definition of
‘‘commercial refrigerator, commercial
freezer, and commercial refrigeratorfreezer’’ both duplicates and, in some
ways, is inconsistent with the EPCA
definition of this term. For example, one
inconsistency is that the ARI definition
states that the cabinet is connected to
one or more power sources ranging from
120 to 240 volts AC, whereas the EPCA
definition does not have any
requirements for power sources.
Further, ASAP did not address the fact
that the definition in EPACT 2005 does
not distinguish refrigerator-freezers from
refrigerators and freezers. The
comments by ARI and ASAP, however,
indicate that they believe DOE does not
need to adopt a separate definition for
refrigerator-freezers.
DOE intends to rely here on the
definition of ‘‘commercial refrigerator,
freezer, and refrigerator-freezer’’ in
EPCA (42 U.S.C. 6311(9)(A), added by
EPACT 2005, section 136(a)(3)), and on
its understanding of the well-accepted
meaning of ‘‘refrigerator-freezer.’’ Thus,
DOE construes the EPCA term ‘‘remote
condensing commercial refrigeratorfreezer’’ (see 42 U.S.C. 6313(c)(4)(A),
added by EPACT 2005, section 136(c))
to mean refrigeration equipment that
operates at both chilled and frozen
temperatures and that is connected to a
remote condensing unit. This term
refers to equipment with two or more
separate compartments, at least one of
which is capable of maintaining food or
other perishable items at temperatures
above freezing and at least one of which
maintains its contents frozen. By
contrast, refrigerators operate only at
temperatures above freezing, and
freezers only at or below freezing
temperatures.
In its Framework Document, DOE
pointed out that EPCA defines a ‘‘selfcontained condensing unit,’’ in part, as
an assembly of refrigerating components
‘‘that is an integral part of the
refrigerated equipment * * * ’’ (42
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U.S.C. 6311(9)(F), added by EPACT
2005, section 136(a)(3)) EPCA also
defines a ‘‘remote condensing unit,’’ in
part, as an assembly of refrigerating
components ‘‘that is remotely located
from the refrigerated equipment * * *.’’
(42 U.S.C. 6311(9)(E), added by EPACT
2005, section 136(a)(3)) DOE also stated
in the Framework Document that this
difference in the definitions may mean
that, under EPCA, remote condensing
units are not a part of the refrigerated
equipment and that energy conservation
standards for remote condensing
commercial refrigerators, commercial
freezers, and commercial refrigeratorfreezers would apply only to the
refrigerated equipment (i.e., storage
cabinets and display cases), but not to
the remote condensing units. DOE
specifically requested stakeholder
comments on this topic.
ARI asserted that it was responsible
for the language in EPACT 2005 on this
subject and the intent was to cover the
display case and storage cabinet only,
not the remote condensing unit. (Public
Meeting Transcript, No. 3.4 at pp. 47–
48, 49) ACEEE responded by stating that
it may be worth trying to cover the
remote condensing unit so that the
whole system is regulated. (Public
Meeting Transcript, No. 3.4 at p. 48)
Zero Zone pointed out that regulating
the remote condensing unit would
prove to be difficult because of the wide
range of design differences in
compressors and condensing units, and
recommended not regulating them now.
(Public Meeting Transcript, No. 3.4 at p.
48) ARI stated that it agreed with DOE’s
interpretation of EPACT 2005 that the
rulemaking should be limited to the
refrigerated display merchandisers and
storage cabinets only. Furthermore, ARI
asserted that including the remote
condensing unit in this rulemaking
would significantly complicate the
analysis and likely delay the completion
date, and it recommended that DOE
reassess the situation in the future to
determine whether energy conservation
standards should be established for
remote condensing equipment. (ARI,
No. 7 at p. 3) Finally, the Joint Comment
stated that DOE should cover remote
condensing units under this rulemaking
because it would provide more
opportunity for energy savings and for
manufacturers to trade off performance
between different parts of the system.
However, if DOE determines that
including the entire system in this
rulemaking is impractical, then the
balance of the system should not be
included under ‘‘covered’’ equipment
for now, but instead, DOE should
consider such coverage in a subsequent
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16:34 Jul 25, 2007
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revision to the standard. (Joint
Comment, No. 9 at p. 5).
Clearly, stakeholders differed on
whether a remote condensing unit is
considered part of the equipment to
which it is connected, and whether such
units are covered by the EPCA directive
that DOE set standards for remote
condensing commercial refrigerators,
commercial freezers, and commercial
refrigerator-freezers. (42 U.S.C.
6313(c)(4)(A), added by EPACT 2005,
section 136(c)) ARI indicated that it
believes EPCA does not authorize
application of standards to remote
condensing units, while ACEEE and the
Joint Comment argued that remote
condensing units should be covered but
not necessarily in this rulemaking.
However, DOE agrees with the
stakeholders who stated that including
remote condensing units in the present
rulemaking would significantly
complicate the rulemaking. There
would be many difficulties in
establishing standards for the display
cases and the remote condensing units
as a system. For example, display cases
and remote condensing units are
typically purchased from different
manufacturers and installed at the site.
Multiple display cases may be
connected to one or more remote
condensing units through an extensive
network of refrigerant piping. Since
each system is custom designed for its
location, each individual system will
have unique aspects to its design and
operation (e.g., number of display cases,
variation in temperature control, use of
heat recovery, etc.). Further, because the
intended configuration of the final
system design is not known when the
components are manufactured, it would
be difficult, if not impossible, to set an
energy conservation standard for the
entire system at the point of
manufacture.
For these reasons, the energy
conservation standards DOE intends to
develop in this rulemaking for remote
condensing commercial refrigeration
equipment will apply to display cases
only, not to the remote condensing
units. DOE will address at a later time
whether and to what extent it has the
authority to regulate remote condensing
units and, if so, whether standards that
address these units are warranted and
feasible.
d. Secondary Coolant Applications
In its Framework Document, DOE
stated that it construed the language in
section 136(a)(3) of EPACT 2005, 42
U.S.C. 6311(9)(A)(vii), the definition for
‘‘commercial refrigerator, freezer, and
refrigerator-freezer,’’ to mean that socalled ‘‘secondary-coolant applications’’
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are not covered under this rulemaking.
DOE stated that it believed this
interpretation of EPACT 2005 was
consistent with ANSI/ARI Standard
1200–2006, which explicitly excludes
secondary-coolant applications.
During the Framework comment
period, several stakeholders commented
on the coverage of equipment that uses
secondary coolant systems.12 ACEEE
stated that DOE should have a broad
scope of coverage and should in general
cover as much as possible in the
rulemaking. (Public Meeting Transcript,
No. 3.4 at p. 26) ARI stated that it agrees
with the interpretation DOE expressed
in the Framework Document that
secondary coolant applications should
not be covered under this rulemaking.
ARI explained that these systems
represent a very small percentage of
currently installed commercial
refrigeration systems in the United
States, and that there are no test
procedures currently available for
measuring the energy consumption of
such systems. ARI noted, however, that
DOE should revisit the secondary
coolant issue in the next three to four
years. (ARI, No. 7 at p. 2) Hill Phoenix
stated that based on its experience,
display cases that use secondary coolant
make up less than five percent of what
it sells and that this statistic is probably
representative of the market in general.
(Public Meeting Transcript, No. 3.4 at p.
30) Further, Southern Company stated,
and EEI agreed, that it opposes the
inclusion of secondary-coolant systems
in this rulemaking because of timing
and complexity. Since ANSI/ARI
Standard 1200–2006 excludes
secondary-coolant applications, their
inclusion would complicate the
development of a test procedure for
commercial refrigeration equipment.
Also, Southern Company and EEI
oppose the inclusion of secondary
coolant systems based on the small size
of the secondary coolant market.
(Southern Company, No. 6 at p. 2 and
EEI, No. 8 at p. 1) The Joint Comment
stated that they do not object to DOE’s
interpretation that secondary-coolant
equipment is not covered under this
rulemaking, provided that this
equipment in fact accounts for no more
than five percent of remote equipment
sold, as asserted by Hill Phoenix. (Joint
Comment, No. 9 at p. 5)
Section 340(9)(A)(vii) of EPCA (42
U.S.C. 6311((9)(A)(vii), added by EPACT
2005, section 136(a)(3)), states that the
term ‘‘commercial refrigerator, freezer,
12 Secondary coolant systems use a direct
expansion refrigeration cycle to cool a secondary
single-phase fluid, which is pumped to heat
exchangers in remote condensing display cases and
is used to cool food or other perishable items.
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and refrigerator-freezer means
equipment that ‘‘is connected to a selfcontained condensing unit or to a
remote condensing unit.’’ (See section
I.D.1 of this ANOPR.) In the Framework
Document, DOE stated that it construes
this language to mean that secondary
coolant applications are not covered
under this rulemaking. As indicated in
the Framework Document, equipment
using such applications are not directly
connected to a self-contained or remote
condensing unit. DOE further stated that
it believed its interpretation to be
consistent with ANSI/ARI Standard
1200–2006. DOE has considered the
comments it received, but continues to
believe that the language in section
340(9)(A)(vii) of EPCA means that
equipment using secondary coolant
systems are not covered under this
rulemaking because they are not directly
connected to a self-contained or remote
condensing unit and, therefore, do not
fit within the definition of ‘‘commercial
refrigerator, freezer, and refrigeratorfreezer’’ in EPCA.
e. Self-Contained Commercial
Refrigerators, Commercial Freezers, and
Commercial Refrigerator-Freezers
Without Doors
Under EPCA, this equipment includes
all types of commercial refrigerators,
commercial freezers, and commercial
refrigerator-freezers that have a selfcontained condensing unit and have no
doors, except for self-contained
equipment that meets DOE’s definition
of ‘‘ice-cream freezer’’ as set forth at 10
CFR 431.62. 71 FR 71369. As with
remote condensing equipment, selfcontained equipment is typically used
to store and display merchandise for
direct sale to the consumer, and is
commonly referred to as a ‘‘refrigerated
display case,’’ ‘‘display cabinet,’’ or
‘‘merchandiser.’’ Self-contained
equipment is defined as having an
integral condensing unit (i.e., the
condensing unit is not remote from the
refrigerated cabinet). (See 42 U.S.C.
6311(9)(F), added by EPACT 2005,
section 136(a)(3)) The 2006 ASHRAE
Refrigeration Handbook (see chapter 47,
p. 47.1) defines ‘‘reach-in’’ refrigerators
or freezers as being upright and box
shaped, and having hinged or sliding
doors. Given this definition, selfcontained reach-in commercial
refrigerators, commercial freezers, and
commercial refrigerator-freezers (i.e.,
self-contained units with doors) are not
covered in this rulemaking because the
rulemaking only covers self-contained
equipment without doors.
In its Framework Document, as with
the term ‘‘remote condensing
commercial refrigerator-freezers,’’ DOE
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16:34 Jul 25, 2007
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cream freezer. ARI stated that the
majority of equipment intended for ice
cream operates at ¥5 °F or 0 °F, with
a minority that operates at ¥30 °F, and
stated that DOE should focus on those
ice-cream freezers with high shipment
volumes. (Public Meeting Transcript,
No. 3.4 at pp. 32–33) Zero Zone stated
that there are many interpretations of
what an ice-cream freezer is. Zero Zone
asserted that California and Canada
define an ice-cream freezer ‘‘along the
lines of a dipping cabinet.’’ (Public
Meeting Transcript, No. 3.4 at p. 35)
Zero Zone further commented that the
display-type freezers it sells for ice
cream and frozen food are the same, that
these cases have adjustable
temperatures, and that the user sets the
temperature of the equipment a little
lower when it uses the equipment for
ice cream. Typically, the equipment has
two ratings, one for use of frozen food
and for ice cream, because customers
want to know the energy use for each.
Zero Zone also characterized as ‘‘true
ice-cream cabinets’’ those which have
specific functions for the processing and
storage of ice cream, rather than its
display, and asserted that comparatively
few of these are sold. (Public Meeting
Transcript, No. 3.4 at p. 38) Zero Zone
asserted that the term ‘‘ice-cream
freezer’’ cannot be specifically defined
because ice cream can be stored or
displayed in a number of cabinets that
f. Commercial Ice-Cream Freezers
have different cabinet styles and that
The EPCA provision that requires this may also be used to store other, non-icecream equipment. In addition, it stated
rulemaking identifies ‘‘ice-cream
that not all ice cream is stored at the
freezers’’ separately from ‘‘selfsame temperature. Zero Zone
contained commercial refrigerators,
recommended that freezers be divided
freezers, and refrigerator-freezers
without doors’’ and ‘‘remote condensing into three categories: ice-cream dipping
cabinets, 0 °F to ¥15 °F, and below
commercial refrigerators, freezers, and
¥15 °F. (Zero Zone, No. 5 at p. 1) Hill
refrigerator-freezers.’’ (42 U.S.C.
Phoenix stated that its freezer cases also
6313(c)(4)(A), added by EPACT 2005,
can operate at either 0 °F or ¥5 °F, but
section 136(c)) EPCA neither specifies
there is no distinction in the design of
nor indicates that ‘‘ice-cream freezers’’
the case used for ice cream and that
are limited to equipment with a
used for frozen food, only in how the
particular door configuration (e.g., with
or without doors) or type of condensing customer uses it. Hill Phoenix added
that because these two temperatures are
unit (i.e., remote or self-contained).
so close, there is a linear relationship
Thus, pursuant to EPCA’s definition of
between temperature and energy usage.
‘‘commercial refrigerator, freezer, and
Hill Phoenix also stated there is a
refrigerator-freezer’’ (42 U.S.C.
category of cases that operate at ¥15 °F
6311(9)(A), added by EPACT 2005,
to ¥30 °F, called ‘‘hardening’’ cabinets,
section 136(a)(3)), DOE believes
which have a different design than
commercial ice-cream freezers include
equipment with all door types (i.e., solid typical freezer cases. (Public Meeting
Transcript, No. 3.4 at p. 41) Both
doors, transparent doors, or no doors)
Southern Company and EEI stated that
and configurations (e.g., vertical or
it is important that DOE develop
horizontal), as well as equipment with
definitions for commercial freezer and
either integral or remote condensing
ice-cream freezer that are all-inclusive,
units (i.e., self-contained or remote
and do not leave any loopholes for
condensing).
States to regulate. (Southern Company,
During the Framework comment
period, several stakeholders commented No. 6 at p. 2; EEI, No. 8 at p. 1) ARI
stated that there is very little difference
on the definition of commercial icesought feedback on use of the definition
of ‘‘electric refrigerator-freezer’’ for
consumer products (as set forth in 10
CFR 430.2) as a basis for defining the
term ‘‘self-contained commercial
refrigerator-freezer.’’ The comments on
this subject were virtually identical to
those received with respect to the
remote condensing equipment, which
are discussed above in section II.A.1.c,
and DOE has reached the same
conclusion here as it reached with
respect to that equipment. Specifically,
DOE does not intend at this point to
adopt a definition for ‘‘self-contained
commercial refrigerator-freezer without
doors.’’ Rather, DOE intends to rely on
EPCA’s definition of ‘‘commercial
refrigerator, freezer, and refrigeratorfreezer,’’ and on its understanding of the
well-accepted meaning of ‘‘refrigeratorfreezer.’’ DOE construes the EPCA term
‘‘self-contained commercial refrigeratorfreezer without doors’’ (see 42 U.S.C.
6313(c)(4)(A), added by EPACT 2005,
section 136(c)) to mean refrigeration
equipment that operates at both chilled
and frozen temperatures, is connected to
a self-contained condensing unit, and
has no doors. Such equipment has two
or more separate compartments, at least
one of which is capable of maintaining
food or other perishable items at
temperatures above freezing and at least
one of which maintains its contents
frozen.
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between freezers designed to operate at
0 °F and ¥5 °F, both in terms of features
and in terms of energy consumption.
ARI added that a recent survey of its
members revealed that a significant
number of ice-cream freezers operate at
¥15 °F. It requested that freezers that
operate at ¥5 °F be included in the
freezer category. ARI intends to amend
ANSI/ARI Standard 1200–2006 to
reflect an ice-cream freezer temperature
of ¥15 °F. In addition, ARI proposed
that specialty freezers, such as
hardening cabinets that operate far
below the ice-cream freezer
temperature, be excluded from this
rulemaking. (ARI, No. 7 at p. 2) The
Joint Comment agreed with ARI that
freezers that operate at ¥5 °F be tested
at 0 °F, and that testing at ¥5 °F will
only be for information purposes, not
for setting standards. (Joint Comment,
No. 9 at p. 3)
As part of the December 8, 2006 final
rule, in which it adopted test
procedures for commercial refrigeration
equipment, DOE adopted the following
definition for ‘‘ice-cream freezer:’’ ‘‘a
commercial freezer that is designed to
operate at or below ¥5 °F (¥21 °C) and
that the manufacturer designs, markets,
or intends for the storing, displaying, or
dispensing of ice cream.’’ 71 FR 71369;
10 CFR 431.62. In addition, this final
rule prescribed the rating temperature at
¥15 °F for ice-cream freezers. 71 FR
71370; 10 CFR 431.64.
Under this definition, unless
equipment is designed, marketed, or
intended specifically for the storage,
display or dispensing of ice cream, it
would not be considered an ‘‘ice-cream
freezer.’’ Multi-purpose commercial
freezers, manufactured for storage and
display, for example, of frozen foods as
well as ice cream would not meet this
definition, and DOE would not treat
them as commercial ice-cream freezers
in this rulemaking. This is in accord
with the comments listed above, which
indicated that DOE should not classify
such freezers as ice-cream freezers. On
the other hand, any commercial freezer
that is specifically manufactured for
storing, displaying or dispensing ice
cream, and that is designed so that in
normal operation it can operate at or
below ¥5 °F (¥21 °C), would meet the
definition. This includes equipment that
some stakeholders referred to as true
ice-cream cabinets—freezers designed to
operate considerably below ¥5 °F and
that are sometimes referred to as
‘‘hardening’’ cabinets and are
specifically designed for ice cream
storage, for example—as well as those
ice-cream dipping cabinets that are
designed to operate at least to some
extent below ¥5 °F. DOE intends to
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18:42 Jul 25, 2007
Jkt 211001
classify and address these types of
equipment as commercial ice-cream
freezers in this rulemaking.
2. Equipment Classes
In general, when evaluating and
establishing energy conservation
standards, DOE divides covered
equipment into equipment classes by
the type of energy used, capacity or
other performance-related features that
affect efficiency, and factors such as the
utility of the equipment to users. (See 42
U.S.C. 6295(q).) Different energy
conservation standards may apply to
different equipment classes.
Commercial refrigeration equipment
can be divided into various equipment
classes categorized by physical
characteristics that affect the efficiency
of the equipment. Most of these
characteristics affect the merchandise
that the equipment can be used to
display, and how that merchandise can
be accessed by the customer. Key
physical characteristics are the
operating temperature, the presence or
absence of doors (i.e., closed cases or
open cases), the type of doors used (i.e.,
transparent or solid), the angle of the
door or air curtain (i.e., horizontal,
semivertical, or vertical) and the type of
condensing unit (i.e., remote or selfcontained). ARI agreed that definitions
for the terms horizontal, semivertical,
and vertical be based upon the angle of
the air curtain. (ARI, No. 7 at p. 7)
DOE could not identify an existing
industry definition of air-curtain angle,
but developed a preliminary definition
for consideration. DOE is considering
defining air-curtain angle as the angle
between a vertical line and the line
formed by the points at the center of the
discharge air grille and the center of the
return air grille, when viewed in crosssection. DOE specifically seeks feedback
on this definition of air-curtain angle.
This is identified as Issue 2 under
‘‘Issues on Which DOE Seeks Comment’’
in section IV.E of this ANOPR.
DOE proposed an organization of
equipment classes in its Framework
Document based on the equipment
classes for self-contained commercial
refrigerators, commercial freezers and
commercial refrigerator-freezers with
doors described in section 136(c)(2) of
EPACT 2005. Another organization of
equipment classes for commercial
refrigeration equipment was proposed
by ARI during the Framework comment
period, and presented by DOE during
the Framework public meeting. ARI
organized commercial refrigeration
equipment by equipment family (where
equipment family is considered as broad
groups of covered equipment that have
similar geometric characteristics),
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condensing unit type, and operating
temperature.13 (ARI, No. 7 at pp. 5–7)
During the public meeting, DOE noted
that ARI’s equipment families included
a ‘‘service over counter’’ equipment
family, which was absent from DOE’s
equipment class organization. DOE
understands that the service over
counter equipment family is unique in
that access to merchandise on display is
provided only to sales personnel from
the rear of the cabinet. ARI noted that
DOE did not categorize equipment with
doors based on whether the doors are
solid or transparent, and ARI explained
that this is a necessary distinction. (ARI,
No. 7 at p. 7) The Joint Comment stated
that the equipment families proposed by
ARI are reasonable. (Joint Comment, No.
9 at p. 3)
DOE agrees with ARI that the
characteristics of the service over
counter design affect efficiency, and is
proposing an equipment class
organization that includes a service over
counter equipment family. DOE also
agrees with ARI that the energy
consumption of commercial
refrigeration equipment with doors is
affected by whether the doors are solid
or transparent, and is proposing to
include this distinction in its equipment
class organization.
In its Framework Document, DOE
suggested that equipment without doors
be divided into equipment classes based
on air-curtain angles of 0° to 30°
(vertical), 30° to 60° (semivertical), and
60° to 90° (horizontal) from the vertical.
During the Framework public meeting,
DOE asked for comments on these
proposed ranges of air-curtain angle.
Hill Phoenix stated that the industry
defines these as 0° to 10° for vertical,
10° to 80° for semivertical, and 80° to
90° for horizontal. (Public Meeting
Transcript, No. 3.4 at p. 86) The Joint
Comment stated that the ranges for
vertical and semivertical should be
closer to those used in DOE’s proposal.
Specifically, the Joint Comment stated
that because vertical equipment will
tend to be more efficient and thus likely
13 For this rulemaking, equipment class
designations consist of a combination (in sequential
order separated by periods) of an (1) equipment
family code (VOP=vertical open, SVO=semivertical
open, HZO=horizontal open, VCT=vertical
transparent doors, VCS=vertical solid doors,
HCT=horizontal transparent doors, HCS=horizontal
solid doors, or SOC=service over counter), (2) an
operating mode code (RC=remote condensing or
SC=self-contained), and (3) a rating temperature
code (M=medium temperature (38 °F), L=low
temperature (0 °F), or I=ice-cream temperature
(¥15 °F)). For example, ‘‘VOP.RC.M’’ refers to the
‘‘vertical open, remote condensing, medium
temperature’’ equipment class. See discussion
below and chapter 3 of the TSD, market and
technology assessment, for a more detailed
explanation of the equipment class terminology.
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to have more stringent standards, if the
equipment family delineations allow
manufacturers to substitute semivertical
for vertical, they could unintentionally
shift the market to the less efficient
standard. Therefore, the Joint Comment
stated that DOE should determine a
divide between vertical and semivertical
that will not result in one type of
equipment being substituted for the
other. (Joint Comment, No. 9 at pp.
3–4)
The cost-efficiency data DOE received
from ARI for four covered equipment
classes were based on the industry
definitions of 0° to 10° for vertical
equipment, 10° to 80° for semivertical
equipment, and 80° to 90° for horizontal
equipment, as measured from the
vertical. Therefore, DOE conducted its
analyses for the ANOPR based on these
definitions of equipment families, but
recognizes the concern raised by the
Joint Comment that these delineations
may result in one type of equipment
being substituted for another. To
investigate the relationship of aircurtain angle to energy consumption for
remote condensing medium temperature
open display cases (VOP.RC.M,
SVO.RC.M, and HZO.RC.M equipment
classes), DOE collected market data,
which is documented in the market and
technology assessment (see chapter 3 of
the TSD).14 15 These data show
significant clusters of equipment
divided by air-curtain angles of 10°, 30°
and 65° from the vertical. The most
significant cluster of equipment is in the
range of 0° to 10° from the vertical (this
cluster corresponds to the VOP.RC.M
equipment class as currently defined),
with less significant clusters between
10° and 30°, 30° and 65°, and 65° and
90° from the vertical. The large cluster
of equipment between 0° to 10° from the
vertical has a high frequency of units at
6° to 9° from the vertical. With the
delineation between vertical and
semivertical equipment families at an
angle of 10°, if the SVO.RC.M
equipment class had a less stringent
standard than the VOP.RC.M equipment
class, DOE is concerned that
manufacturers may adjust their
equipment designs slightly to take
advantage of the lower standard for
SVO.RC.M equipment. A piece of
equipment could be redesigned with a
small change in air-curtain angle (e.g.,
from 9° to 11° from the vertical), that
would not significantly affect energy
consumption or utility. This redesign
would move the equipment from the
VOP.RC.M equipment class to the
SVO.RC.M equipment class, where it
would not be subject to as stringent a
standard.
DOE understands that there is the
potential for manufacturers to redesign
equipment to move from one equipment
class to another regardless of where the
air-curtain angle delineation is made.
However, the concern raised above is
heightened by the concentration of
equipment in the 0° to 10° from the
vertical range, and the potential for
mass redesign of the majority of
equipment currently classified as
VOP.RC.M in order to be classified as
SVO.RC.M. According to DOE’s market
data, there is a clear region of low
density at an air-curtain angle of 30°
from the vertical, and DOE believes that
drawing the delineation between the
VOP and SVO equipment families here
could potentially result in less
equipment migration from the
VOP.RC.M equipment class to the
SVO.RC.M equipment class.
Additionally, DOE’s market data
provides little support for delineating
the SVO.RC.M and the HZO.RC.M
equipment families at 80° from the
vertical. A significant group of
equipment with similar characteristics
(but clearly distinguished from the
SVO.RC.M and VOP.RC.M equipment
classes) is present with air curtain
angles of 65° to 90° from the vertical.
This supports drawing the SVO.HZO
equipment family delineation at 60° to
65° from the vertical. In light of this
market data, DOE welcomes any
additional data or feedback regarding
the proposed ranges of air-curtain angles
or shipments of equipment in the
VOP.RC.M, SVO.RC.M and HZO.RC.M
equipment classes broken down by
energy use and air-curtain angle.
DOE believes that the orientation of
doors affects the energy consumption of
commercial refrigeration equipment
with doors and that this equipment can
be broadly categorized by the angle of
the door. DOE did not receive
stakeholder feedback on how to define
the door angle for equipment with
doors, but is considering defining door
angle as ‘‘the angle between a vertical
line and the line formed by the plane of
the door, when viewed in crosssection.’’ DOE specifically seeks
feedback on this definition of door
angle. This is identified as Issue 3 under
‘‘Issues on Which DOE Seeks Comment’’
in section IV.E of this ANOPR.
During the Framework comment
period, no objections were raised to the
proposal of equipment families of
‘‘horizontal’’ and ‘‘vertical’’ equipment
with doors. In addition, Hill Phoenix
commented that ARI eliminated the
‘‘semivertical with doors’’ equipment
family (doors with an angle that
deviated substantially from 0° or 90°
with respect to the vertical) because no
manufacturers could identify any
shipments of semivertical equipment
with doors. (Public Meeting Transcript,
No. 3.4 at p. 63) Therefore, for
equipment with solid and transparent
doors, DOE is considering defining two
equipment families each, based on door
angles of 0° to 45° (vertical) and 45° to
90° (horizontal). DOE specifically seeks
feedback on these ranges of door angles
for equipment with doors. This is
identified as Issue 4 under ‘‘Issues on
Which DOE Seeks Comment’’ in section
IV.E of this ANOPR.
Based on the above information, DOE
intends to use eight equipment families,
which are shown in Table II.1.
TABLE II.1.—EQUIPMENT FAMILY DESIGNATIONS
Equipment family
Description
Vertical Open (VOP) ..........................................
Equipment without doors and an air-curtain angle greater than or equal to 0° and less than 10°
from the vertical.
Equipment without doors and an air-curtain angle greater than or equal to 10 and less than
80° from the vertical.
Equipment without doors and an air-curtain angle greater than or equal to 80° from the
vertical.
Semivertical Open (SVO) ...................................
mstockstill on PROD1PC66 with PROPOSALS2
Horizontal Open (HZO) ......................................
14 See Table II.1 through Table II.3, which set
forth the meaning of the equipment class lettering
designations. Also, see chapter 3 of the TSD for
more details on the equipment class lettering
designations. For example, ‘‘VOP.RC.M’’ refers to
the ‘‘vertical open, remote condensing, medium
temperature’’ equipment class.
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15 The market data that DOE collected represents
equipment offerings of major commercial
refrigeration equipment manufacturers as of 2006.
Each data point represents a particular model
offered, not a piece of equipment shipped, and is
not intended to represent shipments of equipment
in the VOP.RC.M, SVO.RC.M, and HZO.RC.M
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equipment classes. However, in the absence of
detailed shipment information broken down by
energy use and air-curtain angle, DOE believes this
market data provides a reasonable estimate of the
distribution of equipment by energy use and aircurtain angle within these equipment classes.
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TABLE II.1.—EQUIPMENT FAMILY DESIGNATIONS—Continued
Equipment family
Description
Vertical Closed Transparent (VCT) ....................
Horizontal Closed Transparent (HCT) ................
Equipment with hinged or sliding transparent doors and a door angle less than 45°.
Equipment with hinged or sliding transparent doors and a door angle greater than or equal to
45°.
Equipment with hinged or sliding solid (opaque) doors and a door angle less than 45°.
Equipment with hinged or sliding solid (opaque) doors and a door angle greater than or equal
to 45°.
Equipment with sliding or hinged doors intended for use by sales personnel and fixed or
hinged glass for displaying merchandise.
Vertical Closed Solid (VCS) ...............................
Horizontal Closed Solid (HCS) ...........................
Service Over Counter (SOC) .............................
Within each of these eight equipment
families are equipment that have one of
the two condensing unit configurations
shown in Table II.2.
TABLE II.2.—CONDENSING UNIT CONFIGURATION DESIGNATIONS
Condensing unit configuration
Description
Remote condensing (RC) ...................................
Condensing unit is remotely located from the refrigerated equipment and consists of one or
more refrigerant compressors, refrigerant condensers, condenser fans and motors, and factory-supplied accessories.
Condensing unit is an integral part of the refrigerated equipment and consists of one or more
refrigerant compressors, refrigerant condensers, condenser fans and motors, and factorysupplied accessories.
Self-contained (SC) ............................................
Equipment classes would also be
organized based on the three rating
temperatures shown in Table II.3.
TABLE II.3.—RATING TEMPERATURE DESIGNATIONS
Rating temperature
Description
38 °F (M) ............................................................
0 °F (L) ...............................................................
¥15 °F (I) ...........................................................
Medium temperature (refrigerators).
Low temperature (freezers).
Ice-cream temperature (ice-cream freezers).
Based on stakeholder feedback, DOE
is considering 38 of the 48 equipment
classes shown in Table II.4.16 The
equipment classes are organized by
equipment family, compressor operating
mode, and rating temperature. The right
hand column in Table II.4, which has
the heading ‘‘Equipment Class
Designation,’’ identifies each of the 48
equipment classes with a particular set
of letters. The first three letters for each
class represent the equipment family for
that class, the next two letters represent
the condensing unit configuration, and
the last letter represents the rating
temperature. Table II.1 through Table
II.3 set forth the meaning of the
equipment class lettering designations.
(Also, see chapter 3 of the TSD for more
details on the equipment class lettering
designations.)
TABLE II.4.—COMMERCIAL REFRIGERATION EQUIPMENT CLASSES
Rating
temperature
(°F)
Equipment family
Condensing unit
configuration
Vertical Open ...................................................................
Remote ...................................................................
Self-Contained ........................................................
mstockstill on PROD1PC66 with PROPOSALS2
Semivertical Open ...........................................................
Remote ...................................................................
Self-Contained ........................................................
Horizontal Open ..............................................................
16 Table II.4 identifies 48 classes of commercial
refrigeration equipment. Of the 48 classes, 10
classes are identified by asterisks. EPCA has already
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Remote ...................................................................
established energy conservation standards for these
10 classes. (42 U.S.C. 6313(c)(2)–(3)) Therefore,
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38
0
¥15
38
0
¥15
38
0
¥15
38
0
¥15
38
Equipment class
designation
VOP.RC.M.
VOP.RC.L.
VOP.RC.I
VOP.SC.M.
VOP.SC.L.
VOP.SC.I.
SVO.RC.M.
SVO.RC.L.
SVO.RC.I.
SVO.SC.M.
SVO.SC.L.
SVO.SC.I.
HZO.RC.M.
these 10 classes are not covered under this
rulemaking.
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TABLE II.4.—COMMERCIAL REFRIGERATION EQUIPMENT CLASSES—Continued
Rating
temperature
(°F)
Condensing unit
configuration
Equipment family
Self-Contained ........................................................
Vertical Closed Transparent ............................................
Remote ...................................................................
Self-Contained ........................................................
Horizontal Closed Transparent .......................................
Remote ...................................................................
Self-Contained ........................................................
Vertical Closed Solid .......................................................
Remote ...................................................................
Self-Contained ........................................................
Horizontal Closed Solid ...................................................
Remote ...................................................................
Self-Contained ........................................................
Service Over Counter ......................................................
Remote ................................................................
Self-Contained ........................................................
0
¥15
38
0
¥15
38
0
¥15
38
0
¥15
38
0
¥15
38
0
¥15
38
0
¥15
38
0
¥15
38
0
¥15
38
0
¥15
38
0
¥15
38
0
¥15
Equipment class
designation
HZO.RC.L.
HZO.RC.I.
HZO.SC.M.
HZO.SC.L.
HZO.SC.I.
VCT.RC.M.
VCT.RC.L.
VCT.RC.I.
VCT.SC.M.*
VCT.SC.L.*
VCT.SC.I.
HCT.RC.M.
HCT.RC.L.
HCT.RC.I.
HCT.SC.M.*
HCT.SC.L.*
HCT.SC.I.
VCS.RC.M.
VCS.RC.L.
VCS.RC.I.
VCS.SC.M.*
VCS.SC.L.*
VCS.SC.I.
HCS.RC.M.
HCS.RC.L.
HCS.RC.I.
HCS.SC.M.*
HCS.SC.L.*
HCS.SC.I.
SOC.RC.M.
SOC.RC.L.
SOC.RC.I.
SOC.SC.M.*
SOC.SC.L.*
SOC.SC.I.
* These equipment classes have standards established by EPCA and are therefore not covered under this rulemaking. (42 U.S.C. 6313(c)(2)–
(3)).
rulemaking. Table II.5 identifies, by sets
of letters, 10 potential equipment
classes for this equipment. DOE has
based the designations of these possible
equipment classes on the equipment
class designations presented in Table
EPCA contains standards for selfcontained commercial refrigerators,
commercial freezers and commercial
refrigerator-freezers with doors (42
U.S.C. 6313(c)(2)–(3)); therefore this
equipment is not included in this
II.1 through Table II.3. Because these
equipment classes are not included in
this rulemaking, they are indicated with
an asterisk in Table II.4.
TABLE II.5.—POTENTIAL EQUIPMENT CLASSES NOT INCLUDED IN THIS RULEMAKING
mstockstill on PROD1PC66 with PROPOSALS2
VCT.SC.M .........................
VCT.SC.L ..........................
VCS.SC.M .........................
VCS.SC.L ..........................
During the Framework public
meeting, Hill Phoenix asserted that
equipment with separate refrigerator
and freezer compartments (i.e.,
refrigerator-freezers) is custom built and
is a low shipment-volume type of
equipment. Hill Phoenix believes that
spending time on these equipment
categories might unnecessarily slow the
rulemaking. (Public Meeting Transcript,
No. 3.4 at p. 52) Based on this comment
and DOE’s own analysis of the
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HCT.SC.M .........................
HCT.SC.L ..........................
HCS.SC.M .........................
HCS.SC.L ..........................
shipments data, DOE has not
established equipment classes for
remote condensing commercial
refrigerator-freezers or self-contained
commercial refrigerator-freezers without
doors (also called ‘‘dual temperature’’
units). DOE addresses how it might set
standards for this equipment in sections
III and IV.E.1.
In sum, Table II.6 presents the
equipment classes covered under this
rulemaking organized by the three
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SOC.SC.M.
SOC.SC.L.
equipment categories, in accordance
with EPCA section 325(p)(1)(A). (42
U.S.C. 6295(p)(1)(A)) Pursuant to EPCA
section 325(p)(1)(B), DOE specifically
seeks feedback on these equipment
classes and invites interested persons to
submit written presentations of data,
views, and arguments. (42 U.S.C.
6295(p)(1)(B)) This is identified as Issue
5 under ‘‘Issues on Which DOE Seeks
Comment’’ in section IV.E of this
ANOPR.
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41177
TABLE II.6.—COMMERCIAL REFRIGERATION EQUIPMENT CLASSES BY CATEGORY
Rating
temperature
(°F)
Equipment
category
Condensing unit configuration
Equipment family
Remote Condensing Commercial
Refrigerators,
Commercial
Freezers, and Commercial Refrigerator-Freezers.
Remote ..........................................
Vertical Open ................................
Semivertical Open
Horizontal Open ............................
Vertical Closed Transparent .........
Horizontal Closed Transparent .....
Vertical Closed Solid .....................
Horizontal Closed Solid ................
Service Over Counter ...................
Self-Contained Commercial Refrigerators, Commercial Freezers,
and Commercial RefrigeratorFreezers without Doors.
Self-Contained ..............................
Vertical Open ................................
Semivertical Open .........................
Horizontal Open ............................
Commercial Ice-Cream Freezers ..
Remote ..........................................
mstockstill on PROD1PC66 with PROPOSALS2
Self-Contained ..............................
3. Normalization Metric
The standards being developed in this
rulemaking must apply to equipment of
varying size and capacity within an
equipment class, so they must be
normalized by some factor that is
representative of the varying energy use
of the equipment. A ‘‘normalization
metric’’ is a measure of capacity or
utility that allows comparison of energy
use of various sizes of equipment on a
unit capacity basis. During the
Framework public meeting, DOE asked
what normalization metric would be
most appropriate for the equipment in
this rulemaking—total display area
(TDA), refrigerated volume, or length.
ARI commented that in remote
condensing equipment, the trend has
been to use TDA, not only in the United
States, but in Europe as well. ARI is
trying to align itself with standards like
those from the International Standards
Organization (ISO) that use TDA, and
wants DOE to be consistent with these
ISO standards. ARI’s certification
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Vertical Open ................................
Semivertical Open .........................
Horizontal Open ............................
Vertical Closed Transparent .........
Horizontal Closed Transparent .....
Vertical Closed Solid .....................
Horizontal Closed Solid ................
Service Over Counter ...................
Vertical Open ................................
Semivertical Open .........................
Horizontal Open ............................
Vertical Closed Transparent .........
Horizontal Closed Transparent .....
Vertical Closed Solid .....................
Horizontal Closed Solid ................
Service Over Counter ...................
program will be based on TDA, and that
is how the data will be listed in its
certification directory. (Public Meeting
Transcript, No. 3.4 at pp. 95–96) ARI
also proposed that daily energy
consumption be calculated as a function
of the refrigerated volume for selfcontained equipment with doors, and as
a function of TDA for self-contained
equipment without doors, because these
respective normalization metrics are
most representative of the energy
consumption of these two types of
equipment. (ARI, No. 7 at p. 9) ARI also
stated that it will collect and analyze
data for daily energy consumption as a
function of refrigerated volume and
TDA for remote condensing equipment
in order to develop an appropriate
recommendation for that type of
equipment. (ARI, No. 7 at p. 9) The Joint
Comment stated that they do not agree
with DOE’s proposal to use TDA as the
metric for cases without doors, because,
they assert, such an approach would
favor ‘‘shallow’’ and ‘‘tall’’ equipment
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38
0
38
0
38
0
38
0
38
0
38
0
38
0
38
0
38
0
38
0
38
0
¥15
¥15
¥15
¥15
¥15
¥15
¥15
¥15
¥15
¥15
¥15
¥15
¥15
¥15
¥15
¥15
Equipment class
designation
VOP.RC.M.
VOP.RC.L.
SVO.RC.M.
SVO.RC.L.
HZO.RC.M.
HZO.RC.L.
VCT.RC.M.
VCT.RC.L.
HCT.RC.M.
HCT.RC.L.
VCS.RC.M.
VCS.RC.L.
HCS.RC.M.
HCS.RC.L.
SOC.RC.M.
SOC.RC.L.
VOP.SC.M.
VOP.SC.L.
SVO.SC.M.
SVO.SC.L.
HZO.SC.M.
HZO.SC.L.
VOP.RC.I.
SVO.RC.I.
HZO.RC.I.
VCT.RC.I.
HCT.RC.I.
VCS.RC.I.
HCS.RC.I.
SOC.RC.I.
VOP.SC.I.
SVO.SC.I.
HZO.SC.I.
VCT.SC.I.
HCT.SC.I.
VCS.SC.I.
HCS.SC.I.
SOC.SC.I.
over ‘‘deeper’’ and ‘‘shorter’’ equipment
of equivalent volume. The Joint
Comment proposed that DOE instead
use volume, length, or potentially a
combination of TDA and volume. One
compromise would be to use a multiple
regression equation that would consider
both refrigerated volume and length or
refrigerated volume and TDA. (Joint
Comment, No. 9 at p. 5, and Public
Meeting Transcript, No. 3.4 at pp. 94–
95)
In this rulemaking, DOE intends to
establish standards for remote
condensing commercial refrigerators,
commercial freezers and commercial
refrigerator-freezers, as well as
commercial ice-cream freezers, with
solid or transparent doors. Equipment
with transparent doors is subject to
significant radiation loads (as much as
50 percent of the total refrigeration load)
as well as loads due to anti-sweat
heaters that are required to keep the
door free of condensation. In addition,
transparent doors are inherently poorer
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Federal Register / Vol. 72, No. 143 / Thursday, July 26, 2007 / Proposed Rules
insulators than solid doors with an
insulation value of roughly R–2
compared with R–16, respectively, for a
typical freezer. For equipment with
transparent doors, TDA is a good
indicator of the magnitude of the
radiation load, the anti-sweat load, and
the conduction load through the door.
Additionally, TDA is representative of
the ability of the equipment to display
merchandise, which is a measure of its
utility or usefulness to the owner. Thus,
DOE believes that TDA is an appropriate
normalization metric for all remote
condensing refrigerators and freezers
with transparent doors, as well as all
commercial ice-cream freezers with
transparent doors. Remote condensing
commercial refrigerators, commercial
freezers and commercial refrigeratorfreezers with solid doors and
commercial ice-cream freezers with
solid doors (i.e., ‘‘storage cabinets’’)
inherently have no TDA, since there is
no visible product and thus no glass or
other transparent opening. Therefore,
DOE believes refrigerated volume is an
appropriate normalization metric for
this equipment. This is consistent with
the fact that EPCA sets standards for
self-contained units with solid doors in
the form of upper limits on daily energy
consumption using refrigerated volume
as the normalization metric (42 U.S.C.
6313(c)(2), added by EPACT 2005,
section 136(c)). DOE also believes that
length is not an appropriate metric for
equipment with solid or transparent
doors because it does not capture the
physical relationship between heat
loads and equipment capacity as
accurately as either TDA or volume.
DOE will also establish in this
rulemaking standards for remote
condensing and self-contained
commercial refrigerators, commercial
freezers and commercial refrigeratorfreezers, and commercial ice-cream
freezers, without doors. The physical
relationship between heat loads and
energy consumption is fundamentally
different for this equipment than for the
equipment that has standards set by
EPCA (i.e., self-contained commercial
refrigerators, commercial freezers, and
commercial refrigerator-freezers with
doors).17 Equipment without doors is
subject to large loads due to infiltration
of warm moist air from the area around
the equipment. These loads are typically
25 percent to 85 percent of the total
refrigeration load (depending on the aircurtain angle and other factors), while
the conduction loads experienced by
17 Standards for self-contained commerical
refrigerators, commercial freezers, and commercial
refrigerator-freezers with doors were added to 42
U.S.C. 6313(c)(2), by EPACT 2005, section 136(c).
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equipment without doors are typically
less than 5 percent and are rarely more
than 25 percent. TDA is a much better
indicator of infiltration load than
volume because the open area of the
equipment is directly related to the
amount of infiltrated air. Current
standards in Europe (EUROVENT—
CECOMAF), the United Kingdom
(Enhanced Capital Allowance Program),
and Australia (Australian Greenhouse
Office Minimum Energy Performance
Standards) use TDA as a normalization
metric for equipment without doors.
Moreover, similar to equipment with
transparent doors, TDA is representative
of the ability of equipment without
doors to display merchandise, which is
a measure of its utility or usefulness to
the owner. Thus, DOE believes that TDA
should be the normalization metric for
all remote condensing and selfcontained commercial refrigerators,
commercial freezers and commercial
refrigerator-freezers without doors, and
all commercial ice-cream freezers
without doors. DOE also believes that
length is not an appropriate metric for
equipment without doors because it
does not capture the physical
relationship between heat loads and
equipment capacity as accurately as
TDA.
4. Extension of Standards
During the Framework public
meeting, DOE asked stakeholders if it
would be appropriate to extend the
standards prescribed for self-contained
refrigeration equipment with doors in
EPCA to similar remote condensing
equipment with doors and commercial
ice-cream freezers with doors covered in
this rulemaking, and if so, what
methodology would be appropriate. ARI
commented that it would not be
appropriate to extend the standards
from self-contained equipment because
that equipment is normalized by
volume, and the remote condensing
equipment industry uses TDA or some
other metric. (Public Meeting
Transcript, No. 3.4 at p. 89) Hill
Phoenix commented that as DOE has the
opportunity to look at energy data, it
will see that for remote condensing
cases, energy consumption would be
lower than for the self-contained cases.
However, Hill Phoenix did not explain
how to make the comparison. (Public
Meeting Transcript No. 3.4 at p. 91) ARI
also asserted that an extension of the
EPCA standards for self-contained
commercial refrigeration equipment
with doors to remote condensing
commercial refrigeration equipment
with doors is not appropriate. ARI
explained that the interior volume of
self-contained equipment is calculated
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using the ANSI/AHAM Standard HRF–
1–2004, whereas the interior volume of
remote condensing equipment should
be calculated according to ANSI/ARI
Standard 1200–2006. (ARI, No. 7 at p.
8)
Because of the differences in energy
consumption, and calculation of interior
volume, DOE will not apply the
standards prescribed by EPCA for selfcontained equipment with doors to
remote condensing equipment with
doors. Instead, DOE will perform an
analysis of the impacts of potential
standards and will adopt levels that
meet the requirements of EPCA section
325(o). (42 U.S.C. 6295(o)) As to
commercial ice-cream freezers with
doors, in the market and technology
assessment (see chapter 3 of the TSD),
DOE identified 16 commercial ice-cream
freezer equipment classes. During the
engineering analysis (see chapter 5 of
the TSD), DOE developed costefficiency curves directly for 3 of the 16
commercial ice-cream freezer
equipment classes (HCT.SC.I, VCT.SC.I,
and VCS.SC.I) because of their high
shipment volumes. For these three
classes, this eliminated the issue of
extending standards from self-contained
commercial freezers with doors. For the
remaining 13 equipment classes, DOE is
considering use of the cost-efficiency
curves (or standards) developed in this
rulemaking for certain equipment
classes of remote condensing
commercial freezers and self-contained
commercial freezers without doors, for
equivalent equipment classes of
commercial ice-cream freezers. For a
portion of these 13 low-shipmentvolume commercial ice-cream freezer
equipment classes (as well as other lowshipment-volume equipment classes)
DOE is also considering use of the
EPACT 2005 standards for selfcontained commercial freezers with
doors. The intent of this approach is to
save time and resources by eliminating
direct analysis of equipment classes that
have low shipment volumes and lower
overall potential energy savings. At this
point in the rulemaking, DOE only
demonstrated this approach with two
commercial ice-cream freezer
equipment classes, as well as one other
commercial refrigeration equipment
class, (see chapter 5 of the TSD) and not
the full set of covered equipment
classes. DOE specifically seeks feedback
on this approach to extending costefficiency curves (or standards) from
high-shipment-volume equipment
classes to low-shipment-volume
equipment classes, and of extending
EPCA standards to equipment classes in
this rulemaking. This is identified as
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5. Market Assessment
In the market assessment, DOE
develops a qualitative and quantitative
characterization of the commercial
refrigeration equipment industry and
market structure based on publicly
available information and data and
information submitted by manufacturers
and other stakeholders.
DOE identified 34 manufacturers of
commercial refrigeration equipment.
Four of these companies hold
approximately 85 percent of the
domestic market share of refrigerated
display cases. These four manufacturers
produce self-contained commercial
refrigerators, commercial freezers, and
commercial refrigerator-freezers without
doors and commercial ice-cream
freezers, although their primary
business is in remote condensing
commercial refrigerators and
commercial freezers with and without
doors. Like most industries, there exists
a second tier of smaller, but well-known
manufacturers. These other
manufacturers make up the remaining
15 percent of U.S. market share. See
chapter 3 of the TSD for more
information regarding manufacturers of
commercial refrigeration equipment.
DOE is considering the possibility
that small businesses would be
particularly impacted by the
promulgation of energy conservation
standards for commercial refrigeration
equipment. The Small Business
Administration (SBA) defines small
business manufacturing enterprises for
commercial refrigeration equipment as
those having 750 employees or fewer.
SBA lists small business size standards
for industries as they are described in
the North American Industry
Classification System (NAICS). The size
standard for an industry is the largest
that a for-profit concern can be in that
industry and still qualify as a small
business for Federal Government
programs. These size standards are
generally expressed in terms of the
average annual receipts or the average
employment of a firm. For commercial
refrigeration equipment, the size
standard is matched to NAICS code
333415, Air-Conditioning and Warm Air
Heating Equipment and Commercial
and Industrial Refrigeration Equipment
Manufacturing, and is 750 employees.
DOE will study the potential impacts on
these small businesses in detail during
the MIA, which will be conducted as a
part of the NOPR analysis. See chapter
3 of the TSD for more information
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regarding commercial refrigeration
equipment for small businesses.
ARI submitted annual shipment data
by equipment class for its member
companies. (ARI, No. 7 Exhibit B at p.
1) DOE understands that these data do
not include the entire industry, since
not all major manufacturers are
represented by ARI (most notably, True
Manufacturing, which DOE understands
has a large market share of selfcontained commercial equipment with
doors and commercial ice-cream
freezers). However, because these data
cover the vast majority of the
commercial refrigeration equipment
sold, and because no other detailed data
were available, the ARI shipment data
became the basis of DOE’s analysis.
The market and technology
assessment (see chapter 3 of the TSD)
provides detailed shipment information
from ARI for each category of
commercial refrigeration equipment by
equipment class for 2005. The ARI data
included shipments for equipment that
operates at an ‘‘application’’
temperature (e.g., wine chillers that
operate at 45°F and freezers that operate
at ¥30°F). However, DOE only
considered shipments of equipment at
the three operating temperatures
considered in this rulemaking (38°F,
0°F, and ¥15°F). The shipments of
equipment that operate at one of these
three temperatures constitute
approximately 98 percent of the
shipments reported by ARI. See chapter
3 of the TSD for more information
regarding commercial refrigeration
equipment shipments.
DOE reviewed available literature and
consulted with experts on commercial
refrigeration equipment in order to
establish typical equipment lifetimes.
The literature and individuals consulted
estimated a wide range of typical
equipment lifetimes. Based on the
literature reviewed and discussions
with industry experts and other
stakeholders, DOE concluded that a
typical lifetime of 10 years is
appropriate for commercial refrigeration
equipment. See chapter 3 of the TSD for
more information regarding equipment
lifetimes.
DOE characterized commercial
refrigeration equipment energy
consumption by conducting a survey of
existing remote condensing refrigeration
equipment from major manufacturers
and compiling a performance database.
The primary source of information for
the database was equipment data sheets
that were publicly available on
manufacturers’ websites. From these
data sheets, equipment information
such as total refrigeration load,
evaporator temperature, lighting power
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draw, defrost power draw, and motor
power draw allowed determination of
calculated daily energy consumption
(CDEC) according to the test procedure
in ANSI/ARI Standard 1200–2006. See
chapter 3 of the TSD for more
information regarding the performance
data for selected remote condensing
equipment classes.
6. Technology Assessment
In the technology assessment, DOE
identified technologies and design
options that could improve the
efficiency of commercial refrigeration
equipment. This assessment provides
the technical background and structure
on which DOE bases its screening and
engineering analyses. For commercial
refrigeration equipment, DOE based its
list of technologically feasible design
options on input from manufacturers,
industry experts, component suppliers,
trade publications, and technical
papers. See chapter 3 of the TSD for
additional detail on the technology
assessment and technologies analyzed.
B. Screening Analysis
The purpose of the screening analysis
is to evaluate the technologies that
improve the efficiency of equipment, to
determine which technologies to
consider further and which options to
screen out. DOE consulted with
industry, technical experts, and other
interested parties to develop a list of
technologies for consideration. DOE
then applied the following four
screening criteria to determine which
technologies are unsuitable for further
consideration in the rulemaking (10 CFR
Part 430, Subpart C, Appendix A at
4(a)(4) and 5(b)):
1. Technological feasibility.
Technologies incorporated in
commercial equipment or in working
prototypes will be considered
technologically feasible.
2. Practicability to manufacture,
install, and service. If mass production
of a technology in commercial
equipment and reliable installation and
servicing of the technology could be
achieved on the scale necessary to serve
the relevant market at the time of the
effective date of the standard, then that
technology will be considered
practicable to manufacture, install and
service.
3. Adverse impacts on equipment
utility or equipment availability. If a
technology is determined to have
significant adverse impact on the utility
of the equipment to significant
subgroups of consumers, or result in the
unavailability of any covered equipment
type with performance characteristics
(including reliability), features, sizes,
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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. Adverse impacts on health or
safety. If it is determined that a
technology will have significant adverse
impacts on health or safety, it will not
be considered further.
DOE eliminated five of the
technologies considered in the market
and technology assessment. The specific
technologies that were eliminated are:
(1) Air-curtain design, (2)
thermoacoustic refrigeration, (3)
magnetic refrigeration, (4) electrohydrodynamic heat exchangers, and (5)
copper rotor motors. Because all five of
these technologies are in the research
stage, DOE believes that they would not
be practicable to manufacture, install
and service on the scale necessary to
serve the relevant market at the time of
the effective date of the standard. In
addition, because these technologies are
in the research stage, DOE cannot assess
whether they will have any adverse
impacts on utility to significant
subgroups of consumers, result in the
unavailability of any types of
equipment, or present any significant
adverse impacts on health or safety.
Therefore, DOE will not consider these
technologies as design options for
improving the energy efficiency of
commercial refrigeration equipment.
For more details on how DOE
developed the technology options and
the process for screening these options,
refer to the market and technology
assessment (see chapter 3 of the TSD)
and the screening analysis (see chapter
4 of the TSD).
C. Engineering Analysis
The purpose of the engineering
analysis is to establish the relationship
between the cost and efficiency of
commercial refrigeration equipment. For
each equipment class, this relationship
estimates the baseline manufacturer
cost, as well as the incremental cost for
equipment at efficiency levels above a
baseline. In determining the
performance of higher efficiency
equipment, DOE considers technologies
and design option combinations not
eliminated in the screening analysis.
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).
DOE typically structures its
engineering analysis around one of three
methodologies. These are: (1) The
design-option approach, which
calculates the incremental costs of
adding specific design options to a
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baseline model; (2) the efficiency-level
approach, which calculates the relative
costs of achieving increases in energy
efficiency levels; and (3) the reverseengineering or cost-assessment
approach, which involves a ‘‘bottomsup’’ manufacturing cost assessment
based on a detailed bill of materials
derived from commercial refrigeration
equipment tear-downs.
1. Approach
In this rulemaking, DOE is adopting
an efficiency-level approach,
supplemented by a design-option
approach. For the four equipment
classes with the highest shipment
volumes, DOE used industry-supplied
cost-efficiency curves developed using
an efficiency-level approach in
downstream analyses.18 These industrysupplied curves are qualified using
analytically derived curves developed
by DOE using a design-option approach.
In addition, for the equipment classes
where industry-supplied curves were
not available, DOE used the analytically
derived curves developed using a
design-option approach in the
downstream analyses.
In the Framework Document, DOE
requested feedback on the use of an
efficiency-level approach supported, as
needed, by a design-option approach to
determine the cost-efficiency
relationship for commercial
refrigeration equipment. ACEEE
expressed concern about the use of an
efficiency-level approach because it
effectively creates a ‘‘black box’’ that
does not allow for any independent
analyses. ACEEE prefers the designoption approach because of its
transparency and the ability to be
independently verified. ACEEE noted
that in the past, DOE has taken both
approaches simultaneously. By doing
both, DOE can calibrate one approach
against another and have data that are
publicly available so all parties can
comment. (Public Meeting Transcript,
No. 3.4 at p. 110) ASAP stated that the
design-option approach remains very
important because it validates the data
and shows the benefits of different
technical options. (Public Meeting
Transcript, No. 3.4 at p. 119) ARI stated
that it supports DOE’s suggested
approach for determining the costefficiency relationship for commercial
refrigeration equipment. (ARI, No. 7 at
18 The four equipment classes with the highest
shipment volumes are: vertical closed transparent,
remote condensing, low temperature (VCT.RC.L);
vertical open, remote condensing, medium
temperature (VOP.RC.M); semivertical open, remote
condensing, medium temperature (SVO.RC.M); and
horizontal open, remote condensing, low
temperature (HZO.RC.L).
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p. 9) The Joint Comment stated that it
supports the use of an efficiency-level
approach, provided that the estimates
used are sufficiently supported with
design-option data for purposes of both
qualification and adding transparency to
the ‘‘black box’’ of the efficiency-level
data. In particular, the Joint Comment
pointed out that this will require DOE
to qualify multiple points for each
equipment class, carrying out further
design-option analysis as necessary to
identify the most reasonable costs to use
if the design-options and efficiencylevel data are not in alignment. (Joint
Comment, No. 9 at p. 1)
As previously described, DOE used an
efficiency-level approach supported by
a design-option approach. DOE
supplemented the industry-supplied
data with its own design-option
analysis, which involved consultation
with outside experts, review of publicly
available cost and performance
information, and modeling of
equipment cost and energy
consumption. The supplemental designoption analysis provides validation of
the industry efficiency-level data,
transparency of assumptions and
results, and the ability to perform
independent analyses for verification. In
addition, the supplemental designoption analysis allows analytically
derived cost-efficiency curves to be
generated for equipment classes where
no industry-supplied curves are
available. The methodology used to
perform the design-option analysis is
described in detail in chapter 5 of the
TSD.
2. Equipment Classes Analyzed
Because of the large number of
equipment classes in this rulemaking
(see Table II.6), DOE did not directly
analyze all equipment classes in the
engineering analysis for this ANOPR.
Instead, DOE prioritized the engineering
analysis by examining only the
equipment classes with shipment
volumes greater than 100 units per year.
Table II.7 lists the 15 equipment classes
that DOE directly analyzed in the
engineering analysis. This table
includes the 14 equipment classes with
greater than 100 annual unit shipments,
as well as the VOP.RC.L equipment
class.19 According to the 2005 ARI
19 The VOP.RC.L equipment class was reported as
having zero shipments in the ARI shipment data,
but was included in the analysis based on a
recommendation from a manufacturer during the
preliminary manufacturer impact analysis
interviews. This manufacturer estimated that
shipments of the VOP.RC.L equipment class are
actually around 2500 units per year. Regardless of
the actual shipment volume, DOE believes it is
unlikely that this equipment class has zero annual
shipments, and likely has more than 100 annual
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classes represent 98 percent of the
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refrigeration equipment.
TABLE II.7.—EQUIPMENT CLASSES DIRECTLY ANALYZED IN THE ENGINEERING ANALYSIS
Equipment class
VOP.RC.M .........
VOP.RC.L ..........
SVO.RC.M .........
HZO.RC.M .........
HZO.RC.L ..........
VCT.RC.M .........
VCT.RC.L ..........
SOC.RC.M .........
VOP.SC.M .........
SVO.SC.M .........
HZO.SC.M .........
HZO.SC.L ..........
VCT.SC.I ...........
VCS.SC.I ...........
HCT.SC.I ...........
Description
Vertical Refrigerator without Doors with a Remote Condensing Unit, Medium Temperature.
Vertical Freezer without Doors with a Remote Condensing Unit, Low Temperature.
Semi-Vertical Refrigerator without Doors with a Remote Condensing Unit, Medium Temperature.
Horizontal Refrigerator without Doors with a Remote Condensing Unit, Medium Temperature.
Horizontal Freezer without Doors with a Remote Condensing Unit, Low Temperature.
Vertical Refrigerator with Transparent Doors with a Remote Condensing Unit, Medium Temperature.
Vertical Freezer with Transparent Doors with a Remote Condensing Unit, Low Temperature.
Service Over Counter Refrigerator with a Remote Condensing Unit, Medium Temperature.
Vertical Refrigerator without Doors with a Self-Contained Condensing Unit, Medium Temperature.
Semi-Vertical Refrigerator without Doors with a Self-Contained Condensing Unit, Medium Temperature.
Horizontal Refrigerator without Doors with a Self-Contained Condensing Unit, Medium Temperature.
Horizontal Freezer without Doors with a Self-Contained Condensing Unit, Low Temperature.
Vertical Ice-Cream Freezer with Transparent Doors with a Self-Contained Condensing Unit, Ice-Cream Temperature.
Vertical Ice-Cream Freezer with Solid Doors with a Self-Contained Condensing Unit, Ice-Cream Temperature.
Horizontal Ice-Cream Freezer with Transparent Doors with a Self-Contained Condensing Unit, Ice-Cream Temperature.
3. Analytical Models
In the design-option approach, DOE
used models to develop estimates of
cost and energy consumption for each
equipment class at each efficiency level.
A cost model was used to estimate the
manufacturer production cost (MPC) in
dollars, and an energy consumption
model was used to estimate the daily
energy consumption in kilowatt hours
(kWh) of covered commercial
refrigeration equipment.
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a. Cost Model
Development of the cost model
involved the disassembly of a selfcontained refrigerator with transparent
doors, an analysis of the materials and
manufacturing processes, and the
development of a parametric
spreadsheet model flexible enough to
cover all equipment classes. The
manufacturing cost model estimated
MPC and reported it in aggregated form
to maintain confidentiality of sensitive
cost data. DOE obtained input from
stakeholders on the MPC estimates and
assumptions to confirm accuracy. The
cost model was used for 7 of the 15
examined equipment classes and the
results were extended to 6 of the
remaining examined equipment classes.
The cost of the remaining two
equipment classes was estimated using
available manufacturer list price (MLP)
information discounted to MPC. Details
of the cost model are provided in
chapter 5 of the TSD.
A manufacturer markup is applied to
the MPC estimates to arrive at the MSP.
This is the price of equipment sold at
which the manufacturer can recover
both production and non-production
costs, and earn a profit. A market-shareweighted average industry markup was
developed by examining several major
commercial refrigeration equipment
manufacturers’ gross margin
information from annual reports and
Securities and Exchange Commission
(SEC) 10–K reports. The manufacturers
whose gross margin information was
examined by DOE represent
approximately 80 percent of the
commercial refrigeration equipment
market, and each of these companies is
a subsidiary of a more diversified parent
company that manufactures equipment
other than commercial refrigeration
equipment. Because the SEC 10–K
reports do not provide gross margin
information at the subsidiary level, the
estimated markups represent the
average markups that the parent
company applies over its entire range of
offerings.
Markups were evaluated for the years
2000 to 2005, inclusively. The
manufacturer markup is calculated as
100/(100¥average gross margin), where
gross margin is calculated as
revenue¥cost of goods sold (COGS). To
validate the SEC 10–K and annual
report information, Internal Revenue
Service industry statistics were used as
a check. DOE estimated the average
manufacturer markup within the
industry as 1.39.
DOE received industry-supplied
curves from ARI in the form of daily
energy consumption versus MLP, (both
normalized by TDA). Since DOE’s
analytically derived curves were
developed in the form of CDEC versus
MSP (both normalized by TDA), it was
necessary for DOE to estimate an
industry list price markup so that
comparisons between the two sets of
curves could be made. The industry list
price markup is a markup to the
production cost that provides the list
price. To make comparisons between
the analytically derived cost-efficiency
curves and the industry-supplied costefficiency curves, DOE discounted the
industry data with the list price markup
and normalized the analytically derived
curves by TDA.
DOE understands that manufacturers
typically offer a discount off the MLP,
which depends on various factors such
as the relationship with the customer
and the volume and type of equipment
being purchased. For the estimate of list
price markup, DOE relied on
information gathered on self-contained
commercial refrigeration equipment,
since list price information is readily
available and typically published by
self-contained equipment manufacturers
for this equipment. A review of the data
for self-contained equipment shows that
the list price markup is typically 2.0
(i.e., manufacturers will typically sell
their equipment for 50 percent off the
published list price). DOE further
verified the estimate by obtaining list
price quotes from several remote
condensing equipment manufacturers.
During manufacturer interviews, some
commercial refrigeration equipment
manufacturers agreed with the 2.0
markup estimate, while others stated the
estimate was somewhat high. Because
the list price markup can vary
significantly from manufacturer to
manufacturer and from customer to
customer, DOE applied the same
estimated list price markup across each
shipments. DOE believes this warrants inclusion of
the VOP.RC.L equipment class in the analysis.
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equipment class to simplify the
analysis.
b. Energy Consumption Model
The energy consumption model
estimates the daily energy consumption
of commercial refrigeration equipment
at various performance levels using a
design-options approach. The model is
specific to the categories of equipment
covered under this rulemaking, but is
sufficiently generalized to model the
energy consumption of all covered
equipment classes. For a given
equipment class, the model estimates
the daily energy consumption for the
baseline and the energy consumption of
several levels of performance above the
baseline. The model is used to calculate
each performance level separately. For
the baseline level, a corresponding cost
is calculated using the cost model, and
for each level above the baseline, the
cost increases resulting from the
addition of various design options are
used to recalculate the cost.
In the market and technology
assessment (see chapter 3 of the TSD),
DOE defined an initial list of
technologies that can reduce the energy
consumption of commercial
refrigeration equipment. In the
screening analysis, DOE screened out
technologies based on four screening
criteria: Technological feasibility,
practicability to manufacture, changes
to product utility, and safety. The
remaining list of technologies becomes
one of the inputs to the engineering
analysis. However, for reasons noted
below, DOE did not incorporate all of
these technologies in the energy
consumption model. Technologies that
were not used include: Remote lighting
ballast location, evaporator fan motor
controllers, higher efficiency evaporator
and condenser fan blades, insulation
increases or improvements, low
pressure differential evaporators, defrost
cycle controls, and defrost mechanisms.
Relocation of fluorescent lamp
ballasts outside the refrigerated space
can reduce energy consumption by
lessening the refrigeration load on the
compressor. However, for the majority
of commercial refrigeration equipment
currently manufactured, ballasts are
already located in electrical trays
outside of the refrigerated space, in
either the base or top of the equipment.
The notable exceptions are the
equipment classes in the VCT
equipment family, where ballasts are
most often located on the interior of
each door mullion. Most commercial
refrigeration equipment manufacturers
purchase doors for VCT units that are
preassembled with the entire lighting
system in place rather than configured
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for separate ballasts. DOE believes that
most commercial refrigeration
equipment manufacturers choose doors
this way because it would be labor
intensive and time consuming to
relocate these ballasts at the factory, and
because of the additional cost and labor
of wiring separate ballasts. In addition,
the potential energy savings are small,
since modern electronic ballasts are
very efficient and typically contribute
only a few watts each to the
refrigeration load. Therefore, DOE did
not consider remote relocation of
ballasts as a design option.
Evaporator fan motor controllers
allow fan motors to run at variable
speed, to match changing conditions in
the case. For evaporator fan motor
controllers, there is some opportunity
for savings as the buildup and removal
of frost creates differing pressure drops
across the evaporator coil. Theoretically,
less fan power is required when the coil
is free of frost. Additionally, the coil
would operate at a more stable
temperature during the period of frost
build-up. However, the effectiveness of
the air curtain in equipment without
doors is very sensitive to changes in
airflow, so fan motor controllers could
disrupt the air curtain. The potential of
disturbance to the air curtain, which
could lead to higher infiltration loads,
does not warrant the use of evaporator
fan motor controllers in equipment
without doors, even if there were some
reduction in fan energy use. In addition,
DOE believes that savings from
evaporator fan motor controllers in all
equipment types would be small.
Therefore, DOE did not consider
evaporator fan motor controllers as a
design option.
Higher efficiency evaporator and
condenser fan blades reduce motor shaft
power requirements by moving air more
efficiently. Current technology used in
commercial refrigeration equipment is
stamped sheet metal or plastic axial fan
blades. These fan blades are lightweight
and inexpensive. DOE was not able to
identify any axial fan blade technology
that is significantly more efficient than
what is currently used, but did identify
one alternative fan blade technology
that could potentially improve
efficiency: Tangential fan blades.
Tangential fan blades can produce a
wide, even airflow, and have the
potential to allow for increased
saturated evaporator temperature (SET)
through improved air distribution across
the evaporator coil, which would reduce
compressor power. However, tangential
fan blades in small sizes are themselves
less efficient at moving air, and thus
require greater motor shaft power.
Because of these competing effects, DOE
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did not consider tangential fan blades as
a design option.
Increases in or improvements to
insulation thickness reduce the heat
load due to conduction and thus reduce
compressor power. Increases in the
thickness of foam insulation are
problematic because they must either
borrow volume from the refrigerated
space or increase the overall size of the
equipment cabinet. Because the outer
dimensions of commercial refrigeration
equipment are limited, it is often not
practical to increase the overall size of
the cabinet (i.e., case exterior
dimensions are optimized for packing
equipment into freight and shipping
containers). In addition, reducing the
size of the refrigerated space would
reduce the utility of the equipment.
Therefore, increasing the thickness of
foam insulation is not practical.
Furthermore, many display cases do not
have significant conduction loads, so
insulation improvements do not offer
large energy savings. Improvements to
insulation material include better
polyurethane foams and vacuum panels.
In consultation with insulation material
manufacturers, DOE determined that
there are no significant differences in
‘‘grades’’ of insulation material, so most
equipment manufacturers are already
using the best commercially available
foam materials in their equipment.
Vacuum panels are an alternative form
of insulation; however, they may
degrade in performance in time as small
leaks develop. In addition, vacuum
panels cannot be penetrated by
fasteners, and do not provide the
rigidity of ‘‘foamed-in-place’’ panels
that polyurethane insulation creates.
Therefore, DOE did not consider
insulation thickness increases or
improvements as a design option. DOE
did, however, consider improvements to
the efficiency (e.g., thermal
conductance) of doors in the design
options analysis. Higher efficiency
doors reduce the overall heat gain to the
case by using better frame materials,
more panes of glass and better (or more)
insulation in the doorframe.
Low pressure differential evaporators
reduce energy consumption by reducing
the power of evaporator fan motors.
However, in space-constrained
equipment such as commercial
refrigeration equipment, this reduction
usually comes from a decrease in
evaporator coil surface area, which
generally requires a lower SET to
achieve the same discharge air
temperature and cooling potential. This,
in turn, results in a reduction in
compressor efficiency. Because of these
competing effects, DOE did not consider
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low pressure differential evaporators as
a design option.
Defrost cycle control can reduce
energy consumption by reducing the
frequency and duration of defrost
periods. The majority of equipment
currently manufactured already uses
partial defrost cycle control in the form
of cycle termination control. However,
defrost cycle initiation is still scheduled
at regular intervals. Full defrost cycle
control would involve a method of
detecting frost buildup and initiating
defrost. As described in the market and
technology assessment (see chapter 3 of
the TSD), this could be accomplished
through an optical sensor or sensing the
temperature differential across the
evaporator coil. However, both of these
methods are unreliable due to problems
with fouling of the coil due to dust and
other surface contaminants. This
becomes more of an issue as the display
case ages. Because of these issues, DOE
did not consider defrost cycle control as
a design option.
Defrosting for medium temperature
equipment is typically accomplished
with off-cycle defrost. Because off-cycle
defrost uses no energy (and decreases
compressor on-time) there is no defrost
design option capable of reducing
defrost energy in cases that use off-cycle
defrost. Some medium temperature
equipment and all low temperature and
ice-cream temperature equipment use
supplemental heat for defrost.
Commonly, electric resistance heating
(electric defrost) is used in this
equipment. An alternative to electric
defrost in equipment that requires
supplemental defrost heat is hot-gas
defrost. Hot-gas defrost is most often
used in remote condensing equipment
and involves the use of the hot
compressor discharge gas to warm the
evaporator from the refrigerant side. The
test procedure for commercial
refrigeration equipment is not capable of
quantifying the energy expenditure of
the compressor during a hot-gas defrost
cycle. Therefore, DOE did not consider
it as a design option.
The design options DOE considered
in the engineering analysis are:
• Higher efficiency lighting and
ballasts for the VOP, SVO, HZO, and
SOC equipment families (horizontal
fixtures);
• Higher efficiency lighting and
ballasts for the VCT equipment family
(vertical fixtures);
• Higher efficiency evaporator fan
motors;
• Increased evaporator surface area;
• Improved doors for the VCT
equipment family, low temperature;
• Improved doors for the VCT
equipment family, medium temperature;
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• Improved doors for the HCT
equipment family, ice-cream
temperature;
• Improved doors for the SOC
equipment family, medium temperature;
• Higher efficiency condenser fan
motors (for self-contained equipment
only);
• Increased condenser surface area
(for self-contained equipment only); and
• Higher efficiency compressors (for
self-contained equipment only).20
In developing the energy
consumption model, DOE made certain
assumptions including general
assumptions about the analysis
methodology as well as specific
numerical assumptions regarding load
components and design options. DOE
based its energy consumption estimates
on new equipment tested in a
controlled-environment chamber
subjected to ANSI/ARI Standard 1200–
2006, which references the ANSI/
ASHRAE Standard 72–2005 test
method.21 Manufacturers that are
certifying their equipment to comply
with Federal standards will be required
to test new units with this test method,
which specifies a certain ambient
temperature, humidity, light level, and
other requirements. One specification
which DOE noted was absent from this
standard is the operating hours of the
display case lighting in a 24-hour
period. DOE considered the operating
hours to be 24 hours (i.e., that lights are
on continuously). Other commercial
refrigeration equipment considerations
are detailed in chapter 5 of the TSD.
The energy consumption model
calculates CDEC as two major
components: compressor energy
consumption and component energy
consumption (expressed as kilowatt
hours per day (kWh/day)). Component
energy consumption is a sum of the
direct electrical energy consumption of
fan motors, lighting, defrost and drain
heaters, anti-sweat heaters, and pan
heaters. Compressor energy
consumption is calculated from the total
refrigeration load (expressed as British
thermal units per hour (Btu/h)) and one
of two compressor models: one version
for remote condensing equipment and
one for self-contained equipment. The
total heat load is a sum of the
component load and the non-electric
load. The component load is a sum of
the heat emitted by evaporator fan
motors, lighting, defrost and drain
heaters, and anti-sweat heaters inside
20 Improvements to the condensing unit are not
considered for remote condensing equipment, since
the test procedure and standard apply only to the
cabinet and not the condensing unit.
21 Test procedures are found at 10 CFR 431.64.
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and adjacent to the refrigerated space
(condenser fan motors and pan heaters
are outside of the refrigerated space and
do not contribute to the component heat
load). The non-electric load is a sum of
the heat contributed by radiation
through glass and openings, heat
conducted through walls and doors, and
sensible and latent loads from warm,
moist air infiltration through openings.
Details of component energy
consumption, compressor energy
consumption, and load models are
shown in chapter 5 of the TSD.
4. Baseline Models
As mentioned above, the engineering
analysis estimates the incremental costs
for equipment with efficiency levels
above the baseline in each equipment
class. DOE was not able to identify a
voluntary or industry standard that
provided a minimum baseline efficiency
requirement for commercial
refrigeration equipment. Therefore, it
was necessary for DOE to establish
baseline specifications for each
equipment class to define the energy
consumption and cost of the typical
baseline equipment. These
specifications include dimensions,
number of components, temperatures,
nominal power ratings, and other case
features that affect energy consumption,
as well as a basic case cost (the cost of
a piece of equipment not including the
major efficiency-related components
such as lights, fan motors, and
evaporator coils).
DOE established baseline
specifications for each of the equipment
classes modeled in the engineering
analysis by reviewing available
manufacturer data, selecting several
representative units from available
manufacturer data, and then aggregating
the physical characteristics of the
selected units. This process created a
representative unit for each equipment
class with average characteristics for
physical parameters (e.g., volume,
TDA), and minimum performance of
energy-consuming components (e.g.,
fans, lighting). The cost model was used
to develop the basic case cost for each
equipment class. See appendix B of the
TSD for these specifications.
5. Cost-Efficiency Results
The results of the engineering analysis
are reported as cost-efficiency data (or
‘‘curves’’) in the form of CDEC 22 (in
22 The ANSI ARI Standard 1200–2006 test
procedure uses CDEC as the metric for remote
condensing equipment and total daily energy
consumption (TDEC) as the metric for selfcontained equipment. In the engineering analysis,
DOE used CDEC as the metric for both equipment
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kWh) versus MSP (in dollars), which
form the basis for subsequent analyses
in the ANOPR. DOE created 15 costefficiency curves and received 4
industry aggregated curves from ARI.
The industry-supplied curves are in the
form of CDEC versus MLP, both
normalized by TDA. To compare the
analytically derived curves to the
industry-supplied curves, DOE
discounted the industry data with the
list price markup and normalized the
analytically derived curves by TDA. For
the four equipment classes with the
highest shipment volumes DOE used the
industry-supplied cost-efficiency curves
in the downstream analyses. For the
equipment classes where industrysupplied curves were not available, DOE
used the analytically derived curves in
the downstream analyses. See chapter 5
for additional detail on the engineering
analysis and appendix B of the TSD for
complete cost-efficiency results.
D. Markups To Determine Equipment
Price
This section explains how DOE
developed the supply chain markups to
determine installed prices for
commercial refrigeration equipment (see
chapter 6 of the TSD). DOE used the
supply chain markups it developed
(along with sales taxes and installation
costs) in conjunction with the MSPs
developed from the engineering analysis
to arrive at the final installed equipment
prices for baseline and higher efficiency
equipment. As shown in Table II.8, DOE
defined three distribution channels for
commercial refrigeration equipment to
describe how the equipment passes
from the manufacturer to the customer.
In the first distribution channel, the
manufacturer sells the equipment
directly to the customer through a
national account. In the second and
third distribution channels, the
manufacturer sells the commercial
refrigeration equipment to a wholesaler,
who in turn may sell it directly to the
customer or sell it to a mechanical
contractor who may sell it and its
installation to the customer. The
wholesaler in this case can be a
refrigeration wholesaler focusing on
commercial refrigeration equipment, or
a grocery warehouser (supply chain
distributor) who sells food and retail
store equipment to the retailer. Table
II.8 also gives the estimated distribution
channel shares (in percentage of total
sales) through each of the three
distribution channels.
TABLE II.8.—DISTRIBUTION CHANNELS AND SHARES FOR COMMERCIAL REFRIGERATION EQUIPMENT
Channel 2
Manufacturer ........................
Customer .............................
86 percent ............................
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Channel 1
Channel 3
Manufacturer, Wholesaler ...............................................
Customer .........................................................................
7 percent .........................................................................
Manufacturer, Wholesaler, Contractor.
Customer.
7 percent.
For each of the steps in the
distribution channels presented above,
DOE estimated a baseline markup and
an incremental markup. A baseline
markup is applied to the purchase of
equipment with the baseline efficiency.
An incremental markup is applied to
the incremental increase in MSP for the
purchase of higher efficiency
equipment. The overall baseline or
overall incremental markup is then
given by the product of all the markups
at each step in the distribution channel
plus sales tax. Overall baseline or
overall incremental markups for the
entire commercial refrigeration
equipment market can be determined
using the shipment weights through
each distribution channel and the
corresponding overall baseline markup
or the corresponding overall
incremental markup, respectively, for
each distribution channel including the
applicable sales tax.
Markups for each step of the
distribution channel were developed
based on available financial data. DOE
based the wholesaler markups on firm
balance-sheet data from the Heating,
Airconditioning & Refrigeration
Distributors International (HARDI), the
trade association representing
wholesalers of refrigeration and heating,
ventilating and air-conditioning (HVAC)
equipment. DOE used median financial
statistics reported by the controls and
refrigeration industry segment of this
trade association in HARDI’s 2005 Profit
Planning Report. DOE based the
mechanical contractor markups on U.S.
Census Bureau financial data for the
plumbing, heating, and air conditioning
industry as a whole. Average markups
for sales through national accounts were
estimated as one-half that of the
wholesaler to customer distribution
channel.
Baseline markups for wholesalers and
for contractors are calculated as total
revenue (equal to all expenses paid plus
profit) divided by the COGS. Expenses
include direct costs for equipment, labor
expenses, occupancy expenses, and
other operating expenses (e.g.,
insurance, advertising). Some of these
are presumed to be fixed costs (labor,
occupancy) that do not change with the
distribution of higher efficiency
equipment. Other expenses are variable
costs that may change in response to
changes in COGS. In developing
incremental markup, DOE considered
the labor and occupancy costs to be
fixed, and the other operating costs and
profit to scale with the MSP.
The overall markup is the product of
all the markups plus sales tax within a
distribution channel. Both baseline and
types, but will refer to each equipment type’s
incremental overall markups were
calculated for each distribution channel.
Sales taxes were calculated based on
State-by-State sales tax data reported by
the Sales Tax Clearinghouse. Both
contractor costs and sales tax vary by
State, so the markup analysis develops
distributions of markups within each
distribution channel as a function of
State and business type (e.g.,
supermarket, convenience store,
convenience store with gas station, or
superstore). Because the State-by-State
distribution of commercial refrigeration
equipment units varies by business type
(e.g., supermarkets may be more
prevalent relative to convenience stores
in one part of the country than another),
a national level distribution of the
markups is different for each business
type.
Average overall markups in each
distribution channel can be calculated
using estimates of the shipments of
commercial refrigeration equipment
units by business type and by State. The
ANOPR analysis used estimates of
relative total frozen and refrigerated
food sales by State and each business
type as reported by the U.S. Census
Bureau as a proxy for relative shipments
of commercial refrigeration equipment.
Overall baseline and incremental
markups for sales to supermarkets
specific metric when developing standard
equations.
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within each distribution channel are
shown in Table II.9 and Table II.10.
TABLE II.9.—BASELINE MARKUPS BY DISTRIBUTION CHANNEL INCLUDING SALES TAX FOR SUPERMARKETS
Mechanical contractor (includes
wholesaler)
Wholesaler
Distributor(s) Markup .......................................................................
Sales Tax .........................................................................................
Overall Markup ................................................................................
National account
(manufacturerdirect)
2.182
1.068
2.330
1.218
1.068
1.300
1.436
1.068
1.533
Overall
1.301
1.068
1.389
TABLE II.10.—INCREMENTAL MARKUPS BY DISTRIBUTION CHANNEL INCLUDING SALES TAX FOR SUPERMARKETS
Mechanical contractor (includes
wholesaler)
Wholesaler
Distributor(s) Markup .......................................................................
Sales Tax .........................................................................................
Overall Markup ................................................................................
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Additional detail on markups can be
found in chapter 6 of the TSD.
E. Energy Use Characterization
The energy use characterization
estimates the annual energy
consumption of commercial
refrigeration equipment systems
(including remote condensing units).
This estimate is used in the subsequent
LCC and PBP analyses (see chapter 8 of
the TSD) and NIA (see chapter 10 of the
TSD). DOE estimated the energy
consumption of the 15 equipment
classes analyzed in the engineering
analysis (see chapter 5 of the TSD) using
the relevant test procedure. These
energy consumption estimates were
then validated with annual simulation
modeling of selected equipment classes
and efficiency levels.
ANSI/ARI Standard 1200–2006,
which references ANSI/ASHRAE
Standard 72–2005, is an industrydeveloped test procedure for measuring
the energy consumption of commercial
refrigeration equipment. ANSI/ARI
Standard 1200–2006 provides a method
for estimating the daily energy
consumption for a piece of commercial
refrigeration equipment under steadystate conditions. ANSI/ARI Standard
1200–2006 treats remote condensing
and self-contained commercial
refrigeration equipment differently. In
the case of remote condensing
equipment, the test procedure measures
the energy use of each component (e.g.,
fans and lights) as well as the total
refrigeration load of the equipment. The
total refrigeration load is used to
calculate compressor energy
consumption based on a standardized
relationship of evaporator temperature
and compressor energy efficiency ratio.
In the case of self-contained commercial
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National account
(manufacturerdirect)
1.362
1.068
1.454
1.054
1.068
1.125
1.107
1.068
1.182
equipment, the test procedure measures
the total energy use of the equipment as
a whole, including both component
energy use and compressor energy use.
The resulting daily energy consumption
estimate is either CDEC for remote
condensing equipment or TDEC for selfcontained equipment. Both metrics
represent the sum of compressor energy
consumption and the energy
consumption of all other energy
consuming components in the
equipment (i.e., evaporator fan motors,
lighting, anti-sweat heaters, defrost and
drain heaters, and condensate
evaporator pan heaters).
Several options were considered to
provide estimates of the energy
consumption of commercial
refrigeration equipment. These options
include: using a whole building
simulation which would analyze case,
compressor, and HVAC impacts; using
an existing simulation program that
would analyze display case and
compressor energy use on an annual
basis; and using estimates of energy
consumption for various categories of
equipment as developed in the
engineering analysis. For the ANOPR,
DOE used energy consumption
estimates from the engineering analysis
directly in the LCC analysis. To validate
these estimates, DOE conducted a whole
building energy use simulation for
seven equipment classes at selected
design-option levels.
A whole building simulation was the
option first considered by DOE and was
discussed during DOE?s Framework
public meeting. During that meeting
Southern Company and ARI commented
that a whole building analysis is the
desired approach (Public Meeting
Transcript No. 3.4 at p. 151). The
Northwest Power Planning Council
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Overall
1.079
1.068
1.152
(NWPPC) and ASAP were concerned
about the additional difficulty and
complexity of the resulting analysis
(Public Meeting Transcript No. 3.4 at p.
161 and Public Meeting Transcript No.
3.4 at p. 155). The approach taken by
DOE was to use energy estimates
developed from the engineering analysis
but to validate those estimates with
whole building simulation of
supermarkets, which included
simulation of the refrigeration system.
There were four reasons for adopting
this approach.
1. The energy consumption ratings
provided by ANSI/ARI Standard 1200–
2006 do not distinguish between energy
consumption by the compressor (which
may vary as a function of environmental
conditions) and energy consumption by
other components in the case (e.g.,
lighting), which do not vary as a
function of environmental conditions.
These two types of energy consumption
are roughly similar in magnitude, and it
is difficult to assess where the energy
savings are coming from or what the
impact on a building HVAC load might
be.
2. The initial engineering analysis (see
chapter 5 of the TSD) did not suggest
design options that would provide
significant changes to the building load
relative to the commercial refrigeration
system energy consumption.
3. The net interaction between the
refrigeration system and HVAC energy
consumption is a function of the
variation in HVAC designs. HVAC
system designs for food sales buildings,
like supermarkets, may incorporate such
features as separate dehumidification
and refrigerant condenser reheat
systems, which make assessing overall
HVAC impact complicated. Also,
detailed data on the relative prevalence
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of different HVAC system designs
incorporating these features is not
readily available.
4. The interaction between the
refrigeration and overall HVAC energy
consumption is a function of the ratio of
the total heat removed from the space by
the display cases relative to the other
internal loads (lighting, occupancy, and
plug load) and external loads (building
envelope and ventilation driven) in the
building. This ratio determines the
fraction of the year that the building is
either in heating or cooling mode.
However, the balance of refrigerationdriven space loads to the other space
loads is impacted by the efficiency
levels for all commercial refrigeration
equipment classes, complicating the
analysis of each equipment class
individually. For the equipment classes
with the largest shipment, which make
up the largest base of equipment in a
typical store and have the biggest
overall impact on the space load
balance, the industry-supplied
efficiency curves do not provide
information about changes in equipment
design that could be used to assess this
change in refrigeration-driven space
loads.
In its validation effort, DOE used a
modified version of the DOE developed
DOE–2 whole-building energy analysis
tool, DOE–2.2 refrigeration version
(DOE–2.2R), to model whole-building
energy use in a typical supermarket in
five U.S. climate locations (Baltimore,
Chicago, Houston, Los Angeles, and
Memphis). Each of these locations has a
climate that typifies one of five distinct
U.S. climate zones developed by DOE
for use in building energy codes
development work. These five climate
zones taken together encompass
approximately three-fourths of the U.S.
population. Annual energy use for seven
equipment classes was simulated at four
representative efficiency levels. Data on
refrigeration loads from the engineering
analysis supported the development of
the energy efficiency levels analyzed.
These refrigeration loads included those
from internal features (e.g., lighting and
fans inside the case), and externally
driven loads from radiation, convection/
infiltration, and conduction through the
case wall. These loads and other direct
energy-consuming features (e.g., fan and
lights) were mapped to corresponding
inputs in DOE–2.2R for the simulation
analysis. Pull-down loads from shelving
of food are not part of the test procedure
and were therefore not considered.
To examine the impacts of ambient
relative humidity, refrigerant piping
heat loss, and climate location on
energy consumption of commercial
refrigeration equipment, annual
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simulation data from the DOE 2.2R
model was converted to average daily
energy consumption and average daily
refrigeration load comparison with the
engineering analysis estimates. DOE
also assessed the magnitude of
interactions between the refrigeration
system and the building HVAC system.
The results of the whole-building
simulation showed that climate location
has no influence on energy
consumption of the refrigerated case
components for the remote condensing
equipment classes examined. For a
given efficiency level, the energy
consumption of case components is the
same for the simulation and the
engineering analysis. In addition,
climate location was shown to have
relatively little influence on compressor
energy consumption for equipment
classes with doors, where display case
infiltration levels are relatively low.
Climate conditions do have a significant
impact on compressor energy
consumption for open equipment.
Compressor energy consumption is
determined by total refrigeration load
and compressor efficiency, both of
which are affected by climate conditions
for remote condensing equipment.
In general, the average daily
refrigeration load from the DOE 2.2R
simulations was smaller than that
predicted by the engineering analysis,
due to differences between the building
space conditions throughout the year
captured by the simulations and the
space conditions used for the steadystate rating of equipment used in the
engineering analysis. The actual energy
consumption of the compressors was,
however, generally higher than that
predicted by the engineering analysis.
The difference in energy consumption is
due to the aforementioned differences in
refrigeration loads, the fact that the
simulation accounts for changes in
condensing temperatures over the year
for each climate, and the additional
superheat loads calculated by the
simulation software to bring the return
refrigerant return vapor up to the
compressor suction temperature
conditions, which is estimated to be
65°F (the ARI rating condition used to
provide rated compressor performance).
Analysis of the annual refrigeration
system energy savings for each of 3
efficiency levels above the baseline level
were all within 14 percent of that
predicted by the engineering analysis
for 6 equipment classes across all
efficiency levels and climates examined.
Net energy savings averaged 8 percent
higher for the highest efficiency level
examined. For the remote condensing
VOP.RC.L equipment class the annual
energy savings deviated by as much as
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21 percent. No shipments for this
equipment class were reported by ARI.
Actual shipments, if any, are expected
to be small. This suggests that for the
majority of commercial refrigeration
equipment, the energy savings predicted
by the test procedure agreed reasonably
well with the annual simulation results,
although the impact of individual
design options may differ.
Estimates of whole-building energy
consumption and refrigeration energy
consumption were examined at selected
efficiency levels and climate locations
to determine if the design options
considered in the engineering analysis
would have a significant effect on
building HVAC energy use. The
influence of refrigeration equipment
efficiency changes on HVAC system
energy use varies depending on the
design option. For example, improved
display case lighting efficiency would
reduce the energy consumption of the
refrigeration system and potentially the
air-conditioning system, depending on
lighting placement. Reduced conduction
and radiation loads in the refrigeration
equipment would, by contrast, increase
the air-conditioning load and
subsequent energy consumption while
decreasing the heating load. For all
equipment classes and efficiency levels
examined, the annual whole-building
energy savings was within 10 percent of
that calculated for the refrigeration
system alone. For the highest efficiency
level examined, savings were within 1.4
percent. The simulation results suggest
that the collective impact of the design
options considered does not
significantly affect the HVAC energy
consumption.
In the energy use characterization,
DOE used whole-building simulation to
explore the relative energy savings of
refrigeration systems and wholebuilding energy use for supermarkets.
While there were some differences in
the annual energy use predicted by the
whole-building simulation and that
derived in the engineering analysis,
DOE concludes that these differences
were generally small.
Both the engineering analysis and the
whole-building simulation presumed
that display case lighting operated 24
hours per day. In many applications,
display case lighting may not be
required 24 hours per day. DOE
conducted a sensitivity analysis to
explore how variation in display case
lighting operating hours affected the
energy savings. This sensitivity analysis
was done for all equipment classes
using the engineering analysis
spreadsheet and the design options
considered for each equipment class. No
such analysis could be done using the
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industry-supplied efficiency curves as
details on component energy
consumption were not provided with
these curves. The sensitivity analysis
showed that energy savings were
reduced as lighting operating hours
were reduced for all equipment classes
that used display case lighting. The
magnitude of this effect depended upon
the equipment class. For a 20-hour
lighting time assumption, the reduction
in energy savings was between 1 percent
and 6 percent. For a 16-hour lighting
time assumption, the reduction in
energy savings was between 2 percent
and 15 percent. DOE’s analysis suggests
that typical lighting operating hours for
most classes of commercial refrigeration
equipment would fall within the range
of 16 to 24 hours per day, depending on
store operating hours, use of lighting
during after-hours case stocking, and
typical lighting operation or controls
used for unoccupied periods. Display
case lighting hours may also depend on
the business type as convenience stores
have distinctly different operating hours
than other segments of the food retail
industry.
Because of the sensitivity of the
annual energy savings to display case
lighting hours and the lack of data on
actual lighting use, DOE specifically
seeks feedback on the assumption of 24
hours for case lighting operation. This is
identified as Issue 6 under ‘‘Issues on
Which DOE Seeks Comment’’ in section
IV.E of this ANOPR.
Also, DOE specifically seeks feedback
on operation and maintenance practices
for commercial refrigeration equipment,
which may be prevalent in the field and
may differ from standardized
conditions, such as those represented in
a test procedure. Operation and
maintenance practices could potentially
affect the energy consumption savings
experienced in the field as a result of
increased energy efficiency as compared
to those savings estimated in the TSD’s
energy consumption analysis under
idealized testing conditions. These
factors include: compressor operation
that is inefficient due to age or some
other condition associated with the
compressor unit; location of a
commercial refrigeration unit adjacent
to an outside door or in direct sunlight;
operation of a room-cooling fan nearby
the commercial refrigeration unit; a unit
routinely stocked with products that are
significantly under or over the ambient
room temperature; overstocking of a
unit; frequency and promptness of
repair/maintenance of a unit; operation
of doors during periods of high volume
use; frequency of cooling coil cleaning;
maintenance of sufficient space
surrounding a unit for proper air
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circulation or proper operation of air
vents; and wear/tear of, or damage to,
door seals and hinges on a unit. Such
factors may or may not be associated
with use of a unit in the field, and thus
their impacts would be difficult to
analyze in a quantitative manner.
Nevertheless, these factors are among
those commonly highlighted in energy
use reduction guidelines as important to
achieving the maximum energy
efficiency for the given unit. Therefore,
DOE requests comment on the
frequency that such factors come in to
play in energy use in the field, and
whether and how DOE might account
for these factors in assessing the overall
impacts of the candidate standards
levels for commercial refrigeration
equipment. This is identified as Issue 7
under ‘‘Issues on Which DOE Seeks
Comment’’ in section IV.E of this
ANOPR.
In determining the reduction in
energy consumption of commercial
refrigeration equipment due to
increased efficiency, DOE did not take
into account a rebound effect. The
rebound effect occurs when a piece of
equipment that is made more efficient is
used more intensively, so that the
expected energy savings from the
efficiency improvement do not fully
materialize. Because commercial
refrigeration equipment is operated 24
hours a day, 7 days a week to maintain
adequate conditions for the
merchandise being retailed, a rebound
effect resulting from increased
refrigeration energy consumption
seemed unlikely. The engineering
estimates of energy use also used a 24hour lighting schedule; although a
sensitivity analysis to a reduced lighting
schedule was performed. It is possible
that under a reduced lighting schedule,
lower lighting power draw resulting
from energy conservation standards
could lead to equipment operation
strategies with increased lighting
operating hours; however, DOE has no
data with which to examine this impact
for the commercial refrigeration
equipment market and has not taken it
into account in the energy use
characterization.
Additional detail on the energy use
characterization can be found in chapter
7 of the TSD.
F. Rebuttable Presumption Payback
Periods
Section 345(e)(1)(A) of EPCA (42
U.S.C. 6316(e)(1)(A)) establishes a
rebuttable presumption for commercial
refrigeration equipment. The rebuttable
presumption states that a standard is
economically justified if the Secretary
finds that ‘‘the additional cost to the
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consumer of purchasing a product
complying with an energy conservation
standard level will be less than three
times the value of the energy * * *
savings during the first year that the
consumer will receive as a result of the
standard, as calculated under the
applicable test procedure * * *.’’ (42
U.S.C. 6295(o)(2)(B)(iii))
To evaluate the rebuttable
presumption, DOE estimated the
additional cost of a more efficient,
standard-compliant unit, and compared
this cost to the value of the energy saved
during the first year of operation of the
equipment as determined by ANSI/ARI
Standard 1200–2006. DOE interprets
that the increased cost of purchasing a
standard-compliant unit includes the
cost of installing the equipment for use
by the purchaser. DOE calculated the
rebuttable presumption PBP, or the ratio
of the value of the increased installed
price above the baseline efficiency level
to the first year’s energy cost savings.
When this PBP is less than three years,
the rebuttable presumption is satisfied;
when this PBP is equal to or more than
three years, the rebuttable presumption
is not satisfied.
Rebuttable presumption PBPs were
calculated based on a distribution of
installed costs and energy prices that
included four types of businesses and
all 50 States. The rebuttable
presumption PBPs differ from the other
PBPs calculated in the LCC analysis (see
section II.G.14 of this ANOPR) in that
they do not include maintenance or
repair costs. The baseline efficiency
level for the rebuttable presumption
calculation is the baseline established in
the engineering analysis. From the range
of efficiency levels for which cost data
was determined in the engineering
analysis, DOE selected up to eight
efficiency levels in each equipment
class, including the baseline efficiency
level, for the LCC and subsequent
ANOPR analysis. The selection of these
efficiency levels is discussed in chapter
8 and appendix F of the TSD. For each
equipment class the rebuttable
presumption PBP was calculated for
each efficiency level higher than the
baseline.
Inputs to the PBP calculation are the
first seven inputs shown in Table II.12
found in section II.G.2 of this ANOPR.
Table II.11 shows the nationally
averaged rebuttable presumption
paybacks calculated for all equipment
classes and efficiency levels. The
highest efficiency level with a rebuttable
presumption payback of less than three
years is also shown in Table II.11 for
each equipment class. For all equipment
classes analyzed in the ANOPR analysis
with the exception of the SOC.RC.M
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equipment class, the rebuttable
presumption criteria were satisfied at
either the maximum efficiency level
examined or the next lower efficiency
level examined. However, while DOE
has examined the rebuttable
presumption PBPs, DOE has not
determined economic justification for
any of the standard levels analyzed
based on the ANOPR rebuttable
presumption analysis. The setting of
candidate standard levels (CSLs) by
DOE will take into account the more
detailed analysis of the economic
impacts of increased efficiency pursuant
to section 325(o)(2)(B)(i) of EPCA. (42
U.S.C. 6295(o)(2)(B)(i))
TABLE II.11.—REBUTTABLE PRESUMPTION PAYBACK PERIODS BY EFFICIENCY LEVEL AND EQUIPMENT CLASS
Rebuttable presumption payback period (years)
Equipment type
Level 1
Level 2
Level 3
Level 4
Level 5
Level 6
Level 7
Level 8
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
3.2
0.5
0.7
0.3
1.4
0.2
0.3
3.2
0.8
0.6
0.8
1.2
0.7
0.6
0.7
2.8
0.8
0.7
0.4
1.6
0.4
0.6
2.8
0.8
1.0
1.2
1.6
1.0
0.6
0.7
2.6
1.1
0.8
0.6
1.8
0.4
0.6
2.7
0.9
1.1
1.5
1.7
1.1
0.8
1.3
2.7
1.2
1.1
0.8
2.1
0.6
0.7
2.8
1.1
1.3
NA
1.8
1.1
0.8
1.4
2.8
1.9
1.3
2.6
2.2
1.3
0.7
2.9
1.3
2.9
NA
1.9
1.2
0.9
1.4
2.9
NA
2.0
3.7
2.3
1.5
0.8
3.0
1.7
3.6
NA
NA
1.4
1.3
NA
3.1
NA
2.9
NA
2.7
2.0
1.2
NA
2.3
NA
NA
NA
1.8
1.3
NA
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SVO.SC.M .........................................
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HCT.SC.I ...........................................
G. Life-Cycle Cost and Payback Period
Analyses
The LCC and PBP analyses determine
the economic impact of potential
standards on consumers. The effects of
standards on individual commercial
consumers include changes in operating
expenses (usually lower) and changes in
total installed cost (usually higher). DOE
analyzed the net effect of these changes
for commercial refrigeration equipment,
first, by calculating the changes in
consumers’ LCCs likely to result from a
CSL as compared to a base case (no new
standards). The LCC calculation
considers total installed cost (includes
MSP, sales taxes, distribution channel
markups, and installation cost),
operating expenses (energy, repair, and
maintenance costs), equipment lifetime,
and discount rate. DOE performed the
LCC analysis from the perspective of the
user of commercial refrigeration
equipment.
DOE calculated the LCC for all
customers as if each would purchase a
new commercial refrigeration
equipment unit in the year the standard
takes effect. The effective date is the
future date when a new standard
becomes operative. Section 136(c) of
EPACT 2005 amends EPCA to add
section 342(c)(4), 42 U.S.C. 6313(c)(4),
which directs the Secretary to issue a
final rule for commercial refrigeration
equipment not later than January 1,
2009, with the energy conservation
standards levels effective for equipment
manufactured on or after January 1,
2012. Further, the Secretary may issue,
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by rule, energy conservation standards
levels for other types of commercial
refrigeration equipment, with the
standard levels effective for equipment
three or more years after a final rule is
published. (42 U.S.C. 6313(c)(4)(B),
added by EPACT 2005, section 136(c))
Consistent with EPCA, DOE used these
dates in the ANOPR analyses. Further,
DOE based the cost of the equipment on
projected costs in 2012. However, all
dollar values are expressed in 2006
dollars. Annual energy prices are
considered for the life of the commercial
refrigeration equipment.
DOE also analyzed the effect of
changes in operating expenses and
installed costs by calculating the PBP of
potential standards relative to a base
case. The PBP estimates the amount of
time it would take the commercial
consumer to recover the incrementally
higher purchase expense of more energy
efficient equipment through lower
operating costs. Similar to the LCC, the
PBP is based on the total installed cost
and the operating expenses. However,
unlike the LCC, only the first year’s
operating expenses are considered in
the calculation of the PBP. Because the
PBP does not account for changes in
operating expense over time or the time
value of money, it is also referred to as
a simple PBP. For more details on the
LCC and PBP analyses, refer to chapter
8 of the ANOPR TSD.
1. Approach
Recognizing that each commercial
building that uses commercial
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Highest level
with PBP <3
years
Level
Level
Level
Level
Level
Level
Level
Level
Level
Level
Level
Level
Level
Level
Level
7.
6.
8.
6.
8.
8.
8.
6.
8.
6.
4.
6.
8.
8.
6.
refrigeration equipment is unique, DOE
analyzed variability and uncertainty by
performing the LCC and PBP
calculations for two prototype
commercial buildings (stores) and four
types of businesses (two types of
businesses for each prototype store).
The first store prototype is a ‘‘large’’
grocery store, which encompasses
supermarkets and wholesaler/retailer
multi-line stores such as ‘‘big-box’’
stores, ‘‘warehouse’’ stores, and
‘‘supercenters.’’ The second prototype is
a ‘‘small’’ store, which encompasses
convenience stores and small specialty
stores such as meat markets, wine, beer,
and liquor stores, and convenience
stores associated with gasoline stations.
Within a given prototype of store,
various types of commercial
refrigeration equipment can serve the
store’s refrigeration needs.
Aside from energy, the most
important factors influencing the LCC
and PBP analyses are related to the State
to which each commercial refrigeration
equipment unit is shipped. These
factors include energy prices,
installation cost, markup, and sales tax.
The LCC analysis presented here used
the predicted energy consumption based
on the engineering analysis (see chapter
5 of the TSD) and reviewed in the
energy use characterization (see chapter
7 of the TSD). Energy consumption of
commercial refrigeration equipment
calculated using this approach is not
sensitive to climatic conditions, so
energy consumption in the LCC analysis
does not vary by geographical location.
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At the national level, the analysis
explicitly modeled both the uncertainty
and the variability in the model’s inputs
using probability distributions based on
the shipment of units to different States.
2. Life-Cycle Cost Analysis Inputs
For each efficiency level analyzed, the
LCC analysis requires input data for the
total installed cost of the equipment, the
operating cost, and the discount rate.
41189
Table II.12 summarizes the inputs and
key assumptions used to calculate the
economic impacts of various efficiency
levels. A more detailed discussion of the
inputs follows.
TABLE II.12.—SUMMARY OF INPUTS AND KEY ASSUMPTIONS USED IN THE LIFE-CYCLE COST ANALYSIS
Input
Description
Baseline Manufacturer Selling Price ..................
Price charged by manufacturer to either a wholesaler or large customer for baseline equipment.
Incremental change in manufacturer selling price for equipment at each of the higher efficiency
standard levels.
Associated with converting the manufacturer selling price to a customer price (see chapter 6 of
TSD).
Cost to the customer of installing the equipment. This includes labor, overhead, and any miscellaneous materials and parts. The total installed cost equals the customer equipment price
plus the installation price.
Site energy use associated with the use of commercial refrigeration equipment, which includes
only the use of electricity by the equipment itself.
Average commercial electricity price ($/kWh) in each State and for four classes of commercial
customers, as determined from Energy Information Administration (EIA) data for 2003 converted to 2006$.
Used the AEO2006 reference case to forecast future electricity prices.
Labor and material costs associated with maintaining the commercial refrigeration equipment
(e.g., cleaning heat exchanger coils, checking refrigerant charge levels, lamp replacement).
Labor and material costs associated with repairing or replacing components that have failed.
Age at which the commercial refrigeration equipment is retired from service (estimated to be
10 years).
Rate at which future costs are discounted to establish their present value to commercial refrigeration equipment users.
A rebound effect was not taken into account in the LCC analysis.
Standard-Level Manufacturer Selling Price Increases.
Markups and Sales Tax .....................................
Installation Price .................................................
Equipment Energy Consumption .......................
Electricity Prices .................................................
Electricity Price Trends .......................................
Maintenance Costs .............................................
Repair Costs .......................................................
Equipment Lifetime .............................................
Discount Rate .....................................................
Rebound Effect ...................................................
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3. Baseline Manufacturer Selling Price
4. Increase in Selling Price
The baseline MSP is the price charged
by manufacturers to either a wholesaler/
distributor or very large customer for
equipment meeting existing minimum
efficiency (or baseline) standards. The
MSP includes a markup that converts
the MPC to MSP. DOE obtained the
baseline MSPs through industry
supplied efficiency-level data
supplemented with a design-option
analysis. Refer to chapter 5 of the TSD
for details. MSPs were developed for
equipment classes consisting of eight
possible equipment families, two
possible condensing unit configurations
(remote condensing and self-contained)
and three possible rating temperatures.
Not all covered equipment classes have
significant actual shipments (see
chapter 3 of the TSD). The LCC and PBP
analyses have been carried out on a set
of 15 equipment classes identified
earlier.
DOE was not able to identify data on
relative shipments for equipment
classes by efficiency level, nor were
equivalent data found by DOE in the
literature or studies examined by DOE.
For the equipment for which DOE
performed a design option analysis as
the basis for the engineering analysis,
DOE designated the highest-energy-use
equipment as Level 1, and selected this
as the baseline equipment.
The standard-level MSP increase is
the change in MSP associated with
producing equipment at lower energy
consumption levels associated with
higher standards. DOE developed MSP
increases associated with decreasing
equipment energy consumption (or
higher efficiency) levels through a
combination of energy consumption
level and design-option analyses. Refer
to chapter 5 of the TSD for details. MSP
increases as a function of equipment
energy consumption were developed for
each of the 15 equipment classes.
Although the engineering analysis
produced up to 11 energy consumption
levels, depending on equipment type,
only up to 8 selected energy
consumption levels were used in the
LCC and PBP analyses.
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5. Markups
As discussed earlier, overall markups
are based on one of three distribution
channels, as well as whether the
equipment is being purchased for the
new construction or the replacement
market. Based on input received by
DOE, approximately 7 percent of
equipment purchased by end-use
customers is from wholesaler/
distributors, 7 percent is from
mechanical contractors, and 86 percent
is through national accounts. DOE’s
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understanding is that most equipment
replacements are done through store
remodels (as opposed to equipment
failure), and that the distribution
channels and installation process are
similar for the new and replacement
markets. Available information suggests
that the fraction of equipment
purchased through the distribution
channels is the same for new and
replacement equipment.
6. Installation Costs
DOE derived installation costs for
commercial refrigeration equipment
from data provided in RS Means
Mechanical Cost Data.23 RS Means
provides estimates on the person-hours
required to install commercial
refrigeration equipment and the labor
rates associated with the type of crew
required to install the equipment. The
installation cost was calculated by
multiplying the number of person-hours
by the corresponding labor rate. RS
Means provides specific person-hour
and labor rate data for the installation of
so-called ‘‘mercantile equipment’’ (CSI
Masterformat Number 11100), which
includes commercial refrigeration
equipment. Labor rates vary
significantly from region to region of the
23 R.S. Means Company, Inc. 2005. Mechanical
Cost Data 28th Annual Edition. Kingston,
Massachusetts.
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country and the RS Means data provide
the necessary information to capture
this regional variability. RS Means
provides cost indices that reflect the
labor rates for 295 cities in the United
States. Several cities in all 50 States and
the District of Columbia are identified in
the RS Means data. These cost indices
were incorporated into the analysis to
capture variation in installation cost,
depending on the location of the
customer. To arrive at an average index
for each State, the city indices in each
State were weighted by their
population. Population weights for the
year 2000 from the U.S. Census Bureau
were used to calculate a weightedaverage index for each State. Further,
since data was not available to indicate
how installation costs vary with the
commercial refrigeration equipment
type or its efficiency, DOE considered
the installation costs to be fixed,
independent of the cost or efficiency of
the equipment. Even though the LCC
spreadsheet allows for alternative
scenarios, DOE did not find a basis for
changing its basic premise for the
ANOPR analysis.
As described earlier, the total
installed cost is the sum of the
equipment price and the installation
cost. DOE derived the customer
equipment price for any given standard
level by multiplying the baseline MSP
by the baseline markup and adding to it
the product of the incremental MSP and
the incremental markup. Because MSPs,
markups, and the sales tax can all take
on a variety of values depending on
location, the resulting total installed
cost for a particular standard level will
not be a single-point value, but rather a
distribution of values.
mstockstill on PROD1PC66 with PROPOSALS2
7. Energy Consumption
The electricity consumed by the
commercial refrigeration equipment was
based on the engineering analysis
estimates as described previously in
section II.C.1 after the whole-building
simulations validation described in
section II.E.
8. Electricity Prices
Electricity prices are necessary to
convert the electric energy savings into
energy cost savings. DOE received
several comments on the development
of electricity prices for its life cycle cost
analysis. In its Framework Document,
DOE suggested the use of average
commercial electric prices. Comments
received from Southern Company
suggested that due to high load factors,
the price of electricity for commercial
refrigeration customers would be lower
than the commercial average. (Southern
Company No. 3.4 at p. 170) Pacific Gas
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& Electric Company (PG&E) commented
it has a heavy ratcheting charge and is
converting customers to time-of-use
metering. The very high coincident
demand for commercial refrigeration
units could result in DOE
underestimating the cost of electricity.
(PG&E No. 3.4 at p. 171) PG&E also
questioned how DOE would handle the
time dependent valuation of energy.
(PG&E No. 3.4 at p. 191) Southern
Company responded that customers in
its region were not exposed to marginal
rates because it has cost-based rates.
(Southern Company No. 3.4 at p. 193)
Both groups supported the use of a
sensitivity analysis by DOE in this area.
In another area of discussion, ACEEE
also commented that AEO electricity
price forecasts might require revision.
(Public Meeting Transcript No. 3.4 at p.
174; Joint Comment, No. 9 at p. 2) In the
latter comment received, the Joint
Comment also suggested that DOE adopt
the load profile and rate schedule(tariff-) based approach to electricity
prices that DOE used in the commercial
unitary air conditioner rulemaking.
(Joint comment, No. 9 at p. 2)
DOE decided to use average electricity
prices for four classes of commercial
refrigeration equipment customers on a
State-by-State basis. This approach will
include the regional variations in energy
prices and provide for estimated
electricity prices suitable for the target
market, yet reduce the analysis
complexity. An effort to build tariffbased costs would have significantly
increased the complexity and time
needed for the analysis and it is not
clear whether the results of the analysis
will be improved. The development and
use of State-average electricity prices by
building type is described below and in
more detail in chapter 8 of the TSD.
9. Electricity Price Trends
Because of the wide variation in
electricity consumption patterns,
wholesale costs, and retail rates across
the country, it is important to consider
regional differences in electricity prices.
DOE used average effective commercial
electricity prices at the State level from
the Energy Information Administration
(EIA) publication, State Energy
Consumption, Price, and Expenditure
Estimates. The latest available prices
from this source are for the calendar
year 2003. These were adjusted to
represent 2006$ prices in two steps.
First, national data on the reported
average commercial electricity prices
from the EIA website, Average Retail
Price of Electricity to Ultimate
Customers by End-Use Sector, were
used to adjust the 2003 prices to 2005
prices. Next, because actual prices were
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not yet available for the entire year of
2006, the forecasted ratio between 2006
and 2005 national commercial retail
electricity prices from AEO2006 was
used to adjust the 2005 State-level
prices to 2006$. Furthermore, DOE
recognized that different kinds of
businesses typically use electricity in
different amounts at different times of
the day, week, and year, and therefore
face different effective prices. To make
this adjustment, DOE used the 2003
Commercial Building Energy
Consumption Survey (CBECS) data set
to identify the average prices paid by
the four kinds of businesses in this
analysis compared with the average
prices paid by all commercial
customers. The ratios of prices paid by
the four types of businesses to the
national average commercial prices seen
in the 2003 CBECS were used as
multiplying factors to increase or
decrease the average commercial 2006
price data previously developed as
necessary for each of the four kinds of
businesses. Once the electricity prices
for the four types of businesses have
been adjusted, the resulting prices are
used in the analysis. To obtain a
weighted-average national electricity
price, the prices paid by each business
in each State is weighted by the
estimated sales of frozen and
refrigerated food products, which also
serves as the distribution of commercial
refrigeration equipment units in each
state, to each prototype building. The
State/business type weights are the
probabilities that a given commercial
refrigeration equipment unit shipped
will be operated with a given electricity
price. For evaluation purposes, the
prices and weights can be depicted as a
cumulative probability distribution. The
effective electricity prices range from
approximately 5 cents per kWh to
approximately 14 cents per kWh.
The electricity price trend provides
the relative change in electricity prices
for future years out to the year 2030.
Estimating future electricity prices is
difficult, especially considering that
there are efforts in many States
throughout the country to restructure
the electricity supply industry. DOE
applied the AEO2006 reference case as
the default scenario and extrapolated
the trend in values from the years 2020
to 2030 of the forecast to establish prices
in the years 2030 to 2042. This method
of extrapolation is in line with methods
currently being used by the EIA to
forecast fuel prices for the Federal
Energy Management Program (FEMP).
DOE provides a sensitivity analysis of
the life cycle costs saving and PBP
results to future electricity price
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scenarios using both the AEO2006 highgrowth and low-growth forecasts in
chapter 8 of the TSD.
10. Repair Costs
The equipment repair cost is the cost
to the consumer for replacing or
repairing components in the commercial
refrigeration equipment that have failed.
DOE based the annualized repair cost
for baseline efficiency equipment on the
following expression:
RC = kx EQP/LIFE
Where:
RC = repair cost in dollars
k = fraction of equipment price (estimated to
be 0.5)
EQP = baseline equipment price in dollars,
and
LIFE = average lifetime of the equipment in
years (estimated to be 10 years)
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Because data were not available for
how the repair costs vary with
equipment efficiency, DOE held repair
costs constant as the default scenario for
the LCC and PBP analyses.
11. Maintenance Costs
DOE estimated the annualized
maintenance costs for commercial
refrigeration equipment from data in RS
Means Facilities Maintenance & Repair
Cost Data. RS Means provides estimates
on the person-hours, labor rates and
materials required to maintain
commercial refrigeration equipment on
a semi-annual basis. DOE used a single
figure of $156/year (2006$) for
preventative maintenance for all classes
of commercial refrigeration equipment.
Because data were not available for how
the maintenance costs vary with
equipment efficiency, DOE held
maintenance costs constant even as
equipment efficiency increased. Lamp
replacement and other lighting
maintenance activities are required
maintenance for commercial
refrigeration equipment, which DOE
considered to be separate from
preventative maintenance, and were not
itemized in the preventative
maintenance activities described by RS
Means. Different commercial
refrigeration equipment classes have
different numbers of lamps (and
ballasts) and many of the efficiency
options considered in DOE’s
engineering analysis involved changes
to the lighting configuration (lamp,
ballast, or use of light emitting diode
(LED) lighting systems). Because the
lighting configurations can vary by
energy consumption level, DOE
estimated the relative maintenance costs
for lighting by each case type for which
a design-option analysis was performed.
The methodology used was to estimate
the frequency of failure and replacement
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of individual lighting components, to
estimate the cost of replacement in the
field, and to develop an annualized
maintenance cost based on the sum of
the total lighting maintenance costs (in
2006$) over the estimated life of the
equipment divided by the estimated life
of the equipment.
Costs for fluorescent lamp and ballast
replacements were based on review of
the original equipment manufacturer
(OEM) costs used in the engineering
analysis, RS Means estimates and cost
data from Grainger, Inc., and previous
studies. DOE estimated the costs of field
replacement using labor cost hours from
RS Means Electrical Cost Data for
typical lamp or ballast replacement for
other lighting fixtures, using a 150
percent multiplier on OEM costs for
lamps and ballasts (provided in the
engineering analysis spreadsheets) to
reflect retail pricing.
Fluorescent lamp and ballast
technology is mature, so DOE made no
change in inflation-adjusted costs for
these components. However, because of
rapid technological improvement, costs
for LED lamps are declining. DOE
estimated that costs for replacing LED
lighting fixtures (believed to occur 6
years after the effective date of the
standard) are 140 percent of the OEM
installed cost of LED lighting fixtures
today (in 2006$). These LED fixture
replacement costs represent a 30 percent
reduction to the current costs for in-thefield replacement. DOE recognizes that
both life and cost estimates for LED
replacement are speculative and
believes it has taken a conservative
approach to estimating price reduction
over time for this technology. Overhead
and profit factors from RS Means were
not considered.
12. Lifetime
DOE defines lifetime as the age when
a commercial refrigeration equipment
unit is retired from service. DOE based
equipment lifetime on discussions with
industry experts and other stakeholders,
and concluded that a typical lifetime of
10 years is appropriate for commercial
refrigeration equipment. Commercial
refrigeration equipment units are
typically replaced when stores are
renovated—about every 10 years—
which is before the commercial
refrigeration equipment units would
have physically worn out. Because of
this, there is a used-equipment market
for commercial refrigeration equipment.
DOE understands, however, that the
salvage value to the original purchaser
is very low and thus this has not been
taken into account in the LCC. Chapter
3 of the TSD, Market and Technology
Assessment, contains a discussion of
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41191
equipment life data and the sources of
such data.
DOE understands that the actual
lifetime of a commercial refrigeration
equipment unit in the field might vary
from the estimated average 10-year
lifetime, to some degree, by equipment
class, variations associated with
components and manufacturing
methods, as well as store type where the
unit is placed in service. Nevertheless,
the 10-year lifetime estimate is an
important benchmark for testing to a
standard level of performance, making
comparisons of different units for
purchasing decisions, and making a
reasonable quantitative analysis of the
impacts that could result from different
standard levels of efficiency. Therefore,
DOE specifically requests feedback on
the lifetime of commercial refrigeration
equipment and whether, in fact, this is
a significant issue. Where the lifetime
data indicate a substantial variation
from the assumed 10-year lifetime, DOE
will perform a sensitivity analysis of
this variable in the LCC and NES
analyses and may adjust the best
estimate of equipment lifetime as well.
In particular, DOE seeks comment on
how long these units are typically
maintained in service, on average, either
for all equipment covered under this
rulemaking or by equipment class and
store type. Also, DOE seeks comment on
the existence of used-equipment
markets for commercial refrigeration
equipment, and the importance of
considering such markets in its analysis.
This is identified as Issue 8 under
‘‘Issues on Which DOE Seeks Comment’’
in section IV.E of this ANOPR.
13. Discount Rate
The discount rate is the rate at which
future expenditures are discounted to
establish their present value. DOE
received comments on the development
of discount rates at the Framework
Public Meeting. FPA suggested that
DOE’s analysis should consider
discount rates for convenience stores
separately from other food stores, but
considered superstores in the same
general market as the traditional grocery
store. (FPA No. 3.4 at p. 179) ARI
suggested that DOE consider developing
discount rates explicitly for
supercenters. (ARI No. 3.4 at p. 179)
DOE derived the discount rates for the
LCC analysis by estimating the cost of
capital for companies that purchase
commercial refrigeration equipment.
The cost of capital is commonly used to
estimate the present value of cash flows
to be derived from a typical company
project or investment. Most companies
use both debt and equity capital to fund
investments, so their cost of capital is
E:\FR\FM\26JYP2.SGM
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41192
Federal Register / Vol. 72, No. 143 / Thursday, July 26, 2007 / Proposed Rules
the weighted average of the cost to the
company of equity and debt financing.
DOE estimated the cost of equity
financing by using the Capital Asset
Pricing Model (CAPM). The CAPM,
among the most widely used models to
estimate the cost of equity financing,
considers the cost of equity to be
proportional to the amount of
systematic risk associated with a
company. The cost of equity financing
tends to be high when a company faces
a large degree of systematic risk and it
tends to be low when the company faces
a small degree of systematic risk. To
estimate the weighted average cost of
capital (WACC) (including the weighted
average cost of debt and equity
financing) of commercial refrigeration
equipment purchasers, DOE used a
sample of companies involved in
groceries and multi-line retailing drawn
from a database of 7,319 U.S. companies
on the Damodaran Online website. The
WACC approach taken for the
determination of the discount rates
takes into account the current tax status
of the individual firms on an overall
corporate basis. The marginal effects of
increased costs and thus depreciation
due to higher cost equipment on the
overall tax status was not evaluated.
DOE used a sample of 23 companies
to represent the purchasers of
commercial refrigeration equipment. For
each company in the sample, DOE
derived the cost of debt, percent debt
financing, and systematic company risk
from information provided at the
Damodaran Online Web site. It
estimated the cost of debt financing
from the long-term government bond
rate (4.39 percent) and the standard
deviation of the stock price. The cost of
capital for small, independent grocers,
convenience store franchisees, gasoline
station owner-operators, and others with
more limited access to capital is more
difficult to determine. Individual creditworthiness varies considerably, and
some franchisees have access to the
financial resources of the franchising
corporation. However, personal contacts
with a sample of commercial bankers
yielded an estimate for the small
operator weighted cost of capital of
about 200 to 300 basis points (2 percent
to 3 percent) above the rates for large
grocery chains. A central value equal to
the weighted average of large grocery
chains, plus 2.5 percent, was used for
small operators. Deducting expected
inflation from the cost of capital
provides the estimates of the real
discount rate by ownership category.
The average after-tax discount rate,
weighted by the percentage shares of
total purchases of commercial
refrigeration equipment, is 4.76 percent
for large grocery stores, 5.66 percent for
multi-line retailers, and 7.26 percent for
convenience stores and convenience
stores associated with gasoline stations.
14. Payback Period
The PBP is the amount of time it takes
the customer to recover the
incrementally higher purchase cost of
more energy efficient equipment as a
result of lower operating costs.
Numerically, the PBP is the ratio of the
increase in purchase cost (i.e., from a
less efficient design to a more efficient
design) to the decrease in annual
operating expenditures. This type of
calculation is known as a ‘‘simple’’ PBP,
because it does not take into account
changes in operating cost over time or
the time value of money, that is, the
calculation is done at an effective
discount rate of zero percent.
The equation for PBP is:
PBP = ∆IC / ∆OC
Where:
PBP = payback period in years,
DIC = difference in the total installed cost
between the more efficient standard level
equipment (energy consumption levels 2,
3, etc.) and the baseline (energy
consumption level 1) equipment, and
DOC = difference in annual operating costs.
PBPs are expressed in years. PBPs
greater than the life of the equipment
means that the increased total installed
cost of the more efficient equipment is
not recovered in reduced operating costs
for the more efficient equipment.
The data inputs to PBP analysis are
the total installed cost of the equipment
to the customer for each energy
consumption level and the annual (first
year) operating costs for each energy
consumption level. The inputs to the
total installed cost are the equipment
price and the installation cost. The
inputs to the operating costs are the
annual energy cost, the annual repair
cost, and the annual maintenance cost.
The PBP uses the same inputs as the
LCC analysis, except that electricity
price trends and discount rates are not
required. Since the PBP is a ‘‘simple’’
(undiscounted) payback, the required
electricity cost is only for the year in
which a new energy conservation
standard is to take effect—in this case,
the year 2012. The electricity price used
in the PBP calculation of electricity cost
was the price projected for 2012,
expressed in 2006$, but not discounted
to 2006. Discount rates are not used in
the PBP calculation.
15. Life-Cycle Cost and Payback Period
Results
This section presents the LCC and
PBP results for the energy consumption
levels analyzed. Because the values of
most inputs to the LCC analysis are
uncertain, DOE represents them as a
distribution of values rather than a
single-point value. Thus, DOE derived
the LCC results also as a distribution of
values.
DOE provides a summary of the
change in LCC from the baseline by
percentile groupings of the distribution
of results for each of the equipment
classes in chapter 8 and appendix G of
the TSD. A sample for one equipment
class (VOP.RC.M) is shown in Table
II.13. Table II.13 also shows the mean
LCC savings and the percent of units
with LCC savings at each of the
efficiency levels.
TABLE II.13.—DISTRIBUTION OF LIFE-CYCLE COST SAVINGS FROM A BASELINE LEVEL (LEVEL 1) BY EFFICIENCY LEVEL
FOR THE VERTICAL OPEN, REMOTE CONDENSING, MEDIUM TEMPERATURE (VOP.RC.M) EQUIPMENT CLASS
Decrease in LCC from baseline (Level 1) shown by percentiles of the distribution of results (2006$)
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Mean
savings
$145
317
473
717
797
842
835
$238
471
686
1,048
1,186
1,288
1,349
$301
569
822
1,260
1,435
1,576
1,694
$340
634
911
1,399
1,600
1,769
1,911
$361
665
952
1,464
1,681
1,863
2,021
$398
730
1,044
1,606
1,845
2,047
2,230
$425
775
1,106
1,703
1,958
2,177
2,379
$509
911
1,294
1,995
2,303
2,574
2,839
$711
1,238
1,748
2,701
3,135
3,533
3,950
$878
1,512
2,127
3,290
3,828
4,330
4,871
$1,285
2,169
3,036
4,704
5,497
6,255
7,105
$485
871
1,239
1,910
2,203
2,459
2,707
mstockstill on PROD1PC66 with PROPOSALS2
Efficiency level
Level
Level
Level
Level
Level
Level
Level
2
3
4
5
6
7
8
...........................................
...........................................
...........................................
...........................................
...........................................
...........................................
...........................................
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Percent
of units
with LCC
savings
100
100
100
100
100
100
100
41193
Federal Register / Vol. 72, No. 143 / Thursday, July 26, 2007 / Proposed Rules
As an example of how to interpret the
information in Table II.13, here is a
review of the results for the VOP.RC.M
equipment class. The efficiency Level 4
in Table II.13 (row 3) shows that the
change in LCC (zero percentile column)
is a minimum saving of $473. For 90
percent of the cases studied (90th
percentile), the change in LCC is a
reduction of $2,127 or less. The largest
reduction in LCC is $3,036 (100th
percentile). The mean change in LCC is
a net savings of $1,239. The last column
shows that 100 percent of the sample
have LCC savings (i.e., reductions in
LCC greater than zero) when compared
to the baseline efficiency level.
Table II.14 provides the national
average life cycle cost savings calculated
for each efficiency level when compared
to the baseline efficiency (Level 1) for
all equipment classes. Review of Table
II.14 shows that every efficiency level
analyzed generated national average
life-cycle cost savings compared with
the baseline efficiency level. It should
be pointed out that 100 percent of the
units analyzed have positive LCC
savings.
TABLE II.14.—AVERAGE LIFE-CYCLE COST SAVINGS FROM A BASELINE LEVEL (LEVEL 1) BY EFFICIENCY LEVEL AND
EQUIPMENT CLASS
National average LCC savings (2006$)
Equipment class
Level 1
Level 2
Level 3
Level 4
Level 5
Level 6
Level 7
Level 8
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
485
1209
759
1046
1179
1371
398
227
552
835
208
234
66
68
250
871
2604
883
1309
1650
2581
961
500
588
1779
435
591
286
555
315
1239
3512
1006
1596
2105
3020
1383
758
644
1718
490
935
354
1071
731
1910
3470
1265
1750
2949
3285
1451
1000
824
1901
NA
1267
381
1136
809
2203
3443
1328
2362
3333
5313
1559
1223
841
1868
NA
1459
445
1155
835
2459
NA
1487
1925
3684
5613
1619
1458
1200
1540
NA
NA
466
1448
NA
2707
NA
1482
NA
4272
5398
1609
NA
1186
NA
NA
NA
543
1457
NA
VOP.RC.M .......................................................................
VOP.RC.L ........................................................................
VOP.SC.M ........................................................................
VCT.RC.M ........................................................................
VCT.RC.L .........................................................................
VCT.SC.I ..........................................................................
VCS.SC.I ..........................................................................
SVO.RC.M .......................................................................
SVO.SC.M ........................................................................
SOC.RC.M .......................................................................
HZO.RC.M .......................................................................
HZO.RC.L ........................................................................
HZO.SC.M ........................................................................
HZO.SC.L .........................................................................
HCT.SC.I ..........................................................................
1. DOE seeks input on whether a
distribution of efficiencies should be
used for the LCC analysis baseline
(instead of a single efficiency level), and
if so, what data could be used to
populate this distribution. This is
identified as Issue 9 under ‘‘Issues on
Which DOE Seeks Comment’’ in section
IV.E of this ANOPR.
DOE specifically seeks feedback on
the validity of selecting Level 1 as the
baseline in the LCC analysis. Since
higher efficiency equipment are known
to be sold into the market, the LCC
savings estimates presented above
represent overestimates with respect to
the life-cycle savings anticipated for
base case efficiencies higher than Level
Table II.15 summarizes the PBP
results for each of the efficiency levels
for the VOP.RC.M equipment class.
Results are summarized for PBP by
percentile groupings of the distribution
of results. The chart also shows the
mean PBP for each efficiency level.
TABLE II.15.—SUMMARY OF PAYBACK PERIOD RESULTS FOR THE VERTICAL OPEN, REMOTE CONDENSING, MEDIUM
TEMPERATURE (VOP.RC.M) EQUIPMENT CLASS
Payback period in years shown by percentiles of the distribution of results
Efficiency level
0%
mstockstill on PROD1PC66 with PROPOSALS2
Level
Level
Level
Level
Level
Level
Level
2
3
4
5
6
7
8
..............................
..............................
..............................
..............................
..............................
..............................
..............................
10%
1.4
1.2
1.1
1.2
1.2
1.3
1.4
2.1
1.8
1.8
1.8
1.8
1.9
2.1
Table II.16 provides the national
average payback calculated for each
efficiency level when compared to the
baseline efficiency level (Level 1) for all
equipment classes. Table II.16 also
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16:34 Jul 25, 2007
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20%
30%
2.3
2.0
1.9
1.9
2.0
2.1
2.2
40%
2.8
2.4
2.3
2.3
2.4
2.5
2.7
50%
3.1
2.7
2.5
2.6
2.7
2.8
3.0
3.3
2.9
2.7
2.8
2.9
3.0
3.2
60%
3.5
3.0
2.9
2.9
3.0
3.2
3.4
shows the percentage of units reporting
PBPs of less than three years. The
results of the analysis shows that
purchases of higher efficiency levels
resulted in PBPs (with respect to
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70%
80%
3.6
3.1
3.0
3.0
3.1
3.3
3.5
3.8
3.3
3.2
3.2
3.3
3.5
3.8
90%
4.1
3.6
3.4
3.5
3.6
3.8
4.0
100%
4.7
4.1
3.9
4.0
4.1
4.3
4.6
Mean
PBP
3.2
2.8
2.6
2.7
2.8
2.9
3.1
purchase of baseline efficiency units) of
less than four years for any of the
efficiency levels considered for any
equipment class.
E:\FR\FM\26JYP2.SGM
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Federal Register / Vol. 72, No. 143 / Thursday, July 26, 2007 / Proposed Rules
TABLE II.16.—NATIONAL AVERAGE PAYBACK PERIODS BY EFFICIENCY LEVEL AND EQUIPMENT CLASS
Equipment class
Level 1
Level 2
Level 3
Level 4
Level 5
Level 6
Level 7
Level 8
2.9
NA
2.0
3.9
2.3
1.5
0.8
3.0
1.8
3.9
NA
NA
1.4
1.3
NA
3.1
NA
3.1
NA
2.7
2.1
1.2
NA
2.4
NA
NA
NA
1.8
1.3
NA
National Average Payback Period (Years)
VOP.RC.M .......................................................................
VOP.RC.L ........................................................................
VOP.SC.M ........................................................................
VCT.RC.M ........................................................................
VCT.RC.L .........................................................................
VCT.SC.I ..........................................................................
VCS.SC.I ..........................................................................
SVO.RC.M .......................................................................
SVO.SC.M ........................................................................
SOC.RC.M .......................................................................
HZO.RC.M .......................................................................
HZO.RC.L ........................................................................
HZO.SC.M ........................................................................
HZO.SC.L .........................................................................
HCT.SC.I ..........................................................................
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
3.2
0.5
0.7
0.3
1.4
0.3
0.3
3.2
0.8
0.6
0.8
1.2
0.7
0.6
0.7
2.8
0.8
0.7
0.4
1.6
0.4
0.6
2.8
0.8
1.0
1.2
1.6
1.0
0.6
0.7
2.6
1.1
0.8
0.7
1.8
0.5
0.6
2.7
0.9
1.2
1.5
1.7
1.1
0.8
1.3
2.7
1.2
1.1
0.9
2.1
0.6
0.7
2.8
1.1
1.4
NA
1.8
1.1
0.8
1.4
2.8
2.0
1.4
2.7
2.2
1.3
0.7
2.9
1.3
3.1
NA
1.9
1.2
0.9
1.4
Percent of Units With Payback Period of Less Than 3 Years
VOP.RC.M .......................................................................
VOP.RC.L ........................................................................
VOP.SC.M ........................................................................
VCT.RC.M ........................................................................
VCT.RC.L .........................................................................
VCT.SC.I ..........................................................................
VCS.SC.I ..........................................................................
SVO.RC.M .......................................................................
SVO.SC.M ........................................................................
SOC.RC.M .......................................................................
HZO.RC.M .......................................................................
HZO.RC.L ........................................................................
HZO.SC.M ........................................................................
HZO.SC.L .........................................................................
HCT.SC.I ..........................................................................
mstockstill on PROD1PC66 with PROPOSALS2
DOE emphasizes that the PBPs shown
in Table II.16 as well as the rebuttable
PBPs shown in Table II.11 take into
account the cumulative impact of all
technologies used in a design option to
reach a specific energy efficiency level
when compared to the baseline
equipment. Shorter PBP resulting from
the most cost-effective technologies can
offset longer PBP from less cost-effective
technologies to yield a low overall PBP
for the design option. For this reason,
the choice of baseline efficiency level
affects the PBP for higher efficiency
levels. The LCC spreadsheet allows the
user to select alternate baseline
efficiency levels for each equipment
class and calculate the LCC savings and
PBP for all higher levels compared to
the selected baseline.
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
38
100
100
100
100
100
100
38
100
100
100
100
100
100
100
58
100
100
100
100
100
100
57
100
100
100
100
100
100
100
74
100
100
100
100
100
100
60
100
100
100
100
100
100
100
Table II.17 illustrates the impact of
the selection of baseline level on the
VCT.RC.M equipment class for the
supermarket business type and using
national average energy prices. Note that
the values shown in Table II.17 differ
from the values shown in Table II.14
since the values in Table II.17 do not
represent a national average developed
through the weighting of all business
types and fuel costs. Nevertheless, they
serve to illustrate the impact of the
selected baseline efficiency level on
LCC savings and PBP. The LCC savings
and PBP are shown for four alternate
baseline efficiency levels: Level 1, Level
2, Level 3 and Level 4. As the baseline
efficiency is moved from Level 1 to
Level 4, the life-cycle-cost savings are
correspondingly reduced for each of the
64
100
100
100
98
100
100
58
100
100
NA
100
100
100
100
58
100
100
60
94
100
100
50
100
40
NA
100
100
100
100
50
NA
98
24
88
100
100
42
100
25
NA
NA
100
100
NA
40
NA
41
NA
64
98
100
NA
87
NA
NA
NA
100
100
NA
higher efficiency levels. The efficiency
level with the maximum life-cycle-cost
savings (level 6) is, however, the same
regardless of choice of baseline level.
Selection of the baseline level at level 6
would show no life-cycle-cost savings
for higher levels.
The calculated PBP also changes with
selection of alternate baseline efficiency
levels. As the baseline efficiency is
moved from Level 1 to Level 4, the PBP
for each of the higher efficiency levels,
relative to the selected baseline,
increases, with the Level 7 PBP moving
from 3.9 years—using Level 1 as the
baseline efficiency level—to 6.2 years
using Level 4 as the baseline efficiency
level.
TABLE II.17.—SENSITIVITY OF AVERAGE LIFE-CYCLE COST SAVINGS AND PAYBACK PERIOD TO SELECTION OF BASELINE
EFFICIENCY LEVEL FOR THE VERTICAL TRANSPARENT DOOR, REMOTE CONDENSING, MEDIUM TEMPERATURE
(VCT.RC.M) EQUIPMENT CLASS
Baseline level
Level 1
Level 2
Level 3
Level 4
Level 5
Level 6
Level 7
Level 8
1709
726
NA
NA
Average LCC Savings (2006$)
Level 1 .............................................................................
Level 2 .............................................................................
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520
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41195
Federal Register / Vol. 72, No. 143 / Thursday, July 26, 2007 / Proposed Rules
TABLE II.17.—SENSITIVITY OF AVERAGE LIFE-CYCLE COST SAVINGS AND PAYBACK PERIOD TO SELECTION OF BASELINE
EFFICIENCY LEVEL FOR THE VERTICAL TRANSPARENT DOOR, REMOTE CONDENSING, MEDIUM TEMPERATURE
(VCT.RC.M) EQUIPMENT CLASS—Continued
Baseline level
Level 1
Level 2
Level 3
Level 4
Level 5
Level 6
Level 7
Level 8
NA
NA
NA
NA
0
NA
271
0
414
144
944
673
477
206
NA
NA
2.7
3.7
4.0
4.5
3.9
5.2
5.6
6.2
NA
NA
NA
NA
Level 3 .............................................................................
Level 4 .............................................................................
Average Payback Period (Years)
Level
Level
Level
Level
1
2
3
4
.............................................................................
.............................................................................
.............................................................................
.............................................................................
DOE provided a sensitivity analysis of
the life-cycle-cost savings as well as the
PBP to the choice of baseline efficiency
level in Chapter 8 of the TSD. DOE
presents these findings to facilitate
stakeholder review of the LCC and PBP
analyses. DOE seeks information and
comments relevant to the assumptions,
methodology, and results of this
analysis. See chapter 8 of the TSD for
additional detail on the LCC and PBP
analyses.
H. Shipments Analysis
This section presents DOE’s
shipments analysis, which is an input to
the NIA (section II.I) and MIA (section
II.K). DOE will undertake the MIA after
the ANOPR is published, and will
report the results of the MIA in the
NOPR.
The results of the shipments analysis
are driven primarily by historical
shipments data for the 15 equipment
classes of commercial refrigeration
equipment under consideration. The
model estimates that, in each year, the
existing stock of commercial
refrigeration equipment either ages by
one year or is worn out and replaced. In
addition, new equipment can be
shipped into new commercial floor
space, and old equipment can be
removed through demolitions. DOE
chose to analyze all efficiency levels
NA
NA
NA
NA
0.3
NA
NA
NA
0.4
0.8
NA
NA
0.7
1.2
1.6
NA
analyzed in the LCC in the NIA. Because
DOE is assessing impacts presuming
each level analyzed represents a
possible standard level, DOE refers to
the efficiency levels analyzed in the NIA
as ‘‘candidate standard levels’’ (CSLs).
Shipments forecasts were determined
for all of the CSLs analyzed in the NIA
and NPV analysis.
The shipments analysis is a
description of commercial refrigeration
equipment stock flows as a function of
year and age. While there are 15
equipment classes, the shipment
analysis treats each category of
equipment independently and without
coupling between them. DOE
formulated the equations used in the
analysis as updates of the distribution of
stock in any given year, as a function of
age, to the following year using the
following steps: (1) DOE first converted
the equipment units to linear feet of
display space cooled by those units by
taking the national statistics on sales of
equipment and calculating equipment
capacity per linear foot of retail grocery
building display space; (2) DOE used
this calculation of existing stock, and
the average age of the equipment, as a
basis for calculating replacement sales;
(3) DOE subtracted replacement sales
from historical total sales statistics to
calculate new sales of commercial
refrigeration equipment; (4) DOE
0.9
1.5
1.9
2.4
forecast new sales as a function of new
construction of retail food sales space;
(5) DOE recorded sales of new and
replacement equipment by the year
sold, and depreciated each annual
vintage over the estimated life of the
equipment; and (6) DOE allocated sales
in each year to the 15 equipment classes
in proportion to their relative historical
sales.
Table II.18 shows the results of the
shipments analysis for the 15
commercial refrigeration equipment
classes for the base case (baseline
efficiency level or Level 1). As
equipment purchase price increases
with higher efficiency levels, a drop in
shipments could be expected relative to
the base case. However, as annual
energy consumption is reduced, there is
potentially a countering effect of
increased equipment sales due to more
frequent installations and use of
commercial refrigeration equipment by
retailers (a potential rebound effect).
Although there is a provision in the
spreadsheet for a change in projected
shipments in response to efficiency
level increases (or energy consumption
level decreases), DOE has no
information with which to calibrate
such a relationship. Therefore, for the
ANOPR analysis, DOE presumed that
the shipments do not change in
response to the changing CSLs.
TABLE II.18.—FORECASTED SHIPMENTS FOR COMMERCIAL REFRIGERATION EQUIPMENT, 2012–2042, LEVEL 1 (BASE
CASE)
Thousands of linear feet shipped by year and equipment class
Equipment class
mstockstill on PROD1PC66 with PROPOSALS2
2012
VOP.RC.M ................................................
VOP.RC.L* ...............................................
VOP.SC.M ................................................
VCT.RC.M ................................................
VCT.RC.L .................................................
VCT.SC.I ..................................................
VCS.SC.I ..................................................
SVO.RC.M ................................................
SVO.SC.M ................................................
SOC.RC.M ...............................................
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423
0
28
30
420
10
3
323
43
81
PO 00000
2015
446
0
30
32
443
11
3
340
45
86
Frm 00035
2020
2025
490
0
33
35
487
12
3
374
49
94
Fmt 4701
Sfmt 4702
538
0
36
38
535
13
3
411
54
104
2030
2035
591
0
40
42
587
14
4
451
59
114
E:\FR\FM\26JYP2.SGM
649
0
44
46
645
16
4
495
65
125
26JYP2
2040
714
0
48
51
709
17
4
545
72
137
2042
742
0
50
53
737
18
5
566
75
143
Cumulative
17574
0
1182
1255
17456
430
107
13405
1769
3379
41196
Federal Register / Vol. 72, No. 143 / Thursday, July 26, 2007 / Proposed Rules
TABLE II.18.—FORECASTED SHIPMENTS FOR COMMERCIAL REFRIGERATION EQUIPMENT, 2012–2042, LEVEL 1 (BASE
CASE)—Continued
Thousands of linear feet shipped by year and equipment class
Equipment class
2012
HZO.RC.M ................................................
HZO.RC.L .................................................
HZO.SC.M ................................................
HZO.SC.L .................................................
HCT.SC.I ..................................................
50
156
4
8
34
2015
52
164
4
8
35
2020
2025
57
181
4
9
39
63
198
5
10
43
2030
2035
69
218
5
11
47
76
239
6
12
52
2040
84
263
6
13
57
2042
Cumulative
87
273
6
13
59
2060
6476
152
315
1397
* Estimated shipments of this equipment class were zero. The industry requested that this equipment class be included in the rulemaking.
Additional details on the shipments
analysis can be found in chapter 9 of the
TSD.
I. National Impact Analysis
The NIA assesses future NES and the
national economic impacts of CSLs. The
analysis measures economic impacts
using the NPV metric (i.e., future
amounts discounted to the present) of
total commercial customer costs and
savings expected to result from new
standards at specific efficiency levels.
For a given CSL, DOE calculated the
NPV, as well as the NES, as the
difference between a base case forecast
and the standards case. Additional
details on the national impacts analysis
for commercial refrigeration equipment
are found in chapter 10 of the TSD.
DOE determined national annual
energy consumption as the product of
the annual energy consumption per
commercial refrigeration equipment
unit and the number of commercial
refrigeration equipment units of each
vintage. This approach accounts for
differences in unit energy consumption
from year to year. Cumulative energy
savings are the sum of the annual NES
determined over the period of analysis.
DOE calculated net economic savings
each year as the difference between total
operating cost savings and increases in
total installed costs. Cumulative savings
are the sum of the annual NPV.
mstockstill on PROD1PC66 with PROPOSALS2
1. Approach
Over time, in the standards case, more
efficient equipment gradually replaces
less efficient equipment. This affects the
calculation of both the NES and NPV,
both of which are a function of the total
number of units in use and their
efficiencies, and thus are dependent
upon annual shipments and the lifetime
of equipment. Both calculations start by
using the estimate of shipments and the
quantity of units in service, which are
derived from the shipments model.
With regard to the estimation of NES,
because more efficient commercial
refrigeration equipment units gradually
replace less efficient ones, the energy
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Jkt 211001
per unit of capacity used by the
commercial refrigeration equipment in
service gradually decreases in the
standards case relative to the base case.
To estimate the total energy savings for
each candidate efficiency level, DOE
first calculated the national site energy
consumption (site energy is the energy
directly consumed by the units in
operation) for commercial refrigeration
equipment each year, beginning with
the expected effective date of the
standards (2012). This calculation was
done for the base case forecast and the
standards case forecast. Second, DOE
determined the annual site energy
savings, which is the difference between
site energy consumption in the base
case and in the standards case. Third,
DOE converted the annual site energy
savings into the annual amount of
energy saved at the source of electricity
generation (the source energy). Finally,
DOE summed the annual source energy
savings from 2012 to 2042 to calculate
the total NES for that period. DOE
performed these calculations for each
CSL.
2. Base Case and Standards Case
Forecasted Efficiencies
A key component of DOE’s estimates
of NES and NPV are the energy
efficiencies for shipped equipment that
it forecasts over time for the base case
(without new standards) and for each of
the standards cases. The forecasted
efficiencies represent the distribution of
energy efficiency of the equipment
under consideration that is shipped over
the forecast period (i.e., from the
assumed effective date of a new
standard to 30 years after the standard
becomes effective). Because key inputs
to the calculation of the NES and NPV
are dependent on the estimated
efficiencies, they are of great importance
to the analysis. In the case of the NES,
the per-unit annual energy consumption
is a direct function of efficiency. With
regard to the NPV, two inputs, the perunit total installed cost and the per-unit
annual operating cost, both depend on
efficiency. The per-unit total installed
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cost is a direct function of efficiency
while the per-unit annual operating
cost, because it is a direct function of
the per-unit energy consumption, is
indirectly dependent on equipment
efficiency.
The annual per-unit energy
consumption is the site energy
consumed by a commercial refrigeration
equipment unit per year. The annual
energy consumption is directly tied to
the efficiency of the unit. Thus,
knowing the efficiency of a commercial
refrigeration equipment unit determines
the corresponding annual energy
consumption. DOE determined annual
forecasted market shares by efficiency
level that, in turn, enabled a
determination of shipment-weighted
annual energy consumption values.
Because no data were available on
market shares broken down by
efficiency level, DOE determined market
shares by efficiency level for
commercial refrigeration equipment
based on its own analysis. First, DOE
converted 2005 shipment information
by equipment class into market shares
by equipment class, and then adapted a
cost-based method similar to that used
in the NEMS to estimate market shares
for each equipment class by efficiency
level. This cost-based method relied on
cost data developed in the engineering
and life-cycle cost analyses as well as
economic purchase criteria data taken
directly from NEMS. Then, from those
market shares and projections of
shipments by equipment class, DOE
developed the future efficiency
scenarios for a base case (i.e., without
new standards) and for various
standards cases (i.e., with new
standards). DOE did not have data to
calibrate this approach to actual market
shipments by efficiency level.
Therefore, DOE specifically seeks
feedback on this economic-based
approach to estimating market shares.
This is identified as Issue 10 under
‘‘Issues on Which DOE Seeks Comment’’
in section IV.E of this ANOPR.
DOE developed base case efficiency
forecasts based on the estimated market
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Federal Register / Vol. 72, No. 143 / Thursday, July 26, 2007 / Proposed Rules
shares by equipment class and
efficiency level. Because there are no
historical data to indicate how
equipment efficiencies or relative
equipment class preferences have
changed over time, DOE predicted that
forecasted market shares would remain
frozen at the 2012 efficiency level until
the end of the forecast period (30 years
after the effective date—the year 2042).
Realizing that this prediction very likely
has the effect of causing the estimates of
savings associated with these efficiency
standards to be overstated, DOE seeks
comment on this prediction and the
potential significance of the overestimate of savings. In particular, DOE
requests data that would enable it to
better characterize the likely increases
in efficiency that would occur over the
30-year modeling period in absence of
this rule.
For its determination of standards
case forecasted efficiencies, DOE used a
‘‘roll-up’’ scenario to establish the
market shares by efficiency level for the
year that standards become effective
(i.e., 2012). Information available to
DOE suggests that equipment shipments
with efficiencies in the base case that
did not meet the standard level under
consideration would ‘‘roll-up’’ to meet
the new standard level. Also, available
information suggests that all equipment
efficiencies in the base case that were
above the standard level under
consideration would not be affected.
DOE specifically seeks feedback on its
basis for the forecasted base case and
standards case efficiencies and its
prediction on how standards impact
efficiency distributions in the year that
standards take effect. This is identified
as Issue 11 under ‘‘Issues on Which
DOE Seeks Comment’’ in section IV.E of
this ANOPR. In addition, DOE
specifically seeks feedback on whether
higher standard levels in specific
equipment classes are likely to cause
commercial refrigeration equipment
customers to shift to using other, lessefficient equipment classes for
displaying merchandise. This is
identified as Issue 12 under ‘‘Issues on
Which DOE Seeks Comment’’ in section
IV.E of this ANOPR.
3. National Impact Analysis Inputs
The difference in shipments by
equipment efficiency level between the
base and standards cases was the basis
for determining the reduction in perunit annual energy consumption that
could result from new standards. The
commercial refrigeration equipment
stock in a given year is the total linear
footage of commercial refrigeration
equipment shipped from earlier years
that survive in the given year. The NES
spreadsheet model keeps track of the
total linear footage of commercial
refrigeration equipment units shipped
each year. For purposes of the ANOPR
NES and NPV analyses, DOE estimated
that approximately 10 percent of the
existing commercial refrigeration
equipment units are retired each year
(based on a 10-year average lifetime)
and that for units shipped in 2042, any
units still remaining at the end of 2052
are replaced.
The site-to-source conversion factor is
the multiplicative factor used for
converting site energy consumption,
expressed in kWh, into primary or
source energy consumption, expressed
in quads (quadrillion Btu). DOE used
annual site-to-source conversion factors
based on U.S. average values for the
commercial sector, calculated from
AEO2006, Table A5. The average
conversion factors vary over time, due
41197
to projected changes in electricity
generation sources (i.e., the power plant
types projected to provide electricity to
the country).
To estimate NPV, DOE calculated the
net impact each year as the difference
between total operating cost savings
(including electricity, repair, and
maintenance cost savings) and increases
in total installed costs (which consists
of MSP, sales taxes, distribution channel
markups, and installation cost). DOE
calculated the NPV of each CSL over the
life of the equipment, using three steps.
First, DOE determined the difference
between the equipment costs under the
CSL case and the base case, to get the
net equipment cost increase resulting
from the CSL. Second, DOE determined
the difference between the base case
operating costs and the CSL operating
costs, to get the net operating cost
savings from the CSL. Third, DOE
determined the difference between the
net operating cost savings and the net
equipment cost increase to get the net
savings (or expense) for each year. DOE
then discounted the annual net savings
(or expenses) for commercial
refrigeration equipment purchased on or
after 2012 to the year 2007, and summed
the discounted values to provide the
NPV of a CSL. An NPV greater than zero
shows net savings (i.e., the CSL would
reduce overall customer expenditures
relative to the base case in present value
terms). An NPV that is less than zero
indicates that the candidate energy
standard level would result in a net
increase in customer expenditures in
present value terms.
Table II.19 summarizes the NES and
NPV inputs to the NES spreadsheet
model. For each input a brief
description of the data source is given.
TABLE II.19.—NATIONAL ENERGY SAVINGS AND NET PRESENT VALUE INPUTS
Input data
Description
Shipments .......................................
Effective Date of Standard ..............
Base-Case Efficiencies ...................
Standards-Case Efficiencies ...........
Annual shipments from shipments model (see chapter 9 Shipments Analysis).
2012.
Distribution of base-case shipments by efficiency level.
Distribution of shipments by efficiency level for each standards case. Standards case annual market
shares by efficiency level remain constant over time for the base-case and each standards case.
Annual weighted-average values are a function of energy consumption level, which are established in the
Engineering Analysis (see chapter 5 of the TSD). Converted to a per linear foot basis.
Annual weighted-average values are a function of energy consumption level (see chapter 8 of the TSD).
Converted to a per linear foot basis.
Annual weighted-average values are constant with energy consumption level (see chapter 8 of the TSD).
Converted to a per linear foot basis.
Annual weighted-average value equals $156 (see chapter 8 of the TSD), plus lighting maintenance cost.
Converted to a per linear foot basis.
EIA AEO2006 forecasts (to 2030) and extrapolation for beyond 2030 (see chapter 8 of the TSD).
Conversion varies yearly and is generated by DOE/EIA’s NEMS* program (a time series conversion factor;
includes electric generation, transmission, and distribution losses).
3 and 7 percent real.
Future costs are discounted to year 2007.
Annual Energy Consumption per
Linear Foot.
Total Installed Cost per Linear Foot
mstockstill on PROD1PC66 with PROPOSALS2
Repair Cost per Linear Foot ...........
Maintenance Cost per Linear Foot
Escalation of Electricity Prices ........
Electricity Site-to-Source Conversion.
Discount Rate .................................
Present Year ...................................
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41198
Federal Register / Vol. 72, No. 143 / Thursday, July 26, 2007 / Proposed Rules
TABLE II.19.—NATIONAL ENERGY SAVINGS AND NET PRESENT VALUE INPUTS—Continued
Input data
Description
Rebound Effect ...............................
A rebound effect (due to changes in shipments resulting from standards) was not considered in the National Impact Analysis.
* Chapter 13 (utility impact analysis) and chapter 14 (environmental assessment) provide more detail on NEMS.
4. National Impact Analysis Results
Below are the NES results for each
efficiency level considered for the 15
equipment classes of commercial
refrigeration equipment analyzed.
Results are cumulative to 2042 and are
shown as primary energy savings in
quads. Inputs to the NES spreadsheet
model are based on weighted-average
values, yielding results that are discrete
point values, rather than a distribution
of values as in the LCC analysis.
Table II.20 shows the NES results for
the CSLs analyzed for each equipment
class of commercial refrigeration
equipment. DOE based all the results on
electricity price forecasts from the
AEO2006 reference case. The range of
overall cumulative energy impacts for
establishing standards above the
baseline level (Level 1) for all
equipment classes is from 0.12 quad for
a standard at Level 2 to 1.73 quads with
all equipment at the highest efficiency
level.
TABLE II.20.—CUMULATIVE NATIONAL ENERGY SAVINGS FOR COMMERCIAL REFRIGERATION EQUIPMENT (2012–2042)
(QUADS)
National energy savings (quads*,**) by standard level
Equipment class
Level 2
Level 3
Level 4
Level 5
Level 6
Level 7
Level 8
0.04
0.00
0.00
0.00
0.04
0.00
0.00
0.01
0.00
0.01
0.00
0.00
0.00
0.00
0.00
0.07
0.00
0.01
0.00
0.08
0.00
0.00
0.03
0.01
0.02
0.00
0.01
0.00
0.00
0.00
0.13
0.00
0.01
0.01
0.13
0.01
0.00
0.06
0.01
0.02
0.01
0.03
0.00
0.00
0.02
0.26
0.00
0.02
0.01
0.27
0.01
0.00
0.10
0.01
0.03
NA
0.05
0.00
0.00
0.02
0.33
0.00
0.02
0.03
0.36
0.02
0.00
0.14
0.02
0.06
NA
0.07
0.00
0.00
0.02
0.41
0.00
0.04
0.03
0.45
0.02
0.00
0.20
0.04
0.06
NA
NA
0.00
0.01
NA
0.52
NA
0.06
NA
0.66
0.03
0.00
NA
0.05
NA
NA
NA
0.00
0.01
NA
VOP.RC.M .........................................................................................
VOP.RC.L† ........................................................................................
VOP.SC.M ..........................................................................................
VCT.RC.M ..........................................................................................
VCT.RC.L ...........................................................................................
VCT.SC.I ............................................................................................
VCS.SC.I ............................................................................................
SVO.RC.M .........................................................................................
SVO.SC.M ..........................................................................................
SOC.RC.M .........................................................................................
HZO.RC.M .........................................................................................
HZO.RC.L ..........................................................................................
HZO.SC.M ..........................................................................................
HZO.SC.L ...........................................................................................
HCT.SC.I ............................................................................................
mstockstill on PROD1PC66 with PROPOSALS2
* A value of NA means that no energy savings were calculated for this level of efficiency. For example, a vertical open, remote condensing, low
temperature unit (VOP.RC.L) had only six possible energy consumption levels and, therefore, only six possible standards. Level 1 = Baseline, so
there would be no savings at Level 1 and it has been omitted from the table.
** 0.00 indicates savings are less than 0.005 quadrillion Btu.
† The VOP.RC.L equipment class had no projected shipments. It was included in the analysis at the request of the industry.
Below are the NPV results for the
CSLs considered for the 15 equipment
classes of commercial refrigeration
equipment. Results are cumulative and
are shown as the discounted value of
these savings in dollar terms. The
present value of increased total installed
costs is the total installed cost increase
(i.e., the difference between the
standards case and base case),
discounted to 2007, and summed over
the time period in which DOE evaluates
the impact of standards (i.e., from the
effective date of standards, 2012, to the
year 2052 when the last commercial
refrigeration equipment unit is retired).
Savings are decreases in operating
costs (including electricity, repair, and
maintenance) associated with the higher
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Jkt 211001
energy efficiency of commercial
refrigeration equipment units purchased
in the standards case compared to the
base case. Total operating cost savings
are the savings per unit multiplied by
the number of units of each vintage (i.e.,
the year of manufacture) surviving in a
particular year. Commercial
refrigeration equipment consumes
energy and must be maintained over its
entire lifetime. For units purchased in
2042, the operating cost includes energy
consumed and maintenance and repair
costs incurred until the last unit is
retired from service in 2052.
Table II.21 shows the NPV results for
the standard levels considered for
commercial refrigeration equipment
based upon a seven percent discount
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rate. DOE based all results on electricity
price forecasts from the AEO2006
reference case. Detailed results showing
the breakdown of the NPV into national
equipment costs and national operating
costs are provided in appendix I of the
TSD. At a seven percent discount rate,
the range of overall national NPV
benefits calculated for different CSL
scenarios above the baseline was from
$120 million to $1.4 billion. The present
value of the installed cost increase
varied from a low of $70 million to a
high of $1.82 billion. The present value
of the operating cost savings for higher
standards varied from a low of $210
million to a high of $3.14 billion.
E:\FR\FM\26JYP2.SGM
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Federal Register / Vol. 72, No. 143 / Thursday, July 26, 2007 / Proposed Rules
TABLE II.21.—CUMULATIVE NET PRESENT VALUE RESULTS BASED ON A SEVEN PERCENT DISCOUNT RATE (BILLION
2006$)
Standard level (billion 2006$) * **
Equipment class
Level 2
Level 3
Level 4
Level 5
Level 6
Level 7
Level 8
0.03
0.00
0.01
0.00
0.06
0.00
0.00
0.01
0.01
0.01
0.00
0.00
0.00
0.00
0.00
0.07
0.00
0.01
0.01
0.10
0.01
0.00
0.03
0.01
0.03
0.01
0.02
0.00
0.00
0.01
0.12
0.00
0.01
0.01
0.16
0.01
0.00
0.06
0.01
0.02
0.01
0.04
0.00
0.01
0.02
0.25
0.00
0.02
0.01
0.30
0.01
0.00
0.09
0.02
0.03
NA
0.06
0.00
0.01
0.03
0.31
0.00
0.02
0.02
0.37
0.02
0.00
0.13
0.02
0.02
NA
0.08
0.00
0.01
0.03
0.36
NA
0.03
0.00
0.44
0.03
0.00
0.17
0.04
¥0.01
NA
NA
0.00
0.01
NA
0.40
NA
0.02
NA
0.55
0.02
0.00
NA
0.04
NA
NA
NA
0.00
0.01
NA
VOP.RC.M .........................................................................................
VOP.RC.L† ........................................................................................
VOP.SC.M ..........................................................................................
VCT.RC.M ..........................................................................................
VCT.RC.L ...........................................................................................
VCT.SC.I ............................................................................................
VCS.SC.I ............................................................................................
SVO.RC.M .........................................................................................
SVO.SC.M ..........................................................................................
SOC.RC.M .........................................................................................
HZO.RC.M .........................................................................................
HZO.RC.L ..........................................................................................
HZO.SC.M ..........................................................................................
HZO.SC.L ...........................................................................................
HCT.SC.I ............................................................................................
* A value of NA means that no energy savings were calculated for this level of efficiency. For example, a vertical open, remote condensing, low
temperature unit (VOP.RC.L) had only six possible energy consumption levels and, therefore, only six possible standards. Level 1 = Baseline, so
there would be no savings at Level 1 and it has been omitted from the table.
** 0.00 indicates savings are less than 0.005 quadrillion Btu.
† The VOP.RC.L equipment class had no projected shipments. It was included in the analysis at the request of the industry.
Table II.22 provides the NPV results
based on the three percent discount rate
and electricity price forecasts from the
AEO2006 reference case. As with the
NPV results based upon a seven percent
discount rate, detailed results showing
the breakdown of the NPV into national
equipment costs and national operating
costs based upon a three percent
discount rate are provided in appendix
I of the TSD. At a three percent discount
rate, the range of overall NPV benefits
calculated for different CSL scenarios
above the assumed baseline was from
$360 million to $4.03 billion. The
present value of the installed cost varied
from a low of $150 million to a high of
$3.57 billion. The present value of the
operating cost savings for higher
standards varied from a low of $510
million to a high of $7.51 billion.
TABLE II.22.—CUMULATIVE NET PRESENT VALUE RESULTS BASED ON A THREE PERCENT DISCOUNT RATE (BILLION
2006$)
Standard level (billion 2006$) * **
Equipment class
Level 2
Level 3
Level 4
Level 5
Level 6
Level 7
Level 8
0.09
0.00
0.02
0.01
0.15
0.01
0.00
0.03
0.02
0.02
0.00
0.01
0.00
0.00
0.01
0.20
0.00
0.02
0.01
0.27
0.01
0.00
0.09
0.02
0.07
0.02
0.05
0.00
0.01
0.01
0.35
0.00
0.03
0.02
0.42
0.02
0.00
0.17
0.03
0.06
0.02
0.10
0.00
0.01
0.06
0.69
0.00
0.06
0.03
0.80
0.02
0.00
0.26
0.05
0.08
NA
0.17
0.00
0.01
0.07
0.86
0.00
0.06
0.05
1.00
0.07
0.00
0.36
0.05
0.07
NA
0.21
0.00
0.02
0.08
1.03
NA
0.08
0.03
1.21
0.07
0.00
0.49
0.12
0.03
NA
NA
0.00
0.02
NA
1.20
NA
0.08
NA
1.59
0.07
0.00
NA
0.12
NA
NA
NA
0.00
0.02
NA
VOP.RC.M .........................................................................................
VOP.RC.L † ........................................................................................
VOP.SC.M ..........................................................................................
VCT.RC.M ..........................................................................................
VCT.RC.L ...........................................................................................
VCT.SC.I ............................................................................................
VCS.SC.I ............................................................................................
SVO.RC.M .........................................................................................
SVO.SC.M ..........................................................................................
SOC.RC.M .........................................................................................
HZO.RC.M .........................................................................................
HZO.RC.L ..........................................................................................
HZO.SC.M ..........................................................................................
HZO.SC.L ...........................................................................................
HCT.SC.I ............................................................................................
mstockstill on PROD1PC66 with PROPOSALS2
* A value of NA means that no energy savings were calculated for this level of efficiency. For example, a vertical open, remote condensing, low
temperature unit (VOP.RC.L) had only six possible energy consumption levels and, therefore, only six possible standards. Level 1 = Baseline, so
there would be no savings at Level 1 and it has been omitted from the table.
** 0.00 indicates savings are less than 0.005 quadrillion Btu.
† The VOP.RC.L equipment class had no projected shipments. It was included in the analysis at the request of the industry.
J. Life-Cycle Cost Sub-Group Analysis
The LCC sub-group analysis evaluates
impacts of standards on identifiable
groups of customers, such as customers
of different business types, which may
be disproportionately affected by
standards. In the NOPR phase of this
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rulemaking, DOE will analyze the LCCs
and PBPs for customers that fall into
those groups. The analysis will
determine whether any particular group
of commercial consumers would be
adversely affected by any of the CSLs.
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Also, DOE plans to examine
variations in energy prices and energy
use that might affect the NPV of a
standard to customer sub-populations.
To the extent possible, DOE will obtain
estimates of the variability of each input
parameter and consider this variability
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mstockstill on PROD1PC66 with PROPOSALS2
in the calculation of customer impacts.
Variations in energy use for a particular
equipment type may depend on factors
such as climate and type of business.
DOE will determine the effect on
customer sub-groups using the LCC
spreadsheet model. The spreadsheet
model used for the LCC analysis can be
used with different data inputs. The
standard LCC analysis includes various
customer types that use commercial
refrigeration equipment. DOE can
analyze the LCC for any sub-group, such
as a convenience store, by using the LCC
spreadsheet model and sampling only
that sub-group. Details of this model are
explained in section II.G, which
describes the LCC and PBP analyses.
DOE will be especially sensitive to
purchase price increases (‘‘first-cost’’
increases) to avoid negative impacts on
identifiable population groups such as
small businesses (i.e., those with low
annual revenues), which may not be
able to afford a significant increase in
the price of commercial refrigeration
equipment. For such customers that are
sensitive to price increases, increases in
first costs of equipment can preclude
the purchase of a new model. As a
result, some customers may retain
equipment past its useful life. This older
equipment is generally less efficient to
begin with, and its efficiency may
deteriorate further if it is retained
beyond its useful life. Large increases in
first cost also can possibly preclude the
purchase and use of equipment
altogether, resulting in a potentially
large loss of utility to the customer.
Although business income and annual
revenues are not known for the types of
businesses analyzed in the LCC
analysis, the floor space occupied by a
business may be an indicator of its
annual income. If this is generally true,
then DOE will be able to perform subgroup analyses on smaller businesses.
As stated earlier, DOE can also use SBA
data for businesses with 750 or fewer
employees as a proxy for ‘‘smaller
businesses.’’
K. Manufacturer Impact Analysis
The purpose of the manufacturer
impact analysis is to identify the likely
impacts of energy conservation
standards on manufacturers. DOE will
conduct this analysis with input from
manufacturers and other interested
parties and will apply this methodology
to its evaluation of standards. DOE will
also consider financial impacts and a
wide range of quantitative and
qualitative industry impacts that might
occur following the adoption of a
standard. For example, a particular
standard level, if adopted by DOE, could
require changes to commercial
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refrigeration equipment manufacturing
practices. DOE will identify and
understand these impacts through
interviews with manufacturers and
other stakeholders during the NOPR
stage of its analysis.
Recently, DOE announced changes to
the format of the manufacturer impact
analysis through a report submitted to
Congress on January 31, 2006 (as
required by section 141 of EPACT 2005),
entitled ‘‘Energy Conservation
Standards Activities.’’ Previously, DOE
did not report any manufacturer impact
analysis results during the ANOPR
phase; however, under this new format,
DOE has collected, evaluated, and
reported preliminary information and
data in the ANOPR (see section II.K.6 of
this ANOPR). Such preliminary
information includes the anticipated
conversion capital expenditures by
efficiency level and the corresponding
anticipated impacts on jobs. DOE
solicited this information during the
ANOPR engineering analysis
manufacturer interviews and reported
the results in the preliminary
manufacturer impact analysis (see
chapter 12 of the TSD).
DOE conducts the manufacturer
impact analysis in three phases, and
further tailors the analytical framework
based on stakeholder comments. In
Phase I, an industry profile is created to
characterize the industry, and a
preliminary manufacturer impact
analysis is conducted to identify
important issues that require
consideration. Results of the Phase I
analysis are presented in the ANOPR
TSD. In Phase II, an industry cash flow
model and an interview questionnaire
are prepared to guide subsequent
discussions. In Phase III, manufacturers
are interviewed, and the impacts of
standards are assessed both
quantitatively and qualitatively.
Industry and sub-group cash flow and
net present value are assessed through
use of the Government Regulatory
Impact Model (GRIM). Then impacts on
competition, manufacturing capacity,
employment, and regulatory burden are
assessed based on manufacturer
interview feedback and discussions.
Results of the Phase II and Phase III
analyses are presented in the NOPR
TSD. For more detail on the
manufacturer impact analysis, refer to
chapter 12 of the TSD.
1. Sources of Information for the
Manufacturer Impact Analysis
Many of the analyses described above
provide important information
applicable to the MIA. Such information
includes manufacturing costs and prices
from the engineering analysis, retail
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price forecasts, and shipments forecasts.
DOE will supplement this information
with company financial data and other
information gathered during interviews
its contractor conducts with
manufacturers. This interview process
plays a key role in the manufacturer
impact analysis because it allows
interested parties to privately express
their views on important issues. To
preserve confidentiality, DOE aggregates
these perspectives across manufacturers,
creating a combined opinion or estimate
for DOE. This process enables DOE to
incorporate sensitive information from
manufacturers in the rulemaking
process without specifying precisely
which manufacturer provided a certain
set of data.
DOE conducts detailed interviews
with manufacturers to gain insight into
the range of potential impacts of
standards. During the interviews, DOE
typically solicits both quantitative and
qualitative information on the potential
impacts of efficiency levels on sales,
direct employment, capital assets, and
industrial competitiveness. DOE prefers
an interactive interview process, rather
than a written response to a
questionnaire, because it helps clarify
responses and identify additional
issues. Before the interviews, DOE will
circulate a draft document showing the
estimates of the financial parameters
based on publicly available information.
DOE will solicit comments and
suggestions on these estimates during
the interviews.
DOE will ask interview participants to
identify any confidential information
that they have provided, either orally or
in writing. DOE will consider all
information collected, as appropriate, in
its decision-making process. However,
DOE will not make confidential
information available in the public
record. DOE also will ask participants to
identify all information that they wish
to have included in the public record,
but that they do not want to have
associated with their interview. DOE
will incorporate this information into
the public record, but will report it
without attribution.
DOE will collate the completed
interview questionnaires and prepare a
summary of the major issues. For more
detail on the methodology used in the
manufacturer impact analysis, refer to
chapter 12 of the TSD.
2. Industry Cash Flow Analysis
The industry cash flow analysis relies
primarily on the GRIM. DOE uses the
GRIM to analyze the financial impacts
of more stringent energy conservation
standards on the industry.
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The GRIM analysis uses several
factors to determine annual cash flows
from a new standard: Annual expected
revenues; manufacturer costs (including
COGS, depreciation, research and
development, selling, general and
administrative expenses); taxes; and
conversion capital expenditures. DOE
compares the results against base case
projections that involve no new
standards. The financial impact of new
standards is the difference between the
two sets of discounted annual cash
flows. For more information on the
industry cash flow analysis, refer to
chapter 12 of the TSD.
mstockstill on PROD1PC66 with PROPOSALS2
3. Manufacturer Sub-Group Analysis
Industry cost estimates are not
adequate to assess differential impacts
among sub-groups of manufacturers. For
example, small and niche
manufacturers, or manufacturers whose
cost structure differs significantly from
the industry average, could experience a
more negative impact. Ideally, DOE
would consider the impact on every
firm individually; however, it typically
uses the results of the industry
characterization to group manufacturers
exhibiting similar characteristics.
During the interview process, DOE
will discuss the potential sub-groups
and sub-group members it has identified
for the analysis. DOE will encourage the
manufacturers to recommend subgroups or characteristics that are
appropriate for the sub-group analysis.
For more detail on the manufacturer
sub-group analysis, refer to chapter 12
of the TSD.
4. Competitive Impacts Assessment
DOE must also consider whether a
new standard is likely to reduce
industry competition, and the Attorney
General must determine the impacts, if
any, of any reduced competition. DOE
will make a determined effort to gather
and report firm-specific financial
information and impacts. The
competitive analysis will focus on
assessing the impacts on smaller
manufacturers. DOE will base this
assessment on manufacturing cost data
and on information collected from
interviews with manufacturers. The
manufacturer interviews will focus on
gathering information to help assess
asymmetrical cost increases to some
manufacturers, increased proportions of
fixed costs that could increase business
risks, and potential barriers to market
entry (e.g., proprietary technologies).
5. Cumulative Regulatory Burden
DOE recognizes and seeks to mitigate
the overlapping effects on
manufacturers of new or revised DOE
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standards and other regulatory actions
affecting the same equipment. DOE will
analyze and consider the impact on
manufacturers of multiple, equipmentspecific regulatory actions.
Based on its own research and
discussions with manufacturers, DOE
identified several regulations relevant to
commercial refrigeration equipment,
including: existing or new standards for
commercial refrigeration equipment,
phaseout of hydrochlorofluorocarbons
and foam insulation blowing agents,
standards for other equipment made by
commercial refrigeration equipment
manufacturers, State energy
conservation standards, and
international energy conservation
standards. DOE will study the potential
impacts of these cumulative burdens in
greater detail during the MIA conducted
during the NOPR phase.
6. Preliminary Results for the
Manufacturer Impact Analysis
DOE received views from
manufacturers about what they
perceived to be the possible impact of
potential new standards on their future
profitability. As stated by
manufacturers, a new energy
conservation standard has the potential
to impact financial performance in
several different ways. The capital
investment needed to upgrade or
redesign equipment and equipment
platforms before they have reached the
end of their useful life can require
conversion costs that otherwise would
not be expended, resulting in stranded
investments. In addition, more stringent
standards can result in higher per-unit
costs that may deter some customers
from buying higher-margin units with
more features, thereby decreasing
manufacturer profitability.
DOE estimates that a commercial
refrigeration equipment production line
would have a life cycle of
approximately 15 to 20 years in the
absence of standards. During that
period, manufacturers would not make
major changes that altered the
underlying platforms. Thus, a standard
that took effect and resulted in a major
equipment platform redesign before the
end of the platform’s life would strand
a portion of the earlier capital
investments.
DOE asked manufacturers what level
of conversion costs they anticipated if
energy conservation standards were to
take effect. In general, manufacturers
expected only conversion costs
associated with redesigning of
insulation foaming fixtures. One
manufacturer estimated this to be
approximately $10 million in new
fixtures, research, and testing.
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41201
Manufacturers indicated there would
not be a significant amount of stranded
assets because of standards, but any
stranded assets that did exist would be
primarily in the insulation foaming
fixtures. The manufacturers also
indicated that standards would have
little effect on capacity and utilization.
The impact of new energy
conservation standards on employment
is an important consideration in the
rulemaking process. To assess how
domestic employment patterns might be
affected by new energy conservation
standards for commercial refrigeration
equipment, DOE posed several
questions related to this topic to
manufacturers.
Over the past several years, some
commercial refrigeration equipment
manufacturers have moved a portion of
their production out of the United
States, primarily driven by concerns
about profitability and the opportunity
for lower labor costs. Mexico is the most
common location for U.S. manufacturers
to establish new production capacity,
since it offers low labor rates relative to
the United States and proximity to the
U.S. market. Manufacturers indicated
that they anticipate new standards will
accelerate the trend to manufacture
commercial refrigeration equipment
outside of the United States. Further,
new standards may accelerate the rate at
which commercial refrigeration
equipment production is moved to
Mexico because if manufacturers need
to make large capital investments to
produce redesigned equipment
platforms, they have strong financial
incentives to invest in a location with
lower labor costs.
Manufacturers indicated that new
standards could cause them to exit one
or more portions of the markets affected
by the standards. Thus, standards could
affect the degree of industry
consolidation, that is, the degree to
which a limited number of companies
dominate a market. At present, four
companies account for a large majority
of commercial refrigeration equipment
sales.
DOE asked manufacturers to what
degree they expected industry
consolidation to occur in the absence of
standards. In general, manufacturers felt
that there would be little industry
consolidation in the future. Historically,
the commercial refrigeration equipment
industry has not seen extensive
consolidation, although several
manufacturers have been bought and
sold by parent companies in the past.
For more preliminary results for the
manufacturer impact analysis such as
other impacts on financial performance,
impacts on utility and performance, and
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additional details on the impacts of
cumulative regulatory burden, refer to
chapter 12 of the TSD.
mstockstill on PROD1PC66 with PROPOSALS2
L. Utility Impact Analysis
The utility impact analysis estimates
the effects on the utility industry of
reduced energy consumption due to
improved appliance efficiency. The
analysis compares modeling results for
the base case with results for each
candidate standards case. It consists of
forecasted differences between the base
and standards cases for electricity
generation, installed capacity, sales, and
prices.
To estimate these effects of proposed
commercial refrigeration equipment
standard levels on the electric utility
industry, DOE intends to use a variant
of the EIA’s NEMS.24 EIA uses NEMS to
produce the 2007 Annual Energy
Outlook (AEO). DOE will use a variant
known as NEMS–Building Technologies
(BT) to provide key inputs to the
analysis. NEMS–BT produces a widely
recognized reference case forecast for
the United States and is available in the
public domain.
The use of NEMS–BT for the utility
impact analysis offers several
advantages. As the official DOE energy
forecasting model, it relies on a set of
assumptions that are transparent and
have received wide exposure and
commentary. NEMS–BT allows an
estimate of the interactions between the
various energy supply and demand
sectors and the economy as a whole.
The utility impact analysis will
determine the changes in installed
capacity and generation by fuel type
produced by each CSL, as well as
changes in electricity sales to the
commercial sector.
DOE conducts the utility analysis as
a policy deviation from the AEO2007,
applying the same basic set of premises.
For example, the operating
characteristics (e.g., energy conversion
efficiency, emissions rates) of future
electricity generating plants are as
specified in the AEO2007 reference
case, as are the prospects for natural gas
supply. DOE also will explore
deviations from some of the reference
case premises, to represent alternative
futures. Two alternative scenarios use
24 For more information on NEMS, please refer to
the U.S. Department of Energy, Energy Information
Administration documentation. A useful summary
is National Energy Modeling System: An Overview
2000, DOE/EIA–0581(2000), March 2000. DOE/EIA
approves use of the name NEMS to describe only
an official version of the model without any
modification to code or data. Because this analysis
entails some minor code modifications and the
model is run under various policy scenarios that are
variations on DOE/EIA assumptions, in this
analysis, DOE refers to it by the name NEMS–BT.
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the high and low economic growth cases
of AEO2007. (The reference case
corresponds to medium growth.) The
high economic growth case projects
higher growth rates for population, labor
force, and labor productivity, resulting
in lower predicted inflation and interest
rates relative to the reference case and
higher overall aggregate economic
growth. The opposite is true for the low
growth case. Starting in 2012, the high
growth case predicts growth in per
capita gross domestic product of 3.5
percent per year, compared with 3.0
percent per year in the reference case
and 2.5 percent per year in the low
growth case. While supply-side growth
determinants are varied in these cases,
AEO2007 uses the same reference case
energy prices for all three economic
growth cases. Different economic
growth scenarios will affect the rate of
growth of electricity demand.
The electric utility industry analysis
will consist of NEMS–BT forecasts for
generation, installed capacity, sales, and
prices. The NEMS–BT provides
reference case load shapes for several
end uses, including commercial
refrigeration. The model uses predicted
growth in demand for each end use to
build up a projection of the total electric
system load growth for each region,
which it uses in turn to predict the
necessary additions to capacity. The
NEMS–BT accounts for the
implementation of energy conservation
standards by decrementing the
appropriate reference case load shape.
DOE determines the size of the
decrement using data for the per-unit
energy savings developed in the LCC
and PBP analyses (see chapter 8 of the
TSD) and the forecast of shipments
developed for the NIA (see chapter 9 of
the TSD).
The predicted reduction in capacity
additions is sensitive to the peak load
impacts of the standard. DOE will
investigate the need to adjust the hourly
load profiles that include this end use
in NEMS–BT. Since the AEO2007
version of NEMS–BT forecasts only to
the year 2030, DOE must extrapolate the
results to 2042. DOE will use the
approach developed by EIA to forecast
fuel prices for the FEMP. FEMP uses
these prices to estimate LCCs of Federal
equipment procurements. For petroleum
products, EIA uses the average growth
rate for the world oil price over the
years 2010 to 2025, in combination with
the refinery and distribution markups
from the year 2025, to determine the
regional price forecasts. Similarly, EIA
derives natural gas prices from an
average growth rate figure in
combination with regional price
margins from the year 2025. Results of
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the analysis will include changes in
commercial electricity sales, and
installed capacity and generation by fuel
type, for each trial standard level, in
five-year, forecasted increments
extrapolated to the year 2040.
M. Employment Impact Analysis
DOE estimates the impacts of
standards on employment for
equipment manufacturers, relevant
service industries, energy suppliers, and
the economy in general. Both indirect
and direct employment impacts are
covered. Direct employment impacts
would result if standards led to a change
in the number of employees at
manufacturing plants and related
supply and service firms. Direct impact
estimates are covered in the MIA.
Indirect employment impacts are
impacts on the national economy other
than in the manufacturing sector being
regulated. Indirect impacts may result
both from expenditures shifting among
goods (substitution effect) and changes
in income which lead to a change in
overall expenditure levels (income
effect). DOE defines indirect
employment impacts from standards as
net jobs eliminated or created in the
general economy as a result of increased
spending driven by the increased
equipment prices and reduced spending
on energy.
DOE expects new standards to
increase the total installed cost of
equipment (includes MSP, sales taxes,
distribution channel markups, and
installation cost). DOE also expects the
new standards to decrease energy
consumption, and thus expenditures on
energy. Over time, increased total
installed cost is paid back through
energy savings. The savings in energy
expenditures may be spent on new
commercial investment and other items.
Using an input/output model of the
U.S. economy, this analysis seeks to
estimate the effects on different sectors
and the net impact on jobs. DOE will
estimate national employment impacts
for major sectors of the U.S. economy in
the NOPR, using public and
commercially available data sources and
software. DOE will make all methods
and documentation available for review.
DOE developed Impact of Sector
Energy Technologies (ImSET), a
spreadsheet model of the U.S. economy
that focuses on 188 sectors most
relevant to industrial, commercial, and
residential building energy use.25
ImSET is a special-purpose version of
25 Roop, J. M., M. J. Scott, and R. W. Schultz.
2005. ImSET: Impact of Sector Energy
Technologies. PNNL–15273. Pacific Northwest
National Laboratory, Richland, WA.
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the U.S. Benchmark National InputOutput (I–O) model, which has been
designed to estimate the national
employment and income effects of
energy saving technologies that are
deployed by the DOE Office of Energy
Efficiency and Renewable Energy. In
comparison with previous versions of
the model used in earlier rulemakings,
the current version allows for more
complete and automated analysis of the
essential features of energy efficiency
investments in buildings, industry,
transportation, and the electric power
sectors.
The ImSET software includes a
personal computer-based I–O model
with structural coefficients to
characterize economic flows among the
188 sectors. ImSET’s national economic
I–O structure is based on the 1997
Benchmark U.S. table (Lawson, et al.
2002),26 specially aggregated to 188
sectors. The time scale of the model is
50 years.
The model is a static I–O model,
which allows a great deal of flexibility
concerning the types of energy
efficiency effects that can be
accommodated. For example, certain
economic effects of energy efficiency
improvements require an assessment of
inter-industry purchases, which is
handled in the model. Some energy
efficiency investments will not only
reduce the costs of energy in the
economy but the costs of labor and other
goods and services as well, which is
accommodated through a recalculation
of the I–O structure in the model.
Output from the ImSET model can be
used to estimate changes in
employment, industry output, and wage
income in the overall U.S. economy
resulting from changes in expenditures
in the various sectors of the economy.
Although DOE intends to use ImSET
for its analysis of employment impacts,
it welcomes input on other tools and
factors it might consider. For more
information on the employment impacts
analysis, refer to chapter 14 of the TSD.
mstockstill on PROD1PC66 with PROPOSALS2
N. Environmental Assessment
DOE will assess the impacts of
proposed commercial refrigeration
equipment standard levels on certain
environmental indicators, using NEMS–
BT to provide key inputs to the analysis.
The environmental assessment produces
results in a manner similar to those
provided in the AEO.
The intent of the environmental
assessment is to provide estimates of
26 Lawson, Ann M., Kurt S. Bersani, Mahnaz
Fahim-Nader, and Jiemin Guo. 2002. ‘‘Benchmark
Input-Output Accounts of the U.S. Economy, 1997,’’
Survey of Current Business, December, pp. 19–117.
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reduced powerplant emissions and to
fulfill requirements to properly quantify
and consider the environmental effects
of all new Federal rules. The
environmental assessment that will be
produced by NEMS–BT considers two
pollutants (sulfur dioxide (SO2) and
nitrogen oxides (NOX)) and one other
emission (carbon). The only form of
carbon the NEMS–BT model tracks is
carbon dioxide (CO2). Therefore, the
only carbon discussed in this analysis is
in the form of CO2. For each of the CSLs,
DOE will calculate total undiscounted
and discounted emissions using NEMS–
BT and will use external analysis as
needed.
DOE will conduct the environmental
assessment as an incremental policy
impact (i.e., a commercial refrigeration
equipment standard) of the AEO2007
forecast, applying the same basic set of
assumptions used in AEO2007. For
example, the emissions characteristics
of an electricity generating plant will be
exactly those used in AEO2007. Also,
forecasts conducted with NEMS–BT
consider the supply-side and demandside effects on the electric utility
industry. Thus, DOE’s analysis will
account for any factors affecting the type
of electricity generation and, in turn, the
type and amount of airborne emissions
generated by the utility industry. The
NEMS–BT model tracks carbon
emissions with a specialized carbon
emissions estimation subroutine,
producing reasonably accurate results
due to the broad coverage of all sectors
and inclusion of interactive effects. Past
experience with carbon results from
NEMS–BT suggests that emissions
estimates are somewhat lower than
emissions based on simple average
factors. One of the reasons for this
divergence is that NEMS–BT tends to
predict that conservation displaces
generating capacity in future years. On
the whole, NEMS–BT provides carbon
emissions results of reasonable
accuracy, at a level consistent with
other Federal published results.
NEMS–BT also reports SO2 and NOX,
which DOE has reported in past
analyses. The Clean Air Act
Amendments of 1990 set an SO2
emissions cap on all power generation.
The attainment of this target, however,
is flexible among generators through the
use of emissions allowances and
tradable permits. Although NEMS–BT
includes a module for SO2 allowance
trading and delivers a forecast of SO2
allowance prices, accurate simulation of
SO2 trading implies that the effect of
energy conservation standards on
physical emissions will be zero because
emissions will always be at or near the
ceiling. This fact has caused
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considerable confusion in the past.
However, there may be an SO2 benefit
from energy conservation, in the form of
a lower SO2 allowance price. Since the
impact of any one standard on the
allowance price is likely small and
highly uncertain, DOE does not plan to
monetize any potential SO2 benefit.
NEMS also has an algorithm for
estimating NOX emissions from power
generation. The impact of these
emissions, however, will be affected by
the Clean Air Interstate Rule (CAIR),
which the U.S. Environmental
Protection Agency issued on March 10,
2005.27 CAIR will permanently cap
emissions of NOX in 28 eastern States
and the District of Columbia. 70 FR
25162 (May 12, 2005). As with SO2
emissions, a cap on NOX emissions
means that equipment energy
conservation standards may have no
physical effect on these emissions.
When NOX emissions are subject to
emissions caps, DOE’s emissions
reduction estimate corresponds to
incremental changes in the prices of
emissions allowances in cap-and-trade
emissions markets rather than physical
emissions reductions. Therefore, while
the emissions cap may mean that
physical emissions reductions will not
result from standards, standards could
produce an environmental-related
economic benefit in the form of lower
prices for emissions allowances.
However, as with SO2 allowance prices,
DOE does not plan to monetize this
benefit because the impact on the NOX
allowance price from any single energy
conservation standard is likely small
and highly uncertain.
The results for the environmental
assessment are similar to a complete
NEMS run as published in the
AEO2007. These results include power
sector emissions for SO2, NOX, and
carbon in five-year forecasted
increments extrapolated to 2042. The
outcome of the analysis for each CSL is
reported as a deviation from the
AEO2007 reference (base) case.
For more detail on the environmental
assessment, refer to the environmental
assessment report of the TSD.
O. Regulatory Impact Analysis
DOE will prepare a draft regulatory
impact analysis in compliance with
Executive Order 12866, ‘‘Regulatory
Planning and Review,’’ which will be
subject to review by the Office of
Management and Budget’s Office of
Information and Regulatory Affairs
(OIRA). 58 FR 51735 (September 30,
1993).
27 See
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As part of the regulatory impact
analysis (and as discussed in section
II.K of this ANOPR), DOE will identify
and seek to mitigate the overlapping
effects on manufacturers of new or
revised DOE standards and other
regulatory actions affecting the same
equipment. Through manufacturer
interviews and literature searches, DOE
will compile information on burdens
from existing and impending
regulations affecting commercial
refrigeration equipment. DOE also seeks
input from stakeholders about
regulations it should consider.
The regulatory impact analysis also
will address the potential for nonregulatory approaches to supplant or
augment energy conservation standards
to improve the efficiency of commercial
refrigeration equipment. The following
list includes non-regulatory means of
achieving energy savings that DOE can
consider.
• No new regulatory action
• Consumer tax credits
• Manufacturer tax credits
• Performance standards
• Rebates
• Voluntary energy efficiency targets
• Early replacement
• Bulk government purchases
The TSD, in support of DOE’s NOPR,
will include an analysis of each
alternative, the methodology for which
is discussed briefly below.
DOE will use the NES spreadsheet
model (as discussed in sections I.B.5
and II.I of this ANOPR) to calculate the
NES and the NPV corresponding to each
alternative to the proposed standards.
The details of NES spreadsheet model
are discussed in chapter 10 of the TSD.
To compare each alternative
quantitatively to the proposed
conservation standards, it will be
necessary to quantify the effect of each
alternative on the purchase and use of
energy efficient commercial equipment.
Once each alternative is properly
quantified, DOE will make the
appropriate revisions to the inputs in
the NES spreadsheet model. The
following are key inputs that DOE may
revise in the NES spreadsheet model.
• Energy prices and escalation factors
• Implicit market discount rates for
trading off purchase price against
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operating expense when choosing
equipment efficiency
• Customer purchase price, operating
cost, and income elasticities
• Customer price versus efficiency
relationships
• Equipment stock data (purchase of
new equipment or turnover rates for
inventories)
The following are the key measures of
the impact of each alternative.
• Commercial energy use (EJ = 1018
joule) is the cumulative energy use of
the equipment from the effective date of
the new standard to the year 2035. DOE
will report electricity consumption as
primary energy.
• NES is the cumulative national
energy use from the base case projection
less the alternative policy case
projection.
• NPV is the value of future operating
cost savings from commercial
refrigeration equipment bought in the
period from the effective date of the new
standard to the year 2035. DOE
calculates the NPV as the difference
between the present value of equipment
and operating expenditures (including
energy) in the base case, and the present
value of expenditures in each
alternative policy case. DOE discounts
future operating and equipment
expenditures to 2006 using a seven
percent real discount rate. It calculates
operating expenses (including energy)
for the life of the equipment.
For more information on the
regulatory impact analysis, refer to the
regulatory impact analysis report in the
TSD.
III. Candidate Energy Conservation
Standards Levels
DOE will specify CSLs in the ANOPR,
but will not propose a particular
standard. DOE selected between four
and eight energy consumption levels for
each commercial refrigeration
equipment class for use in the LCC and
NIA. Based on the results of the ANOPR
analysis, DOE selects from the CSLs
analyzed in the ANOPR a subset for a
more detailed analysis for the NOPR
stage of the rulemaking. The range of
CSLs selected includes: the most energy
efficient level or most energy efficient
combination of design options, the
combination of design options or
PO 00000
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Fmt 4701
Sfmt 4702
efficiency level with the minimum LCC,
and a combination of design options or
efficiency level with a PBP of not more
than three years. Additionally, CSLs
that incorporate noteworthy
technologies or fill in large gaps
between efficiency levels of other CSLs
may be selected.
DOE will include the most energy
efficient level analyzed as a CSL. The
level with the maximum LCC savings
was identified for each equipment
category. In some instances this was
identical to the most efficient level
analyzed. In other cases it was the next
most efficient level analyzed. The
calculated national average PBPs from
the LCC analysis suggested that many of
the energy efficiency levels analyzed
provided a national average payback of
less than three years when compared
with the baseline equipment. DOE opted
to designate as a CSL the maximum
energy efficiency level that provided for
a payback of less than three years. These
three selection criteria provided only
one or two CSLs selections per
equipment class. Therefore, DOE
selected two or three lower energy
consumption levels for each equipment
class in order to provide greater
variation in CSLs for its future analysis.
The selection of these additional levels
reflects DOE review of the relative cost
effectiveness of the levels when
compared with the baseline equipment
and when compared with other
efficiency levels. Four CSLs were
selected for each equipment class. Table
III.1 shows the selected CSLs based on
the energy consumption for the specific
equipment analyzed in the engineering
analysis. DOE specifically seeks
feedback on its selection of specific
candidate standard levels for the post
ANOPR analysis phase. This is
identified as Issue 13 under ‘‘Issues on
Which DOE Seeks Comment’’ in section
IV.E of this ANOPR.
DOE will refine its final selection of
CSLs for further analysis after receiving
input from stakeholders on the ANOPR
and after any revision of the ANOPR
analyses. At that point, the CSLs will be
recast as Trial Standard Levels (TSLs).
DOE will analyze specific TSLs during
the post-ANOPR analysis and will
report the results of that analysis in the
NOPR.
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TABLE III.1.—CANDIDATE STANDARD LEVELS AND FACTORS CONSIDERED IN THEIR SELECTION FOR FUTURE ANALYSIS
Candidate standard level selection considerations
Equipment class
Maximum
efficiency
level
Level
Level
Level
Level
Level
Level
Level
Level
Level
Level
Level
Level
Level
Level
Level
VOP.RC.M .............................................................
VOP.RC.L ..............................................................
VOP.SC.M ..............................................................
VCT.RC.M ..............................................................
VCT.RC.L ...............................................................
VCT.SC.I ................................................................
VCS.SC.I ................................................................
SVO.RC.M .............................................................
SVO.SC.M ..............................................................
SOC.RC.M .............................................................
HZO.RC.M .............................................................
HZO.RC.L ..............................................................
HZO.SC.M ..............................................................
HZO.SC.L ...............................................................
HCT.SC.I ................................................................
Because the equipment classes cover
a variety of equipment sizes, DOE has
suggested defining the standard in terms
of upper limits on daily energy
consumption (CDEC or TDEC as
provided for remote condensing and
self-contained equipment, respectively)
normalized by TDA for remote
condensing commercial equipment with
transparent doors or without doors,
commercial ice-cream freezers with
transparent doors, and self-contained
Maximum
efficiency
level with
positive
LCC
savings
Level
Level
Level
Level
Level
Level
Level
Level
Level
Level
Level
Level
Level
Level
Level
8
6
8
7
8
8
8
7
8
7
4
6
8
8
6
.....
.....
.....
.....
.....
.....
.....
.....
.....
.....
.....
.....
.....
.....
.....
8
6
8
7
8
8
8
7
8
7
4
6
8
8
6
.....
.....
.....
.....
.....
.....
.....
.....
.....
.....
.....
.....
.....
.....
.....
Efficiency
level with
minimum
LCC
Level
Level
Level
Level
Level
Level
Level
Level
Level
Level
Level
Level
Level
Level
Level
8
4
7
6
8
7
7
7
7
5
4
6
8
8
6
Highest
efficiency
level with
PBP <3
years
.....
.....
.....
.....
.....
.....
.....
.....
.....
.....
.....
.....
.....
.....
.....
Level
Level
Level
Level
Level
Level
Level
Level
Level
Level
Level
Level
Level
Level
Level
commercial equipment without doors.
DOE has suggested defining the
standard levels in terms of maximum
rated daily energy consumption (CDEC
or TDEC as provided for remote
condensing and self-contained
equipment, respectively) normalized by
refrigerated volume (V, as measured by
ANSI/AHAM Standard HRF–1–2004)
for remote condensing commercial
refrigerators, commercial freezers, and
commercial refrigerators-freezers with
7
6
7
6
8
8
8
6
8
5
4
6
8
8
6
Additional candidate standard level
selected for future analysis
.....
.....
.....
.....
.....
.....
.....
.....
.....
.....
.....
.....
.....
.....
.....
Level
Level
Level
Level
Level
Level
Level
Level
Level
Level
Level
Level
Level
Level
Level
6
5
5
5
7
6
6
4
5
4
3
5
7
7
5
.....
.....
.....
.....
.....
.....
.....
.....
.....
.....
.....
.....
.....
.....
.....
Level
Level
Level
Level
Level
Level
Level
Level
Level
Level
Level
Level
Level
Level
Level
4.
3.
3.
3.
5 .....
3.
5.
2.
3.
3.
2.
4 .....
6 .....
6 .....
4 .....
Level 3.
Level
Level
Level
Level
3.
4.
3.
3.
solid doors and for commercial icecream freezers with solid doors. The
industry supplied cost-efficiency curves
are in the form of CDEC normalized by
TDA (kWh/day/ft2). In the engineering
analysis, DOE normalized the CDEC for
each efficiency level by TDA or
refrigerated volume. Table III.2 presents
the CSLs for the analyzed equipment
classes in terms of these normalized
metrics.
TABLE III.2.—CANDIDATE STANDARD LEVELS FOR ANALYZED EQUIPMENT CLASSES EXPRESSED IN TERMS OF THE
NORMALIZED TEST METRICS
Candidate standard level
in order of efficiency
Equipment class
Test metric
VOP.RC.M .......................
VOP.RC.L ........................
VOP.SC.M .......................
VCT.RC.M .......................
VCT.RC.L ........................
VCT.SC.I .........................
VCS.SC.I .........................
SVO.RC.M .......................
SVO.SC.M .......................
SOC.RC.M ......................
HZO.RC.M .......................
HZO.RC.L ........................
HZO.SC.M .......................
HZO.SC.L ........................
HCT.SC.I .........................
CDEC/TDA kWh/day/ft2 ..
CDEC/TDA kWh/day/ft2 ..
TDEC/TDA kWh/day/ft2 ...
CDEC/TDA kWh/day/ft2 ..
CDEC/TDA kWh/day/ft2 ..
TDEC/TDA kWh/day/ft2 ...
TDEC/V kWh/day/ft3 .......
CDEC/TDA kWh/day/ft2 ..
TDEC/TDA kWh/day/ft2 ...
CDEC/TDA kWh/day/ft2 ..
CDEC/TDA kWh/day/ft2 ..
CDEC/TDA kWh/day/ft2 ..
TDEC/TDA kWh/day/ft2 ...
TDEC/TDA kWh/day/ft2 ...
TDEC/TDA kWh/day/ft2 ...
Candidate standard levels for equipment analyzed
expressed in terms of the test metric
mstockstill on PROD1PC66 with PROPOSALS2
Baseline
When an energy conservation
standard is defined for an equipment
class, DOE must consider how to
express the level in a manner suitable
for all equipment within that class. This
is of particular concern when the rating
is in terms of energy consumption and
there is variation of energy consumption
within a class due to variation in
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16:34 Jul 25, 2007
Jkt 211001
CSL1
CSL2
CSL3
CSL4
Level
Level
Level
Level
Level
Level
Level
Level
Level
Level
Level
Level
Level
Level
Level
Level
Level
Level
Level
Level
Level
Level
Level
Level
Level
Level
Level
Level
Level
Level
Level
Level
Level
Level
Level
Level
Level
Level
Level
Level
Level
Level
Level
Level
Level
Level
Level
Level
Level
Level
Level
Level
Level
Level
Level
Level
Level
Level
Level
Level
Level
Level
Level
Level
Level
Level
Level
Level
Level
Level
Level
Level
Level
Level
Level
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
4
3
3
3
3
3
5
2
3
3
1
3
4
3
3
6
4
5
5
5
6
6
4
5
4
2
4
6
6
4
7
5
7
6
7
7
7
6
7
5
3
5
7
7
5
8
6
8
7
8
8
8
7
8
7
4
6
8
8
6
equipment size or capacity. DOE
believes that TDA captures the most
significant driver behind capacityrelated energy consumption differences
between like equipment designs within
an equipment class (see section II.A.2 of
the ANOPR). For this reason, DOE has
suggested that the maximum energy
PO 00000
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Sfmt 4702
Baseline
CSL1
1.08
2.93
2.55
0.54
1.06
1.58
0.27
1.05
2.24
0.95
0.16
0.83
0.78
2.05
1.63
0.90
2.61
2.23
0.42
0.90
1.24
0.19
1.00
1.99
0.76
0.16
0.75
0.61
1.80
1.28
CSL2
0.75
2.47
2.07
0.38
0.75
0.77
0.18
0.90
1.87
0.74
0.14
0.70
0.56
1.52
0.73
CSL3
CSL4
0.70
2.46
1.84
0.24
0.65
0.69
0.17
0.80
1.62
0.71
0.11
0.65
0.54
1.33
0.61
0.64
2.39
1.65
0.19
0.55
0.63
0.17
0.74
1.54
0.60
0.10
0.62
0.48
1.32
0.57
consumption standards for this
equipment be expressed as:
MECSC = ASC × TDA (self-contained
equipment)
MECRC = ARC × TDA (remote
condensing equipment)
Where:
MECSC = maximum TDEC (kWh/day) from
ANSI/ARI Standard 1200–2006,
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MECRC = maximum CDEC (kWh/day) from
ANSI/ARI Standard 1200–2006,
ARC = a minimum normalized energy
consumption factor (expressed in kWh/
day/ft2 TDA),
ASC = a minimum normalized TDEC factor
(expressed in kWh/day/ft2 TDA), and
TDA = Total Display Area (ft2).
Commercial refrigerators, commercial
freezers and commercial refrigeratorfreezers with a self-contained
condensing unit designed for holding
temperature applications manufactured
on or after January 1, 2010, will have
energy conservation standards in terms
of:
Maximum energy consumption M
(kWh/yr) = B × V + K
Where:
B is expressed in terms of kWh/yr/ft3 of rated
volume,
V is the adjusted volume (ft3) calculated for
the equipment class, and
K is an offset factor expressed in kWh/yr.
In similar fashion, DOE has suggested
that the energy conservation standards
for remote condensing refrigerators,
commercial freezers, and commercial
refrigerators-freezers with solid doors
and for commercial ice-cream freezers
with solid doors, respectively, be
expressed as:
MECRC= BRC × V + KRC (remote
condensing equipment)
MECSC= BSC × V + KSC (self-contained
equipment)
mstockstill on PROD1PC66 with PROPOSALS2
Where:
MECRC = maximum CDEC (kWh/day) from
ANSI/ARI Standard 1200–2006,
MECSC = maximum TDEC (kWh/day) from
ANSI/ARI Standard 1200–2006,
BRC = a minimum normalized energy
consumption factor (expressed in kWh/
day/ft3 gross refrigerated volume)
calculated using the CDEC rating from
the DOE adopted test procedure (ANSI/
ARI Standard 1200–2006),
BSC = a minimum normalized TDEC factor
(expressed in kWh/day/ft3 gross
refrigerated volume) and calculated
using the TDEC rating from the DOE
adopted test procedure (ANSI/ARI
Standard 1200),
V = Gross Refrigerated Volume (ft3),
KRC = an offset factor in kWh/day for remote
condensing equipment, and
KSC = an offset factor in kWh/day for selfcontained equipment.
DOE is concerned that V may not
completely capture the most significant
driver behind capacity- or size-related
energy consumption differences
between equipment designs within
these equipment classes. In particular,
for these equipment classes, the surface
area for heat gain may not vary linearly
with volume. The VCS.SC.I equipment
class falls under this category.
DOE specifically seeks feedback on its
approach for characterizing energy
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18:42 Jul 25, 2007
Jkt 211001
conservation standards for commercial
refrigeration equipment. If the approach
to characterizing standards for remote
condensing commercial refrigerators,
commercials freezers, and commercial
refrigerators-freezers with solid doors
and for commercial ice-cream freezers
with solid doors is acceptable, DOE
seeks comments on how it could
develop appropriate offset factors (KSC
and KRC) for these classes of equipment.
This is identified as Issue 14 under
‘‘Issues on Which DOE Seeks Comment’’
in section IV.E of this ANOPR.
Commercial refrigerator-freezers (also
called dual temperature units) are
equipment that have two or more
compartments that operate at different
temperatures. During the Framework
public meeting, Hill Phoenix stated that
shipments of this equipment are very
low. (Public Meeting Transcript, No. 3.4
at p. 52) In the engineering analysis
(section II.C of this ANOPR), DOE only
analyzed those equipment classes with
the highest shipment volumes, and
therefore did not include an analysis of
commercial refrigerator-freezers.
However, DOE explained in the market
and technology assessment (section II.A
of this ANOPR) that it intended to adapt
the analytical results for commercial
refrigerators and commercial freezers to
commercial refrigerator-freezers.
DOE understands that remote
condensing commercial refrigeratorfreezers (with and without doors) and
self-contained commercial refrigeratorfreezers without doors may operate in
one of two ways. First, they may operate
as separate chilled and frozen
compartments with evaporators fed by
two sets of refrigerant lines or two
compressors. Second, they may operate
as separate chilled and frozen
compartments fed by one set of low
temperature refrigerant lines (with
evaporator pressure regulator (EPR)
valves or similar devices used to raise
the evaporator pressure, and thus the
temperature of one or more
compartments) or one compressor.
Accordingly, for the purposes of
implementing standards, DOE is
considering the following method for
implementing standards for commercial
refrigerator-freezers.
• For remote condensing commercial
refrigerator-freezers where two or more
chilled and frozen compartments are
cooled by independent remote
condensing units, each compartment
should have its total refrigeration load
measured separately according to the
ANSI/ASHRAE Standard 72–2005 test
procedure. Compressor energy
consumption (CEC) for each
compartment shall be calculated using
Table 1 in ANSI/ARI Standard 1200–
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Frm 00046
Fmt 4701
Sfmt 4702
2006 using the 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
ANSI/ARI Standard 1200–2006).
Determine the maximum limit on CDEC
for each compartment, based on that
compartment’s respective equipment
class and TDA or volume. The
maximum limit on CDEC for the entire
case is the sum of all the maximum
limits on CDEC of all compartments.
• For remote condensing commercial
refrigerator-freezers where two or more
chilled and frozen compartments are
cooled by one condensing unit (with
EPR valves or similar devices used to
raise the evaporator pressure, and thus
the temperature of one or more
compartments), the total case shall have
its total refrigeration load measured
according to the ANSI/ASHRAE
Standard 72–2005 test procedure. CEC
for the entire case shall be calculated
using Table 1 in ANSI/ARI Standard
1200–2006 using the lowest evaporator
temperature of all compartments. The
CDEC for the entire case shall be the
sum of the CEC, FEC, LEC, AEC, DEC,
and PEC. Determine the maximum limit
on CDEC for the compartment with the
lowest integrated average temperature
(IAT), based on that compartment’s
respective equipment class and the total
TDA or volume of all compartments.
This value is the maximum limit on
CDEC for the entire case.
• For self-contained commercial
refrigerator-freezers without doors
where two or more chilled and frozen
compartments are cooled by
independent self-contained condensing
units, the CDEC for the entire case shall
be measured according to the ANSI/
ASHRAE Standard 72–2005 test
procedure. Determine the maximum
limit on CDEC for each compartment,
based on that compartment’s respective
equipment class and TDA. The
maximum limit on CDEC for the entire
case is the sum of all the maximum
limits on CDEC of all compartments.
• For self-contained commercial
refrigerator-freezers without doors
where two or more chilled and frozen
compartments are cooled by one
condensing unit (with EPR valves or
similar devices used to raise the
evaporator pressure, and thus the
temperature of one or more
compartments), the daily energy
consumption for the entire case shall be
measured according to the ANSI/
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ASHRAE Standard 72–2005 test
procedure. Determine the maximum
limit on CDEC for the compartment with
the lowest IAT, based on that
compartment’s respective equipment
class and the total TDA of all
compartments. This value is the
maximum limit on CDEC for the entire
case.
DOE specifically seeks feedback on its
approach for setting standards for
remote condensing commercial
refrigerator-freezers. Additionally, DOE
seeks feedback on how to implement
standards for self-contained commercial
refrigerator-freezers without doors.
These are identified as Issue 15 under
‘‘Issues on Which DOE Seeks Comment’’
in section IV.E of this ANOPR.
IV. Public Participation
A. Attendance at Public Meeting
The time, date and location of the
public meeting are set forth in the
DATES and ADDRESSES sections at the
beginning of this document. Anyone
who wants to attend the public meeting
must notify Ms. Brenda Edwards-Jones
at (202) 586–2945. As explained in the
ADDRESSES section, foreign nationals
visiting DOE Headquarters are subject to
advance security screening procedures.
mstockstill on PROD1PC66 with PROPOSALS2
B. Procedure for Submitting Requests to
Speak
Any person who has an interest in
today’s notice, or who is a
representative of a group or class of
persons that has an interest in these
issues, may request an opportunity to
make an oral presentation. Please handdeliver requests to speak to the address
shown under the heading ‘‘Hand
Delivery/Courier’’ in the ADDRESSES
section of this ANOPR, between 9 a.m.
and 4 p.m., Monday through Friday,
except Federal holidays. Also, requests
may be sent by mail to the address
shown under the heading ‘‘Postal Mail’’
in the ADDRESSES section of this
ANOPR, or by e-mail to
Brenda.Edwards-Jones@ee.doe.gov.
Persons requesting to speak should
briefly describe the nature of their
interest in this rulemaking and provide
a telephone number for contact. DOE
asks persons selected to be heard to
submit a copy of their statements at
least two weeks before the public
meeting, either in person, by postal
mail, or by e-mail as described in the
preceding paragraph. Please include an
electronic copy of your statement on a
computer diskette or compact disk
when delivery is by postal mail or in
person. Electronic copies must be in
WordPerfect, Microsoft Word, Portable
Document Format (PDF), or text
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(American Standard Code for
Information Interchange (ASCII)) file
format. At its discretion, DOE may
permit any person who cannot supply
an advance copy of his or her statement
to participate, if that person has made
alternative arrangements with the
Building Technologies Program. In such
situations, the request to give an oral
presentation should ask for alternative
arrangements.
C. Conduct of Public Meeting
DOE will designate a DOE official to
preside at the public meeting and may
also use a professional facilitator to aid
discussion. The meeting will not be a
judicial or evidentiary-type public
hearing, but DOE will conduct it in
accordance with 5 U.S.C. 553 and
section 336 of EPCA. (42 U.S.C. 6306) A
court reporter will be present to record
and transcribe the proceedings. DOE
reserves the right to schedule the order
of presentations and to establish the
procedures governing the conduct of the
public meeting. After the public
meeting, interested parties may submit
further comments about the
proceedings, and any other aspect of the
rulemaking, until the end of the
comment period.
The public meeting will be conducted
in an informal, conference style. DOE
will present summaries of comments
received before the public meeting,
allow time for presentations by
participants, and encourage all
interested parties to share their views on
issues affecting this rulemaking. Each
participant will be allowed to make a
prepared general statement (within time
limits determined by DOE) before
discussion of a particular topic. DOE
will permit other participants to
comment briefly on any general
statements.
At the end of all prepared statements
on a topic, DOE will permit participants
to clarify their statements briefly and
comment on statements made by others.
Participants should be prepared to
answer questions by DOE and by other
participants concerning these issues.
DOE representatives may also ask
questions of participants concerning
other matters relevant to the public
meeting. The official conducting the
public meeting will accept additional
comments or questions from those
attending, as time permits. The
presiding official will announce any
further procedural rules or modification
of the above procedures that may be
needed for proper conduct of the public
meeting.
DOE will make the entire record of
this proposed rulemaking, including the
transcript from the public meeting,
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available for inspection at the U.S.
Department of Energy, Forrestal
Building, Room 1J–018 (Resource Room
of the Building Technologies Program),
1000 Independence Avenue, SW.,
Washington, DC, (202) 586–2945,
between 9 a.m. and 4 p.m., Monday
through Friday, except Federal holidays.
Any person may purchase a copy of the
transcript from the transcribing reporter.
D. Submission of Comments
DOE will accept comments, data, and
information regarding all aspects of this
ANOPR before or after the public
meeting, but no later than October 9,
2007. Please submit comments, data,
and information electronically to the
following e-mail address:
commercialrefrigeration.
rulemaking@ee.doe.gov. Submit
electronic comments in WordPerfect,
Microsoft Word, PDF, or ASCII file
format and avoid the use of special
characters or any form of encryption.
Comments in electronic format should
be identified by the docket number EE–
2006-STD–0126 and/or RIN 1904–AB59,
and whenever possible carry the
electronic signature of the author.
Absent an electronic signature,
comments submitted electronically
must be followed and authenticated by
submitting a signed original paper
document. No telefacsimiles (faxes) will
be accepted.
Under 10 CFR Part 1004.11, any
person submitting information that he
or she believes to be confidential and
exempt by law from public disclosure
should submit two copies: One copy of
the document including all the
information believed to be confidential,
and one copy of the document with the
information believed to be confidential
deleted. DOE will make its own
determination about the confidential
status of the information and treat it
according to its determination.
Factors of interest to DOE when
evaluating requests to treat submitted
information as confidential include: (1)
A description of the items; (2) whether
and why such items are customarily
treated as confidential within the
industry; (3) whether the information is
generally known by, or available from,
other sources; (4) whether the
information has previously been made
available to others without obligation
concerning its confidentiality; (5) an
explanation of the competitive injury to
the submitting person which would
result from public disclosure; (6) when
such information might lose its
confidential character due to the
passage of time; and (7) why disclosure
of the information would be contrary to
the public interest.
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E. Issues on Which DOE Seeks Comment
DOE is interested in receiving
comments on all aspects of this ANOPR.
DOE particularly invites comments or
data to improve DOE’s analysis,
including data or information that will
respond to the following questions or
concerns that were addressed in this
ANOPR:
1. Equipment Class Prioritization and
Extending Analyses
Because of the large number of
equipment classes included in this
rulemaking, DOE focused on conducting
a thorough examination of the
equipment classes with the greatest
energy-savings potential. To address
low-shipment equipment classes, DOE
could either conduct a full technical
analysis of these equipment classes or
develop correlations to extend analyses
or standard levels in the NOPR phase of
the rulemaking. DOE requests feedback
on the approach to equipment type
prioritization and its approach to
address low-shipment volume
equipment classes, and of extending
EPCA standards to equipment classes in
this rulemaking. (See section I.D.3.c and
II.A.2 of this ANOPR and chapter 5 of
the TSD for further details.)
2. Air-Curtain Angle
For equipment without doors, DOE
believes that the orientation of the air
curtain affects the energy consumption
(both remote condensing and selfcontained equipment) and that
equipment without doors can be broadly
categorized by the angle of the air
curtain that divides the refrigerated
compartment from the ambient space.
DOE is considering defining air-curtain
angle as ‘‘the angle between a vertical
line and the line formed by the points
at the center of the discharge air grille
and the center of the return air grille,
when viewed in cross-section.’’ DOE
requests feedback on this definition of
air-curtain angle. (See section II.A.2 of
this ANOPR for further details.)
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3. Door Angle
For equipment with doors, DOE
believes that the orientation of doors
affects the energy consumption and that
equipment with doors can be broadly
categorized by the angle of the door.
DOE is considering defining door angle
as ‘‘the angle between a vertical line and
the line formed by the plane of the door,
when viewed in cross-section.’’ DOE
requests feedback on this on this
definition of door angle. (See section
II.A.2 of this ANOPR for further details.)
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4. Equipment Classes for Equipment
With Doors
DOE is proposing to define two
equipment families each for equipment
with solid and transparent doors, based
on door angles of 0° to 45° (vertical) and
45° to 90° (horizontal). DOE requests
comments on these ranges of door
angles in defining equipment classes
with doors. (See section II.A.2 of this
ANOPR for further details.)
5. Equipment Classes
In accordance with EPCA section
325(p)(1)(A), DOE identified the
equipment classes covered under this
rulemaking in Table II.6. (42 U.S.C.
6295(p)(1)(A)) Pursuant to EPCA section
325(p)(1)(B), DOE requests comments on
these equipment classes and invites
interested persons to submit written
presentations of data, views, and
arguments. (42 U.S.C. 6295(p)(1)(B))
(See section II.A.2 of this ANOPR for
further details.)
6. Case Lighting Operating Hours
DOE’s analysis suggests that typical
lighting operating hours for most classes
of commercial refrigeration equipment
would fall in the range of 16 to 24 hours
per day, depending on store operating
hours, use of lighting during after-hours
case stocking, and typical lighting
operation or controls used for
unoccupied periods. Display case
lighting hours may also depend on
business type as convenience stores
have distinctly different operating hours
than other segments of the food retail
industry. DOE requests comments on
whether the 24-hour basis for case
lighting operating hours is valid for
DOE’s continued analysis, and if not,
what changes should be made to better
characterize the case lighting operating
hours? (See section II.E of this ANOPR
for further details.)
7. Operation and Maintenance Practices
DOE requests comments on operation
and maintenance practices for
commercial refrigeration equipment that
may be prevalent in the field which may
differ from standardized conditions,
such as those represented in a test
procedure. These field conditions could
potentially affect the energy
consumption savings experienced in the
field as a result of increased energy
efficiency as compared to those savings
estimated in the TSD’s energy
consumption analysis under idealized
conditions. DOE requests comment on
the frequency to which such factors
come in to play in energy use in the
field, and whether and how DOE could
account for these factors in assessing the
overall impacts of the candidate
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standards levels for commercial
refrigeration equipment. (See section
II.E of this ANOPR for further details.)
8. Equipment Lifetime
DOE requests comments on the
lifetime of commercial refrigeration
equipment and whether, in fact, this is
a significant issue and whether DOE
should perform a sensitivity analysis of
this variable in the LCC and NES
analyses. In particular, DOE seeks
comment on how long these units are
typically maintained in service by
equipment class and store type. Also,
DOE seeks comment on the existence
and importance of a used-equipment
market for commercial refrigeration
equipment, and the importance of
considering such a market in its
analysis. (See section II.E of this ANOPR
for further details.)
9. Life-Cycle Cost Baseline Level
DOE did not receive data from
industry concerning the average energy
efficiency of commercial refrigeration
equipment currently being shipped, nor
was data provided in further discussion
with manufacturers. An analysis of the
literature suggests little data on the
energy characteristics of display cases in
the general market is available. Based on
this, DOE used the Level 1 (minimum
energy efficiency level) established in
the engineering analysis as the baseline
for the LCC analysis.
The selection of baseline level has
two impacts in the LCC and PBP
analyses. It can affect the PBP calculated
since payback is calculated from the
baseline level, and it can affect the
maximum level showing LCC savings. It
can also affect the fraction of users on
the market who experience LCC savings
at any level. The selection of the
baseline level does not generally affect
the level identified as having the
maximum LCC savings. DOE requests
feedback on whether the Level 1
baseline selected by DOE is valid for the
LCC analysis, and if not, what changes
should be made to provide a more
realistic baseline level. Since higher
efficiency equipment is known to be
sold into the market, DOE also seeks
input on whether a distribution of
efficiencies should be used for the LCC
analysis baseline, and if so, what data
could be used to populate this
distribution. If more detailed data to
develop a distribution of efficiencies in
the baseline cannot be provided, DOE
seeks input on how a sensitivity
analysis to alternative baselines could
best be used to inform the LCC and NES
analyses supporting the rulemaking.
(See section II.G.15 of this ANOPR for
further details.)
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10. Characterizing the National Impact
Analysis Base Case
No data have been found on the
market shares of various commercial
refrigeration equipment classes by
energy consumption level. Therefore,
for the National Impact Analysis base
case, DOE adapted a cost-based method
used in the NEMS to estimate market
shares for each equipment class by
efficiency level. DOE did not have data
to calibrate this approach to actual
market shipments. Does the economicbased approach DOE used to establish
base case shipments by efficiency level
provide a valid base case assumption for
the NIA and future analyses? If not,
what should DOE do to improve the
base case efficiency forecast? (See
section II.I.2 of this ANOPR for further
details.)
11. Base Case and Standards Case
Forecasts
Because key inputs to the calculation
of the NES and NPV are dependent on
the estimated efficiencies under the base
case (without standards) and the
standards case (with standards),
forecasted efficiencies are of great
importance to the analysis. Information
available to DOE suggests that
forecasted market shares would remain
frozen throughout the analysis period
(i.e., 2012–2042). For its determination
of standards case forecasted efficiencies,
DOE used a ‘‘roll-up’’ scenario to
establish the market shares by efficiency
level for the year that standards become
effective (i.e., 2012). Available
information suggests that equipment
shipments with efficiencies in the base
case that did not meet the standard level
under consideration would ‘‘roll-up’’ to
meet the new standard level. Also,
available information suggests that all
equipment efficiencies in the base case
that were above the standard level
under consideration would not be
affected. DOE requests feedback on its
development of standards case
efficiency forecasts from the base case
efficiency forecast and its basis for how
standards would impact efficiency
distributions in the year that standards
are to take effect. (See section II.I.2 of
this ANOPR for further details.)
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12. Differential Impact of New
Standards on Future Shipments by
Equipment Classes
The shipment models used in the NES
and NIA presume that the relative
market share of the different classes of
commercial refrigeration equipment
remains constant over the time period
analyzed. While DOE is aware that
market preferences for certain types of
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products may change in the future, DOE
has no data with which to predict or
characterize those changes. DOE is
however particularly concerned
whether higher standards for certain
classes of commercial refrigeration
equipment are likely to generate
significant market shifts to other
equipment that may have higher energy
consumption. By developing standards
for all classes of commercial
refrigeration equipment within the
scope of this rulemaking using the same
economic criteria, DOE hopes to
mitigate this concern. However, DOE
specifically requests stakeholder input
on the potential for standards-driven
market shifts between equipment
classes that could reduce national
energy savings as well as stakeholder
input on how the standards setting
process can reduce or eliminate these
shifts. (See section II.I.2 of this ANOPR
for further details.
15. Standards for Commercial
Refrigerator-Freezers
13. Selection of Candidate Standard
Levels for Post-Advance Notice of
Proposed Rulemaking Analysis
V. Regulatory Review and Procedural
Requirements: Executive Order 12866
DOE is required to examine specific
criteria for the selection of CSLs for
further analysis. Some of these criteria
are economic based and the resulting
CSLs selected may be impacted by
updates to the ANOPR analysis after
input from stakeholders. DOE has
discretion in the selection of additional
standard levels it may choose to
analyze. DOE seeks input on the
candidate standard levels selected for
future analysis shown in Table III.1 (See
section III of this ANOPR for further
details.)
14. Approach to Characterizing Energy
Conservation Standards
When an efficiency or energy
consumption standard is defined for a
class of equipment, DOE must consider
how to express the level in a manner
suitable for all equipment within that
class. DOE seeks input on its approach
for characterizing energy conservation
standards for commercial refrigeration
equipment as discussed in section III. If
the approach to characterizing standards
for remote condensing commercial
refrigerators, commercial freezers, and
commercial refrigerators-freezers with
solid doors and for commercial icecream freezers with solid doors is
acceptable, DOE seeks comments on
how it could develop appropriate offset
factors (KSC and KRC) for these classes of
equipment. (See section III of this
ANOPR for further details.)
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DOE is addressing standards for
commercial refrigerator-freezers (both
remote condensing and self-contained).
For equipment served by independent
condensing units, the maximum limit
on CDEC for the entire case is the sum
of the maximum limits on CDEC of all
compartments, based on each
compartment’s respective equipment
class and TDA or volume. For
equipment served by one condensing
unit, the maximum limit on CDEC for
the entire case is the maximum limit on
CDEC for the compartment with the
lowest IAT, based on the equipment
class of that compartment and the total
TDA or volume of all compartments.
DOE requests feedback on this approach
to implementing standards for
commercial refrigerator-freezers. (See
section III of this ANOPR for further
details.)
DOE submitted this ANOPR for
review to the Office of Management and
Budget, under Executive Order 12866,
‘‘Regulatory Planning and Review.’’ 58
FR 51735 (October 4, 1993). If DOE later
proposes energy conservation standards
for certain commercial refrigeration
equipment, and if the proposed rule
constitutes a significant regulatory
action, DOE would prepare and submit
to OMB for review the assessment of
costs and benefits required under
section 6(a)(3) of the Executive Order.
The Executive Order requires agencies
to identify the specific market failure or
other specific problem that it intends to
address that warrant new agency action,
as well as assess the significance of that
problem, to enable assessment of
whether any new regulation is
warranted. (Executive Order 12866,
§ 1(b)(1)). Without a market failure, a
regulation cannot result in net benefits.
DOE’s preliminary analysis suggests
that accounting for the market value of
energy savings alone (i.e., excluding any
possible ‘‘externality’’ benefits such as
those noted below) would produce
enough benefits to yield net benefits
across a wide array of equipment and
circumstances. These results, if correct,
imply the existence of a market failure
in the commercial refrigeration
equipment market. DOE requests data
on, and suggestions for testing the
existence and extent of, these potential
market failures to complete an
assessment in the proposed rule of the
significance of these failures and thus
the net benefits of regulation.
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First, DOE believes that there is a lack
of consumer information and/or
information processing capability about
energy efficiency opportunities in the
commercial refrigeration equipment
market. If this is in fact the case, DOE
would expect the energy efficiency for
commercial refrigeration equipment to
be randomly distributed across key
variables such as energy prices and
usage levels. DOE seeks data on the
efficiency levels of existing commercial
refrigeration equipment in use by store
type (e.g., large grocery, multi-line
retailer, small grocery/convenience
store) and electricity price (and/or
geographic region of the country). DOE
plans to use these data to test the extent
to which purchasers of this equipment
behave as if they are unaware of the
costs associated with their energy
consumption. Also, DOE seeks comment
on knowledge of the Federal
ENERGYSTAR program, and it’s
penetration into the commercial
refrigeration equipment consumer
market as a resource for knowledge of
the availability and benefits of energy
efficient refrigeration units.
Second, for small businesses in
particular, DOE believes there may be
‘‘split incentives’’ for more energy
efficient equipment. The commercial
space owner may not invest in efficient
equipment because the owner of the
space does not pay the energy bill, and
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the retail establishment owner (building
tenant) does not want to invest so as not
to risk losing the capital investment at
the end of the lease. If this is in fact the
case, DOE would expect that, other
things equal, establishments that own
the equipment purchase higher
efficiency commercial refrigeration
equipment on average than those who
rent the equipment through building
lease arrangements. DOE seeks data on
owner-occupied buildings versus
leased/non-owner occupied buildings
for given store types (e.g., large grocery)
and their associated use of highefficiency units. With these data, DOE
plans to assess the significance of this
market failure by comparing the energy
efficiencies of the units in place by
building occupancy status.
Of course, there are likely to be
certain ‘‘external’’ benefits resulting
from the improved efficiency of units
that are not captured by the users of
such equipment. These include both
environmental and energy securityrelated externalities that are not already
reflected in energy prices such as
reduced emissions of greenhouse gases
and reduced use of natural gas (and oil)
for electricity generation. DOE invites
comments on the weight that should be
given to these factors in DOE’s
determination of the maximum
efficiency level at which the total
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benefits are likely to exceed the total
burdens resulting from a DOE standard.
In addition, various other analyses
and procedures may apply to such
future rulemaking action, including
those required by the National
Environmental Policy Act, Pub. L. 91–
190, 42 U.S.C. 4321 et seq.; the
Unfunded Mandates Act of 1995, Pub.
L. 104–4; the Paperwork Reduction Act,
44 U.S.C. 3501 et seq.; the Regulatory
Flexibility Act, 5 U.S.C. 601 et seq.; and
certain Executive Orders.
The draft of today’s action and any
other documents submitted to OIRA for
review are part of the rulemaking record
and are available for public review at
the U.S. Department of Energy, Forrestal
Building, Room 1J–018, (Resource Room
of the Building Technologies Program),
1000 Independence Avenue, SW.,
Washington, DC, (202) 586–2945,
between 9 a.m. and 4 p.m., Monday
through Friday, except Federal holidays.
VI. Approval of the Office of the
Secretary
The Secretary of Energy has approved
publication of today’s ANOPR.
Issued in Washington, DC, on July 19,
2007.
John Mizroch,
Principal Deputy Assistant Secretary, Energy
Efficiency and Renewable Energy.
[FR Doc. 07–3640 Filed 7–25–07; 8:45 am]
BILLING CODE 6450–01–P
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]]>Agencies
[Federal Register Volume 72, Number 143 (Thursday, July 26, 2007)]
[Proposed Rules]
[Pages 41162-41210]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 07-3640]
[[Page 41161]]
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Part IV
Department of Energy
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Office of Energy Efficiency and Renewable Energy
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10 CFR Part 431
Energy Conservation Program for Commercial and Industrial Equipment;
Proposed Rule
Federal Register / Vol. 72, No. 143 / Thursday, July 26, 2007 /
Proposed Rules
[[Page 41162]]
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DEPARTMENT OF ENERGY
Office of Energy Efficiency and Renewable Energy
10 CFR Part 431
[Docket No. EE-2006-STD-0126]
RIN 1904-AB59
Energy Conservation Program for Commercial and Industrial
Equipment: Energy Conservation Standards for Commercial Ice-Cream
Freezers; for Self-Contained Commercial Refrigerators, Commercial
Freezers, and Commercial Refrigerator-Freezers without Doors; and for
Remote Condensing Commercial Refrigerators, Commercial Freezers, and
Commercial Refrigerator-Freezers
AGENCY: Office of Energy Efficiency and Renewable Energy, Department of
Energy.
ACTION: Advance notice of proposed rulemaking and notice of public
meeting.
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SUMMARY: The Energy Policy and Conservation Act (EPCA) authorizes the
Department of Energy (DOE) to establish energy conservation standards
for various consumer products and commercial and industrial equipment,
including commercial ice-cream freezers; self-contained commercial
refrigerators, commercial freezers, and commercial refrigerator-
freezers without doors; and remote condensing commercial refrigerators,
commercial freezers, and commercial refrigerator-freezers, if DOE
determines that energy conservation standards would be technologically
feasible and economically justified, and would result in significant
energy savings. DOE publishes this Advance Notice of Proposed
Rulemaking (ANOPR) to consider establishing energy conservation
standards for the categories of commercial refrigeration equipment
mentioned above, and to announce a public meeting to receive comments
on a variety of issues.
DATES: DOE will hold a public meeting on August 23, 2007, from 9 a.m.
to 5 p.m. in Washington, DC. DOE must receive requests to speak at the
public meeting no later than 4 p.m., August 3, 2007. DOE must receive a
signed original and an electronic copy of statements to be given at the
public meeting no later than 4 p.m., August 9, 2007. DOE will accept
comments, data, and information regarding this ANOPR no later than
October 9, 2007. See section IV, ``Public Participation,'' of this
ANOPR for details.
ADDRESSES: The public meeting will be held at the U.S. Department of
Energy, Forrestal Building, Room 1E-245, 1000 Independence Avenue, SW.,
Washington, DC. Please note that foreign nationals visiting DOE
Headquarters are subject to advance security screening procedures,
requiring a 30-day advance notice. If you are a foreign national and
wish to participate in the public meeting, please inform DOE of this
fact as soon as possible by contacting Ms. Brenda Edwards-Jones at
(202) 586-2945 so that the necessary procedures can be completed.
You may submit comments identified by docket number EE-2006-STD-
0126 and/or Regulatory Information Number (RIN) 1904-AB59 using any of
the following methods:
Federal eRulemaking Portal: https://www.regulations.gov.
Follow the instructions for submitting comments.
E-mail: commercialrefrigeration.rulemaking@ee.doe.gov.
Include EE-2006-STD-0126 and/or RIN 1904-AB59 in the subject line of
your message.
Postal Mail: Ms. Brenda Edwards-Jones, U.S. Department of
Energy, Building Technologies Program, Mailstop EE-2J, 1000
Independence Avenue, SW., Washington, DC 20585-0121. Telephone: (202)
586-2945. Please submit one signed paper original.
Hand Delivery/Courier: Ms. Brenda Edwards-Jones, U.S.
Department of Energy, Building Technologies Program, Room 1J-018, 1000
Independence Avenue, SW., Washington, DC 20585-0121. Please submit one
signed original paper copy.
For detailed instructions on submitting comments and additional
information on the rulemaking process, see section IV, ``Public
Participation,'' of this document.
Docket: For access to the docket to read background documents or
comments received, go to the U.S. Department of Energy, Forrestal
Building, Room 1J-018 (Resource Room of the Building Technologies
Program), 1000 Independence Avenue, SW., Washington, DC, (202) 586-
2945, between 9 a.m. and 4 p.m., Monday through Friday, except Federal
holidays. Please call Ms. Brenda Edwards-Jones at the above telephone
number for additional information regarding visiting the Resource Room.
Please note: DOE's Freedom of Information Reading Room (Room 1E-190 at
the Forrestal Building) no longer houses rulemaking materials.
FOR FURTHER INFORMATION CONTACT: Mr. Charles Llenza, U.S. Department of
Energy, Building Technologies Program, EE-2J, 1000 Independence Avenue,
SW., Washington, DC 20585-0121, (202) 586-2192. E-mail:
Charles.Llenza@ee.doe.gov, or Ms. Francine Pinto, Esq., U.S. Department
of Energy, Office of General Counsel, GC-72, 1000 Independence Avenue,
SW., Washington, DC 20585, (202) 586-9507. E-mail:
Francine.Pinto@hq.doe.gov.
SUPPLEMENTARY INFORMATION:
I. Introduction
A. Purpose of the Advance Notice of Proposed Rulemaking
B. Summary of the Analysis
1. Engineering Analysis
2. Markups To Determine Equipment Price
3. Energy Use Characterization
4. Life-Cycle Cost and Payback Period Analyses
5. National Impact Analysis
C. Authority
D. Background
1. History of Standards Rulemaking for Commercial Refrigeration
Equipment
2. Rulemaking Process
3. Miscellaneous Rulemaking Issues
a. Federal Preemption
b. State Exemptions from Federal Preemption
c. Equipment Class Prioritization
4. Test Procedure
II. Commercial Refrigeration Equipment Analyses
A. Market and Technology Assessment
1. Definitions of Commercial Refrigeration Equipment Categories
a. Coverage of Equipment Excluded From American National
Standards Institute/Air-Conditioning and Refrigeration Institute
Standard 1200-2006
b. Coverage of Equipment Not Designed for Retail Use
c. Remote Condensing Commercial Refrigerators, Commercial
Freezers, and Commercial Refrigerator-Freezers
d. Secondary Coolant Applications
e. Self-Contained Commercial Refrigerators, Commercial Freezers,
and Commercial Refrigerator-Freezers Without Doors
f. Commercial Ice-Cream Freezers
2. Equipment Classes
3. Normalization Metric
4. Extension of Standards
5. Market Assessment
6. Technology Assessment
B. Screening Analysis
C. Engineering Analysis
1. Approach
2. Equipment Classes Analyzed
3. Analytical Models
a. Cost Model
b. Energy Consumption Model
4. Baseline Models
5. Cost-Efficiency Results
D. Markups To Determine Equipment Price
E. Energy Use Characterization
F. Rebuttable Presumption Payback Periods
G. Life-Cycle Cost and Payback Period Analyses
1. Approach
2. Life-Cycle Cost Analysis Inputs
3. Baseline Manufacturer Selling Price
4. Increase in Selling Price
5. Markups
[[Page 41163]]
6. Installation Costs
7. Energy Consumption
8. Electricity Prices
9. Electricity Price Trends
10. Repair Costs
11. Maintenance Costs
12. Lifetime
13. Discount Rate
14. Payback Period
15. Life-Cycle Cost and Payback Period Results
H. Shipments Analysis
I. National Impact Analysis
1. Approach
2. Base Case and Standards Case Forecasted Efficiencies
3. National Impact Analysis Inputs
4. National Impact Analysis Results
J. Life-Cycle Cost Sub-Group Analysis
K. Manufacturer Impact Analysis
1. Sources of Information for the Manufacturer Impact Analysis
2. Industry Cash Flow Analysis
3. Manufacturer Sub-Group Analysis
4. Competitive Impacts Assessment
5. Cumulative Regulatory Burden
6. Preliminary Results for the Manufacturer Impact Analysis
L. Utility Impact Analysis
M. Employment Impact Analysis
N. Environmental Assessment
O. Regulatory Impact Analysis
III. Candidate Energy Conservation Standards Levels
IV. Public Participation
A. Attendance at Public Meeting
B. Procedure for Submitting Requests to Speak
C. Conduct of Public Meeting
D. Submission of Comments
E. Issues on Which DOE Seeks Comment
1. Equipment Class Prioritization and Extending Analyses
2. Air-Curtain Angle
3. Door Angle
4. Equipment Classes for Equipment With Doors
5. Equipment Classes
6. Case Lighting Operating Hours
7. Operation and Maintenance Practices
8. Equipment Lifetime
9. Life-Cycle Cost Baseline Level
10. Characterizing the National Impact Analysis Base Case
11. Base Case and Standards Case Forecasts
12. Differential Impact of New Standards on Future Shipments by
Equipment Classes
13. Selection of Candidate Standard Levels for Post-Advance
Notice of Proposed Rulemaking Analysis
14. Approach to Characterizing Energy Conservation Standards
15. Standards for Commercial Refrigerator-Freezers
V. Regulatory Review and Procedural Requirements: Executive Order
12866
VI. Approval of the Office of the Secretary
I. Introduction
A. Purpose of the Advance Notice of Proposed Rulemaking
The purpose of this Advance Notice of Proposed Rulemaking (ANOPR)
is to provide interested persons with an opportunity to comment on:
1. The equipment classes that the Department of Energy (DOE) is
planning to analyze in this rulemaking;
2. The analytical framework, models, and tools (e.g., life-cycle
cost (LCC) and national energy savings (NES) spreadsheets) that DOE has
been using to perform analyses of the impacts of energy conservation
standards for commercial ice-cream freezers; self-contained commercial
refrigerators, commercial freezers, and commercial refrigerator-
freezers without doors; and remote condensing commercial refrigerators,
commercial freezers, and commercial refrigerator-freezers; \1\
---------------------------------------------------------------------------
\1\ These types of equipment are referred to collectively
hereafter as ``commercial refrigeration equipment.''
---------------------------------------------------------------------------
3. The results of the preliminary engineering analyses, the markups
analysis to determine equipment price, the energy use characterization,
the LCC and payback period (PBP) analyses, and the NES and national
impact analyses as presented in the ANOPR Technical Support Document
(TSD): Energy Efficiency Standards for Commercial and Industrial
Equipment: Commercial Ice-Cream Freezers; Self-Contained Commercial
Refrigerators, Freezers, and Refrigerator-Freezers without Doors; and
Remote Condensing Commercial Refrigerators, Freezers, and Refrigerator-
Freezers, and summarized in this ANOPR; and
4. The candidate energy conservation standard levels that DOE has
developed from these analyses.
B. Summary of the Analysis
The Energy Policy and Conservation Act, as amended, (EPCA)
authorizes DOE to establish minimum energy conservation standards for
various consumer products and commercial and industrial equipment,
including commercial refrigeration equipment, which are the subject of
this ANOPR. (42 U.S.C. 6291 et seq.) DOE conducted in-depth technical
analyses for this ANOPR in the following areas: engineering, markups to
determine equipment price, energy use characterization, LCC and PBP,
and NES and net present value (NPV). The ANOPR discusses the
methodologies and assumptions for each of these analyses. Table I.1
identifies the sections in this document that contain the results of
each of the analyses, and summarizes the methodologies, key inputs and
assumptions for the analyses. DOE consulted with interested parties and
stakeholders in developing these analyses, and invites further input
from interested parties and stakeholders on these topics. Obtaining
that input is a primary purpose of this ANOPR. Thus, the results of the
preliminary analyses presented in this ANOPR are subject to revision
following review and input from stakeholders and other interested
parties. The final rule will contain the results of the final analyses.
Table I.1.--In-Depth Technical Analyses Conducted for the Advance Notice of Proposed Rulemaking
--------------------------------------------------------------------------------------------------------------------------------------------------------
TSD section for
Analysis area Methodology Key inputs Key assumptions ANOPR section for results results
--------------------------------------------------------------------------------------------------------------------------------------------------------
Engineering (TSD Chapter 5)...... Efficiency level Component cost data Component Section II.C.5................ Chapter 5, section
approach and performance performance 5.10, and appendix
supplemented with values. improvements are B.
design option estimated using
analysis. ANSI/ARI Standard
1200-2006.
Markups to Determine Equipment Assessment of Distribution Markups for baseline Section II.D.................. Chapter 6, section
Price (TSD Chapter 6). company financial channels; market and more efficient 6.7.
reports to develop shares across the equipment are
markups to different channels; different.
transform State sales taxes;
manufacturer prices and shipments to
into customer different States.
prices.
[[Page 41164]]
Energy Use Characterization (TSD Energy use estimates Component energy use Case lighting Section II.E.................. Chapter 7, section
Chapter 7). from the and refrigerant operates for 24 7.4.4, and
engineering load (from hours a day; and appendix D.
analysis, validated engineering supermarket is used
using whole- analysis); and as building
building annual condenser rack prototype.
simulation for performance data.
selected climates.
LCC and Payback Period (TSD Analysis of a Manufacturer selling Baseline efficiency Section II.G.15............... Chapter 8, section
Chapter 8). representative prices; markups level is Level 1; 8.4, and appendix
sample of (including sales average electricity G.
commercial taxes); prices are by
customers by installation price; customer-type and
building-type and energy consumption; State; Annual
location. electricity prices Energy Outlook
and future trends; (AEO) 2006 is used
maintenance costs; as reference case
repair costs; for future trends;
equipment lifetime; equipment lifetime
and discount rate. is 10 years; and
discount rate is
estimated by
weighted average
cost of capital by
customer type.
Shipments (TSD Chapter 9)........ Projection of linear Wholesaler markups Market shares by Section II.H.................. Chapter 9, section
footage of total from company equipment class are 9.4.
sales by equipment balance-sheet data constant;
class for new and and mechanical saturation by
replacement markets. markups from U.S. building type is
Census Bureau data; constant; and
current shipments shipments do not
data by equipment change in response
class; average to standards.
equipment lifetime;
construction
forecasts for food
sales buildings;
and shipments by
equipment size.
National Impact (TSD Chapter 10). Forecasts of Shipments; effective Annual shipments are Section II.I.4................ Chapter 10, section
commercial date of standard; from shipments 10.4, and appendix
refrigeration base case model; annual I.
equipment costs, efficiencies; weighted-average
annual energy shipment-weighted energy efficiency
consumption and market shares; and installed cost
operating costs to annual energy are a function of
the year 2042. consumption, total energy efficiency
installed cost and level; annual
repair & weighted-average
maintenance costs, repair and
all on a per linear maintenance costs
foot basis; are constant with
escalation of energy consumption
electricity prices; level; AEO2006 is
electricity site-to- used for
source conversion; electricity price
discount rate; and escalation;
present year. National Energy
Modeling System
(NEMS) is used for
site-to-source
conversion;
discount rates are
3 percent and 7
percent real; and
future costs are
discounted to
present year: 2007.
--------------------------------------------------------------------------------------------------------------------------------------------------------
1. Engineering Analysis
The engineering analysis establishes the relationship between the
cost and efficiency of commercial refrigeration equipment. This
relationship serves as the basis for cost and benefit calculations for
individual commercial consumers, manufacturers, and the Nation. The
engineering analysis identifies representative baseline equipment,
which is the starting point for analyzing technologies that provide
energy efficiency improvements. Baseline equipment here refers to a
model or models having features and technologies typically found in
equipment currently offered for sale. The baseline model in each
equipment class represents the characteristics of equipment in that
class. After identifying baseline models, DOE estimated manufacturer
selling prices (MSPs) through an analysis of
[[Page 41165]]
manufacturer costs and manufacturer markups. Manufacturer markups are
the multipliers used to determine the MSPs based on manufacturing cost.
The engineering analysis uses 4 industry-supplied cost-efficiency
curves, which are based on an efficiency-level approach, and 15 cost-
efficiency curves derived from DOE analysis, which are based on a
design-options approach.2 3 DOE also discusses in the
engineering analysis the equipment classes analyzed, the methodology
used to extend the analysis to equipment classes that have low volumes
of shipments, an analysis of sensitivity to material prices, and the
use of alternative refrigerants.
---------------------------------------------------------------------------
\2\ An efficiency-level approach establishes the relationship
between manufacturer cost and increased efficiency at predetermined
efficiency levels above the baseline. Under this approach,
manufacturers typically provide incremental manufacturer cost data
for incremental increases in efficiency.
\3\ A design-options approach uses individual or combinations of
design options to identify increases in efficiency. Under this
approach, estimates are based on manufacturer or component supplier
data, or through the use of engineering computer simulation models.
Individual design options, or combinations of design options, are
added to the baseline model in ascending order of cost-
effectiveness.
---------------------------------------------------------------------------
2. Markups To Determine Equipment Price
DOE determines customer prices for commercial refrigeration
equipment from MSP and equipment price markups using industry balance
sheet data and U.S. Census Bureau data. To determine price markups, DOE
identifies distribution channels for equipment sales and determines the
existence and amounts of markups within each distribution channel. For
each distribution channel, DOE distinguishes between ``baseline
markups'' applied to the MSP for baseline equipment and ``incremental
markups'' applied to the incremental increase in MSP for higher
efficiency equipment. Overall baseline and overall incremental markups
are calculated separately based on the product of all baseline markups
at each step within a distribution channel or the product of all
incremental markups at each step within a distribution channel,
respectively. The combination of the overall baseline markup applied to
the baseline MSP and the incremental markups applied to the incremental
increase in MSP for higher efficiency equipment, including sales tax,
determines the final customer price.
3. Energy Use Characterization
The energy use characterization provides estimates of annual energy
consumption for commercial refrigeration equipment, which are used in
the subsequent LCC and PBP analyses and the national impact analysis
(NIA). DOE developed energy consumption estimates for the 15 classes of
equipment analyzed in the engineering analysis. DOE validated these
estimates with simulation modeling of energy consumption on an annual
basis for selected equipment classes and efficiency levels.
4. Life-Cycle Cost and Payback Period Analyses
The LCC and PBP analyses determine the economic impact of potential
standards on individual commercial consumers. The LCC is the total
consumer expense for a piece of equipment over the life of the
equipment. The LCC analysis compares the LCCs of equipment designed to
meet more stringent energy conservation standards with the LCC of the
equipment likely to be installed in the absence of standards. DOE
determines LCCs by considering: (1) Total installed cost to the
purchaser (which consists of MSP, sales taxes, distribution channel
markups, and installation cost), (2) the operating expenses of the
equipment (energy cost and maintenance and repair cost), (3) equipment
lifetime, and (4) a discount rate that reflects the real consumer cost
of capital and puts the LCC in present value terms. The PBP represents
the number of years needed to recover the increase in purchase price
(including installation cost) of more efficient equipment through
savings in the operating cost of the equipment. The PBP is the increase
in total installed cost due to increased efficiency divided by the
(undiscounted) decrease in annual operating cost from increased
efficiency.
5. National Impact Analysis
The NIA estimates the NES, and the NPV of total national customer
costs and savings, expected to result from new standards at specific
efficiency levels. DOE calculated the NES and NPV for each standard
level for commercial refrigeration equipment as the difference between
a base case forecast (without new standards) and the standards case
forecast (with new standards). For the NES, DOE determined national
annual energy consumption by multiplying the number of commercial
refrigeration equipment units in use (by vintage) by the average unit
energy consumption (also by vintage). DOE then computed cumulative
energy savings, which is the sum of each annual NES determined from the
year 2012 to 2042. The national NPV is the sum over time of the
discounted net savings each year, which consists of the difference
between total operating cost savings and the increase in total
installed costs. Critical inputs to the NIA include shipments
projections, rates at which users retire equipment (based on estimated
equipment lifetimes), and estimates of changes in shipments and
retirement rates in response to changes in equipment costs due to new
standards.
C. Authority
Title III of EPCA, 42 U.S.C. 6311-6317, as amended by the Energy
Policy Act of 2005 (EPACT 2005), Pub. L. 109-58, provides an energy
conservation program for certain commercial and industrial equipment.
Further, EPACT 2005 prescribes new or amended energy conservation
standards and test procedures, and directs DOE to undertake rulemakings
to promulgate such requirements. In particular, section 136(c) of EPACT
2005 directs DOE to prescribe energy conservation standards for
commercial refrigeration equipment. (42 U.S.C. 6313(c)(4)(A))
Before DOE prescribes any such standards, however, it must first
solicit comments on proposed standards. Moreover, DOE must design each
new standard for commercial refrigeration equipment to achieve the
maximum improvement in energy efficiency that is technologically
feasible and economically justified, and will result in significant
conservation of energy. (42 U.S.C. 6295(o)(2)(A), (o)(3)) To determine
whether a standard is economically justified, DOE must, after receiving
comments on the proposed standard, determine whether the benefits of
the standard exceed its burdens to the greatest extent practicable,
considering the following seven factors:
(1) The economic impact of the standard on manufacturers and
consumers of each of the products subject to the standard;
(2) The savings in operating costs throughout the estimated average
life of the covered products in the type (or class) compared with any
increase in the price, initial charges, or maintenance expenses for the
covered products which are likely to result from the imposition of the
standard;
(3) The total projected amount of energy savings likely to result
directly from the imposition of the standard;
(4) Any lessening of the utility or the performance of the covered
products likely to result from the imposition of the standard;
(5) The impact of any lessening of competition, as determined in
writing by the Attorney General, that is likely to
[[Page 41166]]
result from the imposition of the standard;
(6) The need for national energy conservation; and
(7) Other factors the Secretary of Energy (Secretary) considers
relevant. (42 U.S.C. 6295(o)(2)(B)(i)).
Other statutory requirements are set forth in 42 U.S.C. 6295
(o)(1)-(2)(A), (2)(B)(ii)-(iii), and (3)-(4), and 42 U.S.C. 6316(e).
D. Background
1. History of Standards Rulemaking for Commercial Refrigeration
Equipment
Section 136(c) of EPACT 2005 amended section 342 of EPCA, in part,
by adding new subsection 342(c)(4)(A), (42 U.S.C. 6313(c)(4)(A)) which
directs the Secretary to issue, by rule, no later than January 1, 2009,
energy conservation standards for the following equipment, manufactured
on or after January 1, 2012: commercial ice-cream freezers; self-
contained commercial refrigerators, commercial freezers, and commercial
refrigerator-freezers without doors; and remote condensing commercial
refrigerators, commercial freezers, and commercial refrigerator-
freezers. This equipment, which has never before been regulated at the
Federal level, is the subject of this rulemaking.
Section 136(a)(3) of EPACT 2005 amended section 340 of EPCA, in
part by adding the definitions for ``commercial refrigerator, freezer,
and refrigerator-freezer,'' ``holding temperature application,''
``pull-down temperature application,'' ``remote condensing unit,'' and
``self-contained condensing unit.'' \4\
---------------------------------------------------------------------------
\4\ ``(9)(A) The term `commercial refrigerator, freezer, and
refrigerator-freezer' means refrigeration equipment that--
(i) Is not a consumer product (as defined in section 321 of EPCA
[42 U.S.C. 6291(1)]);
(ii) Is not designed and marketed exclusively for medical,
scientific, or research purposes;
(iii) Operates at a chilled, frozen, combination chilled and
frozen, or variable temperature;
(iv) Displays or stores merchandise and other perishable
materials horizontally, semivertically, or vertically;
(v) Has transparent or solid doors, sliding or hinged doors, a
combination of hinged, sliding, transparent, or solid doors, or no
doors;
(vi) Is designed for pull-down temperature applications or
holding temperature applications; and
(vii) Is connected to a self-contained condensing unit or to a
remote condensing unit.'' (42 U.S.C. 6311(9)(A)).
``(B) The term `holding temperature application' means a use of
commercial refrigeration equipment other than a pull-down
temperature application, except a blast chiller or freezer.'' (42
U.S.C. 6311(9)(B)).
``(D) The term `pull-down temperature application' means a
commercial refrigerator with doors that, when fully loaded with 12
ounce beverage cans at 90 degrees Fahrenheit (F), can cool those
beverages to an average stable temperature of 38 degrees F in 12
hours or less.'' (42 U.S.C. 6311(9)(D)).
``(E) The term `remote condensing unit' means a factory-made
assembly of refrigerating components designed to compress and
liquefy a specific refrigerant that is remotely located from the
refrigerated equipment and consists of 1 or more refrigerant
compressors, refrigerant condensers, condenser fans and motors, and
factory supplied accessories.'' (42 U.S.C. 6311(9)(E)).
``(F) The term `self-contained condensing unit' means a factory-
made assembly of refrigerating components designed to compress and
liquefy a specific refrigerant that is an integral part of the
refrigerated equipment and consists of 1 or more refrigerant
compressors, refrigerant condensers, condenser fans and motors, and
factory supplied accessories.'' (42 U.S.C. 6311(9)(F)).
---------------------------------------------------------------------------
EPCA does not explicitly define the terms ``self-contained
commercial refrigerator, freezer, or refrigerator-freezer'' and
``remote condensing commercial refrigerator, freezer, or refrigerator-
freezer,'' which delineate two of the categories of equipment covered
by this rulemaking. DOE construes these two terms to mean ``commercial
refrigerator, freezer, or refrigerator-freezer that is connected to a
self-contained condensing unit'' and ``commercial refrigerator,
freezer, or refrigerator-freezer that is connected to a remote
condensing unit,'' respectively.
On April 25, 2006, DOE published in the Federal Register a notice
of public meeting and availability of the Rulemaking Framework for
Commercial Refrigeration Equipment Including Ice-Cream Freezers; Self-
Contained Commercial Refrigerators, Freezers, and Refrigerator-Freezers
without doors; and Remote Condensing Commercial Refrigerators,
Freezers, and Refrigerator-Freezers (Framework Document) that describes
the procedural and analytical approaches that DOE anticipates using to
evaluate energy conservation standards for commercial refrigeration
equipment. 71 FR 23876. This document is available at https://
www.eere.energy.gov/buildings/appliance_standards/commercial/
refrigeration_equipment.html. DOE held a Framework public meeting on
May 16, 2006, to discuss the procedural and analytical approaches for
use in the rulemaking, and to inform and facilitate stakeholders'
involvement in the rulemaking process. The analytical framework
presented at the public meeting described different analyses, such as
LCC and PBP, the proposed methods for conducting them, and the
relationships among the various analyses. The ANOPR TSD describes the
analytical framework in detail.
Statements received after publication of the Framework Document and
at the May 16, 2006, Framework public meeting helped identify issues
involved in this rulemaking and provided information that has
contributed to DOE's proposed resolution of these issues. Many of the
statements are quoted or summarized in this ANOPR. A parenthetical
reference at the end of a quotation or passage provides the location
index in the public record.
2. Rulemaking Process
Table I.2 sets forth a list of the analyses DOE has conducted and
intends to conduct in its evaluation of standards for commercial
refrigeration equipment. Until recently, DOE performed the manufacturer
impact analysis (MIA) in its entirety between the ANOPR and notice of
proposed rulemaking (NOPR) during energy conservation standards
rulemakings. As noted in the table, DOE has performed a preliminary MIA
for this ANOPR. DOE believes this change will improve the rulemaking
process.
Table I.2.--Commercial Refrigeration Equipment Analysis
------------------------------------------------------------------------
ANOPR NOPR Final Rule *
------------------------------------------------------------------------
Market and technology Revised Revised
assessment. ANOPR analyses. NOPR analyses.
Screening analysis..... Life-
cycle cost sub-
group analysis.
Engineering analysis...
Manufacturer
impact analysis.
Energy use Utility
characterization. impact analysis.
Markups to determine
equipment price. Employment impact
analysis.
Life-cycle cost and
payback period analyses. Environmental
assessment.
Shipments analysis.....
Regulatory impact
analysis.
National impact
analysis.
[[Page 41167]]
Preliminary
manufacturer impact analysis.
------------------------------------------------------------------------
* During the Final Rule phase, DOE considers the comments submitted by
the U.S. Department of Justice in the NOPR phase concerning the impact
of any lessening of competition that is likely to result from the
imposition of the standard. (42 U.S.C. 6295(o)(2)(B)(v)).
The analyses in Table I.2 include the development of economic
models and analytical tools. If timely new data, models, or tools that
enhance the development of standards become available, DOE will
incorporate them into this rulemaking.
3. Miscellaneous Rulemaking Issues
a. Federal Preemption
During the Framework public meeting, the Air-Conditioning and
Refrigeration Institute (ARI) stated that it interpreted EPACT 2005 as
authorizing DOE to conduct a rulemaking for commercial refrigeration
equipment, and to exempt certain categories from the standards DOE
adopts. (Public Meeting Transcript, No. 3.4 at p. 80) \5\ The Appliance
Standards Awareness Project (ASAP) responded that setting a ``no-
standard'' standard that preempts the States is problematic. (Public
Meeting Transcript, No. 3.4 at pp. 81-82) However, ASAP agrees with
ARI's basic view that DOE should address opportunities for energy
savings, and should not necessarily have standards for every unit in
the marketplace, because the objective is to save energy in a cost-
effective way. Id. The American Council for an Energy-Efficient Economy
(ACEEE), in apparent agreement with ARI and ASAP, expressed doubt that
States would seek to set energy conservation standards for equipment
that are truly niche equipment. (Public Meeting Transcript, No. 3.4 at
p. 82) The Alliance to Save Energy, ACEEE, ASAP, Natural Resources
Defense Council (NRDC), Northeast Energy Efficiency Partnerships
(NEEP), and Northwest Power and Conservation Council (hereafter ``Joint
Comment'') strongly opposed any suggestion that States be preempted
from setting standards for equipment for which DOE does not itself set
standards. (Joint Comment, No. 9 at p. 3) \6\
---------------------------------------------------------------------------
\5\ A notation in the form ``Public Meeting Transcript, No. 3.4
at p. 80'' identifies an oral comment that DOE received during the
May 16, 2006, Framework public meeting and which was recorded in the
public meeting transcript in the docket for this rulemaking (Docket
No. EE-2006-STD-0126), maintained in the Resource Room of the
Building Technologies Program This particular notation refers to a
comment (1) made during the public meeting, (2) recorded in document
number 3.4, which is the public meeting transcript that is filed in
the docket of this rulemaking, and (3) which appears on page 80 of
document number 3.4.
\6\ A notation in the form ``Joint Comment'', No. 9 at p. 3''
identifies a written comment that DOE has received and has included
in the docket of this rulemaking. This particular notation refers to
(1) A joint comment, (2) in document number 9 in the docket of this
rulemaking, and (3) appearing on page 3 of document number 9.
---------------------------------------------------------------------------
DOE is evaluating all commercial refrigeration equipment--i.e., all
commercial ice-cream freezers, self-contained commercial refrigerators,
commercial freezers, and commercial refrigerator-freezers without
doors, and remote condensing commercial refrigerators, commercial
freezers, and commercial refrigerator-freezers--for the development of
standards. DOE will evaluate all relevant equipment classes during this
evaluation. This equipment has a large number of classes, however, and
DOE intends to prioritize the technical analyses based on shipment data
and only to conduct a full technical analysis on classes with the
highest numbers of shipments for this ANOPR. In accordance with 42
U.S.C. 6316(e)(1), DOE intends to adopt standards for all equipment for
which standards would satisfy the criteria in 42 U.S.C. 6295(o). DOE is
not aware of any basis for it to exclude from this rule any commercial
refrigeration equipment for which a standard would meet the statutory
criteria above. Furthermore, the extent to which States will be barred
from regulating the efficiency of any commercial refrigeration
equipment for which the final rule in this rulemaking omits standards,
will be governed by the relevant provisions of EPCA as to preemption,
42 U.S.C. 6297 and 6316(e)(3)-(4).
b. State Exemptions From Federal Preemption
Southern Company Services (Southern Company) and Edison Electric
Institute (EEI) believe that the standards for commercial refrigeration
equipment should be a ``50-state'' rule without exemptions from Federal
preemption. They claim that exemptions would complicate the regulation
of this equipment and increase costs to both manufacturers and
consumers. (Southern Company, No. 6 at p. 1 and EEI, No. 8 at p. 1)
DOE fully intends that any standards it adopts in this rulemaking
will apply uniformly in all of the States. In addition, any such
Federal standards would, on the date of publication of the final rule,
preempt any State standards that apply to the equipment covered by the
Federal standards. In the event any State or local standard is issued
before the date of publication of the final rule by the Secretary, that
State or local standard shall not be preempted until the Federal
standards take effect. (42 U.S.C. 6297 and 6316(e)(3)(A)) However, EPCA
allows the States to petition DOE for waivers of preemption with regard
to specific State standards, and DOE to grant such waiver applications
if the statutory criteria are met. (42 U.S.C. 6297(d)) DOE does not
have the authority to preclude States from seeking waivers or to decree
in advance that it will not grant them, either generally or for any
particular type of equipment.
c. Equipment Class Prioritization
ARI stated that it strongly recommends that DOE focus its
rulemaking efforts on the commercial refrigeration equipment classes
with the highest energy savings potential, and not spend its scarce
resources establishing standards for equipment with limited shipment
volume and/or energy consumption. (ARI, No. 7 at p. 1)
Because of the large number of equipment classes included in this
rulemaking, for the ANOPR phase of the rulemaking DOE has focused on
conducting a thorough examination of the equipment classes with the
greatest energy savings potential. To determine which equipment classes
have the greatest energy savings potential, DOE relied on industry-
supplied shipment data and addressed equipment classes with the highest
shipment values first. To address low-shipment equipment classes, DOE
could, for the NOPR phase of the rulemaking, either conduct a full
technical analysis of these equipment classes, or develop correlations
to extend analyses or standard levels. DOE explored the approach of
developing correlations by conducting a ``focused
[[Page 41168]]
matched-pair analysis.'' \7\ This methodology is described in further
detail in chapter 5 of the TSD. DOE specifically seeks feedback on its
approach to equipment-class prioritization and the approach to extend
the technical analysis from high-shipment equipment classes to low-
shipment equipment classes. This is identified as Issue 1 under
``Issues on Which DOE Seeks Comment'' in section IV.E of this ANOPR.
---------------------------------------------------------------------------
\7\ The ``focused matched-pair analysis'' establishes a
correlation between rating temperature levels and energy consumption
by quantifying the differences in energy consumption for matched
pairs of equipment classes that are very similar in features and
dimensions, but have different operating temperatures.
---------------------------------------------------------------------------
4. Test Procedure
A test procedure outlines the method by which manufacturers will
determine the efficiency of their commercial refrigeration equipment,
and thereby assess compliance with an energy conservation standard.
Section 136(f)(1)(B) of EPACT 2005 amended section 343 of EPCA (42
U.S.C. 6314) by adding new subsections 343(a)(6)(A)-(D) (42 U.S.C.
6314(a)(6)(A)-(D)), which direct the Secretary to develop test
procedures for commercial refrigeration equipment. On December 8, 2006,
DOE published a final rule (the December 2006 final rule) in which it
adopted American National Standards Institute (ANSI)/ARI Standard 1200-
2006, Performance Rating of Commercial Refrigerated Display
Merchandisers and Storage Cabinets, with one modification, as the DOE
test procedure for this equipment. 71 FR 71340, 71369-70.\8\ ANSI/ARI
Standard 1200-2006 contains rating temperature specifications of 38
[deg]F (2 [deg]F) for commercial refrigerators and
refrigerator compartments, 0 [deg]F (2 [deg]F) for
commercial freezers and freezer compartments, and -5 [deg]F (2 [deg]F) for commercial ice-cream freezers, and requires
performance tests to be conducted according to the American Society of
Heating, Refrigerating, and Air-Conditioning Engineers (ASHRAE)
Standard 72-2005, Method of Testing Commercial Refrigerators and
Freezers, test method. The one modification DOE made in adopting ANSI/
ARI Standard 1200-2006 was to adopt in the final rule -15 [deg]F
(2 [deg]F) as the rating temperature for commercial ice-
cream freezers, instead of -5 [deg]F (2 [deg]F). 71 FR
71370. In addition, DOE adopted ANSI/Association of Home Appliance
Manufacturers (AHAM) Standard HRF-1-2004, Energy, Performance and
Capacity of Household Refrigerators, Refrigerator-Freezers and
Freezers, for determining compartment volumes for this equipment. 71 FR
71369-70.
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\8\ DOE incorporated by reference the ANSI/ARI Standard 1200-
2006 test procedure in section 431.64 of 10 CFR Part 431. 71 FR
71340 (December 8, 2006).
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As mentioned above, on April 25, 2006, DOE published a Framework
Document that describes the procedural and analytical approaches to
evaluate energy conservation standards for commercial refrigeration
equipment and presented this analytical framework to stakeholders
during the Framework public meeting held on May 16, 2006. During the
Framework public meeting, the Food Products Association (FPA)
suggested, in lieu of climate-adjusted standards, climate conditions be
part of the test method. FPA stated that DOE should specify the range
of conditions that are expected for efficiency testing, and pointed out
that most grocery stores across the country operate in a 65 [deg]F to
70 [deg]F range. (Public Meeting Transcript, No. 3.4 at pp. 158-159)
ANSI/ARI Standard 1200-2006 requires that testing be in accordance with
ASHRAE Standard 72-2005, which requires ambient conditions during
testing of 75.2 [deg]F (1.8 [deg]F) for dry bulb
temperature and 64.4 [deg]F (1.8 [deg]F) for wet bulb
temperature. Although this is not the range recommended by FPA, it is
close to FPA's recommended range, these temperatures have been widely
used for testing commercial refrigeration equipment, and they provide
ambient test temperatures that are typical of the conditions in which
this equipment generally operates. Therefore, DOE's test procedure for
commercial refrigeration equipment does include ambient rating
conditions that represent normal operation conditions for commercial
refrigeration equipment.
During the Framework public meeting and Framework comment period,
DOE received comments on the inclusion of ``application temperatures''
for commercial refrigeration equipment, which are rating temperatures
other than the standard rating temperatures prescribed by DOE's test
procedures (38 [deg]F for commercial refrigerators, 0 [deg]F for
commercial freezers, and -15 [deg]F for commercial ice-cream freezers).
Hill Phoenix stated that manufacturers of commercial refrigeration
equipment occasionally produce a piece of equipment (usually at the
customer's request) that is designed to operate at a temperature
significantly different from one of the three standard temperatures.
(Public Meeting Transcript, No. 3.4 at pp. 74-76) ARI commented that
DOE should analyze the shipment data and determine whether it would be
worth regulating equipment that operates at application temperatures if
shipments for these units are very low. (Public Meeting Transcript, No.
3.4 at p. 79) ARI also asserted that allowing for an application
temperature category is essential because operating temperature plays a
key role in equipment energy consumption. (ARI, No. 7 at p. 4) The
Joint Comment pointed out that the application temperature category
should be reserved for equipment that cannot operate at 0 [deg]F or at
38 [deg]F, that DOE should not regulate equipment that has a small
shipments volume, and that appropriate Federal standards and rating
temperatures should be developed if shipments are large. (Joint
Comment, No. 9 at p. 3)
DOE analyzed the shipments data provided by ARI during the
Framework comment period. Excluding equipment for which EPACT 2005
amended EPCA to set standards (self-contained commercial refrigerators
and commercial freezers with doors), there were 170,949 units of remote
condensing commercial refrigerators and commercial freezers, self-
contained commercial refrigerators and commercial freezers without
doors, and commercial ice-cream freezers shipped in 2005. Shipments of
commercial refrigerator-freezers were not reported, but are considered
to be very small. Of the total shipments (both self-contained and
remote condensing), only 1.7 percent were equipment that operate at 45
[deg]F, 20 [deg]F, 10 [deg]F, or -30 [deg]F (application temperatures),
and 98.3 percent were equipment that operate at 38 [deg]F, 0 [deg]F, or
-15 [deg]F. By far, the application temperature with the largest number
of units shipped is the 45 [deg]F category (typically ``wine
chillers''), and these were predominately remote condensing equipment.
There were 1,834 units of remote condensing wine chillers shipped in
2005. Comparatively, in 2005 there were 85,001 units of remote
condensing refrigerators that operate at 38 [deg]F.
As stated above, DOE's test procedure for commercial refrigeration
equipment requires that all equipment, including equipment designed to
operate at application temperatures, be tested at one of the three
rating temperatures: 38 [deg]F for refrigerators, 0 [deg]F for
freezers, and -15 [deg]F for ice-cream freezers. Given the relatively
low shipment volumes of equipment that operates at application
temperatures, as well as DOE's understanding that some of this
equipment already can operate and be tested at one of the standard
rating temperatures and that manufacturers might be able to redesign
other equipment in relatively minor ways to have these capabilities,
DOE believes this requirement will not place an
[[Page 41169]]
unreasonable burden on manufacturers. In addition, if necessary,
manufacturers could seek waivers from the DOE test procedure, pursuant
to 10 CFR 431.401. For these reasons, DOE does not intend to develop
separate standards for equipment that operates at application
temperatures.
II. Commercial Refrigeration Equipment Analyses
This section addresses the analyses DOE has performed and intends
to perform for this rulemaking. A separate subsection addresses each
analysis, and contains a general introduction that describes the
analysis and a discussion of comments received from interested parties.
A. Market and Technology Assessment
When DOE begins a standards rulemaking, it develops information
that provides an overall picture of the market for the equipment
concerned, including the nature of the equipment, the industry
structure, and the market characteristics for the equipment. This
activity consists of both quantitative and qualitative efforts based
primarily on publicly available information. The subjects addressed in
the market and technology assessment for this rulemaking include
definitions, equipment classes, manufacturers and market shares,
shipments of covered equipment, regulatory and non-regulatory programs,
and technologies that could be used to improve the efficiency of
covered commercial refrigeration equipment. This information serves as
resource material for use throughout the rulemaking.
1. Definitions of Commercial Refrigeration Equipment Categories
Section 136(c) of EPACT 2005 amended section 342 of EPCA to include
new subsection (c)(4)(A), which mandates that DOE issue standards for
three categories of commercial refrigerators, commercial freezers, and
commercial refrigerator-freezers.\9\ Accordingly, pursuant to this
provision, the three categories of equipment addressed by this
rulemaking are: remote condensing commercial refrigerators, commercial
freezers and commercial refrigerator-freezers; self-contained
commercial refrigerators, commercial freezers, and commercial
refrigerator-freezers without doors; and commercial ice-cream freezers.
These categories of equipment are referred to collectively as
``commercial refrigeration equipment.''
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\9\ ``Commercial refrigerators, commercial freezers, and
commercial refrigerator-freezers'' is a type of covered commercial
equipment. For purposes of discussion only in this proceeding, DOE
uses the term ``categories'' to designate groupings of ``commercial
refrigeration equipment.'' The categories of equipment are: self-
contained commercial refrigerators, commercial freezers, and
commercial refrigerator-freezers without doors; remote condensing
commercial refrigerators, commercial freezers, and commercial
refrigerator-freezers; and commercial ice-cream freezers. DOE will
analyze specific equipment classes that fall within these general
categories and set appropriate standards.
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a. Coverage of Equipment Excluded From American National Standards
Institute/Air-Conditioning and Refrigeration Institute Standard 1200-
2006
During the Framework comment period, ARI stated that the ANSI/ARI
Standard 1200-2006 test procedure specifically excludes ice-cream
``dipping cabinets,'' but recommended that DOE include this equipment
under this rulemaking as commercial freezers. (ARI, No. 7 at p. 3) ARI
also appeared to suggest, however, that this and certain other
equipment excluded from ANSI/ARI Standard 1200-2006, such as floral
merchandisers, are excluded from coverage under EPCA because they are
not considered commercial display merchandisers or storage cabinets.
(ARI, No. 7 at p. 7)
EPCA directs DOE to set standards for commercial refrigeration
equipment (i.e., the three categories of equipment identified above).
Any equipment that meets the EPCA definition of a ``commercial
refrigerator, freezer, or refrigerator-freezer'' (see section I.D and
the preceding section) and falls under one of these three categories
will be covered by this rulemaking. In the December 2006 final rule,
DOE incorporated by reference certain sections of ANSI/ARI Standard
1200-2006 as the test procedure for commercial refrigeration equipment,
but did not reference section 2.2, which provides exclusions for
certain equipment such as ice-cream dipping cabinets and floral display
merchandisers. The equipment excluded in this section of ANSI/ARI
Standard 1200-2006 will only be excluded from this rulemaking if they
do not meet the EPACT 2005 definition of a ``commercial refrigerator,
freezer, or refrigerator-freezer.''
b. Coverage of Equipment Not Designed for Retail Use
During the Framework comment period, several stakeholders commented
on whether this rulemaking applies to equipment not designated for
retail use. FPA commented that DOE needs to distinguish between
``industrial'' and ``commercial.'' FPA believes that the EPCA
requirements for commercial refrigeration equipment were intended for
``point-of-sale'' equipment that is found in convenience stores and
supermarkets. FPA continued that, in the food industry,
``refrigeration'' includes the industrial equipment found in
manufacturing and processing facilities, not just the equipment in
retail stores. (Public Meeting Transcript, No. 3.4 at pp. 23-24)
Southern Company stated that the language ``storing or displaying or
dispensing'' in DOE's definition of ``ice-cream freezer'' is ambiguous
because it could include some industrial equipment the size of a
tractor-trailer compartment. Southern Company believes there needs to
be language to clarify that this rulemaking covers equipment used at
the retail level. (Public Meeting Transcript, No. 3.4 at pp. 35-36)
Southern Company and EEI both stated that a literal reading of DOE's
proposed equipment classes appears to include industrial refrigeration
equipment, which is not used for the display of merchandise for sale to
the consumer. Southern Company and EEI believe that the inclusion of
this equipment would unnecessarily complicate the analysis and the
development of test procedures. They also stated that this equipment is
not covered by EPCA and only commercial equipment is covered. They
suggest that DOE define which equipment is for commercial purposes and
which is for industrial purposes. Southern Company and EEI suggest that
DOE define commercial refrigeration equipment as ``refrigeration
equipment which would normally be used in a commercial business which
sells products to ultimate consumers.'' Further, the definition
``should not include equipment which is normally used only in
refrigerated warehouses or manufacturing facilities.'' (Southern
Company, No. 6 at pp. 1-2; EEI, No. 8 at p. 1)
DOE understands that industrial refrigeration equipment consists of
equipment used to process, manufacture, transport, or store chilled or
frozen food and other perishable items. Industrial refrigeration
equipment used to process or manufacture chilled or frozen food
primarily includes equipment used to flash-freeze or chill food on an
assembly line or in a batch manufacturing process. Industrial
refrigeration equipment used to transport chilled or frozen food or
other perishable items primarily includes refrigerated rail cars and
tractor-trailers. In industrial buildings, temporary storage of chilled
or frozen food is also necessary, as the manufactured product is often
held at
[[Page 41170]]
the manufacturing facility for processing or while awaiting transport.
Industrial refrigeration equipment used to store chilled or frozen food
is accomplished with refrigerated warehouses and/or refrigerated walk-
in rooms (``walk-ins'').
The term ``commercial refrigerator, freezer, and refrigerator-
freezer'' is defined as refrigeration equipment that, in part,
``displays or stores merchandise and other perishable materials'' (see
section I.D of this ANOPR). DOE interprets this language to mean that
equipment used in the processing, manufacture or transport of chilled
or frozen food is not considered commercial refrigeration equipment
because it is not used to ``display or store.'' However, equipment that
is used to store chilled or frozen food is considered covered
equipment. This language does not make mention of the intended
destination of the equipment, so DOE believes that walk-ins are covered
under the definition because they store chilled or frozen food,
regardless of whether the application is commercial or industrial.
However, it is unclear whether this rulemaking would be the appropriate
place to address walk-ins. The test procedures for self-contained
commercial refrigerators, commercial freezers, and commercial
refrigerator-freezers with doors specified in EPCA section
343(a)(6)(A)(ii) specifically exclude walk-ins and therefore DOE
believes that the standards in EPCA sections 342(c)(2) and (3) do not
apply to walk-ins. Since the test procedures DOE adopted for equipment
covered under this rulemaking also specifically exclude walk-ins, DOE
believes that the standards being developed in this rulemaking under
EPCA section 342(c)(4)(A) also do not apply to walk-ins.\10\ DOE could,
however, address walk-ins under EPCA section 342(c)(4)(B), which states
that DOE may issue standard levels, by rule, for other categories of
commercial refrigerators, commercial freezers and commercial
refrigerator-freezers.
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\10\ Test procedures are found at 10 CFR 431.64.
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c. Remote Condensing Commercial Refrigerators, Commercial Freezers, and
Commercial Refrigerator-Freezers
Under EPCA, this equipment includes commercial refrigerators,
commercial freezers, and commercial refrigerator-freezers that have a
remote condensing unit, except for any remote condensing equipment that
would meet DOE's definition of ``ice-cream freezer'' as set forth at 10
CFR 431.62, 71 FR 71369.\11\ This equipment is typically used to store
and display merchandise for direct sale to the consumer, and referred
to as ``display cases,'' ``display cabinets,'' or ``merchandisers.''
The remote condensing unit has at least one compressor and a condenser
coil, and most remote condensing units consist of multiple compressors
(a compressor ``rack'') that serve multiple display cases.
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\11\ The EPCA provision that requires this rulemaking identifies
``ice-cream freezers'' separately from ``self-contained commercial
refrigerators, commercial freezers, and commercial refrigerator-
freezers without doors'' and ``remote condensing commercial
refrigerators, commercial freezers, and commercial refrigerator-
freezers.'' (42 U.S.C. 6313(c)(4)(A), added by EPACT 2005, section
136(c)) Since the Act neither specifies nor indicates that ``ice-
cream freezers
