Energy Conservation Program: Energy Conservation Standards for Commercial Refrigeration Equipment, 55889-55991 [2013-21531]
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Vol. 78
Wednesday,
No. 176
September 11, 2013
Part III
Department of Energy
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10 CFR Part 431
Energy Conservation Program: Energy Conservation Standards for
Commercial Refrigeration Equipment; Proposed Rule
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Federal Register / Vol. 78, No. 176 / Wednesday, September 11, 2013 / Proposed Rules
DEPARTMENT OF ENERGY
10 CFR Part 431
[Docket No. EERE–2010–BT–STD–0003]
RIN 1904–AC19
Energy Conservation Program: Energy
Conservation Standards for
Commercial Refrigeration Equipment
Office of Energy Efficiency and
Renewable Energy, Department of
Energy.
ACTION: Notice of proposed rulemaking
and public meeting.
AGENCY:
The Energy Policy and
Conservation Act of 1975 (EPCA), as
amended, prescribes energy
conservation standards for various
consumer products and certain
commercial and industrial equipment,
including commercial refrigeration
equipment (CRE). EPCA also requires
the U.S. Department of Energy (DOE) to
determine whether more-stringent,
amended standards would be
technologically feasible and
economically justified, and would save
a significant amount of energy. In this
notice, DOE proposes amended energy
conservation standards for commercial
refrigeration equipment. The notice also
announces a public meeting to receive
comment on these proposed standards
and associated analyses and results.
DATES: DOE will hold a public meeting
on Thursday, October 3, 2013, from 9
a.m. to 4 p.m., in Washington, DC. The
meeting will also be broadcast as a
webinar. See section VII, ‘‘Public
Participation,’’ for webinar registration
information, participant instructions,
and information about the capabilities
available to webinar participants.
DOE will accept comments, data, and
information regarding this notice of
proposed rulemaking (NOPR) before and
after the public meeting, but no later
than November 12, 2013. See section
VII, ‘‘Public Participation,’’ for details.
ADDRESSES: The public meeting will be
held at the U.S. Department of Energy,
Forrestal Building, Room 8E–089, 1000
Independence Avenue SW.,
Washington, DC 20585. To attend,
please notify Ms. Brenda Edwards at
(202) 586–2945. Persons can attend the
public meeting via webinar. For more
information, refer to section VII, Public
Participation.
Any comments submitted must
identify the NOPR for Energy
Conservation Standards for Commercial
Refrigeration Equipment and provide
docket number EERE–2010–BT–STD–
0003 and/or regulatory information
number (RIN) 1904–AC19. Comments
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SUMMARY:
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may be submitted using any of the
following methods:
1. Federal eRulemaking Portal:
www.regulations.gov. Follow the
instructions for submitting comments.
2. Email: CRE-2010-STD-0003@
ee.doe.gov. Include the docket number
and/or RIN in the subject line of the
message.
3. Mail: Ms. Brenda Edwards, U.S.
Department of Energy, Building
Technologies Program, Mailstop EE–2J,
1000 Independence Avenue SW.,
Washington, DC 20585–0121. If
possible, please submit all items on a
CD. It is not necessary to include
printed copies.
4. Hand Delivery/Courier: Ms. Brenda
Edwards, U.S. Department of Energy,
Building Technologies Program, 950
L’Enfant Plaza SW., Suite 600,
Washington, DC 20024. Telephone:
(202) 586–2945. If possible, please
submit all items on a CD, in which case
it is not necessary to include printed
copies.
Written comments regarding the
burden-hour estimates or other aspects
of the collection-of-information
requirements contained in this proposed
rule may be submitted to Office of
Energy Efficiency and Renewable
Energy through the methods listed
above and by email to Chad_S_
Whiteman@omb.eop.gov.
For detailed instructions on
submitting comments and additional
information on the rulemaking process,
see section VII of this document
(‘‘Public Participation’’).
Docket: The docket, which includes
Federal Register notices, public meeting
attendee lists and transcripts,
comments, and other supporting
documents/materials, is available for
review at regulations.gov. All
documents in the docket are listed in
the regulations.gov index. However,
some documents listed in the index,
such as those containing information
that is exempt from public disclosure,
may not be publicly available.
A link to the docket Web page can be
found at: https://www.regulations.gov/
#!docketDetail;D=EERE-2010-BT-STD0003. This Web page will contain a link
to the docket for this notice on the
regulations.gov site. The regulations.gov
Web page will contain simple
instructions on how to access all
documents, including public comments,
in the docket. See section VII for further
information on how to submit
comments through
www.regulations.gov.
For further information on how to
submit a comment, review other public
comments and the docket, or participate
in the public meeting, contact Ms.
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Brenda Edwards at (202) 586–2945 or by
email: Brenda.Edwards@ee.doe.gov.
FOR FURTHER INFORMATION CONTACT: Mr.
Charles Llenza, U.S. Department of
Energy, Office of Energy Efficiency and
Renewable Energy, Building
Technologies Program, EE–2J, 1000
Independence Avenue SW.,
Washington, DC 20585–0121.
Telephone: (202) 586–2192. Email:
commercial_refrigeration_equipment@
EE.Doe.Gov.
Ms. Jennifer Tiedeman, U.S.
Department of Energy, Office of the
General Counsel, GC–71, 1000
Independence Avenue SW.,
Washington, DC 20585–0121.
Telephone: (202) 287–6111. Email:
Jennifer.Tiedeman@hq.doe.gov.
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Summary of the Proposed Rule
A. Benefits and Costs to Customers
B. Impact on Manufacturers
C. National Benefits
II. Introduction
A. Authority
B. Background
1. Current Standards
2. History of Standards Rulemaking for
Commercial Refrigeration Equipment
III. General Discussion
A. Test Procedures and Normalization
Metrics
1. Test Procedures
2. Normalization Metrics
B. Technological Feasibility
1. General
2. Maximum Technologically Feasible
Levels
C. Energy Savings
1. Determination of Savings
2. Significance of Savings
D. Economic Justification
1. Specific Criteria
a. Economic Impact on Manufacturers and
Commercial Customers
b. Life-Cycle Costs
c. Energy Savings
d. Lessening of Utility or Performance of
Equipment
e. Impact of Any Lessening of Competition
f. Need of the Nation To Conserve Energy
g. Other Factors
2. Rebuttable Presumption
IV. Methodology and Discussion of
Comments
A. General Rulemaking Issues
1. Statutory Authority
2. January 2009 Final Rule Equipment
3. Normalization Metrics
4. Treatment of Blast Chillers, Thawing
Cabinets, Prep Tables, Salad Bars, and
Buffet Tables
5. Dedicated Remote Condensing Units
6. Small Units
7. Consideration of Impact of Amended
Standards
8. CO2 Cascade Systems
9. Coverage of Existing Cases Undergoing
Refurbishments or Retrofits
10. Components Shipped as After-Market
Additions
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11. Definition of Hybrid Equipment
12. Coverage of Commercial Refrigeration
Equipment With Drawers
B. Test Procedures
C. Market and Technology Assessment
1. Equipment Classes
a. Equipment Classification
b. Application Temperature Equipment
c. Open Cases
d. Service Over Counter Equipment
2. Technology Assessment
a. Technologies Applicable to All
Equipment
b. Technologies Relevant Only to
Equipment With Doors
c. Technologies Applicable Only to
Equipment Without Doors
d. Self-Contained Equipment Technologies
D. Screening Analysis
E. Engineering Analysis
1. Representative Equipment for Analysis
a. Representative Unit Selection
b. Baseline Models
2. Design Options
3. Refrigerants
4. Cost Assessment Methodology
a. Teardown Analysis
b. Cost Model
c. Manufacturer Production Cost
d. Cost-Efficiency Relationship
e. Manufacturer Markup
f. Shipping Costs
g. Manufacturer Interviews
5. Energy Consumption Model
a. Energy Consumption Model Results
b. Anti-Sweat Heater Power
c. Evaporator Fan Motor Power
d. Condenser Energy Consumption
e. Evaporator Coil Design
F. Markups Analysis
1. Baseline and Incremental Markups
2. Distribution Channel Market Shares
G. Energy Use Analysis
H. Life-Cycle Cost Analysis
1. Effect of Current Standards
2. Equipment Cost
3. Installation, Maintenance, and Repair
Costs
a. Maintenance and Repair Costs by
Efficiency Level
b. Maintenance and Repair Cost
Annualization
c. Maintenance Cost Estimates
d. Refrigerant Costs
e. Repair Costs
4. Annual Energy Consumption
5. Energy Prices
6. Energy Price Projections
7. Equipment Lifetime
8. Discount Rates
9. Compliance Date of Standards
10. Base-Case and Standards-Case
Efficiency Distributions
11. Inputs to Payback Period Analysis
12. Rebuttable-Presumption Payback
Period
I. National Impact Analysis—National
Energy Savings and Net Present Value
1. Shipments
a. VOP.RC.L Shipments
b. Shipments by End User Type
c. Shipments Forecasts
2. Forecasted Efficiency in the Base Case
and Standards Cases
3. National Energy Savings
4. Net Present Value of Customer Benefit
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5. Benefits From Effects of Amended
Standards on Energy Prices
J. Customer Subgroup Analysis
K. Manufacturer Impact Analysis
1. Overview
2. Government Regulatory Impact Model
a. Government Regulatory Impact Model
Key Inputs
b. Government Regulatory Impact Model
Scenarios
3. Discussion of Comments
a. Testing and Certification
b. Cumulative Regulatory Burden
c. Small Manufacturers
d. Manufacturer Markup
4. Manufacturer Interviews
a. Enforcement
b. Certification and Compliance Costs
c. Disproportionate Impact on Small
Businesses
d. Potential Loss of Product Utility and
Decrease in Food Safety
L. Employment Impact Analysis
M. Utility Impact Analysis
N. Emissions Analysis
O. Monetizing Carbon Dioxide and Other
Emissions Impacts
1. Social Cost of Carbon
a. Monetizing Carbon Dioxide Emissions
b. Social Cost of Carbon Values Used in
Past Regulatory Analyses
c. Current Approach and Key Assumptions
2. Valuation of Other Emissions
Reductions
P. Regulatory Impact Analysis
V. Analytical Results
A. Trial Standard Levels
1. Trial Standard Level Formulation
Process and Criteria
2. Trial Standard Level Equations
B. Economic Justification and Energy
Savings
1. Economic Impacts on Commercial
Customers
a. Life-Cycle Cost and Payback Period
b. Life-Cycle Cost Subgroup Analysis
2. Economic Impacts on Manufacturers
a. Industry Cash-Flow Analysis Results
b. Impacts on Direct Employment
c. Impacts on Manufacturing Capacity
d. Impacts on Subgroups of Manufacturers
e. Cumulative Regulatory Burden
3. National Impact Analysis
a. Amount and Significance of Energy
Savings
b. Net Present Value of Customer Costs and
Benefits
c. Employment Impacts
4. Impact on Utility or Performance of
Equipment
5. Impact of Any Lessening of Competition
6. Need of the Nation To Conserve Energy
7. Other Factors
C. Proposed Standard
VI. Procedural Issues and Regulatory Review
A. Review Under Executive Orders 12866
and 13563
B. Review Under the Regulatory Flexibility
Act
1. Description and Estimated Number of
Small Entities Regulated
2. Description and Estimate of Compliance
Requirements
3. Duplication, Overlap, and Conflict With
Other Rules and Regulations
4. Significant Alternatives to the Rule
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55891
C. Review Under the Paperwork Reduction
Act
D. Review Under the National
Environmental Policy Act of 1969
E. Review Under Executive Order 13132
F. Review Under Executive Order 12988
G. Review Under the Unfunded Mandates
Reform Act of 1995
H. Review Under the Treasury and General
Government Appropriations Act, 1999
I. Review Under Executive Order 12630
J. Review Under the Treasury and General
Government Appropriations Act, 2001
K. Review Under Executive Order 13211
L. Review Under the Information Quality
Bulletin for Peer Review
VII. Public Participation
A. Attendance at the Public Meeting
B. Procedure for Submitting Prepared
General Statements for Distribution
C. Conduct of the Public Meeting
D. Submission of Comments
E. Issues on Which DOE Seeks Comment
1. Primary and Secondary Equipment
Classes
2. Design Option and Core Case Costs
3. Offset Factors
4. Extension of Standards
5. Types of Refrigerant Analyzed
6. Distribution Channel Market Shares and
Markups
7. Market Shares of Efficiency Levels
8. Maintenance and Repair Costs at Higher
Efficiency Levels
9. Impact of Amended Standards on Future
Shipments
10. Small Businesses
VIII. Approval of the Office of the Secretary
I. Summary of the Proposed Rule
Title III, Part C of the Energy Policy
and Conservation Act of 1975 (EPCA),
Public Law 94–163 (42 U.S.C. 6311–
6317, as codified), added by Public Law
95–619, Title IV, section 441(a),
established the Energy Conservation
Program for Certain Industrial
Equipment, a program covering certain
industrial equipment, which includes
the commercial refrigeration equipment
that is the focus of this notice.1 2 EPCA
specifies that any new or amended
energy conservation standard that DOE
prescribes for the equipment covered
shall be designed to achieve the
maximum improvement in energy
efficiency that the Secretary of Energy
(Secretary) determines is
technologically feasible and
economically justified. (42 U.S.C.
6295(o)(2)(A) and 6316(e)(1))
Furthermore, EPCA mandates that the
new or amended standard must result in
significant conservation of energy. (42
U.S.C. 6295(o)(3)(B) and 6316(e)(1)) In
accordance with these and other
statutory criteria discussed in this
1 For editorial reasons, upon codification in the
U.S. Code, Part C was re-designated Part A–1.
2 All references to EPCA in this document refer
to the statute as amended by the American Energy
Manufacturing Technical Corrections Act
(AEMTCA), Public Law 112–210 (Dec. 18, 2012).
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Federal Register / Vol. 78, No. 176 / Wednesday, September 11, 2013 / Proposed Rules
notice, DOE proposes to adopt amended
energy conservation standards for
commercial refrigeration equipment.
The proposed standards, which consist
of maximum daily energy consumption
(MDEC) values as a function of either
refrigerated volume or total display area
(TDA), are shown in Table I.1. DOE
proposes that the standards proposed in
this NOPR, if adopted, would apply to
all equipment listed in Table I.1 that is
manufactured in, or imported into, the
United States on or after 3 years
following the publication date of the
final rule. (42 U.S.C. 6313(c)(6)(C)) For
the NOPR analysis, DOE assumed a
publication date in 2014 for this final
rule and a compliance date in 2017 for
the amended standards established by
the final rule.
TABLE I.1—PROPOSED ENERGY CONSERVATION STANDARDS FOR COMMERCIAL
REFRIGERATION EQUIPMENT
[Assumes compliance beginning in 2017]
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Equipment class *
VCT.RC.L .................
VOP.RC.M ................
SVO.RC.M ................
HZO.RC.L .................
HZO.RC.M ................
VCT.RC.M ................
VOP.RC.L .................
SOC.RC.M ................
VOP.SC.M ................
SVO.SC.M ................
HZO.SC.L .................
HZO.SC.M ................
HCT.SC.I ..................
VCT.SC.I ..................
VCS.SC.I ..................
VCT.SC.M ................
VCT.SC.L .................
VCS.SC.M ................
VCS.SC.L .................
HCT.SC.M ................
HCT.SC.L .................
HCS.SC.M ................
HCS.SC.L .................
PD.SC.M ...................
SOC.SC.M ................
VOP.RC.I ..................
SVO.RC.L .................
SVO.RC.I ..................
HZO.RC.I ..................
VOP.SC.L .................
VOP.SC.I ..................
SVO.SC.L .................
SVO.SC.I ..................
HZO.SC.I ..................
SOC.RC.L .................
SOC.RC.I ..................
SOC.SC.I ..................
VCT.RC.I ..................
HCT.RC.M ................
HCT.RC.L .................
HCT.RC.I ..................
VCS.RC.M ................
VCS.RC.L .................
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Proposed standard
level ** †
0.43 × TDA + 2.03
0.61 × TDA + 3.03
0.63 × TDA + 2.41
0.57 × TDA + 6.88
0.35 × TDA + 2.88
0.08 × TDA + 0.72
2.11 × TDA + 6.36
0.39 × TDA + 0.08
1.51 × TDA + 4.09
1.5 × TDA + 3.99
1.92 × TDA + 7.08
0.75 × TDA + 5.44
0.49 × TDA + 0.37
0.52 × TDA + 2.56
0.35 × V + 0.81
0.04 × V + 1.07
0.22 × V + 1.21
0.03 × V + 0.53
0.13 × V + 0.43
0.02 × V + 0.51
0.11 × V + 0.6
0.02 × V + 0.37
0.12 × V + 0.42
0.03 × V + 0.83
0.32 × TDA + 0.53
2.68 × TDA + 8.08
2.11 × TDA + 6.36
2.68 × TDA + 8.08
0.72 × TDA + 8.74
3.79 × TDA + 10.26
4.81 × TDA + 13.03
3.77 × TDA + 10.01
4.79 × TDA + 12.72
2.44 × TDA + 9.0
0.83 × TDA + 0.18
0.97 × TDA + 0.21
1.35 × TDA + 0.29
0.51 × TDA + 2.37
0.14 × TDA + 0.11
0.3 × TDA + 0.23
0.35 × TDA + 0.27
0.1 × V + 0.24
0.21 × V + 0.5
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TABLE I.1—PROPOSED ENERGY CON- analysis on groups of customers that
SERVATION STANDARDS FOR COM- may be disproportionately affected by
MERCIAL
REFRIGERATION EQUIP- the proposed standard.
MENT—Continued
TABLE I.2—IMPACTS OF PROPOSED
[Assumes compliance beginning in 2017]
STANDARDS ON CUSTOMERS OF
COMMERCIAL
REFRIGERATION
Proposed standard
Equipment class *
level ** †
EQUIPMENT
VCS.RC.I ..................
HCS.SC.I ..................
HCS.RC.M ................
HCS.RC.L .................
HCS.RC.I ..................
SOC.SC.L .................
0.25 × V + 0.58
0.35 × V + 0.81
0.1 × V + 0.24
0.21 × V + 0.5
0.25 × V + 0.58
0.67 × TDA + 1.12
* Equipment class designations consist of a
combination (in sequential order separated by
periods) of: (1) an 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, SOC = service over
counter, or PD = pull-down); (2) an operating
mode code (RC = remote condensing or SC =
self-contained); and (3) a rating temperature
code (M = medium temperature (38±2 °F), L =
low temperature (0±2 °F), or I = ice-cream
temperature (¥15±2 °F)). For example,
‘‘VOP.RC.M’’ refers to the ‘‘vertical open, remote condensing, medium temperature’’
equipment class. See discussion in chapter 3
of the NOPR technical support document
(TSD) for a more detailed explanation of the
equipment class terminology.
** ‘‘TDA’’ is the total display area of the
case, as measured in the Air-Conditioning,
Heating, and Refrigeration Institute (AHRI)
Standard 1200–2010, appendix D.
† ‘‘V’’ is the volume of the case, as measured in American National Standards Institute
(ANSI)/Association of Home Appliance Manufacturers (AHAM) Standard HRF–1–2004.
A. Benefits and Costs to Customers
Table I.2 presents DOE’s evaluation of
the economic impacts of the proposed
standards on customers of commercial
refrigeration equipment, as measured by
the average life-cycle cost (LCC)
savings 3 and the median payback
period (PBP).4 The average LCC savings
are positive for all equipment classes
under the standard proposed by DOE in
this notice. At TSL 4, the percentage of
customers who experience net benefits
or no impacts ranges from 59 to 100
percent, and customers experiencing a
net cost range from 0 to 41 percent.
Chapter 11 presents the LCC subgroup
3 Life-cycle cost (LCC) of commercial refrigeration
equipment is the cost to customers of owning and
operating the equipment over the entire life of the
equipment. Life-cycle cost savings are the
reductions in the life-cycle costs due to amended
energy conservation standards when compared to
the life-cycle costs of the equipment in the absence
of amended energy conservation standards. Further
discussion of the LCC analysis can be found in
Chapter 8 of the TSD.
4 Payback period (PBP) refers to the amount of
time (in years) it takes customers to recover the
increased installed cost of equipment associated
with new or amended standards through savings in
operating costs. Further discussion of the PBP can
be found in Chapter 8 of the TSD.
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Equipment
class *
VOP.RC.M ........
VOP.RC.L .........
VOP.SC.M ........
VCT.RC.M ........
VCT.RC.L .........
VCT.SC.M .........
VCT.SC.L ..........
VCT.SC.I ...........
VCS.SC.M ........
VCS.SC.L .........
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.M ........
HCT.SC.L .........
HCT.SC.I ..........
HCS.SC.M ........
HCS.SC.L .........
PD.SC.M ...........
SOC.SC.M ........
Average
LCC
savings
2012$
$1,493.72
1,129.51
691.27
1,108.13
797.91
641.05
1,342.84
431.88
131.80
220.83
152.69
1,008.46
491.99
494.51
0.00
0.00
28.78
0.00
253.60
368.92
42.48
8.68
80.72
310.43
739.75
Median PBP
years
3.91
2.22
4.39
2.70
1.64
2.54
0.96
1.97
1.75
1.15
2.42
4.50
4.75
4.41
NA
NA
6.40
NA
3.08
1.47
4.28
4.28
2.57
2.27
2.99
* Values have been shown only for primary
equipment classes, which are equipment
classes that have significant volume of shipments and, therefore, were directly analyzed.
See chapter 5 of the NOPR TSD, Engineering
Analysis, for a detailed discussion of primary
and secondary equipment classes.
** For equipment classes HZO.RC.M,
HZO.RC.L, and HZO.SC.L, no efficiency levels
above the baseline were found to be economically justifiable. Therefore, the proposed
standards for these equipment classes are the
same as the current standards. As a result,
LCC savings for these equipment classes are
shown as zero. The PBP values are indeterminate and are shown as ‘‘NA.’’
B. Impact on Manufacturers
The industry net present value (INPV)
is the sum of the discounted cash flows
to the industry from the base year (2013)
through the end of the analysis period
(2046). Using a real discount rate of 10
percent,5 DOE estimates that the INPV
for manufacturers of commercial
refrigeration equipment is $1,162.0
million in 2012$. Under the proposed
standards, DOE expects the industry net
present value to decrease by 3.95
5 This is the rate used to discount future cash
flows in the Manufacturer Impact Analysis. A
discount rate of 10% was calculated based on SEC
filings and feedback from manufacturer interviews
about the current cost of capital in the industry. For
more information, refer to Chapter 12 of the NOPR
TSD.
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percent to 7.97 percent. Total industry
conversion costs are expected to total
$87.5 million.
C. National Benefits
DOE’s analyses indicate that the
proposed standards would save a
significant amount of energy. The
lifetime savings for commercial
refrigeration equipment purchased in
the 30-year period that begins in the
year of the compliance with amended
standards (2017–2046) amount to 1.001
quadrillion British thermal units
(quads). The average annual energy
savings over the life of commercial
refrigeration equipment purchased in
2017 through 2046 is 0.04 quads.6
The cumulative national net present
value (NPV) of total customer costs and
savings of the proposed standards for
commercial refrigeration equipment in
2012$ ranges from $1.606 billion (at a 7percent discount rate) to $4.067 billion
(at a 3-percent discount rate). This NPV
expresses the estimated total value to
customers of future operating cost
savings minus the estimated increased
installed costs for equipment purchased
in 2017–2046, discounted to 2013.
The proposed standards are expected
to have significant environmental
benefits. The energy savings would
result in cumulative greenhouse gas
(GHG) emission reductions of 54.88
million metric tons (MMt) 7 of carbon
dioxide (CO2), 265.9 thousand tons of
methane, 1.1 thousand tons of nitrous
oxide, 70.1 thousand tons of sulfur
dioxide (SO2), 81.1 thousand tons of
NOX and 0.1 tons of mercury (Hg).8 9
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The value of the CO2 reductions is
calculated using a range of values per
metric ton of CO2 (otherwise known as
the Social Cost of Carbon, or SCC)
developed by a recent Federal
interagency process. The derivation of
the SCC values is discussed in section
IV.O. DOE estimates that the net present
monetary value of the CO2 emissions
reduction would be between $0.31 and
$4.55 billion. DOE also estimates the
present monetary value of the NOX
emissions reduction would be between
$8.8 and $90.7 million at a 7-percent
discount rate, and between $19.1 and
$196.2 million at a 3-percent discount
rate.10
Table I.3 summarizes the national
economic costs and benefits expected to
result from the proposed standards for
commercial refrigeration equipment.
TABLE I.3—SUMMARY OF NATIONAL ECONOMIC BENEFITS AND COSTS OF PROPOSED COMMERCIAL REFRIGERATION
EQUIPMENT ENERGY CONSERVATION STANDARDS
Present value
million 2012$
Category
Discount rate
(percent)
Benefits
Operating Cost Savings ...................................................................................................................................
2,695
6,034
308
1,504
2,452
4,552
50
108
4,249
7,646
1,089
1,967
Total Benefits † .................................................................................................................................................
7
3
3,160
5,679
CO2 Reduction Monetized Value (at $12.9/Metric Ton) * ................................................................................
CO2 Reduction Monetized Value (at $40.8/Metric Ton) * ................................................................................
CO2 Reduction Monetized Value (at $62.2/Metric Ton) * ................................................................................
CO2 Reduction Monetized Value (at $117.0/Metric Ton) * ..............................................................................
NOX Reduction Monetized Value (at $2639/Ton) ** ........................................................................................
7
3
5
3
2.5
3
7
3
7
3
7
3
Costs
Incremental Installed Costs .............................................................................................................................
Net Benefits
Including CO2 and NOX Reduction Monetized Value .....................................................................................
mstockstill on DSK4VPTVN1PROD with PROPOSALS3
* The interagency group selected four sets of SCC values for use in regulatory analyses. Three sets of values are based on the average SCC
from the integrated assessment models, at discount rates of 2.5, 3, and 5 percent. The fourth set, which represents the 95th percentile SCC estimate across all three models at a 3-percent discount rate, is included to represent higher-than-expected impacts from temperature change further out in the tails of the SCC distribution. The values in parentheses represent the SCC in 2015. The SCC time series incorporate an escalation factor.
** The value represents the average of the low and high NOX values used in DOE’s analysis.
† Total Benefits for both the 3% and 7% cases are derived using the CO reduction monetized value series corresponding to average SCC with
2
3-percent discount rate.
The benefits and costs of today’s
proposed standards, for commercial
refrigeration equipment sold in 2017–
2046, can also be expressed in terms of
annualized values. The annualized
monetary values are the sum of (1) the
annualized national economic value of
the benefits from the customer operation
of equipment that meets the proposed
standards (consisting primarily of
operating cost savings from using less
energy, minus increases in equipment
6 Total U.S. commercial sector energy (source
energy) used for refrigeration in 2010 was 1.21
quads. Source: U.S. Department of Energy—Office
of Energy Efficiency and Renewable Energy.
Buildings Energy Data Book, Table 3.1.4, 2010
Commercial Energy End-Use Splits, by Fuel Type
(Quadrillion Btu). 2012. (Last accessed April 23,
2013.) https://buildingsdatabook.eren.doe.gov/
TableView.aspx?table=3.1.4.
7 A metric ton is equivalent to 1.1 U.S. short tons.
Results for NOX and Hg are presented in short tons.
8 DOE calculated emissions reductions relative to
the Annual Energy Outlook (AEO) 2013 Reference
case, which generally represents current legislation
and environmental regulations for which
implementing regulations were available as of
December 31, 2012.
9 DOE also estimated CO and CO equivalent
2
2
(CO2eq) emissions that occur through 2030 (CO2eq
includes greenhouse gases such as CH4 and N2O).
The estimated emissions reductions through 2030
are 16 million metric tons CO2, 1,687 thousand tons
CO2eq for CH4, and 72.27 thousand tons CO2eq for
N2O.
10 DOE is currently investigating valuation of
avoided Hg and SO2 emissions.
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installed cost, which is another way of
representing customer NPV); and (2) the
annualized monetary value of the
benefits of emission reductions,
including CO2 emission reductions.11
Although combining the values of
operating savings and CO2 emission
reductions provides a useful
perspective, two issues should be
considered. First, the national operating
savings are domestic U.S. customer
monetary savings that occur as a result
of market transactions, while the value
of CO2 reductions is based on a global
value. Second, the assessments of
operating cost savings and CO2 savings
are performed with different methods
that use different time frames for
analysis. The national operating cost
savings is measured over the lifetimes of
commercial refrigeration equipment
shipped in 2017–2046. The SCC values,
on the other hand, reflect the present
value of some future climate-related
impacts resulting from the emission of
1 ton of CO2 in each year. These impacts
continue well beyond 2100.
Table I.4 shows the annualized
benefits and costs of the proposed
standards. The results of the primary
estimate are as follows. Table I.4 shows
the primary, low net benefits, and high
net benefits scenarios. The primary
estimate is the estimate in which the
operating cost savings were calculated
using the Annual Energy Outlook 2013
(AEO2013) Reference Case forecast of
future electricity prices. The other two
estimates, low net benefits estimate and
high net benefits estimate, are based on
the low and high electricity price
scenarios from the AEO2013 forecast. At
a 7-percent discount rate for benefits
and costs, the cost in the primary
estimate of the standards proposed in
today’s notice is $82 million per year in
increased equipment costs. The
annualized benefits are $203 million per
year in reduced equipment operating
costs, $75 million in CO2 reductions
(note that DOE used a 3-percent
discount rate, along with the
corresponding SCC series that uses a 3percent discount rate, to calculate the
monetized value of CO2 emissions
reductions), and $3.75 million in
reduced NOX emissions. In this case, the
annualized net benefit amounts to $199
million. At a 3-percent discount rate for
all benefits and costs, the cost in the
primary estimate of the amended
standards proposed in today’s notice is
$97 million per year in increased
equipment costs. The benefits are $299
million per year in reduced operating
costs, $75 million in CO2 reductions,
and $5.33 million in reduced NOX
emissions. In this case, the net benefit
amounts to $281 million per year.
DOE also calculated the low net
benefits and high net benefits estimates
by calculating the operating cost savings
and incremental installed costs at the
AEO2013 low economic growth case
and high economic growth case
scenarios, respectively. These scenarios
do not change the monetized emissions
reductions values. The net benefits and
costs for low and high net benefits
estimates were calculated in the same
manner as the primary estimate by using
the corresponding values of operating
cost savings and incremental installed
costs.
TABLE I.4—ANNUALIZED BENEFITS AND COSTS OF PROPOSED STANDARDS FOR COMMERCIAL REFRIGERATION EQUIPMENT
Primary
estimate *
million 2012$
Discount rate
(percent)
Low net benefits
estimate *
million 2012$
High net benefits
estimate *
million 2012$
Benefits
Operating Cost Savings ...................................................................
7
3
5
3
2.5
3
7
3
212
314
19
75
114
225
3.75
5.33
281
379
275
368
290
394
7
3
Total Benefits (Operating Cost Savings, CO2 Reduction and NOX
Reduction) † ..................................................................................
197
288
19
75
114
225
3.75
5.33
7
3
CO2 Reduction Monetized Value (at $12.9/Metric Ton) ** ..............
CO2 Reduction Monetized Value (at $40.8/Metric Ton) ** ..............
CO2 Reduction Monetized Value (at $62.2/Metric Ton) ** ..............
CO2 Reduction Monetized Value (at $117.0/Metric Ton) ** ............
NOX Reduction Monetized Value (at $2,639/Ton) ** .......................
203
299
19
75
114
225
3.75
5.33
82
97
84
100
80
95
199
281
191
268
210
299
Costs
Total Incremental Installed Costs ....................................................
Net Benefits Less Costs
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Total Benefits Less Incremental Costs ............................................
7
3
* This table presents the annualized costs and benefits associated with equipment shipped in 2017–2046. These results include benefits to
consumers which accrue after 2046 from the products purchased in 2017–2046. The primary, low, and high estimates utilize forecasts of energy
prices from the AEO2013 Reference Case, Low Economic Growth Case, and High Economic Growth Case, respectively. In addition, incremental
equipment costs reflect a medium decline rate for projected product price trends in the Primary Estimate, a low decline rate for projected equipment price trends in the Low Benefits Estimate, and a high decline rate for projected equipment price trends in the High Benefits Estimate. The
methods used to derive projected price trends are explained in Appendix 10B.
11 DOE used a two-step calculation process to
convert the time-series of costs and benefits into
annualized values. First, DOE calculated a present
value in 2013, the year used for discounting the
NPV of total consumer costs and savings, for the
time-series of costs and benefits using discount
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rates of 3 and 7 percent for all costs and benefits
except for the value of CO2 reductions. For the
latter, DOE used a range of discount rates, as shown
in Table I.4. From the present value, DOE then
calculated the fixed annual payment over a 30-year
period (2017 through 2046) that yields the same
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present value. The fixed annual payment is the
annualized value. Although DOE calculated
annualized values, this does not imply that the
time-series of cost and benefits from which the
annualized values were determined is a steady
stream of payments.
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55895
** The interagency group selected four sets of SCC values for use in regulatory analyses. Three sets of values are based on the average SCC
from the three integrated assessment models, at discount rates of 2.5, 3, and 5 percent. The fourth set, which represents the 95th percentile
SCC estimate across all three models at a 3-percent discount rate, is included to represent higher-than-expected impacts from temperature
change further out in the tails of the SCC distribution. The values in parentheses represent the SCC in 2015. The SCC time series incorporate
an escalation factor. The value for NOX is the average of the low and high values used in DOE’s analysis.
† Total Benefits for both the 3-percent and 7-percent cases are derived using the series corresponding to average SCC with 3-percent discount
rate. In the rows labeled ‘‘7% plus CO2 range’’ and ‘‘3% plus CO2 range,’’ the operating cost and NOX benefits are calculated using the labeled
discount rate, and those values are added to the full range of CO2 values.
DOE has tentatively concluded that
the proposed standards meet the
requirements found in EPCA by
representing maximum improvement in
energy efficiency that is technologically
feasible and economically justified, and
would result in significant conservation
of energy. (42 U.S.C. 6295 (o), 6316(e))
DOE further notes that technologies
used to achieve these standard levels are
already commercially available for the
equipment classes covered by today’s
proposal. Based on the analyses
described above, DOE has tentatively
concluded that the benefits of the
proposed standards to the Nation
(energy savings, positive NPV of
customer benefits, customer LCC
savings, and emission reductions)
would outweigh the burdens (loss of
INPV for manufacturers and LCC
increases for some customers).
DOE also considered more-stringent
and less-stringent energy use levels as
trial standard levels (TSLs), and is still
considering them in this rulemaking.
However, DOE has tentatively
concluded that the potential burdens of
the more-stringent energy use levels
would outweigh the projected benefits.
Based on consideration of the public
comments DOE receives in response to
this notice and related information
collected and analyzed during the
course of this rulemaking effort, DOE
may adopt energy use levels presented
in this notice that are either higher or
lower than the proposed standards, or
some combination of level(s) that
incorporate the proposed standards in
part.
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II. Introduction
The following section briefly
discusses the statutory authority
underlying today’s proposal, as well as
some of the relevant historical
background related to the establishment
of standards for commercial
refrigeration equipment.
A. Authority
Title III, Part C of EPCA, Public Law
94–163 (42 U.S.C. 6311–6317, as
codified), added by Public Law 95–619,
Title IV, section 441(a), established the
Energy Conservation Program for
Certain Industrial Equipment, a program
covering certain industrial equipment,
which includes the commercial
refrigeration equipment that is the focus
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of this notice.12 13 EPCA prescribes
energy conservation standards for
commercial refrigeration equipment (42
U.S.C. 6313(c)(2)–(4)), and directs DOE
to conduct rulemakings to establish new
and amended standards for commercial
refrigeration equipment. (42 U.S.C.
6313(c)(4)–(6)) (DOE notes that under 42
U.S.C. 6295(m) and 6316(e)(1) the
agency must periodically review its
already established energy conservation
standards for covered equipment. Under
this requirement, the next review that
DOE would need to conduct must occur
no later than 6 years from the issuance
of a final rule establishing or amending
a standard for covered equipment.)
Pursuant to EPCA, DOE’s energy
conservation program for covered
equipment generally consists of four
parts: (1) Testing; (2) labeling; (3) the
establishment of Federal energy
conservation standards; and (4)
certification and enforcement
procedures. For commercial
refrigeration equipment, DOE is
responsible for the entirety of this
program. Subject to certain criteria and
conditions, DOE is required to develop
test procedures to measure the energy
efficiency, energy use, or estimated
annual operating cost of each type or
class of covered equipment. (42 U.S.C.
6314) Manufacturers of covered
equipment must use the prescribed DOE
test procedure as the basis for certifying
to DOE that their equipment complies
with the applicable energy conservation
standards adopted under EPCA and
when making representations to the
public regarding the energy use or
efficiency of that equipment. (42 U.S.C.
6315(b), 6295(s), and 6316(e)(1))
Similarly, DOE must use these test
procedures to determine whether that
equipment complies with standards
adopted pursuant to EPCA. The DOE
test procedure for commercial
refrigeration equipment currently
appears at title 10 of the Code of Federal
Regulations (CFR) part 431, subpart C.
DOE must follow specific statutory
criteria for prescribing amended
standards for covered equipment. As
12 For editorial reasons, upon codification in the
U.S. Code, Part C was re-designated Part A–1.
13 All references to EPCA in this document refer
to the statute as amended through the American
Energy Manufacturing Technical Corrections Act
(AEMTCA), Public Law 112–210 (Dec. 18, 2012).
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indicated above, any amended standard
for covered equipment must be designed
to achieve the maximum improvement
in energy efficiency that is
technologically feasible and
economically justified. (42 U.S.C.
6295(o)(2)(A) and 6316(e)(1))
Furthermore, DOE may not adopt any
standard that would not result in the
significant conservation of energy. (42
U.S.C. 6295(o)(3) and 6316(e)(1)) DOE
also may not prescribe a standard: (1)
For certain equipment, including
commercial refrigeration equipment, if
no test procedure has been established
for the product; or (2) if DOE determines
by rule that the proposed standard is not
technologically feasible or economically
justified. (42 U.S.C. 6295(o)(3)(A)–(B)
and 6316(e)(1)) In deciding whether a
proposed standard is economically
justified, DOE must determine whether
the benefits of the standard exceed its
burdens. (42 U.S.C. 6295(o)(2)(B)(i) and
6316(e)(1)) DOE must make this
determination after receiving comments
on the proposed standard, and by
considering, to the greatest extent
practicable, the following seven factors:
1. The economic impact of the
standard on manufacturers and
consumers of the equipment subject to
the standard;
2. The savings in operating costs
throughout the estimated average life of
the covered equipment in the type (or
class) compared to any increase in the
price, initial charges, or maintenance
expenses for the covered equipment that
are likely to result from the imposition
of the standard;
3. The total projected amount of
energy, or as applicable, water, savings
likely to result directly from the
imposition of the standard;
4. Any lessening of the utility or the
performance of the covered equipment
likely to result from the imposition of
the standard;
5. The impact of any lessening of
competition, as determined in writing
by the U.S. Attorney General (Attorney
General), that is likely to result from the
imposition of the standard;
6. The need for national energy and
water conservation; and
7. Other factors the Secretary
considers relevant.
(42 U.S.C. 6295(o)(2)(B)(i)(I)–(VII) and
6316(e)(1))
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EPCA, as codified, also contains what
is known as an ‘‘anti-backsliding’’
provision, which prevents the Secretary
from prescribing any amended standard
that either increases the maximum
allowable energy use or decreases the
minimum required energy efficiency of
covered equipment. (42 U.S.C.
6295(o)(1) and 6316(e)(1)) Also, the
Secretary may not prescribe an amended
or new standard if interested persons
have established by a preponderance of
the evidence that the standard is likely
to result in the unavailability in the
United States of any covered product
type (or class) of performance
characteristics (including reliability),
features, sizes, capacities, and volumes
that are substantially the same as those
generally available in the United States.
(42 U.S.C. 6295(o)(4) and 6316(e)(1))
Further, EPCA, as codified,
establishes a rebuttable presumption
that a standard is economically justified
if the Secretary finds that the additional
cost to the consumer of purchasing 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. (See 42 U.S.C.
6295(o)(2)(B)(iii) and 6316(e)(1)) Section
III.D.2 presents additional discussion
about the rebuttable presumption
payback period.
Additionally, 42 U.S.C. 6295(q)(1) and
6316(e)(1) specify requirements when
promulgating a standard for a type or
class of covered equipment that has two
or more subcategories that may justify
different standard levels. DOE must
specify a different standard level than
that which applies generally to such
type or class of equipment for any group
of covered products that has the same
function or intended use if DOE
determines that products within such
group (A) consume a different kind of
energy from that consumed by other
covered equipment within such type (or
class); or (B) have a capacity or other
performance-related feature that other
equipment within such type (or class)
do not have and such feature justifies a
higher or lower standard. (42 U.S.C.
6295(q)(1) and 6316(e)(1)) In
determining whether a performancerelated feature justifies a different
standard for a group of equipment, DOE
must consider such factors as the utility
to the consumer of the feature and other
factors DOE deems appropriate. Id. Any
rule prescribing such a standard must
include an explanation of the basis on
which such higher or lower level was
established. (42 U.S.C. 6295(q)(2) and
6316(e)(1))
Federal energy conservation
requirements generally supersede State
laws or regulations concerning energy
conservation testing, labeling, and
standards. (42 U.S.C. 6297(a)–(c) and
6316(e))
B. Background
1. Current Standards
The current energy conservation
standards for commercial refrigeration
equipment were established by two
different legislative actions and one
DOE final rule. EPCA, as amended by
the Energy Policy Act of 2005 (EPACT
2005), established standards for selfcontained commercial refrigerators and
freezer with solid or transparent doors,
self-contained commercial refrigeratorfreezers with solid doors, and selfcontained commercial refrigerators
designed for pull-down applications.
(42 U.S.C. 6313(c)(2)–(3)) On January 9,
2009, DOE published a final rule
(January 2009 final rule) prescribing
standards for commercial refrigeration
equipment. 74 FR 1092. Specifically,
this final rule completed the first
standards rulemaking for commercial
refrigeration equipment by establishing
standards for equipment types specified
in 42 U.S.C. 6313(c)(5), and for which
EPCA did not prescribe standards in 42
U.S.C. 6313(c)(2)–(3). These types
consisted of 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. More recently, the American
Energy Manufacturing Technical
Corrections Act (AEMTCA), Public Law
112–210 (Dec. 18, 2012), amended
section 342(c) of EPCA to establish a
new standard for self-contained service
over counter medium temperature
commercial refrigerators (this class is
known as SOC.SC.M per DOE’s
equipment class nomenclature). (42
U.S.C. 6313(c)(4)) As a result, DOE’s
current energy conservation standards
for commercial refrigeration equipment
include the following: standards
established by EPCA for commercial
refrigeration equipment manufactured
on or after January 1, 2010; standards
established in the January 2009 final
rule for commercial refrigeration
equipment manufactured on or after
January 1, 2012; and standards
established by AEMTCA for SOC.SC.M
equipment manufactured on or after
January 1, 2012.
Table II.1 and Table II.2 present
DOE’s current energy conservation
standards for commercial refrigeration
equipment set by EPCA and the January
2009 final rule, respectively. The
AEMTCA standard for SOC.SC.M
equipment manufactured on or after
January 1, 2012 is prescribed as 0.6 ×
TDA + 1.0. (42 U.S.C. 6313(c)(4)).
TABLE II.1—COMMERCIAL REFRIGERATION EQUIPMENT STANDARDS PRESCRIBED BY EPCA—COMPLIANCE REQUIRED
BEGINNING ON JANUARY 1, 2010
Maximum daily energy consumption
kWh/day *
mstockstill on DSK4VPTVN1PROD with PROPOSALS3
Category
Refrigerators with solid doors ..............................................................................................................
Refrigerators with transparent doors ...................................................................................................
Freezers with solid doors ....................................................................................................................
Freezers with transparent doors ..........................................................................................................
Refrigerators/freezers with solid doors ................................................................................................
Self-contained refrigerators with transparent doors designed for pull-down temperature applications.
0.10 V ** + 2.04.
0.12 V + 3.34.
0.40 V + 1.38.
0.75 V + 4.10.
the greater of 0.27 AV † ¥0.71 or 0.70.
0.126V + 3.51.
* kilowatt-hours per day.
** Where ‘‘V’’ means the chilled or frozen compartment volume in cubic feet as defined in the Association of Home Appliance Manufacturers
Standard HRF–1–1979. 10 CFR 431.66.
† Where ‘‘AV’’ means that adjusted volume in cubic feet measured in accordance with the Association of Home Appliance Manufacturers
Standard HRF–1–1979. 10 CFR 431.66
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commercial refrigeration equipment
designed for holding temperatures 14
(i.e., commercial refrigerators, freezers,
and refrigerator-freezers with
transparent and solid doors designed for
holding temperature applications) and
self-contained commercial refrigerators
with transparent doors designed for
†
Standard level **
Equipment class *
pull-down temperature applications.15
kWh/day
Compliance with these standards was
required as of January 1, 2010. (42
VOP.RC.M ................ 0.82 × TDA + 4.07
SVO.RC.M ................ 0.83 × TDA + 3.18
U.S.C. 6313(c)(2)–(3)) DOE published a
HZO.RC.M ................ 0.35 × TDA + 2.88
technical amendment final rule on
VOP.RC.L ................. 2.27 × TDA + 6.85
October 18, 2005 codifying these
HZO.RC.L ................. 0.57 × TDA + 6.88
standards into subpart C of part 431
VCT.RC.M ................ 0.22 × TDA + 1.95
under title 10 of the Code of Federal
VCT.RC.L ................. 0.56 × TDA + 2.61
Regulations (CFR). 70 FR 60407.
SOC.RC.M ................ 0.51 × TDA + 0.11
In addition, EPCA requires DOE to set
VOP.SC.M ................ 1.74 × TDA + 4.71
standards for additional commercial
SVO.SC.M ................ 1.73 × TDA + 4.59
refrigeration equipment that is not
HZO.SC.M ................ 0.77 × TDA + 5.55
covered by 42 U.S.C. 6313(c)(2)–(3),
HZO.SC.L ................. 1.92 × TDA + 7.08
VCT.SC.I .................. 0.67 × TDA + 3.29
namely commercial ice-cream freezers;
VCS.SC.I .................. 0.38 × V + 0.88
self-contained commercial refrigerators,
HCT.SC.I .................. 0.56 × TDA + 0.43
freezers, and refrigerator-freezers
SVO.RC.L ................. 2.27 × TDA + 6.85
without doors; and remote condensing
VOP.RC.I .................. 2.89 × TDA + 8.7
commercial refrigerators, freezers, and
SVO.RC.I .................. 2.89 × TDA + 8.7
refrigerator-freezers. (42 U.S.C.
HZO.RC.I .................. 0.72 × TDA + 8.74
6313(c)(5)) DOE published a final rule
VCT.RC.I .................. 0.66 × TDA + 3.05
establishing these standards on January
HCT.RC.M ................ 0.16 × TDA + 0.13
9, 2009 (74 FR 1092), and manufacturers
HCT.RC.L ................. 0.34 × TDA + 0.26
HCT.RC.I .................. 0.4 × TDA + 0.31
must comply with these standards
VCS.RC.M ................ 0.11 × V + 0.26
starting on January 1, 2012. (42 U.S.C.
VCS.RC.L ................. 0.23 × V + 0.54
6313(c)(5)(A))
VCS.RC.I .................. 0.27 × V + 0.63
EPCA requires DOE to conduct a
HCS.RC.M ................ 0.11 × V + 0.26
subsequent rulemaking to determine
HCS.RC.L ................. 0.23 × V + 0.54
whether to amend the standards
HCS.RC.I .................. 0.27 × V + 0.63
established under 42 U.S.C. 6313(c),
SOC.RC.L ................. 1.08 × TDA + 0.22
which includes both the standards
SOC.RC.I .................. 1.26 × TDA + 0.26
prescribed by EPACT 2005 and those
VOP.SC.L ................. 4.37 × TDA + 11.82
prescribed by DOE in the January 2009
VOP.SC.I .................. 5.55 × TDA + 15.02
final rule. (42 U.S.C. 6313(c)(6)) If DOE
SVO.SC.L ................. 4.34 × TDA + 11.51
SVO.SC.I .................. 5.52 × TDA + 14.63
decides as part of this ongoing
HZO.SC.I .................. 2.44 × TDA + 9.
rulemaking to amend the current
SOC.SC.I .................. 1.76 × TDA + 0.36
standards, DOE must publish a final
HCS.SC.I .................. 0.38 × V + 0.88
rule establishing any such amended
* Equipment class designations consist of a standards by January 1, 2013. Id.
To satisfy this requirement, DOE
combination (in sequential order separated by
periods) of: (1) an equipment family code initiated the current rulemaking on
(VOP = vertical open, SVO = semivertical April 30, 2010 by publishing on its Web
open, HZO = horizontal open, VCT = vertical
transparent doors, VCS = vertical solid doors, site its ‘‘Rulemaking Framework for
HCT = horizontal transparent doors, HCS = Commercial Refrigeration Equipment.’’
horizontal solid doors, or SOC = service over (The Framework document is available
counter); (2) an operating mode code (RC = at: www1.eere.energy.gov/buildings/
remote condensing or SC = self-contained);
and (3) a rating temperature code (M = me- appliance_standards/commercial/pdfs/
dium temperature (38 °F), L = low temperature cre_framework_04-30-10.pdf.) DOE also
(0 °F), or I = ice-cream temperature (-15 °F)). published a notice in the Federal
For example, ‘‘VOP.RC.M’’ refers to the Register announcing the availability of
‘‘vertical open, remote condensing, medium
the Framework document, as well as a
temperature’’ equipment class.
** TDA is the total display area of the case, public meeting to discuss the document.
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TABLE II.2—COMMERCIAL REFRIGERATION EQUIPMENT STANDARDS ESTABLISHED IN THE JANUARY 2009
RULE—COMPLIANCE
REFINAL
QUIRED BEGINNING ON JANUARY 1,
2012
as measured in ANSI/Air-Conditioning and Refrigeration Institute (ARI) Standard 1200–2006,
appendix D.
† V is the volume of the case, as measured
in AHAM Standard HRF–1–2004.
2. History of Standards Rulemaking for
Commercial Refrigeration Equipment
EPCA, as amended by EPACT 2005,
prescribes energy conservation
standards for certain self-contained
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14 EPCA defines the term ‘‘holding temperature
application’’ as 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))
15 EPCA defines the term ‘‘pull-down temperature
application’’ as a commercial refrigerator with
doors that, when fully loaded with 12 ounce
beverage cans at 90 °F, can cool those beverages to
an average stable temperature of 38 °F in 12 hours
or less. (42 U.S.C. 6311(9)(D))
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The notice also solicited comment on
the matters raised in the document. 75
FR 24824 (May 6, 2010). The
Framework document described the
procedural and analytical approaches
that DOE anticipated using to evaluate
energy conservation standards for
commercial refrigeration equipment,
and identified various issues to be
resolved in the rulemaking.
DOE held the Framework public
meeting on May 18, 2010, at which it:
(1) Presented the contents of the
Framework document; (2) described the
analyses it planned to conduct during
the rulemaking; (3) sought comments
from interested parties on these
subjects; and (4) in general, sought to
inform interested parties about, and
facilitate their involvement in, the
rulemaking. Major issues discussed at
the public meeting included: (1) the
scope of coverage for the rulemaking; (2)
potential updates to the test procedure
and appropriate test metrics (being
addressed in a concurrent rulemaking);
(3) manufacturer and market
information, including distribution
channels; (4) equipment classes,
baseline units,16 and design options to
improve efficiency; (5) life-cycle costs to
customer, including installation,
maintenance, and repair costs; and (6)
any customer subgroups DOE should
consider. At the meeting and during the
comment period on the Framework
document, DOE received many
comments that helped it identify and
resolve issues pertaining to commercial
refrigeration equipment relevant to this
rulemaking. These are discussed in
subsequent sections of this notice.
DOE then gathered additional
information and performed preliminary
analyses to help review energy
conservation standards for this
equipment. This process culminated in
DOE’s notice of another public meeting
to discuss and receive comments
regarding the tools and methods DOE
used in performing its preliminary
analysis, as well as the analyses results.
76 FR 17573 (March 30, 2011) (the
March 2011 notice). DOE also invited
written comments on these subjects and
announced the availability on its Web
site of a preliminary analysis technical
support document (preliminary analysis
TSD). Id. (The preliminary analysis TSD
is available at: www.regulations.gov/
#!documentDetail;D=EERE-2010-BTSTD-0003-0030.) Finally, DOE sought
comments concerning other relevant
issues that could affect amended energy
16 Baseline units consist of units possessing
features and levels of efficiency consistent with the
least-efficient equipment currently available and
widely sold on the market.
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conservation standards for commercial
refrigeration equipment, or that DOE
should address in this NOPR. 76 FR
17575 (March 30, 2011).
The preliminary analysis TSD
provided an overview of DOE’s review
of the standards for commercial
refrigeration equipment, discussed the
comments DOE received in response to
the Framework document, and
addressed issues including the scope of
coverage of the rulemaking. The
document also described the analytical
framework that DOE used (and
continues to use) in considering
amended standards for commercial
refrigeration equipment, including a
description of the methodology, the
analytical tools, and the relationships
between the various analyses that are
part of this rulemaking. Additionally,
the preliminary analysis TSD presented
in detail each analysis that DOE had
performed for this equipment up to that
point, including descriptions of inputs,
sources, methodologies, and results.
These analyses were as follows:
• A market and technology
assessment addressed the scope of this
rulemaking, identified existing and
potential new equipment classes for
commercial refrigeration equipment,
characterized the markets for this
equipment, and reviewed techniques
and approaches for improving its
efficiency;
• A screening analysis reviewed
technology options to improve the
efficiency of commercial refrigeration
equipment, and weighed these options
against DOE’s four prescribed screening
criteria;
• An engineering analysis estimated
the manufacturer selling prices (MSPs)
associated with more energy efficient
commercial refrigeration equipment;
• An energy use analysis estimated
the annual energy use of commercial
refrigeration equipment;
• A markups analysis converted
estimated MSPs derived from the
engineering analysis to customer
purchase prices;
• A life-cycle cost analysis calculated,
for individual customers, the
discounted savings in operating costs
throughout the estimated average life of
commercial refrigeration equipment,
compared to any increase in installed
costs likely to result directly from the
imposition of a given standard;
• A payback period analysis
estimated the amount of time it would
take customers to recover the higher
purchase price of more energy efficient
equipment through lower operating
costs;
• A shipments analysis estimated
shipments of commercial refrigeration
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equipment over the time period
examined in the analysis;
• A national impact analysis (NIA)
assessed the national energy savings
(NES), and the national NPV of total
customer costs and savings, expected to
result from specific, potential energy
conservation standards for commercial
refrigeration equipment; and
• A preliminary manufacturer impact
analysis (MIA) took the initial steps in
evaluating the potential effects on
manufacturers of amended efficiency
standards.
The public meeting announced in the
March 2011 notice took place on April
19, 2011 (April 2011 preliminary
analysis public meeting). At the April
2011 preliminary analysis public
meeting, DOE presented the
methodologies and results of the
analyses set forth in the preliminary
analysis TSD. Interested parties
provided comments on the following
issues: (1) Equipment classes; (2)
technology options; (3) energy
modeling; (4) installation, maintenance,
and repair costs; (5) markups and
distributions chains; (6) commercial
refrigeration equipment shipments; and
(7) test procedures. The comments
received since publication of the March
2011 notice, including those received at
the April 2011 preliminary analysis
public meeting, have contributed to
DOE’s proposed resolution of the issues
in this rulemaking as they pertain to
commercial refrigeration equipment.
This NOPR responds to the issues raised
by the commenters.
In December 2012, AEMTCA
established new standards for
SOC.SC.M equipment with a
compliance date of January 1, 2012. (42
U.S.C. 6313(c)(4)) The SOC.SC.M
equipment had previously been
classified under the category selfcontained commercial refrigerators with
transparent doors for which standards
were established by EPACT 2005. (42
U.S.C. 6313(c)(2)) The standard
established by AEMTCA for SOC.SC.M
equipment reduces the stringency of the
standard applicable to this equipment.
AEMTCA also directs DOE to
determine, within three years of
enactment of the new SOC.SC.M
standard, whether this standard should
be amended. (42 U.S.C. 6313(c)(4)(B)(i))
If DOE determines that the standard
should be amended, then DOE must
issue a final rule establishing an
amended standard within this same
three-year period. (42 U.S.C.
6313(c)(4)(B)(ii))
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III. General Discussion
A. Test Procedures and Normalization
Metrics
1. Test Procedures
On December 8, 2006, DOE published
a final rule in which it adopted
American National Standards Institute
(ANSI)/Air-Conditioning and
Refrigeration Institute (ARI) Standard
1200–2006, ‘‘Performance Rating of
Commercial Refrigerated Display
Merchandisers and Storage Cabinets,’’
as the DOE test procedure for this
equipment. 71 FR 71340, 71369–70.
ANSI/ARI Standard 1200–2006 requires
performance tests to be conducted
according to the American Society of
Heating, Refrigerating, and AirConditioning Engineers (ASHRAE)
Standard 72–2005, ‘‘Method of Testing
Commercial Refrigerators and Freezers.’’
The standard also 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. During
the 2006 test procedure rulemaking,
DOE determined that testing at a ¥15 °F
(±2 °F) rating temperature was more
representative of the actual energy
consumption of commercial freezers
specifically designed for ice-cream
application. 71 FR 71357 (Dec. 8, 2006).
Therefore, in the test procedure final
rule, DOE adopted a ¥15 °F (±2 °F)
rating temperature for commercial icecream freezers, rather than the ¥5 °F
(±2 °F) prescribed in the ANSI/ARI
Standard 1200–2006. In addition, DOE
adopted ANSI/Association of Home
Appliance Manufacturers (AHAM)
Standard HRF–1–2004, ‘‘Energy,
Performance, and Capacity of
Household Refrigerators, RefrigeratorFreezers, and Freezers,’’ for determining
compartment volumes for this
equipment. 71 FR 71369–70 (Dec. 8,
2006).
On February 21, 2012, DOE published
a test procedure final rule (2012 test
procedure final rule) in which it
adopted several amendments to the DOE
test procedure. This included an
amendment to incorporate by reference
ANSI/Air-Conditioning, Heating, and
Refrigeration Institute (AHRI) Standard
1200–2010, ‘‘Performance Rating of
Commercial Refrigerated Display
Merchandisers and Storage Cabinets,’’
as the DOE test procedure for this
equipment. 77 FR 10292, 10314 (Feb.
21, 2012). The 2012 test procedure final
rule also included an amendment to
incorporate by reference the updated
ANSI/AHAM Standard HRF–1–2008,
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‘‘Energy, Performance, and Capacity of
Household Refrigerators, RefrigeratorFreezers, and Freezers,’’ for determining
compartment volumes for this
equipment.
In addition, the 2012 test procedure
final rule included several amendments
designed to address certain energy
efficiency features that were not
accounted for by the previous DOE test
procedure, including provisions for
measuring the impact of night
curtains 17 and lighting occupancy
sensors and scheduled controls. 77 FR
10296–98 (Feb. 21, 2012). In the 2012
test procedure final rule, DOE also
adopted amendments to allow testing of
commercial refrigeration equipment at
temperatures other than one of the three
rating temperatures previously specified
in the test procedure. Specifically, the
2012 test procedure final rule allows
testing of commercial refrigeration
equipment at its lowest application
product temperature, for equipment that
cannot be tested at the prescribed rating
temperature. The 2012 test procedure
final rule also allows manufacturers to
test and certify equipment at the morestringent temperatures and ambient
conditions required by NSF for food
safety testing. 77 FR 10305 (Feb. 21,
2012). (The NSF was founded in 1944
as the National Sanitation Foundation,
and is now referred to simply as NSF.)
The test procedure amendments
established in the 2012 test procedure
final rule are required to be used in
conjunction with any amended
standards promulgated as a result of this
energy conservation standard
rulemaking. As such, use of the
amended test procedure to show
compliance with DOE energy
conservation standards or make
representations with respect to energy
consumption of commercial
refrigeration equipment is required on
the compliance date of any revised
energy conservation standards
established as part of this rulemaking.
77 FR 10308 (Feb. 21, 2012).
DOE has initiated a test procedure
rulemaking for commercial refrigeration
equipment to address many issues
raised by stakeholders since the
publication of the 2012 test procedure
final rule. This rulemaking will address
the following issues:
• A number of new definitions
related to commercial refrigeration
equipment,
17 Night curtains are devices made of an
insulating material, typically insulated aluminum
fabric, designed to be pulled down over the open
front of the case to decrease infiltration and heat
transfer into the case when the merchandizing
establishment is closed.
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• A description of the proper
configuration and use of energy
management systems,
• Clarifications on the use of
calculation methods, appropriate
reporting requirements, and
determination of the lowest application
product temperature,
• Incorporation of Interpretations 1
through 5 to AHRI 1200–2010, and
• Updates and clarifications regarding
the compliance dates of test procedure
amendments adopted in the 2012 test
procedure final rule by reorganizing the
test procedure in two different
appendices.
The issues that will be addressed in
the test procedure rulemaking are
consistent with the analysis in this
NOPR.
2. Normalization Metrics
Both the January 2009 final rule and
EPACT 2005 contain energy
conservation standards for respective
covered types of commercial
refrigeration equipment, expressed in
the form of equations developed as a
function of unit size. This use of
normalization metrics allows for a
single standard-level equation
developed for an equipment class to
apply to a broad range of equipment
sizes offered within that class by
manufacturers. In the aforementioned
commercial refrigeration equipment
standards, the two normalization
metrics used are refrigerated
compartment volume, as determined
using AHAM HRF–1–2004, and TDA, as
determined using ANSI/ARI 1200–2006.
In particular, the EPACT 2005 standards
utilize volume as the normalization
metric for all equipment types, with the
exception of refrigerator-freezers with
solid doors, for which it specifies
adjusted volume. (42 U.S.C. 6313(c)(2))
The January 2009 final rule, meanwhile,
utilized TDA as the normalization
metric for all equipment with display
capacity while specifying volume as the
metric for solid-door (VCS and HCS)
equipment. 74 FR 1093 (Jan. 9, 2009).
At the May 2010 Framework public
meeting, interested parties raised
several questions regarding the potential
normalization metrics that could be
used in amended standards. DOE also
received stakeholder feedback
pertaining to this issue following the
publication of the Framework
document. In the preliminary analysis,
DOE suggested that it would consider
retaining the normalization metrics in
this rulemaking for the respective
classes to which they were applied in
EPCA (42 U.S.C. 6313(c)(2)–(3)) and the
January 2009 final rule. 74 FR 1093 (Jan.
9, 2009). In chapter 2 of the preliminary
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analysis TSD, DOE presented its
rationale for the continued use of TDA
for equipment with display areas
addressed in the January 2009 final rule
and the continued use of volume as the
metric for solid-door remote condensing
equipment and ice-cream freezers, as
well as for the equipment covered by
EPACT 2005 standards. DOE did not
receive any information or data while
conducting the NOPR analyses that
would alter this position, and thus DOE
proposes continued use of the existing
normalization metrics in today’s notice.
B. Technological Feasibility
1. General
In each standards rulemaking, DOE
conducts a screening analysis, which is
based on information that the
Department has gathered on all current
technology options and prototype
designs that could improve the
efficiency of the products or equipment
that are the subject of the rulemaking.
As the first step in such analysis, DOE
develops a list of design options for
consideration, in consultation with
manufacturers, design engineers, and
other interested parties. DOE then
determines which of these options for
improving efficiency are technologically
feasible. DOE considers a design option
to be technologically feasible if it is
used by the relevant industry or if a
working prototype has been developed.
Technologies incorporated in
commercially available equipment or in
working prototypes will be considered
technologically feasible. 10 CFR 430,
subpart C, appendix A, section 4(a)(4)(i)
Although DOE considers technologies
that are proprietary, it will not consider
efficiency levels that can only be
reached through the use of proprietary
technologies (i.e., a unique pathway),
which could allow a single
manufacturer to monopolize the market.
Once DOE has determined that
particular design options are
technologically feasible, it further
evaluates each of these design options
in light of the following additional
screening criteria: (1) Practicability to
manufacture, install, or service; (2)
adverse impacts on product utility or
availability; and (3) adverse impacts on
health or safety. 10 CFR part 430,
subpart C, appendix A, section
4(a)(4)(ii)–(iv) Chapter 4 of the NOPR
TSD discusses the results of the
screening analyses for commercial
refrigeration equipment. Specifically, it
presents the designs DOE considered,
those it screened out, and those that are
the bases for the TSLs considered in this
rulemaking.
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2. Maximum Technologically Feasible
Levels
When DOE proposes to adopt (or not
adopt) an amended or new energy
conservation standard for a type or class
of covered equipment such as
commercial refrigeration equipment, it
determines the maximum improvement
in energy efficiency that is
technologically feasible for such
equipment. (See 42 U.S.C. 6295(p)(1)
and 6316(e)(1)) Accordingly, in the
preliminary analysis, DOE determined
the maximum technologically feasible
(‘‘max-tech’’) improvements in energy
efficiency for commercial refrigeration
equipment in the engineering analysis
using the design parameters that passed
the screening analysis.
As indicated previously, whether
efficiency levels exist or can be
achieved in commonly used equipment
is not relevant to whether they are
considered max-tech levels. DOE
considers technologies to be
technologically feasible if they are
incorporated in any currently available
equipment or working prototypes.
Hence, a max-tech level results from the
combination of design options predicted
to result in the highest efficiency level
possible for an equipment class, with
such design options consisting of
technologies already incorporated in
commercial equipment or working
prototypes. DOE notes that it
reevaluated the efficiency levels,
including the max-tech levels, when it
updated its results for this NOPR. See
chapter 5 of the NOPR TSD for the
results of the analyses, and a list of
technologies included in max-tech
equipment. Table III.1 shows the maxtech levels determined in the
engineering analysis for commercial
refrigeration equipment.
DOE has begun to also estimate fullTABLE III.1—‘‘MAX-TECH’’ LEVELS FOR
COMMERCIAL
REFRIGERATION fuel-cycle (FFC) energy savings. 76 FR
EQUIPMENT PRIMARY CLASSES— 51282 (Aug. 18, 2011), as amended at 77
FR 49701 (August 17, 2012). The FFC
Continued
Equipment class
VCT.SC.L ..................
VCS.SC.M .................
VCS.SC.L ..................
HCT.SC.M .................
HCT.SC.L ..................
HCS.SC.M .................
HCS.SC.L ..................
PD.SC.M ...................
SOC.SC.M ................
‘‘Max-Tech’’ level
kWh/day
0.21
0.02
0.11
0.01
0.08
0.01
0.07
0.03
0.32
×
×
×
×
×
×
×
×
×
V + 1.16
V + 0.41
V + 0.38
V + 0.38
V + 0.45
V + 0.18
V + 0.24
V + 0.72
TDA + 0.53
C. Energy Savings
1. Determination of Savings
For each TSL, DOE projected energy
savings from the products that are the
subjects of this rulemaking, purchased
during the 30-year period that begins in
the year of compliance with amended
standards (2017–2046). The savings are
measured over the entire lifetime of
products purchased in the 30-year
period.18 DOE used the NIA model to
estimate the NES for equipment
purchased over the period 2017–2046.
The model forecasts total energy use
over the analysis period for each
representative equipment class at
efficiency levels set by each of the five
considered TSLs. DOE then compares
the energy use at each TSL to the basecase energy use to obtain the NES. The
NIA model is described in section IV.I
of this notice and in chapter 10 of the
NOPR TSD.
DOE used its national impact analysis
(NIA) spreadsheet model to estimate
energy savings from amended standards
for the products that are the subject of
this rulemaking. The NIA spreadsheet
model (described in section IV.I of this
TABLE III.1—‘‘MAX-TECH’’ LEVELS FOR notice) calculates energy savings in site
COMMERCIAL
REFRIGERATION energy, which is the energy directly
EQUIPMENT PRIMARY CLASSES
consumed by products at the locations
where they are used. For electricity,
‘‘Max-Tech’’ level
DOE reports national energy savings in
Equipment class
kWh/day
terms of the savings in the energy that
is used to generate and transmit the site
VCT.RC.L .................. 0.41 × TDA + 1.93
electricity. To calculate this quantity,
VOP.RC.M ................ 0.6 × TDA + 2.99
SVO.RC.M ................ 0.62 × TDA + 2.38
DOE derives annual conversion factors
HZO.RC.L ................. 0.55 × TDA + 6.7
from the model used to prepare the
HZO.RC.M ................ 0.34 × TDA + 2.83
Energy Information Administration’s
VCT.RC.M ................. 0.07 × TDA + 0.66
(EIA) Annual Energy Outlook (AEO).
VOP.RC.L .................
SOC.RC.M ................
VOP.SC.M .................
SVO.SC.M .................
HZO.SC.L ..................
HZO.SC.M .................
HCT.SC.I ...................
VCT.SC.I ...................
VCS.SC.I ...................
VCT.SC.M .................
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2.07 × TDA + 6.26
0.39 × TDA + 0.08
1.5 × TDA + 4.06
1.5 × TDA + 3.97
1.91 × TDA + 7.03
0.74 × TDA + 5.35
0.36 × TDA + 0.28
0.5 × TDA + 2.44
0.33 × V + 0.76
0.03 × V + 0.97
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18 In the past, DOE presented energy savings
results for only the 30-year period that begins in the
year of compliance. In the calculation of economic
impacts, however, DOE considered operating cost
savings measured over the entire lifetime of
products purchased during the 30-year period. DOE
has chosen to modify its presentation of national
energy savings to be consistent with the approach
used for its national economic analysis.
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metric includes the energy consumed in
extracting, processing, and transporting
primary fuels, and thus presents a more
complete picture of the impacts of
energy efficiency standards. DOE’s
approach is based on calculation of an
FFC multiplier for each of the energy
types used by covered products.
2. Significance of Savings
EPCA prohibits DOE from adopting a
standard that would not result in
significant additional energy savings.
(42 U.S.C. 6295(o)(3)(B),(v) and
6316(e)(1)) While the term ‘‘significant’’
is not defined in EPCA, the U.S. Court
of Appeals for the District of Columbia
in Natural Resources Defense Council v.
Herrington, 768 F.2d 1355, 1373 (D.C.
Cir. 1985), indicated that Congress
intended significant energy savings to
be savings that were not ‘‘genuinely
trivial.’’ The estimated energy savings in
the 30-year analysis period for the TSLs
considered in this rulemaking range
from 0.236 to 1.278 quads (see section
V.B.2 for additional details); therefore,
DOE considers them significant within
the meaning of section 325 of the Act.
D. Economic Justification
1. Specific Criteria
As discussed in section II.A, EPCA
provides seven factors to be evaluated in
determining whether a potential energy
conservation standard is economically
justified. (42 U.S.C. 6295(o)(2)(B)(i) and
6316(e)(1)) The following sections
generally discuss how DOE is
addressing each of those seven factors in
this rulemaking. For further details and
the results of DOE’s analyses pertaining
to economic justification, see sections
IV and V of today’s notice.
a. Economic Impact on Manufacturers
and Commercial Customers
In determining the impacts of a
potential new or amended energy
conservation standard on
manufacturers, DOE first determines its
quantitative impacts using an annual
cash flow approach. This includes both
a short-term assessment (based on the
cost and capital requirements associated
with new or amended standards during
the period between the announcement
of a regulation and the compliance date
of the regulation) and a long-term
assessment (based on the costs and
marginal impacts over the 30-year
analysis period). The impacts analyzed
include INPV (which values the
industry based on expected future cash
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flows), cash flows by year, changes in
revenue and income, and other
measures of impact, as appropriate.
Second, DOE analyzes and reports the
potential impacts on different types of
manufacturers, paying particular
attention to impacts on small
manufacturers. Third, DOE considers
the impact of new or amended
standards on domestic manufacturer
employment and manufacturing
capacity, as well as the potential for
new or amended standards to result in
plant closures and loss of capital
investment. Finally, DOE takes into
account cumulative impacts of other
DOE regulations and non-DOE
regulatory requirements on
manufacturers.
For individual customers, measures of
economic impact include the changes in
LCC and the PBP associated with new
or amended standards. The LCC, which
is also separately specified as one of the
seven factors to be considered in
determining the economic justification
for a new or amended standard (42
U.S.C. 6295(o)(2)(B)(i)(II), and
6316(e)(1)), is discussed in the following
section. For customers in the aggregate,
DOE also calculates the NPV from a
national perspective of the economic
impacts on customers over the analysis
period used in a particular rulemaking.
For a description of the methodology
used for assessing the economic impact
on customers, see sections IV.H and
IV.I; for results, see sections V.B.1 and
V.B.2 of this notice. Additionally,
chapters 8 and 10 and the associated
appendices of the NOPR TSD contain a
detailed description of the methodology
and discussion of the results. For a
description of the methodology used to
assess the economic impact on
manufacturers, see section IV.K; for
results, see section V.B.2 of this notice.
Additionally, chapter 13 of the NOPR
TSD contains a detailed description of
the methodology and discussion of the
results.
b. Life-Cycle Costs
The LCC is the sum of the purchase
price of equipment (including the cost
of its installation) and the operating
costs (including energy and
maintenance and repair costs)
discounted over the lifetime of the
equipment. The LCC savings for the
considered efficiency levels are
calculated relative to a base-case
scenario, which reflects likely trends in
the absence of new or amended
standards. DOE carried out the LCC
analysis for this rulemaking by
analyzing the LCC impacts on those
customers who purchase the equipment
in the year in which compliance with
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the new standard is required. To
account for uncertainty and variability
in specific inputs, such as equipment
lifetime and discount rate, DOE uses a
range of values, each with its own
probability of selection. In addition to
identifying distribution of customer
impacts, DOE evaluates the LCC impacts
of potential standards on identifiable
subgroups of customers who may be
disproportionately affected by a new
national standard. For the results of
DOE’s analyses related to the LCC, see
section V.B.1 of this notice and chapter
8 of the NOPR TSD; for LCC impacts on
identifiable subgroups, see section V.B.1
of this notice and chapter 11 of the
NOPR TSD.
c. Energy Savings
While significant conservation of
energy is a statutory requirement for
imposing an energy conservation
standard, EPCA also requires DOE, in
determining the economic justification
of a standard, to consider the total
projected energy savings that are
expected to result directly from the
standard. (42 U.S.C. 6295(o)(2)(B)(i)(III)
and 6316(e)(1)) DOE uses NIA
spreadsheet results in its consideration
of total projected savings. For the results
of DOE’s analyses related to the
potential energy savings, see section
VI.B.3 of this notice and chapter 10 of
the NOPR TSD.
d. Lessening of Utility or Performance of
Equipment
In establishing classes of equipment,
and in evaluating design options and
the impact of potential standard levels,
DOE seeks to develop standards that
would not lessen the utility or
performance of the equipment under
consideration. None of the TSLs
presented in today’s NOPR would
reduce the utility or performance of the
equipment considered in the
rulemaking. (42 U.S.C.
6295(o)(2)(B)(i)(IV) and 6316(e)(1))
During the screening analysis, DOE
eliminated from consideration any
technology that would adversely impact
customer utility. For the results of
DOE’s analyses related to the potential
impact of amended standards on
equipment utility and performance, see
section IV.D of this notice and chapter
4 of the NOPR TSD.
e. Impact of Any Lessening of
Competition
EPCA directs DOE to consider the
impact of any lessening of competition,
as determined in writing by the
Attorney General, that is likely to result
from the imposition of a standard. (42
U.S.C. 6295(o)(2)(B)(i)(V) Specifically, it
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directs the Attorney General to
determine in writing the impact, if any,
of any lessening of competition likely to
result from a proposed standard and to
transmit such determination to the
Secretary, not later than 60 days after
the publication of a proposed rule,
together with an analysis of the nature
and extent of such impact. (42 U.S.C.
6295(o)(2)B(ii) and 6316(e)(1)) For the
results of DOE’s analysis related to
lessening of competition, see section
V.B.5 of this notice.
f. Need of the Nation To Conserve
Energy
Another factor that DOE must
consider in determining whether a new
or amended standard is economically
justified is the need for national energy
and water conservation. (42 U.S.C.
6295(o)(2)(B)(i)(VI) and 6316(e)(1)) The
energy savings from new or amended
standards are likely to provide
improvements to the security and
reliability of the Nation’s energy system.
Reductions in the demand for electricity
may also result in reduced costs for
maintaining the reliability of the
Nation’s electricity system. DOE
conducts a utility impact analysis to
estimate how new or amended
standards may affect the Nation’s
needed power generation capacity.
Energy savings from amended
standards for commercial refrigeration
equipment are also likely to result in
environmental benefits in the form of
reduced emissions of air pollutants and
GHGs associated with energy
production (i.e., from power plants). For
a discussion of the results of the
analyses relating to the potential
environmental benefits of the amended
standards, see sections IV.N, IV.O and
V.B.6 of this notice. DOE reports the
expected environmental effects from the
proposed standards, as well as from
each TSL it considered for commercial
refrigeration equipment, in the
emissions analysis contained in chapter
13 of the NOPR TSD. DOE also reports
estimates of the economic value of
emissions reductions resulting from the
considered TSLs in chapter 14 of the
NOPR TSD.
g. Other Factors
EPCA allows the Secretary, in
determining whether a new or amended
standard is economically justified, to
consider any other factors that the
Secretary deems to be relevant. (42
U.S.C. 6295(o)(2)(B)(i)(VII) and
6316(e)(1)) In developing the TSLs set
forth in this notice, DOE has also
considered the comments submitted by
interested parties. For the results of
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DOE’s analyses related to other factors,
see section V.B.7 of this notice.
2. Rebuttable Presumption
As set forth in 42 U.S.C.
6295(o)(2)(B)(iii) and 6316(e)(1), EPCA
provides for a rebuttable presumption
that an energy conservation standard is
economically justified if the additional
cost to the customer of equipment that
meets the new or amended standard
level is less than three times the value
of the first-year energy (and, as
applicable, water) savings resulting from
the standard, as calculated under the
applicable DOE test procedure. DOE’s
LCC and PBP analyses generate values
that calculate the PBP for customers of
potential new and amended energy
conservation standards. These analyses
include, but are not limited to, the 3year PBP contemplated under the
rebuttable presumption test. However,
DOE routinely conducts a full economic
analysis that considers the full range of
impacts to the customer, manufacturer,
Nation, and environment, as required
under 42 U.S.C. 6295(o)(2)(B)(i) and
6316(e)(1). The results of these analyses
serve as the basis for DOE to evaluate
the economic justification for a potential
standard level definitively (thereby
supporting or rebutting the results of
any preliminary determination of
economic justification). The rebuttable
presumption payback calculation is
discussed in section IV.H.12 of this
notice and chapter 8 of the NOPR TSD.
IV. Methodology and Discussion of
Comments
A. General Rulemaking Issues
During the April 2011 preliminary
analysis public meeting and in
subsequent written comments,
stakeholders provided input regarding
general issues pertinent to the
rulemaking, such as issues of scope of
coverage and DOE’s authority in setting
standards. These issues are discussed in
this section.
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1. Statutory Authority
In the preliminary analysis, DOE
stated its position that EPCA prevents
the setting of both energy performance
standards and prescriptive design
requirements (see chapter 2 of the
preliminary analysis TSD 19). DOE also
19 U.S.
Department of Energy—Office of Energy
Efficiency and Renewable Energy. Preliminary
Technical Support Document (TSD): Energy
Conservation Program for Certain Commercial and
Industrial Equipment: Commercial Refrigeration
Equipment. Chapter 2. Analytical Framework,
Comments from Interested Parties, and DOE
Responses. March 2011. Washington, DC
www.regulations.gov/#!documentDetail;D=EERE2010-BT-STD-0003-0030.
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stated its intent to amend the energy
performance standards for commercial
refrigeration equipment, and not to set
prescriptive design requirements at this
time (see chapter 2 of the preliminary
analysis TSD). In a written comment,
Earthjustice opined that DOE misread
EPCA in suggesting that DOE does not
have authority to establish design
requirements for commercial
refrigeration equipment. More
specifically, Earthjustice asserted that
DOE’s interpretation of 42 U.S.C.
6311(18) ignores that EPCA uses the
plural form in compelling this
rulemaking to amend energy
conservation ‘‘standards.’’ Further,
Earthjustice stated, even if DOE were
only authorized to promulgate a single
standard or single design requirement in
any one rulemaking, nothing in EPCA
indicates that prior establishment of
performance standards would foreclose
the issuance of design requirements in
a subsequent rulemaking, provided that
those design requirements achieved the
maximum technologically feasible and
economically justified energy savings.
(Earthjustice, No. 35 at pp. 4–5) 20
EPCA defines the phrase ‘‘energy
conservation standard’’ as a
performance standard that prescribes a
minimum level of energy efficiency or a
maximum quantity of energy use for a
product or as a design requirement for
a product. (42 U.S.C. 6311(18)(A)–(B))
Therefore, based on a clear reading of
EPCA, DOE must use either a
performance standard or a design
(prescriptive) requirement in
prescribing energy conservation
standards. It has been DOE’s
longstanding interpretation that the
term ‘‘standard’’ means either a
performance standard or a design
requirement, and that the plural term
‘‘standards’’ refers to the setting of a
collective group of standards across all
covered equipment or product classes.
Thus, it is not DOE’s interpretation of
EPCA that the statute’s use of the plural
term ‘‘standards,’’ in referring to a
collective group of equipment classes,
grants DOE the authority to set both
prescriptive and performance standards
for a given class within that group. In
the case of commercial refrigeration
equipment, all of the equipment that is
the subject of this rulemaking is
20 A notation in this form provides a reference for
information that is in the docket of DOE’s
rulemaking to develop energy conservation
standards for commercial refrigeration equipment
(Docket No. EERE–2010–BT–STD–0003), which is
maintained at www.regulations.gov. This notation
indicates that the statement preceding the reference
is document number 35 in the docket for the
commercial refrigeration equipment energy
conservation standards rulemaking, and appears at
pages 4–5 of that document.
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currently covered either by a statutorily
mandated performance standard or by a
performance standard set by DOE in the
January 2009 final rule. (42 U.S.C.
6313(c)(1)–(4)); 74 FR 1093 (Jan. 9,
2009). In this rulemaking, DOE is
considering amendments to these
performance standards for commercial
refrigeration equipment, and is therefore
not considering design requirements at
this time.
2. January 2009 Final Rule Equipment
At the April 2011 preliminary
analysis public meeting, AHRI stated
that in 2005 when the legislation that
was to become EPACT 2005 was
drafted, the drafters’ intent was not for
DOE to start a rulemaking on remote
cases in 2010. According to AHRI, the
drafters’ intent was that DOE start the
rulemaking on self-contained units.
AHRI pointed out that manufacturers
would have to redesign products (those
covered by the 2009 DOE final rule)
twice in a 4-year period, first to meet the
2009 DOE standards in 2012, and then
again to meet the 2013 standards in
2016. AHRI asked DOE to take that into
account, a situation AHRI described as
unprecedented. (AHRI, Public Meeting
Transcript, No. 31 at pp. 204–05) AHRI
elaborated on this situation in its
written comment, expressing its belief
that it is illogical that DOE decided to
analyze equipment types for which
standards exist, but with which
manufacturers are not yet required to
comply. AHRI stated that the intent of
Congress was never to require DOE to
start a rulemaking on this equipment,
and questioned how DOE could
possibly assess whether amended
standards are appropriate before the
January 2009 final rule standards reach
the stage where manufacturers must
comply. AHRI urged DOE to focus on
self-contained refrigerators and freezers
with doors in this rulemaking. (AHRI,
No. 43 at pp. 1–2)
Similarly, Zero Zone expressed
disappointment with the fact that the
current rulemaking was initiated before
the standards compliance date of
January 1, 2012 specified in the January
2009 final rule. Zero Zone went on to
state that waiting until after this
compliance date to initiate a rulemaking
would have allowed DOE to determine
the accuracy of its models and the
impacts on industry. (Zero Zone, No. 37
at p. 1)
The EPACT 2005 amendments to
EPCA require DOE to conduct a
rulemaking to determine whether to
amend the standards for commercial
refrigeration equipment established
under 42 U.S.C. 6313(c), which covers
both the standards prescribed by EPACT
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2005 and the standards set by DOE in
the January 2009 final rule. (42 U.S.C.
6313(c)(6)) If DOE determines that these
standards should be amended, DOE
must publish a final rule establishing
such amended standards by January 1,
2013. Id. Regarding AHRI’s comment,
DOE is thus compelled by statute to
conduct this rulemaking with a scope of
coverage including the equipment
specified in both EPACT 2005 and in
the January 2009 final rule. In response
to Zero Zone’s comments concerning
the burden imposed by amended
standards, DOE has considered
manufacturer impacts in the MIA, as
required by 42 U.S.C. 6295(o)(2)(B)(i)(I)
and 6316(e)(1). DOE has also used its
manufacturer interviews as a forum to
discuss and receive feedback on the
inputs to and accuracy of its models.
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3. Normalization Metrics
In chapter 2 of the preliminary
analysis TSD, DOE stated its proposal to
retain the current normalization metrics
for all equipment classes and requested
comment from interested parties.
Traulsen agreed with DOE’s tentative
plan to use cabinet volume as the
normalization metric for ‘‘appropriate’’
equipment, but noted that there are
other (unspecified) design factors that
need to be considered. (Traulsen, No. 45
at p. 2) Zero Zone stated that evaluation
of the normalization metrics should take
place after the January 2009 final rule
compliance date. (Zero Zone, No. 37 at
p. 4)
During the NOPR analyses, DOE took
into account stakeholder input when
reviewing normalization metrics for
covered equipment. DOE agrees with
Traulsen that volume is the appropriate
normalization metric for most selfcontained equipment classes. With
respect to the comment by Zero Zone,
the timing of this proceeding made it
difficult for significant amounts of data
on sales and other factors to be acquired
after the January 2009 final rule
compliance date of January 1, 2012.
DOE took into account information
regarding the size and composition of
the commercial refrigeration equipment
market obtained through manufacturer
interviews, market research
publications, and other sources during
the NOPR stage.
4. Treatment of Blast Chillers, Thawing
Cabinets, Prep Tables, Salad Bars, and
Buffet Tables
In its written comment, Traulsen
expressed concern that DOE may
inadvertently include equipment such
as prep tables, blast chillers, and
thawing cabinets in standards it
develops. (Traulsen, No. 45 at p. 1)
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During the ongoing rulemaking, DOE
also received several inquiries from
interested parties regarding the
coverage, under current or amended
energy conservation standards, of salad
bars, buffet tables, and other refrigerated
holding and serving equipment.
EPCA, in its definition of
‘‘commercial refrigerator, freezer, and
refrigerator-freezer,’’ states that such
equipment must display or store
merchandise or other perishable
materials horizontally, vertically, or
semi-vertically, and must be designed
for pull-down temperature applications
or holding temperature applications,
among other factors. (42 U.S.C.
6311(9)(A)) Moreover, 42 U.S.C. 6311(9)
defines ‘‘holding temperature
application’’ as specifically omitting
blast chillers or freezers, and specifies
that ‘‘pull-down temperature
application’’ refers solely to equipment
designed to cool 12 ounce beverage cans
from 90 to 38 °F in 12 hours or less.
Thus, blast chillers and thawing
cabinets do not meet the relevant
statutory definition, and will not be
addressed in this rulemaking.
With regard to prep tables with open
bins or trays, salad bars, and buffet
tables, DOE does not currently have
energy conservation standards that
cover this equipment. DOE notes that
some of this equipment is designed for
the temporary placement of food during
preparation or service, rather than
storage or retailing, and may operate
very differently from the commercial
refrigeration equipment considered in
this rulemaking. Moreover, DOE’s
current test procedure does not include
provisions for testing this type of
equipment. For example, some types of
foodservice equipment (such as salad
bars, buffet tables, and prep tables) do
not have doors, drawers, or openings
typical of conventional commercial
refrigeration equipment. While DOE has
the authority to set standards for other
types of commercial refrigeration
equipment (42 U.S.C. 6313(c)(5)(B)), this
rulemaking is not currently considering
standards for equipment types other
than those covered by DOE’s existing
standards. 10 CFR 431.66
55903
cases 21 are almost exclusively rack
condensing systems 22 due to the energy
savings gained in the long term by
rejecting heat outside of the building.
(True, Public Meeting Transcript, No. 31
at pp. 268–69) Southern Store Fixtures
stated that it is very difficult for the
company to predict whether a given
case that it builds will ultimately be
connected to an individual condensing
unit or to a compressor rack. (Southern
Store Fixtures, Public Meeting
Transcript, No. 31 at p. 268) Zero Zone
commented that 20 to 40 percent of the
units it sells are served by dedicated
condensing units, and that the
remainder are served by racks, noting
that businesses such as convenience
stores and dollar stores use dedicated
condensing units in the interest of
simplicity. (Zero Zone, Public Meeting
Transcript, No. 31 at p. 269) In its
written comment, Earthjustice
referenced Zero Zone’s statement that
20 to 40 percent of remote condensing
commercial refrigeration equipment is
served by dedicated remote condensing
units, and stated that because there is a
significant market share for such
equipment, DOE should explore
standards that address the performance
of such units. (Earthjustice, No. 35 at p.
4)
DOE understands that some
stakeholders are concerned that
shipments of equipment utilizing
dedicated remote condensing units may
comprise a nontrivial portion of the
market. However, the DOE test
procedure does not contain a
methodology for testing such
condensing units. DOE anticipates
working with the industry in the future
to develop testing methodologies that
can be used in future commercial
refrigeration equipment rulemakings.
For this current rulemaking, display
cases connected to dedicated remote
condensers will be treated like any other
piece of remote condensing equipment
under the DOE test procedure, with the
energy of the remote condensing unit
calculated as specified in AHRI 1200
and added to the measured energy
consumption of the display case. As
there is no industry-accepted method of
test for dedicated remote condensers,
DOE proposes to continue to treat
5. Dedicated Remote Condensing Units
Several stakeholders inquired
whether equipment consisting of a
refrigerated case served by a single,
dedicated remote condensing unit that
serves only that unit would be covered
under DOE’s proposed standards. True
Manufacturing (True) stated that smaller
units are more likely to have such a
condensing unit, and that continuous
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21 In most supermarket and large food retail
settings, multiple display cases from a manufacturer
are attached together into a single continuous
lineup without internal partitions; these are referred
to as ‘‘continuous cases.’’
22 Rack condensing systems utilize a ‘‘rack’’ of
multiple compressors and a condenser that serves
to deliver liquid refrigerant to a number of different
pieces of equipment served by the single rack. For
example, most supermarkets have one or more
compressor racks to serve their display cases, walkin coolers and freezers, and other equipment.
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equipment utilizing this condensing
unit configuration in the same manner
as all other display cases connected to
remote condensers.
Also, as Southern Store Fixtures
noted, it is often difficult or impossible
for the display case manufacturer to
know ahead of time whether a given
case will be attached to a dedicated
remote condensing unit or a remote
condensing rack by an end user. In some
cases, the dedicated condensing unit is
produced by a separate manufacturer
and purchased independently. As Zero
Zone stated, the majority of remote
condensing cases are still sold to be
connected to a remote condensing rack
system that serves multiple pieces of
equipment. Thus, DOE believes that
comparing remote condensing cases
based on the calculated performance of
a typical remote condensing rack, in the
manner prescribed by AHRI 1200, is a
consistent way to compare performance
of remote condensing display cases.
In chapter 2 of the preliminary
analysis TSD, DOE discussed the
potential of addressing coverage of
remote condensers in a separate future
rulemaking. DOE believes that, should
any such action take place in the future,
such a proceeding would be the
appropriate venue in which to
investigate dedicated remote
condensers.
6. Small Units
Traulsen stated that it believes that
smaller units are effectively prohibited
under current DOE regulations, and that
it recognizes that legislative change is
the proper avenue for resolution of this
issue. (Traulsen, No. 45 at p. 5)
DOE understands manufacturer
concerns regarding the performance of
small units, and took steps to account
for them in its analyses. In its
engineering analysis, DOE selected
specifications for units that it found to
be representative of typical, high sales
volume models for each of the
equipment classes directly analyzed.
These selections were based on market
and industry research, and the
representative unit specifications were
presented to manufacturers for their
feedback and input during manufacturer
interviews. The representative units
were then used as one analysis point in
developing the standard-level equations
for their respective classes. DOE also
developed ‘‘offset factors’’ that form the
second analysis point used in
developing the linear equations that
represent the equipment standards. The
purpose of the offset factor is to account
for energy consumption end effects
inherent in equipment of all sizes so
that certain groups of units, including
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small units, would not be disadvantaged
by the standard-level equations. To
understand how the offset accounts for
size effects, consider the energy
consumption of a single lighting
fixture—a feature common to all sizes of
VCT display cases. The development of
offset factors resulted in energy
allowances at zero case volume or TDA,
thus preventing even the smallest cases
from being disadvantaged by the
standards. The procedure that DOE used
to develop the offset factors implicitly
assumes that small units are relatively
less efficient than larger units,
particularly in the case of the smallestsized equipment. Therefore, DOE
believes that its analysis adequately
accounts for smaller units. A detailed
discussion of offset factors can be found
in chapter 5 of the NOPR TSD.
7. Consideration of Impact of Amended
Standards
Traulsen stated that there are many
niches of commercial refrigeration
equipment that are essential to
manufacturers and customers, and that
setting overly aggressive standards may
lead to inadvertent equipment design
obsolescence. Traulsen thus urged DOE
to take a conservative approach when
setting mandatory standards. (Traulsen,
No. 45 at p. 1)
DOE performed an MIA, as required
by 42 U.S.C. 6295(o)(2)(B)(i)(I) and
6316(e)(1), in which it assessed both the
qualitative issues of concern to
manufacturers and the quantitative
potential impacts to the commercial
refrigeration equipment industry. These
impacts were weighed and taken into
consideration during the selection of the
proposed standard level in an effort to
minimize adverse impacts on the
industry. DOE also notes it considers
the design configurations offered in the
commercial refrigeration equipment
market in its analysis and selection of
equipment classes. As required by
EPCA, DOE does not set standards that
eliminate equipment designs that
deliver unique utility or features for
consumers. (42 U.S.C. 6295(o)(4) and
6316(e)(1))
8. CO2 Cascade Systems
Hussmann stated that, in California,
Title 24 23 allows the use of CO2 cascade
systems,24 and that compliance with
23 ‘‘Title 24’’ refers to Title 24, part 6 of the
California Code of Regulations, and includes
California’s energy efficiency standards for
residential and nonresidential buildings. This is
available at: www.energy.ca.gov/title24/.
24 A cascade system is a type of secondary-loop
refrigeration cycle that uses a higher-temperature
refrigerant to condense the secondary refrigerant, in
this case carbon dioxide, which is then used to cool
the refrigerated space.
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both Title 24 and amended DOE
standards could make development of a
CO2 cascade system difficult.
(Hussmann, Public Meeting Transcript,
No. 31 at p. 153) True stated that there
is no DOE test procedure for cascade
systems, and that there has been no
consideration of cascade systems in the
standards-setting process. (True, Public
Meeting Transcript, No. 31 at p. 154)
DOE agrees with True that secondary
coolant systems, including CO2 cascade
systems, are not being addressed in this
rulemaking, partially due to the lack of
an industry-accepted method of test for
this type of equipment. DOE articulated
its rationale in the preliminary analysis
TSD chapter 2 and maintains the
position in this notice.
9. Coverage of Existing Cases
Undergoing Refurbishments or Retrofits
During the NOPR analysis period,
DOE received a stakeholder inquiry as
to whether the Department’s energy
conservation standards apply only to
new equipment manufactured or
imported after the compliance date, or
to existing equipment undergoing
retrofits and refurbishments as well.
DOE wishes to clarify that energy
conservation standards apply only to
new equipment, and not to previously
installed equipment undergoing retrofits
or refurbishments. As DOE stated in its
Certification, Compliance and
Enforcement final rule published on
March 7, 2011, manufacturers and
private labelers must certify to DOE that
any covered equipment meets the
applicable standard before distributing
that equipment into U.S. commerce.
DOE’s authority covers newly
manufactured equipment and does not
extend to rebuilt and refurbished
equipment. 76 FR 12422, 12426 and
12437 (March 7, 2011).
10. Components Shipped as AfterMarket Additions
DOE has received inquiries regarding
open commercial refrigerated display
cases that may be shipped with doors to
be installed in the field. Stakeholders
have sought guidance on whether
equipment that is produced and
shipped in this manner would be
subject to the standards applicable to an
open case or subject to the standards
applicable to a closed case.
DOE’s response to the issue of
components shipped as after-market
additions will be addressed in the ongoing test procedure rulemaking.
11. Definition of Hybrid Equipment
During the NOPR analysis period,
DOE received a comment regarding the
definition of hybrid equipment.
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Specifically, the stakeholder inquired
about the proper definition of
commercial hybrid refrigerator-freezer
and the applicable standards.
DOE’s response to the issue of hybrid
equipment will be addressed in the ongoing test procedure rulemaking.
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12. Coverage of Commercial
Refrigeration Equipment With Drawers
DOE has received several comments
from interested parties regarding the
coverage of commercial refrigeration
equipment units with drawers.
Specifically, interested parties inquired
if commercial refrigeration equipment
units with drawers were covered under
the existing and proposed energy
conservation standards for commercial
refrigeration equipment and, so, (1)
which equipment families they belong
to; and (2) what the test procedure
requirements are for these units.
DOE’s response to the issue of
commercial refrigeration equipment
with drawers will be addressed in the
on-going test procedure rulemaking.
B. Test Procedures
DOE received several comments that
pertain only to the test procedure
rulemaking. DOE responded to these
and similar comments in the 2012 test
procedure final rule. 77 FR 10298,
10300, and 10307 (Feb. 21, 2012).
Specifically, DOE received comments
from multiple interested parties that
many cases are installed with remote
lighting controls that are operated at the
aisle or store level (Southern Store
Fixtures, Public Meeting Transcript, No.
31 at pp. 190–91, 194; Zero Zone, Public
Meeting Transcript, No. 31 at p. 196;
California Investor Owned Utilities, No.
42 at p. 4) and, according to the
Northwest Energy Efficiency Alliance
(NEEA), that cases wired uniquely to
receive a remote energy management
system should receive credit in the DOE
test procedure. (NEEA, Public Meeting
Transcript, No. 31 at p. 195) DOE also
received comments from interested
parties that an accepted test method for
secondary coolant systems, especially
those with two-phase flow, had not been
developed and validated. (True, Public
Meeting Transcript, No. 31 at pp. 162–
64; Southern Store Fixtures, Public
Meeting Transcript, No. 31 at pp. 164–
65; AHRI, Public Meeting Transcript,
No. 31 at pp. 165–66) Because these
comments pertain only to the test
procedure for commercial refrigeration
equipment and not the potential
standards or analysis discussed in this
rulemaking, DOE addressed these
comments in the 2012 test procedure
final rule and has not addressed them
further here.
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NEEA stated that DOE’s efforts to
conduct a robust standards analysis are
hindered by DOE’s failure to resolve
some test procedure issues and the fact
that test procedure limitations have
resulted in the removal of some
technologies from consideration. Among
these issues, according to NEEA, are the
inability of the test procedure to
measure savings from anti-sweat heater
controls and the screening out of
variable-speed and variable-capacity
components based on the perceived
limitations of the test procedure. (NEEA,
No. 36 at p. 1)
DOE recognizes stakeholders’ desire
that the DOE test procedure better
measure the performance of variablespeed and variable-capacity devices.
However, in the 2012 test procedure
final rule, DOE stated that testing of
part-load technologies would
significantly increase the burden on
manufacturers to test and certify
equipment and is not justified given the
minimal efficiency gains achieved by
this equipment. 77 FR 10308 (Feb. 21,
2012). As such, DOE maintained that
the fluctuations in refrigeration load
experienced by equipment undergoing
the DOE test procedure are sufficiently
representative of average use, and that
the establishment of additional test
requirements would impose an undue
burden on manufacturers. When
evaluating amended energy
conservation standards, DOE bases its
engineering analysis on the energy
efficiency of a unit as tested by the DOE
test procedure. DOE has assessed the
potential energy savings associated with
technologies as tested under the test
procedure established in DOE’s 2012
test procedure final rule and considered
technologies based on the factors
prescribed by EPCA. (42 U.S.C.
6295(o)(2)(B)(i) and 6316(e)(1))
C. Market and Technology Assessment
When beginning an energy
conservation standards rulemaking,
DOE develops information that provides
an overall picture of the market for the
equipment concerned, including the
purpose of the equipment, the industry
structure, and market characteristics.
This activity includes both quantitative
and qualitative assessments based
primarily on publicly available
information (e.g., manufacturer
specification sheets, industry
publications) and data submitted by
manufacturers, trade associations, and
other stakeholders. The subjects
addressed in the market and technology
assessment for this rulemaking include:
(1) Quantities and types of equipment
sold and offered for sale; (2) retail
market trends; (3) equipment covered by
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the rulemaking; (4) equipment classes;
(5) manufacturers; (6) regulatory
requirements and non-regulatory
programs (such as rebate programs and
tax credits); and (7) technologies that
could improve the energy efficiency of
the equipment under examination. DOE
researched manufacturers of commercial
refrigeration equipment and made a
particular effort to identify and
characterize small business
manufacturers. See chapter 3 of the
NOPR TSD for further discussion of the
market and technology assessment.
1. Equipment Classes
In evaluating and establishing energy
conservation standards, DOE generally
divides covered equipment into classes
by the type of energy used, or by
capacity or other performance-related
feature that justifies a different standard
for equipment having such a feature. (42
U.S.C. 6295(q) and 6316(e)(1)) In
deciding whether a feature justifies a
different standard, DOE must consider
factors such as the utility of the feature
to users. Id. DOE normally establishes
different energy conservation standards
for different equipment classes based on
these criteria.
Commercial refrigeration equipment
can be divided into various equipment
classes categorized by specific physical
and design characteristics. These
characteristics impact equipment
efficiency, determine the kind of
merchandise that the equipment can be
used to display, and affect how the
customer can access that merchandise.
Key physical and design characteristics
of commercial refrigeration equipment
are the operating temperature, the
presence or absence of doors (i.e., closed
cases or open cases), the type of doors
used (transparent or solid), the angle of
the door or air curtain 25 (horizontal,
semivertical, or vertical), and the type of
condensing unit (remote condensing or
self-contained). The following list
shows the key characteristics of
commercial refrigeration equipment that
DOE developed as part of the January
2009 final rule (74 FR 1099–1100 (Jan.
9, 2009)), and used during the
Framework and preliminary analysis for
this rulemaking:
1. Operating Temperature
• Medium temperature (38 °F,
refrigerators)
25 An air curtain is a continuously moving stream
of air, driven by fans, which exits on one side of
the opening in an open refrigerated case and reenters on the other side via an intake grille. The
function of the air curtain is to cover the opening
in the case with this sheet of air, which minimizes
the infiltration of warmer ambient air into the
refrigerated space.
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• Low temperature (0 °F, freezers)
• Ice-cream temperature (¥15 °F, icecream freezers)
2. Door Type
• Equipment with transparent doors
• Equipment with solid doors
• Equipment without doors
3. Orientation (air-curtain or door angle)
• Horizontal
• Semivertical
• Vertical
4. Type of Condensing Unit
• Remote condensing
• Self-contained
Additionally, because EPCA
specifically sets a separate standard for
refrigerators with a self-contained
condensing unit designed for pull-down
temperature applications and
transparent doors, DOE plans to create
a separate equipment class for this
equipment. (42 U.S.C. 6313(c)(3)) DOE
included this equipment in the form of
a separate family with a single class
(PD.SC.M) for the preliminary analysis.
A total of 49 equipment classes were
created, and these are listed in chapter
3 of the NOPR TSD using the
nomenclature developed in the January
2009 final rule. 74 FR 1100 (Jan. 9,
2009).
During the April 2011 preliminary
analysis public meeting and in
subsequent written comments, a number
of stakeholders addressed issues related
to proposed equipment classes and the
inclusion of certain types of equipment
in the analysis. These topics are
discussed in this section.
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a. Equipment Classification
Several stakeholders commented on
the general equipment classification
structure used by DOE in the
preliminary analysis. Traulsen stated
that, with respect to the currently
defined classes of equipment, there are
subcategories DOE failed to specify,
including upright units (1-, 2-, and 3section; reach-in; pass-through; roll-in;
and roll-through) and undercounter
units (categorized by length in inches).
(Traulsen, No. 45 at p. 1) On the other
hand, Zero Zone approved of DOE’s
proposed equipment classes, as
presented in the preliminary analysis
TSD. (Zero Zone, No. 37 at p. 4) AHRI
stated that the equipment class
nomenclature developed by DOE in the
January 2009 final rule was appropriate.
(AHRI, No. 43 at p. 2)
In response to Traulsen’s comment,
DOE recognizes that there are
subcategories of equipment within
certain equipment families and classes,
each with varying geometries. However,
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DOE believes that the equipment classes
it has developed and modeled are broad
enough to account for the variety of
equipment incorporated within each of
them, including the unit types described
in Traulsen’s comment. In performing
its engineering analysis, DOE selected
representative unit sizes and feature sets
for modeling so as to best represent a
typical unit for each given class.
Regarding the comments from Zero
Zone and AHRI, DOE has retained the
equipment classes and nomenclature
adopted in the January 2009 final rule
(74 FR 1100 (Jan. 9, 2009)) and used in
the Framework document and
preliminary analysis for this NOPR.
b. Application Temperature Equipment
DOE received feedback on the subject
of application temperature equipment 26
at the April 2011 preliminary analysis
public meeting and in written
comments. NEEA stated that the
difference between DOE rating
temperatures and application
temperatures can be significant, and
commented that allowing manufacturers
to demonstrate that equipment meets a
standard defined by rating temperature
by testing at (presumably higher)
application temperatures would equate
to a very lenient standard for such
equipment. (NEEA, Public Meeting
Transcript, No. 31 at pp. 26–27) NEEA
added that, for such equipment, the
difference between ambient conditions
and internal conditions would be much
lower than for equipment maintaining a
temperature of 38 °F, and that daily
energy use for this equipment would be
lower as well. Thus, while NEEA agreed
that cabinets should be tested at the
lowest temperature they can achieve,
NEEA stated that, if the standard for
such cabinets is set equal to the level of
energy use of cabinets designed to hold
38 °F, that equipment may be much less
efficient than what could be costeffectively possible were separate
standards set for the equipment. (NEEA,
No. 36 at p. 2) NEEA further asked why
DOE was not proposing to set separate
standards for application temperature
equipment. (NEEA, Public Meeting
Transcript, No. 31 at pp. 26–27) NEEA
stated that, while DOE has dismissed
concerns regarding application
temperature equipment because it is
roughly 2 percent of the market, NEEA
has heard from manufacturers that it is
a growing market segment and added
that 2 percent is, in its opinion, a
26 Application temperature equipment is
equipment that is designed to operate at
temperatures distinctly different from the DOE
rating temperatures of 38 °F, 0 °F, and ¥15 °F.
Examples include wine chillers and candy cases,
which operate in the range of 45 to 60 °F.
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nontrivial portion of the market. (NEEA,
No. 36 at pp. 1–2)
Moreover, NEEA asserted that DOE
failed to acknowledge the differences
between high-temperature equipment
(e.g., floral cases) and ice storage
cabinets, and suggested two new
equipment classes for these products:
One for equipment with cabinet
temperature greater than 40 °F and one
for ice storage cabinets that can operate
outdoors and are designed to hold
temperatures between 20 and 30 °F.
(NEEA, No. 36 at p. 2; NEEA, Public
Meeting Transcript, No. 31 at pp. 26–27)
NEEA further opined that ice storage
cabinets in particular are often used in
environments not well represented by
the test procedure conditions, namely
outdoor environments. NEEA added
that to allow the test procedure to not
represent the operating conditions of
this equipment would violate 42 U.S.C.
6295(2). (NEEA, No. 36 at pp. 1–2)
True stated that, during the test
procedure public meeting, interested
parties suggested that the lowest
application temperature should include
ice storage and be in the mid-twenties.
(True, Public Meeting Transcript, No. 31
at p. 177) Traulsen commented that it
did not have an issue with testing
equipment at internal temperatures that
are higher than the rating temperatures,
such as 50 °F or 10 °F. However,
Traulsen expressed concern regarding
equipment that is designed to run at
internal temperatures that are lower
than the rating temperature, or ambient
temperatures that are higher than the
test ambient temperature. Specifically,
Traulsen stated that this equipment
inherently uses more energy at the
design conditions (often very high
ambient temperatures and relative
humidities) and may also use more
energy at the designated rating
conditions (the temperature and relative
humidity values specified by ASHRAE
72–2005) as well. Traulsen provided the
examples of a piece of equipment
designed to hold ice cream at ¥40 °F
and a unit designed for 105 °F ambient
conditions. (Traulsen, No. 45 at p. 2)
In the 2012 test procedure final rule,
DOE adopted provisions that allow for
the testing of commercial refrigeration
equipment that cannot operate at its
prescribed rating temperature at the
‘‘lowest application product
temperature.’’ DOE defined ‘‘lowest
application product temperature’’ as
‘‘the integrated average temperature
closest to the specified rating
temperature for a given piece of
equipment achievable and repeatable,
such that the integrated average
temperature of a given unit is within
±2 °F of the reported lowest application
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product temperature for that basic
model.’’ DOE also applied this provision
to all refrigerators, freezers, and icecream freezers. 77 FR 10302 (Feb. 21,
2012).
DOE maintains that units tested at the
lowest application product temperature
will still be required to meet the
applicable energy conservation standard
based on their equipment class. The
required standard level will not change
based on the different internal
temperature at which a particular unit is
tested. While DOE understands that this
requirement makes it easier for a small
number of units (that cannot be tested
at the prescribed rating temperatures) to
meet the current standards, DOE does
not believe that establishing separate
equipment categories for these niche
types of equipment would be justified
because the energy savings achievable
with such standards would be relatively
small. In response to NEEA’s suggestion
that ice chests designed to operate
outdoors be tested at alternate ambient
conditions, DOE notes that its test
procedure prescribes only one ambient
condition. DOE believes this ambient
condition is adequately representative
of the operating conditions for the
majority of commercial refrigeration
equipment. Additionally, DOE has seen
no evidence that a unit designed to
perform at stricter conditions than the
DOE test procedure (i.e., higher ambient
temperature and/or humidity) would
have difficulty meeting a standard at the
conditions prescribed in the test
procedure.
In response to NEEA’s assertion that
application temperature equipment is a
growing commercial refrigeration
equipment market segment, DOE has no
data to substantiate the assertion. DOE
has not collected shipments data
indicating that such a trend exists, nor
have manufacturer interviews indicated
that this is the case. Application
temperature equipment represents a
niche equipment market, and this
equipment has been in existence for a
long time (e.g., candy cases, wine cases,
floral cases). DOE has no evidence
indicating that this market segment will
grow disproportionately to other
equipment types.
DOE also agrees with Traulsen that
testing these units at a higher integrated
average temperature does not
necessarily mean that the unit will use
less energy. The variability in energy
use and the impact of variation in
integrated average temperature will vary
based on case type, geometry, and
configuration. This variation would
make setting a consistent standard for
high-temperature or intermediatetemperature equipment impractical,
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because any value chosen would not be
representative of all cases.
c. Open Cases
At the April 2011 preliminary
analysis public meeting and in written
comments, numerous stakeholders
revisited the issue of DOE’s proposed
decision to retain separate standards for
open and closed cases. Earthjustice first
raised the issue, inquiring about the
evidence behind DOE’s assertion that
open cases provide distinct utility with
respect to features such as unobstructed
view and access to product, as well as
simplified stocking, cleaning, and
maintenance. Earthjustice continued by
stating that it wished to renew its
request that DOE continue grouping
open and doored cases together, adding
that any determination of utility is
required to be based on substantial
evidence. (Earthjustice, Public Meeting
Transcript, No. 31 at pp. 23, 25) AHRI
responded that the distinction between
the two types of cases was made in the
language of EPACT 2005, which was
developed through negotiations among
AHRI and other parties, including
advocacy groups. (AHRI, Public Meeting
Transcript, No. 31 at pp. 24–25)
Southern Store Fixtures added that open
and doored cases are two distinct types
of equipment with different
applications, and that they cannot be
combined into a single category.
Southern Store Fixtures also stated that
substantial analysis and evidence would
have to be provided in order to show
that there would be no product loss or
sales loss as a result of moving from
open to doored cases. (Southern Store
Fixtures, Public Meeting Transcript, No.
31 at pp. 28–29)
In further discussion at the public
meeting, Earthjustice stated that it had
submitted to DOE a study conducted by
ASHRAE,27 as well as a Swedish study,
to support Earthjustice’s assertion that
product sales are unaffected by the
presence of door on cases. (Earthjustice,
Public Meeting Transcript, No. 31 at p.
29) However, Southern Store Fixtures
stated that it would dispute the
ASHRAE study regarding open cases,
and that it would articulate its argument
later. (Southern Store Fixtures, Public
Meeting Transcript, No. 31 at pp. 29–30)
Additionally, the Swedish study was
retracted from submission due to
copyright issues.
27 Fricke, B.A., and B.R. Becker. Comparison of
Vertical Display Cases: Energy and Productivity
Impacts of Glass Doors Versus Open Vertical
Display Cases. December 2009. American Society of
Heating, Refrigerating and Air-Conditioning
Engineers, Atlanta, GA. Report No. RP–1402.
https://rp.ashrae.biz/researchproject.php?rp_id=580
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Stakeholders also provided comments
regarding the subject of metrics of
utility. Pacific Gas and Electric (PG&E)
stated that, in its opinion, sales would
be the most obvious metric, along with
the ability to keep product at the desired
temperature. However, PG&E asked that
DOE elaborate on how it would quantify
what constitutes utility. (PG&E, Public
Meeting Transcript, No. 31 at pp. 30–31)
The California Investor Owned Utilities
(CA IOUs) included a similar request in
its written comment, asking that DOE
clarify what it specifically considers as
criteria to justify unique utility. CA
IOUs also asked that DOE continue to
assess options that would enable open
cases to consume amounts of energy
similar to those used by equivalent
closed cases. (CA IOUs, No. 42 at p. 5)
Zero Zone, continuing on the subject of
utility, stated that, in its opinion, there
may have been utility differences
between open and doored cases at one
time, but since that time it believed the
market had changed and this difference
no longer exists. As a result, Zero Zone
supported the comments suggesting that
DOE combine the open and doored
display case classes. (Zero Zone, Public
Meeting Transcript, No. 31 at p. 32)
The Appliance Standards Awareness
Project (ASAP), while not commenting
specifically on equipment utility, stated
that it believed the issue of open versus
closed cases is very important from an
NES perspective, as the preliminary
analysis documents showed that open
cases consume two to three times as
much energy as comparable doored
cases. (ASAP, Public Meeting
Transcript, No. 31 at p. 32) CA IOUs
agreed with DOE’s assessment that
open, low-temperature vertical and
semivertical cases represent small
portions of the market. Further, it
pointed out that the California Energy
Commission (CEC) is proposing to
require doors on all upright, lowtemperature cases at the State level. (CA
IOUs, No. 42 at p. 5)
During the preliminary analysis
comment period, Earthjustice submitted
a detailed comment outlining its
position on the issue of open cases.
Earthjustice expressed its belief that
separate standards for open cases are
neither warranted nor required by
EPCA, as well as its opinion that such
cases provide no capacity or
performance features justifying separate
standards, once again referencing the
previously submitted ASHRAE and
Swedish studies. Implicitly in response
to statements made by AHRI at the
public meeting, Earthjustice added that
EPACT 2005’s codification of standards
for equipment with doors does not
require DOE to maintain separate
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classes for equipment without doors.
(Earthjustice, No. 35 at p.1) Earthjustice
expressed the belief that DOE’s
intention to adhere to its previous
stance that the presence or absence of
doors on cases affects case utility
ignores the evidence that has been
presented in the form of the
aforementioned ASHRAE and Swedish
sales studies, and that EPCA requires
DOE’s factual conclusions to be
supported by substantial evidence
which, according to Earthjustice, DOE
has not provided. (Earthjustice, No. 35
at p. 2)
Earthjustice reiterated its
disagreement with DOE’s assertion in
the preliminary analysis that open cases
provide utility in the form of
‘‘unobstructed view of and access to
product,’’ citing the two sales studies
that it believed to conclude otherwise.
Earthjustice also disagreed with DOE’s
statement that open cases simplify
stocking, cleaning, and maintenance,
questioning how the need to prop a door
open would impede stocking a case. On
the contrary, Earthjustice asserted, the
presence of doors would reduce warm
air infiltration and the opportunities for
items to fall out of the case onto the
store floor, thereby reducing stocking
burdens and losses due to products
damaged during stocking. Furthermore,
Earthjustice stated that DOE has not
suggested shorter life cycles for
equipment with doors, something it
believes would be a logical outcome
were the presence of doors to impair
cleaning and maintenance operations.
(Earthjustice, No. 35 at p. 2)
Earthjustice then presented a legal
argument, stating that, in maintaining
that 42 U.S.C. 6295(o) prevents the
merging of equipment classes for
equipment with and without doors,
DOE has misconstrued the statutory
authority for whether separate classes
are required. Earthjustice asserted that
DOE has, in its preliminary analysis
TSD, attempted to shift the evidentiary
burden onto the stakeholders who
support equivalent standards for the two
equipment types. Earthjustice
commented that, in dismissing the
findings of the ASHRAE study, DOE has
violated the plain language of EPCA,
which requires that a preponderance of
the evidence must support the position
that open cases provide a unique feature
in order for DOE to conclude that
separate equipment classes are required.
(Earthjustice, No. 35 at pp. 2–3)
Earthjustice suggested that, should
DOE decide not to merge classes for
open and closed cases, DOE should
adopt standards reflecting the
overlapping applications for the
equipment. Earthjustice stated that
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because equipment with doors is
economically advantageous on an LCC
basis, encouraging a shift to equipment
with doors will increase the monetary
savings from this rulemaking.
(Earthjustice, No. 35 at p. 3) By adopting
highly cost-effective standards for
equipment with doors as well as
standards that would result in LCC
increases for open cases, Earthjustice
suggested, DOE could encourage
consumers to purchase cases with
transparent doors. Earthjustice stated
that DOE has taken a markettransforming approach in the past.
Specifically, Earthjustice referenced the
small electric motors rulemaking (75 FR
10874 (March 9, 2010)), in which DOE
maintained standards for two types of
general purpose single-phase motors but
tailored those standards to encourage
the market to shift to one of those types.
(Earthjustice, No. 35 at p. 3) Similarly,
Earthjustice added, in the rulemaking
for commercial clothes washers (75 FR
1122 (Jan. 8, 2010)), DOE adopted
standards set at the max-tech level for
top-loading washers, but less aggressive
standards for front-loading washers,
partially to encourage the growth of
front-loader market share. In
conclusion, Earthjustice suggested that
DOE adopt the max-tech level for
equipment without doors and a more
economically advantageous standard for
equipment with doors, thus encouraging
the market to shift to doored cases.
(Earthjustice, No. 35 at pp. 3–4)
DOE understands the concern of some
stakeholders regarding the issue of open
cases. While some stakeholders have
reiterated their previous positions on
this topic, DOE does not believe that
any new data has been presented since
the Framework document public
meeting (May 2010) that would warrant
a change in DOE’s stance as outlined in
chapter 2 of the preliminary analysis
TSD. DOE maintains that to set
standards discouraging users from
purchasing open cases would violate its
statutory charge to preserve the
availability of features and performance
characteristics currently on the market.
While Earthjustice again cited the
ASHRAE study and the Swedish study
comparing sales from open and closed
cases, DOE still maintains its position
from the preliminary analysis. After
having reviewed the ASHRAE study,
DOE believes that because the data were
collected only under very specific
conditions in a controlled environment
and with a limited range of merchandise
types, the data are insufficient to drive
a conclusion applicable across the broad
wide range of open case applications
and end uses. As one example, DOE
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points out that neither study includes
fresh produce and packaged meat
products in the analysis of impact on
product sales, and that these are types
of merchandise that manufacturers have
mentioned as benefiting from the use of
open cases.
Regarding the questions about the
definition of utility raised by
Earthjustice and PG&E, EPCA states
that, in setting or amending standards,
the Secretary must consider, among
other factors, any lessening of the utility
or performance of the covered products
likely from the imposition of the
standard. (42 U.S.C. 6295(o)(2)(B)(i)(IV)
and 6316(e)(1)) EPCA further states that
the Secretary may not prescribe an
amended or new standard under this
section if the Secretary finds (and
publishes such finding) that interested
persons have established by a
preponderance of the evidence that the
standard is likely to result in the
unavailability in the United States in
any covered product type (or class) of
performance characteristics (including
reliability), features, sizes, capacities,
and volumes that are substantially the
same as those generally available in the
United States at the time of the
Secretary’s finding. (42 U.S.C.
6295(o)(4) and 6316(e)(1))
Thus, while the term ‘‘utility’’ is not
specifically defined in EPCA, it is used
in conjunction with the term
‘‘performance’’; the statute further
prohibits DOE from setting standards
that result in the unavailability of
performance characteristics or features
from the U.S. market. In this case, DOE
has determined that customer access to
product is a distinct performance
characteristic or feature in the case of
commercial refrigeration equipment and
believes, based on its research and
discussions with experts and members
of industry, that open cases provide
more convenient access to products
than do closed cases, as well as
providing other measures of utility,
such as ease of stocking and cleaning.
In response to the comment by
Earthjustice that DOE violated the plain
language of EPCA, which requires that
a preponderance of the evidence must
support the position that open cases
provide a unique feature in order to
conclude that separate equipment
classes are required, DOE refers to the
language found at 42 U.S.C. 6295(o)(4)
and 6316(e)(1). This language states that
the Secretary may not issue a standard
if interested persons have established by
a preponderance of the evidence that
the standard is likely to result in the
unavailability in the United States of
any covered product type (or class) of
performance characteristics (including
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reliability), or features currently
available. One statement suggesting that
the elimination of open cases would
have this effect was presented at the
April 2011 preliminary analysis public
meeting, when Southern Store Fixtures
explicitly stated that open and doored
cases are two different equipment types,
adding that ‘‘substantial analysis and
evidence would have to be provided’’ to
ensure that there would be no detriment
to performance by combining the
classes. (Southern Store Fixtures, Public
Meeting Transcript, No. 31 at pp. 28–29)
DOE has agreed with this stance in its
past and current proceedings, as
evidenced by the retention of separate
equipment types for open and closed
cases in its analyses. At the commercial
refrigeration equipment test procedure
NOPR public meeting, Coca-Cola, a
major purchaser of display cases, cited
internal studies concluding that the
presence of doors on displays near
registers can decrease sales by 35 to 50
percent. (Docket No. EERE–2010–BT–
TP–0034, Coca-Cola, No. 19 at p. 90)
These study results stand in contrast to
the assertion by Earthjustice that the
two sales studies it provided show that
open cases do not provide utility in the
form of unobstructed view of and access
to product. The conflict between the
sets of data suggests that, while both
conclusions may be correct in the
specific contexts of the respective
studies, in some applications the
presence of doors on cases can
adversely affect visibility and access to
product. Therefore, elimination of open
cases from the market would equate to
the unavailability of this performance
characteristic, in direct violation of (42
U.S.C. 6295(o)(2)(B)(i)(IV) and
6316(e)(1)).
In its manufacturer interviews, DOE
spoke with several manufacturers who
provided anecdotal data regarding the
utility of open cases. They pointed to
increased sales due to ‘‘impulse buys,’’
stating that users of open cases reported
generating higher revenues out of those
cases. Manufacturers also stated that
open cases allow for vastly easier
stocking of high-margin items including
produce and meat. The ease of stocking
these items is particularly important to
retailers, because open cases are stocked
continuously while shoppers are in the
store, making simultaneous,
unobstructed access to the case by both
the employee and customer an
important utility issue. Manufacturers
reaffirmed during these interviews that
unobstructed view of and access to
product, as well as simplified stocking,
as previously referenced by DOE, were
significant attributes of open cases.
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Furthermore, the manufacturers pointed
to better accommodation of nonstandard-sized merchandise within
these cases. The information that DOE
has gathered regarding market
perceptions at conferences and other
venues has indicated that many grocery
store managers and operators strongly
prefer open cases to closed cases, as
they perceive that product visibility
from a distance is a very strong factor
in sales. Engineers for large chain
grocery stores have stated that their
efforts to convert even part of the
grocery store equipment from open
cases to closed cases, during store
remodeling, have been met with
opposition from store managers due to
their perception that open cases lead to
higher sales compared to closed cases.
This finding is in contrast to the
statement by Zero Zone that utility
differences between open and doored
cases no longer exist. The statement by
Zero Zone also conflicts with the
internal study data quoted by Coca-Cola,
in which that company noted a
significant loss in sales due to the
presence of doors on display cases in
certain settings. As the result of a
collective review of the data obtained
through its public meetings,
manufacturer interviews, and
conferences, DOE believes that its
position of setting separate standards for
open and closed cases is reasonable and
based on the distinct performance
characteristics of each class, as shown
by a preponderance of the evidence
presented. DOE notes that
manufacturers did not cite differences
in maintenance and cleaning between
open and closed cases, but DOE believes
the other utility and performance factors
cited, including ease of access to the
product, increased visibility, and ease of
use during operations and maintenance,
are sufficient to warrant maintenance of
two separate equipment classes.
DOE understands AHRI’s statement
that the distinction between case types
was made in the EPACT 2005 language,
which set standards for closed cases and
required DOE to set standards for open
cases (42 U.S.C. 6313(c)), and
Earthjustice’s response that the
codification of separate standards does
not require DOE to maintain different
classes. However, DOE is restricted by
EPCA from prescribing energy
conservation standards in any manner
that would lessen utility to the customer
or result in the unavailability of
performance characteristics or features
currently on the market. (42 U.S.C.
6295(o)(2)(B)(IV), 6295(o)(4), and
6316(e)(1)) Therefore, DOE continues to
consider open and doored cases to be
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two distinct equipment types due to the
evident performance and feature
differences between them.
DOE acknowledges ASAP’s statement
that open cases have been shown to
consume more energy than doored cases
and CA IOU’s assertion that open, lowtemperature cases comprise a small
market share. However, independent of
these factors, as stated above, DOE is
forbidden by EPCA from setting
standards that would result in the
unavailability on the market of the
performance characteristics and features
that open cases exhibit. (42 U.S.C.
6295(o)(4) and 6316(e)(1)) Therefore,
DOE, through its analyses, sought to
develop separate proposed standard
levels for open and closed cases that
would result in the maximum
economically justified and
technologically feasible energy savings
for the respective equipment.
Regarding Earthjustice’s assertion that
DOE failed to suggest shorter life cycles
for commercial refrigeration equipment
with doors, DOE points out that the
replacement of doors is one of the
factors contributing to repair costs (see
chapter 8 of the NOPR TSD). Damage to
doors does not necessarily shorten the
life of the equipment itself.
With respect to Earthjustice’s
suggestion that DOE force a market shift
from open to closed cases by adopting
cost-effective standards for doored cases
but less economically attractive
standards for open cases, DOE is
compelled by EPCA to examine the
economic and technical justification of
all equipment under the same criteria
and with the same rigor. (42 U.S.C.
6295(o) and 6316(e)(1)) In other words,
DOE must independently determine the
maximum technologically feasible and
economically justified standard level for
each equipment class. Therefore, DOE
examined all TSLs equally using the
same quantitative metrics, such as LCC
and national NPV, and selected a
proposed standard level using these
criteria. In response to the suggestion
that DOE adopt a market-transforming
approach in which it would
intentionally shift market share toward
doored cases, DOE believes that to do so
would violate the EPCA provision
barring DOE from setting standards that
result in the lessening of utility or
unavailability of performance
characteristics. (42 U.S.C. 6295(o)(4)
and 6316(e)(1)) Because DOE has
determined that open cases present a
unique set of performance
characteristics and features to the
market, to set standards eliminating
their manufacture and sale would
violate 42 U.S.C. 6295(o)(4) and
6316(e)(1). DOE notes that in the
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rulemakings for small electric motors
and commercial clothes washers that
Earthjustice cited, DOE was careful to
set standards such that they would not
result in the unavailability of features or
performance characteristics. For
example, the commercial clothes
washers final rule, published by DOE on
January 8, 2010, states that the amended
efficiency levels can be met by either
top- or front-loading designs. In fact, the
clothes washers final rule notes that
there were vertical-axis top-loading and
horizontal-axis frontloading washers on
the market at the time that already met
the higher standard. Thus, DOE
concluded, consumers would have the
same range of clothes washer options,
including features valued by consumers
such as door placement, capacity, water
temperature, and adjustable load sizes.
75 FR 1122, 1133–34 (Jan. 8, 2010). In
the case of commercial refrigeration
equipment, DOE believes that separate
equipment classes are necessary to
preserve the unique features provided
by open refrigerated display cases,
established by interested parties as
discussed above. DOE does not believe
it would be possible to combine
standards classes or arbitrarily set more
aggressive standards for open cases
without violating EPCA provisions
regarding utility/product availability.
(42 U.S.C. 6295(o)(2)(B) and 6316(e)(1))
As a result, DOE has maintained the
position regarding utility of open cases
that it asserted in the January 2009 final
rule and in its preliminary analysis and
framework document. 74 FR 1099 (Jan.
9, 2009).
DOE understands that there are other
options available in the market to
reduce the energy consumption of open
cases, such as retrofitting doors to open
cases, and that DOE’s energy
conservation standards may not be the
only factor related to improving the
energy efficiency of open cases. DOE
believes that, in general, management
staff of grocery stores is well aware of
high energy costs because energy costs
consistently figure as one of the top five
issues in the Food Marketing Institute
(FMI) Worry Index,28 which is obtained
through surveys of the food retailers
regarding the most important issues in
their businesses that cause them to
‘‘worry.’’ Some stores have retrofitted
their open cases with transparent doors
to achieve substantial savings in energy
costs. DOE also recognizes that the
market for retrofitting open, multi-deck
display cases with transparent doors is
steadily increasing. In addition, features
28 FMI Research. The Food Retailing Industry
Speaks 2011. 2011. Food Marketing Institute,
Arlington, VA.
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such as night curtains and moreefficient air curtains are also available in
the market to reduce the energy
consumption of open cases.
In its NOPR analyses, DOE modeled
open and closed display cases
separately, and has included separate
proposed standards for the two types of
equipment in this notice.
d. Service Over Counter Equipment
AHRI voiced concerns about selfcontained service over counter (SOC)
equipment,29 stating that DOE
incorrectly determined that SOC
equipment was covered by EPACT 2005
and that this error resulted in an overly
stringent standard being applied to the
equipment. (AHRI, No. 43 at p. 2) AHRI
commented that it, working with other
stakeholders, had proposed legislative
language that defines SOC equipment
and establishes minimum standards for
that equipment, which is included in
the Implementation of National
Consensus Appliance Agreements Act
of 2011, S. 398, 112th Cong. (2011).
AHRI asked that DOE adopt the
definition of SOC equipment that AHRI
had proposed in that legislation, and
also asked DOE to use TDA as a
normalization metric for this
equipment. (AHRI, No. 43 at p. 2)
With respect to the statement by AHRI
that DOE has incorrectly determined
that SOC equipment is within the scope
of coverage of EPACT 2005, DOE
disagrees, having determined that
SOC.SC.M equipment meets the
statutory definition of a self-contained
commercial refrigerator with transparent
doors in 42 U.S.C. 6311(9)(A). EPCA
does not specify equipment subsets
such as SOC equipment beyond
defining the terms ‘‘commercial
refrigerator,’’ ‘‘freezer,’’ and
‘‘refrigerator-freezer’’ and ‘‘selfcontained condensing unit,’’ among
other definitions related to this
equipment. (42 U.S.C. 6311(9)) In
December 2009, DOE’s Office of
Hearings and Appeals (OHA) responded
to an application for exception relief
from a manufacturer of SOC equipment.
This manufacturer argued that it was
entitled to relief because its SOC units
could not meet the EPACT 2005
standards for self-contained equipment
with doors. OHA responded that DOE
did not have jurisdiction to consider
29 ‘‘Service over counter’’ means equipment with
sliding or hinged doors in the back intended for use
by sales personnel for loading and retrieving items
for sale, and fixed, sliding or hinged transparent
panels in the front for displaying merchandise. The
equipment has a height no greater than 66 inches
and is intended to serve as a counter for
transactions between sales personnel and
customers.
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such exceptions for equipment covered
by the statutorily mandated standards.
(Case No. TEE–0066, Dec. 29, 2009)
During the preliminary engineering
analysis for this rulemaking, DOE
confirmed that the EPACT 2005
standards for SOC.SC.M (42 U.S.C.
6313(c)(2)) could not be achieved at
even the max-tech level (see chapter 2,
section 2.2.1.5, of the preliminary
analysis TSD). Therefore, DOE agrees
with AHRI’s comment that the standard
set by EPACT 2005 was too stringent for
equipment belonging to equipment class
SOC.SC.M. Consequently, DOE had
excluded SOC.SC.M equipment from
the preliminary analysis.30
In December 2012, during the NOPR
analysis for this rulemaking, the
American Energy Manufacturing
Technical Corrections Act (AEMTCA),
Public Law 112–210 (Dec. 18, 2012)
amended EPCA to establish new
standards for self-contained service over
counter medium temperature
commercial refrigerators. (42 U.S.C.
6313(c)(4)) The amendment reduces the
stringency of the standard applicable to
this equipment. AEMTCA prescribed
the standard for SOC.SC.M equipment
manufactured on or after January 1,
2012 as 0.6 × TDA + 1.0, expressed in
kilowatt hours per day. (42 U.S.C.
6313(c)(4)(A))
AEMTCA also amended EPCA to
direct DOE to determine, within 3 years
of enactment of the new standard for
SOC.SC.M, whether the standard should
be amended. (42 U.S.C. 6313(c)(4)(B)(1)
If DOE determines that the standard
should be amended, then DOE must
issue a final rule establishing an
amended standard within this same 3year period. (42 U.S.C. 6313(c)(4)(B))
DOE conducted the analysis for this
determination of whether to amend the
standard for equipment class SOC.SC.M
as part of this NOPR analysis. The
analysis was carried out in a manner
similar to that of all the other equipment
classes being analyzed as part of the
current rulemaking. DOE used the
standard established by AEMTCA as the
baseline efficiency level for equipment
class SOC.SC.M.31 The results of the
analysis indicated that if an amendment
to the AEMTCA standard for equipment
30 DOE had also excluded SOC.SC.L, a lowshipments-volume equipment class, from the
preliminary analysis as well, as it too is covered
under standards prescribed by EPACT 2005 for
freezers with transparent doors found at 10 CFR
431.66(b). Due to its similarity in design,
construction, and performance to SOC.SC.M
equipment, DOE presumed that it too would not be
able to meet the standards set by EPACT 2005 for
self-contained equipment with transparent doors.
31 This approach is similar to that adopted for all
the other equipment classes, as explained in section
IV.H.1.
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class SOC.SC.M, based on same criteria
established for all the other equipment
classes of the current rulemaking,32
would represent a reduction in energy
consumption of roughly 30 percent as
compared to the AEMTCA standard.
Based on this result, DOE has proposed
an amended standard for equipment
class SOC.SC.M in this NOPR (see
section I and section V.A.2).
In response to AHRI’s request that
DOE use TDA as a normalization metric
for this equipment, the January 2009
final rule standards for remote
condensing SOC equipment were
expressed using TDA as a normalization
metric. 74 FR 1093 (Jan. 9, 2009). As
AHRI suggested, DOE proposes in this
NOPR to continue to use TDA as the
normalization metric for SOC
equipment.
DOE is also proposing to adopt a new
definition of the ‘‘service over counter’’
equipment family, which is included in
this notice. DOE based its proposed
definition on the definition of selfcontained service-over-counter
refrigerators (SOC.SC.M) found in
Paragraph (1) of section 4 of AEMTCA.
(42 U.S.C. 6313(c)(1)(C)) However, DOE
proposes to adopt a broader definition
of SOC equipment that DOE believes is
applicable to all of the equipment
classes that belong to the SOC
equipment family, not just the single
SOC.SC.M equipment class described by
the AEMTCA language. The proposed
definition can be found in section 0 of
this NOPR.
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2. Technology Assessment
As part of the market and technology
assessment performed for the NOPR
analysis, DOE developed a
comprehensive list of technologies that
would be expected to improve the
energy efficiency of commercial
refrigeration equipment. Chapter 3 of
the NOPR TSD contains a detailed
description of each technology that DOE
identified. Although DOE identified a
complete list of technologies that
improve efficiency, DOE only
considered in its analysis technologies
that would impact the efficiency rating
of equipment as tested under the DOE
test procedure. Therefore, DOE
excluded several technologies from the
analysis during the technology
assessment because they do not improve
the rated efficiency of equipment as
measured under the specified test
procedure. Technologies that DOE
determined impact the rated efficiency
32 The criteria for trial standard level selection
can be found in section V.A.1, and discussion
concerning the selection of the proposed standard
level can be found in section V.C.
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were carried through to the screening
analysis and are discussed in section
IV.D.
a. Technologies Applicable to All
Equipment
In the preliminary analysis market
and technology assessment, DOE listed
the following technologies that would
be expected to improve the efficiency of
all equipment: higher efficiency
lighting, higher efficiency lighting
ballasts, remote lighting ballast location,
higher efficiency expansion valves,
higher efficiency evaporator fan motors,
variable-speed evaporator fan motors
and evaporator fan motor controllers,
higher efficiency evaporator fan blades,
increased evaporator surface area, lowpressure differential evaporators,
increased case insulation or
improvements, defrost mechanisms,
defrost cycle controls, vacuum insulated
panels, and occupancy sensors for
lighting controls. Not all of these
technologies were considered in the
preliminary engineering analysis; some
were screened out or removed from
consideration on technical grounds, as
described in chapters 3 and 4 of the
NOPR TSD. After the publication of the
preliminary analysis, DOE received
numerous stakeholder comments
regarding these technologies, discussed
below.
Lighting Technologies
In response to DOE’s request for
comment, Southern Store Fixtures
questioned DOE’s specification for lightemitting diode (LED) lighting because it
appeared that LEDs had a lower efficacy
in terms of lumens per watt compared
to T8 fluorescent lighting (the standard
baseline lighting technology) in DOE’s
model. (Southern Store Fixtures, Public
Meeting Transcript, No. 31 at pp. 59–60)
Zero Zone observed that while
fluorescent lighting is a mature
technology, LED lighting is constantly
evolving. (Zero Zone, Public Meeting
Transcript, No. 31 at p. 63)
Additionally, Southern Store Fixtures
suggested that the efficiency of the
driver powering the LEDs be explicitly
considered, as it is a key aspect of
lighting energy consumption. (Southern
Store Fixtures, Public Meeting
Transcript, No. 31 at p. 62) True noted
that light output from LEDs is highly
directional, and the additional heat load
from the LEDs increases the load on the
compressor, which is less efficient than
the lighting system. (True, Public
Meeting Transcript, No. 31 at pp. 60–61)
Regarding the comment by Southern
Store Fixtures, the output of LED light
fixtures used in commercial
refrigeration equipment is indeed lower
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55911
in terms of lumens per watt when
compared to T8 fluorescent bulbs.
However, for commercial refrigerated
display applications, the advantage of
LED lighting lies in the directionality of
its light output. While T8 lighting
produces greater output in lumens,
much of that light is directed toward the
ambient space rather than the
merchandise to be illuminated, and thus
is wasted from a product merchandising
perspective. LED lighting, on the other
hand, is very directional, and the light
can be aimed directly at the product on
display. This difference allows for more
conservative sizing of LED fixtures and,
as a result, overall power consumption
is lower compared to T8 fluorescent
lamps.
DOE agrees with the comment by Zero
Zone that LED lighting is an evolving
technology. As a result, DOE has taken
efforts to update its LED fixture cost
estimates throughout the rulemaking
process, gathering the most current data
available from publicly available
sources as well as from manufacturer
interviews. Regarding Southern Store
Fixtures’ concern about driver power,
this power consumption is considered
in the engineering model and is
incorporated into the calculation of
calculated daily energy consumption
(CDEC). Similarly, with respect to
True’s comment, the impact of lighting
on case heat load, and thus compressor
power consumption, is accounted for in
the engineering model through the use
of a multiplier to estimate the fraction
of light produced that is retained inside
the case as heat.
Lighting Controls
In addition to discussing lighting,
stakeholders also commented on the
location of lighting controls. Southern
Store Fixtures observed that certain
operators use central energy
management systems to control the
display case lighting, and asked if this
approach would be considered instead
of just the placement of occupancy
sensors in individual display cases. The
company added that when customers
ask them to supply a case to be
controlled by a central energy
management system, the lights in the
display cases must be wired separately
from the other energy-consuming
components. (Southern Store Fixtures,
Public Meeting Transcript, No. 31 at pp.
190–91, 194) Further, Southern Store
Fixtures pointed out that CEC is
considering these central lighting
systems in its proceedings. (Southern
Store Fixtures, Public Meeting
Transcript, No. 31 at p. 197) Zero Zone
stated that it typically wires cases with
a separate lighting circuit to allow for
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independent lighting control, while
NEEA stated that if a case is wired
differently to interface with centralized
controls, it should be treated identically
to a self-contained set of controls. (Zero
Zone, Public Meeting Transcript, No. 31
at p. 196; NEEA, Public Meeting
Transcript, No. 31 at p. 195) CA IOUs
supported the manufacturer assertion
made during the April 2011 preliminary
analysis public meeting that it is
possible to distinguish between cases
designed for remote energy controls and
those that are not. (CA IOUs, No. 42 at
p. 4) For this reason, the CA IOUs
suggested that DOE develop a
calculation to measure energy savings
due to the use of such remote systems
in the test procedure. (CA IOUs, No. 42
at p. 4)
DOE acknowledges that there are
several ways to implement lighting
controls (e.g., individual case controls,
controls for a case lineup, storewide
energy management systems), and that
allowing certain systems to be included
in calculating energy consumption may
set a precedent for how DOE defines the
boundaries of covered equipment and
what technologies are allocated energy
savings for a piece of equipment in the
test procedure. For example, cases set
up to accept remote control systems
have a dedicated circuit for lights so
that the lights can be controlled
separately from the rest of the case.
However, this lighting circuit
configuration does not inherently save
energy and must be paired with an
expensive energy management control
system, which is sold separately from
the piece of commercial refrigeration
equipment, is produced by different
manufacturers, and is not integral to the
commercial refrigeration equipment. In
addition, the existence of an energy
management system does not
necessarily mean it will be used with
commercial refrigeration equipment; for
example, energy management systems
are used in many stores and offices to
control room lighting and temperature
set points.
DOE acknowledges that remote
lighting controls do save energy and
may be the more commonly used
technology to dim or turn off lights.
However, energy consumption for a
piece of commercial refrigeration
equipment must be determined using
the DOE test procedure to measure the
energy consumption of a representative
unit, as shipped to customers. Because
the remote energy management system
is not part of the piece of commercial
refrigeration equipment as shipped from
the manufacturer, but rather is a
separate piece of equipment supplied by
a separate manufacturer, remote energy
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DOE removed from consideration these
technologies that do not affect or do not
reduce CDEC during the tests.’’ CA IOUs
requested clarification of DOE’s
rationale for eliminating those
Part-Load Technologies
technologies from consideration, and
Stakeholders also submitted
also requested that DOE include in its
comments on the subject of part-load
engineering analysis all technologies
and variable-capacity technologies.
that can be measured in part by the test
These are technologies that allow the
procedure, notably those that save
energy at variable load or under
performance of the system components
fluctuating ambient conditions. (CA
to be varied in response to changes in
IOUs, No. 42 at p. 2) NEEA expressed
the load placed on them, such as
its opinion that DOE had not yet
changes due to varying ambient
adequately justified its lack of initiative
conditions or product loading. PG&E
in examining part-load technologies.
requested that DOE clarify its stance on
(NEEA, No. 36 at p. 4)
part-load technologies, suggesting that
Stakeholders questioned the ability of
there was a disparity between the NOPR
the DOE test procedure to reflect the
DOE published on November 24, 2010,
performance of part-load technologies.
which proposed amendments to DOE’s
In a written comment submitted jointly,
test procedures for commercial
ASAP and the Natural Resources
refrigeration equipment (November
2010 test procedure NOPR (75 FR 71596 Defense Council (NRDC) encouraged
DOE to consider technologies that
(Nov. 24, 2010)) and the screening
improve efficiency under part-load
analysis presented in chapter 2 of the
conditions in the engineering analysis,
preliminary analysis TSD. Specifically,
stating that DOE referenced in its test
in the November 2010 test procedure
procedure NOPR the fact that units
NOPR, DOE stated that the proposed
tested using ASHRAE 72, namely those
test procedure, which relied on AHRI
with doors, experience variation in load
Standard 1200 and ASHRAE Standard
72,33 is able to capture the energy-saving due to the door opening requirements of
the test. ASAP and NRDC mentioned
effects of some part-load technologies.
that there is clearly a variation in
(76 FR 71601 (Nov. 24, 2010)).
Conversely, in the screening analysis in refrigeration load during the test for this
equipment, due to the door opening
chapter 2 of the preliminary analysis
requirement. ASAP and NRDC added
TSD, DOE removed some technologies
that, in its proposed test procedure,
from the analysis and stated that their
DOE also referred to transient load
effects could not be measured by the
steady-state test procedure. PG&E asked variation effects (76 FR 71601 (Nov. 24,
DOE to clarify its stance and asked that, 2010)). ASAP and NRDC stated that, if
single-speed compressors cycle on and
if DOE determines that the effects of
off during the test, there is likely
these technologies can be measured, to
opportunity for variable-speed
include them in the screening and
compressors to reduce energy
engineering analyses. PG&E later
consumption by increasing the
reiterated its desire that DOE be
operating effectiveness of heat
consistent in its approach toward
exchangers and reducing cycling losses.
technologies that maintain energy
(ASAP and NRDC, No. 34 at pp. 1–2)
savings at variable ambient conditions
Interested parties also commented
or variable load. (PG&E, Public Meeting
that it is important to distinguish
Transcript, No. 31 at pp. 51–52, 178)
between steady-state and full-load
Similarly, CA IOUs noted a perceived modes of operation, since equipment
disparity between DOE’s statement in
experiencing relatively constant loads is
the preliminary analysis TSD chapter 2, not necessarily operating at full load.
where DOE stated that it ‘‘believes that
ASAP and NRDC stated that if the
the energy saving potential of these
compressor is cycling, this indicates
technologies is already captured to some that the equipment is operating at part
degree in the current test procedure,’’
load. ASAP and NRDC continued,
and chapter 4, where DOE stated that
stating that if a commercial refrigerator
‘‘[t]echnologies that reduce energy use
or freezer did operate at full load during
only under transient conditions, such as a test, then it would not be able to
fluctuations in ambient temperature and maintain the necessary case temperature
humidity, periods of product loading,
under the more extreme conditions that
and frequent door openings, will not
it would likely encounter in the field,
affect the measured CDEC. Therefore,
posing a risk to food safety. Therefore,
ASAP and NRDC stated, it is likely that
33 ANSI/ASHRAE Standard 72–2005. ‘‘Method of
manufacturers design equipment to
Testing Commercial Refrigerators and Freezers.’’
meet a higher load than that
2005. American Society of Heating, Refrigerating,
and Air-Conditioning Engineers, Inc. Atlanta, GA.
experienced during a test, and that
management controls will not be
considered as an energy conservation
feature in this commercial refrigeration
equipment rulemaking.
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technologies that improve part-load
performance could reduce energy
consumption for both open and doored
cases. (ASAP and NRDC, No. 34 at p. 2)
NEEA expressed a similar viewpoint,
commenting that the door opening
provision in ASHRAE 72 leads to load
variation and that, even for open cases,
it is unlikely that the refrigeration
system is operating at full capacity
during the test period, as this would
make the system unable to meet load
requirements and guarantee food safety
under more extreme environmental
conditions. (NEEA, No. 36 at p. 4) NEEA
stated that, unless a refrigeration system
is sized exactly for its operating load,
and that load remains constant, there is
good reason to examine part-load
system performance. NEEA added that,
since most refrigeration systems must
perform under a variety of conditions,
they will operate cyclically, leaving
room for more-efficient operation during
times of lower load. NEEA urged DOE
to explore the use of variable-speed and
variable-capacity components. (NEEA,
No. 36 at p. 4)
DOE received comments regarding the
treatment and modeling of specific partload technologies. ASAP stated that, in
its proposed energy conservation
standards for residential refrigerators
(75 FR 59470 (Sept. 27, 2010)), DOE had
included variable-speed compressors as
a design option, and that the residential
refrigerators test procedure was also a
steady-state test. ASAP asked why
variable-speed compressors were
considered for residential refrigerators
but not for commercial refrigeration
equipment. (ASAP, Public Meeting
Transcript, No. 31 at p. 54) NEEA
commented that variable-speed
condenser fans and condenser fan motor
controllers could enable improved partload performance, and that screening
them out due to test procedure
limitations is shortsighted. (NEEA, No.
36 at p. 3) NEEA added that highefficiency expansion valves are
becoming much more prevalent in
refrigeration systems, and that they
should be included in the analysis.
NEEA stated that savings associated
with high-efficiency expansion valves
may arise in conjunction with other
technologies installed as part of a partload package and that, while these
energy savings may be small, this
should be proven by analysis. (NEEA,
No. 36 at p. 3) CA IOUs requested
clarification on how variable-speed
compressors and modulating capacity
compressors 34 are covered in this
34 Variable-speed compressors are able to control
the rate at which they operate in order to tailor their
performance to varying conditions and thus reduce
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rulemaking. CA IOUs stated that such
compressor technologies did not appear
to have been screened out or listed as
an option, and appeared to have been
included in the engineering analysis
TSD chapter under the section
discussing higher efficiency
compressors. (CA IOUs, No. 42 at p. 2)
Finally, ASAP and NRDC stated that the
model used in the engineering analysis
should be able to capture the potential
benefits of technologies that improve
part-load performance and that, if this is
not the case, DOE should consider a
different methodology. (ASAP and
NRDC, No. 34 at p. 3)
After receiving these stakeholder
comments, DOE reviewed its position
on part-load and variable-capacity
technologies, as articulated in chapter 2
of the preliminary analysis and test
procedure NOPR publications (75 FR
71601 (Nov. 24, 2010)). DOE agrees
there was a disparity between the
preliminary analysis, in which DOE
reiterated its position from the January
2009 final rule that part-load
technologies could not be captured by
the steady-state ASHRAE 72 method of
test,35 and the test procedure NOPR, in
which DOE stated that the door opening
and night curtain testing portions of the
test would in fact create part-load
conditions. 75 FR 71601 (Nov. 24,
2010). DOE believes that the position
presented in the test procedure NOPR is
accurate, as the variation in operating
conditions introduced by door openings
and the use of night curtains could
create an opportunity for part-load
technologies to produce quantifiable
energy impacts. DOE revised its position
after reviewing the test procedure
established in the 2012 test procedure
final rule (77 FR 10292 (Feb. 21, 2012))
and the energy consumption profile of
equipment observed during testing
conducted using the DOE test
procedure. DOE believes the confusion
arose due to the way in which the
industry refers to the ASHRAE 72
method of test. As mentioned above,
part load technologies allow a piece of
commercial refrigeration equipment to
respond to changes in refrigeration load
compressor cycling. Modulating capacity
compressors, most commonly found in larger sizes
used in compressor racks, allow for the volume of
fluid being compressed by the moving pistons (and
thus the throughput of the compressor) to be
changed in response to load variations.
35 U.S. Department of Energy–Office of Energy
Efficiency and Renewable Energy. Preliminary
Technical Support Document (TSD): Energy
Conservation Program for Certain Commercial and
Industrial Equipment: Commercial Refrigeration
Equipment. Chapter 5, Engineering Analysis. March
2011. Washington, DC. www.regulations.gov/
#!documentDetail;D=EERE-2010-BT-STD-00030030.
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that occur due to changes in ambient
conditions or internal loads on the case.
The ASHRAE 72 method of test
prescribes a single fixed set of ambient
conditions, so no major changes in
refrigeration load are intentionally
introduced through changes in ambient
condition. Thus, the ASHRAE 72
method of test is often referred to as
steady-state. However, as stated in the
November 2010 test procedure NOPR,
commercial refrigeration equipment
tested using ASHRAE 72 experiences
variation in refrigeration load due to
door openings, drawing of the night
curtain, and inherent compressor
cycling that occur during the test. 77 FR
10308 (Feb. 21, 2012). Realizing this,
DOE has revised its position and agrees
with ASAP, NRDC, and NEEA that the
nature of the ASHRAE 72 method of
test, while conducted at fixed ambient
operating conditions, is not strictly
thermodynamically steady-state, as
evidenced by compressor cycling and
minor fluctuations in internal
temperatures throughout the duration of
the test. DOE also agrees with these
stakeholders that the presence of
compressor cycling demonstrates that
commercial refrigeration units generally
do not operate at full load during the
test. From its discussions with
manufacturers, DOE understands that
most equipment can operate at
temperatures lower than the
equipment’s given DOE rating
temperature, and thus performance at
the test procedure conditions would
likely not constitute full-capacity
operation.
In response to the stakeholder
suggestions that DOE include specific
part-load technologies in the NOPR
analyses, DOE investigated the
technologies referenced by these
commenters. DOE researched the state
of part-load and variable-capacity
technologies such as fan motor
controllers and variable-speed
compressors through available
manufacturer and component supplier
literature, as well as through its
discussions with manufacturers during
interviews. DOE found that that many of
these part-load technologies had not yet
been developed for the commercial
refrigeration equipment industry to the
extent that they could be adopted by
manufacturers in the near future. For
example, while variable-speed
compressors are indeed, as some
stakeholders mentioned, prevalent in
residential refrigeration applications,
their availability for commercial
application is very limited and is not
applicable to many equipment types.
Some technologies were also removed
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for functional purposes or because of
concerns over food safety performance.
Others were removed from
consideration because they would not
have measurable impacts under the test
procedure. Therefore, while DOE did
not screen out or preclude the analysis
of part-load technologies, DOE did not
utilize any of these technologies
explicitly as design options in its
engineering analysis. For further
discussion of DOE’s examination of
these technologies, see chapters 3
through 5 of the NOPR TSD.
DOE reiterates that the design options
that it has chosen for this particular
analysis, and the design paths used in
modeling the proposed standard levels,
do not constitute a prescriptive design
requirement. In other words, DOE does
not claim that the combinations of
design options presented in the
engineering analysis form unique paths
for achieving higher energy efficiency.
Manufacturers are free to utilize any
design features available to them in
order to develop compliant units,
provided that those units meet all the
requirements for testing under the DOE
test procedure and other applicable
regulations. Thus, should manufacturers
develop part-load features that produce
quantifiable reductions in energy
consumption under the DOE test
procedure, they are not prohibited from
taking advantage of those features, even
if particular technologies were not
modeled in the analysis for this
rulemaking.
mstockstill on DSK4VPTVN1PROD with PROPOSALS3
b. Technologies Relevant Only to
Equipment With Doors
In chapter 3 of the preliminary
analysis TSD, DOE mentioned three
technologies that could apply only to
doored equipment: anti-fog films, antisweat heater controllers, and highperformance doors. Not all of these
technologies were considered in the
preliminary engineering analysis, as
some were screened out or removed
from consideration on technical
grounds. The following sections discuss
stakeholder comments regarding these
technologies.
Anti-Fog Films
Zero Zone stated that research by
Southern California Edison indicated
that anti-fog films do not allow for the
reduction of anti-sweat heat. (Zero
Zone, Public Meeting Transcript, No. 31
at p. 47)
DOE reviewed the available literature
regarding anti-fog films, and
understands that these films alone do
not necessarily eliminate the need for
anti-sweat heaters under many
conditions, including high ambient
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humidity, as they cannot prevent
condensation from forming on the
outside of the case. This shortcoming of
anti-fog films can present a major
problem for customers. Discussions
with manufacturers have led DOE to
believe that alternative improvements in
door construction provide the capacity
to reduce anti-sweat heat without the
drawbacks mentioned here. Because of
these issues, DOE did not consider antifog films on transparent doors as a
design option. For further discussion of
this subject, see chapter 5 of the NOPR
TSD.
Anti-Sweat Heater Controllers
During the April 2011 preliminary
analysis public meeting, Zero Zone
stated that anti-sweat controllers have
the potential to save energy because the
controllers would allow heaters to be
designed with extra capacity for more
humid climates. (Zero Zone, Public
Meeting Transcript, No. 31 at p. 53)
NEEA, ASAP, and NRDC all suggested
DOE investigate Zero Zone’s comment
further, while the CA IOUs noted it may
be possible to include a calculation
method to address the benefit of these
controllers. (NEEA, No. 36 at p. 3; ASAP
and NRDC, No. 34 at p. 2; CA IOUs, No.
42 at pp. 2–4)
DOE raised the subject of anti-sweat
heater controllers during its
manufacturer interviews for this NOPR.
Several manufacturers agreed that,
within the context of the test procedure,
anti-sweat heater controllers will
effectively keep the power to anti-sweat
heaters at the levels necessary for the
test conditions. While anti-sweat
controllers could also modulate the antisweat power further in the field to
account for more or less extreme
ambient conditions, a system equipped
with anti-sweat heater controllers will
not likely exhibit significantly different
performance at test procedure
conditions than will a unit with antisweat heaters tuned for constant 75 °F,
55 percent relative humidity conditions.
Therefore, DOE did not consider antisweat heater controllers in the
engineering analysis, as modeling these
devices within the context of the test
procedure would not yield appreciable
energy savings over anti-sweat heaters
that are properly sized for the test
procedure ambient conditions. DOE
notes that manufacturers that produce
cases with anti-sweat heater controls for
higher temperature and humidity
environments may use anti-sweat heater
controllers in the test procedure,
however.
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High-Performance Doors
Zero Zone also commented on highperformance doors, stating that when
they were incentivized in California,
retail stores used more energy because
they had to set their air conditioning to
a lower set point to avoid condensation.
Zero Zone added that high-performance
doors also sweat under conditions that
are less favorable than the ASHRAE test
conditions, and that DOE should
evaluate technologies intended to be
used for performance under actual
conditions, not just under ASHRAE 72
test procedure conditions. Zero Zone
stated that DOE should remove highperformance doors from the analysis.
(Zero Zone, No. 37 at pp. 1 and 3)
During the NOPR engineering
analysis, DOE reviewed its data for all
design options, including highperformance doors. Transparent door
performance was discussed at
manufacturer interviews during the
preliminary analysis and NOPR stages
of the rulemaking, and the glass door
designs considered in the engineering
analysis are based on door models
currently available on the market. The
performance of these door designs was
analyzed using Lawrence Berkeley
National Laboratory’s (LBNL’s)
WINDOW 5 software 36 in conjunction
with the analyses for DOE’s ongoing
energy conservation standards rule for
walk-in coolers and freezers, an
equipment type in which the same
models of glass display doors are often
employed. While it is true that extreme
conditions could adversely impact glass
door performance, as mentioned by Zero
Zone, the performance of the equipment
for this analysis was based on the
standardized ASHRAE 72 test
conditions of 75°F and 55 percent
relative humidity, ambient conditions
that have been accepted by industry, the
ASHRAE working group, and DOE as
being generally representative of the
environments typically encountered by
commercial refrigeration equipment.
DOE believes that high-performance
doors, such as those offered on the
market by several door manufacturers
and analyzed in this rulemaking, have
the potential to save significant amounts
of energy for transparent-door cases.
Based on its market research and
discussions with manufacturers, DOE
has concluded that high-performance
doors meet all the criteria for inclusion
in its analysis, and has thus considered
them as a design option in the
engineering analysis.
36 LBNL’s WINDOW 5 software is a program
designed for modeling the performance of windows,
doors, and other fenestration devices.
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c. Technologies Applicable Only to
Equipment Without Doors
In chapter 3 of the preliminary
analysis TSD, DOE mentioned two
technologies, air-curtain design and
night curtains, that could potentially be
used to improve the efficiency of
commercial refrigeration equipment
without doors. Air curtain design was
not considered in the preliminary
engineering analysis, as it was screened
out and removed from consideration
because, according to the information
available to DOE, advanced air curtain
designs are still in research and
development stages and are not yet
available for use in the manufacture of
commercial refrigeration equipment.
The following sections address
stakeholder comments regarding
technologies applicable to equipment
without doors.
mstockstill on DSK4VPTVN1PROD with PROPOSALS3
Night Curtains
At the April 2011 preliminary
analysis public meeting and in written
comments, DOE received numerous
comments from stakeholders regarding
night curtains and their use in
equipment without doors. CA IOUs
agreed with DOE’s decision to include
night curtains in the analysis, but
pointed out that such energy savings are
only significant if the night curtains are
properly deployed, and encouraged
DOE to review and update its
assumptions. (CA IOUs, No. 42 at pp. 4–
5) Zero Zone also commented on the
potential of night curtains to conserve
energy, and stated that this technology
should not be included in this
rulemaking because there is no
reasonable way to estimate how it will
actually be used and because it cannot
be used in 24-hour stores. (Zero Zone,
No. 37 at p. 4) Southern Store Fixtures
agreed with respect to these operational
challenges, and also pointed out that
CEC did not consider night curtains due
to long PBPs, labor costs, and questions
about the reliability of energy savings.
(Southern Store Fixtures, No. 38 at p. 1;
Southern Store Fixtures, Public Meeting
Transcript, No. 31 at p. 42)
Southern Store Fixtures expressed
concern that the use of night curtains on
open cases could create design and
operational challenges, potentially
resulting in an inefficient case with
product temperature issues and the
potential for noncompliance with food
safety regulations. (Southern Store
Fixtures, No. 38 at p. 1) Southern Store
Fixtures also noted that major design
changes will be needed for cases with
night curtains. Specifically, the
evaporator coil and expansion devices
currently used in open cases will be
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significantly oversized for use with
night curtains; the number of fans
needed and airflow characteristics will
change; and lighting and temperature
controls will need to be altered in
converting a standard open case to
accommodate night curtains. Cases with
night curtains would also, Southern
Store Fixtures stated, require
duplication of controls to be able to
operate with and without the curtains.
(Southern Store Fixtures, No. 38 at p. 1)
In summary, Southern Store Fixtures
asserted that these issues would require
a redesign of an open case for
compatibility with night curtains and
that, when considering the potential
energy savings associated with the use
of a night curtain, DOE should include
the cost of performing such a redesign
in its analysis. (Southern Store Fixtures,
No. 38 at p. 1)
During the public meeting, Zero Zone
observed that doored and open cases
have a similar energy profile, and
therefore, night curtains could be used
as a design option for doored equipment
as well. (Zero Zone, Public Meeting
Transcript, No. 31 at pp. 40–41)
DOE acknowledges that the use of
night curtains may not be consistent in
the field. However, DOE’s test
procedures and energy conservation
standards cannot control for equipment
application and actual end use. Night
curtains are an available technology for
reducing energy consumption in
commercial refrigeration equipment and
DOE believes that including night
curtains in its test procedure and energy
conservation standards would allow
manufacturers to take credit for the
energy savings associated with this
technology. In the 2012 test procedure
final rule, DOE assumed 6 hours as the
time period that night curtains would be
implemented. 77 FR 10310 (Feb. 21,
2012). DOE believes that 6 hours
conservatively represents the amount of
time a night curtain would be drawn in
a typical, non-24-hour store, when
accounting for stocking and the fact that
not all night curtains can be deployed
at once. In addition, 6 hours is
consistent with field data and studies
that DOE has identified.37 38 39
37 Southern California Edison, Refrigeration and
Technology and Test Center, Energy Efficiency
Division. Effects of the Low Emissivity Shields on
Performance and Power Use of a Refrigerated
Display Case. August 1997. Irwindale, CA.
www.econofrost.com/acrobat/sce_report_long.pdf.
38 Faramarzi, R. and Woodworth-Szieper, M.
Effects of Low-E Shields on the Performance and
Power Use of a Refrigerated Display Case. ASHRAE
Transactions. 1999. 105(1).
39 Portland Energy Conservation, Inc. Query of
Database of GrocerySmart Data. Portland, OR.
Received October 18, 2011. Last viewed July 23,
2011.
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With respect to Zero Zone’s concern
regarding the use of night curtains in 24hour stores, DOE is not mandating the
use of night curtains, but is simply
accounting for them as one available
energy efficiency technology. In
addition, DOE notes that night curtains
may be used in 24-hour stores during
periods of low customer traffic. DOE
further acknowledges that accounting
for the energy savings associated with
night curtains on open cases would, by
definition, result in the setting of a
more-stringent standard for open cases.
DOE believes such a standard may
encourage migration to the use of moreefficient doored cases for those cases
used in contexts where the distinct
utility of an open case is not required,
while preserving the availability of open
cases.
Regarding Southern Store Fixtures’
comment about the cost-effectiveness of
night curtains, DOE points out that the
LCC analysis and NIA conducted by
DOE are specifically aimed at assessing
the cost-effectiveness of all the design
options used to achieve greater energy
efficiency.
DOE acknowledges Southern Store
Fixtures’ concerns regarding the costs
associated with the need for equipment
redesign due to presence of night
curtains. After discussions with
multiple manufacturers, DOE did not
incorporate additional material costs
and redesign costs associated with a
secondary set of controls because most
manufacturers do not implement this
design according to information that
DOE has obtained through market
research and manufacturer interviews.
DOE recognizes that individual
manufacturers may select different
design options and incur different
conversion costs than those modeled by
DOE. However, DOE attempts in its
analysis to represent the choices most
likely to be selected by the industry.
Southern Store Fixtures also
commented that use of night curtains on
open cases could create design and
operational challenges that would result
in inefficient cases with product
temperature issues and the potential for
noncompliance with food safety
regulations. (Southern Store Fixtures,
No. 38 at p. 1) DOE acknowledges that,
as with any new technology,
implementation of night curtains on
open cases may require slight
adjustments to equipment design to
ensure the case operates efficiently and
effectively. During manufacturer
interviews for the MIA, data was
collected by manufacturer (under
confidentiality agreements) and, in
aggregate, DOE’s resulting conclusion
was that night curtains would not result
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mstockstill on DSK4VPTVN1PROD with PROPOSALS3
in the challenges discussed by Southern
Store Fixtures. The prevalence of night
curtains as retrofit options supports this
conclusion as well. Thus, DOE believes
that modifications can be made that
allow open cases to be used with night
curtains to achieve energy savings and
improve temperature control, and has
accounted for the cost to achieve these
modifications in the MIA.
In response to Zero Zone’s comment
regarding the use of night curtains on
doored cases, it is DOE’s understanding
that night curtains can be applied to all
types of open cases (i.e., vertical,
semivertical, and horizontal), and that
night curtains are most effective and
commonly used on open cases rather
than doored cases. DOE was not able to
identify any public data regarding the
use or potential for energy savings of
night curtains on doored cases. Lacking
a sound technical basis for including
night curtains on doored cases in its
analysis, DOE is hesitant to expand the
definition of night curtain, as
established in the 2012 test procedure
final rule (77 FR 10296 (Feb. 21, 2012)),
to explicitly include doored cases at this
time. On January 6, 2011, DOE held a
public meeting to discuss amendments
to the DOE test procedure for
commercial refrigeration equipment
proposed in a NOPR DOE published on
November 24, 2010. 75 FR 71596. At
that January 2011 test procedure NOPR
public meeting, True stated that it had
seen night curtains implemented on
doored cases and that this does save a
minimal amount of energy, but that
these minor savings did not justify
consideration of night curtains in the
DOE test procedure. (Docket No. EERE–
BT–2010–TP–0034, True, Public
Meeting Transcript, No. 19 at pp. 146–
47) DOE agrees with True and believes
that use of night curtains on doored
cases will not significantly impact the
daily energy consumption of the display
case. Therefore, DOE did not
incorporate the use of night curtains on
cases with doors in the 2012 test
procedure final rule. 77 FR 10297 (Feb.
21, 2012). Because night curtains on
doored cases cannot be accounted for in
the DOE test procedure, they are not
included as a design option in the
energy conservation standards analyses.
the analysis, stating that the criteria for
considering design options in the
analysis should be whether a technology
is technologically feasible, economically
justified, and reduces energy
consumption, not whether it is currently
used by manufacturers. (Earthjustice,
Public Meeting Transcript, No. 31 at p.
36) Earthjustice stated that DOE should
include strip curtains as a design option
because these devices can be installed
by equipment purchasers, and this
illustrates the ease and practicality of
their use. (Earthjustice, No. 35 at p. 4)
True stated that manufacturers do not
install strip curtains at the factory
because customers can often receive a
secondary rebate for installing strip
curtains at the point of end use. (True,
Public Meeting Transcript, No. 31 at p.
40)
While DOE understands that some
end users purchase and install strip
curtains on some open refrigerated
display cases, DOE has no information
as to the prevalence of use of these
accessories. DOE has concerns that
incorporating strip curtains into its
analyses, and thus potentially into an
amended standard, could impose
restrictions similar to requiring the use
of doors. Doing so would compromise
one of the major utility factors of an
open case. Namely, manufacturers have
reported to DOE that the major utility of
an open case is enhanced product
visibility to the customer and easy
access to product. Installation of a strip
curtain would, by definition, inhibit
both of these functions. Moreover, on
technical grounds, strip curtains could
potentially interfere with the operation
of the existing air curtain in cases in
which the air curtain is less than
vertical. Thus, in response to the
comment by Earthjustice, the latter issue
described above is one of technical
feasibility, while the former concern,
reduction of utility, could make the
consideration of strip curtains
inconsistent with the requirements of
EPCA. (42 U.S.C. 6295(o)(4) and
6316(e)(1)) While some end users may
decide to install strip curtains on their
own accord for their specific
applications, DOE does not intend to
explore their use as applicable to entire
equipment classes.
Strip Curtains
d. Self-Contained Equipment
Technologies
In chapter 3 of the preliminary
analysis, DOE listed several
technologies that are applicable only to
the self-contained equipment classes.
While not providing specific
comments on the included technologies,
Earthjustice questioned DOE’s grounds
for not considering strip curtains 40 in
40 Strip curtains consist of a series of strips of
transparent, flexible material (usually plastic) that
hang down and cover the opening of a case without
doors. This creates a physical barrier that reduces
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ambient air infiltration into the case while still
allowing customers and employees to access the
product contained inside.
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One of the technologies mentioned in
the preliminary market and technology
assessment, but not considered for
analysis as a design option, was liquid
suction heat exchangers (LSHXs).41
NEEA commented that it did not see a
reason for excluding LSHXs from the
analysis for systems in which they are
likely to be used, and that DOE should
include them to the extent that the test
procedure can be structured to capture
their savings. (NEEA, No. 36 at p. 3)
Southern Store Fixtures suggested that
DOE investigate why CEC decided not
to consider LSHXs because of potential
refrigerant leaks. (Southern Store
Fixtures, Public Meeting Transcript, No.
31 at p. 44)
During the NOPR stage of this
rulemaking, DOE further investigated
the subject of LSHXs as applicable to
commercial refrigeration equipment.
The information obtained by DOE
indicated that LSHX performance
depends on the specific design of a
given system, as well as other factors,
including refrigerant type, operating
temperature, and ambient conditions.
These factors all combine to determine
whether an LSHX will reduce the
energy consumption of a given system;
in some systems, the use of an LSHX
will actually increase energy
consumption by introducing a greater
pressure drop within the refrigeration
circuit. DOE also heard comments from
parties during manufacturer interviews
and conferences concerning potential
reliability and leakage issues such as
those mentioned by Southern Store
Fixtures. Because LSHXs may not
improve efficiency in all systems and
may experience reliability issues, DOE
did not include LSHXs in its analysis.
For more discussion of LSHXs, see
chapter 3 of the NOPR TSD.
D. Screening Analysis
DOE uses four screening criteria to
determine which design options are
suitable for further consideration in a
standards rulemaking. Namely, design
options will be removed from
consideration if they are not
technologically feasible; are not
practicable to manufacture, install, or
service; have adverse impacts on
product utility or product availability;
or have adverse impacts on health or
41 A liquid suction heat exchanger is a device
intended to further cool the flow of liquid
refrigerant entering the expansion valve from the
condenser using the flow of gaseous refrigerant
leaving the evaporator. The exchanger provides subcooling for the entering liquid by super-heating the
exiting suction vapor. Hotter suction vapor is less
susceptible to heat gains in the return piping to the
compressor.
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safety. 10 CFR part 430, subpart C,
appendix A, sections (4)(a)(4) and (5)(b)
In written comments submitted
following the April 2011 preliminary
analysis public meeting, Zero Zone
stated that DOE was correct in screening
out a number of technologies, as any
technology needs to be thoroughly
researched and proven reliable before
inclusion for consideration in a
standards rulemaking. Zero Zone cited
demand defrost as an example of an
unproven technology that, if its use
were encouraged by an energy
conservation standard, would produce
poor results in the field. (Zero Zone, No.
37 at p. 1) DOE agrees with Zero Zone’s
comment, as it is compelled by the
screening criteria to ensure that any
technology considered is feasible to
implement; practicable to manufacture,
install, and service; does not adversely
impact utility or availability; and would
not lead to adverse impacts on health or
safety.
Based on all available information,
DOE has concluded that: (1) All of the
efficiency levels discussed in today’s
notice are technologically feasible; (2)
equipment at these efficiency levels
could be manufactured, installed, and
serviced on a scale needed to serve the
relevant markets; (3) these efficiency
levels would not force manufacturers to
use technologies that would adversely
affect product utility or availability; and
(4) these efficiency levels would not
adversely affect consumer health or
safety. Thus, the efficiency levels that
DOE analyzed and discusses in this
notice are all achievable through
technology options that were ‘‘screened
in’’ during the screening analysis.
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E. Engineering Analysis
The engineering analysis determines
the manufacturing costs of achieving
increased efficiency or decreased energy
consumption. DOE historically has used
the following three methodologies to
generate the manufacturing costs
needed for its engineering analyses: (1)
The design-option approach, which
provides the incremental costs of adding
to a baseline model design options that
will improve its efficiency; (2) the
efficiency-level approach, which
provides the relative costs of achieving
increases in energy efficiency levels,
without regard to the particular design
options used to achieve such increases;
and (3) the cost-assessment (or reverse
engineering) approach, which provides
‘‘bottom-up’’ manufacturing cost
assessments for achieving various levels
of increased efficiency, based on
detailed data as to costs for parts and
material, labor, shipping/packaging, and
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investment for models that operate at
particular efficiency levels.
As discussed in the Framework
document and preliminary analysis,
DOE conducted the engineering
analyses for this rulemaking using a
design-option approach for commercial
refrigeration equipment. The decision to
use this approach was made due to
several factors, including the wide
variety of equipment analyzed, the lack
of numerous levels of equipment
efficiency currently available in the
market, and the prevalence of relatively
easily implementable energy-saving
technologies applicable to this
equipment. More specifically, DOE
identified design options for analysis
and used a combination of industry
research and teardown-based cost
modeling to determine manufacturing
costs, then employed numerical
modeling to determine the energy
consumption for each combination of
design options employed in increased
equipment efficiency. DOE selected a
set of 24 high-shipment classes, referred
to as ‘‘primary’’ classes, to analyze
directly in the engineering analysis.
Additional details of the engineering
analysis are available in chapter 5 of the
NOPR TSD.
1. Representative Equipment for
Analysis
a. Representative Unit Selection
In performing its engineering analysis,
DOE selected representative units for
each primary equipment class to serve
as analysis points in the development of
cost-efficiency curves. In selecting these
units, DOE researched the offerings of
major manufacturers to select models
that were generally representative of the
typical offerings produced within the
given equipment class. Unit sizes,
configurations, and features were based
on high-shipment-volume designs
prevalent in the market. Using this data,
a set of specifications was developed
defining a representative unit for each
primary equipment class. These
specifications include geometric
dimensions, quantities of components
(such as fans), operating temperatures,
and other case features that are
necessary to calculate energy
consumption. Modifications to the units
modeled were made as needed to ensure
that those units were representative of
typical models from industry, rather
than a specific unit offered by one
manufacturer. This process created a
representative unit for each equipment
class with typical characteristics for
physical parameters (e.g., volume,
TDA), and minimum performance of
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energy-consuming components (e.g.,
fans, lighting).
In its written comment following the
preliminary analysis, Traulsen stated
that DOE’s choice of representative unit
sizes for self-contained commercial
refrigeration equipment with doors was
generally suitable, but added that factors
such as cabinet sizes, door quantities,
and door types contribute significantly
to overall equipment performance.
Traulsen cautioned that a failure to
factor these variables into the analysis
could lead to unintended obsolescence
of models with these features. (Traulsen,
No. 45 at p. 2) DOE agrees with Traulsen
that there are numerous design factors
that can influence the performance of
commercial refrigeration equipment. In
selecting representative units for
analysis, DOE sought unit sizes and
configurations that generally
represented the most commonly sold
equipment on the market. The geometric
features DOE considered included unit
volume, height, length and width,
number of doors, and door orientation.
DOE avoided considering any features
or unit configurations that could skew
the analysis away from sound
representation of the majority of units
produced within a chosen equipment
class. As a result, DOE believes that its
analysis and resulting proposed
standards are applicable and extensible
to the range of covered equipment in
each class. In response to Traulsen’s
concern, DOE wishes to point out that
it is compelled by statute to avoid the
elimination of features or utility
currently present in equipment on the
market, and that the obsolescence of
specific unique equipment types would
be included in this provision. (42 U.S.C.
6295(o)(2)(B)(IV), 6295(o)(4), and
6316(e)(1))
b. Baseline Models
DOE created a set of baseline design
specifications for each equipment class
analyzed directly in the engineering
model. Each set of representative
baseline unit specifications, when
combined with the lowest technological
level of each design option applicable to
the given equipment class, defines the
energy consumption and cost of the
lowest efficiency equipment analyzed
for that class. DOE established baseline
specifications by reviewing available
manufacturer data for equipment
manufactured at the time of the
analysis, and by selecting components
and design features that were
representative of the most basic models
being manufactured at the time of the
analysis. Chapter 5 of the NOPR TSD
sets forth the specifications that DOE
chose for each equipment class and
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discusses baseline models in greater
detail.
One complexity involved in
developing an engineering baseline was
due to the timing of the analysis, which
was conducted in 2010 and 2011.
Because the analysis was performed in
proximity to the January 2009 final rule
compliance date of January 1, 2012 (74
FR 1092 (Jan. 9, 2009)), and the
compliance date for the standards
established in EPCA of January 1, 2010
(42 U.S.C. 6313(c)(2)–(3)), it was
difficult for DOE to establish a market
baseline reflecting compliance with any
specific set of standards. In particular,
the equipment covered by the January
2009 final rule was not required to
comply with amended standards until
after the preliminary and NOPR
analyses had been performed. As a
result, DOE retained the engineering
baseline and associated technologies
used in its January 2009 final rule
engineering analysis and expanded
them to accommodate the new
equipment classes covered by the
standards initially established by EPCA.
(42 U.S.C. 6313(c)(2)–(3)) DOE then
added technologies to this baseline to
develop its cost-efficiency curves. As a
result, some of the engineering results
represent units that are below the
standard levels for equipment currently
on the market and subject to the DOE’s
existing standards. 10 CFR 431.66
However, in its LCC and other
downstream analyses, DOE accounted
for this fact by utilizing a standards
baseline as the minimum efficiency
level examined, thereby truncating the
engineering design option levels so that
the lowest efficiency point analyzed
corresponded to the current standard
level with which that particular piece of
equipment would have to comply. The
exact procedure is described in section
IV.H.1, and additional details are
provided in chapter 8 of NOPR TSD.
2. Design Options
After conducting the screening
analysis and removing from
consideration technologies that did not
warrant inclusion on technical grounds,
DOE included the remaining
technologies as design options in the
energy consumption model for its NOPR
engineering analysis:
• Higher efficiency lighting and
occupancy sensors for VOP, SVO, and
SOC equipment families (horizontal
fixtures);
• Higher efficiency lighting and
occupancy sensors for VCT and PD
equipment families (vertical fixtures);
• Improved evaporator coil design;
• Higher efficiency evaporator fan
motors;
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• Improved case insulation;
• Improved doors for VCT equipment
family, low temperature and ice-cream
temperature (hinged);
• Improved doors for VCT and PD
equipment families, medium
temperature (hinged);
• Improved doors for HCT equipment
family, low temperature and ice-cream
temperature (sliding);
• Improved doors for HCT equipment
family, medium temperature (sliding);
• Improved doors for SOC equipment
family, medium temperature (sliding);
• Improved condenser coil design (for
self-contained equipment only);
• Higher efficiency condenser fan
motors (for self-contained equipment
only);
• Higher efficiency compressors (for
self-contained equipment only); and
• Night curtains (equipment without
doors only).
3. Refrigerants
For the preliminary analysis, DOE
considered two refrigerants,
hydrofluorocarbons (HFCs) R–134a and
R–404a, because these are the industrystandard choices for use in the vast
majority of commercial refrigeration
equipment covered by this rulemaking.
This selection was consistent with the
modeling performed in the January 2009
final rule, which was based on industry
research and stakeholder feedback at
that time. After the publication of the
preliminary analysis, DOE received
several comments on potential future
issues relating to refrigerants for this
equipment. Emerson noted that possible
future EPA actions could prohibit
certain refrigerants, which would
reduce equipment efficiency, and
suggested that if EPA is going to use
total emissions as the basis for
Significant New Alternatives Policy
(SNAP) 42 regulations, then energy
efficiency must also be considered by
the EPA when making those
determinations. However, Emerson
conceded that the discussion of
potential action by EPA was speculative
at this point. (Emerson, Public Meeting
Transcript, No. 31 at pp. 48, 157–58)
Similarly, True observed that EPA
proposals could result in the banning of
R134a and R404a, and that while there
are replacements for R134a, it would be
difficult to replace R404a. (True, Public
Meeting Transcript, No. 31 at p. 154)
However, AHRI remarked that it
believed that EPA was only considering
42 SNAP is EPA’s program to evaluate and
regulate substitutes for the ozone-depleting
chemicals that are being phased out under the
stratospheric ozone protection provisions of the
Clean Air Act. For more information, please see:
www.epa.gov/ozone/snap/.
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NRDC’s petition for removal of R134a 43
from the list of acceptable substitutes
under the SNAP program in the context
of automotive air-conditioning
applications, and that EPA is not
currently seeking to restrict the use of
R134a in the commercial refrigeration
industry. (AHRI, Public Meeting
Transcript, No. 31 at pp. 155–56) True
also pointed out that the removal of
HFCs from remote condensing
equipment would likely necessitate a
total system design and a shift toward
cascade equipment. (True, Public
Meeting Transcript, No. 31 at pp. 152–
53) However, True stated that 90
percent of its market is for selfcontained equipment, and that 85
percent of its products could be
converted to alternative refrigerants
with minimal cost increases and
efficiency losses. (True, Public Meeting
Transcript, No. 31 at p. 155)
Commenters also provided
information regarding the performance
and regulatory status of specific
alternative refrigerants. True noted that
it had tested a large amount of isobutene
and propane-driven equipment, which
exhibited an efficiency gain of 7 to 11
percent in smaller equipment. True
stated that the use of these alternative
refrigerants was not overly cost
burdensome because of the recent
increase in the cost of HFC refrigerants,
but that they could not be used on larger
equipment because of SNAP regulations
involving refrigerant charge levels.
(True, Public Meeting Transcript, No. 31
at pp. 151–52, 155) However, True
added, the need to address flammability
concerns in the interest of safety could
result in significant cost increases for
certain components. True further stated
that the EPA SNAP program’s
discussion of allowing 150-gram charges
of propane as a refrigerant in selfcontained commercial applications
would not be a factor that could prevent
use of these refrigerants, and that
propane is not currently excluded from
use by most building codes. (True,
Public Meeting Transcript, No. 31 at p.
152, 159) Emerson asked whether
building codes could be changed to
allow for numerous 150-gram charges
within a supermarket. (Emerson, Public
Meeting Transcript, No. 31 at p. 158)
Coca-Cola mentioned that it had
43 In May 2010, the Natural Resources Defense
Council petitioned the EPA to remove HFC–134a
from the list of acceptable substitutes under the
SNAP program. In February 2011, the EPA
concluded that NRDC’s petition was complete with
respect to the end use of motor vehicle air
conditioners, and expressed its intent to begin a
rulemaking on the topic. For more information,
please see: www.epa.gov/ozone/downloads/NRDC_
petition_responses.pdf.
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selected transcritical 44 CO2 as an
alternative for applications in the
United States, but could not provide
efficiency data. (Coca-Cola, Public
Meeting Transcript, No. 31 at p. 157)
NEEA noted that Daikin Industries, Ltd.,
the world’s largest central air
conditioner manufacturer, was
progressing toward using only nonhalogen refrigerants in its products.
(NEEA, Public Meeting Transcript, No.
31 at p. 161) AHRI encouraged DOE to
not assume constant refrigerant prices
over the analysis period it considers
because legislation has been introduced
that could result in the unavailability of
HFC refrigerants and lead to significant
price increases. (AHRI, No. 43 at p. 3)
In its written comments, NEEA
provided an alternative viewpoint,
stating that it did not believe refrigerant
issues are significant for this
rulemaking. This is because, according
to NEEA, refrigerant issues (referring to
past phase-outs of CFCs, HCFCs, and
other refrigerant types used in the past)
have been known for almost 20 years.
Historically, these issues have included
the phase-outs of chlorofluorocarbons
(CFCs) and HFCs in accordance with the
Montreal Protocol.45 Manufacturers
have contended with these issues over
time, and understand the design
changes needed to adapt to new
refrigerants. NEEA added that shifts to
different refrigerants will have to be
made regardless of the course that any
one rulemaking takes. Further, NEEA
pointed to the statements by several
manufacturers that a reduction of
system efficiency due to
implementation of new refrigerants
should not be assumed. NEEA agreed
with these manufacturers and suggested
that it is likely that these parties will
resolve refrigerant issues in a way that
will not compromise efficiency and that
will not be cost-prohibitive. In
conclusion, NEEA stated that refrigerant
issues are not new and that the outcome
of the standards-setting process is not
likely to affect how manufacturers
resolve these issues. (NEEA, No. 36 at
pp. 6–7)
While future regulations may cap or
eliminate the use of the currently
prevalent refrigerants, and proposed
legislation, such as the American Clean
Energy and Security Act of 2009,46 has
44 A transcritical system is one in which the
refrigerant changes phase during the course of the
refrigeration cycle.
45 The Montreal Protocol on Substances that
Deplete the Ozone Layer is an international treaty
that was designed to protect the ozone layer by
phasing out many ozone depleting substances.
46 Colloquially known as the Waxman-Markey
Bill, this legislation (H.R. 2454) would have
established an emissions cap and trade system in
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included HFC phase-downs, DOE does
not speculate on the impact of proposed
legislation in current rulemaking
analyses. Additionally, as mentioned
above, many low global warming
potential (GWP) refrigerants, such as
CO2 and propane, are being introduced
to the market, and use of these new
refrigerants may influence the cost and
efficiency of equipment. However, DOE
is not in a position to predict future
trends of the refrigerants market or the
performance of alternative refrigerants,
and any analysis conducted at this time
would be speculative. Consequently,
DOE is not considering the potential
effects of alternative refrigerants or
current or future legislation on
refrigerants within the scope of this
rulemaking. Instead, DOE will continue
to model equipment as currently
designed for the U.S. market, utilizing
the most common HFC refrigerants, R–
134A and R–404A, accepted and
broadly used by the industry. To the
extent that there has been experience
within the industry, domestically or
internationally, with the use of
alternative low-GWP refrigerants, DOE
requests any available information,
specifically cost and efficiency
information relating to use of alternative
refrigerants. DOE acknowledges that
there are government-wide efforts to
reduce emissions of HFCs, and such
actions are being pursued both through
international diplomacy as well as
domestic actions. DOE, in concert with
other relevant agencies, will continue to
work with industry and other
stakeholders to identify safer and more
sustainable alternatives to HFCs while
evaluating energy efficiency standards
for this equipment.
4. Cost Assessment Methodology
During the preliminary analysis, DOE
developed costs for the core case
structure of the representative units it
modeled, based on cost estimates
performed in the analysis for the
January 2009 final rule. For more
information, see chapter 5 of the
preliminary analysis TSD, pp. 5–3 to 5–
8. DOE also developed costs for the
design option levels implemented,
based on publicly available information
and price quotes provided during
manufacturer interviews. These costs
were combined in the engineering cost
model based on the specifications of a
given modeled unit in order to yield
manufacturer production cost (MPC)
estimates for each representative unit at
the United States. It was passed by the House of
Representatives in June 2009, but was tabled by the
Senate. For more information, please see https://
thomas.loc.gov/cgi-bin/bdquery/z?d111:H.R.2454:.
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each configuration modeled. At the
preliminary analysis rulemaking stage,
DOE’s component cost estimates were
based on data developed from
manufacturer interviews, estimates from
the January 2009 final rule, and publicly
available cost information. During the
NOPR analysis, DOE augmented this
information with data from physical
teardowns of commercial refrigeration
equipment currently on the market.
During the development of the
engineering analysis for this NOPR,
DOE interviewed manufacturers to gain
insight into the commercial refrigeration
industry, and to request feedback on the
engineering analysis methodology, data,
and assumptions that DOE used. Based
on the information gathered from these
interviews, along with the information
obtained through a teardown analysis
and public comments, DOE refined the
engineering cost model. Next, DOE
derived manufacturer markups using
publicly available commercial
refrigeration industry financial data, in
conjunction with manufacturer
feedback. The markups were used to
convert the MPCs into MSPs. Further
discussion of the comments received
and the analytical methodology used is
presented in the following subsections.
For additional detail, see chapter 5 of
the NOPR TSD.
a. Teardown Analysis
In the preliminary analysis TSD, DOE
expressed its intent to update its core
case cost estimates, which were at that
time developed based on estimates from
the January 2009 final rule, through
performing physical teardowns of
selected units. These core case costs
consist of the costs to manufacture the
structural members, insulation,
shelving, wiring, etc., but not the costs
associated with the components that
could directly affect energy
consumption, which were considered
collectively as design options and
served as one of many inputs to the
engineering cost model. DOE first
selected representative units for
physical teardown based on available
offerings from the catalogs of major
manufacturers. DOE selected units that
had sizes and feature sets similar to
those of the representative units
modeled in the engineering analytical
model. DOE selected units for teardown
representing each of the proposed
equipment families, with the exception
of the HZO family.47 The units were
47 The reason why no HZO units were torn down
was that the HZO family is the least complex of the
equipment classes with respect to its construction.
DOE felt that there was no additional data which
could be gained from teardown of this equipment
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then disassembled into their base
components, and DOE estimated the
materials, processes, and labor required
for the manufacture of each individual
component. This process is referred to
as a ‘‘physical teardown.’’ Using the
data gathered from the physical
teardowns, DOE characterized each
component according to its weight,
dimensions, material, quantity, and the
manufacturing processes used to
fabricate and assemble it. These
component data were then entered into
a spreadsheet and organized by system
and subsystem levels to produce a
comprehensive bill of materials (BOM)
for each unit analyzed through the
physical teardown process.
The physical teardowns allowed DOE
to identify the technologies, designs,
and manufacturing techniques that
manufacturers incorporated into the
equipment that DOE analyzed. The
result of each teardown was a structured
BOM, incorporating all materials,
components, and fasteners, classified as
either raw materials or purchased parts
and assemblies, and characterizing the
materials and components by weight,
manufacturing processes used,
dimensions, material, and quantity. The
BOMs from the teardown analysis were
then modified, and the results used as
one of the inputs to the cost model to
calculate the MPC for each
representative unit modeled. The MPCs
resulting from the teardowns were then
used to develop an industry average
MPC for each equipment class analyzed.
See chapter 5 of the NOPR TSD for more
details on the teardown analysis.
b. Cost Model
The cost model for this rulemaking
was divided into two parts. The first of
these was a standalone core case cost
model, based on physical teardowns,
that was used for developing the core
case costs for the 24 directly analyzed
equipment classes. This cost model is a
spreadsheet that converts the materials
and components in the BOMs from the
teardowns units into MPC dollar values
based on the price of materials, average
labor rates associated with
manufacturing and assembling, and the
cost of overhead and depreciation, as
determined based on manufacturer
interviews and DOE expertise. To
convert the information in the BOMs to
dollar values, DOE collected
information on labor rates, tooling costs,
raw material prices, and other factors.
For purchased parts, the cost model
estimates the purchase price based on
volume-variable price quotations and
which would not have already been captured by the
teardowns of other units.
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detailed discussions with manufacturers
and component suppliers. For fabricated
parts, the prices of raw metal materials
(e.g., tube, sheet metal) are estimated
based on 5-year averages calculated
from cost estimates obtained from
sources including the American Metal
Market and manufacturer interviews.
The cost of transforming the
intermediate materials into finished
parts is estimated based on current
industry pricing.
The function of the cost model
described above is solely to convert the
results of the physical teardown
analysis into core case costs. To achieve
this, components immaterial to the core
case cost (lighting, compressors, fans,
etc.) were removed from the BOMs,
leaving the cost model to generate
values for the core case costs for each of
the teardown points. Then, these
teardown-based core case BOMs were
used to develop a ‘‘parameterized’’
computational cost model, which allows
a user to virtually manipulate case
parameters such as height, length,
insulation thickness, and number of
doors by inputting different numerical
values for these features to produce new
cost estimates. For example, a user
could start with the teardown data for
a two-door case and expand the model
of the case computationally to produce
a cost estimate for a three-door case by
changing the parameter representing the
number of doors. This parameterized
model, coupled with the design
specifications chosen for each
representative unit modeled in the
engineering analysis, was used to
develop core case MPC cost estimates
for each of the 24 directly analyzed
representative units. These values
served as one of several inputs to the
engineering cost model.
The engineering analytical model, as
implemented by DOE in a Microsoft
Excel spreadsheet, also incorporated the
engineering cost model, the second cost
modeling tool used in this analysis. In
the engineering cost model, core case
costs developed based on physical
teardowns were one input, and costs of
the additional components required for
a complete piece of equipment (design
options) were another input. The two
inputs were added together to arrive at
an overall MPC value for each
equipment class. Based on the
configuration of the system at a given
design option level, the appropriate
design option costs were added to the
core case cost to reflect the cost of the
entire system. Costs for design options
were calculated based on price quotes
from publicly available sources and
discussions with commercial
refrigeration equipment manufacturers.
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Chapter 5 of the NOPR TSD describes
DOE’s cost model and definitions,
assumptions, data sources, and
estimates.
Some stakeholders expressed concern
with the potential variability in prices
that served as inputs to the cost model.
NEEA suggested that using a forecast of
materials futures market pricing might
be a better approach than using a
historical average, and Hill Phoenix
questioned whether the 2009 cost model
had been updated, as its cost structure
had significantly increased since that
time. (NEEA, Public Meeting Transcript,
No. 31 at pp. 85–86; Hill Phoenix,
Public Meeting Transcript, No. 31 at p.
84) Southern Store Fixtures agreed with
Hill Phoenix, and noted that it would be
advisable to use 2011 costs for
equipment that complies with the
January 2009 final rule, instead of a
current market baseline. (Southern Store
Fixtures, Public Meeting Transcript, No.
31 at pp. 86–87)
Regarding the comments from Hill
Phoenix and Southern Store Fixtures,
DOE has updated all of its cost
modeling information. This information
includes component costs, which were
based on public-source data and
estimates provided during manufacturer
interviews, and core case costs, which
were developed based on DOE’s
teardown analysis performed during the
NOPR stage of the rulemaking. In
response to Southern Store Fixtures’
comment that DOE should use 2011
costs in its analyses for equipment that
complies with the January 2009 final
rule, DOE believes that materials prices
depend on broader market conditions
and are unlikely to be influenced by
equipment that complies with the
January 2009 final rule. DOE calculates
the materials cost based on price
information gathered from the market,
and uses a methodology based on the
Bureau of Labor Statistics (BLS)
Producer Price Indices to account for
fluctuations in materials prices and
processing costs. Regarding NEEA’s
suggestion that using a forecast of
materials futures market pricing might
be preferable to using an historical
average, DOE believes that such price
forecasting is speculative, and therefore
DOE has continued to use actual prices
and averages thereof as the basis for its
analyses.
c. Manufacturer Production Cost
Once the cost estimates for all the
components of each representative unit,
including the core case cost and design
option costs, were finalized, DOE
totaled the costs in the engineering cost
model to calculate the MPC. DOE
estimated the MPC at each efficiency
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level considered for each directly
analyzed equipment class, from the
baseline through the max-tech. After
incorporating all of the assumptions
into the cost model, DOE calculated the
percentages attributable to each element
of total production cost (i.e., materials,
labor, depreciation, and overhead). DOE
used these production cost percentages
in the MIA (see section IV.K). DOE
revised the cost model assumptions
used for the preliminary analysis based
on teardown analysis, updated pricing,
and additional manufacturer feedback,
which resulted in refined MPCs and
production cost percentages. DOE
calculated the average equipment cost
percentages by equipment class. Chapter
5 of the NOPR TSD presents DOE’s
estimates of the MPCs for this
rulemaking, along with the different
percentages attributable to each element
of the production costs that comprise
the total MPC.
d. Cost-Efficiency Relationship
The result of the engineering analysis
is a cost-efficiency relationship. DOE
created a separate relationship for each
input capacity associated with each
commercial refrigeration equipment
class examined for this NOPR. DOE also
created 24 cost-efficiency curves,
representing the cost-efficiency
relationship for each commercial
refrigeration equipment class.
To develop cost-efficiency
relationships for commercial
refrigeration equipment, DOE examined
the cost differential to move from one
design option to the next for
manufacturers. DOE used the results of
teardowns to develop core case costs for
the equipment classes modeled, and
added those results to costs for design
options developed from publicly
available pricing information and
manufacturer interviews. Additional
details on how DOE developed the costefficiency relationships and related
results are available in the chapter 5 of
the NOPR TSD. Chapter 5 of the NOPR
TSD also presents these cost-efficiency
curves in the form of energy efficiency
versus MPC. After the publication of the
preliminary analysis, several
stakeholders provided input and
feedback regarding DOE’s cost
estimates, specifically regarding
insulation costs, LED lighting costs, and
DOE’s methodology for estimating
manufacturer overhead in its cost
model. The following sections address
these stakeholder comments and
concerns.
Insulation Cost Specifications
Several stakeholders submitted
comments regarding DOE’s estimated
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costs and specifications for insulation.
Traulsen observed that DOE’s estimates
for the number of foaming fixtures 48
present in a manufacturing facility and
units per year are high if they are meant
to represent the production of a base
model by an average manufacturer.
(Traulsen, No. 45 at p. 4) Zero Zone
noted that the material costs for
increasing foamed-in-place panels are
not trivial, and that its foam cost
associated with adding a half inch of
insulation to a five-door case is
approximately $25. (Zero Zone, No. 37
at p. 3) Zero Zone also commented that
the engineering costs modeled by DOE
do not include any redesign costs that
are incurred as wall thickness changes,
and that foamed-in-place sheet metal
panels are an integral part of the
structural design of cases. However,
Zero Zone expressed concern that the
ability of vacuum insulated panels to
perform as structural members has not
been verified and should be validated
before vacuum insulated panels are
included in the analysis. (Zero Zone,
No. 37 at p. 3) Zero Zone concluded by
stating that increased foam panel
thickness should be dropped from the
analysis because DOE had not collected
sufficient, accurate cost information
regarding this design option. (Zero
Zone, No. 37 at p. 3)
DOE considered these comments in
revising its implementation of improved
insulation during the NOPR analyses.
Regarding Traulsen’s statement, DOE
based its estimates of costs and
specifications on discussions with
manufacturers and site visits of
manufacturing facilities and, while DOE
understands the variability in
manufacturing practices and equipment
utilization that exists across
manufacturers and product line
offerings, DOE believes those estimates
are sound. DOE took into account the
comment from Zero Zone regarding
additional foam costs and, in response,
accounted for the differential cost of
additional foam due to changes in wall
thickness in its engineering analysis for
the NOPR. However, regarding Zero
Zone’s assertion that redesign costs are
not accounted for in the engineering
analysis, the engineering model does
include an estimate of engineering cost
to account for the design efforts that
must be incurred in developing a case
with higher wall thickness. DOE has
also discussed the implementation of
vacuum insulated panels with
manufacturers, cross-referenced its data
48 Foaming fixtures are pieces of equipment
consisting of molds to guide the injection of
foamed-in-place insulation so that that the foam
takes a desired shape once hardened.
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with other rulemaking analyses in
which vacuum insulated panels were
used, and revised its data accordingly.
As a result, DOE believes that its
estimates and assumptions for improved
insulation are valid, and has retained
those design options for the NOPR.
Light-Emitting Diode Cost
Specifications
Stakeholders also provided feedback
on pricing and performance related to
DOE’s LED specifications in the
engineering model. ASAP and NRDC
stated that DOE should not assume LED
prices remain constant because LEDs are
an emerging technology and will likely
experience a dramatic price decline in
the near future. The comment cited
DOE’s 2011 Solid-State Lighting
Research and Development (R&D) MultiYear Program Plan (MYPP),49 which
projects that, between 2010 and 2015,
prices of some LEDs will decrease by 85
percent, while LED lighting will
experience a significant increase in
efficacy during the same period. (ASAP
and NRDC, No. 34 at p. 3) These
stakeholders added that it is important
for DOE to capture cost decreases not
only during the analysis period (2017–
2046), but prior to the proposed 2017
compliance date for the amended
standards considered in this rulemaking
as well, stating that a price estimate for
2017 will be needed for the LCC
calculations to be accurate. ASAP and
NRDC stated that, according to the DOE
solid-state lighting documents
referenced, if today’s LED prices are
held constant through the 2017
compliance date, the result will be a
misrepresentation in the LCC of the
value of potential LED energy savings;
as a result, ASAP and NRDC urged DOE
to develop cost estimates reflecting this
price decline. (ASAP and NRDC, No. 34
at p. 3) NEEA referenced the DOE 2011
MYPP as well, and agreed that it
believed that DOE is grossly
overestimating the future cost of LED
lighting. (NEEA, No. 36 at pp. 3–4)
DOE agrees with these stakeholders
that forecasts of the LED lighting
industry, including those performed by
DOE, suggest that LED lighting is an
emerging technology that will continue
to experience significant price decreases
in coming years. For this reason, to
capture the anticipated cost reduction in
LED fixtures in the analyses for this
49 The DOE Solid-State Lighting Research and
Development Multi-Year Program Plan outlines
DOE’s research goals and planned methodologies
with respect to the advancement of solid-state
lighting technologies in the United States. The
complete document is available at: https://
apps1.eere.energy.gov/buildings/publications/pdfs/
ssl/ssl_mypp2011_web.pdf.
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rulemaking, DOE incorporated price
projections from its Solid-State Lighting
Program into its MPC values for the
primary equipment classes. The price
projections for LED case lighting were
developed from projections developed
for the DOE Solid-State Lighting
Program 2012 report, Energy Savings
Potential of Solid-State Lighting in
General Illumination Applications 2010
to 2030 (‘‘the energy savings report’’).50
In the appendix of this report, price
projections from 2010 to 2030 were
provided in ($/klm) for LED lamps and
LED luminaires. DOE analyzed the
models used in the Solid-State Lighting
Program work and determined that the
LED luminaire projection would serve
as an appropriate proxy for a cost
projection to apply to refrigerated case
LEDs.
The price projections presented in the
Solid-State Lighting Program’s energy
savings report are based on the DOE’s
2011 MYPP. The MYPP is developed
based on input from manufacturers,
researchers, and other industry experts.
This input is collected by the DOE at
annual roundtable meetings and
conferences. The projections are based
on expectations dependent on the
continued investment into solid-state
lighting by the DOE.
DOE incorporated the price projection
trends from the energy savings report
into its engineering analysis by using
the data to develop a curve of
decreasing LED prices normalized to a
base year. That base year corresponded
to the year when LED price data was
collected for the NOPR analyses of this
rulemaking from catalogs, manufacturer
interviews, and other sources. DOE
started with this commercial
refrigeration equipment-specific LED
cost data and then applied the
anticipated trend from the energy
savings report to forecast the projected
cost of LED fixtures for commercial
refrigeration equipment at the time of
compliance with the proposed rule
(2017). These 2017 cost figures were
incorporated into the engineering
analysis as comprising the LED cost
portions of the MPCs for the primary
equipment classes. Table IV.1 shows the
normalized LED price deflators used in
this NOPR analysis.
TABLE IV.1—LED PRICE DEFLATORS USED IN THE NOPR ANALYSIS
Normalized to
2013
Year
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Normalized to
2017
2.998
1.799
1.285
1.000
0.819
0.693
0.601
0.530
0.475
0.430
0.393
5.652
3.392
2.423
1.885
1.543
1.306
1.133
1.000
0.895
0.810
0.740
..................................................
..................................................
..................................................
..................................................
..................................................
..................................................
..................................................
..................................................
..................................................
..................................................
..................................................
Normalized to
2013
Year
2021 .................................................
2022 .................................................
2023 .................................................
2024 .................................................
2025 .................................................
2026 .................................................
2027 .................................................
2028 .................................................
2029 .................................................
2030 .................................................
2031–2046 * .....................................
Normalized to
2017
0.361
0.335
0.312
0.292
0.274
0.259
0.245
0.232
0.221
0.211
0.211
0.681
0.631
0.588
0.550
0.517
0.488
0.462
0.438
0.417
0.398
0.398
* DOE did not have data available to project prices beyond 2030. Therefore, for the NOPR analysis, it was assumed that the LED prices stay
constant after 2030.
The LCC analysis (section IV.H) was
carried out with the engineering
numbers that account for the 2017
prices of LED luminaires. The reduction
in price of LED luminaires from 2018
through 2030 was taken into account in
the NIA (section IV.I). The cost
reductions were calculated for each year
from 2018 through 2030 and subtracted
from the equipment costs in the NIA.
The reduction in lighting maintenance
costs 51 due to reduction in LED prices
for equipment installed in 2018 to 2030
were also calculated and appropriately
deducted from the lighting maintenance
costs.
mstockstill on DSK4VPTVN1PROD with PROPOSALS3
Manufacturer Overhead Costs
NEEA commented that, in the DOE
rulemaking on distribution
transformers, manufacturers had stated
that they do not apply overhead to
material costs, but to labor costs only,
and that the application of overhead to
50 Navigant Consulting, Inc., Energy Savings
Potential for Solid-State Lighting in General
Illumination Applications. 2012. Prepared for the
U.S. Department of Energy—Office of Energy
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both of these cost components can have
a major impact on MPCs, depending on
how much of the product cost is
attributed to each component. (NEEA,
Public Meeting Transcript, No. 31 at pp.
70–71) In another comment, NEEA
elaborated on this statement, adding
that during the distribution transformers
public meeting, manufacturers stated
that they do not apply factory overhead
rates to the cost of materials, but only
to labor. NEEA went on to suggest that
DOE use this methodology to the extent
applicable to commercial refrigeration
equipment, and adjust its cost
estimation methods to take this
approach into account. (NEEA, No. 36 at
pp. 4–5)
In DOE’s cost model for commercial
refrigeration equipment, the following
three overhead components are
dependent on labor or materials:
utilities, property tax, and insurance.
The cost of utilities is a function of
equipment costs only (no labor
included) and is calculated using a ratio
derived in the past from U.S. Securities
and Exchange Commission (SEC) 10–K
forms for appliance manufacturers.52
The ratios for property tax and
insurance costs are also based on past
10–K form analysis, but are dependent
on overall unit costs (i.e., cost of goods
sold). Altogether, these three
components represent only about 3
percent of the total cost of a unit, so
whether they are based on labor and
materials or on labor only, they are
unlikely to have a significant effect on
MPCs, especially on an incremental cost
basis. DOE welcomes suggestions on
how to improve its methodology and
hopes that stakeholders can provide
DOE with documentation for improved
insurance, property tax, and utility
calculations. In particular, DOE would
welcome nationwide data on property
tax rates based on property, plant, and
Efficiency and Renewable Energy Building
Technologies Office, Washington, DC.
51 Discussion related to lighting maintenance
costs for commercial refrigeration equipment can be
found in section IV.H.3, and a more detailed
explanation can be found in chapter 8 of the NOPR
TSD.
52 A searchable directory of SEC filings is
available at: www.sec.gov/edgar/searchedgar/
companysearch.html.
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equipment valuations; average power
consumption for conditioned as well as
unconditioned factory spaces; and
insurance rates and how they are
applied.
For the distribution transformers
energy conservation standards
rulemaking, DOE did not apply
overhead rates to labor—overhead was
only applied to direct material
production costs. For more details on
material and labor inputs for
distribution transformers, see chapter 5
of the TSD for the distribution
transformers preliminary analysis
(www1.eere.energy.gov/buildings/
appliance_standards/commercial/pdfs/
transformer_preanalysis_ch5.pdf).
Furthermore, due to the different
industries in which distribution
transformer and commercial
refrigeration manufacturers operate, the
same cost model may not necessarily be
applicable to both.
e. Manufacturer Markup
To account for manufacturers’ nonproduction costs and profit margin, DOE
applies a non-production cost multiplier
(the manufacturer markup) to the full
MPC. The resulting MSP is the price at
which the manufacturer can recover all
production and non-production costs
and earn a profit. To meet new or
amended energy conservation
standards, manufacturers often
introduce design changes to their
product lines that result in increased
MPCs. Depending on the competitive
environment for this equipment, some
or all of the increased production costs
may be passed from manufacturers to
retailers and eventually to customers in
the form of higher purchase prices. The
MSP should be high enough to recover
the full cost of the equipment (i.e., full
production and non-production costs)
and yield a profit. The manufacturer
markup has an important bearing on
profitability. A high markup under a
standards scenario suggests
manufacturers can readily pass along
the increased variable costs and some of
the capital and equipment conversion
costs (one-time expenditures) to
customers. A low markup suggests that
manufacturers will not be able to
recover as much of the necessary
investment in plant and equipment.
To calculate the manufacturer
markups, DOE used 10–K reports
submitted to the SEC by the six publicly
owned commercial refrigeration
equipment companies in the United
States. (SEC 10–K reports can be found
using the search database available at
www.sec.gov/edgar/searchedgar/
webusers.htm.) The financial figures
necessary for calculating the
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manufacturer markup are net sales,
costs of sales, and gross profit. DOE
averaged the financial figures spanning
the years from 2004 to 2010 53 to
calculate the markups. For commercial
refrigeration equipment, to calculate the
average gross profit margin for the
periods analyzed for each firm, DOE
summed the gross profit earned during
all of the aforementioned years and then
divided the result by the sum of the net
sales for those years. DOE presented the
calculated markups to manufacturers
during the manufacturer interviews for
the NOPR (see section IV.E.4.g). DOE
considered manufacturer feedback to
supplement the calculated markup, and
refined the markup to better reflect the
commercial refrigeration market. DOE
developed the manufacturer markup by
weighting the feedback from
manufacturers on a market share basis
because manufacturers with larger
market shares more significantly affect
the market average. DOE used a constant
markup to reflect the MSPs of both the
baseline equipment and higher
efficiency equipment. DOE used this
approach because amended standards
may transform high-efficiency
equipment, which currently is
considered to be premium equipment,
into baseline equipment. See chapter 5
of the NOPR TSD for more details about
the manufacturer markup calculation.
f. Shipping Costs
The final component of the MSP after
the MPC and manufacturer markup is
the shipping cost associated with
moving the equipment from the factory
to the first point on the distribution
chain. During interviews, manufacturers
stated that the specific party
(manufacturer or buyer) that incurs that
cost for a given shipment may vary
based on the terms of the sale, the type
of account, the manufacturer’s own
business practices, and other factors.
However, for consistency, DOE includes
shipping costs as a component of MSP.
In calculating the shipping costs for use
in its analysis, DOE first gathered
estimates of the cost to ship a full trailer
of manufactured equipment an average
distance in the United States, generally
representative of the distance from a
typical manufacturing facility to the first
point on the distribution chain. DOE
then used representative unit sizes to
calculate a volume for each unit. Along
with the dimensions of a shipping
trailer and a loading factor to account
for inefficiencies in packing, DOE used
53 Typically, DOE uses the data for the 5 years
preceding the year of analysis. However, in this
case additional data were available up to 2004.
Hence, data from 2004 to 2010 were used for these
calculations.
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this cost and volume information to
develop an average shipping cost for
each equipment class directly analyzed.
g. Manufacturer Interviews
Throughout the rulemaking process,
DOE has sought and continues to seek
feedback and insight from interested
parties that would improve the
information used in its analyses. DOE
interviewed manufacturers as a part of
the NOPR MIA (see section IV.K).
During the interviews, DOE sought
feedback on all aspects of its analyses
for commercial refrigeration equipment.
For the engineering analysis, DOE
discussed the analytical assumptions
and estimates, cost model, and costefficiency curves with manufacturers.
DOE considered all of the information
learned from manufacturers when
refining the cost model and
assumptions. However, DOE
incorporated equipment and
manufacturing process figures into the
analysis as averages to avoid disclosing
sensitive information about individual
manufacturers’ equipment or
manufacturing processes. More details
about the manufacturer interviews are
contained in chapter 12 of the NOPR
TSD.
5. Energy Consumption Model
The energy consumption model is the
second key analytical model used in
constructing cost-efficiency curves. This
model estimates the daily energy
consumption, calculated using the DOE
test procedure, of commercial
refrigeration equipment in kilowatthours at various performance levels
using a design-option approach. In this
methodology, a unit is initially modeled
at a baseline level of performance, and
higher-efficiency technologies, referred
to as design options, are then
implemented and modeled to produce
incrementally more-efficient equipment
designs. The model is specific to the
types of equipment covered under this
rulemaking, but is sufficiently
generalized to model the energy
consumption of all covered equipment
classes. DOE developed the energy
consumption model as a Microsoft Excel
spreadsheet.
For a given equipment class, the
model estimates the daily energy
consumption for the baseline, as well as
the energy consumption of subsequent
levels of performance above the
baseline. The model calculates each
performance level separately. For the
baseline level, a corresponding cost is
calculated using the cost model, which
is described in section IV.E.4.b. For each
level above the baseline, the changes in
system cost due to the implementation
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of various design options are used to
recalculate the cost. Collectively, the
data from the energy consumption
model are paired with the cost model
data to produce points on costefficiency curves corresponding to
specific equipment configurations. After
the publication of the preliminary
analysis, DOE received numerous
stakeholder comments regarding the
methodology and results of the energy
consumption model.
mstockstill on DSK4VPTVN1PROD with PROPOSALS3
a. Energy Consumption Model Results
Zero Zone noted that, while the
overall modeling approach is
appropriate, the results for the
VCT.RC.M class are, in its opinion, too
restrictive. (Zero Zone, No. 37 at p. 1)
Similarly, Traulsen believed that DOE’s
numbers were slightly high for the
VCT.SC.L equipment class, and that the
incremental energy change may have
been overstated, while the cost was
understated, for technologies such as
LED lighting, high-performance doors,
and vacuum insulated panels.
(Traulsen, No. 45 at p. 4)
In its analyses for the NOPR stage of
this rulemaking, DOE reviewed its
inputs to the engineering cost model
and energy consumption model. This
included reviewing publicly available
data from sources such as manufacturer
specification sheets and catalogs, as
well as incorporating information drawn
from stakeholder comments and
manufacturer interviews conducted as
part of the MIA process. The process
included discussion and investigation of
specific design options, such as the
aforementioned LED lighting and
vacuum insulated panels. DOE has
taken efforts to incorporate all available
information into its models to produce
the most accurate results possible. In
response to the comments by Zero Zone
and Traulsen regarding energy
consumption and cost results for the
VCT.RC.M and VCT.SC.L classes,
respectively, DOE has reviewed and
updated its methodologies during the
NOPR analyses to account for the latest
information available, and is confident
that its current results best reflect this
information.
b. Anti-Sweat Heater Power
Traulsen suggested that DOE
investigate whether the anti-sweat
power consumed by the VCT.SC.L and
VCT.SC.I equipment classes can truly be
zero when high-performance doors are
used, and suggested that DOE review its
data. Traulsen added that it believed
that, even with these door types, antisweat heaters are often still found on the
cabinet body, especially in lowtemperature equipment, which is prone
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to condensation due to conduction.
(Traulsen, No. 45 at pp. 6–7)
In DOE’s preliminary engineering
analysis, anti-sweat heater power values
were assigned for each of the
transparent door configurations based
on available data from manufacturer
specification sheets and data obtained
during manufacturer interviews. For
medium-temperature doors, both
commercial refrigeration equipment
manufacturer and door manufacturer
literature indicated that truly energyfree door designs with no anti-sweat
heat are available on the market. This
finding was confirmed through
discussions with commercial
refrigeration equipment manufacturers.
However, for low- and ice-cream
temperature doors, DOE has found that,
as Traulsen stated, anti-sweat heat is
still required, at a minimum, on the
door frame. Table 5.6.9 of the
preliminary analysis TSD chapter 5 lists
anti-sweat heater powers of 165 and 80
watts for standard and highperformance doors, respectively, at low
and ice-cream temperatures. These
values are consistent with those that
DOE has found through its research, and
were retained in the NOPR analysis.
include a representation of the
condenser fan motor energy
consumption under the category of
component energy consumption. The
energy usage attributed to the condenser
fan, found in self-contained units, is
accounted for in the energy
consumption model by the compressor
duty cycle. For remote condensing
units, the condenser fan energy
consumption is not explicitly
calculated; instead, remote case
compressor energy consumption is
calculated based on the energy
efficiency ratio values given in AHRI
1200.
e. Evaporator Coil Design
Zero Zone expressed concerns about
DOE’s assumptions regarding evaporator
coils, and noted that reduced fin
spacing 54 will result in coils that do not
function well in the field due to
excessive frost loading. (Zero Zone, No.
37 at p. 2) Zero Zone also observed that
the improved evaporator coil described
in the preliminary analysis TSD for the
VCT.RC.M and VCT.RC.L equipment
classes would raise evaporator
temperatures to the same level as the
discharge air temperature, which is not
feasible. (Zero Zone, No. 37 at pp. 2–3)
c. Evaporator Fan Motor Power
Additionally, Zero Zone recommended
Zero Zone observed that, while DOE’s that DOE conduct performance testing
assumptions regarding motor efficiency
before assuming that high-performance
are valid, the evaporator fan
coils will work in all situations because,
specifications used by DOE for freezers
Zero Zone asserted, DOE failed to
of 6 rated watts per fan were flawed
address issues with superheat control
because freezer fans are generally higher for these advanced coils, namely that as
in wattage (i.e., 9 or 12 watts) to increase the evaporating temperature becomes
airflow and decrease frost formation.
closer to the return air temperature, the
(Zero Zone, No. 37 at p. 2)
ability of the expansion valve to
After receiving the comment by Zero
maintain a stable superheat is
Zone, DOE further researched
decreased. (Zero Zone, No. 37 at p. 3)
evaporator fan motor power values
With respect to Zero Zone’s comment
through manufacturer catalogs and
on reduction of fin spacing, DOE
discussed the subject in manufacturer
confirmed during manufacturer
interviews during the NOPR stage of the interviews that excessive frost loading
rulemaking. The data yielded by this
becomes a concern once fin spacing is
effort showed that remote condensing
reduced below certain thresholds. As a
freezer cases do utilize evaporator fan
result, DOE sought to ensure that its coil
motors with rated shaft powers
models reflected coil geometries that are
generally closer to 9 watts. As a result,
suitable for production and field use
DOE updated the design specifications
without incurring such negative
for those representative units in its
secondary effects as increased frost
engineering model to more accurately
buildup. With respect to Zero Zone’s
reflect the standard design of those
second comment involving the
units.
evaporator coil temperatures, the
referenced statement in the preliminary
d. Condenser Energy Consumption
analysis TSD was intended to be a
Southern Store Fixtures stated that
single example, and was incorrectly
the energy usage of the condenser is
presented as applying to all equipment
missing from the energy consumption
model diagram contained in chapter 5 of classes. The engineering model never
utilized evaporator temperatures that
the preliminary analysis TSD (Figure
5.6.1).
54 Fin spacing, or fin pitch, refers to the distance
Regarding the comment by Southern
between the flat fins that are oriented transverse to
Store Fixtures, Figure 5.6.1 of the
the direction of airflow across a fin-and-tube heat
preliminary analysis TSD chapter 5 does exchanger.
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were physically infeasible or impossible
to attain.
During its NOPR analyses, DOE
performed independent modeling of
evaporator and condenser coils based on
physical teardowns of coils available on
the market, coupled with numerical
modeling of the coil performance.
Design parameters were varied from the
baseline, and the heat transfer
performance of the coils was iteratively
analyzed to yield higher efficiency coil
designs. Cost modeling was utilized to
produce cost estimates for the baseline
and high-performance coil designs. This
analysis served as the basis for the coil
cost and performance values input into
the engineering model. While DOE was
unable to perform physical testing of its
high-performance coil designs, as those
designs were solely analytically derived
and not constructed as prototypes, DOE
controlled the parameters of its analysis
to retain the required conditions for
proper system performance. DOE
believes that this analysis addresses the
concerns presented by Zero Zone in its
comments. For more details on the coil
modeling process, see chapter 5 of the
NOPR TSD.
F. Markups Analysis
DOE applies multipliers called
‘‘markups’’ to the MSP to calculate the
customer purchase price of the analyzed
equipment. These markups are in
addition to the manufacturer markup
(discussed in section IV.E.4.e) and are
intended to reflect the cost and profit
margins associated with the distribution
and sales of the equipment. DOE
identified three major distribution
channels for commercial refrigeration
equipment, and markup values were
calculated for each distribution channel
based on industry financial data. The
overall markup values were then
calculated by weighted-averaging the
individual markups with market share
values of the distribution channels. See
chapter 6 of the NOPR TSD for more
details on DOE’s methodology for
markups analysis.
DOE received a number of comments
regarding markups after the publication
of the preliminary analysis.
55925
1. Baseline and Incremental Markups
2. Distribution Channel Market Shares
Traulsen stated that, in its experience,
the initial markup on equipment will be
consistent with production costs, and
that the incremental markups will
increase with higher levels of product
efficiency due to product
differentiation. (Traulsen, No. 45 at p. 4)
However, Traulsen also stated that it did
not believe that wholesalers
differentiate markups based on the
technologies inherently present in this
equipment and that, in its experience,
wholesalers/resellers will use
traditional markup rates regardless of
equipment’s energy efficiency.
(Traulsen, No. 45 at p. 7)
In general, DOE has found that
markup values vary over a wide range
according to general economic outlook,
manufacturer brand value, inventory
levels, manufacturer rebates to
distributors based on sales volume,
newer versions of the same equipment
model introduced into the market by the
manufacturers, and availability of
cheaper or more technologically
advanced alternatives. Based on market
data, DOE divided distributor costs into:
(1) Direct cost of equipment sales; (2)
labor expenses; (3) occupancy expenses;
(4) other operating expenses (such as
depreciation, advertising, and
insurance); and (5) profit. DOE assumed
that, for higher efficiency equipment
only, the ‘‘other operating costs’’ and
‘‘profit’’ scale with MSP, while the
remaining costs scale the same way as
does the MSP of baseline equipment. In
other words, the remaining costs stay
constant irrespective of equipment
efficiency level. Incremental markups
were applied as multipliers only to the
MSP increments (of higher efficiency
equipment compared to baseline) and
not to the entire MSP. This assumption
is in line with Traulsen’s first comment.
Further, while DOE’s use of separate
values for baseline and incremental
markup rates will lead to higher
marked-up values for equipment at
higher efficiency levels, the rate of
markup will be same for all higher
efficiency levels, which is consistent
with Traulsen’s second comment.
True stated that national chains are a
major part of the glass-doored, selfcontained equipment market. True
stated that it serves these via national
accounts, adding that the market shares
of the national accounts channel and the
distributor channel that were used for
the preliminary analysis of this
rulemaking should be reversed. (True,
Public Meeting Transcript, No. 31 at p.
80) NEEA agreed with True, stating that
DOE had more or less reversed the
market shares of the distribution
channels for glass door and open selfcontained equipment. NEEA also agreed
with other commenters who stated that
DOE’s market channel fractions applied
more to specialty and solid-door selfcontained equipment. (NEEA, No. 36 at
p. 5) Southern Store Fixtures added that
it sells many remote condensing units
directly to the end users, and that it also
sells many self-contained units directly
to supermarket and convenience store
chains without using an intermediary.
(Southern Store Fixtures, Public
Meeting Transcript, No. 31 at pp. 80–81)
Traulsen commented that it believed
that DOE’s distribution channel data
were reasonably accurate, within plus or
minus 10 percent. (Traulsen, No. 45 at
p. 3)
DOE agrees with comments from
True, NEEA, and Southern Store
Fixtures regarding market shares for
self-contained display cases.
Consequently, DOE made the
distribution channel market shares for
all display cases (VOP, SVO, HZO, VCT,
HCT, SOC, and PD), irrespective of selfcontained or remote condensing
configuration, equal to that of the
remote condensing equipment market
shares that were proposed in the
preliminary analysis TSD. DOE kept the
market shares of VCS and HCS
equipment families same as the selfcontained equipment market shares
proposed in the preliminary analysis
TSD. The distribution channel market
shares used for this NOPR are shown in
Table IV.2. Chapter 6 and appendix 6A
of the NOPR TSD provide complete
details of the methodology and data
used in the estimation of the markups.
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TABLE IV.2—DISTRIBUTION CHANNEL MARKET SHARES
National
account
channel
(percent)
Equipment family
VOP, SVO, HZO, VCT, HCT, SOC, and PD ..............................................................................
VCS and HCS ..............................................................................................................................
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Wholesaler
channel
(percent)
70
30
11SEP3
15
60
Contractor
channel
(percent)
15
10
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G. Energy Use Analysis
Several stakeholders commented on
DOE’s methodology for investigating
secondary impacts of efficiency
improvement, as described in the
preliminary analysis. Southern Store
Fixtures agreed with DOE’s conclusion
that efficiency improvements in selfcontained equipment do not have a
noticeable impact on building heating
and cooling loads. Southern Store
Fixtures further stated that a kitchen
area, with limited space and limited
equipment, differs from larger settings
such as supermarkets, which contain a
large quantity of self-contained
equipment. Southern Store Fixtures
asked whether the impact of large
numbers of self-contained units on the
heating and cooling loads of buildings
had been investigated. (Southern Store
Fixtures, Public Meeting Transcript, No.
31 at pp. 93–94)
Other stakeholders, however, had
questions regarding DOE’s methods.
NRDC asked why only self-contained
units were reviewed for secondary
impacts, and whether any rack-based
units had been reviewed. (NRDC, Public
Meeting Transcript, No. 31 at p. 100)
NEEA stated that the placement of
multiple cases in a supermarket will
affect heating, ventilation, and airconditioning (HVAC) loads, and
suggested that DOE reexamine the
subject by modeling the performance of
commercial refrigeration equipment in a
business type other than a restaurant,
such as a grocery store. NEEA added
that restaurants typically have high
ventilation loads, and opined that, in a
space such as a supermarket, where the
refrigeration loads approximate the
ventilation loads, DOE’s results are
inaccurate. NEEA added that
mechanical engineers use DOE–2 55 to
model secondary impacts. (NEEA,
Public Meeting Transcript, No. 31 at pp.
98–100)
NEEA continued, stating that selfcontained equipment, because it is not
perfectly efficient, will emit more heat
into its surroundings than it absorbs,
which could be of benefit in the heating
season but which is definitely a
detriment in the cooling season. While
the magnitude of these effects will
depend on the equipment’s geographic
location, NEEA expressed its belief that
DOE should not ignore this issue. NEEA
added that DOE should quantify the
55 DOE–2 is a widely used and accepted freeware
building energy analysis program that can predict
the energy use and cost for different types of
buildings. DOE–2 uses a description of the building
layout, construction, usage, conditioning systems
and utility rates provided by the user, along with
weather data, to perform an hourly simulation of
the building and to estimate utility bills.
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contributions to space cooling and
heating loads being generated by selfcontained equipment so that
stakeholders can make an informed
judgment as to their significance.
(NEEA, No. 36 at p. 5)
In response to NRDC’s comment
regarding modeling rack-based units,
DOE points to the January 2009 final
rule analysis that presents an extensive
energy use analysis for remote
condensing equipment and selfcontained equipment without doors.
The analysis was carried out by
simulating display cases in
supermarkets using the DOE–2.2
software package. Details of this
analysis can be found in chapter 7 of the
January 2009 final rule TSD
(www1.eere.energy.gov/buildings/
appliance_standards/commercial/pdfs/
chp_7_cre_energy_final.pdf). Based on
this energy use analysis, DOE concluded
that the overall impact of the considered
design options had only a minor
differential impact on the overall HVAC
energy consumption of supermarkets.
Further, DOE concluded that the energy
consumption model used in the
engineering analysis simulated the
energy consumption of the various
equipment classes with adequate
accuracy, and therefore DOE used the
estimates from the engineering analysis
for the LCC and subsequent analyses.
For the current rulemaking, DOE
received comments during the May
2010 Framework document public
meeting regarding the proportionally
larger share of self-contained equipment
examined in this rulemaking compared
to that examined in the January 2009
final rule, and the impact of this
equipment on building HVAC loads.
DOE evaluated the impact of selfcontained equipment through wholebuilding simulations with a VCT.SC.L
freezer in restaurant buildings using the
whole-building energy use simulation
tool EnergyPlus, which is the primary
software tool supported by DOE’s
Building Technologies Program for
energy use analysis of buildings.
Through these simulations, DOE found
that the differential impact of efficiency
improvements in VCT.SC.L equipment
on the HVAC loads of restaurant
buildings was negligible. Since
VCT.SC.L energy consumption is one of
the highest among the major selfcontained equipment classes, DOE
concluded that the incremental impact
of efficiency improvements in all selfcontained refrigerators and freezers on
HVAC loads of restaurant buildings is
negligible. While it is true, as stated in
NEEA’s comment, that restaurant
building models have higher ventilation
loads than other building models, DOE
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decided, as a matter of policy, that it
would not assess the secondary impacts
of amended standards such as the
impacts of improved equipment
efficiency on building HVAC loads.
Therefore, DOE did not pursue this
matter any further in its NOPR analysis.
In response to NEEA’s comment
regarding the equipment’s heat emitted
by self-contained equipment and the
geographic location of these units, DOE
points to chapter 7 of the preliminary
analysis TSD for complete details of the
analysis. The whole-building
simulations conducted for the
preliminary analysis were carried out in
15 different climates zones, representing
all the major climate zones in the
United States, with an appropriate
weighting factor applied to each climate
zone. Further, the analysis was carried
out over 1 full year (365 days). The
results of the preliminary energy use
analysis were obtained by averaging the
energy consumption of the equipment
over 1 full year and over all the major
climate zones in the United States.
DOE understands that the presence of
many self-contained refrigeration units
may have a considerable impact on the
HVAC loads of a business
establishment, as stated by Southern
Store Fixtures. However, DOE reiterates
that the objective of its analysis is to
assess only the differential impact of
equipment efficiency improvements,
and not to assess the impact of total heat
output by a self-contained unit.
Moreover, DOE’s energy use analysis is
concerned with the impact of only one
unit of commercial refrigeration
equipment. As stated above, DOE found
that the differential impact of
equipment efficiency improvements to a
VCT.SC.L freezer on the building HVAC
loads was negligible.
As a matter of policy, DOE has
determined that it will not carry out
studies to determine the impact of
efficiency improvements to equipment
on building HVAC loads in appliance
and commercial equipment standards
rulemakings.
H. Life-Cycle Cost Analysis
DOE conducts LCC analysis to
evaluate the economic impacts of
potential amended energy conservation
standards on individual commercial
customers—that is, buyers of the
equipment. LCC is defined as the total
customer cost over the life of the
equipment, and consists of purchase
price, installation costs, and operating
costs (maintenance, repair, and energy
costs). DOE discounts future operating
costs to the time of purchase and sums
them over the expected lifetime of the
piece of equipment. PBP is defined as
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the estimated amount of time it takes
customers to recover the higher
installed costs of more-efficient
equipment through savings in operating
costs. DOE calculates the PBP by
dividing the increase in installed costs
by the average savings in annual
operating costs.
As part of the engineering analysis,
design option levels were ordered based
on increasing efficiency (i.e., decreasing
energy consumption) and increasing
MSP. For the LCC analysis, DOE chose
a maximum of eight levels, henceforth
referred to as ‘‘efficiency levels,’’ from
the list of engineering design option
levels. For equipment classes for which
fewer than eight design option levels
were defined in the engineering
analysis, all design option levels were
used. However, for equipment classes
where more than eight design option
levels were defined, DOE selected
specific levels to analyze in the
following manner:
1. The lowest and highest energy
consumption levels provided in the
engineering analysis were preserved.
2. If the difference in reported energy
consumptions and reported
manufacturer price between sequential
levels was minimal, only the higher
efficiency level was selected.
3. If the energy consumption savings
benefit between efficiency levels
relative to the increased cost was very
similar across multiple sequential
levels, an intermediate level was not
selected as an efficiency level.
The first efficiency level (Level 1) in
each equipment class is the least
efficient and the least expensive
equipment in that class. The higher
efficiency levels (Level 2 and higher)
exhibit progressive increases in
efficiency and cost from Level 1. The
highest efficiency level in each
equipment class corresponds to the
max-tech level. DOE treats the efficiency
levels as ‘‘candidate standard levels,’’ as
each higher efficiency level represents a
potential new standard level.
The installed cost of equipment to a
customer is the sum of the equipment
purchase price and installation costs.
The purchase price includes MPC, to
which a manufacturer markup and
outbound freight cost are applied to
obtain the MSP. This value is calculated
as part of the engineering analysis
(chapter 5 of the NOPR TSD). DOE then
applies additional markups to the
equipment to account for the markups
associated with the distribution
channels for the particular type of
equipment (chapter 6 of the NOPR
TSD). Installation costs varied by State,
depending on the prevailing labor rates.
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Operating costs for commercial
refrigeration equipment are the sum of
maintenance costs, repair costs, and
energy costs. These costs are incurred
over the life of the equipment and
therefore are discounted to the base year
(2017, which is the compliance date of
any amended standards that are
established as part of this rulemaking).
The sum of the installed cost and the
operating cost, discounted to reflect the
present value, is termed the life-cycle
cost or LCC.
Generally, customers incur higher
installed costs when they purchase
higher efficiency equipment, and these
cost increments will be partially or
wholly offset by savings in the operating
costs over the lifetime of the equipment.
Usually, the savings in operating costs
are due to savings in energy costs
because higher efficiency equipment
uses less energy over the lifetime of the
equipment. Often, the LCC of higher
efficiency equipment is less than lower
efficiency equipment. LCC savings are
calculated for each efficiency level of
each equipment class.
The PBP of higher efficiency
equipment is obtained by dividing the
increase in the installed cost by the
decrease in annual operating cost. In
addition to energy costs (calculated
using the electricity price forecast for
the first year), the annual operating cost
includes annualized maintenance and
repair costs. PBP is calculated for each
efficiency level of each equipment class.
Apart from MSP, installation costs,
and maintenance and repair costs, other
important inputs for the LCC analysis
are markups and sales tax, equipment
energy consumption, electricity prices
and future price trends, expected
equipment lifetime, and discount rates.
Many inputs for the LCC analysis are
estimated from the best available data in
the market, and in some cases the inputs
are generally accepted values within the
industry. In general, each input value
has a range of values associated with it.
While single representative values for
each input may yield an output that is
the most probable value for that output,
such an analysis does not provide the
general range of values that can be
attributed to a particular output value.
Therefore, DOE carried out the LCC
analysis in the form of Monte Carlo
simulations,56 in which certain inputs
56 Monte Carlo simulation is, generally, a
computerized mathematical technique that allows
for computation of the outputs from a mathematical
model based on multiple simulations using
different input values. The input values are varied
based on the uncertainties inherent to those inputs.
The combination of the input values of different
inputs is carried out in a random fashion to
simulate the different probable input combinations.
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were expressed as a range of values and
probability distributions to account for
the ranges of values that may be
typically associated with the respective
input values. The results, or outputs, of
the LCC analysis are presented in the
form of mean and median LCC savings;
percentages of customers experiencing
net savings, net cost and no impact in
LCC; and median PBP. For each
equipment class, 10,000 Monte Carlo
simulations were carried out. The
simulations were conducted using
Microsoft Excel and Crystal Ball, a
commercially available Excel add-in
used to carry out Monte Carlo
simulations.
LCC savings and PBP are calculated
by comparing the installed costs and
LCC values of standards-case scenarios
against those of base-case scenarios. The
base-case scenario is the scenario in
which equipment is assumed to be
purchased by customers in the absence
of the proposed energy conservation
standards. Standards-case scenarios are
scenarios in which equipment is
assumed to be purchased by customers
after the amended energy conservation
standards, determined as part of the
current rulemaking, go into effect. The
number of standards-case scenarios for
an equipment class is equal to one less
than the total number of efficiency
levels in that equipment class, since
each efficiency level above Efficiency
Level 1 represents a potential amended
standard. Usually, the equipment
available in the market will have a
distribution of efficiencies. Therefore,
for both base-case and standards-case
scenarios, in the LCC analysis, DOE
assumed a distribution of efficiencies in
the market, and the distribution was
assumed to be spread across all
efficiency levels in the LCC analysis (see
NOPR TSD chapter 10).
Recognizing that each building that
uses commercial refrigeration
equipment is unique, DOE analyzed
variability in the LCC and PBP results
by performing the LCC and PBP
calculations for seven types of
businesses: (1) Supermarkets; (2)
wholesaler/multi-line retail stores, such
as ‘‘big-box stores,’’ ‘‘warehouses,’’ and
‘‘supercenters’’; (3) convenience and
small specialty stores, such as meat
markets and wine, beer, and liquor
stores; (4) convenience stores associated
with gasoline stations; (5) full-service
restaurants; (6) limited service
restaurants; and (7) other foodservice
businesses, such as caterers and
cafeterias. Different types of businesses
The outputs of the Monte Carlo simulations reflect
the various outputs that are possible due to the
variations in the inputs.
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face different energy prices and also
exhibit differing discount rates that they
apply to purchase decisions.
Expected equipment lifetime is
another input whose value varies over a
range. Therefore, DOE assumed a
distribution of equipment lifetimes that
are defined by Weibull survival
functions.57
Another important factor influencing
the LCC analysis is the State in which
the commercial refrigeration equipment
is installed. Inputs that vary based on
this factor include energy prices and
sales tax. At the national level, the
spreadsheets explicitly modeled
variability in the inputs for electricity
price and markups, using probability
distributions based on the relative
shipments of units to different States
and business types.
Detailed descriptions of the
methodology used for the LCC analysis,
along with a discussion of inputs and
results, are presented in chapter 8 and
appendices 8A and 8B of the NOPR
TSD.
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1. Effect of Current Standards
DOE notes that, beginning January 1,
2012, manufacturers were required to
comply with the standards set by the
January 2009 final rule.58 74 FR 1092
(Jan. 9, 2009). DOE concludes that the
efficiency level of the equipment on the
market increased during this time. The
engineering analysis for this NOPR was
first developed in 2011, and therefore
the engineering design option levels
include efficiency levels of equipment
available in the market in 2011. This
means that the engineering efficiency
levels were built up starting from levels
which are below the standards set by
the January 2009 final rule. These levels
were included for analytical purposes,
solely to represent the manner in which
manufacturers may have achieved
compliance with the January 2009 final
rule standard levels, and were not
considered in the development of
proposed standard levels. The LCC
analysis and NIA assume the first year
for the analyses as 2017. As noted
above, the market in 2017 will be
different from that in 2011 in terms of
efficiency distribution of the equipment,
mainly due to the effect of the standards
established by the January 2009 final
57 Weibull survival function is a continuous
probability distribution function that is used to
approximate the distribution of equipment lifetimes
of commercial refrigeration equipment.
58 DOE extended the compliance date for
manufacturers to submit certification reports tor
commercial refrigeration equipment until December
31, 2013. 77 FR 76825 (Dec. 31, 2012). DOE
emphasizes, however, that the testing and sampling
requirements for commercial refrigeration
equipment are unchanged by this extension.
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rule. Therefore, the market baseline
(from the year 2011) used as the starting
point for the engineering analysis is not
the same as the market baseline in 2017,
when any amended standards
prescribed by the current rulemaking
are scheduled to go into effect.
To estimate the state of the market
baseline level in 2017, DOE introduced
a baseline level termed the ‘‘standards
baseline.’’ The energy consumption of
the standards baseline level of an
equipment class is equal to the standard
prescribed by the January 2009 final
rule for that equipment class. 74 FR
1093 (Jan. 9, 2009). The design option
levels that are less efficient than the
standards baseline were disregarded,
and the more-efficient design option
levels were carried forward for
downstream analyses. A detailed
description of this procedure is
presented with the aid of an example in
chapter 8 of NOPR TSD.
At the April 2011 preliminary
analysis public meeting, AHRI asked
whether DOE intended to update the
LCC analysis once the standards set in
the January 2009 final rule became
effective in order to change the baseline.
(AHRI, Public Meeting Transcript, No.
31 at pp. 99–100)
The engineering analysis for this
NOPR was first developed in 2011, and
updated with new information as it
became available up to the time of this
publication. However, DOE continued
to use in its engineering baseline
characteristics reflecting the
construction of equipment prior to
required compliance with the standards
set by the January 2009 final rule. As a
result, some of the engineering
efficiency levels reflect levels which do
not correspond to equipment
performance currently permitted on the
market after January 1, 2012. These
levels, however, are solely used to
reflect the manner in which DOE
believes manufacturers could have
attained the 2009 final rule standard
levels through implementation of design
options, and were not used in the
downstream analysis for the purposes of
calculating standard levels proposed in
this NOPR.
Consistent with the methodology
described above and explained in detail
in Chapter 8 of the NOPR TSD, DOE
developed a ‘‘standards baseline’’ for
use as the starting point for its
downstream (LCC and PBP, NIA, etc.)
analyses. This standards baseline
corresponds to the lowest efficiency
level which would be compliant with
current (January 2009 final rule)
standards. From there, higher efficiency
levels were studied as the basis for
developing potential standard levels as
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proposed in today’s NOPR. In response
to AHRI’s comment, DOE used updated
inputs to the baseline in order to reflect
the compliance date of the January 2009
final rule standards having passed. This
includes updates to the non-standards
case efficiency distribution and other
inputs to the downstream analyses.
These inputs were updated based on the
most recent available information for
use in conducting the analysis described
in today’s NOPR.
2. Equipment Cost
To calculate customer equipment
costs, DOE multiplied the MSPs
developed in the engineering analysis
by the distribution channel markups,
described in section IV.F. DOE applied
baseline markups to baseline MSPs, and
incremental markups to the MSP
increments associated with higher
efficiency levels.
3. Installation, Maintenance, and Repair
Costs
Installation cost includes labor,
overhead, and any miscellaneous
materials and parts needed to install the
equipment. The installation costs may
vary from one equipment class to
another, but they do not vary with
efficiency levels within an equipment
class. Costs that do not vary with
efficiency levels do not impact the LCC,
PBP, or NIA results. DOE retained the
nationally representative installation
cost values from the January 2009 final
rule of $2,000 for all remote condensing
equipment and $750 for all selfcontained equipment, and simply
escalated the values from 2007$ to
2012$, resulting in 2012 installation
costs of $2,299 and $862, respectively.
True stated that the average glassdoored merchandiser is moved and
installed twice in its lifetime, and that
self-contained, solid-doored units,
which are used in commercial kitchens,
are moved and installed in different
locations at least three times, on
average, during their lifetimes.
Therefore, True suggested that DOE
double or triple its estimated
installation cost. (True, Public Meeting
Transcript, No, 31 at p. 110)
Based on the design options for higher
efficiency levels, DOE determined that
installation costs do not vary by
efficiency levels within a given
equipment class. Costs that do not vary
with efficiency levels do not impact the
LCC, PBP, or NIA results. Because
doubling or tripling of installation costs
would not impact the net results, DOE
did not alter the installation costs for
the NOPR analyses based on True’s
comment.
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Maintenance costs are associated with
maintaining the operation of the
equipment. DOE split the maintenance
costs into regular maintenance costs and
lighting maintenance costs. Regular
maintenance activities, which include
cleaning evaporator and condenser
coils, drain pans, fans, and intake
screens; inspecting door gaskets and
seals; lubricating hinges; and checking
starter panel, control, and defrost
system operation, were considered to be
equivalent for equipment at all
efficiency levels. Lighting maintenance
costs are the costs incurred to replace
display case lighting at regular intervals
in a preventative fashion. Because lights
and lighting configuration change with
efficiency levels, lighting maintenance
costs vary with efficiency levels. As
stated in section IV.E.4.d, for efficiency
levels that incorporate LED lights as a
design option, the reduction in LED
costs beyond 2017 were taken into
account when calculating the lighting
maintenance costs.
Repair cost is the cost to the customer
of replacing or repairing failed
components. DOE calculated repair
costs based on the typical failure rate of
refrigeration system components,
original equipment manufacturer (OEM)
cost of the components, and an assumed
markup value to account for labor cost.
a. Maintenance and Repair Costs by
Efficiency Level
Traulsen commented that it agreed
with DOE that installation and
maintenance costs would be flat across
all efficiency levels. (Traulsen, No. 45 at
p. 4) AHRI, however, disagreed with
DOE’s assumption that repair and
maintenance costs would not vary with
efficiency. AHRI stated that the
industry’s experience has been that
higher efficiency equipment is more
expensive to repair and maintain since
it uses more sophisticated components.
AHRI also added that, if repair and
maintenance cost data are not available
by efficiency level, DOE should
correlate repair and maintenance cost
with equipment cost. (AHRI, No. 43 at
p. 3)
DOE does not believe that any design
option used in the higher efficiency
equipment considered in this
rulemaking would lead to higher costs
for regular maintenance activities.
Repair costs and lighting maintenance
costs, on the other hand, have been
modeled to be proportional to the OEM
cost of the components and,
consequently, are higher for higher
efficiency equipment. DOE requested
information from stakeholders regarding
maintenance and repair costs
specifically related to any of the design
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options used for this rulemaking, but
did not receive any such information.
Therefore, DOE retained its approach of
using flat costs for regular maintenance,
and costs proportional to OEM cost for
repair costs and lighting maintenance
costs.
Southern Store Fixtures questioned
whether DOE would examine the
economic impact of night curtains and
lighting occupancy sensors on
equipment cost and operating cost.
(Southern Store Fixtures, Public
Meeting Transcript, No. 31 at pp. 185–
86) CA IOUs stated that labor costs
related to night curtain deployment can
be significant. CA IOUs urged DOE to
review and update its assumptions
involving night curtains. (CA IOUs, No.
42 at p. 5)
Equipment costs, which include costs
of night curtains and lighting occupancy
sensors, were covered in the engineering
analysis used to obtain the MSP (see
section IV.E). Based on discussions with
specialists in display case retrofits who
are familiar with lighting occupancy
sensor installation and setup, DOE
concluded that lighting occupancy
sensors do not increase maintenance
costs of commercial refrigeration
equipment. With respect to repair or
replacement costs, DOE determined that
the manufacturing processes used today
produce highly reliable products,
making the failure of occupancy sensors
relatively rare. Typically, according to
the available data, lighting occupancy
sensors last nearly 15 years, which is
longer than the average lifetime of
commercial refrigeration equipment.
Therefore, DOE did not include lighting
occupancy sensor repair or replacement
costs in the LCC analysis.
DOE believes that the night curtains
currently available in the market are
designed for easy deployment and
retraction. In most instances, it takes
less than 15 seconds per refrigerated
display case to deploy or retract a night
curtain. DOE believes that deployment
and retraction of night curtains can be
easily assimilated into the activities
associated with store closing or opening
operations, and will not amount to an
added expense. Therefore, DOE did not
add labor costs for night curtain
deployment and retraction to the LCC
analysis or NIA.
b. Maintenance and Repair Cost
Annualization
Stakeholders provided feedback on
DOE’s methodology in annualizing the
costs of equipment maintenance and
repair. ASAP stated that annualizing
lighting maintenance costs results in a
present value that is greater than it
would be if DOE were to model lighting
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55929
replacement costs in the years in which
they actually were incurred. (ASAP,
Public Meeting Transcript, No. 31 at p.
104) NEEA agreed that DOE should try
to characterize maintenance costs as
accurately as possible, modeling truly
annual costs on an annual basis, and
other costs as they occur (i.e., as capital
equipment costs). NEEA added that it is
not appropriate to annualize all costs
because, while some costs are truly
annual or biannual, others are periodic
maintenance investments and should be
treated as such. NEEA referenced the
fluorescent lamp ballast rulemaking
(Docket No. EE–2007–BT–STD–0016),
in which DOE accounted for lamp
replacement costs in the years in which
they occurred, and urged DOE to adopt
a similar methodology in this
rulemaking. (NEEA, Public Meeting
Transcript, No. 31 at p. 105, No. 36 at
pp. 5–6) ASAP and NRDC echoed this
stance in their jointly submitted written
comment, stating that, while it is
reasonable to annualize costs that are
indeed incurred annually or biannually,
annualizing costs that only occur in
certain years could distort the LCC
output, resulting in a higher present
value of annualized costs. ASAP and
NRDC also referenced the fluorescent
ballast rulemaking, and suggested that
DOE account for costs similarly in this
rulemaking’s analyses. (ASAP and
NRDC, No. 34 at p. 4) Southern Store
Fixtures, however, offered a dissenting
opinion, adding that it is a common
practice in supermarkets to have
lighting contracts under which a
maintenance worker changes the lights
on a scheduled basis, whether they are
broken or not, making lighting costs
indeed annual. (Southern Store
Fixtures, Public Meeting Transcript, No.
31 at p. 107)
DOE has determined that, if the costs
of known items occurring at predictable
intervals are appropriately discounted
when annualized, there will be no
impact on LCC and NIA results,
regardless of whether or not the costs
are annualized. Additionally, in the
commercial refrigeration equipment
analyses, repairs and replacements have
been modeled as a combination of
known, expected items, plus others
modeled simply as a fraction of failed
components that are expected to be
replaced during equipment lifetime.
Such a characterization of maintenance
and repair costs does not lend itself to
specification of a particular time, during
the equipment lifetime, when such
repairs are likely to occur. Further, the
PBP by its very definition cannot be
calculated unless the costs are
annualized. Finally, if multiple explicit
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repair and maintenance line items were
tracked individually in the NIA model,
the size and complexity of the computer
model would grow exponentially
without a commensurate improvement
in value. Therefore, DOE has retained its
conventional approach of annualizing
the maintenance and repair costs.
Store Fixtures, Public Meeting
Transcript, No. 31 at p. 108)
Costs incurred due to refrigerant
leakage do not vary with equipment
efficiency levels. Therefore, these costs
will not affect the LCC analysis or NIA
results. DOE did not take these costs
into account for the NOPR analysis.
Data.’’ 60 DOE calculated an average
national commercial price by (1)
estimating an average commercial price
for each utility company by dividing the
commercial revenues by commercial
sales; and (2) weighting each utility by
the number of commercial customers it
served in that region, across the nation.
c. Maintenance Cost Estimates
e. Repair Costs
Traulsen stated that repair costs
would increase commensurate with the
purchase price of the components to be
repaired. This increase, Traulsen added,
would be consistent with the increase in
manufacturing cost due to the
implementation of a technology.
(Traulsen, No. 45 at p. 4)
DOE modeled repair costs as directly
proportional to the OEM cost of the
failed components. This approach
yields higher repair costs for higher
efficiency equipment and is consistent
with Traulsen’s comment.
Zero Zone stated that it suspected the
average lifetime of an LED light is less
than 5 years, and that the cost to replace
one will be higher than estimated. This,
Zero Zone added, is because LEDs
continue to evolve and older models are
discontinued, meaning that replacement
of failed LEDs will require a complete
relamping to maintain consistent
product appearance. (Zero Zone, No. 37
at p. 4)
All major manufacturers of LED
lighting solutions for refrigerated
display cases state that the
maintenance-free lifetime for LED lights
is 50,000 hours, and some of the
retailers offer a 5-year warranty. DOE
did not find any basis for doubting the
assumption of a 50,000-hour lifetime for
LED lights in refrigerated display cases.
Recognizing that replacement of LED
strip lighting in refrigerated display
cases involves higher labor costs
compared to the simple lamp
replacement process of fluorescent tube
lights, DOE applied a retrofit factor
(multiplier) of 1.4 to the LED lamp cost
to account for relamping of LED lights
in display cases. The results presented
in the preliminary analysis used the
retrofit factor of 1.4, and DOE used the
same factor for its NOPR analysis.
6. Energy Price Projections
To estimate energy prices in future
years for the preliminary analysis TSD,
DOE multiplied the average regional
energy prices described above by the
forecast of annual average commercial
energy price indices developed in the
Reference Case from
AEO2013.61 AEO2013 forecasted prices
through 2040. To estimate the price
trends after 2040, DOE assumed the
same average annual rate of change in
prices as from 2031 to 2040.
At the April 2011 preliminary
analysis public meeting, Coca-Cola
stated that its largest maintenance cost
is condenser cleaning, which is much
more expensive than lighting
maintenance. (Coca-Cola, Public
Meeting Transcript, No. 31 at p. 109)
NEEA commented that, in the case of
actual maintenance costs, it agreed with
Coca-Cola’s assertion that $35 per year,
the maintenance cost presented by DOE
in its preliminary analysis, is too low
based on its intuition regarding the cost
of labor and travel to maintain
equipment. (NEEA, No. 36 at p. 6)
DOE obtained its annualized
maintenance costs for commercial
refrigeration equipment from RS Means
Facilities Maintenance and Repair Cost
Data.59 RS Means data provide estimates
of the person-hours, labor rates, and
materials required to maintain
commercial refrigeration equipment.
While it could be true that an amount
of $35 per year does not reflect travel
and other overhead charges, DOE
believes that the value reflects the cost
incurred for labor if the maintenance
were to be performed by in-house
personnel of the business establishment.
In any case, the actual amount allocated
to the regular maintenance costs has no
effect on the LCC analysis or the NIA
because maintenance costs do not vary
based on efficiency levels in any
equipment class. DOE believes the
higher efficiency design options
selected for this rulemaking do not
result in changes to the regular
maintenance costs of the commercial
refrigeration equipment. Therefore, DOE
believes that a value of $35 is
reasonably representative of the regular
maintenance costs for self-contained
equipment.
mstockstill on DSK4VPTVN1PROD with PROPOSALS3
d. Refrigerant Costs
Southern Store Fixtures stated that
DOE should include refrigerant recharge
costs in its maintenance cost estimates,
because EPA and DOE have accepted
that there is an 18-percent refrigerant
leakage rate annually, or at least
regularly, for rack systems. (Southern
59 RS Means Company, Inc. Means Costworks
2010: Facility, Maintenance and Repair Cost Data.
2010. Kingston, MA.
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4. Annual Energy Consumption
Annual energy consumption of
commercial refrigeration equipment is
obtained from engineering analysis
(chapter 5 of the NOPR TSD).
5. Energy Prices
DOE calculated average commercial
electricity prices using the U.S. Energy
Information Administration’s (EIA’s)
Form EIA–826, ‘‘Database Monthly
Electric Utility Sales and Revenue
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7. Equipment Lifetime
DOE defines lifetime as the age at
which a commercial refrigeration
equipment unit is retired from service.
DOE based expected equipment lifetime
on discussions with industry experts,
and concluded that a typical lifetime of
10 years is appropriate for most
commercial refrigeration equipment in
large grocery/multi-line stores and
restaurants. Industry experts believe
that operators of small food retail stores,
on the other hand, tend to use display
cases longer. DOE used 15 years as the
average equipment lifetime for display
cases used in such retail stores. DOE
reflects the uncertainty of equipment
lifetimes in the LCC analysis for both
equipment markets as probability
distributions, as discussed in section
8.2.3.5 of the TSD.
Traulsen stated that 10 years is an
acceptable estimate for the lifetime of
self-contained equipment, and that it is
not uncommon for some applications to
have a 20-year lifetime. However,
Traulsen added that smaller units
subject to more frequent human
interaction, such as undercounter units,
would likely have shorter lifetimes,
such as 7 years. Traulsen also stated that
price point could indicate potential
lifetime. (Traulsen, Public Meeting
Transcript, No. 31 at p. 4) AHRI
commented that properly installed and
maintained equipment typically has a
much longer lifetime than the actual
60 U.S. Energy Information Administration. EIA–
826 Sales and Revenue Spreadsheets. (Last
accessed May 16, 2012). www.eia.doe.gov/cneaf/
electricity/page/eia826.html
61 The spreadsheet tool that DOE used to conduct
the LCC and PBP analyses allows users to select
price forecasts from either AEO’s High Economic
Growth or Low Economic Growth Cases. Users can
thereby estimate the sensitivity of the LCC and PBP
results to different energy price forecasts.
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period of time the end use customers
retain it, and that this is entirely
dependent on the specific business
models of and competitive demands on
different users. However, AHRI added
that the 10-year lifetime used by DOE is
an appropriate average value. (AHRI,
No. 43 at p. 3) NEEA concurred, stating
that it generally agreed with the inputs
to the Crystal Ball simulations that DOE
used. In particular, NEEA stated that it
was comfortable with the assumed
equipment lifetimes and distributions
thereof, and that, while much of the
equipment does indeed last longer, at
that point the equipment becomes used
equipment and is not directly applicable
to the rulemaking except for purposes of
estimating shipments. (NEEA, No. 36 at
p. 6)
DOE appreciates the comments
previously submitted and welcomes
further input on the equipment lifetimes
for the LCC analysis and NIA.
mstockstill on DSK4VPTVN1PROD with PROPOSALS3
8. Discount Rates
In calculating the LCC, DOE applies
discount rates to estimate the present
value of future operating costs to the
customers for commercial refrigeration
equipment. The discount rate is the rate
at which future expenditures are
discounted to establish their present
value to the customer.62 DOE derived
the discount rates for the commercial
refrigeration equipment analysis by
estimating the cost of capital for a large
number of companies similar to those
that could purchase commercial
refrigeration equipment and then
sampling them to characterize the effect
of a distribution of potential customer
discount rates. 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
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).63 The CAPM,
among the most widely used models to
estimate the cost of equity financing,
assumes that the cost of equity is
proportional to the amount of
62 The LCC analysis estimates the economic
impact on the individual customer from that
customer’s own economic perspective in the year of
purchase and therefore needs to reflect that
individual’s own perceived cost of capital. By way
of contrast DOE’s analysis of national impact
requires a societal discount rate. These rates used
in that analysis are 7 percent and 3 percent, as
required by OMB Circular A–4, September 17, 2003.
63 Harris, R.S. Applying the Capital Asset Pricing
Model. UVA–F–1456. Available at SSRN: https://
ssrn.com/abstract=909893.
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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.
9. Compliance Date of Standards
EPCA prescribes that DOE must
review and determine whether to amend
performance-based standards for
commercial refrigeration equipment by
January 1, 2013. (42 U.S.C.
6313(c)(6)(A)) In addition, EPCA
requires that any amended standards
established in this rulemaking must
apply to equipment that is
manufactured on or after 3 years after
the final rule is published in the Federal
Register unless DOE determines, by
rule, that a 3-year period is inadequate,
in which case DOE may extend the
compliance date for that standard by an
additional 2 years. (42 U.S.C.
6313(c)(6)(C)) Based on these criteria,
DOE reasoned due to the cumulative
regulatory burden of the recently
implemented 2009 CRE final rule and of
the upcoming walk-in cooler and freezer
rule, which both affect the same
industry that the most likely compliance
date for standards set by this rulemaking
would be in 2017. Therefore, DOE
calculated the LCC and PBP for
commercial refrigeration equipment
under the assumption that compliant
equipment would be purchased in 2017.
DOE seeks comment on whether it
should extend the compliance date as
authorized, and, if so, by how long.
10. Base-Case and Standards-Case
Efficiency Distributions
To accurately estimate the share of
affected customers who would likely be
impacted by a standard at a particular
efficiency level, DOE’s LCC analysis
considers the projected distribution of
efficiencies of equipment that customers
purchase under the base case (that is,
the case without new or amended
energy efficiency standards). DOE refers
to this distribution of equipment
efficiencies as a base-case efficiency
distribution.
DOE’s methodology to estimate
market shares of each efficiency level
within each equipment class is a costbased method consistent with the
approaches that were used in the EIA’s
National Energy Modeling System
(NEMS) 64 and in the Canadian
Integrated Modeling System (CIMS) 65 66
64 U.S. Energy Information Administration.
National Energy Modeling System Commercial
Model (2004 Version). 2004. Washington, DC.
65 The CIMS Model was originally known as the
Canadian Integrated Modeling System, but as the
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for estimating efficiency choices within
each equipment class. DOE then
extrapolated future scenarios of the
equipment efficiency for the base case
and amended standards cases using the
same cost-based method. The difference
in equipment efficiency between the
base case and amended standards case
was the basis for determining the
reduction in unit energy consumption
resulting from amended standards.
Traulsen commented that it believed
that DOE’s estimates of shipmentweighted market share are skewed
toward the higher performance levels.
Traulsen added that it believed that
DOE has overestimated the value that
end users place on energy efficiency.
(Traulsen, No. 45 at p. 7)
DOE recognizes Traulsen’s concern,
but at this time has no data to more
accurately define the market shares by
efficiency level within each equipment
class. No data on shipments by
efficiency level of either self-contained
or remote condensing equipment classes
are known to DOE or were provided by
industry or other stakeholders.
Currently, there is also no extensive
database of available efficiency levels by
model that could be used to provide a
proxy for efficiency levels for shipped
equipment, an approach that has been
used in rulemakings for other products
when efficiency data on shipped
products was lacking. The methodology
used for this analysis was identical to
that used in the January 2009 final rule
analysis. See chapter 10 of the TSD for
the January 2009 final rule, available at:
www1.eere.energy.gov/buildings/
appliance_standards/commercial/pdfs/
chp_10_cre_shipmts_final.pdf. If the
model overstates the share of shipments
at higher efficiency levels in the base
case scenario, it results in analysis
erring on the side of lower NES and
NPV values.
11. Inputs to Payback Period Analysis
Payback period is the amount of time
it takes the customer to recover the
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
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
model is now being applied to other countries, the
acronym is now used as its proper name.
66 Energy Research Group/M.K. Jaccard &
Associates. Integration of GHG Emission Reduction
Options using CIMS. 2000. Vancouver, B.C.
www.emrg.sfu.ca/media/publications/Reports%20
for%20Natural%20Resources%20Canada/
Rollup.pdf
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value of money; that is, the calculation
is done at an effective discount rate of
zero percent. PBPs are expressed in
years. PBPs greater than the life of the
equipment mean that the increased total
installed cost of the more-efficient
equipment is not recovered in reduced
operating costs over the life of the
equipment.
The inputs to the PBP calculation are
the total installed cost to the customer
of the equipment for each efficiency
level and the average annual operating
expenditures for each efficiency level in
the first year. The PBP calculation uses
the same inputs as the LCC analysis,
except that electricity price trends and
discount rates are not used.
12. Rebuttable-Presumption Payback
Period
Sections 325(o)(2)(B)(iii) and
345(e)(1)(A) of EPCA, (42 U.S.C.
6295(o)(2)(B)(iii) and 42 U.S.C.
6316(e)(1)(A)), establish a rebuttable
presumption applicable to commercial
refrigeration equipment. The rebuttable
presumption states that a new or
amended standard is economically
justified if the Secretary finds that the
additional cost to the consumer of
purchasing a product complying with
an energy conservation standard level
will be less than three times the value
of the energy savings during the first
year that the consumer will receive as
a result of the standard, as calculated
under the applicable test procedure.
This rebuttable presumption test is an
alternative way of establishing
economic justification.
To evaluate the rebuttable
presumption, DOE estimated the
additional cost of purchasing moreefficient, standards-compliant
equipment, and compared this cost to
the value of the energy saved during the
first year of operation of the equipment.
DOE interprets that the increased cost of
purchasing standards-compliant
equipment includes the cost of
installing the equipment for use by the
purchaser. DOE calculated the
rebuttable presumption payback period
(RPBP), 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 the
RPBP is less than 3 years, the rebuttable
presumption is satisfied; when the
RPBP is equal to or more than 3 years,
the rebuttable presumption is not
satisfied. Note that this PBP calculation
does not include other components of
the annual operating cost of the
equipment (i.e., maintenance costs and
repair costs).
While DOE examined the rebuttablepresumption, it also considered whether
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the standard levels considered are
economically justified through a more
detailed analysis of the economic
impacts of these levels pursuant to 42
U.S.C. 6295(o)(2)(B)(i). The results of
this analysis served as the basis for DOE
to evaluate the economic justification
for a potential standard level
definitively (thereby supporting or
rebutting the results of any preliminary
determination of economic
justification).
I. National Impact Analysis—National
Energy Savings and Net Present Value
The NIA assesses the NES and the
NPV of total customer costs and savings
that would be expected as a result of
amended energy conservation
standards. The NES and NPV are
analyzed at specific efficiency levels for
each equipment class of commercial
refrigeration equipment. DOE calculates
the NES and NPV based on projections
of annual equipment shipments, along
with the annual energy consumption
and total installed cost data from the
LCC analysis. For the NOPR analysis,
DOE forecasted the energy savings,
operating cost savings, equipment costs,
and NPV of customer benefits for
equipment sold from 2017 through
2046—the year in which the last
standards-compliant equipment is
shipped during the 30-year analysis
period.
DOE evaluates the impacts of the
amended standards by comparing basecase projections with standards-case
projections. The base-case projections
characterize energy use and customer
costs for each equipment class in the
absence of any amended energy
conservation standards. DOE compares
these projections with projections
characterizing the market for each
equipment class if DOE were to adopt
an amended standard at specific energy
efficiency levels for that equipment
class. For the standards cases, DOE
considered a ‘‘roll-up’’ scenario, in
which DOE assumed that equipment
efficiencies that do not meet the
standard level under consideration
would ‘‘roll-up’’ to meet the amended
standard level, and those already above
the proposed standard level would
remain unaffected.
DOE uses a Microsoft Excel
spreadsheet model to calculate the
energy savings and the national
customer costs and savings from each
TSL. The NOPR TSD and other
documentation that DOE provides
during the rulemaking help explain the
models and how to use them, and
interested parties can review DOE’s
analyses by interacting with these
spreadsheets. The NIA spreadsheet
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model uses average values as inputs (as
opposed to probability distributions of
key input parameters from a set of
possible values).
For the current analysis, the NIA used
projections of energy prices and
commercial building starts from the
AEO2013 Reference Case. In addition,
DOE analyzed scenarios that used
inputs from the AEO2013 Low
Economic Growth and High Economic
Growth Cases. These cases have lower
and higher energy price trends,
respectively, compared to the Reference
Case. NIA results based on these cases
are presented in chapter 10 of the NOPR
TSD.
A detailed description of the
procedure to calculate NES and NPV,
and inputs for this analysis are provided
in chapter 10 of the NOPR TSD.
1. Shipments
Complete historical shipments data
for commercial refrigeration equipment
could not be obtained from a single
source; therefore, DOE used data from
multiple sources to estimate historical
shipments. The major sources were
2005 shipments data provided by ARI as
part of its comments submitted in
response to the January 2009 final rule
Framework document, ARI 2005 Report
(Docket No. EERE–2006–BT–STD–0126,
ARI, No. 7, Exhibit B at p. 1);
Commercial Refrigeration Equipment to
2014 by Freedonia Group, Inc.67; 2008
Size and Shape of Industry by the North
American Association of Food
Equipment Manufacturers; 68 and
Energy Savings Potential and R&D
Opportunities for Commercial
Refrigeration prepared by Navigant
Consulting, Inc. for DOE.69 Exact
shipments numbers and assumptions
have been withheld because some of the
sources cited above are not public
documents and are available only for
purchase.
Historical linear feet of shipped units
depicts the annual amount of
commercial refrigeration equipment
capacity shipped, and is an alternative
way to express shipments data. DOE
determined the linear feet shipped for
any given year by multiplying each unit
shipped by its associated average length,
and then summing all the linear footage
67 Freedonia Group, Inc. Commercial
Refrigeration Equipment to 2014. 2010. Cleveland,
OH. Study 2261. www.freedoniagroup.com/
Commercial-Refrigeration-Equipment.html
68 North American Association of Food
Equipment Manufacturers. 2008 Size and Shape of
Industry. 2008. Chicago, IL.
69 Navigant Consulting, Inc. Energy Savings
Potential and R&D Opportunities for Commercial
Refrigeration. 2009. Prepared by Navigant
Consulting, Inc. for the U.S. Department of Energy,
Washington, DC.
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values. Table IV.3 presents the
representative equipment class lengths
used for the conversion of per-unit
shipments to linear footage within each
equipment class.
TABLE IV.3—EQUIPMENT LINEAR DIMENSIONS ASSUMED FOR SHIPMENTS ANALYSIS
Assumed length
ft
Equipment class
VOP.RC.M ................................................
VOP.RC.L .................................................
VOP.SC.M ................................................
SVO.RC.M ................................................
SVO.SC.M ................................................
HZO.RC.M ................................................
HZO.RC.L .................................................
HZO.SC.M ................................................
HZO.SC.L .................................................
VCT.RC.M ................................................
VCT.RC.L .................................................
VCT.SC.M .................................................
VCT.SC.L ..................................................
VCT.SC.I ...................................................
VCS.SC.M ................................................
VCS.SC.L .................................................
VCS.SC.I ..................................................
HCT.SC.M ................................................
HCT.SC.L .................................................
HCT.SC.I ..................................................
HCS.SC.M ................................................
HCS.SC.L .................................................
SOC.RC.M ................................................
PD.SC.M ...................................................
SOC.SC.M ................................................
10
10
4
10
4
10
10
4
4
10
10
4
3.5
5
4
3.5
5
3
3
3.4
4
5
8
2.5
5
Basis
Average of 8 ft and 12 ft, manufacturer interviews.
Average of 8 ft and 12 ft, manufacturer interviews.
Baseline equipment used for engineering analysis.
Average of 8 ft and 12 ft, manufacturer interviews.
Baseline equipment used for engineering analysis.
Average of 8 ft and 12 ft, manufacturer interviews.
Average of 8 ft and 12 ft, manufacturer interviews.
Baseline equipment used for engineering analysis.
Baseline equipment used for engineering analysis.
Average of 3-door and 5-door (30 in. per door), manufacturer interviews.
Average of 3-door and 5-door (3 in. per door), manufacturer interviews.
Engineering estimate.*
Average of 1-door and 2-door freezer.
Baseline equipment used for engineering analysis.
Engineering estimate.*
Average of 1-door and 2-door freezer.
Baseline equipment used for engineering analysis.
Engineering estimate.*
Engineering estimate.*
Baseline equipment used for engineering analysis.
Engineering estimate.*
Engineering estimate.*
Average of 4 ft, 8 ft, 12 ft, all common equipment lengths.
Baseline equipment used for engineering analysis.
Engineering estimate.*
* For equipment classes that exhibit a wide range of equipment lengths in the market, DOE assumed a value for equipment length based on its
best engineering judgment.
DOE converted the estimated 2009
shipments data in each equipment class
to percentages of total shipped linear
feet of commercial refrigeration
equipment for use in the shipments
model. This established the commercial
refrigeration equipment market share
attributed to each equipment class. DOE
calculated the percentage of shipped
linear footage by dividing the linear
footage shipped for each equipment
class by the overall linear footage
shipped for all commercial refrigeration
equipment covered in this rulemaking.
Table IV.4 summarizes DOE’s
estimated division of historical annual
shipments into new and replacement
categories by building type. The
distributions shown in Table IV.4 result
from several discrete steps. First,
equipment types were identified by the
type of business they generally serve.
For example, vertical open cases with
remote compressors are associated with
large grocers and multi-line retail stores.
Remote condensing equipment is
generally associated with retail stores
that sell high volumes of perishable
goods, while self-contained units are
associated with foodservice and
convenience or small food sales stores.
When there was no strong association
between the building type and
equipment class, equipment was
distributed across broader classes.
Second, a ratio of new versus
replacement equipment was developed
based on commercial floor space
estimates (floor space estimates are
discussed below). Using the expected
useful life of commercial refrigeration
equipment and commercial floor space
stock, additions, and retirements, ratios
were developed of new versus
replacement stock for use in this
analysis. Using these and related factors
(e.g., the division of foodservice into the
three building types—limited service
restaurants, full-service restaurants, and
other), DOE distributed commercial
refrigeration equipment shipments
among building types and new versus
replacement shipments, as shown in
Table IV.4.
TABLE IV.4—ESTIMATED DISTRIBUTION OF 2009 LINEAR FEET OF COMMERCIAL REFRIGERATION EQUIPMENT SHIPMENTS
AMONG NEW VS. REPLACEMENT EQUIPMENT
Replacement
(percent)
mstockstill on DSK4VPTVN1PROD with PROPOSALS3
Building type
New
(percent)
Total
(percent)
Large Grocery/Multi-Line Retail ...................................................................................................
Small Grocery/Convenience ........................................................................................................
Limited Service Restaurants ........................................................................................................
Full Service Restaurants .............................................................................................................
Other ............................................................................................................................................
30.5
14.6
9.4
9.8
12.1
8.6
4.1
3.3
3.4
4.2
39.1
18.7
12.7
13.2
16.3
Total ......................................................................................................................................
76.4
23.6
100.0
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Federal Register / Vol. 78, No. 176 / Wednesday, September 11, 2013 / Proposed Rules
Table IV.5 shows the forecasted
square footage of new construction used
to scale annual new commercial
refrigeration equipment shipments. As
the data in Table IV.5 show, forecasted
square footage additions to the building
stocks vary from year to year, with the
first few years of the analyzed period
exhibiting lower levels of growth due to
predicted lingering impacts of the U.S.
economic recession. The forecasted
commercial refrigeration equipment
shipments therefore show some
variability as well, tracking the
forecasted square footage floor space
additions. The growth rates over the last
10 years of the AEO2013 forecast (2031
through 2040) were used to extend the
AEO forecast out until the year 2046 to
develop the full 30-year forecast needed
for the NIA.
TABLE IV.5—AEO2013 FORECAST OF NEW FOOD SALES AND FOODSERVICE SQUARE FOOTAGE
New construction
million ft 2
Year
Foodservice
2009
2012
2017
2020
2025
2030
2035
2040
Food sales
.........................................................................................................................................................................
.........................................................................................................................................................................
.........................................................................................................................................................................
.........................................................................................................................................................................
.........................................................................................................................................................................
.........................................................................................................................................................................
.........................................................................................................................................................................
.........................................................................................................................................................................
47.715
31.455
49.076
47.617
47.522
53.630
55.536
55.814
34.070
22.149
34.496
33.447
33.416
37.836
39.107
39.243
Annual Growth Factor, 2031–2040 ..................................................................................................................
2.41%
2.27%
Source: U.S. Energy Information Administration, Annual Energy Outlook 2013.
mstockstill on DSK4VPTVN1PROD with PROPOSALS3
DOE then estimated the annual linear
footage shipped for each of the 24
primary equipment classes. The
shipments analysis relies on the 24
primary equipment classes to represent
the commercial refrigeration equipment
market. Table IV.6 shows the fraction of
the linear footage shipped by each of
these 24 equipment classes.
TABLE IV.6—PERCENT OF SHIPPED
LINEAR FEET OF COMMERCIAL REFRIGERATION EQUIPMENT—Continued
Equipment class
Percentage of
linear feet
shipped*
Comments related to shipment analysis
received during the April 2011
preliminary analysis public meeting are
listed below, along with DOE’s
responses to the comments.
a. VOP.RC.L Shipments
At the April 2011 preliminary
analysis public meeting, Southern Store
SOC.SC.M ............................
0.17 Fixtures stated that vertical open
* The percentages in this column do not freezers represent far less than the figure
TABLE IV.6—PERCENT OF SHIPPED
sum to 100 percent because shipments of of 1.9 percent of the commercial
LINEAR FEET OF COMMERCIAL RE- secondary equipment classes and certain
refrigeration equipment shipments that
other equipment classes that were not anaFRIGERATION EQUIPMENT
DOE included in the preliminary
lyzed in this rulemaking were not included.
analysis TSD. (Southern Store Fixtures,
Percentage of
The amount of new and existing
Public Meeting Transcript, No. 31 at p.
Equipment class
linear feet
commercial floor space is the main
123) In a written comment, NEEA
shipped*
driver for commercial refrigeration
referenced this statement by Southern
VOP.RC.M ............................
11.59 equipment shipments, and is
Store Fixtures, urging DOE to ensure the
VOP.RC.L .............................
0.61 appropriately one of the basic inputs
accuracy of its shipments data for the
VOP.SC.M ............................
0.82 into the shipments model. The model
VOP.RC.L equipment class, but stating
SVO.RC.M ............................
9.30 divides commercial space into two
that it generally agreed with DOE’s
SVO.SC.M ............................
1.23 components: space from new
shipments analysis. (NEEA, No. 36 at p.
HZO.RC.M ............................
1.43 construction floor space and space from
6)
HZO.RC.L .............................
4.49 existing floor space.
Shipments estimates for VOP.RC.L
DOE took the projected floor space
HZO.SC.M ............................
0.11
were not explicitly stated in the ARI
construction after the year 2009 from
HZO.SC.L .............................
0.22
2005 Report. DOE assumed that these
VCT.RC.M ............................
0.87 the NEMS projection underlying
shipments numbers were likely grouped
AEO2013.70 DOE extracted annual
VCT.RC.L .............................
12.11
with those of VOP.RC.M. For the
VCT.SC.M .............................
5.46 estimates of new floor space additions
preliminary analysis, DOE allocated a
from an AEO2013 data file (kdbout) for
VCT.SC.L ..............................
0.27
portion of VOP.RC.M shipments to the
VCT.SC.I ...............................
0.30 the period from 2009 through 2040. As
VOP.RC.L equipment class. In response
stated earlier, the last 10 years of the
VCS.SC.M ............................
22.11
to the comments from Southern Store
VCS.SC.L .............................
11.25 AEO forecast were used to develop
Fixtures and based on new evidence,
growth rates used to extend the forecast
VCS.SC.I ..............................
0.07
DOE reduced the portion of VOP.RC.M
HCT.SC.M ............................
0.07 to 2046.
shipments (obtained from the ARI 2005
Detailed description of the procedure
HCT.SC.L .............................
0.43
Report) that it allocated to the VOP.RC.L
HCT.SC.I ..............................
0.48 to calculate future shipments is
equipment class.
HCS.SC.M ............................
5.01 presented in chapter 9 of NOPR TSD.
HCS.SC.L .............................
0.65
b. Shipments by End User Type
SOC.RC.M ............................
PD.SC.M ...............................
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70 U.S. Energy Information Administration.
Annual Energy Outlook 2013. Washington, DC.
DOE/EIA–0383(2013).
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Southern Store Fixtures stated that
the shipments estimates presented in
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mstockstill on DSK4VPTVN1PROD with PROPOSALS3
the preliminary analysis for new
equipment for large supermarkets and
smaller markets did not appear to reflect
the assumption of 10- and 15-year
equipment lifetimes. Specifically,
Southern Store Fixtures pointed out that
the replacement shipment numbers
were much higher than the new
shipments in the small grocery store
segment. Southern Store Fixtures
pointed out that because the equipment
life in small grocery stores is 15 years,
compared to 10 years in large grocery
stores, the ratio of replacement
shipments to new shipments for small
grocery stores should be smaller than
the same ratio for large grocery stores.
(Southern Store Fixtures, Public
Meeting Transcript, No. 31 at p. 124)
Small grocery stores and convenience
stores house many self-contained units.
In many stores, self-contained units
comprise most of the refrigeration load,
when the refrigeration from walk-in
cold rooms is discounted (as it does not
belong in the commercial refrigeration
equipment rulemaking). In the current
rulemaking, all self-contained units are
assumed to have an average lifetime of
10 years. Therefore, the ratio of
replacement shipments to new
shipments in small grocery stores and
convenience stores is dictated largely by
the 10-year lifetime of self-contained
units, and is relatively less impacted by
the 15-year lifetime of remote
condensing display cases, which form a
much smaller share of the commercial
refrigeration equipment found in small
grocery and convenience stores. DOE
believes that this factor explains the
apparent discrepancy highlighted in the
comment by Southern Store Fixtures.
Traulsen expressed the belief that
DOE’s values for projected shipments
for the foodservice building type, as
well as its projected shipments by
equipment class, were low. (Traulsen,
No. 45 at p. 4)
DOE calculated future shipments
based on forecasted square footage of
new construction, obtained from the
AEO forecast and historical shipments
data. The ratio of floor space occupied
by commercial refrigeration equipment
to the total commercial floor space is
much smaller in foodservice buildings
than in food sales buildings such as
grocery stores. Further, DOE converted
the historical shipment numbers from
number of units into number of linear
feet by multiplying the number of units
by the average linear feet of equipment.
Commercial refrigeration equipment
used in the foodservice industry is
overwhelmingly dominated by selfcontained equipment, which, on an
average, has a shorter length compared
to the remote condensing equipment
found in grocery stores. A combination
of these factors results in the shipments
numbers (in linear feet) to foodservice
buildings being much lower than
shipments numbers to food sales
buildings. However, in terms of number
of units shipped, the proportion of
shipments to foodservice buildings is
much higher as compared to shipments
to food sales buildings.
c. Shipments Forecasts
Traulsen commented that overly
aggressive performance standards are
likely to add costs that will be passed
along to the customer, resulting in
stunted market growth and retention of
less-efficient units. Traulsen estimated
that equipment prices have increased 1–
2 percent based on variable
manufacturing cost increases alone as a
result of the need to comply with the
standards set by EPACT 2005.
(Traulsen, No. 45 at p. 6)
DOE does not have detailed
information on the historical shipments
data of various types of commercial
refrigeration equipment by equipment
classes. As described in earlier in this
section, DOE extracted shipments data
from certain publications and estimated
the shipments by equipment class. The
ARI 2005 report only contains
shipments data for the year 2005. With
the available shipments data for
commercial refrigeration equipment, its
difficult to determine the impact of
price increases on future shipments.
Regarding display cases, which are
predominantly used in supermarkets
and grocery stores, DOE believes that
replacement of display cases is largely
performed during store remodeling, and
that the major driving factor behind
remodeling is the need to improve
aesthetics. Decisions regarding store
remodeling are influenced by many
factors, including overall future
economic outlook and availability of
55935
capital, and DOE believes that
equipment price increases do not figure
as the major factor. DOE recognizes that,
on the other hand, foodservice
establishments may be more sensitive to
equipment prices. The equipment that is
predominantly used in this sector is
composed of refrigerators and freezers
with solid doors. The MSP increases
related to the higher efficiency
refrigerators and freezers were estimated
as part of the engineering analysis, and
were found to be 6 to 8 percent of the
baseline MSPs. The effect of amended
DOE standards could be that foodservice
establishments extend the life of their
existing equipment. DOE expects that
this effect will result in a slight dip in
shipments only in the early years after
amended standards go into effect
because the old equipment will have to
be replaced eventually. The effect of
such a dip will not have a significant
impact on the NIA, which is carried out
over a 30-year period. Extending the life
of the existing equipment may also
result in higher maintenance and repair
costs that may offset part or all of the
apparent customer savings.
DOE welcomes stakeholder input in
this regard, as the information currently
available to DOE is not sufficient to
determine the impact of price increases
on future shipments of commercial
refrigeration equipment.
2. Forecasted Efficiency in the Base Case
and Standards Cases
The method for estimating the market
share distribution of efficiency levels is
presented in section IV.H.9, and a
detailed description can be found in
chapter 11 of the NOPR TSD. To
estimate efficiency trends in the
standards cases, DOE uses a ‘‘roll-up’’
scenario in its standards rulemakings.
Under the roll-up scenario, DOE
assumes that equipment efficiencies in
the base case that do not meet the
standard level under consideration
would ‘‘roll up’’ to meet the new
standard level, and equipment
efficiencies above the standard level
under consideration would be
unaffected. Table IV.7 shows the
shipment-weighted market shares by
efficiency level in the base-case
scenario.
TABLE IV.7—SHIPMENT-WEIGHTED MARKET SHARES BY EFFICIENCY LEVEL, BASE CASE
Shipment-weighted market shares by efficiency level * **
Equipment class
Level 1
(percent)
VOP.RC.M .......................
VOP.RC.L ........................
VOP.SC.M ........................
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(percent)
24.3
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(percent)
24.0
26.1
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23.2
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(percent)
Level 5
(percent)
13.4
22.4
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2.2
11.3
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Level 6
(percent)
2.0
NA
10.7
11SEP3
Level 7
(percent)
NA
NA
3.1
Level 8
(percent)
NA
NA
NA
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TABLE IV.7—SHIPMENT-WEIGHTED MARKET SHARES BY EFFICIENCY LEVEL, BASE CASE—Continued
Shipment-weighted market shares by efficiency level * **
Equipment class
Level 1
(percent)
VCT.RC.M ........................
VCT.RC.L .........................
VCT.SC.M ........................
VCT.SC.L .........................
VCT.SC.I ..........................
VCS.SC.M ........................
VCS.SC.L .........................
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.M ........................
HCT.SC.L .........................
HCT.SC.I ..........................
HCS.SC.M ........................
HCS.SC.L .........................
PD.SC.M ..........................
SOC.SC.M .......................
Level 2
(percent)
18.8
19.5
16.7
10.5
16.4
13.1
12.1
16.7
24.5
19.5
17.7
78.4
86.2
25.4
71.8
14.8
12.3
25.6
17.2
17.2
14.0
14.7
Level 3
(percent)
18.8
20.4
17.4
13.3
18.1
14.9
15.1
16.8
24.5
19.5
17.8
21.6
13.8
25.4
28.2
15.4
13.3
25.8
17.5
17.5
17.2
15.1
15.9
20.0
15.5
16.4
17.8
15.0
15.3
17.4
22.2
18.5
17.8
NA
NA
25.0
NA
15.6
13.6
25.1
17.2
17.2
16.1
15.1
Level 4
(percent)
Level 5
(percent)
15.5
19.4
13.0
16.2
15.9
15.0
15.4
17.0
13.2
18.0
14.5
NA
NA
21.9
NA
15.7
15.8
22.3
16.8
16.8
15.8
15.0
14.8
19.0
12.6
14.4
15.5
14.6
14.3
16.0
12.6
10.8
14.1
NA
NA
2.4
NA
13.4
15.6
1.1
15.9
16.6
15.3
12.5
Level 6
(percent)
14.5
1.8
11.7
14.2
14.8
14.0
13.9
15.4
3.0
10.1
12.7
NA
NA
NA
NA
12.8
15.0
NA
13.3
14.5
11.0
12.1
Level 7
(percent)
Level 8
(percent)
1.7
NA
11.5
13.1
1.5
12.6
13.3
0.7
NA
3.7
5.4
NA
NA
NA
NA
11.0
13.2
NA
2.1
1.5
9.7
11.0
NA
NA
1.7
2.0
NA
0.8
0.6
NA
NA
NA
NA
NA
NA
NA
NA
1.4
1.2
NA
NA
NA
1.0
4.6
* ‘‘NA’’ means that no market share was calculated for this efficiency level. For example, the VOP.RC.M equipment class only had six possible
efficiency levels, so no market share was allotted to Efficiency Levels 7 and 8.
** Shares may not add to 100 percent exactly due to rounding.
mstockstill on DSK4VPTVN1PROD with PROPOSALS3
3. National Energy Savings
For each year in the forecast period,
DOE calculates the NES for each
potential standard level by multiplying
the stock of equipment affected by the
energy conservation standards by the
estimated per-unit annual energy
savings. DOE typically considers the
impact of a rebound effect, introduced
in the energy use analysis, in its
calculation of NES for a given product.
A rebound effect occurs when users
operate higher efficiency equipment
more frequently and/or for longer
durations, thus offsetting estimated
energy savings. However, DOE used a
rebound factor of 1, or no effect, for
commercial refrigeration equipment
because it is operates 24 hours a day,
and therefore there is no potential for a
rebound effect.
Major inputs to the calculation of NES
are annual unit energy consumption,
shipments, equipment stock, a site-tosource conversion factor, and a full fuel
cycle factor.
The annual unit energy consumption
is the site energy consumed by a
commercial refrigeration unit in a given
year. Because the equipment classes
analyzed represent equipment sold
across a range of sizes, DOE’s ‘‘unit’’ in
the NES is actually expressed as a linear
foot of equipment in an equipment
class, and not an individual unit of
commercial refrigeration equipment of a
specific size. DOE determined annual
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forecasted shipment-weighted average
equipment efficiencies that, in turn,
enabled determination of shipmentweighted annual energy consumption
values.
The commercial refrigeration
equipment stock in a given year is the
total linear footage of commercial
refrigeration equipment shipped from
earlier years (up to 15 years, depending
on the type of equipment) that is in use
in that year. The NES spreadsheet
model keeps track of the total linear
footage of commercial refrigeration units
shipped each year. For purposes of the
NES and NPV analyses conducted for
the NOPR, DOE assumed that, based on
15-year and 10-year average equipment
lifetimes, approximately 6.67 and 10
percent, respectively, of the existing
commercial refrigeration units are
retired in each year. DOE assumes that,
for units shipped in 2046, any units
remaining at the end of 2060 will be
replaced.
DOE has historically presented NES
in terms of primary energy savings. In
response to the recommendations of a
committee on ‘‘Point-of-Use and FullFuel-Cycle Measurement Approaches to
Energy Efficiency Standards’’ appointed
by the National Academy of Science,
DOE announced its intention to use fullfuel-cycle (FFC) measures of energy use
and greenhouse gas and other emissions
in the national impact analyses and
emissions analyses included in future
PO 00000
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energy conservation standards
rulemakings. 76 FR 51281 (August 18,
2011) While DOE stated in that notice
that it intended to use the Greenhouse
Gases, Regulated Emissions, and Energy
Use in Transportation (GREET) model to
conduct the analysis, it also said it
would review alternative methods,
including the use of NEMS. After
evaluating both models and the
approaches discussed in the August 18,
2011 notice, DOE published a statement
of amended policy in the Federal
Register in which DOE explained its
determination that NEMS is a more
appropriate tool for its FFC analysis and
its intention to use NEMS for that
purpose. 77 FR 49701 (August 17, 2012).
DOE received one comment, which was
supportive of the use of NEMS for
DOE’s FFC analysis.71
The approach used for today’s NOPR,
and the FFC multipliers that were
applied, are described in appendix 10D
of the NOPR TSD. NES results are
presented in both primary and FFC
savings in section V.B.3.a.
4. Net Present Value of Customer
Benefit
The inputs for determining the NPV
of the total costs and benefits
experienced by customers of the
commercial refrigeration equipment are:
(1) total annual installed cost; (2) total
71 Docket ID: EERE–2010–BT–NOA–0028,
comment by Kirk Lundblade.
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annual savings in operating costs; and
(3) a discount factor. DOE calculated net
national customer savings for each year
as the difference between the base-case
scenario and standards-case scenarios in
terms of installation and operating costs.
DOE calculated operating cost savings
over the life of each piece of equipment
shipped in the forecast period.
DOE multiplied monetary values in
future years by the discount factor to
determine the present value of costs and
savings. DOE estimated national
impacts using both a 3-percent and a 7percent real discount rate as the average
real rate of return on private investment
in the U.S. economy. These discount
rates are used in accordance with the
Office of Management and Budget
(OMB) guidance to Federal agencies on
the development of regulatory analysis
(OMB Circular A–4, September 17,
2003), and section E, ‘‘Identifying and
Measuring Benefits and Costs,’’ therein.
DOE defined the present year as 2013
for the NOPR analysis. The 7-percent
real value is an estimate of the average
before-tax rate of return to private
capital in the U.S. economy. The 3percent real value represents the
‘‘societal rate of time preference,’’ which
is the rate at which society discounts
future consumption flows to their
present.
amended standards for refrigeration
products.
For this rulemaking, DOE used
NEMS–BT to assess the impacts of the
reduced need for new electric power
plants and infrastructure projected to
result from amended standards. In
NEMS–BT, changes in power generation
infrastructure affect utility revenue
requirements, which in turn affect
electricity prices. DOE estimated the
impact on electricity prices associated
with each considered TSL. Although the
aggregate benefits for electricity users
are potentially large, there may be
negative effects on some involved in
electricity supply, particularly power
plant providers and fuel suppliers. DOE
has concluded that, at present, it should
not give significant weighting to this
factor (aggregate benefit to customers
due to reductions in electricity prices)
in its consideration of the justification
of the amended standards because there
is uncertainty about the extent to which
the benefits to electricity users from
reduced electricity prices would
represent a transfer from those involved
in electricity supply to electricity
customers. DOE is continuing to
investigate the extent to which
electricity price changes projected to
result from amended standards
represent a net gain to society.
J. Customer Subgroup Analysis
5. Benefits From Effects of Amended
Standards on Energy Prices
The reduction in electricity
consumption associated with amended
standards for commercial refrigeration
equipment could reduce the electricity
prices charged to customers in all
sectors of the economy, and thereby
reduce electricity expenditures. In
chapter 2 of the preliminary analysis
TSD, DOE explained that, because the
power industry is a complex mix of fuel
and equipment suppliers, electricity
producers, and distributors, it did not
plan to estimate the value of potentially
reduced electricity costs for all
customers associated with new or
In analyzing the potential impact of
new or amended standards on
commercial customers, DOE evaluates
the impact on identifiable groups (i.e.,
subgroups) of customers, such as
different types of businesses that may be
disproportionately affected. Based on
data from the 2007 U.S. Economic
Census and size standards set by the
U.S. Small Business Administration
(SBA), DOE determined that a majority
of convenience stores and restaurants
fall under the definition of small
businesses (see chapter 11 of NOPR TSD
for details). Small businesses typically
face higher cost of capital. In general,
the lower the cost of electricity and
55937
higher the cost of capital, the more
likely it is that an entity would be
disadvantaged by the requirement to
purchase higher efficiency equipment.
Table IV.8 and Table IV.9 present
average commercial electricity prices by
business type and discount rates by
building types, respectively.
Comparing the small grocery and
convenience store category to the
convenience store with gas station
category, both face the same cost of
capital, but convenience stores with gas
stations generally incur lower electricity
prices. Therefore, convenience stores
with gas stations were chosen for LCC
subgroup analysis in the food-retail
segment.
In the foodservice segment, limited
service restaurants and full-service
restaurants have similar electricity price
and discount rates, with limited service
restaurants paying slightly lower
electricity rates and full-service
restaurants facing a slightly higher cost
of capital. DOE chose to study fullservice restaurants for the LCC subgroup
analysis in the foodservice segment
because a higher percentage of fullservice restaurants tend to be operated
by independent small business
concerns, as compared to a majority of
fast-food restaurants which are owned
by or affiliated with national restaurant
chains.
DOE estimated the impact on the
identified customer subgroups using the
LCC spreadsheet model. The standard
LCC analysis (described in section IV.H)
includes various types of businesses
that use commercial refrigeration
equipment. For the LCC subgroup
analysis, it was assumed that the
subgroups analyzed do not have access
to national commercial refrigeration
equipment purchasing accounts and,
consequently, face a higher distribution
channel markup. Further, electricity
rates and discount rates differ among
these subgroups. Details of the data used
for LCC subgroup analysis and results
are presented in chapter 11 of the NOPR
TSD.
TABLE IV.8—DERIVED AVERAGE COMMERCIAL ELECTRICITY PRICE BY BUSINESS TYPE
Electricity price cents/
kWh
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Business type
Grocery store/food market .......................................................................................................
Convenience store * .................................................................................................................
Convenience store with gas station ........................................................................................
Multi-line retail ** ......................................................................................................................
Limited service restaurant .......................................................................................................
Full service restaurant .............................................................................................................
Other foodservice ....................................................................................................................
All commercial buildings ..........................................................................................................
0.07222
0.08583
0.07722
0.07262
0.07962
0.08467
0.07664
0.07936
Source: Commercial Buildings Energy Consumption Survey 2003.
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Ratio of electricity price
to average price for all
commercial buildings
0.910
1.082
0.973
0.915
1.003
1.067
0.966
1.000
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This group is assumed to include convenience stores without gas stations, specialty stores (such as meat markets), and beer, wine, and liquor
stores.
** This group is assumed to include mainly large multi-line retailers and supercenters that sell both grocery and non-grocery items.
TABLE IV.9—DERIVATION OF REAL DISCOUNT RATES BY BUILDING TYPE
Major chain
Building type description
WACC *
(percent)
Large Grocery ..................
Small Grocery & Convenience .............................
Gas Station With Convenience Store ...................
Multi-Line Retail ...............
Restaurant—Limited Service .................................
Restaurant—Full Service
Restaurant—Other
Foodservice ..................
Local or non-chain
Percent of
stock
Small frm
premium **
(percent)
Governmental
Percent of
stock
Muni bond
rate
(percent)
Percent of
stock
Discount
rate
(percent)
No. Obs.†
4.16
100
0.0
0
0
0
4.16
18
4.20
50
1.9
50
0
0
5.19
5
4.20
4.33
50
100
1.9
0.0
50
0
0
0
0
0
5.19
4.33
NA
6
5.29
5.61
50
50
1.9
1.9
50
50
0
0
0
0
6.29
6.62
21
24
5.61
25
1.9
25
2.34
50
4.48
NA
Source: Pacific Northwest National Laboratory (PNNL) Weighted Average Cost of Capital (WACC) calculations applied to firms sampled from
the Damodaran Online web site (https://pages.stern.nyu.edu/∼adamodar/New_Home_Page/papers.html). Assumptions for weighting factors for
convenience and foodservice reflect lack of reliable data sources. The estimate of inflation used to translate nominal rates to real rates is based
on a 40-year (1971–2010) average gross domestic product deflator (3.832 percent).
* WACC stands for weighted-average cost of capital. See chapter 8 of the NOPR TSD for additional details.
** Small Firm Premium refers to higher premium paid by smaller firms that face higher risks of loss of invested capital. Source: Small Business
Administration data on loans between $10,000 and $99,000 compared to AAA Corporate Rates. https://www.sba.gov/advocacy/7540/6282. Data
compiled 6/20/2013.
† ‘‘NA’’ means no Damodaran observations available.
K. Manufacturer Impact Analysis
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1. Overview
DOE performed an MIA to estimate
the financial impact of amended energy
conservation standards on
manufacturers of commercial
refrigeration equipment and to calculate
the impact of such standards on
employment and manufacturing
capacity. The MIA has both quantitative
and qualitative aspects. The quantitative
part of the MIA primarily relies on the
Government Regulatory Impact Model
(GRIM), an industry cash-flow model
with inputs specific to this rulemaking.
The key GRIM inputs are data on the
industry cost structure, product costs,
shipments, and assumptions about
markups and conversion expenditures.
The key output is the INPV. Different
sets of markup scenarios will produce
different results. The qualitative part of
the MIA addresses factors such as
equipment characteristics, impacts on
particular subgroups of manufacturers,
and important market and product
trends. The complete MIA is outlined in
chapter 12 of the NOPR TSD.
DOE conducted the MIA for this
rulemaking in three phases. In Phase 1
of the MIA, DOE prepared a profile of
the commercial refrigeration equipment
industry that includes a top-down cost
analysis of manufacturers used to derive
preliminary financial inputs for the
GRIM (e.g., sales general and
administration (SG&A) expenses;
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research and development (R&D)
expenses; and tax rates). DOE used
public sources of information, including
company SEC 10–K filings, corporate
annual reports, the U.S. Census
Bureau’s Economic Census, and
Hoover’s reports.
In Phase 2 of the MIA, DOE prepared
an industry cash-flow analysis to
quantify the impacts of an amended
energy conservation standard. In
general, more-stringent energy
conservation standards can affect
manufacturer cash flow in three distinct
ways: (1) by creating a need for
increased investment; (2) by raising
production costs per unit; and (3) by
altering revenue due to higher per-unit
prices and possible changes in sales
volumes.
In Phase 3 of the MIA, DOE
conducted structured, detailed
interviews with a representative crosssection of manufacturers. During these
interviews, DOE discussed engineering,
manufacturing, procurement, and
financial topics to validate assumptions
used in the GRIM and to identify key
issues or concerns. See section IV.K.4
for a description of the key issues
manufacturers raised during the
interviews.
Additionally, in Phase 3, DOE
evaluated subgroups of manufacturers
that may be disproportionately
impacted by amended standards, or that
may not be accurately represented by
the average cost assumptions used to
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develop the industry cash-flow analysis.
For example, small manufacturers,
niche players, or manufacturers
exhibiting a cost structure that largely
differs from the industry average could
be more negatively affected.
DOE identified one subgroup, small
manufacturers, for separate impact
analyses. DOE applied the small
business size standards published by
the SBA to determine whether a
company is considered a small business.
65 FR 30836, 30848 (May 15, 2000), as
amended at 65 FR 53533, 53544 (Sept.
5, 2000) and codified at 13 CFR part
121. To be categorized as a small
business under North American
Industry Classification System (NAICS)
333415, ‘‘Air-Conditioning and Warm
Air Heating Equipment and Commercial
and Industrial Refrigeration Equipment
Manufacturing,’’ a commercial
refrigeration manufacturer and its
affiliates may employ a maximum of
750 employees. The 750-employee
threshold includes all employees in a
business’s parent company and any
other subsidiaries. Based on this
classification, DOE identified at least 32
commercial refrigeration equipment
manufacturers that qualify as small
businesses. The commercial
refrigeration equipment small
manufacturer subgroup is discussed in
chapter 12 of the NOPR TSD and in
section VI.B.1 of this notice.
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2. Government Regulatory Impact Model
DOE uses the GRIM to quantify the
changes in the commercial refrigeration
equipment industry cash flow due to
amended standards that result in a
higher or lower industry value. The
GRIM analysis uses a standard, annual
cash-flow analysis that incorporates
manufacturer costs, markups,
shipments, and industry financial
information as inputs, and models
changes in costs, investments, and
manufacturer margins that would result
from new and amended energy
conservation standards. The GRIM
spreadsheet uses the inputs to arrive at
a series of annual cash flows, beginning
with the base year of the analysis, 2013
in this case, and continuing to 2046.
DOE calculated INPVs by summing the
stream of annual discounted cash flows
during this period. For commercial
refrigeration equipment manufacturers,
DOE used a real discount rate of 10
percent. DOE’s discount rate estimate
was derived from industry financials
and then modified according to
feedback during manufacturer
interviews.
The GRIM calculates cash flows using
standard accounting principles and
compares changes in INPV between a
base case and various TSLs (the
standards cases). The difference in INPV
between the base case and a standards
case represents the financial impact of
the amended standard on
manufacturers. As discussed previously,
DOE collected the information on the
critical GRIM inputs from a number of
sources, including publicly available
data and interviews with a number of
manufacturers (described in the next
section). The GRIM results are shown in
section V.B.2.a. Additional details about
the GRIM can be found in chapter 12 of
the NOPR TSD.
mstockstill on DSK4VPTVN1PROD with PROPOSALS3
a. Government Regulatory Impact Model
Key Inputs
Manufacturer Production Costs
Manufacturing a higher efficiency
product is typically more expensive
than manufacturing a baseline product
due to the use of more complex
components, which are more costly than
baseline components. The changes in
the MPCs of the analyzed products can
affect the revenues, gross margins, and
cash flow of the industry, making these
product cost data key GRIM inputs for
DOE’s analysis.
In the MIA, DOE used the MPCs for
each considered efficiency level
calculated in the engineering analysis,
as described in section IV.C and further
detailed in chapter 5 of the NOPR TSD.
In addition, DOE used information from
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its teardown analysis, described in
section IV.E.4.a, to disaggregate the
MPCs into material, labor, and overhead
costs. To calculate the MPCs for
equipment above the baseline, DOE
added incremental material, labor,
overhead costs from the engineering
cost-efficiency curves to the baseline
MPCs. These cost breakdowns and
equipment markups were validated with
manufacturers during manufacturer
interviews.
Base-Case Shipments Forecast
The GRIM estimates manufacturer
revenues based on total unit shipment
forecasts and the distribution of these
values by efficiency level. Changes in
sales volumes and efficiency mix over
time can significantly affect
manufacturer finances. For this analysis,
the GRIM uses the NIA’s annual
shipment forecasts derived from the
shipments analysis from 2013, the base
year, to 2046, the end of the analysis
period. See chapter 9 of the NOPR TSD
for additional details.
Product and Capital Conversion Costs
Amended energy conservation
standards will cause manufacturers to
incur conversion costs to bring their
production facilities and product
designs into compliance. For the MIA,
DOE classified these conversion costs
into two major groups: (1) Product
conversion costs and (2) capital
conversion costs. Product conversion
costs are investments in research,
development, testing, marketing, and
other non-capitalized costs necessary to
make product designs comply with a
new or amended energy conservation
standard. Capital conversion costs are
investments in property, plant, and
equipment necessary to adapt or change
existing production facilities such that
new product designs can be fabricated
and assembled.
To evaluate the level of capital
conversion expenditures manufacturers
would likely incur to comply with
amended energy conservation
standards, DOE used manufacturer
interviews to gather data on the level of
capital investment required at each
efficiency level. DOE validated
manufacturer comments through
estimates of capital expenditure
requirements derived from the product
teardown analysis and engineering
model described in section IV.E.4.
DOE assessed the equipment
conversion costs at each level by
integrating data from quantitative and
qualitative sources. DOE considered
feedback regarding the potential costs of
each efficiency level from multiple
manufacturers to determine conversion
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55939
costs such as R&D expenditures and
certification costs. Manufacturer data
were aggregated to better reflect the
industry as a whole and to protect
confidential information.
In general, DOE assumes that all
conversion-related investments occur
between the year of publication of the
final rule and the year by which
manufacturers must comply with an
amended standard. The investment
figures used in the GRIM can be found
in section V.B.2.a of this notice. For
additional information on the estimated
product conversion and capital
conversion costs, see chapter 12 of the
NOPR TSD.
b. Government Regulatory Impact Model
Scenarios
Markup Scenarios
As discussed above, MSPs include
direct manufacturing production costs
(i.e., labor, material, and overhead
estimated in DOE’s MPCs) and all nonproduction costs (i.e., SG&A, R&D, and
interest), along with profit. To calculate
the MSPs in the GRIM, DOE applied
markups to the MPCs estimated in the
engineering analysis and then added in
the cost of shipping. Modifying these
markups in the standards case yields
different sets of impacts on
manufacturers. For the MIA, DOE
modeled two standards-case markup
scenarios to represent the uncertainty
regarding the potential impacts on
prices and profitability for
manufacturers following the
implementation of amended energy
conservation standards: (1) A
preservation of gross margin percentage
markup scenario; and (2) a preservation
of operating profit markup scenario.
These scenarios lead to different
markups values that, when applied to
the inputted MPCs, result in varying
revenue and cash flow impacts.
Under the preservation of gross
margin percentage scenario, DOE
applied a single uniform ‘‘gross margin
percentage’’ markup across all efficiency
levels. As production costs increase
with efficiency, this scenario implies
that the absolute dollar markup will
increase as well. Based on publicly
available financial information for
manufacturers of commercial
refrigeration equipment and comments
from manufacturer interviews, DOE
assumed the non-production cost
markup—which includes SG&A
expenses, R&D expenses, interest, and
profit—to be 1.42. Because this markup
scenario assumes that manufacturers
would be able to maintain their gross
margin percentage markups as
production costs increase in response to
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Federal Register / Vol. 78, No. 176 / Wednesday, September 11, 2013 / Proposed Rules
an amended energy conservation
standard, the scenario represents a high
bound to industry profitability under an
amended energy conservation standard.
In the preservation of operating profit
scenario, manufacturer markups are set
so that operating profit 1 year after the
compliance date of the amended energy
conservation standard is the same as in
the base case. Under this scenario, as
the cost of production and the cost of
sales go up, manufacturers are generally
required to reduce their markups to a
level that maintains base-case operating
profit. The implicit assumption behind
this markup scenario is that the industry
can only maintain its operating profit in
absolute dollars after compliance with
the amended standard is required.
Therefore, operating margin in
percentage terms is squeezed (reduced)
between the base case and standards
case. DOE adjusted the manufacturer
markups in the GRIM at each TSL to
yield approximately the same earnings
before interest and taxes in the
standards case in the year after the
compliance date of the amended
standards as in the base case. This
markup scenario represents a low bound
to industry profitability under an
amended energy conservation standard.
mstockstill on DSK4VPTVN1PROD with PROPOSALS3
3. Discussion of Comments
During the April 2011 preliminary
analysis public meeting, interested
parties commented on the assumptions
and results of the preliminary analysis
TSD. Oral and written comments
addressed several topics, including
testing and certification, cumulative
regulatory burden, small manufacturers,
and manufacturer markups.
a. Testing and Certification
At the public meeting and in written
comments, several stakeholders
expressed concern to DOE regarding the
potential burden of testing.
Traulsen stated that certification,
compliance, and enforcement (CC&E) is
its most significant cost item in terms of
internal resources in the form of time
and direct expenses. Traulsen further
explained that, with respect to the
manufacturer impacts, the three most
important topics are CC&E, testing
burden, and compliance with other
(unspecified) certifications. (Traulsen,
No. 45 at pp. 4–5) NEEA expressed the
opinion that the most significant issue
associated with manufacturer impacts is
testing and compliance for a wide array
of equipment offerings, especially given
the large number of variations on single
models. AHRI also stated that the CC&E
requirements put in place by DOE have
the potential to bankrupt the industry
due to the excessive number of tests
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required. (AHRI, No. 43 at p. 3) True
added that it believed there are
economies of scale in testing
commercial refrigeration equipment
units. (True, Public Meeting Transcript,
No. 31 at p. 151) True also stated that
the testing and regulatory burden,
including tooling, fixturing, and setup
costs imposed on small production runs
is an issue for large manufacturers as
well as small manufacturers. (True,
Public Meeting Transcript, No. 31 at pp.
206, 210) NEEA expressed agreement
with manufacturers that testing each
variation would create a significant
potential burden, especially on small
manufacturers. (NEEA, No. 36 at p. 7) In
addition, Southern Store Fixtures stated
that it would be difficult to produce
information to estimate the compliance
testing burden on manufacturers, as the
certification and compliance
requirements had not yet been finalized.
(Southern Store Fixtures, Public
Meeting Transcript, No. 31 at pp. 149–
50) Southern Store Fixtures added that
it is impossible to determine potential
impacts of testing and certification on
manufacturers until the definition of a
basic model is clarified. (Southern Store
Fixtures, No. 38 at p. 1)
DOE recognizes industry concerns
regarding CC&E testing requirements.
Although CC&E costs are not directly
analyzed in the GRIM because they do
not vary with different standard levels,
the CC&E burden is identified as a key
issue and as a cumulative regulatory
burden in the MIA. DOE intends to
address these manufacturer concerns in
ongoing CC&E rulemakings. Moreover,
DOE is currently considering alternative
efficiency determination methods
(AEDMs) for commercial refrigeration
equipment and issued a notice of
proposed rulemaking on Alternative
Efficiency Determination Methods and
Alternative Rating Methods in May
2012. 77 FR 32038 (May 31, 2012).
AEDMs are computer modeling tools
used to establish a model’s efficiency
rating in lieu of testing. More
information about the AEDM
rulemaking can be found at:
www1.eere.energy.gov/buildings/
appliance_standards/certification_
enforcement.html.
While the GRIM does not account for
DOE certification costs, it does account
for industry certification (i.e.,
Underwriters Laboratories (UL) and NSF
testing) and research and development
costs in its analysis of product
conversion costs, which are associated
with a change in standards. The change
in INPV, the primary output of the
GRIM, reflects the possible increase in
industry certification costs and is
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considered by DOE when proposing a
standard.
b. Cumulative Regulatory Burden
Numerous stakeholders commented
on the cumulative regulatory burden
tied to DOE efficiency standards. Some
stakeholders expressed concern
regarding potential conflicts with other
certification programs. Traulsen stated
that the redundancy of testing required
by other Federal programs (such as EPA
ENERGY STAR®),72 potentially involves
conflicting criteria, increases cost, and
that cross-references to databases with
inconsistent tests, classes, and
enforcement requirements adds further
complications. Traulsen estimated that
the financial burden associated with
meeting both DOE and EPA ENERGY
STAR requirements has been greater
than 0.5 percent of revenue, and that it
would be beneficial to reconcile the
differences between DOE and EPA
standards. (Traulsen, No. 45 at pp. 5–6)
NEEA stated that the burden of
certifications and associated testing is
inherent in the manufacturing industry,
and that this burden should have little
to do with the current standards
rulemaking. However, NEEA added, any
steps that can be taken to harmonize test
methods and procedures between
certifications should be taken. (NEEA,
No. 36 at p. 7)
DOE realizes that the cumulative
effect of multiple regulations on an
industry may significantly increase the
burden faced by manufacturers that
need to comply with regulations and
certification programs from different
organizations and levels of government.
However, DOE notes that certain
standards, such as ENERGY STAR, are
optional for manufacturers.
AHRI stated that there are several
legislative and regulatory activities that
could significantly burden
manufacturers of commercial
refrigeration equipment, including the
DOE CC&E program and the upcoming
amended energy conservation standards
for walk-in coolers and freezers. AHRI
also added that climate change bills
could have a significant negative impact
on the availability and price of HFC
refrigerants. (AHRI, No. 43 at p. 4)
DOE estimates the present value of
the total benefits over the analysis
period (2010–2040) of the EPACT 2005
standards for CRE to be $2.3 billion and
the costs to be $0.32 billion, in 2012
dollars and using a discount rate of 7
percent. DOE estimates the present
72 ENERGY STAR is a joint program of EPA and
DOE that helps the Nation save money and protect
the environment through energy efficient products
and practices. More information can be found at:
www.energystar.gov.
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value of total benefits over the analysis
period (2012–2042) of the DOE 2009
standards for CRE to be $3.97 billion
and the costs to be $1.52 billion, in 2012
dollars and using a 7 percent discount
rate. Additionally, in the energy
conservation standard NOPR for walk-in
coolers and freezers, DOE estimates the
net present value of the total benefits
over the analysis period (2017–2046) to
be $21.6 billion and the costs to be $3.7
billion, in 2012% and using a discount
rate of 7 percent.
DOE takes into account the
cumulative cost of multiple Federal
regulations on manufacturers, including
CC&E, in the cumulative regulatory
burden (CRB) section of its analysis. The
CRB can be found in section V.B.2.e of
this document. The CRB review also
recognizes the additional burden faced
by manufacturers that produce both
commercial refrigeration equipment and
walk-in coolers and freezers.
AHRI also stated that California is
currently working on new regulations as
part of Title 24 that will likely establish
new prescriptive requirements on
commercial refrigeration equipment
beginning in 2013. AHRI added that
other States on the West Coast are
following California’s lead and are
likely to implement similar regulations
in the near future. AHRI suggested that
DOE account for these developments in
its analysis. (AHRI, No. 43 at p. 4)
Finally, AHRI commented that several
States have enacted their own climate
change legislation, including regulations
established by the California Air
Resources Board (CARB) to limit GHGs
and reduce the usage of high GWP
refrigerants such as HFCs. AHRI stated
that CARB will implement these
regulations in 2011. (AHRI, No. 43 at p.
4)
According to the California Code of
Regulations, title 24, part 6, any
appliance for which there is a California
standard established may be installed
only if the manufacturer has certified to
the CEC, as specified in those
regulations, that the appliance complies
with the applicable standard for that
appliance. California’s appliance
efficiency regulations require that the
MDEC (in kilowatt-hours) for
commercial refrigerators manufactured
on or after January 1, 2010 does not
exceed the following:
• Refrigerators with solid doors:
0.10V + 2.04
• Refrigerators with transparent
doors: 0.12V + 3.34
• Freezers with solid doors: 0.40V +
1.38
• Freezers with transparent doors:
0.75V + 4.10
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• Refrigerator/freezers with solid
doors: the greater of 0.27AV–0.71 or
0.70
• Refrigerators with self-condensing
unit designed for pull-down
temperature applications: 0.126V + 3.51
Since these standards are identical to
the ones prescribed in EPACT 2005 and
the efficiency levels set by the current
rulemaking will either exceed or be
equivalent to the EPACT 2005 levels,
DOE does not expect the Title 24
regulations to create a cumulative
regulatory burden on manufacturers.
California also has started a rulemaking
proceeding to adopt changes to the
building energy efficiency standards
contained in the California Code of
Regulations, title 24, part 6, but the CEC
is currently in the pre-rulemaking stage
and any new standards will not be
published until 2013. DOE has not
evaluated the impacts of the 2013 rule
because any analysis would be
speculative in the absence of final
regulations.
CARB is currently limiting the inState use of high-GWP refrigerants in
non-residential refrigeration systems
through its Refrigerant Management
Program, effective January 1, 2011.73
According to this new regulation,
facilities with refrigeration systems that
have a refrigerant capacity exceeding 50
pounds must repair leaks within 14
days of detection, maintain on-site
records of all leak repairs, and keep
receipts of all refrigerant purchases. The
regulation applies to any person or
company that installs, services, or
disposes of appliances with high-GWP
refrigerants. Refrigeration systems with
a refrigerant capacity exceeding 50
pounds typically belong to food retail
operations with remote condensing
racks that store refrigerant serving
multiple commercial refrigeration
equipment units within a business.
However, commercial refrigeration
equipment units in food retail
establishments are usually installed and
serviced by refrigeration contractors, not
manufacturers. As a result, although
these CARB regulations apply to
refrigeration technicians and owners of
facilities with refrigeration systems,
they are unlikely to represent a
regulatory burden for commercial
refrigeration manufacturers.
The cumulative regulatory burden on
manufacturers of commercial
refrigeration equipment is discussed in
further detail in chapter 12 of the NOPR
TSD.
73 California Air Resources Board. Refrigerant
Management Program Final Regulation. 2011. (Last
accessed March 16, 2012.) www.arb.ca.gov/cc/
reftrack/reftrackrule.html.
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c. Small Manufacturers
During the April 2011 preliminary
analysis public meeting, Southern Store
Fixtures stated that the impact of
research, development, and testing is
greater on smaller manufacturers
because, while they may have the same
number of models in their product lines
as do larger manufacturers, they
produce fewer units of each model.
(Southern Store Fixtures, Public
Meeting Transcript, No. 31 at p. 150)
Similarly, Zero Zone stated that
amended standards have large impacts
on small companies. For example, Zero
Zone uses foamed-in-place urethane
panels. If it were to become necessary to
use thicker foam, Zero Zone stated, the
company could face capital conversion
expenditures of roughly $250,000. (Zero
Zone, Public Meeting Transcript, No. 31
at p. 199)
DOE agrees that amended standards
may have disproportionate impacts on
smaller manufacturers. As a result, the
DOE conducts a small business analysis
to assess those impacts, the results of
which are set forth in section VI.B of
this notice.
Stakeholders also commented on
DOE’s classification of small
manufacturers. NEEA suggested that
DOE review its characterizations of
small and large manufacturers, as it
believed there to be disparities between
the listed company sizes and market
shares in DOE’s classifications. (NEEA,
Public Meeting Transcript, No. 31 at p.
160) Emerson stated that manufacturers’
sizes should be characterized by their
operations in the market. According to
Emerson, some manufacturers are part
of larger companies, but the fact that
they are owned by larger companies
does not change the potential for
impacts on their employment levels or
risk of going out of business. (Emerson,
Public Meeting Transcript, No. 31 at p.
207)
DOE requested feedback regarding the
accuracy of its list of small businesses
during its interviews with
manufacturers. Since the publication of
the preliminary analysis TSD, DOE has
revised the list based on responses
received from manufacturers.
Furthermore, DOE understands that
manufacturers that are owned by large
parent companies may not be protected
from the potential impacts of amended
standards. However, in its analysis of
small businesses, DOE also takes into
account that manufacturers that belong
to large parent companies are more
likely to have better access to capital
and engineering resources than
manufacturers that have no parent
company or have parent companies
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with a total size of less than 750
employees.
A detailed discussion of the impact of
the proposed standards on small
manufacturers can be found in chapter
12 of the NOPR TSD.
d. Manufacturer Markup
Southern Store Fixtures expressed
concern that research and development
was considered part of the manufacturer
markup. The company also asked
whether sales, marketing, and
engineering costs were included in this
markup as well, and suggested that all
of these expenses should be considered
indirect costs instead. (Southern Store
Fixtures, Public Meeting Transcript, No.
31 at pp. 71–72)
DOE incorporates all non-production
costs, including sales, marketing, and
R&D, in its manufacturer markup.
Although manufacturers’ accounting
practices may vary, DOE uses this
standard model to approximate the cost
structure of the commercial refrigeration
industry as a whole. A detailed
explanation of the manufacturer markup
can be found in section V.B.2 of this
notice and in chapter 5 of the NOPR
TSD.
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4. Manufacturer Interviews
DOE interviewed manufacturers
representing over 90 percent of food
retail sales and over 60 percent of
foodservice sales. These interviews were
in addition to those DOE conducted as
part of the engineering analysis. The
information gathered during these
interviews enabled DOE to tailor the
GRIM to reflect the unique financial
characteristics of the commercial
refrigeration industry. All interviews
provided information that DOE used to
evaluate the impacts of potential
amended energy conservation standards
on manufacturer cash flows,
manufacturing capacities, and
employment levels.
During the manufacturer interviews,
DOE asked manufacturers to describe
their major concerns about this
rulemaking. The following sections
describe the most significant issues
identified by manufacturers. DOE has
also included additional concerns in
chapter 12 of the NOPR TSD.
a. Enforcement
Interviewed manufacturers expressed
concern about the enforcement of an
amended energy efficiency standard for
commercial refrigeration equipment.
Manufacturers believe that insufficient
enforcement will lead to market
distortions, as companies that make the
necessary investments to meet amended
standards and compliance requirements
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would be at a distinct pricing
disadvantage to unscrupulous
competitors that do not fully comply.
The manufacturers requested that DOE
take the enforcement action necessary to
maintain a level playing field and to
eliminate non-compliant products from
the market.
b. Certification and Compliance Costs
Nearly all manufacturers expressed
concern over CC&E costs. In particular,
confusion over the definition of ‘‘basic
model’’ and the implementation of
AEDMs is making it difficult for some
manufacturers to anticipate their total
testing needs and total testing costs.
Manufacturers are concerned that
CC&E requirements for commercial
refrigeration equipment do not take into
account the customized nature of the
commercial refrigeration equipment
industry. Manufacturers stated that their
industry has a high level of end-user
specification and low production
volumes compared to other industries,
such as residential refrigeration. As a
result, the strictest interpretations of the
CC&E requirements could lead to
hundreds of thousands of tests per
company. Additional clarification of
how basic models and AEDMs apply to
the commercial refrigeration equipment
industry would help manufacturers
understand the testing investments that
will be necessary. DOE is aware of the
current confusion and continues to
work with industry to improve the
CC&E process and AEDM rules to
address these concerns.
c. Disproportionate Impact on Small
Businesses
Manufacturers noted that small
businesses will be disproportionately
impacted by certification and
compliance requirements compared to
larger businesses. One manufacturer
indicated that small and large
manufacturers of the same equipment
tend to have similar numbers of basic
models, but large manufacturers offer a
broader suite of products based on those
basic models and have higher sales.
Therefore, the manufacturer expressed
concern that small manufacturers will
be at a disadvantage because they will
need to spread both industry
certification and conversion costs over a
smaller number of shipments.
Also, small manufacturers indicated
they have fewer resources with which to
manage CC&E requirements. As a result,
they will be forced to focus on
compliance rather than on innovation.
Small manufacturers believe that their
large competitors will have greater
resources to continue innovating while
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meeting amended energy conservation
standards.
d. Potential Loss of Product Utility and
Decrease in Food Safety
Manufacturers expressed concern
about the potential impact of amended
energy conservation standards on
product performance. Specifically,
manufacturers serving the foodservice
industry were concerned about negative
impacts on food safety, while
manufacturers serving the food retail
industry were concerned about negative
impacts on merchandising design.
One manufacturer of commercial
refrigeration equipment for the
foodservice industry summarized the
challenge of amended energy
conservation standards as ‘‘the design
trade-off between product price, energy
efficiency, and food safety.’’ In the
foodservice industry, refrigeration
equipment must maintain safe food
temperatures despite frequent door
openings in challenging environments,
such as kitchens with high temperatures
and high humidity. The infiltration of
warm, moist air places an additional
burden on the refrigeration equipment
and increases energy usage.
Manufacturers expressed concern that
more-efficient equipment would have
trouble maintaining food safety in
extreme, but not uncommon,
conditions.
Manufacturers in the food retail
market design their equipment to
optimally present merchandise. Some
manufacturers were concerned that
amended energy conservation standards
would limit their ability to tailor their
commercial refrigeration equipment for
specific merchandise. Specifically,
manufacturers noted that the highly
directional light from LED bulbs
provides poor light for display case
applications where the product is
presented in multiple layers, such as
prepared food display cases.
Additionally, manufacturers noted that
higher efficiency designs generally have
less airflow (due to reduced fan power
consumption). They stated that this
reduction in airflow could result in less
desirable presentation of meats and in
increased icing on products. In general,
more-efficient standards limit
manufacturer options for optimizing the
presentation features of products. Food
retail customers such as supermarkets
make purchasing decisions based on the
various presentation features of
commercial refrigeration equipment
offered by different manufacturers.
L. Employment Impact Analysis
Employment impacts are one of the
factors that DOE considers in selecting
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an efficiency standard. Employment
impacts include direct and indirect
impacts. Direct employment impacts are
any changes that affect employment of
commercial refrigeration equipment
manufacturers, their suppliers, and
related service firms. Indirect impacts
are those changes in employment in the
larger economy that occur because of
the shift in expenditures and capital
investment caused by the purchase and
operation of more-efficient commercial
refrigeration equipment. Direct
employment impacts are analyzed as
part of the MIA. Indirect impacts are
assessed as part of the employment
impact analysis.
Indirect employment impacts from
amended commercial refrigeration
equipment standards consist of the net
jobs created or eliminated in the
national economy, other than in the
manufacturing sector being regulated, as
a consequence of (1) reduced spending
by end users on electricity; (2) reduced
spending on new energy supply by the
utility industry; (3) increased spending
on the purchase price of new
commercial refrigeration equipment;
and (4) the effects of those three factors
throughout the Nation’s economy. DOE
expects the net monetary savings from
amended standards to stimulate other
forms of economic activity. DOE also
expects these shifts in spending and
economic activity to affect the demand
for labor.
In developing this analysis in the
NOPR, DOE estimated indirect national
employment impacts using an input/
output model of the U.S. economy,
called ImSET (Impact of Sector Energy
Technologies), developed by DOE’s
Building Technologies Program. ImSET
is an economic analysis model that
characterizes the interconnections
among 188 sectors of the economy as
national input/output structural
matrices, using data from the U.S.
Department of Commerce’s 1997
Benchmark U.S. input/output table.74
The ImSET model estimates changes in
employment, industry output, and wage
income in the overall U.S. economy
resulting from changes in expenditures
in various sectors of the economy. DOE
estimated changes in expenditures using
the NIA model. ImSET then estimated
the net national indirect employment
impacts that amended commercial
refrigeration equipment efficiency
standards could have on employment by
sector.
74 U.S. Department of Commerce, Bureau of
Economic Analysis. Benchmark Input-Output
Accounts. 1997. U.S. Government Printing Office:
Washington, DC.
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For more details on the employment
impact analysis and its results, see
chapter 16 of the NOPR TSD and section
0 of this notice.
M. Utility Impact Analysis
The utility impact analysis estimates
several important effects on the utility
industry of the adoption of new or
amended standards. For this analysis,
DOE used the NEMS–BT model to
generate forecasts of electricity
consumption, electricity generation by
plant type, and electric generating
capacity by plant type, that would result
from each considered TSL. DOE
obtained the energy savings inputs
associated with efficiency
improvements to considered products
from the NIA. DOE conducts the utility
impact analysis as a scenario that
departs from the latest AEO Reference
Case. In the analysis for today’s rule, the
estimated impacts of standards are the
differences between values forecasted
by NEMS–BT and the values in the
AEO2013 Reference Case. For more
details on the utility impact analysis,
see chapter 15 of the NOPR TSD.
N. Emissions Analysis
In the emissions analysis, DOE
estimated the reduction in power sector
emissions of CO2, NOX, sulfur dioxide
(SO2) and Hg from amended energy
conservation standards for commercial
refrigeration equipment. In addition,
DOE estimates emissions impacts in
production activities (extracting,
processing, and transporting fuels) that
provide the energy inputs to power
plants. These are referred to as
‘‘upstream’’ emissions. Together, these
emissions account for the full-fuel-cycle
(FFC). In accordance with DOE’s FFC
Statement of Policy (76 FR 51282 (Aug.
18, 2011)) 77 FR 49701 (August 17,
2012), the FFC analysis includes
impacts on emissions of methane (CH4)
and nitrous oxide (N2O), both of which
are recognized as greenhouse gases.
DOE conducted the emissions
analysis using emissions factors that
were derived from data in EIA’s Annual
Energy Outlook 2013 (AEO 2013),
supplemented by data from other
sources. DOE developed separate
emissions factors for power sector
emissions and upstream emissions. The
method that DOE used to derive
emissions factors is described in chapter
13 of the NOPR TSD.
EIA prepares the Annual Energy
Outlook using the National Energy
Modeling System (NEMS). Each annual
version of NEMS incorporates the
projected impacts of existing air quality
regulations on emissions. AEO 2013
generally represents current legislation
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55943
and environmental regulations,
including recent government actions, for
which implementing regulations were
available as of December 31, 2012.
SO2 emissions from affected electric
generating units (EGUs) are subject to
nationwide and regional emissions capand-trade programs. Title IV of the
Clean Air Act sets an annual emissions
cap on SO2 for affected EGUs in the 48
contiguous States (42 U.S.C. 7651 et
seq.) and the District of Columbia (DC).
SO2 emissions from 28 eastern States
and DC were also limited under the
Clean Air Interstate Rule (CAIR; 70 FR
25162 (May 12, 2005)), which created an
allowance-based trading program. CAIR
was remanded to the U.S.
Environmental Protection Agency (EPA)
by the U.S. Court of Appeals for the
District of Columbia but it remained in
effect. See North Carolina v. EPA, 550
F.3d 1176 (D.C. Cir. 2008); North
Carolina v. EPA, 531 F.3d 896 (D.C. Cir.
2008). On July 6, 2011, EPA issued a
replacement for CAIR, the Cross-State
Air Pollution Rule (CSAPR). 76 FR
48208 (Aug. 8, 2011). On August 21,
2012, the DC Circuit issued a decision
to vacate CSAPR. See EME Homer City
Generation, LP v. EPA, 696 F.3d 7, 38
(D.C. Cir. 2012). The court ordered EPA
to continue administering CAIR. The
AEO 2013 emissions factors used for
today’s NOPR assume that CAIR
remains a binding regulation through
2040.75
The attainment of emissions caps is
typically flexible among EGUs and is
enforced through the use of emissions
allowances and tradable permits. Under
existing EPA regulations, any excess
SO2 emissions allowances resulting
from the lower electricity demand
caused by the adoption of a new or
amended efficiency standard could be
used to permit offsetting increases in
SO2 emissions by any regulated EGU. In
past rulemakings, DOE recognized that
there was uncertainty about the effects
of efficiency standards on SO2
emissions covered by the existing capand-trade system, but it concluded that
negligible reductions in power sector
SO2 emissions would occur as a result
of standards.
75 On December 30, 2011, the DC Circuit stayed
the new rules while a panel of judges reviews them,
and told EPA to continue administering CAIR. See
EME Homer City Generation, LP v. EPA, Order, No.
11–1302, Slip Op. at *2 (D.C. Cir. Dec. 30, 2011).
On August 21, 2012, the DC Circuit issued a
decision to vacate CSAPR. See EME Homer City
Generation, LP v. EPA, No. 11–1302, 2012 WL
3570721 at *24 (D.C. Cir. Aug. 21, 2012). The court
again ordered EPA to continue administering CAIR.
AEO2012 had been finalized prior to both these
decisions, however. DOE understands that CAIR
and CSAPR are similar with respect to their effect
on emissions impacts of energy efficiency
standards.
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Beginning in 2015, however, SO2
emissions will fall as a result of the
Mercury and Air Toxics Standards
(MATS) for power plants, which were
announced by EPA on December 21,
2011. 77 FR 9304 (Feb. 16, 2012). In the
final MATS rule, EPA established a
standard for hydrogen chloride as a
surrogate for acid gas hazardous air
pollutants (HAP), and also established a
standard for SO2 (a non-HAP acid gas)
as an alternative equivalent surrogate
standard for acid gas HAP. The same
controls are used to reduce HAP and
non-HAP acid gas; thus, SO2 emissions
will be reduced as a result of the control
technologies installed on coal-fired
power plants to comply with the MATS
requirements for acid gas. AEO2013
assumes that, in order to continue
operating, coal plants must have either
flue gas desulfurization or dry sorbent
injection systems installed by 2015.
Both technologies, which are used to
reduce acid gas emissions, also reduce
SO2 emissions. Under the MATS, NEMS
shows a reduction in SO2 emissions
when electricity demand decreases (e.g.,
as a result of energy efficiency
standards). Emissions will be far below
the cap that would be established by
CAIR, so it is unlikely that excess SO2
emissions allowances resulting from the
lower electricity demand would be
needed or used to permit offsetting
increases in SO2 emissions by any
regulated EGU. Therefore, DOE believes
that efficiency standards will reduce
SO2 emissions in 2015 and beyond.
CAIR established a cap on NOX
emissions in 28 eastern States and the
District of Columbia. Energy
conservation standards are expected to
have little effect on NOX emissions in
those States covered by CAIR because
excess NOX emissions allowances
resulting from the lower electricity
demand could be used to permit
offsetting increases in NOX emissions.
However, standards would be expected
to reduce NOX emissions in the States
not affected by the caps, so DOE
estimated NOX emissions reductions
from the standards considered in
today’s NOPR for these States.
The MATS limit mercury emissions
from power plants, but they do not
include emissions caps and, as such,
DOE’s energy conservation standards
would likely reduce Hg emissions. DOE
estimated mercury emissions factors
based on AEO2013, which incorporates
the MATS.
After the preliminary analysis, two
stakeholders provided comments
pertinent to the emissions analysis.
NRDC stated that, given that
supermarket rack-based commercial
refrigeration equipment units have
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leakage rates of 15 to 30 percent and use
HFC refrigerants with GWPs in the
range of 2,000 to 3,400, direct emissions
can be as large as the indirect emissions
due to energy use. NRDC added that
DOE or EPA should review emissions
due to leakage. (NRDC, Public Meeting
Transcript, No. 31 at p. 173) CA IOUs
stated that refrigerant emissions and
leakage may have a significant GWP,
and suggested that DOE include in its
environmental impact analysis
estimates of changes in refrigerant
emissions, and their effects on total
GHG emissions and GWP. CA IOUs
pointed to the CEC analysis as a
potential starting point for DOE to use
in including refrigerants in the
environmental impact analysis. (CA
IOUs, No. 42 at p. 6)
DOE appreciates the comments by
stakeholders regarding the emissions
analysis of refrigerants. DOE’s emission
analysis adheres to the guidance and
methodologies that has been outlined in
this section.
DOE also adds that the design options
used for efficiency improvement of
commercial refrigeration equipment in
this rulemaking are not expected to
impact refrigerant leakage rates.
Consequently, the proposed standards
would not affect refrigerant emissions. If
stakeholders believe that the proposed
standards would lead to an increase or
a decrease in refrigerant emissions, then
supporting arguments may be submitted
for DOE’s consideration during the
NOPR public meeting or comment
period.
O. Monetizing Carbon Dioxide and
Other Emissions Impacts
As part of the development of the
proposed standards in this NOPR, DOE
considered the estimated monetary
benefits from the reduced emissions of
CO2 and NOX that are expected to result
from each of the TSLs considered. In
order to make this calculation analogous
to the calculation of the NPV of
customer benefit, DOE considered the
reduced emissions expected to result
over the lifetime of equipment shipped
in the forecast period for each TSL. This
section summarizes the basis for the
monetary values used for each of these
emissions and presents the values
considered in this NOPR.
For today’s NOPR, DOE is relying on
a set of values for the SCC that was
developed by a Federal interagency
process. The basis for these values is
summarized below, and a more detailed
description of the methodologies used is
provided as an appendix to chapter 14
of the NOPR TSD.
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1. Social Cost of Carbon
The SCC is an estimate of the
monetized damages associated with an
incremental increase in carbon
emissions in a given year. It is intended
to include (but is not limited to) changes
in net agricultural productivity, human
health, property damages from
increased flood risk, and the value of
ecosystem services. Estimates of the
SCC are provided in dollars per metric
ton of carbon dioxide. A domestic SCC
value is meant to reflect the value of
damages in the United States resulting
from a unit change in carbon dioxide
emissions, while a global SCC value is
meant to reflect the value of damages
worldwide.
Under section 1(b) of Executive Order
12866, agencies must, to the extent
permitted by law, ‘‘assess both the costs
and the benefits of the intended
regulation and, recognizing that some
costs and benefits are difficult to
quantify, propose or adopt a regulation
only upon a reasoned determination
that the benefits of the intended
regulation justify its costs.’’ The purpose
of the SCC estimates presented here is
to allow agencies to incorporate the
monetized social benefits of reducing
CO2 emissions into cost-benefit analyses
of regulatory actions that have small, or
‘‘marginal,’’ impacts on cumulative
global emissions. The estimates are
presented with an acknowledgement of
the many uncertainties involved and
with a clear understanding that they
should be updated over time to reflect
increasing knowledge of the science and
economics of climate impacts.
As part of the interagency process that
developed these SCC estimates,
technical experts from numerous
agencies met on a regular basis to
consider public comments, explore the
technical literature in relevant fields,
and discuss key model inputs and
assumptions. The main objective of this
process was to develop a range of SCC
values using a defensible set of input
assumptions grounded in the existing
scientific and economic literatures. In
this way, key uncertainties and model
differences transparently and
consistently inform the range of SCC
estimates used in the rulemaking
process.
a. Monetizing Carbon Dioxide Emissions
When attempting to assess the
incremental economic impacts of carbon
dioxide emissions, the analyst faces a
number of serious challenges. A report
from the National Research Council 76
76 National Research Council. Hidden Costs of
Energy: Unpriced Consequences of Energy
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points out that any assessment will
suffer from uncertainty, speculation,
and lack of information about (1) future
emissions of GHGs; (2) the effects of
past and future emissions on the climate
system, (3) the impact of changes in
climate on the physical and biological
environment, and (4) the translation of
these environmental impacts into
economic damages. As a result, any
effort to quantify and monetize the
harms associated with climate change
will raise serious questions of science,
economics, and ethics and should be
viewed as provisional.
Despite the serious limits of both
quantification and monetization, SCC
estimates can be useful in estimating the
social benefits of reducing CO2
emissions. Most Federal regulatory
actions can be expected to have
marginal impacts on global emissions.
For such policies, the agency can
estimate the benefits from reduced (or
costs from increased) emissions in any
future year by multiplying the change in
emissions in that year by the SCC value
appropriate for that year. The net
present value of the benefits can then be
calculated by multiplying each of these
future benefits by an appropriate
discount factor and summing across all
affected years. This approach assumes
that the marginal damages from
increased emissions are constant for
small departures from the baseline
emissions path, an approximation that
is reasonable for policies that have
effects on emissions that are small
relative to cumulative global CO2
emissions. For policies that have a large
(non-marginal) impact on global
cumulative emissions, there is a
separate question of whether the SCC is
an appropriate tool for calculating the
benefits of reduced emissions. This
concern is not applicable to this notice,
however.
It is important to emphasize that the
interagency process is committed to
updating these estimates as the science
and economic understanding of climate
change and its impacts on society
improves over time. In the meantime,
the interagency group will continue to
explore the issues raised by this analysis
and consider public comments as part of
the ongoing interagency process.
b. Social Cost of Carbon Values Used in
Past Regulatory Analyses
Economic analyses for Federal
regulations have used a wide range of
values to estimate the benefits
associated with reducing CO2 emissions.
The model year 2011 Corporate Average
Production and Use. 2009. National Academies
Press: Washington, DC.
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Fuel Economy final rule, the U.S.
Department of Transportation (DOT)
used both a ‘‘domestic’’ SCC value of $2
per metric ton of CO2 and a ‘‘global’’
SCC value of $33 per metric ton of CO2
for 2007 emission reductions (in 2007$),
increasing both values at 2.4 percent per
year. DOT also included a sensitivity
analysis at $80 per metric ton of CO2.77
A 2008 regulation proposed by DOT
assumed a domestic SCC value of $7 per
metric ton of CO2 (in 2006$) for 2011
emission reductions (with a range of $0–
$14 for sensitivity analysis), also
increasing at 2.4 percent per year.78 79 A
regulation for packaged terminal air
conditioners and packaged terminal
heat pumps finalized by DOE in 2008
used a domestic SCC range of $0 to $20
per metric ton CO2 for 2007 emission
reductions (in 2007$). 73 FR 58772,
58814 (Oct. 7, 2008) In addition, EPA’s
2008 Advance Notice of Proposed
Rulemaking on Regulating Greenhouse
Gas Emissions Under the Clean Air Act
identified what it described as ‘‘very
preliminary’’ SCC estimates subject to
revision. 73 FR 44354 (July 30, 2008).
EPA’s global mean values were $68 and
$40 per metric ton CO2 for discount
rates of approximately 2 percent and 3
percent, respectively (in 2006$ for 2007
emissions).
In 2009, an interagency process was
initiated to offer a preliminary
assessment of how best to quantify the
benefits from reducing carbon dioxide
emissions. To ensure consistency in
how benefits are evaluated across
Federal agencies, the Administration
sought to develop a transparent and
defensible method, specifically
designed for the rulemaking process, to
quantify avoided climate change
damages from reduced CO2 emissions.
The interagency group did not
undertake any original analysis. Instead,
it combined SCC estimates from the
existing literature to use as interim
77 See Average Fuel Economy Standards
Passenger Cars and Light Trucks Model Year 2011,
74 FR 14196 (March 30, 2009) (Final Rule); Final
Environmental Impact Statement Corporate Average
Fuel Economy Standards, Passenger Cars and Light
Trucks, Model Years 2011–2015 at 3–90 (Oct. 2008)
(Available at: www.nhtsa.gov/fuel-economy).
78 See Average/fuel Economy Standards,
Passenger Cars and Light Trucks, Model Years
2011–2015, 73 FR 24352 (May 2, 1008) (Proposed
Rule); Draft Environmental Impact Statement
Corporate Average Fuel Economy Standards,
Passenger Cars and Light Trucks, Model Years
2011–2015 at 3-58 (June 2008) (Available at
www.nhtsa.gov/fuel-economy).
79 See Average/fuel Economy Standards,
Passenger Cars and Light Trucks, Model Years
2011–2015, 73 FR 24352 (May 2, 1008) (Proposed
Rule); Draft Environmental Impact Statement
Corporate Average Fuel Economy Standards,
Passenger Cars and Light Trucks, Model Years
2011–2015 at 3-58 (June 2008) (Available at
www.nhtsa.gov/fuel-economy).
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values until a more comprehensive
analysis could be conducted. The
outcome of the preliminary assessment
by the interagency group was a set of
five interim values: global SCC
estimates for 2007 (in 2006$) of $55,
$33, $19, $10, and $5 per metric ton of
CO2. These interim values represented
the first sustained interagency effort
within the U.S. government to develop
an SCC for use in regulatory analysis.
The results of this preliminary effort
were presented in several proposed and
final rules.
c. Current Approach and Key
Assumptions
Since the release of the interim
values, the interagency group
reconvened on a regular basis to
generate improved SCC estimates.
Specially, the group considered public
comments and further explored the
technical literature in relevant fields.
The interagency group relied on three
integrated assessment models
commonly used to estimate the SCC: the
FUND, DICE, and PAGE models. These
models are frequently cited in the peerreviewed literature and were used in the
last assessment of the Intergovernmental
Panel on Climate Change. Each model
was given equal weight in the SCC
values that were developed.
Each model takes a slightly different
approach to model how changes in
emissions result in changes in economic
damages. A key objective of the
interagency process was to enable a
consistent exploration of the three
models, while respecting the different
approaches to quantifying damages
taken by the key modelers in the field.
An extensive review of the literature
was conducted to select three sets of
input parameters for these models:
climate sensitivity, socio-economic and
emissions trajectories, and discount
rates. A probability distribution for
climate sensitivity was specified as an
input into all three models. In addition,
the interagency group used a range of
scenarios for the socio-economic
parameters and a range of values for the
discount rate. All other model features
were left unchanged, relying on the
model developers’ best estimates and
judgments.
The interagency group selected four
sets of SCC values for use in regulatory
analyses. Three sets of values are based
on the average SCC from the three IAMs,
at discount rates of 2.5, 3, and 5 percent.
The fourth set, which represents the
95th percentile SCC estimate across all
three models at a 3-percent discount
rate, was included to represent higher
than expected impacts from temperature
change further out in the tails of the
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SCC distribution. The values grow in
real terms over time. Additionally, the
interagency group determined that a
range of values from 7 percent to 23
percent should be used to adjust the
global SCC to calculate domestic
effects,80 although preference is given to
consideration of the global benefits of
reducing CO2 emissions. Table IV.10
presents the values in the 2010
interagency group report,81 which is
reproduced in appendix 14A of the
NOPR TSD.
TABLE IV.10—ANNUAL SCC VALUES FROM 2010 INTERAGENCY REPORT, 2010–2050
[In 2007 dollars per metric ton]
Discount rate
Year
3%
2.5%
3%
Average
2010
2015
2020
2025
2030
2035
2040
2045
2050
5%
Average
Average
95th percentile
.................................................................................................................
.................................................................................................................
.................................................................................................................
.................................................................................................................
.................................................................................................................
.................................................................................................................
.................................................................................................................
.................................................................................................................
.................................................................................................................
4.7
5.7
6.8
8.2
9.7
11.2
12.7
14.2
15.7
updated sets of SCC estimates in 5-year
increments from 2010 to 2050. The full
set of annual SCC estimates between
2010 and 2050 is reported in appendix
14A of the TSD. The central value that
emerges is the average SCC across
The SCC values used for today’s
notice were generated using the most
recent versions of the three integrated
assessment models that have been
published in the peer-reviewed
literature.82 Table IV.11 shows the
21.4
23.8
26.3
29.6
32.8
36.0
39.2
42.1
44.9
35.1
38.4
41.7
45.9
50.0
54.2
58.4
61.7
65.0
64.9
72.8
80.7
90.4
100.0
109.7
119.3
127.8
136.2
models at the 3 percent discount rate.
However, for purposes of capturing the
uncertainties involved in regulatory
impact analysis, the interagency group
emphasizes the importance of including
all four sets of SCC values.
TABLE IV.11—ANNUAL SCC VALUES FROM 2013 INTERAGENCY REPORT, 2010–2050
[in 2007 dollars per metric ton]
Discount rate
Year
mstockstill on DSK4VPTVN1PROD with PROPOSALS3
3%
2.5%
3%
Average
2010
2015
2020
2025
2030
2035
2040
2045
2050
5%
Average
Average
95th Percentile
.................................................................................................................
.................................................................................................................
.................................................................................................................
.................................................................................................................
.................................................................................................................
.................................................................................................................
.................................................................................................................
.................................................................................................................
.................................................................................................................
11
12
12
14
16
19
21
24
27
33
38
43
48
52
57
62
66
71
52
58
65
70
76
81
87
92
98
90
109
129
144
159
176
192
206
221
It is important to recognize that a
number of key uncertainties remain, and
that current SCC estimates should be
treated as provisional and revisable
since they will evolve with improved
scientific and economic understanding.
The interagency group also recognizes
that the existing models are imperfect
and incomplete. The 2009 National
Research Council report mentioned
above points out that there is tension
between the goal of producing
quantified estimates of the economic
damages from an incremental ton of
carbon and the limits of existing efforts
to model these effects. There are a
number of concerns and problems that
should be addressed by the research
community, including research
programs housed in many of the Federal
agencies participating in the interagency
process to estimate the SCC. The
interagency group intends to
periodically review and reconsider
those estimates to reflect increasing
knowledge of the science and
economics of climate impacts, as well as
improvements in modeling.
The interagency group intends to
periodically review and reconsider
those estimates to reflect increasing
knowledge of the science and
economics of climate impacts, as well as
improvements in modeling.
80 It is recognized that this calculation for
domestic values is approximate, provisional, and
highly speculative. There is no a priori reason why
domestic benefits should be a constant fraction of
net global damages over time.
81 Social Cost of Carbon for Regulatory Impact
Analysis Under Executive Order 12866. Interagency
Working Group on Social Cost of Carbon, United
States Government, February 2010.
www.whitehouse.gov/sites/default/files/omb/
inforeg/for-agencies/Social-Cost-of-Carbon-forRIA.pdf.
82 Technical Update of the Social Cost of Carbon
for Regulatory Impact Analysis Under Executive
Order 12866. Interagency Working Group on Social
Cost of Carbon, United States Government. May
2013. https://www.whitehouse.gov/sites/default/
files/omb/inforeg/social_cost_of_carbon_for
_ria_2013_update.pdf
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In summary, in considering the
potential global benefits resulting from
reduced CO2 emissions, DOE used the
values from the 2013 interagency report
adjusted to 2012$ using the GDP price
deflator. For each of the four sets of SCC
values, the values for emissions in 2015
were $12.9, $40.8, $62.2, and $117 per
metric ton avoided 83 (values expressed
in 2012$). DOE derived values after
2050 using the relevant growth rates for
the 2040–2050 period in the interagency
update.
DOE multiplied the CO2 emissions
reduction estimated for each year by the
SCC value for that year in each of the
four cases. To calculate a present value
of the stream of monetary values, DOE
discounted the values in each of the
four cases using the specific discount
rate that had been used to obtain the
SCC values in each case.
2. Valuation of Other Emissions
Reductions
DOE investigated the potential
monetary benefit of reduced NOX
emissions from the potential standards
it considered. As noted above, DOE has
taken into account how new or
amended energy conservation standards
would reduce NOX emissions in those
22 States not affected by emissions caps.
DOE estimated the monetized value of
NOX emissions reductions resulting
from each of the TSLs considered for
today’s NOPR based on estimates found
in the relevant scientific literature.
Available estimates suggest a very wide
range of monetary values per ton of NOX
from stationary sources, ranging from
$468 to $4,809 per ton in 2012$).84 In
accordance with OMB guidance, 85 DOE
calculated a range of monetary benefits
using each of the economic values for
NOX and real discount rates of 3 percent
and 7 percent.
DOE is evaluating appropriate
monetization of avoided SO2 and Hg
emissions in energy conservation
standards rulemakings. It has not
included monetization in the current
analysis
mstockstill on DSK4VPTVN1PROD with PROPOSALS3
P. Regulatory Impact Analysis
DOE prepared a regulatory impact
analysis (RIA) for this rulemaking,
which is described in chapter 16 of the
83 The interagency report presents SCC values
through 2050. DOE derived values after 2050 using
the 3-percent per year escalation rate used by the
interagency group.
84 For additional information, refer to U.S. Office
of Management and Budget, Office of Information
and Regulatory Affairs, 2006 Report to Congress on
the Costs and Benefits of Federal Regulations and
Unfunded Mandates on State, Local, and Tribal
Entities, Washington, DC.
85 OMB, Circular A–4: Regulatory Analysis (Sept.
17, 2003).
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NOPR TSD. The RIA is subject to review
by OIRA in the OMB. The RIA consists
of (1) a statement of the problem
addressed by this regulation and the
mandate for Government action; (2) a
description and analysis of policy
alternatives to this regulation; (3) a
qualitative review of the potential
impacts of the alternatives; and (4) the
national economic impacts of the
proposed standard.
The RIA assesses the effects of
feasible policy alternatives to amended
commercial refrigeration equipment
standards and provides a comparison of
the impacts of the alternatives. DOE
evaluated the alternatives in terms of
their ability to achieve significant
energy savings at reasonable cost, and
compared them to the effectiveness of
the proposed rule.
DOE identified the following major
policy alternatives for achieving
increased commercial refrigeration
equipment efficiency:
• No new regulatory action
• commercial customer tax credits
• commercial customer rebates
• voluntary energy efficiency targets
• bulk government purchases
• early replacement
DOE qualitatively evaluated each
alternative’s ability to achieve
significant energy savings at reasonable
cost and compared it to the effectiveness
of the proposed rule. DOE assumed that
each alternative policy would induce
commercial customers to voluntarily
purchase at least some higher efficiency
equipment at any of the TSLs. In
contrast to a standard at one of the
TSLs, the adoption rate of the
alternative non-regulatory policy cases
may not be 100 percent, which would
result in lower energy savings than a
standard. The following paragraphs
discuss each policy alternative. (See
chapter 17 of the NOPR TSD for further
details.)
No new regulatory action: The case in
which no regulatory action is taken for
commercial refrigeration equipment
constitutes the base case (or no action)
scenario. By definition, no new
regulatory action yields zero energy
savings and an NPV of zero dollars.
Commercial customer tax credits:
Customer tax credits are considered a
viable non-regulatory market
transformation program. From a
customer perspective, the most
important difference between rebate and
tax credit programs is that a rebate can
be obtained quickly, whereas receipt of
tax credits is delayed until income taxes
are filed or a tax refund is provided by
the Internal Revenue Service (IRS).
From a societal perspective, tax credits
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55947
(like rebates) do not change the installed
cost of the equipment, but rather
transfer a portion of the cost from the
customer to taxpayers as a whole. DOE,
therefore, assumed that equipment costs
in the customer tax credits scenario
were identical to the NIA base case. The
change in the NES and NPV is a result
of the change in the efficiency
distributions that results from lowering
the prices of higher efficiency
equipment.
Commercial customer rebates:
Customer rebates cover a portion of the
difference in incremental product price
between products meeting baseline
efficacy levels and those meeting higher
efficacy levels, resulting in a higher
percentage of customers purchasing
more-efficacious models and decreased
aggregated energy use compared to the
base case. Although the rebate program
reduces the total installed cost to the
customer, it is financed by tax revenues.
Therefore, from a societal perspective,
the installed cost at any efficiency level
does not change with the rebate
program; rather, part of the cost is
transferred from the customer to
taxpayers as a whole. Consequently,
DOE assumed that equipment costs in
the rebates scenario were identical to
the NIA base case. The change in the
NES and NPV is a result of the change
in the efficiency distributions that
results as a consequence of lowering the
prices of higher efficiency equipment.
Voluntary energy efficiency targets:
While it is possible that voluntary
programs for equipment would be
effective, DOE lacks a quantitative basis
to determine how effective such a
program might be. As noted previously,
broader economic and social
considerations are in play than simple
economic return to the equipment
purchaser. DOE lacks the data necessary
to quantitatively project the degree to
which voluntary programs for more
expensive, higher efficiency equipment
would modify the market.
Bulk government purchases and early
replacement incentive programs: DOE
also considered, but did not analyze, the
potential of bulk government purchases
and early replacement incentive
programs as alternatives to the proposed
standards. Bulk government purchases
would have a very limited impact on
improving the overall market efficiency
of commercial refrigeration equipment
because they would be a negligible part
of the total equipment sold in the
market. In the case of replacement
incentives, several policy options exist
to promote early replacement, including
a direct national program of customer
incentives, incentives paid to utilities to
promote an early replacement program,
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market promotions through equipment
manufacturers, and replacement of
government-owned equipment. In
considering early replacements, DOE
estimates that the energy savings
realized through a one-time early
replacement of existing stock equipment
does not result in energy savings
commensurate to the cost to administer
the program. Consequently, DOE did not
analyze this option in detail.
V. Analytical Results
A. Trial Standard Levels
1. Trial Standard Level Formulation
Process and Criteria
DOE selected between five and eight
efficiency levels for all but three
equipment classes for the LCC analysis
and NIA; the three exceptions were the
HZO.RC.M, HZO.RC.L, and HZO.SC.L
equipment classes, which had only two
efficiency levels each, including the
baseline efficiency levels.86 For all
equipment classes, the first efficiency
level is the baseline efficiency level.
Based on the results of the LCC analysis
and NIA, DOE selected five TSLs above
the baseline level for each equipment
class for the NOPR stage of this
rulemaking. TSL 5 was selected at the
max-tech level for all equipment classes.
TSL 4 was chosen so as to group the
efficiency levels with the highest energy
savings combined with a positive
customer NPV at a 7-percent discount
rate. ‘‘Customer NPV’’ is the NPV of
future savings obtained from the NIA. It
provides a measure of the benefits only
to the customers of the commercial
refrigeration equipment, and does not
account for the net benefits to the
Nation. The net benefits to the Nation
also include monetized values of
emissions reductions in addition to the
customer NPV. TSL 3 was chosen to
represent the group of efficiency levels
with the highest customer NPV at a 7percent discount rate. While the
selection of TSL 4 and TSL 3 were based
on customer NPV, the proposed
standard levels were selected on the
basis of net social benefits. TSL 2 and
TSL 1 were selected to provide
intermediate efficiency levels that fill
the gap between the baseline efficiency
level and TSL 3. For the HZO.RC.M,
HZO.RC.L, and HZO.SC.L equipment
classes, there is only one efficiency level
above baseline. While TSL 5 was
associated with the max-tech level for
these three equipment classes, TSLs 1
through 4 did not have corresponding
efficiency levels that satisfied TSL
formulation criteria. Therefore, the
baseline efficiency level was assigned to
TSL 1 through TSL 4 for each of these
three equipment classes. Table V.1
shows the mapping between TSLs and
efficiency levels.
TABLE V.1—MAPPING BETWEEN TSLS AND EFFICIENCY LEVELS
mstockstill on DSK4VPTVN1PROD with PROPOSALS3
VOP.RC.M ...................
VOP.RC.L ....................
VOP.SC.M ...................
VCT.RC.M ...................
VCT.RC.L ....................
VCT.SC.M ...................
VCT.SC.L ....................
VCT.SC.I .....................
VCS.SC.M ...................
VCS.SC.L ....................
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.M ...................
HCT.SC.L ....................
HCT.SC.I .....................
HCS.SC.M ...................
HCS.SC.L ....................
PD.SC.M .....................
SOC.SC.M ...................
Intermediate
level *
Baseline
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
1
1
1
1
1
1
1
1
1
1
................
................
................
................
...............
................
...............
................
...............
...............
...............
................
................
................
...............
...............
...............
...............
................
...............
................
...............
...............
...............
................
Intermediate
level **
Max NPV ***
Max eff. lvl with
pos-NPV †
Max-tech
TSL 1
Equipment class
TSL 2
TSL 3
TSL 4
TSL 5
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
2
2
3
2
3
2
3
3
3
3
3
2
3
2
1
1
2
1
3
3
2
2
4
2
3
...............
...............
...............
...............
................
...............
................
...............
................
...............
................
...............
...............
...............
................
................
................
................
...............
................
...............
................
...............
...............
...............
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
3
3
4
3
4
3
4
5
5
5
5
3
4
3
1
1
2
1
5
4
3
3
5
2
4
................
...............
................
...............
...............
...............
...............
...............
...............
................
...............
................
................
................
...............
...............
...............
...............
...............
...............
...............
...............
................
................
................
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
4
4
5
4
5
4
5
6
7
6
6
4
5
4
1
1
3
1
6
5
4
4
6
3
5
...............
................
...............
................
................
................
................
................
...............
...............
...............
...............
...............
...............
................
...............
...............
...............
................
................
................
...............
...............
...............
...............
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
5
4
6
6
5
7
7
6
7
7
6
5
6
6
1
1
4
1
7
7
4
5
6
7
7
...............
...............
...............
...............
...............
...............
...............
...............
................
................
................
...............
...............
...............
...............
................
................
................
...............
...............
...............
................
................
................
...............
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
6.
5.
7.
7.
6.
8.
8.
7.
8.
8.
7.
6.
7.
7.
2.
2.
5.
2.
8.
8.
5.
7.
7.
8.
8.
‘‘Level’’ stands for ‘‘Efficiency Level.’’
* TSL 1 was generally chosen as one level below TSL 2, but in some cases an even lower efficiency level was chosen if the Level immediately
below TSL 2 had an NPV value that was close to the NPV value of TSL 2.
** TSL 2 was generally chosen as one level below TSL 3, but in some cases an even lower efficiency level was chosen if the Level immediately below TSL 3 had an NPV value that was close to the NPV value of TSL 3.
*** Efficiency level that has the highest NPV at a 7-percent discount rate.
† Highest efficiency level with a positive NPV at a 7-percent discount rate.
‡ TSLs 1 through 4 for equipment classes HZO.RC.M, HZO.RC.L, and HZO.SC.L do not satisfy the criteria for the corresponding TSL selection. See explanation in section V.A.1. TSLs 1 through 4 were assigned to the baseline efficiency level for all three equipment classes.
86 As explained in section IV.H.1, the baseline
efficiency levels for equipment classes HZO.RC.M,
HZO. RC.L and HZO.SC.L were set by their
respective standards baseline values. The latest
amended standards for these equipment classes
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were specified by the January 2009 final rule. DOE
could identify only one design option (vacuum
insulated panels) that could increase the efficiency
of these equipment classes above the standards
baseline. Therefore, apart from the baseline
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efficiency levels (standard baseline levels), there
was only one additional efficiency level for each of
these three equipment classes.
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2. Trial Standard Level Equations
Because of the equipment size
variation within each equipment class
and the use of daily energy
consumption as the efficiency metric,
DOE developed a methodology to
express efficiency standards in terms of
a normalizing metric. DOE used two
normalizing metrics that were used for
all equipment classes: (1) Volume (V)
and (2) TDA. The use of these two
normalization metrics allows for the
development of the standard in the form
of a linear equation that can be used to
represent the entire range of equipment
sizes within a given equipment class.
DOE retained the respective
normalization metric (TDA or volume)
previously used in the EPACT 2005 or
the January 2009 final rule standards for
each covered equipment class. (42
U.S.C. 6313(c)(2)–(3)); 74 FR 1093 (Jan.
9, 2009). Additionally, in its January
2009 final rule, DOE developed offset
factors as a method to adjust the energy
efficiency requirements for smaller
equipment in each equipment class
analyzed. These offset factors, which
form the y-intercept on a plot of each
standard level equation (representing a
fictitious case of zero volume or zero
TDA), accounted for certain components
of the refrigeration load (such as
conduction end effects) that remain
constant even when equipment sizes
vary. These constant loads affect smaller
cases disproportionately. The offset
factors were intended to approximate
these constant loads and provide a fixed
end point in an equation that describes
the relationship between energy
consumption and the corresponding
normalization metric. 74 FR 1,118–19
(Jan. 9, 2009). The standard level
equations prescribed by EPACT 2005
also contained similar fixed parts not
multiplied by the volume metric and
which correspond to these offset factors.
(42 U.S.C. 6313(c)(2)) In this NOPR,
DOE modified the January 2009 final
rule (74 FR 1,118–19 (Jan. 9, 2009)) and
EPACT 2005 offset factors at each TSL
to reflect the proportional changes in
energy consumption for each equipment
class, as modeled in the engineering
analysis. See chapter 5 of the NOPR
TSD for further details and discussion of
offset factors.
For the equipment classes covered
under this rulemaking, the standards
55949
equation at each TSL is proposed in the
form of MDEC (in kilowatt-hours per
day), normalized by a volume (V) or
TDA metric, with an offset factor added
to that value. These equations take the
form:
MDEC = A × TDA + B (for equipment
using TDA as a normalizing metric)
or
MDEC = A × V + B (for equipment using
volume as a normalizing metric)
For equipment classes directly
analyzed in the engineering analysis,
offset factor B was calculated for each
class (see chapter 5 of the NOPR TSD for
discussion of offset factors). The slope,
A, was derived based on the offset
factor, B, and the CDEC of the
representative unit modeled in the
engineering analysis for that equipment
class is presented in Table V.2. The
standards equations may be used to
prescribe the MDEC for equipment of
different sizes within the same
equipment class. Chapter 9 of the NOPR
TSD explains the methodology used for
selecting TSLs and developing the
coefficients shown in Table V.3.
TABLE V.2—CDEC VALUES BY TSL FOR REPRESENTATIVE UNITS ANALYZED IN THE ENGINEERING ANALYSIS FOR EACH
PRIMARY EQUIPMENT CLASS
CDEC Values by TSL
kWh/day
Equipment class
mstockstill on DSK4VPTVN1PROD with PROPOSALS3
TSL 1
VOP.RC.M ...........................................................................
VOP.RC.L ............................................................................
VOP.SC.M ............................................................................
VCT.RC.M ............................................................................
VCT.RC.L .............................................................................
VCT.SC.M ............................................................................
VCT.SC.L .............................................................................
VCT.SC.I ..............................................................................
VCS.SC.M ............................................................................
VCS.SC.L .............................................................................
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.M ............................................................................
HCT.SC.L .............................................................................
HCT.SC.I ..............................................................................
HCS.SC.M ............................................................................
HCS.SC.L .............................................................................
PD.SC.M ..............................................................................
SOC.SC.M ...........................................................................
TSL 2
46.84
106.22
30.03
15.56
31.13
7.56
13.48
17.45
2.36
7.26
18.24
36.11
25.74
25.62
14.43
33.10
14.76
30.12
1.87
4.11
3.22
0.65
1.61
3.90
27.04
44.33
101.03
29.60
8.10
30.58
4.08
13.30
16.36
2.17
6.75
17.79
33.85
25.36
24.97
14.43
33.10
14.76
30.12
0.84
1.77
3.07
0.60
1.46
3.90
26.80
TSL 3
TSL 4
35.71
100.51
26.70
6.26
30.29
3.24
12.44
16.14
1.81
6.66
17.64
27.71
23.29
20.43
14.43
33.10
14.60
30.12
0.75
1.70
2.86
0.56
1.27
2.23
22.02
TSL 5
35.51
100.51
26.62
5.97
30.29
2.97
12.09
16.14
1.81
6.56
17.64
27.57
23.24
20.15
14.43
33.10
14.49
30.12
0.67
1.57
2.86
0.50
1.27
1.64
21.70
35.06
98.87
26.46
5.49
28.85
2.68
11.57
15.37
1.39
5.71
16.53
27.26
23.12
19.93
14.17
32.22
14.26
29.91
0.49
1.18
2.13
0.25
0.74
1.42
21.41
TABLE V.3—EQUATIONS REPRESENTING THE STANDARDS AT EACH TSL FOR ALL PRIMARY EQUIPMENT CLASSES
Equipment
class
VCT.RC.L ....
VOP.RC.M ...
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Trial standard levels for primary equipment classes analyzed
Baseline
0.56 × TDA + 2.61
0.82 × TDA + 4.07
18:35 Sep 10, 2013
TSL 1
0.45 × TDA + 2.08
0.8 × TDA + 3.99
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TSL 2
TSL 3
0.44 × TDA + 2.05
0.76 × TDA + 3.78
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0.43 × TDA + 2.03
0.61 × TDA + 3.04
Sfmt 4702
TSL 4
0.43 × TDA + 2.03
0.61 × TDA + 3.03
E:\FR\FM\11SEP3.SGM
11SEP3
TSL 5
0.41 × TDA + 1.93
0.6 × TDA + 2.99
55950
Federal Register / Vol. 78, No. 176 / Wednesday, September 11, 2013 / Proposed Rules
TABLE V.3—EQUATIONS REPRESENTING THE STANDARDS AT EACH TSL FOR ALL PRIMARY EQUIPMENT CLASSES—
Continued
Equipment
class
SVO.RC.M ...
HZO.RC.L ....
HZO.RC.M ...
VCT.RC.M ...
VOP.RC.L ....
SOC.RC.M ..
VOP.SC.M ...
SVO.SC.M ...
HZO.SC.L ....
HZO.SC.M ...
HCT.SC.I .....
VCT.SC.I .....
VCS.SC.I .....
VCT.SC.M ...
VCT.SC.L ....
VCS.SC.M ...
VCS.SC.L ....
HCT.SC.M ...
HCT.SC.L ....
HCS.SC.M ...
HCS.SC.L ....
PD.SC.M .....
SOC.SC.M ...
Trial standard levels for primary equipment classes analyzed
Baseline
0.83 × TDA + 3.18
0.57 × TDA + 6.88
0.35 × TDA + 2.88
0.22 × TDA + 1.95
2.27 × TDA + 6.85
0.51 × TDA + 0.11
1.74 × TDA + 4.71
1.73 × TDA + 4.59
1.92 × TDA + 7.08
0.77 × TDA + 5.55
0.56 × TDA + 0.43
0.67 × TDA + 3.29
0.38 × V + 0.88
0.12 × V + 3.34
0.53 × V + 2.92
0.06 × V + 1.31
0.21 × V + 0.72
0.06 × V + 1.73
0.36 × V + 1.98
0.03 × V + 0.54
0.2 × V + 0.69
0.13 × V + 3.51
0.6 × TDA + 1.0
TSL 1
TSL 2
0.82 × TDA + 3.16
0.57 × TDA + 6.88
0.35 × TDA + 2.88
0.21 × TDA + 1.87
2.23 × TDA + 6.72
0.5 × TDA + 0.11
1.7 × TDA + 4.61
1.67 × TDA + 4.42
1.92 × TDA + 7.08
0.77 × TDA + 5.54
0.55 × TDA + 0.42
0.56 × TDA + 2.77
0.36 × V + 0.84
0.1 × V + 2.74
0.25 × V + 1.35
0.03 × V + 0.69
0.14 × V + 0.48
0.05 × V + 1.42
0.29 × V + 1.57
0.02 × V + 0.49
0.15 × V + 0.53
0.07 × V + 1.98
0.4 × TDA + 0.67
In addition to the 24 primary
equipment classes analyzed, DOE
evaluating existing and potentially
amended standards for 23 secondary
equipment classes of commercial
refrigeration equipment covered in this
rulemaking that were not directly
analyzed in the engineering analysis.
DOE’s approach to evaluating standards
for these secondary equipment classes
involves extension multipliers
developed using the engineering results
TSL 3
0.77 × TDA + 2.96
0.57 × TDA + 6.88
0.35 × TDA + 2.88
0.11 × TDA + 0.97
2.12 × TDA + 6.39
0.49 × TDA + 0.11
1.68 × TDA + 4.54
1.64 × TDA + 4.35
1.92 × TDA + 7.08
0.77 × TDA + 5.54
0.52 × TDA + 0.4
0.53 × TDA + 2.6
0.35 × V + 0.82
0.05 × V + 1.48
0.24 × V + 1.33
0.03 × V + 0.64
0.13 × V + 0.44
0.02 × V + 0.63
0.12 × V + 0.68
0.02 × V + 0.45
0.14 × V + 0.48
0.07 × V + 1.98
0.4 × TDA + 0.66
0.63 × TDA + 2.42
0.57 × TDA + 6.88
0.35 × TDA + 2.88
0.08 × TDA + 0.75
2.11 × TDA + 6.36
0.4 × TDA + 0.09
1.51 × TDA + 4.1
1.51 × TDA + 4.
1.92 × TDA + 7.08
0.76 × TDA + 5.48
0.49 × TDA + 0.37
0.52 × TDA + 2.56
0.35 × V + 0.81
0.04 × V + 1.17
0.23 × V + 1.25
0.03 × V + 0.53
0.13 × V + 0.44
0.02 × V + 0.57
0.12 × V + 0.65
0.02 × V + 0.41
0.12 × V + 0.42
0.04 × V + 1.13
0.33 × TDA + 0.54
for the primary equipment classes
analyzed and a set of matched-pair
analyses performed during the January
2009 final rule analysis.87 In addition,
DOE believes that standards for certain
primary equipment classes can be
directly applied to similar secondary
equipment classes. Chapter 5 of the
NOPR TSD discusses the development
of the extension multipliers.
Using the extension multiplier
approach, DOE developed an additional
TSL 4
0.63 × TDA + 2.41
0.57 × TDA + 6.88
0.35 × TDA + 2.88
0.08 × TDA + 0.72
2.11 × TDA + 6.36
0.39 × TDA + 0.08
1.51 × TDA + 4.09
1.5 × TDA + 3.99
1.92 × TDA + 7.08
0.75 × TDA + 5.44
0.49 × TDA + 0.37
0.52 × TDA + 2.56
0.35 × V + 0.81
0.04 × V + 1.07
0.22 × V + 1.21
0.03 × V + 0.53
0.13 × V + 0.43
0.02 × V + 0.51
0.11 × V + 0.6
0.02 × V + 0.37
0.12 × V + 0.42
0.03 × V + 0.83
0.32 × TDA + 0.53
TSL 5
0.62 × TDA + 2.38
0.55 × TDA + 6.7
0.34 × TDA + 2.83
0.07 × TDA + 0.66
2.07 × TDA + 6.26
0.39 × TDA + 0.08
1.5 × TDA + 4.06
1.5 × TDA + 3.97
1.91 × TDA + 7.03
0.74 × TDA + 5.35
0.36 × TDA + 0.28
0.5 × TDA + 2.44
0.33 × V + 0.76
0.03 × V + 0.97
0.21 × V + 1.16
0.02 × V + 0.41
0.11 × V + 0.38
0.01 × V + 0.38
0.08 × V + 0.45
0.01 × V + 0.18
0.07 × V + 0.24
0.03 × V + 0.72
0.32 × TDA + 0.53
set of TSLs and associated equations for
the secondary equipment classes, as
shown in Table V.4. The TSLs shown in
Table V.4 do not necessarily satisfy the
criteria spelled out in section V.A. DOE
is presenting the standards equations
developed for each TSL for all 47
equipment classes to allow interested
parties to better review the ramifications
of each TSL across the range of
equipment sizes on the market.
TABLE V.4—EQUATIONS REPRESENTING THE STANDARDS AT EACH TSL FOR ALL SECONDARY EQUIPMENT CLASSES
mstockstill on DSK4VPTVN1PROD with PROPOSALS3
Equipment
class
VOP.RC.I .....
SVO.RC.L ....
SVO.RC.I .....
HZO.RC.I .....
VOP.SC.L ....
VOP.SC.I .....
SVO.SC.L ....
SVO.SC.I .....
HZO.SC.I .....
SOC.RC.L ...
SOC.RC.I ....
SOC.SC.I .....
VCT.RC.I .....
HCT.RC.M ...
HCT.RC.L ....
HCT.RC.I .....
VCS.RC.M ...
VCS.RC.L ....
VCS.RC.I .....
HCS.SC.I .....
HCS.RC.M ...
HCS.RC.L ....
HCS.RC.I .....
Trial standard levels for secondary equipment classes analyzed
Baseline
2.89 × TDA + 8.7
2.27 × TDA + 6.85
2.89 × TDA + 8.7
0.72 × TDA + 8.74
4.37 × TDA + 11.82
5.55 × TDA + 15.02
4.34 × TDA + 11.51
5.52 × TDA + 14.63
2.44 × TDA + 9.0
1.08 × TDA + 0.22
1.26 × TDA + 0.26
1.76 × TDA + 0.36
0.66 × TDA + 3.05
0.16 × TDA + 0.13
0.34 × TDA + 0.26
0.4 × TDA + 0.31
0.11 × V + 0.26
0.23 × V + 0.54
0.27 × V + 0.63
0.38 × V + 0.88
0.11 × V + 0.26
0.23 × V + 0.54
0.27 × V + 0.63
TSL 1
2.83
2.23
2.83
0.72
4.27
5.43
4.18
5.31
2.44
1.05
1.23
1.72
0.52
0.16
0.33
0.39
0.11
0.22
0.26
0.36
0.11
0.22
0.26
×
×
×
×
×
×
×
×
×
×
×
×
×
×
×
×
×
×
×
×
×
×
×
TDA + 8.54
TDA + 6.72
TDA + 8.54
TDA + 8.74
TDA + 11.57
TDA + 14.69
TDA + 11.09
TDA + 14.09
TDA + 9.0
TDA + 0.23
TDA + 0.27
TDA + 0.37
TDA + 2.44
TDA + 0.12
TDA + 0.26
TDA + 0.3
V + 0.24
V + 0.51
V + 0.6
V + 0.84
V + 0.24
V + 0.51
V + 0.6
87 The matched-pair analyses compared
calculated energy consumption levels for pieces of
equipment with similar designs but one major
construction or operational difference; for example,
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18:35 Sep 10, 2013
Jkt 229001
TSL 2
TSL 3
2.69 × TDA + 8.12
2.12 × TDA + 6.39
2.69 × TDA + 8.12
0.72 × TDA + 8.74
4.21 × TDA + 11.4
5.35 × TDA + 14.48
4.12 × TDA + 10.93
5.23 × TDA + 13.88
2.44 × TDA + 9.0
1.02 × TDA + 0.22
1.2 × TDA + 0.26
1.68 × TDA + 0.36
0.51 × TDA + 2.39
0.15 × TDA + 0.12
0.32 × TDA + 0.24
0.37 × TDA + 0.29
0.1 × V + 0.24
0.22 × V + 0.5
0.25 × V + 0.58
0.35 × V + 0.82
0.1 × V + 0.24
0.22 × V + 0.5
0.25 × V + 0.58
2.68 × TDA + 8.08
2.11 × TDA + 6.36
2.68 × TDA + 8.08
0.72 × TDA + 8.74
3.8 × TDA + 10.29
4.83 × TDA + 13.06
3.78 × TDA + 10.04
4.8 × TDA + 12.75
2.44 × TDA + 9.0
0.84 × TDA + 0.18
0.98 × TDA + 0.21
1.37 × TDA + 0.3
0.51 × TDA + 2.37
0.14 × TDA + 0.11
0.3 × TDA + 0.23
0.35 × TDA + 0.27
0.1 × V + 0.24
0.21 × V + 0.5
0.25 × V + 0.58
0.35 × V + 0.81
0.1 × V + 0.24
0.21 × V + 0.5
0.25 × V + 0.58
vertical open remote condensing cases operating at
medium and low temperatures. The relationships
between these sets of units were used to determine
the effect of the design or operational difference on
PO 00000
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Fmt 4701
Sfmt 4702
TSL 4
2.68 × TDA + 8.08
2.11 × TDA + 6.36
2.68 × TDA + 8.08
0.72 × TDA + 8.74
3.79 × TDA + 10.26
4.81 × TDA + 13.03
3.77 × TDA + 10.01
4.79 × TDA + 12.72
2.44 × TDA + 9.0
0.83 × TDA + 0.18
0.97 × TDA + 0.21
1.35 × TDA + 0.29
0.51 × TDA + 2.37
0.14 × TDA + 0.11
0.3 × TDA + 0.23
0.35 × TDA + 0.27
0.1 × V + 0.24
0.21 × V + 0.5
0.25 × V + 0.58
0.35 × V + 0.81
0.1 × V + 0.24
0.21 × V + 0.5
0.25 × V + 0.58
TSL 5
2.63 × TDA + 7.95
2.07 × TDA + 6.26
2.63 × TDA + 7.95
0.7 × TDA + 8.5
3.77 × TDA + 10.2
4.78 × TDA + 12.95
3.76 × TDA + 9.96
4.77 × TDA + 12.65
2.42 × TDA + 8.93
0.82 × TDA + 0.18
0.96 × TDA + 0.21
1.34 × TDA + 0.29
0.48 × TDA + 2.26
0.1 × TDA + 0.08
0.22 × TDA + 0.17
0.26 × TDA + 0.2
0.1 × V + 0.22
0.2 × V + 0.46
0.23 × V + 0.54
0.33 × V + 0.76
0.1 × V + 0.22
0.2 × V + 0.46
0.23 × V + 0.54
applicable equipment. For more information, please
see chapter 5 of the 2009 final rule TSD, which can
be found at https://www.regulations.gov/#!document
Detail;D=EERE-2006-STD-0126-0058.
E:\FR\FM\11SEP3.SGM
11SEP3
Federal Register / Vol. 78, No. 176 / Wednesday, September 11, 2013 / Proposed Rules
55951
TABLE V.4—EQUATIONS REPRESENTING THE STANDARDS AT EACH TSL FOR ALL SECONDARY EQUIPMENT CLASSES—
Continued
Equipment
class
SOC.SC.L* ..
Trial standard levels for secondary equipment classes analyzed
Baseline
0.75 × V + 4.10
TSL 1
TSL 2
0.84 × TDA + 1.4
TSL 3
0.83 × TDA + 1.39
0.68 × TDA + 1.14
TSL 4
0.67 × TDA + 1.12
TSL 5
0.66 × TDA + 1.11
* Equipment class SOC.SC.L was inadvertently grouped under the category self-contained commercial freezers with transparent doors in the standards prescribed
by EPCA, as amended by EPACT 2005. (42 U.S.C. 6313(c)(2)) The baseline expression is thus given by the expression 0.75 × V + 4.10, which is the current standard for SOC.SC.L equipment. A similar anomaly (of inadvertent classification under a different equipment category) for SOC.SC.M equipment was corrected by the
standard established by AEMTCA (see section IV.C.1.d for a detailed discussion). (42 U.S.C. 6313(c)(4)) However, no such corrective action has been prescribed for
standards for SOC.SC.L equipment. In establishing a new standard for SOC.SC.M equipment, AEMTCA also changed the normalization metric from volume (V) to
total display area (TDA). Accordingly, DOE is proposing the amended standards for SOC.SC.M equipment with TDA as the normalization metric (see Table V.3),
DOE derives the proposed standards for secondary equipment classes based on the proposed standard of a primary equipment that has similar characteristics as the
secondary equipment class under consideration (see chapter 5 of the NOPR TSD for details). For the equipment class SOC.SC.L, the proposed standards were derived from the proposed standards for equipment class SOC.SC.M. Since the proposed standards for SOC.SC.M are in terms of TDA, the proposed standards for
SOC.SC.L equipment have also been specified in terms of TDA. Therefore, while the baseline expression has been shown with V as the normalization metric, the expressions for TSLs 1 through 5 have been shown in terms of TDA. This change of normalization metric for equipment class SOC.SC.L is consistent with the legislative intent, evident in AEMTCA, for equipment class SOC.SC.M.
B. Economic Justification and Energy
Savings
1. Economic Impacts on Commercial
Customers
mstockstill on DSK4VPTVN1PROD with PROPOSALS3
a. Life-Cycle Cost and Payback Period
Customers affected by new or
amended standards usually incur higher
purchase prices and lower operating
costs. DOE evaluates these impacts on
individual customers by calculating the
LCC and the PBP associated with the
TSLs. The results of the LCC analysis for
each TSL were obtained by comparing
the installed and operating costs of the
equipment in the base-case scenario
(scenario with no amended energy
conservation standards) against the
standards-case scenarios at each TSL.
The energy consumption values for both
the base-case and standards-case
scenarios were calculated based on the
DOE test procedure conditions specified
in the 2012 test procedure final rule. 77
FR 10292, 10318–21 (Feb 21, 2012) The
DOE test procedure adopted an
industry-accepted test method and has
been widely accepted as a reasonably
accurate representation of the
conditions to which a vast majority of
the equipment covered in this
rulemaking is subjected during actual
use. Using the approach described in
section IV.H, DOE calculated the LCC
savings and PBPs for the TSLs
considered in this NOPR. The LCC
analysis was carried out in the form of
Monte Carlo simulations. Consequently,
the results of LCC analysis are
distributed over a range of values, as
opposed to a single deterministic value.
DOE presents the mean or median
values, as appropriate, calculated from
the distributions of results.
Table V.5 through Table V.29 show
the results of LCC analysis for each
equipment class. Each table presents the
important results of the LCC analysis,
including mean LCC, mean LCC savings,
median PBP, and distribution of
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18:35 Sep 10, 2013
Jkt 229001
customer impacts in the form of
percentages of customers who
experience net cost, no impact, or net
benefit.
All of the equipment classes have
negative LCC savings values at TSL 5.
Negative average LCC savings imply
that, on average, customers experience
an increase in LCC of the equipment as
a consequence of buying equipment
associated with that particular TSL. TSL
5 is associated with the max-tech level
for all the equipment classes. Vacuum
insulated panel technology is the design
option associated with the max-tech
efficiency levels for all equipment
classes. The cost increments associated
with vacuum insulated panels are
considerably high, and the increase in
LCC indicates that this design option
may not be economically justified.
The mean LCC savings associated
with TSL 4 are all either positive values
or zero (in the case of equipment classes
HZO.RC.M, HZO.RC.L, and HZO.SC.L)
for all equipment classes, and the nonzero values range from $9 to $1,494. The
mean LCC savings at all lower TSL
levels are also positive. This implies
that, on average, all the equipment
classes show either no change in LCC or
a decrease in LCC for TSL 1 through
TSL 4. A comparison of LCC savings
between TSL 4 and TSL 3, across all
equipment classes, shows that the LCC
savings associated with TSL 3 are either
greater than or equal to the LCC savings
associated with TSL 4. LCC savings are
equal in cases in which both TSLs are
associated with the same efficiency
level.
As described in section IV.I.2, DOE
used a ‘‘roll-up’’ scenario in this
rulemaking. Under the roll-up scenario,
DOE assumes that the market shares of
the efficiency levels (in the base case)
that do not meet the standard level
under consideration would be ‘‘rolled
up’’ into (meaning ‘‘added to’’) the
market share of the efficiency level at
the standard level under consideration,
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Fmt 4701
Sfmt 4702
and the market shares of efficiency
levels that are above the standard level
under consideration would remain
unaffected. Customers, in the base-case
scenario, who buy the equipment at or
above the TSL under consideration
would be unaffected if the amended
standard were to be set at that TSL.
Customers, in the base-case scenario,
who buy equipment below the TSL
under consideration would be affected if
the amended standard were to be set at
that TSL. Among these affected
customers, some may benefit from lower
LCC of the equipment and some may
incur net cost due to higher LCC,
depending on the inputs to LCC analysis
such as electricity prices, discount rates
and markups. DOE’s results clearly
indicate that only a small percentage of
customers may benefit from an amended
standard that is set at TSL 5. At TSL 4,
the percentage of customers who
experience net benefits or no impacts
ranges from 59 to 100 percent. At TSL
3, a larger percentage of customers
experience net benefits or no impacts as
compared to TSL 4. At TSLs 1 and 2,
almost all customers experience either
net benefits or no impacts.
For most of the equipment classes, the
median PBPs for TSL 5 are greater than
the average lifetime of the equipment,
indicating that a majority of customers
may not be able to recover the higher
equipment installed costs through
savings in operating costs throughout
the life of the equipment. The median
PBP values for TSL 4 range from 0.96
years to 6.40 years. The average lifetime
of a majority of the commercial
refrigeration equipment under
consideration is 10 years. Therefore,
PBP results for TSL 4 indicate that, in
general, the majority of customers will
be able to recover the increased
purchase costs associated with
equipment that is compliant with TSL 4
through operating cost savings within
the lifetime of the equipment.
E:\FR\FM\11SEP3.SGM
11SEP3
55952
Federal Register / Vol. 78, No. 176 / Wednesday, September 11, 2013 / Proposed Rules
TABLE V.5—SUMMARY LCC AND PBP RESULTS FOR VOP.RC.M EQUIPMENT CLASS*
TSL
1
2
3
4
5
Annual energy
consumption
kWh/yr
............
............
............
............
............
Life-cycle cost, all customers
2012$
Installed cost
17,095
16,180
13,033
12,962
12,798
Discounted
operating cost
9,490
9,633
10,823
10,898
14,006
Life-cycle cost savings
LCC
20,618
19,849
17,364
17,303
17,162
30,108
29,482
28,187
28,201
31,168
Affected customers’ average savings
2012$
Median
payback
period, years
% of Customers that experience**
Net cost
236
743
1,789
1,494
(1,669)
No impact
0
0
0
11
90
Net benefit
76
52
28
15
2
24
48
72
74
8
1.73
1.77
3.77
3.91
11.76
* Values in parentheses are negative values.
** Percentages may not add up to 100 percent due to rounding.
TABLE V.6—SUMMARY LCC AND PBP RESULTS FOR VOP.RC.L EQUIPMENT CLASS*
TSL
1
2
3
4
5
Life-cycle cost, all customers
2012$
Annual energy
consumption
kWh/yr
Installed cost
Discounted
operating cost
38,770
36,877
36,685
36,685
36,088
10,099
10,511
10,594
10,594
15,667
Life-cycle cost savings
39,184
37,520
37,356
37,356
36,847
............
............
............
............
............
LCC
49,282
48,031
47,950
47,950
52,513
Affected customers’ average savings
2012$
Median
payback
period, years
% of Customers that experience**
Net cost
537
1,517
1,130
1,130
(3,693)
No impact
0
0
0
0
98
Net benefit
74
48
25
25
2
26
52
75
75
0
1.11
2.03
2.22
2.22
18.30
* Values in parentheses are negative values.
** Percentages may not add up to 100 percent due to rounding.
TABLE V.7—SUMMARY LCC AND PBP RESULTS FOR VOP.SC.M EQUIPMENT CLASS*
TSL
1
2
3
4
5
Annual energy
consumption
kWh/yr
............
............
............
............
............
Life-cycle cost, all customers
2012$
Installed cost
10,960
10,804
9,747
9,718
9,660
Discounted
operating cost
4,650
4,693
5,183
5,234
6,293
Life-cycle cost savings
LCC
15,471
15,314
14,180
14,147
14,079
20,120
20,008
19,364
19,381
20,373
Affected customers’ average savings
2012$
Median
payback
period, years
% of Customers that experience**
Net cost
171
227
815
691
(377)
No impact
0
0
0
11
77
Net benefit
62
43
25
14
3
38
57
75
75
20
1.61
2.17
4.12
4.39
11.37
* Values in parentheses are negative values.
** Percentages may not add up to 100 percent due to rounding.
TABLE V.8—SUMMARY LCC AND PBP RESULTS FOR VCT.RC.M EQUIPMENT CLASS*
TSL
1
2
3
4
5
Life-cycle cost, all customers
2012$
Annual energy
consumption
kWh/yr
Installed cost
5,679
2,955
2,285
2,177
2,005
12,070
12,669
12,819
12,929
16,537
............
............
............
............
............
Discounted
Operating
Cost
Life-cycle cost savings
LCC
11,800
9,411
8,809
8,715
8,560
23,870
22,081
21,629
21,644
25,097
Affected customers’ average savings
2012$
Median
payback
period, years
% of Customers that Experience**
Net cost
175
1,864
1,759
1,108
(2,509)
No impact
0
0
0
26
94
Net benefit
81
62
46
16
2
19
38
54
57
4
1.23
2.42
2.43
2.70
13.09
* Values in parentheses are negative values.
** Percentages may not add up to 100 percent due to rounding.
mstockstill on DSK4VPTVN1PROD with PROPOSALS3
TABLE V.9—SUMMARY LCC AND PBP RESULTS FOR VCT.RC.L EQUIPMENT CLASS*
TSL
1
2
3
4
5
Annual energy
consumption
kWh/yr
............
............
............
............
............
Life-cycle cost, all customers
2012$
Installed cost
11,362
11,161
11,056
11,056
10,531
Discounted
operating cost
13,756
13,836
13,887
13,887
18,626
Life-cycle cost savings
LCC
17,581
17,401
17,311
17,311
16,840
31,337
31,237
31,198
31,198
35,466
Affected customers’ average savings
2012$
Net cost
1,357
1,005
798
798
(3,624)
No impact
0
0
0
0
97
60
40
21
21
2
* Values in parentheses are negative values.
** Percentages may not add up to 100 percent due to rounding.
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Median
payback
period, years
% of Customers that experience**
E:\FR\FM\11SEP3.SGM
11SEP3
Net benefit
40
60
79
79
1
1.30
1.51
1.64
1.64
15.75
Federal Register / Vol. 78, No. 176 / Wednesday, September 11, 2013 / Proposed Rules
55953
TABLE V.10—SUMMARY LCC AND PBP RESULTS FOR VCT.SC.M EQUIPMENT CLASS*
TSL
1
2
3
4
5
Annual energy
consumption
kWh/yr
............
............
............
............
............
Life-cycle cost, all customers
2012$
Installed cost
2,758
1,488
1,182
1,082
979
Discounted
operating cost
4,594
4,849
4,999
5,088
6,362
Life-cycle cost savings
LCC
5,261
3,916
3,583
3,489
3,377
9,855
8,764
8,582
8,578
9,739
Affected customers’ average savings
2012$
Median
payback
period, years
% of Customers that experience**
Net cost
566
1,364
1,122
641
(596)
No impact
0
0
0
27
74
Net benefit
83
66
51
13
2
17
34
49
60
24
0.86
1.73
2.21
2.54
8.13
* Values in parentheses are negative values.
** Percentages may not add up to 100 percent due to rounding.
TABLE V.11—SUMMARY LCC AND PBP RESULTS FOR VCT.SC.L EQUIPMENT CLASS
TSL
1
2
3
4
5
Life-cycle cost, all customers
2012$
Annual energy
consumption
kWh/yr
Installed cost
Discounted
operating cost
4,921
4,853
4,541
4,411
4,222
6,101
6,120
6,271
6,364
8,077
Life-cycle cost savings
8,222
8,150
7,811
7,692
7,486
............
............
............
............
............
LCC
14,323
14,270
14,082
14,056
15,562
Affected customers’ average savings
2012$
Median
payback
period years
% of Customers that experience
Net cost
4,186
2,523
1,984
1,343
(343)
No impact
0
0
0
7
74
Net benefit
76
60
44
15
2
24
40
56
78
24
0.58
0.61
0.83
0.96
3.65
* Values in parentheses are negative values.
** Percentages may not add up to 100 percent due to rounding.
TABLE V.12—SUMMARY LCC AND PBP RESULTS FOR VCT.SC.I EQUIPMENT CLASS*
TSL
1
2
3
4
5
Annual energy
consumption
kWh/yr
............
............
............
............
............
Life-cycle cost, all customers
2012$
Installed cost
6,370
5,972
5,891
5,891
5,609
Discounted
operating cost
6,383
6,558
6,612
6,612
8,883
Life-cycle cost savings
LCC
10,160
9,733
9,644
9,644
9,332
16,543
16,292
16,256
16,256
18,215
Affected customers’ average savings
2012$
Median
payback
period years
% of Customers that experience
Net cost
572
486
432
432
(1,592)
No impact
0
1
1
1
95
Net benefit
65
32
16
16
1
35
68
83
83
3
0.86
1.74
1.97
1.97
13.21
* Values in parentheses are negative values.
** Percentages may not add up to 100 percent due to rounding.
TABLE V.13—SUMMARY LCC AND PBP RESULTS FOR VCS.SC.M EQUIPMENT CLASS*
TSL
1
2
3
4
5
Life-cycle cost, all customers
2012$
Annual energy
consumption
kWh/yr
Installed cost
Discounted
operating cost
863
793
659
659
507
3,386
3,406
3,484
3,484
4,771
Life-cycle cost savings
2,122
2,070
1,967
1,967
1,837
............
............
............
............
............
LCC
5,508
5,476
5,451
5,451
6,608
Affected customers’ average savings
2012$
Median
payback
period years
% of Customers that experience
Net cost
279
163
132
132
(1,042)
No impact
0
0
7
7
99
Net benefit
72
42
13
13
1
28
58
80
80
0
0.78
0.98
1.75
1.75
14.11
* Values in parentheses are negative values.
** Percentages may not add up to 100 percent due to rounding.
mstockstill on DSK4VPTVN1PROD with PROPOSALS3
TABLE V.14—SUMMARY LCC AND PBP RESULTS FOR VCS.SC.L EQUIPMENT CLASS*
TSL
1
2
3
4
5
Annual energy
consumption
kWh/yr
............
............
............
............
............
Life-cycle cost, all customers
2012$
Installed cost
2,649
2,463
2,432
2,394
2,084
Discounted
operating cost
3,673
3,735
3,751
3,776
5,505
Life-cycle cost savings
LCC
3,829
3,671
3,651
3,630
3,366
7,501
7,405
7,402
7,405
8,871
Affected customers’ average savings
2012$
Net cost
525
329
268
221
(1,274)
No impact
0
0
5
20
97
73
42
28
14
1
* Values in parentheses are negative values.
** Percentages may not add up to 100 percent due to rounding.
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Median
payback
period years
% of Customers that experience
E:\FR\FM\11SEP3.SGM
11SEP3
Net benefit
27
58
68
66
2
0.55
0.91
1.00
1.15
10.54
55954
Federal Register / Vol. 78, No. 176 / Wednesday, September 11, 2013 / Proposed Rules
TABLE V.15—SUMMARY LCC AND PBP RESULTS FOR VCS.SC.I EQUIPMENT CLASS*
TSL
1
2
3
4
5
Annual energy
consumption
kWh/yr
............
............
............
............
............
Life-cycle cost, all customers
2012$
Installed cost
6,657
6,492
6,438
6,438
6,034
Discounted
operating cost
4,148
4,218
4,243
4,243
6,535
Life-cycle cost savings
Affected customers’ average savings
2012$
LCC
7,526
7,392
7,357
7,357
7,013
11,674
11,610
11,600
11,600
13,548
Median
payback
period years
% of Customers that experience
Net cost
237
177
153
153
(1,819)
No impact
0
0
3
3
99
Net benefit
67
32
16
16
1
33
68
81
81
0
0.80
2.07
2.42
2.42
27.19
* Values in parentheses are negative values.
** Percentages may not add up to 100 percent due to rounding.
TABLE V.16—SUMMARY LCC AND PBP RESULTS FOR SVO.RC.M EQUIPMENT CLASS*
TSL
1
2
3
4
5
Life-cycle cost, all customers
2012$
Annual energy
consumption
kWh/yr
Installed cost
Discounted
operating cost
13,179
12,355
10,114
10,065
9,949
8,341
8,547
9,455
9,517
11,511
Life-cycle cost savings
16,821
16,098
14,347
14,304
14,202
............
............
............
............
............
Affected customers’ average savings
2012$
LCC
25,161
24,645
23,802
23,821
25,713
Median
payback
period years
% of Customers that experience
Net cost
74
552
1,217
1,008
(1,015)
No impact
0
0
0
13
85
Net benefit
75
51
29
16
3
25
49
71
72
12
1.31
2.64
4.34
4.50
11.60
* Values in parentheses are negative values.
** Percentages may not add up to 100 percent due to rounding.
TABLE V.17—SUMMARY LCC AND PBP RESULTS FOR SVO.SC.M EQUIPMENT CLASS*
TSL
9,396
9,255
8,501
8,481
8,439
Annual energy
consumption
kWh/yr
.....
.....
.....
.....
.....
Life-cycle cost, all customers
2012$
Installed cost
3,885
3,914
4,314
4,359
5,049
Discounted
operating cost
12,744
12,600
11,866
11,843
11,796
Life-cycle cost savings
Affected customers’ average savings
2012$
LCC
16,629
16,514
16,180
16,202
16,844
324
335
588
492
(202)
Median
payback
period years
% of Customers that experience
Net cost
0
0
0
12
69
No impact
61
43
25
14
4
Net benefit
39
57
75
75
27
1.97
2.06
4.43
4.75
10.36
9,396
9,255
8,501
8,481
8,439
* Values in parentheses are negative values.
** Percentages may not add up to 100 percent due to rounding.
TABLE V.18—SUMMARY LCC AND PBP RESULTS FOR SOC.RC.M EQUIPMENT CLASS*
TSL
1
2
3
4
5
Life-cycle cost, all customers
2012$
Annual energy
consumption
kWh/yr
Installed cost
Discounted
operating cost
9,353
9,115
7,455
7,356
7,274
12,766
12,799
13,343
13,570
15,050
Life-cycle cost savings
15,106
14,906
13,511
13,443
13,372
............
............
............
............
............
LCC
27,872
27,704
26,854
27,012
28,423
Affected customers’ average savings
2012$
Median
payback
period years
% of Customers that experience**
Net cost
118
226
998
495
(982)
No impact
0
0
0
29
89
Net benefit
82
64
47
18
5
18
36
53
53
6
1.25
1.44
3.31
4.41
11.88
* Values in parentheses are negative values.
** Percentages may not add up to 100 percent due to rounding.
mstockstill on DSK4VPTVN1PROD with PROPOSALS3
TABLE V.19—SUMMARY LCC AND PBP RESULTS FOR HZO.RC.M EQUIPMENT CLASS*
TSL
1
2
3
4
5
Annual energy
consumption
kWh/yr
............
............
............
............
............
Life-cycle cost, all customers
2012$
Installed cost
5,267
5,267
5,267
5,267
5,173
Discounted
operating cost
8,056
8,056
8,056
8,056
9,406
Life-cycle cost savings
LCC
8,916
8,916
8,916
8,916
8,837
16,972
16,972
16,972
16,972
18,243
Affected customers’ average savings
2012$
Median
payback
period years
% of Customers that experience
Net cost
NA
NA
NA
NA
(1,271)
No impact
NA
NA
NA
NA
78
NA
NA
NA
NA
22
Net benefit
NA
NA
NA
NA
0
NA
NA
NA
NA
161.23
‘‘NA’’ stands for not applicable. TSLs 1 through 4 are at the baseline efficiency level. Therefore, the LCC savings, distribution of customer impacts and PBP are
shown as ‘‘NA.’’
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11SEP3
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55955
* Values in parentheses are negative values.
** Percentages may not add up to 100 percent due to rounding.
TABLE V.20—SUMMARY LCC AND PBP RESULTS FOR HZO.RC.L EQUIPMENT CLASS*
TSL
1
2
3
4
5
Annual energy
consumption
kWh/yr
............
............
............
............
............
Life-cycle cost, all customers
2012$
Installed cost
12,082
12,082
12,082
12,082
11,759
Discounted
operating cost
8,895
8,895
8,895
8,895
11,301
Life-cycle cost savings
LCC
14,989
14,989
14,989
14,989
14,718
23,884
23,884
23,884
23,884
26,019
Affected customers’ average savings
2012$
Median
payback
period years
% of Customers that experience
Net cost
NA
NA
NA
NA
(2,135)
No impact
NA
NA
NA
NA
86
Net benefit
NA
NA
NA
NA
14
NA
NA
NA
NA
0
NA
NA
NA
NA
83.78
‘‘NA’’ stands for not applicable. TSLs 1 through 4 are at the baseline efficiency level. Therefore, the LCC savings, distribution of customer impacts and PBP are
shown as ‘‘NA.’’
* Values in parentheses are negative values.
** Percentages may not add up to 100 percent due to rounding.
TABLE V.21—SUMMARY LCC AND PBP RESULTS FOR HZO.SC.M EQUIPMENT CLASS*
TSL
1
2
3
4
5
Annual energy
consumption
kWh/yr
............
............
............
............
............
Life-cycle cost, all customers
2012$
Installed cost
5,388
5,388
5,330
5,289
5,206
Discounted
operating cost
2,343
2,343
2,356
2,405
3,340
Life-cycle cost savings
LCC
7,055
7,055
6,999
6,954
6,862
9,399
9,399
9,354
9,358
10,202
Affected customers’ average savings
2012$
Median
payback
period years
% of Customers that experience
Net cost
9
9
49
29
(822)
No impact
0
0
0
19
98
Net benefit
75
75
49
24
2
25
25
51
57
0
1.89
1.89
2.42
6.40
55.78
* Values in parentheses are negative values.
** Percentages may not add up to 100 percent due to rounding.
TABLE V.22—SUMMARY LCC AND PBP RESULTS FOR HZO.SC.L EQUIPMENT CLASS*
TSL
1
2
3
4
5
Annual energy
consumption
kWh/yr
............
............
............
............
............
Life-cycle cost, all customers
2012$
Installed cost
10,994
10,994
10,994
10,994
10,916
Discounted
operating cost
3,691
3,691
3,691
3,691
4,251
Life-cycle cost savings
LCC
13,891
13,891
13,891
13,891
13,804
17,582
17,582
17,582
17,582
18,056
Affected customers’ average savings
2012$
Median
payback
period years
% of Customers that experience
Net cost
NA
NA
NA
NA
(474)
No impact
NA
NA
NA
NA
72
Net benefit
NA
NA
NA
NA
28
NA
NA
NA
NA
0
NA
NA
NA
NA
73.62
‘‘NA’’ stands for not applicable. TSLs 1 through 4 are at the baseline efficiency level. Therefore, the LCC savings, distribution of customer impacts and PBP are
shown as ‘‘NA.’’
* Values in parentheses are negative values.
** Percentages may not add up to 100 percent due to rounding.
TABLE V.23—SUMMARY LCC AND PBP RESULTS FOR HCT.SC.M EQUIPMENT CLASS*
TSL
mstockstill on DSK4VPTVN1PROD with PROPOSALS3
1
2
3
4
5
Annual energy
consumption
kWh/yr
............
............
............
............
............
Life-cycle cost, all customers
2012$
Installed cost
683
305
275
244
181
Discounted
operating cost
2,057
2,161
2,175
2,220
2,812
Life-cycle cost savings
LCC
1,685
1,263
1,236
1,200
1,127
3,742
3,423
3,411
3,420
3,939
Affected customers’ average savings
2012$
Median
payback
period years
% of Customers that experience
Net cost
107
359
307
254
(294)
No impact
0
0
0
18
89
Net benefit
70
38
25
12
1
30
62
75
70
10
0.69
2.24
2.42
3.08
12.26
* Values in parentheses are negative values.
** Percentages may not add up to 100 percent due to rounding.
TABLE V.24—SUMMARY LCC AND PBP RESULTS FOR HCT.SC.L EQUIPMENT CLASS*
TSL
Annual energy
consumption
kWh/yr
1 ............
VerDate Mar<15>2010
Life-cycle cost, all customers
2012$
Installed cost
1,499
18:35 Sep 10, 2013
Discounted
operating cost
2,240
Jkt 229001
Life-cycle cost savings
LCC
2,336
PO 00000
Frm 00067
4,576
Fmt 4701
Affected customers’ average savings
2012$
Net cost
217
Sfmt 4702
Median
payback
period years
% of Customers that experience**
No impact
0
E:\FR\FM\11SEP3.SGM
75
11SEP3
Net benefit
26
0.53
55956
Federal Register / Vol. 78, No. 176 / Wednesday, September 11, 2013 / Proposed Rules
TABLE V.24—SUMMARY LCC AND PBP RESULTS FOR HCT.SC.L EQUIPMENT CLASS*—Continued
TSL
2
3
4
5
Annual energy
consumption
kWh/yr
............
............
............
............
Life-cycle cost, all customers
2012$
Installed cost
667
647
572
432
Discounted
operating cost
2,337
2,344
2,403
3,204
Life-cycle cost savings
LCC
1,589
1,574
1,513
1,385
3,926
3,918
3,916
4,590
Affected customers’ average savings
2012$
Median
payback
period years
% of Customers that experience**
Net cost
791
571
369
(355)
No impact
0
0
23
76
Net benefit
61
45
14
1
39
55
63
23
1.00
1.05
1.47
7.15
* Values in parentheses are negative values.
** Percentages may not add up to 100 percent due to rounding.
TABLE V.25—SUMMARY LCC AND PBP RESULTS FOR HCT.SC.I EQUIPMENT CLASS*
TSL
1
2
3
4
5
Annual energy
consumption
kWh/yr
............
............
............
............
............
Life-cycle cost, all customers
2012$
Installed cost
1,174
1,121
1,045
1,045
776
Discounted
operating cost
2,331
2,346
2,391
2,391
3,461
Life-cycle cost savings
LCC
1,991
1,953
1,889
1,889
1,663
4,322
4,299
4,279
4,279
5,124
Affected customers’ average savings
2012$
Median
payback
period years
% of Customers that experience**
Net cost
22
35
42
42
(811)
No impact
0
0
2
2
99
Net benefit
74
49
23
23
1
26
51
75
75
0
0.88
2.39
4.28
4.28
27.99
* Values in parentheses are negative values.
** Percentages may not add up to 100 percent due to rounding.
TABLE V.26—SUMMARY LCC AND PBP RESULTS FOR HCS.SC.M EQUIPMENT CLASS*
TSL
1
2
3
4
5
Annual energy
consumption
kWh/yr
............
............
............
............
............
Life-cycle cost, all customers
2012$
Installed cost
238
220
203
183
90
Discounted
operating cost
1,951
1,957
1,964
1,979
2,490
Life-cycle cost savings
LCC
972
959
948
937
857
2,924
2,916
2,912
2,916
3,347
Affected customers’ average savings
2012$
Median
payback
period years
% of Customers that experience**
Net cost
23
19
17
9
(423)
No impact
0
0
1
29
98
Net benefit
83
65
48
31
2
17
35
51
40
0
0.50
1.64
2.54
4.28
34.05
* Values in parentheses are negative values.
** Percentages may not add up to 100 percent due to rounding.
TABLE V.27—SUMMARY LCC AND PBP RESULTS FOR HCS.SC.L EQUIPMENT CLASS*
TSL
1
2
3
4
5
Annual energy
consumption
kWh/yr
............
............
............
............
............
Life-cycle cost, all customers
2012$
Installed cost
588
534
464
464
271
Discounted
operating cost
1,988
2,003
2,046
2,046
2,681
Life-cycle cost savings
LCC
1,284
1,244
1,184
1,184
1,020
3,272
3,246
3,231
3,231
3,700
Affected customers’ average savings
2012$
Median
payback
period years
% of Customers that experience**
Net cost
75
81
81
81
(401)
No impact
0
0
2
2
98
Net benefit
50
33
16
16
2
50
67
82
82
0
0.86
1.36
2.57
2.57
14.98
* Values in parentheses are negative values.
** Percentages may not add up to 100 percent due to rounding.
mstockstill on DSK4VPTVN1PROD with PROPOSALS3
TABLE V.28—SUMMARY LCC AND PBP RESULTS FOR PD.SC.M EQUIPMENT CLASS*
TSL
1
2
3
4
5
Annual energy
consumption
kWh/yr
............
............
............
............
............
Life-cycle cost, all customers
2012$
Installed cost
1,423
1,423
815
597
517
Discounted
operating cost
3,002
3,002
3,121
3,348
4,347
Life-cycle cost savings
LCC
2,926
2,926
2,322
2,112
2,031
5,927
5,927
5,444
5,460
6,379
Affected customers’ average savings
2012$
Net cost
1,010
1,010
934
310
(638)
No impact
0
0
0
41
86
86
86
69
11
1
* Values in parentheses are negative values.
** Percentages may not add up to 100 percent due to rounding.
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Median
payback
period years
% of Customers that experience
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11SEP3
Net benefit
14
14
31
48
13
0.53
0.53
1.10
2.27
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Federal Register / Vol. 78, No. 176 / Wednesday, September 11, 2013 / Proposed Rules
55957
TABLE V.29—SUMMARY LCC AND PBP RESULTS FOR SOC.SC.M EQUIPMENT CLASS*
TSL
1
2
3
4
5
Annual energy
consumption
kWh/yr
............
............
............
............
............
Life-cycle cost, all customers
2012$
Installed cost
9,869
9,783
8,039
7,920
7,814
Discounted
operating cost
12,314
12,339
12,883
13,110
14,591
Life-cycle cost savings
LCC
14,364
14,301
12,863
12,777
12,687
26,678
26,640
25,747
25,887
27,277
Affected customers’ average savings
2012$
Median
payback
period years
% of customers that experience
Net cost
646
466
1,242
740
(735)
No impact
0
0
0
25
80
70
55
40
16
5
Net benefit
30
45
60
60
16
1.12
1.24
2.35
2.99
7.42
* Values in parentheses are negative values.
** Percentages may not add up to 100 percent due to rounding.
mstockstill on DSK4VPTVN1PROD with PROPOSALS3
b. Life-Cycle Cost Subgroup Analysis
As described in section IV.J, DOE
estimated the impact of potential
amended efficiency standards for
commercial refrigeration equipment, at
each TSL, on two customer subgroups,
one belonging to the foodservice sector
and one to the food-retail sector. For the
small business segment in the
foodservice sector, full-service
restaurants were chosen as the
representative subgroup, and for the
food-retail sector, convenience stores
with gas stations were chosen as the
representative subgroup. DOE carried
out two LCC subgroup analyses by using
the LCC spreadsheet described in
chapter 8 of the NOPR TSD, but with
certain modifications. The input for
business type was fixed to the identified
subgroup, which ensured that the
discount rates and electricity price rates
associated with only that subgroup were
selected in the Monte Carlo simulations
(see chapter 8 of the NOPR TSD). The
discount rate was further increased by
applying the small firm premium to the
WACC (See Table IV.9 for details).
Another major modification to the LCC
analysis was an added assumption that
the subgroups do not have access to
national accounts, which results in
higher distribution channel markups for
the subgroups, leading to higher
equipment purchase prices. Apart from
these changes, all other inputs for LCC
subgroup analysis are same as those in
the LCC analysis described in chapter 8
of the NOPR TSD.
The results for the small business
subgroup in the foodservice sector
(Table V.30, Table V.31, and Table V.32)
are presented only for the self-contained
equipment classes because full-service
restaurants that are small businesses
generally do not use remote condensing
equipment. Table V.30 presents the
comparison of mean LCC savings for the
small business subgroup in foodservice
sector (full-service restaurants) with the
national average values (LCC savings
results from chapter 8 of the NOPR
TSD). For all TSLs in all equipment
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classes, the LCC savings for the small
business subgroup are lower than the
national average values. Table V.31
presents the percentage change in LCC
savings compared to national average
values for self-contained equipment. For
many of the equipment classes in Table
V.31, the percentage decrease in LCC
savings is less than 15 percent.
Equipment classes that show a
substantial decrease in LCC savings,
compared to national average values, are
VOP.SC.M, VCT.SC.M, VCT.SC.L,
VCT.SC.I, SVO.SC.M, HZO.SC.M,
HCT.SC.I and PD.SC.M, which belong to
the classification of self-contained
display type equipment. It is uncommon
to find display type equipment in small
full-service restaurants. An
overwhelming majority of commercial
refrigeration equipment in small
restaurants is composed of solid door
refrigerators and freezers that are used
for food storage in the kitchen. The
solid-door equipment (VCS and HCS)
exhibits a relatively smaller percentage
decrease in LCC savings. In any case,
the value of LCC savings at TSL 4 is
positive for all equipment classes as
shown in Table V.30. Therefore, even
though the LCC savings for small
business subgroup in foodservice sector
are lower than the national average
values, they are still positive, implying
that small businesses still save money
over the equipment lifetime at TSL 4.
Table V.32 presents the comparison of
median PBPs for the small business
subgroup in the foodservice sector with
national median values (median PBPs
from chapter 8 of the NOPR TSD). The
PBP values are higher for the small
business subgroup in all cases, which is
consistent with the decrease in LCC
savings.
Table V.33 presents the comparison of
mean LCC savings for the small business
subgroup in the food-retail sector
(convenience stores with gasoline
stations) with the national average
values (LCC savings results from chapter
8 of the NOPR TSD) at each TSL. This
comparison shows mixed results, with
higher LCC savings for the subgroup in
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some instances and lower LCC savings
in others. The higher LCC savings for
the subgroup are exhibited in the case
of large display cases such as
VOP.RC.M, VOP.RC.L, VCT.RC.M,
VCT.RC.L, SVO.RC.M, and SOC.RC.M.
This equipment is predominantly used
in large grocery stores, where the
average lifetime of the equipment was
assumed to be 10 years, while the
average lifetime of this equipment in
convenience stores with gas stations
was assumed to be 15 years (see chapter
8 of the NOPR TSD for discussion of
equipment lifetime assumptions). In
general, the longer the equipment
lifetime, the lower the LCC values
because of a longer available timeframe
to offset the initial cost increases by
savings in energy costs. Because the
large display type equipment is
predominantly used in larger grocery
and multi-line retail stores, the national
average values show lower LCC savings
compared to the LCC savings of the
subgroup. Self-contained equipment, on
the other hand, was assumed to have a
10-year average lifetime in all
businesses. For self-contained
equipment, the subgroup LCC savings
were lower than the national average
LCC savings with the exception of the
HCT.SC.L cases.
Table V.34 presents the percentage
change in LCC savings of the customer
subgroup in the food-retail sector
compared to national average values at
each TSL. For a majority of equipment
classes that show a decrease in LCC
savings for the subgroup, the percentage
decrease in LCC savings is less than 15
percent. Equipment classes that show a
substantial decrease in LCC savings,
compared to national average values, are
VOP.SC.M, SVO.SC.M, HZO.SC.M,
HCT.SC.M, HCT.SC.I, and HSC.SC.M.
Among these, the equipment classes
that show decrease in LCC saving of
greater than 15 percent at TSL 4 are
VOP.SC.M (27 percent), SVO.SC.M (26
percent), HZO.SC.M (38 percent),
HCT.SC.M (21 percent), HCT.SC.I (17
percent), and HCS.SC.M (15 percent).
Even though the percentage decrease in
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LCC savings for these equipment classes
may appear to be high, the absolute
value of decrease in LCC savings is
small when compared to the total LCC
for each equipment class. Table V.35
presents the comparison of median
PBPs for small business subgroup in the
foodservice sector with national median
values (median PBPs from chapter 8 of
the NOPR TSD) at each TSL. The PBP
values are higher in the small business
subgroup in all instances, including
instances in which the LCC savings for
the subgroup are higher than national
average values. This is an expected
outcome because the PBP values are
obtained by dividing the increase in
equipment installed cost by the first
year savings in operating costs, and are
not affected by the higher average
lifetime of the equipment in the
convenience stores with gas stations.
TABLE V.30—COMPARISON OF MEAN LCC SAVINGS FOR THE SMALL BUSINESS SUBGROUP IN THE FOODSERVICE SECTOR
WITH THE NATIONAL AVERAGE VALUES
Equipment class*
Mean LCC savings
2012$**
Category
TSL 1
VOP.SC.M .................
VCT.SC.M ..................
VCT.SC.L ...................
VCT.SC.I ....................
VCS.SC.M .................
VCS.SC.L ..................
VCS.SC.I ...................
SVO.SC.M .................
HZO.SC.M .................
HZO.SC.L † ................
HCT.SC.M .................
HCT.SC.L ..................
HCT.SC.I ...................
HCS.SC.M .................
HCS.SC.L ..................
PD.SC.M ....................
SOC.SC.M .................
Small Business ............................
All Business Types ......................
Small Business ............................
All Business Types ......................
Small Business ............................
All Business Types ......................
Small Business ............................
All Business Types ......................
Small Business ............................
All Business Types ......................
Small Business ............................
All Business Types ......................
Small Business ............................
All Business Types ......................
Small Business ............................
All Business Types ......................
Small Business ............................
All Business Types ......................
Small Business ............................
All Business Types ......................
Small Business ............................
All Business Types ......................
Small Business ............................
All Business Types ......................
Small Business ............................
All Business Types ......................
Small Business ............................
All Business Types ......................
Small Business ............................
All Business Types ......................
Small Business ............................
All Business Types ......................
Small Business ............................
All Business Types ......................
TSL 2
$157.27
170.78
421.59
566.18
3,127.24
4,186.06
414.02
572.05
272.26
278.84
511.64
524.52
231.08
236.77
296.25
324.33
8.16
8.85
NA
NA
99.52
106.59
209.05
217.19
21.15
21.83
22.47
23.07
72.79
74.69
815.04
1,009.53
625.01
646.15
TSL 3
$205.50
227.17
960.34
1,363.60
1,879.37
2,522.67
310.26
486.28
158.67
162.88
318.96
329.33
170.13
176.83
305.21
334.89
8.16
8.85
NA
NA
323.44
359.48
754.27
790.53
32.20
34.69
18.59
19.18
78.72
80.97
815.04
1,009.53
449.27
466.47
TSL 4
$690.22
814.91
752.15
1,122.14
1,433.25
1,984.45
261.24
431.88
125.72
131.80
259.10
267.81
146.54
152.69
486.70
587.90
44.26
48.60
NA
NA
274.76
307.26
544.14
571.07
35.19
42.48
16.03
16.66
76.67
80.72
729.72
933.59
1,149.04
1,241.60
TSL 5
$576.21
691.27
405.47
641.05
941.77
1,342.84
261.24
431.88
125.72
131.80
213.08
220.83
146.54
152.69
397.67
491.99
18.90
28.78
NA
NA
219.49
253.60
344.36
368.92
35.19
42.48
7.99
8.68
76.67
80.72
187.05
310.43
651.93
739.75
($586.43)
(376.52)
(954.55)
(595.52)
(906.58)
(343.16)
(2,036.01)
(1,591.87)
(1,079.78)
(1,042.03)
(1,326.22)
(1,274.03)
(1,884.22)
(1,818.87)
(356.12)
(201.61)
(925.33)
(821.57)
(532.72)
(473.71)
(385.92)
(293.54)
(458.19)
(354.75)
(926.07)
(811.31)
(436.55)
(422.79)
(422.16)
(400.63)
(861.56)
(637.94)
(959.99)
(735.33)
* Only self-contained equipment have been shown for this subgroup analysis because the remote condensing equipment is not generally used
by small full-service restaurants.
** Values in parentheses are negative values. Negative percentage values imply decrease in LCC savings and positive percentage values
imply increase in LCC savings.
† TSLs 1 through 4 for equipment class HZO.SC.L are associated with the baseline efficiency level. Hence, the LCC savings are shown as
‘‘NA’’.
TABLE V.31—PERCENTAGE CHANGE IN MEAN LCC SAVINGS FOR THE SMALL BUSINESS SUBGROUP IN THE FOODSERVICE
SECTOR COMPARED TO NATIONAL AVERAGE VALUES
mstockstill on DSK4VPTVN1PROD with PROPOSALS3
Equipment class*
(percent)
TSL 1**
(percent)
VOP.SC.M ............................................................................
VCT.SC.M ............................................................................
VCT.SC.L .............................................................................
VCT.SC.I ..............................................................................
VCS.SC.M ............................................................................
VCS.SC.L .............................................................................
VCS.SC.I ..............................................................................
SVO.SC.M ............................................................................
HZO.SC.M ............................................................................
HZO.SC.L‡ ...........................................................................
HCT.SC.M ............................................................................
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TSL 2**
(percent)
(8)
(26)
(25)
(28)
(2)
(2)
(2)
(9)
(8)
NA
(7)
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TSL 3**
(percent)
(10)
(30)
(26)
(36)
(3)
(3)
(4)
(9)
(8)
NA
(10)
E:\FR\FM\11SEP3.SGM
(15)
(33)
(28)
(40)
(5)
(3)
(4)
(17)
(9)
NA
(11)
11SEP3
TSL 4**
(percent)
(17)
(37)
(30)
(40)
(5)
(4)
(4)
(19)
(34)
NA
(13)
TSL 5**
(percent)
(56)
(60)
(164)
(28)
(4)
(4)
(4)
(77)
(13)
(12)
(31)
Federal Register / Vol. 78, No. 176 / Wednesday, September 11, 2013 / Proposed Rules
55959
TABLE V.31—PERCENTAGE CHANGE IN MEAN LCC SAVINGS FOR THE SMALL BUSINESS SUBGROUP IN THE FOODSERVICE
SECTOR COMPARED TO NATIONAL AVERAGE VALUES—Continued
Equipment class*
(percent)
TSL 1**
(percent)
HCT.SC.L .............................................................................
HCT.SC.I ..............................................................................
HCS.SC.M ............................................................................
HCS.SC.L .............................................................................
PD.SC.M ..............................................................................
SOC.SC.M ...........................................................................
TSL 2**
(percent)
(4)
(3)
(3)
(3)
(19)
(3)
TSL 3**
(percent)
(5)
(7)
(3)
(3)
(19)
(4)
TSL 4**
(percent)
(5)
(17)
(4)
(5)
(22)
(7)
TSL 5**
(percent)
(7)
(17)
(8)
(5)
(40)
(12)
(29)
(14)
(3)
(5)
(35)
(31)
* Only self-contained equipment have been shown for this subgroup analysis because the remote condensing equipment is not generally used
by small full-service restaurants.
** Values in parentheses are negative values. Negative percentage values imply decrease in LCC savings and positive percentage values
imply increase in LCC savings.
† This value is high because of change of sign from subgroup value to national average value.
‡ TSLs 1 through 4 for equipment class HZO.SC.L are associated with the baseline efficiency level. Hence, the percentage changes in LCC
savings are shown as ‘‘NA’’.
‘0%’ means the value is in between ¥0.5% and 0.5%.
TABLE V.32—COMPARISON OF MEDIAN PAYBACK PERIODS FOR THE SMALL BUSINESS SUBGROUP IN THE FOODSERVICE
SECTOR WITH NATIONAL MEDIAN VALUES
Median payback period years
Equipment class*
Category
TSL 1
VOP.SC.M .................
VCT.SC.M ..................
VCT.SC.L ...................
VCT.SC.I ....................
VCS.SC.M .................
VCS.SC.L ..................
VCS.SC.I ...................
SVO.SC.M .................
HZO.SC.M .................
HZO.SC.L** ...............
HCT.SC.M .................
HCT.SC.L ..................
HCT.SC.I ...................
HCS.SC.M .................
HCS.SC.L ..................
PD.SC.M ....................
mstockstill on DSK4VPTVN1PROD with PROPOSALS3
SOC.SC.M .................
Small Business ............................
All Business Types ......................
Small Business ............................
All Business Types ......................
Small Business ............................
All Business Types ......................
Small Business ............................
All Business Types ......................
Small Business ............................
All Business Types ......................
Small Business ............................
All Business Types ......................
Small Business ............................
All Business Types ......................
Small Business ............................
All Business Types ......................
Small Business ............................
All Business Types ......................
Small Business ............................
All Business Types ......................
Small Business ............................
All Business Types ......................
Small Business ............................
All Business Types ......................
Small Business ............................
All Business Types ......................
Small Business ............................
All Business Types ......................
Small Business ............................
All Business Types ......................
Small Business ............................
All Business Types ......................
Small Business ............................
All Business Types ......................
TSL 2
1.77
1.61
0.89
0.86
0.60
0.58
0.93
0.86
0.74
0.78
0.53
0.55
0.77
0.80
2.15
1.97
2.07
1.89
NA
NA
0.77
0.69
0.58
0.53
0.96
0.88
0.48
0.50
0.82
0.86
0.53
0.53
1.14
1.12
TSL 3
2.38
2.17
1.77
1.73
0.63
0.61
1.89
1.74
0.94
0.98
0.87
0.91
1.99
2.07
2.25
2.06
2.07
1.89
NA
NA
2.49
2.24
1.10
1.00
2.60
2.39
1.57
1.64
1.30
1.36
0.53
0.53
1.26
1.24
TSL 4
4.52
4.12
2.27
2.21
0.85
0.83
2.14
1.97
1.68
1.75
0.96
1.00
2.32
2.42
4.83
4.43
2.64
2.42
NA
NA
2.69
2.42
1.15
1.05
4.67
4.28
2.42
2.54
2.47
2.57
1.11
1.10
2.40
2.35
TSL 5
4.81
4.39
2.61
2.54
0.99
0.96
2.14
1.97
1.68
1.75
1.10
1.15
2.32
2.42
5.17
4.75
6.98
6.40
NA
NA
3.43
3.08
1.61
1.47
4.67
4.28
4.06
4.28
2.47
2.57
2.28
2.27
3.06
2.99
12.46
11.37
8.34
8.13
3.76
3.65
14.34
13.21
13.51
14.11
10.11
10.54
26.08
27.19
11.30
10.36
60.83
55.78
80.27
73.62
13.64
12.26
7.83
7.15
30.57
27.99
32.56
34.05
14.38
14.98
7.63
7.61
7.59
7.42
* Only self-contained equipment have been shown for this subgroup analysis because the remote condensing equipment is not generally used
by small full-service restaurants.
** TSLs 1 through 4 for equipment class HZO.SC.L are associated with the baseline efficiency level. Hence, the payback period is shown as
‘‘NA.’’
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11SEP3
55960
Federal Register / Vol. 78, No. 176 / Wednesday, September 11, 2013 / Proposed Rules
TABLE V.33—COMPARISON OF LCC SAVINGS FOR THE SMALL BUSINESS SUBGROUP IN THE FOOD-RETAIL SECTOR WITH
THE NATIONAL AVERAGE VALUES
Equipment class
Mean LCC savings
2012$*
Category
TSL 1
VOP.RC.M .................
VOP.RC.L ..................
VOP.SC.M .................
VCT.RC.M .................
VCT.RC.L ..................
VCT.SC.M ..................
VCT.SC.L ...................
VCT.SC.I ....................
VCS.SC.M .................
VCS.SC.L ..................
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.M .................
HCT.SC.L ..................
HCT.SC.I ...................
HCS.SC.M .................
HCS.SC.L ..................
PD.SC.M ....................
SOC.SC.M .................
Small Business ............................
All Business Types ......................
Small Business ............................
All Business Types ......................
Small Business ............................
All Business Types ......................
Small Business ............................
All Business Types ......................
Small Business ............................
All Business Types ......................
Small Business ............................
All Business Types ......................
Small Business ............................
All Business Types ......................
Small Business ............................
All Business Types ......................
Small Business ............................
All Business Types ......................
Small Business ............................
All Business Types ......................
Small Business ............................
All Business Types ......................
Small Business ............................
All Business Types ......................
Small Business ............................
All Business Types ......................
Small Business ............................
All Business Types ......................
Small Business ............................
All Business Types ......................
Small Business ............................
All Business Types ......................
Small Business ............................
All Business Types ......................
Small Business ............................
All Business Types ......................
Small Business ............................
All Business Types ......................
Small Business ............................
All Business Types ......................
Small Business ............................
All Business Types ......................
Small Business ............................
All Business Types ......................
Small Business ............................
All Business Types ......................
Small Business ............................
All Business Types ......................
Small Business ............................
All Business Types ......................
TSL 2
$295.31
235.92
668.10
537.27
145.72
170.78
205.12
175.23
1,586.15
1,357.25
535.27
566.18
3,980.86
4,186.06
529.93
572.05
271.17
278.84
510.86
524.52
230.24
236.77
89.01
73.77
285.37
324.33
147.25
118.36
0.00
0.00
0.00
0.00
8.05
8.85
0.00
0.00
93.73
106.59
249.39
217.19
21.15
21.83
22.48
23.07
72.46
74.69
1,026.80
1,009.53
619.20
646.15
TSL 3
$927.25
743.00
1,899.69
1,516.59
187.71
227.17
2,200.61
1,864.44
1,177.93
1,004.72
1,264.79
1,363.60
2,396.41
2,522.67
430.30
486.28
157.63
162.88
318.22
329.33
169.16
176.83
674.27
551.98
292.93
334.89
280.43
226.26
0.00
0.00
0.00
0.00
8.05
8.85
0.00
0.00
299.66
359.48
906.61
790.53
32.20
34.69
18.44
19.18
78.02
80.97
1,026.80
1,009.53
444.70
466.47
TSL 4
TSL 5
$2,347.11
1,788.85
1,421.70
1,129.51
608.29
814.91
2,074.57
1,758.73
937.97
797.91
1,024.79
1,122.14
1,864.97
1,984.45
375.53
431.88
124.30
131.80
258.09
267.81
145.08
152.69
1,544.54
1,216.77
449.78
587.90
1,278.84
997.89
0.00
0.00
0.00
0.00
43.45
48.60
0.00
0.00
253.49
307.26
655.15
571.07
35.19
42.48
15.75
16.66
75.98
80.72
945.24
933.59
1,138.70
1,241.60
$1,970.10
1,493.72
1,421.70
1,129.51
503.17
691.27
1,313.23
1,108.13
937.97
797.91
574.38
641.05
1,248.55
1,342.84
375.53
431.88
124.30
131.80
211.59
220.83
145.08
152.69
1,286.98
1,008.46
364.68
491.99
670.29
494.51
0.00
0.00
0.00
0.00
17.89
28.78
0.00
0.00
199.55
253.60
425.64
368.92
35.19
42.48
7.40
8.68
75.98
80.72
299.03
310.43
643.60
739.75
($1,528.98)
(1,668.79)
(3,855.19)
(3,692.90)
(655.21)
(376.52)
(2,663.30)
(2,508.61)
(3,902.43)
(3,624.20)
(784.35)
(595.52)
(602.09)
(343.16)
(1,881.48)
(1,591.87)
(1,081.39)
(1,042.03)
(1,328.25)
(1,274.03)
(1,886.42)
(1,818.87)
(949.64)
(1,015.16)
(387.03)
(201.61)
(960.27)
(982.21)
(1,384.63)
(1,271.24)
(2,306.30)
(2,134.96)
(927.01)
(821.57)
(533.60)
(473.71)
(407.29)
(293.54)
(366.23)
(354.75)
(926.07)
(811.31)
(437.16)
(422.79)
(423.21)
(400.63)
(744.27)
(637.94)
(967.59)
(735.33)
* Values in parentheses are negative values.
** TSLs 1 through 4 for equipment classes HZO.RC.M, HZO.RC.L, and HZO.SC.L are associated with the baseline efficiency level. Hence, the
LCC savings are shown as ‘‘NA.’’
mstockstill on DSK4VPTVN1PROD with PROPOSALS3
TABLE V.34—PERCENTAGE CHANGE IN MEAN LCC SAVINGS FOR THE SMALL BUSINESS SUBGROUP IN THE FOOD RETAIL
SECTOR COMPARED TO NATIONAL AVERAGE VALUES
TSL 1*
(percent)
Equipment class
VOP.RC.M ...........................................................................
VOP.RC.L ............................................................................
VOP.SC.M ............................................................................
VCT.RC.M ............................................................................
VCT.RC.L .............................................................................
VCT.SC.M ............................................................................
VCT.SC.L .............................................................................
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TSL 2*
(percent)
25
24
(15)
17
17
(5)
(5)
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TSL 3*
(percent)
25
25
(17)
18
17
(7)
(5)
E:\FR\FM\11SEP3.SGM
31
26
(25)
18
18
(9)
(6)
11SEP3
TSL 4*
(percent)
32
26
(27)
19
18
(10)
(7)
TSL 5*
(percent)
8
(4)
(74)
(6)
(8)
(32)
(75)
Federal Register / Vol. 78, No. 176 / Wednesday, September 11, 2013 / Proposed Rules
55961
TABLE V.34—PERCENTAGE CHANGE IN MEAN LCC SAVINGS FOR THE SMALL BUSINESS SUBGROUP IN THE FOOD RETAIL
SECTOR COMPARED TO NATIONAL AVERAGE VALUES—Continued
TSL 1*
(percent)
Equipment class
VCT.SC.I ..............................................................................
VCS.SC.M ............................................................................
VCS.SC.L .............................................................................
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.M ............................................................................
HCT.SC.L .............................................................................
HCT.SC.I ..............................................................................
HCS.SC.M ............................................................................
HCS.SC.L .............................................................................
PD.SC.M ..............................................................................
SOC.SC.M ...........................................................................
TSL 2*
(percent)
(7)
(3)
(3)
(3)
21
(12)
24
NA
NA
(9)
NA
(12)
15
(3)
(3)
(3)
2
(4)
TSL 3*
(percent)
(12)
(3)
(3)
(4)
22
(13)
24
NA
NA
(9)
NA
(17)
15
(7)
(4)
(4)
2
(5)
TSL 4*
(percent)
(13)
(6)
(4)
(5)
27
(23)
28
NA
NA
(11)
NA
(17)
15
(17)
(5)
(6)
1
(8)
TSL 5*
(percent)
(13)
(6)
(4)
(5)
28
(26)
36
NA
NA
(38)
NA
(21)
15
(17)
(15)
(6)
(4)
(13)
(18)
(4)
(4)
(4)
6
(92)
2
(9)
(8)
(13)
(13)
(39)
(3)
(14)
(3)
(6)
(17)
(32)
* Values in parentheses are negative values. Negative percentage values imply decrease in LCC savings and positive percentage values imply
increase in LCC savings.
† TSLs 1 through 4 for equipment classes HZO.RC.M, HZO.RC.L, and HZO.SC.L are associated with the baseline efficiency level. Hence, the
LCC savings are zero and the decrease in LCC savings are shown as ‘‘NA.’’
‘0%’ implies the value is in between ¥0.5 and 0.5.
TABLE V.35—COMPARISON OF MEDIAN PAYBACK PERIODS FOR THE SMALL BUSINESS SUBGROUP IN THE FOOD-RETAIL
SECTOR WITH THE NATIONAL MEDIAN VALUES
Median payback period years
Equipment class
Category
TSL 1
VOP.RC.M .................
VOP.RC.L ..................
VOP.SC.M .................
VCT.RC.M .................
VCT.RC.L ..................
VCT.SC.M ..................
VCT.SC.L ...................
VCT.SC.I ....................
VCS.SC.M .................
VCS.SC.L ..................
VCS.SC.I ...................
SVO.RC.M .................
SVO.SC.M .................
mstockstill on DSK4VPTVN1PROD with PROPOSALS3
SOC.RC.M .................
HZO.RC.M* ................
HZO.RC.L* .................
HZO.SC.M .................
HZO.SC.L* .................
HCT.SC.M .................
VerDate Mar<15>2010
Small Business ............................
All Business Types ......................
Small Business ............................
All Business Types ......................
Small Business ............................
All Business Types ......................
Small Business ............................
All Business Types ......................
Small Business ............................
All Business Types ......................
Small Business ............................
All Business Types ......................
Small Business ............................
All Business Types ......................
Small Business ............................
All Business Types ......................
Small Business ............................
All Business Types ......................
Small Business ............................
All Business Types ......................
Small Business ............................
All Business Types ......................
Small Business ............................
All Business Types ......................
Small Business ............................
All Business Types ......................
Small Business ............................
All Business Types ......................
Small Business ............................
All Business Types ......................
Small Business ............................
All Business Types ......................
Small Business ............................
All Business Types ......................
Small Business ............................
All Business Types ......................
Small Business ............................
All Business Types ......................
18:35 Sep 10, 2013
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TSL 2
1.78
1.73
1.15
1.11
1.95
1.61
1.28
1.23
1.35
1.30
0.98
0.86
0.65
0.58
1.02
0.86
0.79
0.78
0.56
0.55
0.82
0.80
1.36
1.31
2.29
1.97
1.28
1.25
0.00
0.00
0.00
0.00
2.14
1.89
0.00
0.00
0.80
0.69
Fmt 4701
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TSL 3
1.83
1.77
2.10
2.03
2.65
2.17
2.51
2.42
1.57
1.51
1.95
1.73
0.68
0.61
2.08
1.74
1.01
0.98
0.93
0.91
2.12
2.07
2.74
2.64
2.40
2.06
1.48
1.44
0.00
0.00
0.00
0.00
2.14
1.89
0.00
0.00
2.60
2.24
E:\FR\FM\11SEP3.SGM
TSL 4
3.88
3.77
2.30
2.22
5.02
4.12
2.53
2.43
1.71
1.64
2.49
2.21
0.93
0.83
2.35
1.97
1.79
1.75
1.03
1.00
2.48
2.42
4.49
4.34
5.18
4.43
3.41
3.31
0.00
0.00
0.00
0.00
2.74
2.42
0.00
0.00
2.81
2.42
11SEP3
TSL 5
4.02
3.91
2.30
2.22
5.34
4.39
2.80
2.70
1.71
1.64
2.87
2.54
1.09
0.96
2.35
1.97
1.79
1.75
1.18
1.15
2.48
2.42
4.66
4.50
5.55
4.75
4.54
4.41
0.00
0.00
0.00
0.00
7.23
6.40
0.00
0.00
3.58
3.08
12.09
11.76
18.90
18.30
13.84
11.37
13.61
13.09
16.40
15.75
9.17
8.13
4.12
3.65
15.75
13.21
14.45
14.11
10.80
10.54
27.85
27.19
12.01
11.60
12.12
10.36
12.24
11.88
166.41
161.23
86.47
83.78
62.97
55.78
83.02
73.62
14.23
12.26
55962
Federal Register / Vol. 78, No. 176 / Wednesday, September 11, 2013 / Proposed Rules
TABLE V.35—COMPARISON OF MEDIAN PAYBACK PERIODS FOR THE SMALL BUSINESS SUBGROUP IN THE FOOD-RETAIL
SECTOR WITH THE NATIONAL MEDIAN VALUES—Continued
Median payback period years
Equipment class
Category
TSL 1
HCT.SC.L ..................
HCT.SC.I ...................
HCS.SC.M .................
HCS.SC.L ..................
PD.SC.M ....................
SOC.SC.M .................
Small Business ............................
All Business Types ......................
Small Business ............................
All Business Types ......................
Small Business ............................
All Business Types ......................
Small Business ............................
All Business Types ......................
Small Business ............................
All Business Types ......................
Small Business ............................
All Business Types ......................
TSL 2
0.59
0.53
0.96
0.88
0.51
0.50
0.88
0.86
0.58
0.53
1.23
1.12
TSL 3
1.12
1.00
2.60
2.39
1.68
1.64
1.40
1.36
0.58
0.53
1.36
1.24
TSL 4
1.17
1.05
4.67
4.28
2.60
2.54
2.63
2.57
1.22
1.10
2.58
2.35
TSL 5
1.65
1.47
4.67
4.28
4.39
4.28
2.63
2.57
2.50
2.27
3.28
2.99
8.01
7.15
30.57
27.99
34.88
34.05
15.35
14.98
8.40
7.61
8.13
7.42
* TSLs 1 through 4 for equipment classes HZO.RC.M, HZO.RC.L, and HZO.SC.L are associated with the baseline efficiency level. Hence, the
payback period is shown as ‘‘NA.’’
2. Economic Impacts on Manufacturers
range of anticipated market responses to
amended standards.
To assess the lower (less severe) end
of the range of potential impacts, DOE
modeled a preservation of gross margin
percentage markup scenario, in which a
uniform ‘‘gross margin percentage’’
markup was applied across all potential
efficiency levels. In this scenario, DOE
assumed that a manufacturer’s absolute
dollar markup would increase as
production costs increase in the
amended standards case. Manufacturers
have indicated that it is optimistic to
assume that they would be able to
maintain the same gross margin
percentage markup as their production
costs increase in response to an
amended efficiency standard,
particularly at higher TSLs. To assess
the higher (more severe) end of the
range of potential impacts, DOE
modeled the preservation of operating
profit markup scenario, which assumes
that manufacturers would be able to
earn the same operating margin in
DOE performed an MIA to estimate
the impact of amended energy
conservation standards on
manufacturers of commercial
refrigeration equipment. The following
section describes the expected impacts
on manufacturers at each TSL. Chapter
12 of the NOPR TSD explains the
analysis in further detail.
a. Industry Cash-Flow Analysis Results
The following tables depict the
financial impacts (represented by
changes in INPV) of amended energy
standards on manufacturers as well as
the conversion costs that DOE estimates
manufacturers would incur for all
equipment classes at each TSL. To
evaluate the range of cash flow impacts
on the commercial refrigeration
industry, DOE modeled two different
scenarios using different assumptions
for markups that correspond to the
absolute dollars in the amended
standards case as in the base case. Table
V.36 and Table V.37 show the potential
INPV impacts for commercial
refrigeration equipment manufacturers
at each TSL: Table V.36 reflects the
lower bound of impacts and Table V.37
represents the upper bound.
Each of the modeled scenarios results
in a unique set of cash flows and
corresponding industry values at each
TSL. In the following discussion, the
INPV results refer to the difference in
industry value between the base case
and each potential amended standards
case that results from the sum of
discounted cash flows from the base
year 2013 through 2046, the end of the
analysis period. To provide perspective
on the short-run cash flow impact, DOE
includes in the discussion of the results
below a comparison of free cash flow
between the base case and the standards
case at each TSL in the year before
amended standards take effect.
TABLE V.36—MANUFACTURER IMPACT ANALYSIS FOR COMMERCIAL REFRIGERATION EQUIPMENT—PRESERVATION OF
GROSS MARGIN PERCENTAGE MARKUP SCENARIO*
Trial standard level
Units
Base case
1
mstockstill on DSK4VPTVN1PROD with PROPOSALS3
INPV ......................
Change in INPV ....
Product Conversion
Costs.
Capital Conversion
Costs.
Total Conversion Costs.
2
3
4
5
2012$ Millions ......
2012$ Millions ......
(%) ........................
2012$ Millions ......
1,162.0
........................
........................
........................
1,158.4
(3.6)
(0.31)
8.0
1,146.9
(15.2)
(1.30)
9.9
1,135.7
(26.3)
(2.26)
10.5
1,116.1
(45.9)
(3.95)
11.2
1,136.5
(25.5)
(2.20)
68.0
2012$ Millions ......
........................
........................
18.4
42.9
76.3
252.4
2012$ Millions ......
........................
8.0
28.3
53.4
87.5
320.4
* Values in parentheses are negative values.
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11SEP3
Federal Register / Vol. 78, No. 176 / Wednesday, September 11, 2013 / Proposed Rules
55963
TABLE V.37—MANUFACTURER IMPACT ANALYSIS FOR COMMERCIAL REFRIGERATION EQUIPMENT—PRESERVATION OF
OPERATING PROFIT MARKUP SCENARIO*
Trial standard level
Units
Base case
1
INPV ......................
Change in INPV ....
Product Conversion
Costs.
Capital Conversion
Costs.
Total Conversion Costs.
2
3
4
5
2012$ Millions ......
2012$ Millions ......
(%) ........................
2012$ Millions ......
1,162.0
........................
........................
........................
1,155.2
(6.8)
(0.58)
8.0
1,135.6
(26.4)
(2.27)
9.9
1,102.8
(59.2)
(5.09)
10.5
1,069.4
(92.6)
(7.97)
11.2
646.0
(516.0)
(44.41)
68.0
2012$ Millions ......
........................
........................
18.4
42.9
76.3
252.4
2012$ Millions ......
........................
8.0
28.3
53.4
87.5
320.4
mstockstill on DSK4VPTVN1PROD with PROPOSALS3
* Values in parentheses are negative values.
At TSL 1, DOE estimates impacts on
INPV for commercial refrigeration
equipment manufacturers to range from
¥$6.8 million to ¥$3.6 million, or a
change in INPV of ¥0.58 percent to
¥0.31 percent. At this potential
standard level, industry free cash flow
is estimated to decrease by
approximately 2.85 percent to $89.6
million, compared to the base-case
value of $92.2 million in the year before
the compliance date (2016).
DOE anticipates no capital conversion
costs at TSL 1 because manufacturers
would be able to make simple
component swaps to meet the efficiency
levels for each equipment class at this
TSL. However, small product
conversion costs may be incurred in
order to incorporate the new
components in existing designs.
At TSL 2, DOE estimates impacts on
INPV for commercial refrigeration
equipment manufacturers to range from
¥$26.4 million to ¥$15.2 million, or a
change in INPV of ¥2.27 percent to
¥1.30 percent. At this potential
standard level, industry free cash flow
is estimated to decrease by
approximately 12.48 percent to $80.7
million, compared to the base-case
value of $92.2 million in the year before
the compliance date (2016).
At TSL 2, DOE expects mild impacts
on the industry. While capital
conversion costs ramp up to $18.4
million for the industry, these costs are
entirely accounted for by the VOP.RC.L
and VCT.RC.L equipment classes. This
is due to the potential need for foam
insulation that is a half-inch thicker to
meet a standard set at this level. Product
conversion costs also slightly increase
as design options that require new UL
or NSF certification are incorporated.
Detailed discussion can be found in
chapter 12 of NOPR TSD.
At TSL 3, DOE estimates impacts on
INPV for commercial refrigeration
equipment manufacturers to range from
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¥$59.2 million to ¥$26.3 million, or a
change in INPV of ¥5.09 percent to
¥2.26 percent. At this potential
standard level, industry free cash flow
is estimated to decrease by
approximately 24.65 percent to $69.5
million, compared to the base-case
value of $92.2 million in the year before
the compliance date (2016).
DOE expects mild, though slightly
higher, conversion costs at TSL 3. The
majority of the capital conversion costs
are associated with the potential need
for additional foam insulation for highvolume products, such as VCS.SC.M,
which accounts for approximately 27
percent of total shipments, and for
VCS.SC.L, which accounts for
approximately16 percent. In total, DOE
expects 8 of the 24 equipment classes to
require new production equipment due
to higher standards at this level.
At TSL 4, DOE estimates impacts on
INPV for commercial refrigeration
equipment manufacturers to range from
¥$92.6 million to ¥$45.9 million, or a
change in INPV of ¥7.97 percent to
¥3.95 percent. At this proposed
standard level, industry free cash flow
is estimated to decrease by
approximately 41.19 percent to $54.2
million, compared to the base-case
value of $92.2 million in the year before
the compliance date (2016).
At TSL 4, the drop in INPV is largely
driven by continued increases in
conversion costs. The increase in
conversion costs is caused by the need
for new tooling to accommodate
additional foam insulation. At TSL 4,
DOE expects 18 of the 24 equipment
classes to require new production
equipment due to higher standards.
At TSL 5, DOE estimates impacts on
INPV for commercial refrigeration
equipment manufacturers to range from
¥$516.0 million to ¥$25.5 million, or
a change in INPV of ¥44.41 percent to
2.20 percent. At this potential standard
level, industry free cash flow is
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estimated to decrease by approximately
147.31 percent to ¥$43.6 million,
compared to the base-case value of
$92.2 million in the year before the
compliance date (2016).
A substantial increase in conversion
costs are expected at TSL 5 due to the
possible need for vacuum insulated
panel technology required to meet a
standard at TSL 5. Vacuum insulated
panels are not currently used by any
commercial refrigeration equipment
manufacturers, and the production of
vacuum insulated panels would require
processes different from those used to
produce standard foam panels.
Therefore, high R&D investments may
be necessary to redesign commercial
refrigeration equipment cases. It is
possible that substantial new equipment
would be necessary to produce vacuum
insulated panels for commercial
refrigeration equipment applications.
Current panel production equipment
that cannot be used to produce vacuum
insulated panels would be retired before
it reaches the end of its useful life and
would become a stranded asset.
b. Impacts on Direct Employment
To quantitatively assess the impacts
of amended energy conservation
standards on employment, DOE used
the GRIM to estimate the domestic labor
expenditures and number of employees
in the base case and at each TSL from
2013 through 2046. DOE used statistical
data from the U.S. Census Bureau’s 2011
Annual Survey of Manufacturers (ASM),
the results of the engineering analysis,
the commercial refrigeration equipment
shipments forecast, and interviews with
manufacturers to determine the inputs
necessary to calculate industry-wide
labor expenditures and domestic
employment levels. Labor expenditures
related to manufacturing of the product
are a function of the labor intensity of
the product, the sales volume, and an
assumption that wages remain fixed in
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real terms over time. The total labor
expenditures in each year are calculated
by multiplying the MPCs by the labor
percentage of MPCs.
The total labor expenditures in the
GRIM were then converted to domestic
production employment levels by
dividing production labor expenditures
by the annual payment per production
worker (production worker hours times
the labor rate found in the U.S. Census
Bureau’s 2011 ASM). The estimates of
production workers in this section cover
workers, including line supervisors who
are directly involved in fabricating and
assembling a product within the OEM
facility. Workers performing services
that are closely associated with
production operations, such as materials
handling tasks using forklifts, are also
included as production labor. DOE’s
estimates only account for production
workers who manufacture the specific
products covered by this rulemaking.
TABLE V.38—POTENTIAL CHANGES IN THE NUMBER OF COMMERCIAL REFRIGERATION EQUIPMENT PRODUCTION WORKERS
IN 2017
Trial Standard Level*
Base case
1
Total Number of Domestic Production
Workers in 2017 (assuming no
changes in production locations) .........
Range of Potential Changes in Domestic
Production Workers in 2017 ** .............
2
3
4
5
3,672
3,672
3,672
3,672
3,672
3,925
........................
¥3,672 to 0
¥3,672 to 0
¥3,672 to 0
¥3,672 to 0
¥3,672 to 253
mstockstill on DSK4VPTVN1PROD with PROPOSALS3
* Numbers in parentheses are negative numbers.
** DOE presents a range of potential employment impacts, where the lower range represents the scenario in which all domestic manufacturers
move production to other countries.
The employment impacts shown in
Table V.38 represent the potential
production employment changes that
could result following the compliance
date of an amended energy conservation
standard. The upper end of the results
in the table estimates the maximum
increase in the number of production
workers after the implementation of
new energy conservation standards and
it assumes that manufacturers would
continue to produce the same scope of
covered products within the United
States. The lower end of the range
indicates the total number of U.S.
production workers in the industry who
could lose their jobs if all existing
production were moved outside of the
United States. Though manufacturers
stated in interviews that shifts in
production to foreign countries is
unlikely, the industry did not provide
enough information for DOE fully
quantify what percentage of the industry
would move production at each
evaluated standard level.
The majority of design options
analyzed in the engineering analysis
require manufacturers to purchase
more-efficient components from
suppliers. These components do not
require significant additional labor to
assemble. A key component of a
commercial refrigeration equipment
unit that requires fabrication labor by
the commercial refrigeration equipment
manufacturer is the shell of the unit,
which needs to be formed and foamed
in. Although this activity may require
new production equipment if thicker
insulation is needed to meet higher
efficiency levels, the process of building
the panels would essentially remain the
same, and therefore require no
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additional labor costs. As a result, labor
needs are not expected to increase as the
amended energy conservation standard
increases from baseline to TSL 4.
At TSL 5, the introduction of hybrid
vacuum insulation panels may lead to
greater labor requirements. In general,
the production and handling of hybrid
VIPs will require more labor than the
production of standard panels. This is
due to the delicate nature of VIPs and
the additional labor necessary to embed
them into a hybrid panel. The
additional labor and handling
associated with hybrid panels account
for the increase in labor at the max-tech
trial standard level.
DOE notes that the employment
impacts discussed here are independent
of the employment impacts to the
broader U.S. economy, which are
documented in the Employment Impact
Analysis, chapter 16 of the TSD.
c. Impacts on Manufacturing Capacity
According to the majority of
commercial refrigeration equipment
manufacturers interviewed, amended
energy conservation standards will not
significantly affect manufacturers’
production capacities. Any necessary
redesign of commercial refrigeration
equipment would not change the
fundamental assembly of the
equipment, but manufacturers do
anticipate some potential for minor
changes to tooling. The most significant
of these would come as a result of any
redesigns performed to accommodate
additional foam insulation thickness.
Additionally, most of the design options
being evaluated are already available on
the market as product options. Thus,
DOE believes manufacturers would be
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able to maintain manufacturing capacity
levels and continue to meet market
demand under amended energy
conservation standards.
d. Impacts on Subgroups of
Manufacturers
Small manufacturers, niche
equipment manufacturers, and
manufacturers exhibiting a cost
structure substantially different from the
industry average could be affected
disproportionately. As discussed in
section IV.K, using average cost
assumptions to develop an industry
cash-flow estimate is inadequate to
assess differential impacts among
manufacturer subgroups.
For commercial refrigeration
equipment, DOE identified and
evaluated the impact of amended energy
conservation standards on one
subgroup: small manufacturers. The
SBA defines a ‘‘small business’’ as
having 750 employees or less for NAICS
333415, ‘‘Air-Conditioning and Warm
Air Heating Equipment and Commercial
and Industrial Refrigeration Equipment
Manufacturing.’’ Based on this
definition, DOE identified 32
manufacturers in the commercial
refrigeration equipment industry that
are small businesses.
For a discussion of the impacts on the
small manufacturer subgroup, see the
regulatory flexibility analysis in section
VI.B of this notice and chapter 12 of the
NOPR TSD.
e. Cumulative Regulatory Burden
While any one regulation may not
impose a significant burden on
manufacturers, the combined effects of
recent or impending regulations may
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have serious consequences for some
manufacturers, groups of manufacturers,
or an entire industry. Assessing the
impact of a single regulation may
overlook this cumulative regulatory
burden. In addition to energy
conservation standards, other
regulations can significantly affect
manufacturers’ financial operations.
Multiple regulations affecting the same
manufacturer can strain profits and lead
companies to abandon product lines or
markets with lower expected future
returns than competing products. For
these reasons, DOE conducts an analysis
of cumulative regulatory burden as part
of its rulemakings pertaining to
appliance efficiency.
During previous stages of this
rulemaking, DOE identified a number of
requirements in addition to amended
energy conservation standards for
commercial refrigeration equipment.
The following section briefly addresses
comments DOE received with respect to
cumulative regulatory burden and
summarizes other key related concerns
that manufacturers raised during
interviews.
Certification, Compliance, and
Enforcement Rule
Multiple manufacturers have
expressed concerns about the CC&E
burdens for commercial refrigeration
equipment. Traulsen stated that CC&E is
the most significant cost item in terms
of internal resources in the form of time
and direct expenses. (Traulsen, No. 45
at pp. 4–5) NEEA expressed the opinion
that the most significant issue
associated with manufacturer impacts is
testing and compliance for a wide array
of equipment offerings, especially
considering the large number of
variations on single models. NEEA also
agreed with manufacturers that testing
each variation would create a significant
potential burden, especially on small
manufacturers. (NEEA, No. 36 at p. 7)
AHRI stated that the CC&E requirements
put in place by DOE have the potential
to bankrupt the industry due to the
excessive number of tests required.
(AHRI, No. 43 at p. 3) In addition,
Southern Store Fixtures stated that it
would be difficult to produce
information to estimate the compliance
testing burden on manufacturers, as the
certification and compliance
requirements had not yet been finalized.
(Southern Store Fixtures, Public
Meeting Transcript, No. 31 at pp. 149–
50) Southern Store Fixtures added that
it is impossible to determine potential
impacts of testing and certification on
manufacturers until the issue of basic
model is clarified. (Southern Store
Fixtures, No. 38 at p. 1)
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DOE understands that testing and
certification requirements may have a
significant impact on manufacturers,
and the CC&E burden is identified as a
key issue in the MIA. DOE also
understands that CC&E requirements
can be particularly onerous for
manufacturers producing low volume or
highly customized commercial
refrigeration equipment. As a result,
DOE is conducting a rulemaking to
expand AEDM coverage and has issued
a proposed rule to permit the
application of AEDMs for commercial
refrigeration equipment. 77 FR 32038
(May 31, 2012). More information about
the AEDM rulemaking can be found at:
www1.eere.energy.gov/buildings/
appliance_standards/certification_
enforcement.html.
EPA and ENERGY STAR
Some stakeholders also expressed
concern regarding potential conflicts
with other certification programs.
Traulsen stated that redundancy of
testing given other Federal programs
(such as EPA ENERGY STAR), where
there may be conflicting criteria,
increases cost, and that cross-references
to other databases with inconsistent
tests, classes, and enforcement adds
further complications. Traulsen
estimated that the financial impact of
meeting DOE and EPA ENERGY STAR
requirements has been greater than 0.5
percent of revenue, and stated that it
would be beneficial to reconcile the
differences between DOE and EPA
standards. (Traulsen, No. 45 at pp. 5–6)
NEEA stated that the burden of
certifications and associated testing is
inherent in the manufacturing industry,
and that this burden should have little
to do with the standards rulemaking.
However, NEEA added, any steps that
can be taken to harmonize test methods
and procedures between certifications
should be taken. (NEEA, No. 36 at p. 7)
DOE realizes that the cumulative
effect of several regulations on an
industry may significantly increase the
burden faced by manufacturers that
need to comply with multiple
regulations and certification programs
from different organizations and levels
of government. However, DOE notes
that certain standards, such as ENERGY
STAR, are optional for manufacturers.
Harmonizing of test methods and
procedures is not part of the energy
conservation standards rulemaking. In
its test procedure rulemaking, which
culminated in the publication of the
February 2012 test procedure final rule
(77 FR 10292 (Feb. 21, 2012)), DOE
attempted to set the test procedure in
such a way so as to maximize the
similarities between the DOE test
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55965
procedure and the test procedure
required for ENERGY STAR
certification.
Other Federal Regulations
AHRI stated that there are several
legislative and regulatory activities that
could significantly burden
manufacturers of commercial
refrigeration equipment, including the
upcoming amended energy conservation
standards for walk-in coolers and
freezers. AHRI also added that climate
change bills that could be presented
before Congress could have significant
negative impact on the availability and
price of HFC refrigerants. (AHRI, No. 43
at p. 4)
DOE recognizes the additional burden
faced by manufacturers that produce
both commercial refrigeration
equipment and walk-in coolers and
freezers. Companies that produce a wide
range of regulated equipment may be
faced with more capital and equipment
design development expenditures than
competitors with a narrower scope of
production. However, DOE cannot
consider the quantitative impacts of
amended standards that have not yet
been finalized, such as those for walkins. Likewise, DOE cannot consider the
impacts of potential climate change bills
because any potential impacts would be
speculative in the absence of finalized
legislation.
State Regulations
AHRI stated that California is
currently working on new regulations as
part of Title 24 that will likely establish
new prescriptive requirements on
commercial refrigeration equipment
beginning in 2013. Additionally, AHRI
added, other States on the West Coast
are following California’s lead and are
likely to implement similar regulations
in the near future. Finally, AHRI
commented that several States have
enacted their own climate change
legislation, including regulations
established by CARB to limit GHGs and
reduce the usage of high-GWP
refrigerants such as HFCs. AHRI stated
that CARB will implement these
regulations in 2011. (AHRI, No. 43 at p.
4)
According to the latest California
Code of Regulations, title 24, part 6, any
appliance for which there is a California
energy conservation standard
established in the California Appliance
Efficiency Regulations may be installed
only if the manufacturer has certified to
the CEC, as specified in those
regulations, that the appliance complies
with the applicable standard for that
appliance. The Commission’s appliance
efficiency regulations require that the
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MDEC (in kilowatt-hours) for
commercial refrigerators manufactured
on or after January 1, 2010 does not
exceed the following:
• Refrigerators with solid doors:
0.10V + 2.04
• refrigerators with transparent doors:
0.12V + 3.34
• freezers with solid doors: 0.40V +
1.38
• freezers with transparent doors:
0.75V + 4.10
• refrigerator/freezers with solid
doors: the greater of 0.27AV–0.71 or
0.70
• refrigerators with self-condensing
unit designed for pull-down
temperature applications: 0.126V + 3.51
Since these standards are identical to
the ones prescribed in EPACT 2005, and
the efficiency levels set by the current
rulemaking will either exceed or be
equivalent to the EPACT 2005 levels,
DOE does not expect the Title 24
regulations to create a cumulative
regulatory burden on manufacturers.
California has started a rulemaking
proceeding to adopt changes to the
building energy efficiency standards
contained in the California Code of
Regulations, title 24, part 6, but the CEC
is currently in the pre-rulemaking stage
and amended standards will not be
published until 2013.
Further, CARB is currently limiting
the in-State use of high-GWP
refrigerants in non-residential
refrigeration systems through its
Refrigerant Management Program,
effective January 1, 2011.88 According to
this new regulation, facilities with
refrigeration systems that have a
refrigerant capacity exceeding 50
pounds must repair leaks within 14
days of detection, maintain on-site
records of all leak repairs, and keep
receipts of all refrigerant purchases. The
regulation applies to any person or
company that installs, services, or
disposes of appliances with high-GWP
refrigerants. Refrigeration systems with
a refrigerant capacity exceeding 50
pounds typically belong to food retail
operations with remote condensing
racks that store refrigerant serving
multiple commercial refrigeration
equipment units within a business.
However, commercial refrigeration
equipment units in food retail are
usually installed and serviced by
refrigeration contractors, not
manufacturers. As a result, although
these CARB regulations do apply to
refrigeration technicians and owners of
facilities with refrigeration systems,
they are unlikely to represent a
regulatory burden for commercial
refrigeration manufacturers.
DOE discusses these and other
requirements, and includes the full
details of the cumulative regulatory
burden analysis, in chapter 12 of the
NOPR TSD.
3. National Impact Analysis
a. Amount and Significance of Energy
Savings
DOE estimated the NES by calculating
the difference in annual energy
consumption for the base-case scenario
and standards-case scenario at each TSL
for each equipment class and summing
up the annual energy savings for all
equipment purchased in 2017–2046.
The energy consumption calculated in
the NIA is source energy, taking into
account losses in the generation and
transmission of electricity as discussed
in section IV.I.
Table V.39 presents the NES for all
equipment classes at each TSL and the
sum total of NES for each TSL and Table
V.40 presents estimated FFC energy
savings for each considered TSL. The
total NES progressively increases from
0.236 quads at TSL 1 to 1.278 quads at
TSL 5. Table V.41 presents the energy
savings at each TSL for each equipment
class in the form of percentage of the
cumulative energy use of the equipment
stock in the base case scenario.
TABLE V.39—CUMULATIVE NATIONAL PRIMARY ENERGY SAVINGS FOR EQUIPMENT PURCHASED IN 2017–2046
Quads *
Equipment class
mstockstill on DSK4VPTVN1PROD with PROPOSALS3
TSL 1
VOP.RC.M ...........................................................................
VOP.RC.L ............................................................................
VOP.SC.M ............................................................................
VCT.RC.M ............................................................................
VCT.RC.L .............................................................................
VCT.SC.M ............................................................................
VCT.SC.L .............................................................................
VCT.SC.I ..............................................................................
VCS.SC.M ............................................................................
VCS.SC.L .............................................................................
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.M ............................................................................
HCT.SC.L .............................................................................
HCT.SC.I ..............................................................................
HCS.SC.M ............................................................................
HCS.SC.L .............................................................................
PD.SC.M ..............................................................................
SOC.SC.M ...........................................................................
88 California Air Resources Board. Refrigerant
Management Program Final Regulation. 2011. Cal.
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TSL 2
0.007
0.001
0.001
0.000
0.061
0.011
0.005
0.001
0.047
0.042
0.000
0.002
0.004
0.001
0.000
0.000
0.001
0.000
0.001
0.001
0.047
0.000
0.045
0.005
0.003
0.007
0.071
0.057
0.005
0.003
0.064
0.064
0.000
0.029
0.006
0.002
0.000
0.000
0.004
0.000
0.001
0.001
0.047
0.000
Code Regs. tit. 17, § 95386. (Last accessed March 16,
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TSL 3
0.238
0.006
0.017
0.009
0.078
0.074
0.006
0.003
0.111
0.068
0.000
0.139
0.021
0.017
0.000
0.000
0.004
0.001
0.002
0.002
0.105
0.002
TSL 4
0.244
0.006
0.018
0.009
0.078
0.081
0.007
0.003
0.111
0.076
0.000
0.142
0.022
0.019
0.000
0.000
0.005
0.001
0.004
0.002
0.157
0.002
2012.) www.arb.ca.gov/cc/reftrack/
reftrackrule.html.
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TSL 5
0.257
0.009
0.019
0.010
0.121
0.092
0.008
0.005
0.176
0.144
0.001
0.150
0.023
0.020
0.001
0.009
0.000
0.000
0.001
0.006
0.005
0.013
0.005
0.181
0.002
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55967
TABLE V.39—CUMULATIVE NATIONAL PRIMARY ENERGY SAVINGS FOR EQUIPMENT PURCHASED IN 2017–2046—
Continued
Quads *
Equipment class
TSL 1
Net NES ........................................................................
TSL 2
0.233
TSL 3
0.416
TSL 4
0.905
TSL 5
0.985
1.257
‘-’ represents zero energy savings, since TSLs 1 through 4 for the equipment classes HZO.RC.M, HZO.RC.L, and HZO.SC.L are associated
with the baseline efficiency level.
* A value of 0.000 means NES values are less than 0.0005 quads.
TABLE V.40—CUMULATIVE NATIONAL FULL-FUEL-CYCLE ENERGY SAVINGS FOR EQUIPMENT PURCHASED IN 2017–2046
Quads *
Equipment class
TSL 1
TSL 2
TSL 3
TSL 4
TSL 5
VOP.RC.M ...........................................................................
VOP.RC.L ............................................................................
VOP.SC.M ............................................................................
VCT.RC.M ............................................................................
VCT.RC.L .............................................................................
VCT.SC.M ............................................................................
VCT.SC.L .............................................................................
VCT.SC.I ..............................................................................
VCS.SC.M ............................................................................
VCS.SC.L .............................................................................
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.M ............................................................................
HCT.SC.L .............................................................................
HCT.SC.I ..............................................................................
HCS.SC.M ............................................................................
HCS.SC.L .............................................................................
PD.SC.M ..............................................................................
SOC.SC.M ...........................................................................
0.007
0.001
0.001
0.000
0.062
0.011
0.005
0.001
0.048
0.043
0.000
0.002
0.004
0.001
0.000
0.000
0.001
0.000
0.001
0.001
0.048
0.000
0.046
0.005
0.003
0.007
0.072
0.058
0.006
0.003
0.065
0.065
0.000
0.030
0.006
0.002
0.000
0.000
0.004
0.000
0.001
0.001
0.048
0.000
0.242
0.006
0.018
0.009
0.079
0.075
0.006
0.003
0.112
0.070
0.000
0.141
0.022
0.018
0.000
0.000
0.004
0.001
0.002
0.002
0.106
0.002
0.248
0.006
0.018
0.009
0.079
0.083
0.007
0.003
0.112
0.077
0.000
0.144
0.022
0.019
0.000
0.000
0.005
0.001
0.004
0.002
0.159
0.002
0.262
0.009
0.019
0.010
0.123
0.094
0.008
0.005
0.179
0.146
0.001
0.152
0.023
0.020
0.001
0.009
0.000
0.000
0.001
0.006
0.005
0.013
0.005
0.184
0.002
Net NES ........................................................................
0.236
0.422
0.920
1.001
1.278
‘-’ represents zero energy savings, since TSLs 1 through 4 for the equipment classes HZO.RC.M, HZO.RC.L, and HZO.SC.L are associated
with the baseline efficiency level.
* A value of 0.000 means NES values are less than 0.0005 quads.
TABLE V.41—CUMULATIVE ENERGY SAVINGS BY TSL FOR EACH EQUIPMENT CLASS EXPRESSED AS A PERCENTAGE OF
CUMULATIVE BASE-CASE ENERGY USAGE OF THE NEW COMMERCIAL REFRIGERATION EQUIPMENT STOCK PURCHASED IN 2017–2046
Total basecase energy
use
quads *
mstockstill on DSK4VPTVN1PROD with PROPOSALS3
Equipment class
VOP.RC.M ...............................................
VOP.RC.L ................................................
VOP.SC.M ................................................
VCT.RC.M ................................................
VCT.RC.L .................................................
VCT.SC.M ................................................
VCT.SC.L .................................................
VCT.SC.I ..................................................
VCS.SC.M ................................................
VCS.SC.L .................................................
VCS.SC.I ..................................................
SVO.RC.M ...............................................
SVO.SC.M ................................................
SOC.RC.M ...............................................
HZO.RC.M ...............................................
HZO.RC.L ................................................
HZO.SC.M ................................................
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TSL Savings as percent of total base-case energy use
TSL 1
(percent)
1.606
0.203
0.231
0.027
1.198
0.235
0.036
0.047
0.472
0.720
0.012
0.990
0.300
0.173
0.066
0.475
0.015
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TSL 2
(percent)
0
0
1
1
5
5
15
3
10
6
1
0
1
0
0
0
0
Fmt 4701
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TSL 3
(percent)
3
3
1
25
6
25
15
6
14
9
3
3
2
1
0
0
0
E:\FR\FM\11SEP3.SGM
TSL 4
(percent)
15
3
8
33
7
32
18
7
24
10
3
14
7
10
0
0
1
11SEP3
TSL 5
(percent)
15
3
8
35
7
35
19
7
24
11
3
15
7
11
0
0
1
16
4
8
39
10
40
22
10
38
20
8
15
8
12
1
2
2
55968
Federal Register / Vol. 78, No. 176 / Wednesday, September 11, 2013 / Proposed Rules
TABLE V.41—CUMULATIVE ENERGY SAVINGS BY TSL FOR EACH EQUIPMENT CLASS EXPRESSED AS A PERCENTAGE OF
CUMULATIVE BASE-CASE ENERGY USAGE OF THE NEW COMMERCIAL REFRIGERATION EQUIPMENT STOCK PURCHASED IN 2017–2046—Continued
Total basecase energy
use
quads *
Equipment class
HZO.SC.L .................................................
HCT.SC.M ................................................
HCT.SC.L .................................................
HCT.SC.I ..................................................
HCS.SC.M ................................................
HCS.SC.L .................................................
PD.SC.M ..................................................
SOC.SC.M ...............................................
Totals ................................................
TSL Savings as percent of total base-case energy use
TSL 1
(percent)
0.063
0.001
0.012
0.017
0.026
0.010
0.401
0.014
7.349
TSL 2
(percent)
0
5
6
1
2
8
12
3
3
TSL 3
(percent)
0
40
33
3
5
13
12
3
6
TSL 4
(percent)
0
43
33
7
8
21
27
13
13
TSL 5
(percent)
0
48
38
7
14
21
40
13
14
0
57
50
27
49
48
46
14
17
* Energy use of the entire commercial refrigeration equipment stock in the base-case scenario in 2017–2046 plus the energy use of the surviving stock of equipment in 2047–2060 for equipment purchased in 2017–2046.
‘-’ represents zero energy savings, since TSLs 1 through 4 for equipment classes HZO.RC.M, HZO.RC.L, and HZO.SC.L are associated with
the baseline efficiency level.
Circular A–4 requires agencies to
present analytical results, including
separate schedules of the monetized
benefits and costs that show the type
and timing of benefits and costs.
Circular A–4 also directs agencies to
consider the variability of key elements
underlying the estimates of benefits and
costs. For this rulemaking, DOE
undertook a sensitivity analysis using
nine rather than 30 years of product
shipments. The choice of a 9-year
period is a proxy for the timeline in
EPCA for the review of certain energy
conservation standards and potential
revision of and compliance with such
revised standards.89 We would note that
the review timeframe established in
EPCA generally does not overlap with
the product lifetime, product
manufacturing cycles or other factors
specific to commercial refrigeration
equipment. Thus, this information is
presented for informational purposes
only and is not indicative of any change
in DOE’s analytical methodology. The
primary and full-fuel cycle NES results
based on a 9-year analysis period are
presented in Table V.42 and Table V.43,
respectively. The impacts are counted
over the lifetime of products purchased
in 2017–2025.
TABLE V.42—CUMULATIVE NATIONAL PRIMARY ENERGY SAVINGS FOR 9-YEAR ANALYSIS PERIOD
[Equipment purchased in 2017–2025]
quads*
Equipment class
mstockstill on DSK4VPTVN1PROD with PROPOSALS3
TSL 1
VOP.RC.M ...........................................................................
VOP.RC.L ............................................................................
VOP.SC.M ............................................................................
VCT.RC.M ............................................................................
VCT.RC.L .............................................................................
VCT.SC.M ............................................................................
VCT.SC.L .............................................................................
VCT.SC.I ..............................................................................
VCS.SC.M ............................................................................
VCS.SC.L .............................................................................
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.M ............................................................................
HCT.SC.L .............................................................................
HCT.SC.I ..............................................................................
HCS.SC.M ............................................................................
HCS.SC.L .............................................................................
PD.SC.M ..............................................................................
89 EPCA requires DOE to review its standards at
least once every 6 years (42 U.S.C. 6295(m)(1),
6316(e)), and requires, for certain products, a 3-year
period after any new standard is promulgated
before compliance is required, except that in no
case may any new standards be required within 6
years of the compliance date of the previous
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TSL 2
0.001
0.000
0.000
0.000
0.012
0.002
0.001
0.000
0.010
0.009
0.000
0.000
0.001
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.010
0.009
0.001
0.001
0.001
0.015
0.012
0.001
0.001
0.013
0.013
0.000
0.006
0.001
0.000
0.000
0.000
0.001
0.000
0.000
0.000
0.010
standards. (42 U.S.C. 6295(m)(4), 6316(e)).While
adding a 6-year review to the 3-year compliance
period sums to 9 years, DOE notes that it may
undertake reviews at any time within the 6-year
period, and that the 3 year compliance date may be
extended to 5 years. A 9-year analysis period may
not be appropriate given the variability that occurs
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Sfmt 4702
TSL 3
0.049
0.001
0.004
0.002
0.016
0.015
0.001
0.001
0.023
0.014
0.000
0.029
0.004
0.004
0.000
0.000
0.001
0.000
0.000
0.000
0.021
TSL 4
0.050
0.001
0.004
0.002
0.016
0.017
0.001
0.001
0.023
0.016
0.000
0.029
0.004
0.004
0.000
0.000
0.001
0.000
0.001
0.000
0.032
TSL 5
0.053
0.002
0.004
0.002
0.025
0.019
0.002
0.001
0.036
0.030
0.000
0.031
0.005
0.004
0.000
0.002
0.000
0.000
0.000
0.001
0.001
0.003
0.001
0.037
in the timing of standards reviews and the fact that,
for some consumer products, the period following
establishment of a new or amended standard before
which compliance is required is 5 years rather than
3 years.
E:\FR\FM\11SEP3.SGM
11SEP3
Federal Register / Vol. 78, No. 176 / Wednesday, September 11, 2013 / Proposed Rules
55969
TABLE V.42—CUMULATIVE NATIONAL PRIMARY ENERGY SAVINGS FOR 9-YEAR ANALYSIS PERIOD—Continued
[Equipment purchased in 2017–2025]
quads*
Equipment class
TSL 1
TSL 2
TSL 3
TSL 4
TSL 5
SOC.SC.M ...........................................................................
0.000
0.000
0.000
0.000
0.000
Net NES ........................................................................
0.048
0.085
0.185
0.202
0.258
‘-’ represents zero energy savings, since TSLs 1 through 4 for the equipment classes HZO.RC.M, HZO.RC.L, and HZO.SC.L are associated
with the baseline efficiency level.
* A value of 0.000 means NES values are less than 0.0005 quads.
TABLE V.43 CUMULATIVE FULL FUEL CYCLE NATIONAL ENERGY SAVINGS FOR 9-YEAR ANALYSIS PERIOD
[Equipment purchased in 2017–2025]
quads*
Equipment class
TSL 1
TSL 2
TSL 3
TSL 4
TSL 5
VOP.RC.M ...........................................................................
VOP.RC.L ............................................................................
VOP.SC.M ............................................................................
VCT.RC.M ............................................................................
VCT.RC.L .............................................................................
VCT.SC.M ............................................................................
VCT.SC.L .............................................................................
VCT.SC.I ..............................................................................
VCS.SC.M ............................................................................
VCS.SC.L .............................................................................
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.M ............................................................................
HCT.SC.L .............................................................................
HCT.SC.I ..............................................................................
HCS.SC.M ............................................................................
HCS.SC.L .............................................................................
PD.SC.M ..............................................................................
SOC.SC.M ...........................................................................
0.001
0.000
0.000
0.000
0.013
0.002
0.001
0.000
0.010
0.009
0.000
0.000
0.001
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.010
0.000
0.009
0.001
0.001
0.001
0.015
0.012
0.001
0.001
0.013
0.013
0.000
0.006
0.001
0.000
0.000
0.000
0.001
0.000
0.000
0.000
0.010
0.000
0.050
0.001
0.004
0.002
0.016
0.015
0.001
0.001
0.023
0.014
0.000
0.029
0.004
0.004
0.000
0.000
0.001
0.000
0.000
0.000
0.022
0.000
0.051
0.001
0.004
0.002
0.016
0.017
0.001
0.001
0.023
0.016
0.000
0.030
0.005
0.004
0.000
0.000
0.001
0.000
0.001
0.000
0.033
0.000
0.054
0.002
0.004
0.002
0.025
0.019
0.002
0.001
0.037
0.030
0.000
0.031
0.005
0.004
0.000
0.002
0.000
0.000
0.000
0.001
0.001
0.003
0.001
0.038
0.000
Net NES ........................................................................
0.048
0.087
0.189
0.205
0.262
mstockstill on DSK4VPTVN1PROD with PROPOSALS3
‘-’ represents zero energy savings, since TSLs 1 through 4 for the equipment classes HZO.RC.M, HZO.RC.L, and HZO.SC.L are associated
with the baseline efficiency level.
* A value of 0.000 means NES values are less than, 0.0005 quads.
b. Net Present Value of Customer Costs
and Benefits
DOE estimated the cumulative NPV to
the Nation of the total savings for the
customers that would result from
potential standards at each TSL. In
accordance with OMB guidelines on
regulatory analysis (OMB Circular A–4,
section E, September 17, 2003), DOE
calculated NPV using both a 7-percent
and a 3-percent real discount rate. The
7-percent rate is an estimate of the
average before-tax rate of return on
private capital in the U.S. economy, and
reflects the returns on real estate and
small business capital, including
corporate capital. DOE used this
discount rate to approximate the
opportunity cost of capital in the private
VerDate Mar<15>2010
18:35 Sep 10, 2013
Jkt 229001
sector because recent OMB analysis has
found the average rate of return on
capital to be near this rate. In addition,
DOE used the 3-percent rate to capture
the potential effects of amended
standards on private consumption. This
rate represents the rate at which society
discounts future consumption flows to
their present value. It can be
approximated by the real rate of return
on long-term government debt (i.e.,
yield on Treasury notes minus annual
rate of change in the Consumer Price
Index), which has averaged about 3
percent on a pre-tax basis for the last 30
years.
Table V.44 and Table V.45 show the
customer NPV results for each of the
TSLs DOE considered for commercial
PO 00000
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Fmt 4701
Sfmt 4702
refrigeration equipment at both 7percent and 3-percent discount rates. In
each case, the impacts cover the
expected lifetime of equipment
purchased in 2017–2046. Detailed NPV
results are presented in chapter 10 of
the NOPR TSD.
The NPV results at a 7-percent
discount rate were negative for all
equipment classes at TSL 5. This is
consistent with the results of LCC
analysis results for TSL 5, which
showed significant increase in LCC and
significantly high PBPs that were greater
than the average equipment lifetimes.
Efficiency levels for TSL 4 were chosen
to correspond to the highest efficiency
level with a positive NPV at a 7-percent
discount rate for each equipment class.
E:\FR\FM\11SEP3.SGM
11SEP3
55970
Federal Register / Vol. 78, No. 176 / Wednesday, September 11, 2013 / Proposed Rules
Similarly, the criteria for choice of
efficiency levels for TSL 3, TSL 2, and
TSL 1 were such that the NPV values for
all the equipment classes show positive
values. The criterion for TSL 3 was to
select efficiency levels with the highest
NPV at a 7-percent discount rate.
Consequently, the total NPV for
commercial refrigeration equipment is
highest for TSL 3, with a value of $1.705
billion (2012$) at a 7-percent discount
rate. TSL 4 shows the second highest
total NPV, with a value of $1.606 billion
(2012$) at a 7-percent discount rate. TSL
2 and TSL 1 have a total NPV lower
than TSL 4, while TSL 5 has a negative
total NPV of $6.735 billion (2012$).
TABLE V.44—NET PRESENT VALUE AT A 7-PERCENT DISCOUNT RATE
Billion 2012$ * **
Equipment class
TSL 1
TSL 2
TSL 3
TSL 4
TSL 5
VOP.RC.M ...........................................................................
VOP.RC.L ............................................................................
VOP.SC.M ............................................................................
VCT.RC.M ............................................................................
VCT.RC.L .............................................................................
VCT.SC.M ............................................................................
VCT.SC.L .............................................................................
VCT.SC.I ..............................................................................
VCS.SC.M ............................................................................
VCS.SC.L .............................................................................
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.M ............................................................................
HCT.SC.L .............................................................................
HCT.SC.I ..............................................................................
HCS.SC.M ............................................................................
HCS.SC.L .............................................................................
PD.SC.M ..............................................................................
SOC.SC.M ...........................................................................
0.016
0.002
0.003
0.001
0.141
0.026
0.014
0.003
0.113
0.105
0.000
0.004
0.008
0.001
0.000
0.000
0.002
0.000
0.001
0.002
0.119
0.001
0.099
0.013
0.005
0.013
0.155
0.120
0.014
0.004
0.135
0.138
0.001
0.057
0.012
0.004
0.000
0.001
0.009
0.001
0.002
0.002
0.119
0.001
0.466
0.014
0.027
0.017
0.161
0.136
0.015
0.005
0.153
0.139
0.001
0.245
0.029
0.039
0.000
0.001
0.010
0.001
0.003
0.003
0.237
0.004
0.461
0.014
0.025
0.017
0.161
0.129
0.015
0.005
0.153
0.135
0.001
0.240
0.027
0.031
0.000
0.001
0.009
0.001
0.001
0.003
0.176
0.003
(0.466)
(0.062)
(0.041)
(0.060)
(1.170)
(0.340)
(0.016)
(0.042)
(1.720)
(1.084)
(0.011)
(0.231)
(0.037)
(0.056)
(0.039)
(0.229)
(0.007)
(0.006)
(0.003)
(0.016)
(0.039)
(0.166)
(0.021)
(0.872)
(0.003)
Sum Total .....................................................................
0.561
0.905
1.705
1.606
(6.735)
‘-’ represents zero energy savings, since TSLs 1 to 4 for equipment classes HZO.RC.M, HZO.RC.L, and HZO.SC.L are associated with the
baseline efficiency level.
* A value of $0.000 means NES values are less than 0.001 billion 2012$.
** Values in parentheses are negative values.
TABLE V.45—NET PRESENT VALUE AT A 3-PERCENT DISCOUNT RATE
Billion 2012$ * **
Equipment class
mstockstill on DSK4VPTVN1PROD with PROPOSALS3
TSL 1
VOP.RC.M ...........................................................................
VOP.RC.L ............................................................................
VOP.SC.M ............................................................................
VCT.RC.M ............................................................................
VCT.RC.L .............................................................................
VCT.SC.M ............................................................................
VCT.SC.L .............................................................................
VCT.SC.I ..............................................................................
VCS.SC.M ............................................................................
VCS.SC.L .............................................................................
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.M ............................................................................
HCT.SC.L .............................................................................
HCT.SC.I ..............................................................................
HCS.SC.M ............................................................................
HCS.SC.L .............................................................................
PD.SC.M ..............................................................................
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TSL 2
0.037
0.005
0.006
0.001
0.327
0.059
0.031
0.007
0.259
0.239
0.001
0.008
0.018
0.003
0.000
0.000
0.004
0.001
0.003
0.004
0.270
Fmt 4701
Sfmt 4702
TSL 3
0.233
0.030
0.012
0.031
0.363
0.283
0.032
0.011
0.316
0.323
0.001
0.137
0.028
0.010
0.000
0.002
0.022
0.002
0.005
0.006
0.270
E:\FR\FM\11SEP3.SGM
1.144
0.032
0.070
0.041
0.383
0.331
0.035
0.012
0.398
0.329
0.002
0.615
0.078
0.093
0.000
0.002
0.022
0.003
0.007
0.007
0.551
11SEP3
TSL 4
1.140
0.032
0.068
0.041
0.383
0.326
0.035
0.012
0.398
0.327
0.002
0.608
0.074
0.079
0.000
0.002
0.022
0.003
0.006
0.007
0.494
TSL 5
(0.549)
(0.104)
(0.053)
(0.100)
(2.017)
(0.524)
(0.020)
(0.071)
(2.976)
(1.837)
(0.018)
(0.249)
(0.043)
(0.078)
(0.071)
(0.411)
(0.013)
(0.012)
(0.004)
(0.023)
(0.066)
(0.292)
(0.034)
(1.406)
Federal Register / Vol. 78, No. 176 / Wednesday, September 11, 2013 / Proposed Rules
55971
TABLE V.45—NET PRESENT VALUE AT A 3-PERCENT DISCOUNT RATE—Continued
Billion 2012$ * **
Equipment class
TSL 1
TSL 2
TSL 3
TSL 4
TSL 5
SOC.SC.M ...........................................................................
0.002
0.002
0.009
0.008
(0.003)
Sum Total .....................................................................
1.285
2.118
4.165
4.067
(10.972)
‘-’ represents zero energy savings, since TSLs 1 to 4 for equipment classes HZO.RC.M, HZO.RC.L, and HZO.SC.L are associated with the
baseline efficiency level.
* A value of $0.000 means NES values are less than 0.001 billion 2012$.
** Values in parentheses are negative values.
The NPV results based on the
aforementioned 9-year analysis period
are presented in Table V.46 and Table
V.47. The impacts are counted over the
lifetime of products purchased in 2017–
2025. As mentioned previously, this
information is presented for
informational purposes only and is not
indicative of any change in DOE’s
analytical methodology or decision
criteria.
TABLE V.46—NET PRESENT VALUE AT A 7-PERCENT DISCOUNT RATE FOR 9-YEAR ANALYSIS PERIOD
[Equipment purchased in 2017–2025]
billion 2012$ * ** †
Equipment class
TSL 1
TSL 2
TSL 3
TSL 4
TSL 5
VOP.RC.M ...........................................................................
VOP.RC.L ............................................................................
VOP.SC.M ............................................................................
VCT.RC.M ............................................................................
VCT.RC.L .............................................................................
VCT.SC.M ............................................................................
VCT.SC.L .............................................................................
VCT.SC.I ..............................................................................
VCS.SC.M ............................................................................
VCS.SC.L .............................................................................
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.M ............................................................................
HCT.SC.L .............................................................................
HCT.SC.I ..............................................................................
HCS.SC.M ............................................................................
HCS.SC.L .............................................................................
PD.SC.M ..............................................................................
SOC.SC.M ...........................................................................
0.008
0.001
0.001
0.000
0.054
0.011
0.005
0.001
0.043
0.041
0.000
0.003
0.003
0.001
0.000
0.000
0.001
0.000
0.001
0.001
0.047
0.000
0.039
0.005
0.002
0.005
0.059
0.045
0.005
0.002
0.051
0.051
0.000
0.021
0.004
0.002
0.000
0.000
0.004
0.000
0.001
0.001
0.047
0.000
0.154
0.005
0.008
0.006
0.060
0.049
0.006
0.002
0.049
0.051
0.000
0.078
0.008
0.014
0.000
0.000
0.004
0.000
0.001
0.001
0.090
0.001
0.150
0.005
0.007
0.006
0.060
0.044
0.006
0.002
0.049
0.047
0.000
0.075
0.007
0.009
(0.000)
0.000
0.003
0.000
0.000
0.001
0.049
0.001
(0.294)
(0.032)
(0.025)
(0.031)
(0.583)
(0.182)
(0.009)
(0.021)
(0.858)
(0.548)
(0.005)
(0.151)
(0.024)
(0.032)
(0.019)
(0.111)
(0.004)
(0.003)
(0.001)
(0.009)
(0.019)
(0.082)
(0.011)
(0.455)
(0.002)
Sum Total .....................................................................
0.221
0.343
0.586
0.521
(3.509)
‘-’ represents zero energy savings, since TSLs 1 to 4 for equipment classes HZO.RC.M, HZO.RC.L, and HZO.SC.L are associated with the
baseline efficiency level.
* A value of $0.000 means NES values are less than 0.001 billion 2012$.
** Values in parentheses are negative values.
† The impacts were calculated over the lifetime of the equipment purchased in 2017–2025.
TABLE V.47—NET PRESENT VALUE AT A 3-PERCENT DISCOUNT RATE FOR 9-YEAR ANALYSIS PERIOD
[Equipment purchased in 2017–2025]
mstockstill on DSK4VPTVN1PROD with PROPOSALS3
Billion 2012$ * ** †
Equipment class
TSL 1
VOP.RC.M ...........................................................................
VOP.RC.L ............................................................................
VOP.SC.M ............................................................................
VCT.RC.M ............................................................................
VCT.RC.L .............................................................................
VCT.SC.M ............................................................................
VCT.SC.L .............................................................................
VCT.SC.I ..............................................................................
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TSL 2
0.013
0.001
0.002
0.001
0.088
0.017
0.008
0.002
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TSL 3
0.063
0.008
0.003
0.008
0.096
0.073
0.009
0.003
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0.267
0.008
0.015
0.010
0.099
0.083
0.009
0.003
11SEP3
TSL 4
0.263
0.008
0.014
0.010
0.099
0.077
0.009
0.003
TSL 5
(0.330)
(0.040)
(0.028)
(0.039)
(0.753)
(0.222)
(0.011)
(0.027)
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TABLE V.47—NET PRESENT VALUE AT A 3-PERCENT DISCOUNT RATE FOR 9-YEAR ANALYSIS PERIOD—Continued
[Equipment purchased in 2017–2025]
Billion 2012$ * ** †
Equipment class
TSL 1
TSL 2
TSL 3
TSL 4
TSL 5
VCS.SC.M ............................................................................
VCS.SC.L .............................................................................
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.M ............................................................................
HCT.SC.L .............................................................................
HCT.SC.I ..............................................................................
HCS.SC.M ............................................................................
HCS.SC.L .............................................................................
PD.SC.M ..............................................................................
SOC.SC.M ...........................................................................
0.069
0.064
0.000
0.004
0.005
0.001
0.000
0.000
0.001
0.000
0.001
0.001
0.074
0.001
0.082
0.083
0.000
0.036
0.007
0.003
0.000
0.000
0.006
0.000
0.001
0.001
0.074
0.001
0.090
0.084
0.000
0.138
0.016
0.023
0.000
0.000
0.006
0.001
0.002
0.002
0.145
0.002
0.090
0.080
0.000
0.135
0.014
0.017
(0.000)
0.000
0.006
0.001
0.001
0.002
0.102
0.002
(1.111)
(0.702)
(0.007)
(0.166)
(0.027)
(0.038)
(0.025)
(0.147)
(0.005)
(0.004)
(0.002)
(0.011)
(0.025)
(0.107)
(0.014)
(0.568)
(0.002)
Sum Total .....................................................................
0.352
0.558
1.003
0.934
(4.410)
mstockstill on DSK4VPTVN1PROD with PROPOSALS3
‘-’ represents zero energy savings, since TSLs 1 to 4 for equipment classes HZO.RC.M, HZO.RC.L, and HZO.SC.L are associated with the
baseline efficiency level.
* A value of $0.000 means NES values are less than 0.001 billion 2012$.
** Values in parentheses are negative values.
† The impacts were calculated over the lifetime of the equipment purchased in 2017–2025.
c. Employment Impacts
In addition to the direct impacts on
manufacturing employment discussed
in section V.B.2, DOE develops general
estimates of the indirect employment
impacts of proposed standards on the
economy. As discussed above, DOE
expects energy amended conservation
standards for commercial refrigeration
equipment to reduce energy bills for
commercial customers, and the resulting
net savings to be redirected to other
forms of economic activity. DOE also
realizes that these shifts in spending
and economic activity by commercial
refrigeration equipment owners could
affect the demand for labor. Thus,
indirect employment impacts may result
from expenditures shifting between
goods (the substitution effect) and
changes in income and overall
expenditure levels (the income effect)
that occur due to the imposition of
amended standards. These impacts may
affect a variety of businesses not directly
involved in the decision to make,
operate, or pay the utility bills for
commercial refrigeration equipment. To
estimate these indirect economic effects,
DOE used an input/output model of the
U.S. economy using U.S. Department of
Commerce, Bureau of Economic
Analysis (BEA) and BLS data (as
described in section IV.L of this notice;
see chapter 16 of the NOPR TSD for
more details).
Customers who purchase moreefficient equipment pay lower amounts
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towards utility bills, which results in
job losses in the electric utilities sector.
However, in the input/output model,
the dollars saved on utility bills are reinvested in economic sectors that create
more jobs than are lost in the electric
utilities sector. Thus, the proposed
amended energy conservation standards
for commercial refrigeration equipment
are likely to slightly increase the net
demand for labor in the economy.
However, the net increase in jobs might
be offset by other, unanticipated effects
on employment. Neither the BLS data
nor the input/output model used by
DOE includes the quality of jobs. As
shown in Table V.48, DOE estimates
that net indirect employment impacts
from a proposed commercial
refrigeration equipment amended
standard are small relative to the
national economy.
TABLE V.48—NET SHORT-TERM
CHANGE IN EMPLOYMENT*
Trial
standard
level
1
2
3
4
5
...........
...........
...........
...........
...........
2017
2021
35 to 38 ..................
53 to 61 ..................
74 to 108 ................
60 to 105 ................
(728) to (363) .........
198
345
719
760
130
to
to
to
to
to
201
354
749
801
504
* Values in parentheses are negative values.
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4. Impact on Utility or Performance of
Equipment
In performing the engineering
analysis, DOE considers design options
that would not lessen the utility or
performance of the individual classes of
equipment. (42 U.S.C.
6295(o)(2)(B)(i)(IV) and 6316(e)(1)) As
presented in the screening analysis
(chapter 4 of the NOPR TSD), DOE
eliminates from consideration any
design options that reduce the utility of
the equipment. For this notice, DOE
concluded that none of the efficiency
levels proposed for commercial
refrigeration equipment reduce the
utility or performance of the equipment.
5. Impact of Any Lessening of
Competition
EPCA directs DOE to consider any
lessening of competition likely to result
from amended standards. It directs the
Attorney General to determine in
writing the impact, if any, of any
lessening of competition likely to result
from a proposed standard. (42 U.S.C.
6295(o)(2)(B)(i)(V) and 6316(e)(1)) To
assist the Attorney General in making
such a determination, DOE provided the
Department of Justice (DOJ) with copies
of this notice and the TSD for review.
During MIA interviews, domestic
manufacturers indicated that foreign
manufacturers have begun to enter the
commercial refrigeration equipment
industry, but not in significant numbers.
Manufacturers also stated that
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consolidation has occurred among
commercial refrigeration equipment
manufacturers in recent years.
Interviewed manufacturers believe that
these trends may continue in this
market even in the absence of amended
standards.
DOE does not believe that amended
standards would result in domestic
firms moving their production facilities
outside the United States. The majority
of commercial refrigeration equipment
is manufactured in the United States
and, during interviews, manufacturers
in general indicated they would modify
their existing facilities to comply with
amended energy conservation
standards.
6. Need of the Nation to Conserve
Energy
An improvement in the energy
efficiency of the equipment subject to
today’s NOPR is likely to improve the
security of the Nation’s energy system
by reducing overall demand for energy.
Reduced electricity demand may also
improve the reliability of the electricity
system. Reductions in national electric
generating capacity estimated for each
considered TSL are reported in chapter
14 of the NOPR TSD.
Energy savings from amended
standards for commercial refrigeration
equipment could also produce
environmental benefits in the form of
reduced emissions of air pollutants and
GHGs associated with electricity
55973
production. Table V.49 provides DOE’s
estimate of cumulative emissions
reductions projected to result from the
TSLs considered in this rule. The table
includes both power sector emissions
and upstream emissions. The upstream
emissions were calculated using the
multipliers discussed in section IV.N.
DOE reports annual CO2, NOX, SO2,
NO2, CH4 and Hg emissions reductions
for each TSL in chapter 15 of the NOPR
TSD. As discussed in Section IV.N DOE
also did not include NOX emission
reduction from power plants in States
subject to CAIR because an amended
energy conservation standard would not
affect the overall level of NOX emissions
in those States due to the emission caps
mandated by CAIR.
TABLE V.49—CUMULATIVE EMISSIONS REDUCTION ESTIMATED FOR COMMERCIAL REFRIGERATION EQUIPMENT TSLS FOR
EQUIPMENT PURCHASED IN 2017–2046
TSL
1
2
3
4
5
Primary Emissions
CO2 (million metric tons) ......................................................
NOX (thousand tons) ...........................................................
Hg (tons) ..............................................................................
N2O (thousand tons) ............................................................
CH4 (thousand tons) ............................................................
SO2 (thousand tons) ............................................................
12.22
9.05
0.03
0.26
1.53
16.39
21.83
16.18
0.05
0.47
2.73
29.28
47.55
35.23
0.10
1.02
5.95
63.78
51.77
38.36
0.11
1.11
6.48
69.43
66.05
48.93
0.14
1.42
8.27
88.58
1.31
18.01
0.001
0.01
109.39
0.28
2.85
39.23
0.002
0.03
238.27
0.61
3.10
42.71
0.002
0.03
259.41
0.67
3.96
54.49
0.002
0.04
330.92
0.85
23.14
34.19
0.05
0.48
112.13
29.56
50.41
74.46
0.10
1.05
244.22
64.39
54.88
81.07
0.11
1.15
265.89
70.10
70.01
103.42
0.14
1.46
339.19
89.43
Upstream Emissions
CO2 (million metric tons) ......................................................
NOX (thousand tons) ...........................................................
Hg (tons) ..............................................................................
N2O (thousand tons) ............................................................
CH4 (thousand tons) ............................................................
SO2 (thousand tons) ............................................................
0.73
10.08
0.000
0.01
61.23
0.16
Total Emissions
mstockstill on DSK4VPTVN1PROD with PROPOSALS3
CO2 (million metric tons) ......................................................
NOX (thousand tons) ...........................................................
Hg (tons) ..............................................................................
N2O (thousand tons) ............................................................
CH4 (thousand tons) ............................................................
SO2 (thousand tons) ............................................................
As part of the analysis for this NOPR,
DOE estimated monetary benefits likely
to result from the reduced emissions of
CO2 and NOX that DOE estimated for
each of the TSLs considered. As
discussed in section IV.O for CO2, DOE
used values for the SCC developed by
an interagency process. The interagency
group selected four sets of SCC values
for use in regulatory analyses. Three sets
are based on the average SCC from three
integrated assessment models, at
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12.95
19.14
0.03
0.27
62.76
16.55
discount rates of 2.5 percent, 3 percent,
and 5 percent. The fourth set, which
represents the 95th-percentile SCC
estimate across all three models at a 3percent discount rate, is included to
represent higher-than-expected impacts
from temperature change further out in
the tails of the SCC distribution. The
four SCC values for CO2 emissions
reductions in 2015, expressed in 2012$,
are $12.9/ton, $40.8/ton, $62.2/ton, and
$117.0/ton. These values for later years
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Fmt 4701
Sfmt 4702
are higher due to increasing emissionsrelated costs as the magnitude of
projected climate change increase.
Table V.50 presents the global value
of CO2 emissions reductions at each
TSL. DOE calculated domestic values as
a range from 7 percent to 23 percent of
the global values, and these results are
presented in chapter 14 of the NOPR
TSD.
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Federal Register / Vol. 78, No. 176 / Wednesday, September 11, 2013 / Proposed Rules
TABLE V.50—GLOBAL PRESENT VALUE OF CO2 EMISSIONS REDUCTION FOR POTENTIAL STANDARDS FOR COMMERCIAL
REFRIGERATION EQUIPMENT
SCC Scenario*
TSL
5% Discount
rate, average
3% Discount
rate, average
2.5% Discount
rate, average
3% Discount
rate, 95th percentile
million 2012$
Primary Emissions
1
2
3
4
5
.......................................................................................................
.......................................................................................................
.......................................................................................................
.......................................................................................................
.......................................................................................................
68.6
122.6
266.9
290.6
370.7
335.1
598.7
1,304.1
1,419.8
1,811.2
546.1
975.6
2,124.9
2,313.4
2,951.2
1,013.7
1,811.1
3,944.8
4,294.8
5,478.8
4.0
7.2
15.8
17.1
21.9
20.0
35.7
77.8
84.7
108.1
32.6
58.3
126.9
138.1
176.2
60.6
108.3
236.0
256.9
327.7
72.6
129.8
282.7
307.8
392.6
355.1
634.4
1,381.9
1,504.5
1,919.2
578.7
1,033.8
2,251.8
2,451.6
3,127.4
1,074.4
1,919.5
4,180.7
4,551.7
5,806.5
Upstream Emissions
1
2
3
4
5
.......................................................................................................
.......................................................................................................
.......................................................................................................
.......................................................................................................
.......................................................................................................
Total Emissions
1
2
3
4
5
.......................................................................................................
.......................................................................................................
.......................................................................................................
.......................................................................................................
.......................................................................................................
* For each of the four cases, the corresponding SCC value for emissions in 2015 is $12.9, $40.8, $62.2 and $117.0 per metric ton (2012$).
DOE is well aware that scientific and
economic knowledge about the
contribution of CO2 and other GHG
emissions to changes in the future
global climate and the potential
resulting damages to the world economy
continues to evolve rapidly. Thus, any
value placed in this NOPR on reducing
CO2 emissions is subject to change.
DOE, together with other Federal
agencies, will continue to review
various methodologies for estimating
the monetary value of reductions in CO2
and other GHG emissions. This ongoing
review will consider the comments on
this subject that are part of the public
record for this NOPR and other
rulemakings, as well as other
methodological assumptions and issues.
However, consistent with DOE’s legal
obligations, and taking into account the
uncertainty involved with this
particular issue, DOE has included in
this NOPR the most recent values and
analyses resulting from the ongoing
interagency review process.
DOE also estimated a range for the
cumulative monetary value of the
economic benefits associated with NOX
emission reductions anticipated to
result from amended commercial
refrigeration equipment standards.
Estimated monetary benefits for CO2
and NOX emission reductions are
detailed in chapter 14 of the NOPR TSD.
Table V.51 presents the present value of
cumulative NOX emissions reductions
for each TSL calculated using the
average dollar-per-ton values and 7percent and 3-percent discount rates.
TABLE V.51—PRESENT VALUE OF NOX EMISSIONS REDUCTION FOR POTENTIAL STANDARDS FOR COMMERCIAL
REFRIGERATION EQUIPMENT
TSL
3% Discount rate
7% Discount rate
million 2012$
mstockstill on DSK4VPTVN1PROD with PROPOSALS3
Primary Emissions
1
2
3
4
5
...................................................................................................................................................................
...................................................................................................................................................................
...................................................................................................................................................................
...................................................................................................................................................................
...................................................................................................................................................................
12.0
21.4
46.6
50.7
64.7
5.6
10.0
21.7
23.6
30.1
13.4
24.0
52.3
56.9
72.6
6.2
11.0
24.0
26.1
33.3
Upstream Emissions
1
2
3
4
5
...................................................................................................................................................................
...................................................................................................................................................................
...................................................................................................................................................................
...................................................................................................................................................................
...................................................................................................................................................................
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55975
TABLE V.51—PRESENT VALUE OF NOX EMISSIONS REDUCTION FOR POTENTIAL STANDARDS FOR COMMERCIAL
REFRIGERATION EQUIPMENT—Continued
TSL
3% Discount rate
7% Discount rate
25.4
45.4
98.9
107.6
137.3
11.7
21.0
45.7
49.8
63.5
Total Emissions
1
2
3
4
5
...................................................................................................................................................................
...................................................................................................................................................................
...................................................................................................................................................................
...................................................................................................................................................................
...................................................................................................................................................................
The NPV of the monetized benefits
associated with emission reductions can
be viewed as a complement to the NPV
of the customer savings calculated for
each TSL considered in this NOPR.
Table V.52 presents the NPV values that
result from adding the estimates of the
potential economic benefits resulting
from reduced CO2 and NOX emissions
in each of four valuation scenarios to
the NPV of consumer savings calculated
for each TSL considered in this
rulemaking, at both a 7-percent and a 3percent discount rate. The CO2 values
used in the table correspond to the four
scenarios for the valuation of CO2
emission reductions discussed above.
TABLE V.52—COMMERCIAL REFRIGERATION EQUIPMENT TSLS: NET PRESENT VALUE OF CONSUMER SAVINGS COMBINED
WITH NET PRESENT VALUE OF MONETIZED BENEFITS FROM CO2 AND NOX EMISSIONS REDUCTIONS
Consumer NPV at 3% discount rate added with:
TSL
SCC Value of $12.9/
metric ton CO2* and low
value for NOX**
SCC Value of $40.8/
metric ton CO2* and medium value for NOX**
SCC Value of $62.2/
metric ton CO2* and medium value for NOX**
SCC Value of $117.0/
metric ton CO2* and
high value for NOX**
billion 2012$
1
2
3
4
5
.......................................................
.......................................................
.......................................................
.......................................................
.......................................................
1.362
2.256
4.466
4.394
(10.555)
1.665
2.798
5.646
5.679
(8.916)
1.889
3.197
6.516
6.626
(7.708)
2.406
4.120
8.526
8.815
(4.916)
Consumer NPV at 7% Discount Rate added with:
TSL
SCC Value of $12.9/
metric ton CO2* and
Low Value for NOX**
SCC Value of $40.8/
metric ton CO2* and
Medium Value for NOX**
SCC Value of $62.2/
metric ton CO2* and
Medium Value for NOX**
SCC Value of $117.0/
metric ton CO2* and
High Value for NOX**
billion 2012$
1
2
3
4
5
.......................................................
.......................................................
.......................................................
.......................................................
.......................................................
0.636
1.038
1.996
1.922
(6.331)
0.928
1.560
3.133
3.160
(4.752)
1.151
1.959
4.002
4.107
(3.544)
1.657
2.862
5.969
6.248
(0.813)
mstockstill on DSK4VPTVN1PROD with PROPOSALS3
Note: Parentheses indicate negative values.*
* These label values represent the global SCC in 2015, in 2012$. The present values have been calculated with scenario-consistent discount
rates.
** Low Value corresponds to $468 per ton of NOX emissions. Medium Value corresponds to $2,639 per ton of NOX emissions. High Value corresponds to $4,809 per ton of NOX emissions.
Although adding the value of
customer savings to the values of
emission reductions provides a valuable
perspective, two issues should be
considered. First, the national operating
cost savings are domestic U.S. customer
monetary savings that occur as a result
of market transactions, while the value
of CO2 reductions is based on a global
value. Second, the assessments of
operating cost savings and the SCC are
performed with different methods that
use quite different time frames for
analysis. The national operating cost
savings is measured for the lifetime of
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products shipped in 2017–2046. The
SCC values, on the other hand, reflect
the present value of future climaterelated impacts resulting from the
emission of one metric ton of CO2 in
each year. These impacts continue well
beyond 2100.
7. Other Factors
EPCA allows the Secretary, in
determining whether a proposed
standard is economically justified, to
consider any other factors that the
Secretary deems to be relevant. (42
U.S.C. 6295(o)(2)(B)(i)(VII) and
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6316(e)(1)) DOE considered LCC
impacts on identifiable groups of
customers, such as customers of
different business types, who may be
disproportionately affected by any
amended national energy conservation
standard level. DOE also considered the
reduction in generation capacity that
could result from the imposition of any
amended national energy conservation
standard level.
DOE carried out a RIA, as described
in section IV.P, to study the impact of
certain non-regulatory alternatives that
may encourage customers to purchase
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higher efficiency equipment and, thus,
achieve NES. The two major alternatives
identified by DOE are customer rebates
and customer tax credits. DOE surveyed
the various rebate programs available in
the United States. Typically, rebates are
offered for grocery stores that retrofit
their display cases with energy
efficiency components such as LED
lamps, electronically commutated motor
(ECM) fan motors, night curtains, and
higher efficiency doors. Based on
comparison with the incremental MSP
values obtained from the engineering
analysis, DOE chose to model a scenario
in which customers are offered, as
rebates, 60 percent of the incremental
equipment installed cost. The value of
60 percent is very high compared to
most rebate programs and was chosen to
represent the maximum possible rebate
scenario.
For the tax credits scenario, DOE did
not find a suitable program by which to
model the scenario. Therefore, DOE
used a 5-percent/10-percent tax credit
scenario. DOE first calculated the MSP
increments over baseline for each TSL
for each equipment class. For TSLs that
had an increase in MSP between 10 and
15 percent over the baseline MSP, DOE
applied a 5-percent tax credit, where the
amount of tax credit was equal to 5
percent of the MSP of the higher
efficiency equipment. For TSLs that had
increase of 15 percent or more in MSP
values over the baseline MSP, DOE
applied a 10-percent tax credit. This
type of tax credit scenario is an attempt
to approximate a model in which the tax
credits are proportional to the
magnitude of efficiency improvement
with the implicit assumption that the
magnitude of the increase in MSP is
proportional to the magnitude of
increase in energy efficiency.
Table V.53 and Table V.54 show the
NES and NPV, respectively, for the nonregulatory alternatives analyzed. For
comparison, the table includes the
results of the NES and NPV for TSL 4,
the proposed energy conservation
standard. Energy savings are expressed
in quads in terms of primary or source
energy, which includes generation and
transmission losses from electricity
utility sector.
TABLE V.53—CUMULATIVE PRIMARY
ENERGY SAVINGS OF NON-REGULATORY ALTERNATIVES COMPARED
TO THE PROPOSED STANDARDS FOR
COMMERCIAL
REFRIGERATION
EQUIPMENT *
Policy Alternatives
No new regulatory action .....
Customer tax credits ............
Customer rebates .................
Voluntary energy efficiency
targets** ............................
Early replacement** ..............
Proposed standards (TSL 4)
Cumulative
NES
Quads
0
0.151
0.198
NA
NA
0.985
* Chapter 17 of the TSD describes the inputs and their respective sources for the RIA.
** Analysis
of two non-regulatory alternatives: voluntary energy efficiency targets
and early replacement were not performed as
DOE expected minimal potential benefits as
discussed in Chapter 17 of the TSD.
TABLE V.54—CUMULATIVE NPV OF NON-REGULATORY ALTERNATIVES COMPARED TO THE PROPOSED STANDARDS FOR
COMMERCIAL REFRIGERATION EQUIPMENT
Cumulative Net Present Value
billion 2012$
Policy Alternatives
7% Discount
No new regulatory action .........................................................................................................................................
Customer tax credits ................................................................................................................................................
Customer rebates ....................................................................................................................................................
Voluntary energy efficiency targets* ........................................................................................................................
Early replacement* ..................................................................................................................................................
Proposed standards (TSL 4) ...................................................................................................................................
0
0.257
0.055
NA
NA
1.606
3% Discount
0
0.489
0.122
NA
NA
4.067
* Analysis of two non-regulatory alternatives: voluntary energy efficiency targets and early replacement, were not performed as DOE expected
minimal potential benefits as discussed in Chapter 17 of the TSD.
As shown above, none of the policy
alternatives DOE examined would
achieve close to the amount of energy or
monetary savings that could be realized
under the proposed amended standard.
Also, implementing either tax credits or
customer rebates would incur initial
and/or administrative costs that were
not considered in this analysis.
mstockstill on DSK4VPTVN1PROD with PROPOSALS3
C. Proposed Standard
DOE recognizes that when it
considers proposed standards, it is
subject to the EPCA requirement that
any new or amended energy
conservation standard for any type (or
class) of covered product be designed to
achieve the maximum improvement in
energy efficiency that the Secretary
determines is technologically feasible
and economically justified. (42 U.S.C.
6295(o)(2)(A) and 6316(e)(1)) In
determining whether a proposed
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standard is economically justified, the
Secretary must determine whether the
benefits of the standard exceed its
burdens to the greatest extent
practicable, in light of the seven
statutory factors discussed previously.
(42 U.S.C. 6295(o)(2)(B)(i) and
6316(e)(1)) The new or amended
standard must also result in a significant
conservation of energy. (42 U.S.C.
6295(o)(3)(B) and 6316(e)(1))
DOE considered the impacts of
potential standards at each TSL,
beginning with the maximum
technologically feasible level, to
determine whether that level met the
evaluation criteria. If the max-tech level
was not justified, DOE then considered
the next most efficient level and
undertook the same evaluation until it
reached the highest efficiency level that
is both technologically feasible and
PO 00000
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economically justified and saves a
significant amount of energy.
DOE discusses the benefits and/or
burdens of each TSL in the following
sections. DOE bases its discussion on
quantitative analytical results for each
TSL, including NES, NPV (discounted at
7 and 3 percent), emission reductions,
INPV, LCC, and customers’ installed
price increases. Beyond the quantitative
results, DOE also considers other
burdens and benefits that affect
economic justification, including how
technological feasibility, manufacturer
costs, and impacts on competition may
affect the economic results presented.
Table V.55, Table V.56, Table V.57
and Table V.58 present a summary of
the results of DOE’s quantitative
analysis for each TSL. In addition to the
quantitative results presented in the
tables, DOE also considers other
burdens and benefits that affect
E:\FR\FM\11SEP3.SGM
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Federal Register / Vol. 78, No. 176 / Wednesday, September 11, 2013 / Proposed Rules
economic justification of certain
customer subgroups that are
disproportionately affected by the
proposed standards. Section V.B.7
presents the estimated impacts of each
TSL for these subgroups.
TABLE V.55—SUMMARY OF RESULTS FOR COMMERCIAL REFRIGERATION EQUIPMENT TSLS: NATIONAL IMPACTS *
Category
TSL 1
TSL 2
TSL 3
TSL 4
TSL5
Cumulative National Energy Savings 2017 through 2060
quads
Undiscounted values.
0.236 ...........................
0.422 ...........................
0.920 ...........................
1.001 ...........................
1.278
Cumulative NPV of Customer Benefits 2017 through 2060
2012$ billion
3% discount rate
7% discount rate
$1.285 .........................
$0.561 .........................
$2.118 .........................
$0.905 .........................
$4.165 .........................
$1.705 .........................
$4.067 .........................
$1.606 .........................
($10.972)
($6.735)
Industry Impacts
Change in Industry NPV (2012$
million).
Change in Industry NPV (%).
(3.6) to (6.8) ...............
(15.2) to (26.4) ...........
(26.3) to (59.2) ...........
(45.9) to (92.6) ...........
(25.5) to (516.0)
(0.58) to (0.31) ...........
(2.27) to (1.30) ...........
(5.09) to (2.26) ...........
(7.97) to (3.95) ...........
(44.41) to (2.20)
Cumulative Emissions Reductions 2017 through 2060
CO2 (MMt)** .......
NOX (kt)** ...........
Hg (t)** ...............
N2O (kt)** ...........
N2O (kt CO2eq)**
CH4 (kt)** ............
CH4 (kt CO2eq) **
SO2 (kt) ** ............
12.95 ...........................
19.14 ...........................
0.03 .............................
0.27 .............................
80.56 ...........................
62.76 ...........................
1,568.96 ......................
16.55 ...........................
23.14 ...........................
34.19 ...........................
0.05 .............................
0.48 .............................
143.92 .........................
112.13 .........................
2,803.13 ......................
29.56 ...........................
50.41 ...........................
74.46 ...........................
0.10 .............................
1.05 .............................
313.48 .........................
244.22 .........................
6,105.43 ......................
64.39 ...........................
54.88 ...........................
81.07 ...........................
0.11 .............................
1.15 .............................
341.29 .........................
265.89 .........................
6,647.15 ......................
70.10 ...........................
70.01
103.42
0.14
1.46
435.39
339.19
8,479.71
89.43
Monetary Value of Cumulative Emissions Reductions 2017 through 2060 †
CO2 (2012$ million).
NOX—3% discount rate
(2012$ million).
NOX—7% discount rate
(2012$ million).
73 to 1,074 .................
130 to 1,919 ...............
283 to 4,181 ...............
308 to 4,552 ...............
393 to 5,807
4.5 to 46.3 ..................
8.1 to 82.7 ..................
17.5 to 180.2 ..............
19.1 to 196.2 ..............
24.4 to 250.2
2.1 to 21.4 ..................
3.7 to 38.2 ..................
8.1 to 83.3 ..................
8.8 to 90.7 ..................
11.3 to 115.7
760 to 801 ..................
130 to 504
Employment Impacts
Net Change in Indirect Domestic
Jobs by 2021.
198 to 201 ..................
345 to 354 ..................
719 to 749 ..................
* Values
in parentheses are negative values.
stands for million metric tons; ‘‘kt’’ stands for kilotons; ‘‘t’’ stands for tons. CO2eq is the quantity of CO2 that would have the same
global warming potential (GWP)
† Range of the economic value of CO reductions is based on estimates of the global benefit of reduced CO emissions.
2
2
** ‘‘MMt’’
TABLE V.56—SUMMARY OF RESULTS FOR COMMERCIAL REFRIGERATION EQUIPMENT TSLS: MEAN LCC SAVINGS
Equipment class
TSL 1
TSL 2
TSL 3
TSL 4
$1,788.85
1,129.51
814.91
1,758.73
797.91
1,122.14
1,984.45
431.88
131.80
267.81
$1,493.72
1,129.51
691.27
1,108.13
797.91
641.05
1,342.84
431.88
131.80
220.83
TSL5
mstockstill on DSK4VPTVN1PROD with PROPOSALS3
Mean LCC Savings*
2012$
VOP.RC.M ...........................................................................
VOP.RC.L ............................................................................
VOP.SC.M ............................................................................
VCT.RC.M ............................................................................
VCT.RC.L .............................................................................
VCT.SC.M ............................................................................
VCT.SC.L .............................................................................
VCT.SC.I ..............................................................................
VCS.SC.M ............................................................................
VCS.SC.L .............................................................................
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$235.92
537.27
170.78
175.23
1,357.25
566.18
4,186.06
572.05
278.84
524.52
Fmt 4701
Sfmt 4702
$743.00
1,516.59
227.17
1,864.44
1,004.72
1,363.60
2,522.67
486.28
162.88
329.33
E:\FR\FM\11SEP3.SGM
11SEP3
($1,668.79)
(3,692.90)
(376.52)
(2,508.61)
(3,624.20)
(595.52)
(343.16)
(1,591.87)
(1,042.03)
(1,274.03)
55978
Federal Register / Vol. 78, No. 176 / Wednesday, September 11, 2013 / Proposed Rules
TABLE V.56—SUMMARY OF RESULTS FOR COMMERCIAL REFRIGERATION EQUIPMENT TSLS: MEAN LCC SAVINGS—
Continued
Equipment class
TSL 1
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.M ............................................................................
HCT.SC.L .............................................................................
HCT.SC.I ..............................................................................
HCS.SC.M ............................................................................
HCS.SC.L .............................................................................
PD.SC.M ..............................................................................
SOC.SC.M ...........................................................................
TSL 2
236.77
73.77
324.33
118.36
0.00
0.00
8.85
0.00
106.59
217.19
21.83
23.07
74.69
1,009.53
646.15
TSL 3
176.83
551.98
334.89
226.26
0.00
0.00
8.85
0.00
359.48
790.53
34.69
19.18
80.97
1,009.53
466.47
TSL 4
152.69
1,216.77
587.90
997.89
0.00
0.00
48.60
0.00
307.26
571.07
42.48
16.66
80.72
933.59
1,241.60
TSL5
152.69
1,008.46
491.99
494.51
0.00
0.00
28.78
0.00
253.60
368.92
42.48
8.68
80.72
310.43
739.75
(1,818.87)
(1,015.16)
(201.61)
(982.21)
(1,271.24)
(2,134.96)
(821.57)
(473.71)
(293.54)
(354.75)
(811.31)
(422.79)
(400.63)
(637.94)
(735.33)
* Values in parentheses are negative values.
** ‘‘NA’’ means ‘‘not applicable,’’ because for equipment classes HZO.RC.M, HZO.RC.L, and HZO.SC.L, TSLs 1 through 4 are associated with
the baseline efficiency level.
TABLE V.57—SUMMARY OF RESULTS FOR COMMERCIAL REFRIGERATION EQUIPMENT TSLS: MEDIAN PAYBACK PERIOD
Equipment class
TSL 1
TSL 2
TSL 3
TSL 4
TSL5
Median Payback Period
years
VOP.RC.M ...........................................................................
VOP.RC.L ............................................................................
VOP.SC.M ............................................................................
VCT.RC.M ............................................................................
VCT.RC.L .............................................................................
VCT.SC.M ............................................................................
VCT.SC.L .............................................................................
VCT.SC.I ..............................................................................
VCS.SC.M ............................................................................
VCS.SC.L .............................................................................
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.M ............................................................................
HCT.SC.L .............................................................................
HCT.SC.I ..............................................................................
HCS.SC.M ............................................................................
HCS.SC.L .............................................................................
PD.SC.M ..............................................................................
SOC.SC.M ...........................................................................
1.73
1.11
1.61
1.23
1.30
0.86
0.58
0.86
0.78
0.55
0.80
1.31
1.97
1.25
0.00
0.00
1.89
0.00
0.69
0.53
0.88
0.50
0.86
0.53
1.12
1.77
2.03
2.17
2.42
1.51
1.73
0.61
1.74
0.98
0.91
2.07
2.64
2.06
1.44
0.00
0.00
1.89
0.00
2.24
1.00
2.39
1.64
1.36
0.53
1.24
3.77
2.22
4.12
2.43
1.64
2.21
0.83
1.97
1.75
1.00
2.42
4.34
4.43
3.31
0.00
0.00
2.42
0.00
2.42
1.05
4.28
2.54
2.57
1.10
2.35
3.91
2.22
4.39
2.70
1.64
2.54
0.96
1.97
1.75
1.15
2.42
4.50
4.75
4.41
0.00
0.00
6.40
0.00
3.08
1.47
4.28
4.28
2.57
2.27
2.99
11.76
18.30
11.37
13.09
15.75
8.13
3.65
13.21
14.11
10.54
27.19
11.60
10.36
11.88
161.23
83.78
55.78
73.62
12.26
7.15
27.99
34.05
14.98
7.61
7.42
* ‘‘NA’’ means ‘‘not applicable,’’ because for equipment classes HZO.RC.M, HZO.RC.L, and HZO.SC.L, TSLs 1 through 4 are associated with
the baseline efficiency level.
TABLE V.58—SUMMARY OF RESULTS FOR COMMERCIAL REFRIGERATION EQUIPMENT TSLS: DISTRIBUTION OF CUSTOMER
LCC IMPACTS
mstockstill on DSK4VPTVN1PROD with PROPOSALS3
Category
TSL 1*
VOP.RC.M:
Net Cost (%) .................................................................
No Impact (%) ...............................................................
Net Benefit (%) .............................................................
VOP.RC.L:
Net Cost (%) .................................................................
No Impact (%) ...............................................................
Net Benefit (%) .............................................................
VOP.SC.M:
Net Cost (%) .................................................................
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TSL 2*
TSL 3*
TSL 4*
TSL 5*
0
76
24
0
28
72
11
15
74
90
2
8
0
74
26
0
48
52
0
25
75
0
25
75
98
2
0
0
Fmt 4701
0
52
48
0
0
11
77
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55979
TABLE V.58—SUMMARY OF RESULTS FOR COMMERCIAL REFRIGERATION EQUIPMENT TSLS: DISTRIBUTION OF CUSTOMER
LCC IMPACTS—Continued
mstockstill on DSK4VPTVN1PROD with PROPOSALS3
Category
TSL 1*
No Impact (%) ...............................................................
Net Benefit (%) .............................................................
VCT.RC.M:
Net Cost (%) .................................................................
No Impact (%) ...............................................................
Net Benefit (%) .............................................................
VCT.RC.L:
Net Cost (%) .................................................................
No Impact (%) ...............................................................
Net Benefit (%) .............................................................
VCT.SC.M:
Net Cost (%) .................................................................
No Impact (%) ...............................................................
Net Benefit (%) .............................................................
VCT.SC.L:
Net Cost (%) .................................................................
No Impact (%) ...............................................................
Net Benefit (%) .............................................................
VCT.SC.I:
Net Cost (%) .................................................................
No Impact (%) ...............................................................
Net Benefit (%) .............................................................
VCS.SC.M:
Net Cost (%) .................................................................
No Impact (%) ...............................................................
Net Benefit (%) .............................................................
VCS.SC.L:
Net Cost (%) .................................................................
No Impact (%) ...............................................................
Net Benefit (%) .............................................................
VCS.SC.I:
Net Cost (%) .................................................................
No Impact (%) ...............................................................
Net Benefit (%) .............................................................
SVO.RC.M:
Net Cost (%) .................................................................
No Impact (%) ...............................................................
Net Benefit (%) .............................................................
SVO.SC.M:
Net Cost (%) .................................................................
No Impact (%) ...............................................................
Net Benefit (%) .............................................................
SOC.RC.M:
Net Cost (%) .................................................................
No Impact (%) ...............................................................
Net Benefit (%) .............................................................
HZO.RC.M:**
Net Cost (%) .................................................................
No Impact (%) ...............................................................
Net Benefit (%) .............................................................
HZO.RC.L:**
Net Cost (%) .................................................................
No Impact (%) ...............................................................
Net Benefit (%) .............................................................
HZO.SC.M:
Net Cost (%) .................................................................
No Impact (%) ...............................................................
Net Benefit (%) .............................................................
HZO.SC.L:**
Net Cost (%) .................................................................
No Impact (%) ...............................................................
Net Benefit (%) .............................................................
HCT.SC.M:
Net Cost (%) .................................................................
No Impact (%) ...............................................................
Net Benefit (%) .............................................................
HCT.SC.L:
Net Cost (%) .................................................................
No Impact (%) ...............................................................
Net Benefit (%) .............................................................
HCT.SC.I:
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TSL 2*
TSL 3*
TSL 4*
TSL 5*
62
38
43
57
25
75
14
75
3
20
0
81
19
0
62
38
0
46
54
26
16
57
94
2
4
0
60
40
0
40
60
0
21
79
0
21
79
97
2
1
0
83
17
0
66
34
0
51
49
27
13
60
74
2
24
0
76
24
0
60
40
0
44
56
7
15
78
74
2
24
0
65
35
1
32
68
1
16
83
1
16
83
95
1
3
0
72
28
0
42
58
7
13
80
7
13
80
99
1
0
0
73
27
........................
0
67
33
........................
0
75
25
........................
0
61
39
........................
0
82
18
........................
NA
NA
NA
........................
NA
NA
NA
........................
0
75
25
........................
NA
NA
NA
........................
0
70
30
........................
0
75
26
........................
0
42
58
........................
0
32
68
........................
0
51
49
........................
0
43
57
........................
0
64
36
........................
NA
NA
NA
........................
NA
NA
NA
........................
0
75
25
........................
NA
NA
NA
........................
0
38
62
........................
0
61
39
........................
5
28
68
........................
3
16
81
........................
0
29
71
........................
0
25
75
........................
0
47
53
........................
NA
NA
NA
........................
NA
NA
NA
........................
0
49
51
........................
NA
NA
NA
........................
0
25
75
........................
0
45
55
........................
20
14
66
........................
3
16
81
........................
13
16
72
........................
12
14
75
........................
29
18
53
........................
NA
NA
NA
........................
NA
NA
NA
........................
19
24
57
........................
NA
NA
NA
........................
18
12
70
........................
23
14
63
........................
97
1
2
........................
99
1
0
........................
85
3
12
........................
69
4
27
........................
89
5
6
........................
78
22
0
........................
86
14
0
........................
98
2
0
........................
72
28
0
........................
89
1
10
........................
76
1
23
........................
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55980
Federal Register / Vol. 78, No. 176 / Wednesday, September 11, 2013 / Proposed Rules
TABLE V.58—SUMMARY OF RESULTS FOR COMMERCIAL REFRIGERATION EQUIPMENT TSLS: DISTRIBUTION OF CUSTOMER
LCC IMPACTS—Continued
Category
TSL 1*
TSL 2*
TSL 3*
TSL 4*
TSL 5*
Net Cost (%) .................................................................
No Impact (%) ...............................................................
Net Benefit (%) .............................................................
HCS.SC.M:
Net Cost (%) .................................................................
No Impact (%) ...............................................................
Net Benefit (%) .............................................................
HCS.SC.L:
Net Cost (%) .................................................................
No Impact (%) ...............................................................
Net Benefit (%) .............................................................
PD.SC.M:
Net Cost (%) .................................................................
No Impact (%) ...............................................................
Net Benefit (%) .............................................................
SOC.SC.M:
Net Cost (%) .................................................................
No Impact (%) ...............................................................
Net Benefit (%) .............................................................
0
74
26
........................
0
83
17
........................
0
50
50
........................
0
86
14
........................
0
70
30
0
49
51
........................
0
65
35
........................
0
33
67
........................
0
86
14
........................
0
55
45
2
23
75
........................
1
48
51
........................
2
16
82
........................
0
69
31
........................
0
40
60
2
23
75
........................
29
31
40
........................
2
16
82
........................
41
11
48
........................
25
16
60
99
1
0
........................
98
2
0
........................
98
2
0
........................
86
1
13
........................
80
5
16
mstockstill on DSK4VPTVN1PROD with PROPOSALS3
* Values have been rounded to the nearest integer. Therefore, some of the percentages may not add up to 100.
** ‘‘NA’’ means ‘‘not applicable’’; because for equipment classes HZO.RC.M, HZO.RC.L and HZO.SC.L, TSLs 1 through 4 are associated with
the baseline efficiency level.
DOE also notes that the economics
literature provides a wide-ranging
discussion of how consumers trade off
upfront costs and energy savings in the
absence of government intervention.
Much of this literature attempts to
explain why consumers appear to
undervalue energy efficiency
improvements. This undervaluation
suggests that regulation that promotes
energy efficiency can produce
significant net private gains (as well as
producing social gains by, for example,
reducing pollution). There is evidence
that consumers undervalue future
energy savings as a result of (1) a lack
of information; (2) a lack of sufficient
salience of the long-term or aggregate
benefits; (3) a lack of sufficient savings
to warrant delaying or altering
purchases (e.g., an inefficient
ventilation fan in a new building or the
delayed replacement of a water pump);
(4) excessive focus on the short term, in
the form of inconsistent weighting of
future energy cost savings relative to
available returns on other investments;
(5) computational or other difficulties
associated with the evaluation of
relevant tradeoffs; and (6) a divergence
in incentives (e.g., renter versus
building owner, builder versus home
buyer). Other literature indicates that
with less than perfect foresight and a
high degree of uncertainty about the
future, consumers may trade off these
types of investments at a higher than
expected rate between current
consumption and uncertain future
energy cost savings.
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While DOE is not prepared at present
to provide a fuller quantifiable
framework for estimating the benefits
and costs of changes in consumer
purchase decisions due to an amended
energy conservation standard, DOE has
posted a paper that discusses the issue
of consumer welfare impacts of
appliance energy efficiency standards,
and potential enhancements to the
methodology by which these impacts
are defined and estimated in the
regulatory process.90 DOE is committed
to developing a framework that can
support empirical quantitative tools for
improved assessment of the consumer
welfare impacts of appliance standards.
DOE welcomes comments on
information and methods to better
assess the potential impact of energy
conservation standards on consumer
choice and methods to quantify this
impact in its regulatory analysis in
future rulemakings.
TSL 5 corresponds to the max-tech
level for all the equipment classes and
offers the potential for the highest
cumulative energy savings. The
estimated energy savings from TSL 5 is
1.2784 quads of energy. DOE projects a
net negative NPV for customers with
estimated increased costs valued at
$6.735 billion at a 7-percent discount
rate. Estimated emissions reductions are
70.0 MMt of CO2, and up to 103.4 kt of
NOX, and 89.4 kt of SO2. DOE also
90 Sanstad, A. Notes on the Economics of
Household Energy Consumption and Technology
Choice. 2010. Lawrence Berkeley National
Laboratory, Berkeley, CA. www1.eere.energy.gov/
buildings/appliance_standards/pdfs/
consumer_ee_theory.pdf.
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Fmt 4701
Sfmt 4702
projects a decrease in Hg emissions of
up to 0.14 tons. The CO2 emissions have
a value of up to $5.8 billion and the
NOX emissions have a value of $115.7
million at a 7-percent discount rate.
For TSL 5 the mean LCC savings for
all equipment classes are negative,
implying an increase in LCC, with the
increase ranging from $202 for the
SVO.SC.M equipment class to $3,693 for
the VOP.RC.L equipment class.
At TSL 5, manufacturers may expect
diminished profitability due to large
increases in product costs, capital
investments in equipment and tooling,
and expenditures related to engineering
and testing. The projected change in
INPV ranges from a decrease of $516.0
million to a decrease of $25.5 million
based on DOE’s manufacturer markup
scenarios. The upper bound of -$25.5
million is considered an optimistic
scenario for manufacturers because it
assumes manufacturers can fully pass
on substantial increases in equipment
costs. DOE recognizes the risk of large
negative impacts on industry if
manufacturers’ expectations concerning
reduced profit margins are realized. TSL
5 could reduce commercial refrigeration
equipment INPV by up to 44.41 percent
if impacts reach the lower bound of the
range.
After carefully considering the
analyses results and weighing the
benefits and burdens of TSL 5, DOE
finds that the benefits to the Nation
from TSL 5, in the form of energy
savings and emissions reductions,
including environmental and monetary
benefits, are small compared to the
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burdens, in the form of a decrease of
$6.735 billion in customer NPV and a
decrease of up to 44.41 percent in INPV.
DOE concludes that the burdens of TSL
5 outweigh the benefits and, therefore,
does not find TSL 5 to be economically
justifiable. DOE is not proposing to
adopt TSL 5 in this notice.
TSL 4 corresponds to the highest
efficiency level, in each equipment
class, with a positive NPV at a 7-percent
discount rate. The estimated energy
savings for equipment purchased in
2017–2046 is 1.001 quads of energy, an
amount DOE deems significant. At TSL
4, DOE projects an increase in customer
NPV of $1.606 billion at a 7-percent
discount rate; estimated emissions
reductions of 54.88 MMt of CO2; up to
81.1 kt of NOX, 0.11 in Hg and 70.1 kt
of SO2. The monetary value of these
emissions was estimated to be up to
$4.55 billion for CO2 and up to $90.7
million for NOX at a 7-percent discount
rate.
At TSL 4, the mean LCC savings vary
from $8.68 for HCS.SC.M to $1,493.72
for VOP.RC.M, which implies that on an
average customers will experience a
decrease in LCC. For equipment classes
HZO.RC.M, HZO.RC.L, and HZO.SC.L,
TSL 4 is associated with the baseline
level because these equipment classes
have only one efficiency level above
baseline and each of those higher
efficiency levels yields a negative NPV.
Therefore, there are no efficiency levels
that satisfy the criteria used for selection
of TSLs 1 through 4. DOE is not
proposing to amend the standards for
these three equipment classes.
At TSL 4, the projected change in
INPV ranges from a decrease of $92.6
million to a decrease of $45.9 million.
At TSL 4, DOE recognizes the risk of
negative impacts if manufacturers’
expectations concerning reduced profit
margins are realized. If the lower bound
of the range of impacts is reached, as
DOE expects, TSL 4 could result in a net
loss of 7.97 percent in INPV for
commercial refrigeration equipment
manufacturers.
DOE contrasted the benefits and
burdens of TSL 4 with those of TSL 3
because even though TSL 4 has higher
energy savings than TSL 3, the customer
NPV values at TSL 3 are higher than at
TSL 4. The estimated energy savings at
TSL 3 is 0.920 quads of energy, whereas
at TSL 4 the energy savings are higher
by about 9 percent at 1.001 quads. At
TSL 3, DOE projects an increase in
customer NPV of $1.705 billion at a 7percent discount rate, whereas at TSL 4
the customer NPV is lower by about 6
percent at $1.606 billion, with the actual
difference amounting to approximately
$99 million. Estimated emissions
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reductions at TSL 3 are 50.41 MMt of
CO2 as opposed to 54.88 MMt at TSL 4,
and up to 74.46 kt of NOX at TSL 3 as
compared to 81.07 kt at TSL 4. The
monetary value of the CO2 emissions
reductions was estimated to be up to
$4.18 billion at TSL 3 compared to
$4.55 billion at TSL 4, and NOX
emission reductions at a 7-percent
discount rate were valued at up to $83.3
million at TSL 3 compared to $90.7
million at TSL 4.
To facilitate a direct comparison
between the benefits of TSL 3 versus
those of TSL4, DOE evaluated the net
social benefits of TSL 3 and TSL 4 by
combining the customer NPV values
with monetized emissions reductions.
While Table V.55 provides a range of
monetized values for CO2 and NOX
emissions reductions, DOE calculated
certain intermediate values here for the
purpose of net benefits calculation. The
monetized CO2 emissions reduction
values were calculated at $40.8 per ton
in 2012$ and the monetized NOX
emissions reductions were calculated at
an intermediate value of $2,639 per ton
in 2012$. These monetized emissions
reduction values were added to the
customer NPV at a 7-percent discount
rate to obtain a value of 3.133 billion at
TSL 3. At TSL 4, the net benefit value
of $3.160 billion is higher than that at
TSL 3.
After careful consideration of the
analyses results, weighing the benefits
and burdens of TSL 4, and comparing
them to those of TSL 3, DOE believes
that setting the standards for
commercial refrigeration equipment at
TSL 4 represents the maximum
improvement in energy efficiency that is
technologically feasible and
economically justified. TSL 4 is
technologically feasible because the
technologies required to achieve these
levels already exist in the current
market. TSL 4 is economically justified
because the benefits to the Nation in the
form of energy savings, customer NPV at
3 percent and at 7 percent, and
emissions reductions outweigh the costs
associated with reduced INPV.
Therefore, DOE has decided to
propose the adoption of amended
energy conservation standards for
commercial refrigeration equipment at
TSL 4. DOE specifically seeks comment
on the magnitude of the estimated
decline in INPV at TSL 4 compared to
the baseline, and whether this impact
could risk industry consolidation. DOE
also specifically requests comment on
whether DOE should adopt TSL 5, and
in particular whether, compared to TSL
4, TSL 5’s higher energy savings
outweigh its lower NPV benefits and
higher manufacturer impacts. DOE may
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55981
reexamine this level depending on the
nature of the information it receives
during the comment period and adjust
its final levels in response to that
information.
VI. Procedural Issues and Regulatory
Review
A. Review Under Executive Orders
12866 and 13563
Section 1(b)(1) of Executive Order
12866, ‘‘Regulatory Planning and
Review,’’ 58 FR 51735 (Oct. 4, 1993),
requires each agency to identify the
problem that it intends to address,
including, where applicable, the failures
of private markets or public institutions
that warrant new agency action, as well
as to assess the significance of that
problem. The problems that today’s
standards address are as follows:
1. There is a lack of consumer
information and/or information
processing capability about energy
efficiency opportunities in the
commercial refrigeration equipment
market.
2. There is asymmetric information
(one party to a transaction has more and
better information than the other) and/
or high transactions costs (costs of
gathering information and effecting
exchanges of goods and services).
3. There are external benefits resulting
from improved energy efficiency of
commercial refrigeration equipment that
are not captured by the users of such
equipment. These benefits include
externalities related to environmental
protection and energy security that are
not reflected in energy prices, such as
reduced emissions of GHGs.
In addition, DOE has determined that
today’s regulatory action is an
‘‘economically significant regulatory
action’’ under section 3(f)(1) of
Executive Order 12866. Accordingly,
section 6(a)(3) of the Executive Order
requires that DOE prepare an RIA on
today’s rule and that OIRA in OMB
review this rule. DOE presented to OIRA
for review the draft rule and other
documents prepared for this
rulemaking, including the RIA, and has
included these documents in the
rulemaking record. The assessments
prepared pursuant to Executive Order
12866 can be found in the TSD for this
rulemaking.
DOE has also reviewed this regulation
pursuant to Executive Order 13563,
issued on January 18, 2011. 76 FR 3281
(Jan. 21, 2011). Executive Order 13563
is supplemental to and explicitly
reaffirms the principles, structures, and
definitions governing regulatory review
established in Executive Order 12866.
To the extent permitted by law, agencies
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mstockstill on DSK4VPTVN1PROD with PROPOSALS3
are required by Executive Order 13563
to: (1) Propose or adopt a regulation
only upon a reasoned determination
that its benefits justify its costs
(recognizing that some benefits and
costs are difficult to quantify); (2) tailor
regulations to impose the least burden
on society, consistent with obtaining
regulatory objectives, taking into
account, among other things, and to the
extent practicable, the costs of
cumulative regulations; (3) select, in
choosing among alternative regulatory
approaches, those approaches that
maximize net benefits (including
potential economic, environmental,
public health and safety, and other
advantages; distributive impacts; and
equity); (4) to the extent feasible, specify
performance objectives, rather than
specifying the behavior or manner of
compliance that regulated entities must
adopt; and (5) identify and assess
available alternatives to direct
regulation, including providing
economic incentives to encourage the
desired behavior, such as user fees or
marketable permits, or providing
information upon which choices can be
made by the public.
DOE emphasizes as well that
Executive Order 13563 requires agencies
to use the best available techniques to
quantify anticipated present and future
benefits and costs as accurately as
possible. In its guidance, ORIA has
emphasized that such techniques may
include identifying changing future
compliance costs that might result from
technological innovation or anticipated
behavioral changes. For the reasons
stated in the preamble, DOE believes
that today’s NOPR is consistent with
these principles, including the
requirement that, to the extent
permitted by law, benefits justify costs
and that net benefits are maximized.
B. Review Under the Regulatory
Flexibility Act
The Regulatory Flexibility Act (5
U.S.C. 601 et seq.) requires preparation
of a final regulatory flexibility analysis
(FRFA) for any rule that by law must be
proposed for public comment, unless
the agency certifies that the rule, if
promulgated, will not have a significant
economic impact on a substantial
number of small entities. As required by
Executive Order 13272, ‘‘Proper
Consideration of Small Entities in
Agency Rulemaking’’ 67 FR 53461 (Aug.
16, 2002), DOE published procedures
and policies on February 19, 2003 to
ensure that the potential impacts of its
rules on small entities are properly
considered during the rulemaking
process. 68 FR 7990. DOE has made its
procedures and policies available on the
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Office of the General Counsel’s Web site
(https://energy.gov/gc/office-generalcounsel ).
1. Description and Estimated Number of
Small Entities Regulated
For the manufacturers of commercial
refrigeration equipment, the SBA has set
a size threshold, which defines those
entities classified as ‘‘small businesses’’
for the purposes of the statute. DOE
used the SBA’s small business size
standards to determine whether any
small entities would be subject to the
requirements of the rule. 65 FR 30836,
30848 (May 15, 2000), as amended at 65
FR 53533, 53544 (Sept. 5, 2000) and
codified at 13 CFR part 121. The size
standards are listed by NAICS code and
industry description and are available
at: https://www.sba.gov/sites/default/
files/files/Size_Standards_Table.pdf.
Commercial refrigeration equipment
manufacturing is classified under
NAICS 333415, ‘‘Air-Conditioning and
Warm Air Heating Equipment and
Commercial and Industrial Refrigeration
Equipment Manufacturing.’’ The SBA
sets a threshold of 750 employees or less
for an entity to be considered as a small
business for this category.
During its market survey, DOE used
available public information to identify
potential small manufacturers. DOE’s
research involved industry trade
association membership directories
(including AHRI), public databases (e.g.,
AHRI Directory,91 the SBA Database 92),
individual company Web sites, and
market research tools (e.g., Dunn and
Bradstreet reports 93 and Hoovers
reports)94 to create a list of companies
that manufacture or sell products
covered by this rulemaking. DOE also
asked stakeholders and industry
representatives if they were aware of
any other small manufacturers during
manufacturer interviews and at DOE
public meetings. DOE reviewed publicly
available data and contacted select
companies on its list, as necessary, to
determine whether they met the SBA’s
definition of a small business
manufacturer of covered commercial
refrigeration equipment. DOE screened
out companies that do not offer
products covered by this rulemaking, do
not meet the definition of a ‘‘small
business,’’ or are foreign owned.
DOE identified 54 companies selling
commercial refrigeration equipment
products in the United States. Nine of
the companies are foreign-owned firms.
91 See www.ahridirectory.org/ahriDirectory/
pages/home.aspx.
92 See https://dsbs.sba.gov/dsbs/search/dsp_
dsbs.cfm.
93 See www.dnb.com/.
94 See www.hoovers.com/.
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Fmt 4701
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Of the remaining 45 companies, about
70 percent (32 companies) are small
domestic manufacturers. DOE contacted
eight domestic commercial refrigeration
equipment manufacturers for interviews
and all eight companies accepted. Of
these eight companies, four were small
businesses.
2. Description and Estimate of
Compliance Requirements
The 32 identified domestic
manufacturers of commercial
refrigeration equipment that qualify as
small businesses under the SBA size
standard account for approximately 26
percent of commercial refrigeration
equipment shipments.95 While some
small businesses have significant market
share (e.g., Continental has a 4-percent
market share for foodservice commercial
refrigeration)95, the majority of small
businesses have less than a 1-percent
market share. These smaller firms often
specialize in designing custom products
and servicing niche markets.
At the proposed level, the average
small manufacturer is expected to face
capital conversion costs that are more
than triple the average annual capital
expenditures, and product conversion
costs that are 80% of annual R&D
spending, as shown in Table VI.1. At the
proposed level, the conversion costs are
driven by the incorporation of thicker
insulation into case designs. The thicker
cases design may necessitate the
purchase of new jigs for production.
Manufacturer estimates of the cost of a
new jig ranged from $50,000 to $300,000
in 2011, depending on the jig design. In
addition to the cost of jigs, changes in
case thickness may require product
redesign due to changes in the interior
volume of the equipment and may
require new industry certifications.
The proposed standard could cause
small manufacturers to be at a
disadvantage relative to large
manufacturers. The capital conversion
costs represent a smaller percentage of
annual capital expenditures for large
manufacturers than for small
manufacturers. The capital conversion
costs are 60 percent of annual capital
expenditures for an average large
manufacturer, while capital conversion
costs are 423 percent of annual capital
expenditures for an average small
manufacturer. Small manufacturers may
have greater difficulty obtaining credit,
or may obtain less favorable terms than
larger competitors when financing the
equipment necessary to meet an
amended standard.
95 32nd Annual Portrait of the U.S. Appliance
Industry. Appliance Magazine. September 2009.
66(7).
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Additionally, small manufacturers
may be disproportionately affected by
equipment conversion costs. Product
redesign and industry certification costs
tend to be fixed and do not scale with
sales volume. For each equipment
platform, small businesses must make
equipment redesign investments that are
similar to their large competitors.
However, small manufacturer costs are
spread over a much lower volume of
units, making cost recovery more
difficult.
Manufacturers indicated that many
design options evaluated in the
engineering analysis (e.g., higher
efficiency lighting, motors, and
compressors) would force them to
purchase more expensive components.
Due to smaller purchasing volumes,
small manufacturers typically pay
higher prices for components, while
their large competitors receive volume
discounts. At the proposed standard,
small businesses will likely have greater
increases in component costs than large
businesses and will thus be at a pricing
disadvantage.
Small firms would likely be at a
disadvantage relative to larger firms in
meeting an amended energy
conservation standard for commercial
refrigeration equipment. The small
businesses face disadvantages in terms
of access to capital, the cost of product
redesigns, and pricing for key
components. As a result, DOE could not
certify that the proposed standards
55983
would not have a significant impact on
a significant number of small
businesses.
To estimate how small manufacturers
would be potentially impacted, DOE
used the market share of small
manufacturers to estimate the annual
revenue, earnings before interest and tax
(EBIT), R&D expense, and capital
expenditures for a typical small
manufacturer. DOE then compared these
costs to the required capital and product
conversion costs at each TSL for both an
average small manufacturer (Table VI.1)
and an average large manufacturer
(Table VI.2). In the following tables, TSL
4 represents the proposed standard.
TABLE VI.1—COMPARISON OF AN AVERAGE SMALL COMMERCIAL REFRIGERATION EQUIPMENT MANUFACTURER’S
CONVERSION COSTS TO ANNUAL EXPENSES, REVENUE, AND PROFIT
Capital conversion cost
as a percentage of
annual capital
expenditures
TSL
TSL
TSL
TSL
TSL
TSL
1
2
3
4
5
Product conversion cost
as a percentage of
annual R&D expense
Total conversion cost as
a percentage of annual
revenue
Total conversion cost as
a percentage of annual
EBIT
0
102
238
423
1400
0
71
76
80
489
0
5
10
17
62
0
63
119
196
717
...............................................
...............................................
...............................................
...............................................
...............................................
TABLE VI.2—COMPARISON OF AN AVERAGE LARGE COMMERCIAL REFRIGERATION EQUIPMENT MANUFACTURER’S
CONVERSION COSTS TO ANNUAL EXPENSES, REVENUE, AND PROFIT
Capital conversion cost
as a percentage of
annual capital
expenditures
TSL
TSL
TSL
TSL
TSL
TSL
1
2
3
4
5
Product conversion cost
as a percentage of
annual R&D expense
Total conversion cost as
a percentage of annual
revenue
Total conversion cost as
a percentage of annual
EBIT
0
15
34
60
200
0
10
11
11
70
0
1
1
2
9
0
9
17
28
102
...............................................
...............................................
...............................................
...............................................
...............................................
3. Duplication, Overlap, and Conflict
With Other Rules and Regulations
DOE is not aware of any rules or
regulations that duplicate, overlap, or
conflict with the rule being proposed
today.
mstockstill on DSK4VPTVN1PROD with PROPOSALS3
4. Significant Alternatives to the Rule
The primary alternatives to the
proposed rule are the TSLs other than
the one proposed today, TSL 4. DOE
explicitly considered the role of
manufacturers, including small
manufacturers, in its selection of TSL 4
rather than TSL 5. Though TSL 5 results
in greater energy savings for the
country, the standard would place
excessive burdens on manufacturers.
Chapter 12 of the NOPR TSD contains
additional information about the impact
of this rulemaking on manufacturers.
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In addition to the other TSLs being
considered, the NOPR TSD includes an
RIA. For commercial refrigeration
equipment, the RIA discusses the
following policy alternatives: (1) No
change in standard; (2) customer
rebates; (3) customer tax credits; (4)
manufacturer tax credits; and (5) early
replacement. While these alternatives
may mitigate to some varying extent the
economic impacts on small entities
compared to the amended standards,
DOE determined that the energy savings
of these regulatory alternatives would be
at least five times smaller than those
that would be expected to result from
adoption of the proposed amended
standard levels. Thus, DOE rejected
these alternatives and is proposing to
adopt the amended standards set forth
in this rulemaking. (See chapter 17 of
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Fmt 4701
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the NOPR TSD for further detail on the
policy alternatives DOE considered.)
However, DOE seeks comment and, in
particular, data on the impacts of this
rulemaking on small businesses. (See
Issue 10 under ‘‘Issues on Which DOE
Seeks Comment’’ in section VII.E of this
NOPR.)
C. Review Under the Paperwork
Reduction Act
Manufacturers of commercial
refrigeration equipment must certify to
DOE that their products comply with
any applicable energy conservation
standards. In certifying compliance,
manufacturers must test their products
according to the DOE test procedures for
commercial refrigeration equipment,
including any amendments adopted for
those test procedures. DOE has
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established regulations for the
certification and recordkeeping
requirements for all covered consumer
products and commercial equipment,
including commercial refrigeration
equipment. 76 FR 12422 (March 7,
2011). The collection-of-information
requirement for the certification and
recordkeeping is subject to review and
approval by OMB under the Paperwork
Reduction Act (PRA). This requirement
has been approved by OMB under OMB
Control Number 1910–1400. Public
reporting burden for the certification is
estimated to average 20 hours per
response, including the time for
reviewing instructions, searching
existing data sources, gathering and
maintaining the data needed, and
completing and reviewing the collection
of information.
Notwithstanding any other provision
of the law, no person is required to
respond to, nor shall any person be
subject to a penalty for failure to comply
with, a collection of information subject
to the requirements of the PRA, unless
that collection of information displays a
currently valid OMB Control Number.
mstockstill on DSK4VPTVN1PROD with PROPOSALS3
D. Review Under the National
Environmental Policy Act of 1969
Pursuant to the National
Environmental Policy Act (NEPA) of
1969, (42 U.S.C. 4321 et seq.) DOE has
determined that the proposed rule fits
within the category of actions included
in Categorical Exclusion (CX) B5.1 and
otherwise meets the requirements for
application of a CX. See 10 CFR part
1021, appendix B, B5.1(b); 1021.410(b)
and appendix B, B(1)–(5). The proposed
rule fits within the category of actions
because it is a rulemaking that
establishes energy conservation
standards for consumer products or
industrial equipment, and for which
none of the exceptions identified in CX
B5.1(b) apply. Therefore, DOE has made
a CX determination for this rulemaking,
and DOE does not need to prepare an
Environmental Assessment or
Environmental Impact Statement for
this proposed rule. DOE’s CX
determination for this proposed rule is
available at https://cxnepa.energy.gov/.
E. Review Under Executive Order 13132
Executive Order 13132, ‘‘Federalism,’’
64 FR 43255 (Aug. 10, 1999), imposes
certain requirements on Federal
agencies formulating and implementing
policies or regulations that preempt
State law or that have Federalism
implications. The Executive Order
requires agencies to examine the
constitutional and statutory authority
supporting any action that would limit
the policymaking discretion of the
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States and to carefully assess the
necessity for such actions. The
Executive Order also requires agencies
to have an accountable process to
ensure meaningful and timely input by
State and local officials in the
development of regulatory policies that
have Federalism implications. On
March 14, 2000, DOE published a
statement of policy describing the
intergovernmental consultation process
it will follow in the development of
such regulations. 65 FR 13735. EPCA
governs and prescribes Federal
preemption of State regulations as to
energy conservation for the products
that are the subject of today’s proposed
rule. States can petition DOE for
exemption from such preemption to the
extent, and based on criteria, set forth in
EPCA. (42 U.S.C. 6297) No further
action is required by Executive Order
13132.
F. Review Under Executive Order 12988
With respect to the review of existing
regulations and the promulgation of
new regulations, section 3(a) of
Executive Order 12988, ‘‘Civil Justice
Reform,’’ imposes on Federal agencies
the general duty to adhere to the
following requirements: (1) eliminate
drafting errors and ambiguity; (2) write
regulations to minimize litigation; and
(3) provide a clear legal standard for
affected conduct rather than a general
standard and promote simplification
and burden reduction. 61 FR 4729 (Feb.
7, 1996). Section 3(b) of Executive Order
12988 specifically requires that
Executive agencies make every
reasonable effort to ensure that the
regulation: (1) Clearly specifies the
preemptive effect, if any; (2) clearly
specifies any effect on existing Federal
law or regulation; (3) provides a clear
legal standard for affected conduct
while promoting simplification and
burden reduction; (4) specifies the
retroactive effect, if any; (5) adequately
defines key terms; and (6) addresses
other important issues affecting clarity
and general draftsmanship under any
guidelines issued by the Attorney
General. Section 3(c) of Executive Order
12988 requires Executive agencies to
review regulations in light of applicable
standards in section 3(a) and section
3(b) to determine whether they are met
or it is unreasonable to meet one or
more of them. DOE has completed the
required review and determined that, to
the extent permitted by law, this
proposed rule meets the relevant
standards of Executive Order 12988.
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G. Review Under the Unfunded
Mandates Reform Act of 1995
Title II of the Unfunded Mandates
Reform Act of 1995 (UMRA) requires
each Federal agency to assess the effects
of Federal regulatory actions on State,
local, and Tribal governments and the
private sector. Public Law 104–4, sec.
201 (codified at 2 U.S.C. 1531). For a
proposed regulatory action likely to
result in a rule that may cause the
expenditure by State, local, and Tribal
governments, in the aggregate, or by the
private sector of $100 million or more
in any one year (adjusted annually for
inflation), section 202 of UMRA requires
a Federal agency to publish a written
statement that estimates the resulting
costs, benefits, and other effects on the
national economy. (2 U.S.C. 1532(a), (b))
The UMRA also requires a Federal
agency to develop an effective process
to permit timely input by elected
officers of State, local, and Tribal
governments on a proposed ‘‘significant
intergovernmental mandate,’’ and
requires an agency plan for giving notice
and opportunity for timely input to
potentially affected small governments
before establishing any requirements
that might significantly or uniquely
affect small governments. On March 18,
1997, DOE published a statement of
policy on its process for
intergovernmental consultation under
UMRA. 62 FR 12820. DOE’s policy
statement is also available at https://
energy.gov/gc/office-general-counsel.
Although today’s proposed rule does
not contain a Federal intergovernmental
mandate, it may require expenditures of
$100 million or more on the private
sector. Specifically, the proposed rule
will likely result in a final rule that
could require expenditures of $100
million or more. Such expenditures may
include: (1) Investment in research and
development and in capital
expenditures by commercial
refrigeration equipment manufacturers
in the years between the final rule and
the compliance date for the new
standards; and (2) incremental
additional expenditures by customers to
purchase higher efficiency commercial
refrigeration equipment, starting at the
compliance date for the applicable
standard.
Section 202 of UMRA authorizes a
Federal agency to respond to the content
requirements of UMRA in any other
statement or analysis that accompanies
the proposed rule. (2 U.S.C. 1532(c))
The content requirements of section
202(b) of UMRA relevant to a private
sector mandate substantially overlap the
economic analysis requirements that
apply under section 325(o) of EPCA and
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Executive Order 12866. The
section of
this NOPR and the ‘‘Regulatory Impact
Analysis’’ section of the NOPR TSD for
this proposed rule respond to those
requirements.
Under section 205 of UMRA, DOE is
obligated to identify and consider a
reasonable number of regulatory
alternatives before promulgating a rule
for which a written statement under
section 202 is required. (2 U.S.C.
1535(a)) DOE is required to select from
those alternatives the most cost-effective
and least burdensome alternative that
achieves the objectives of the proposed
rule unless DOE publishes an
explanation for doing otherwise, or the
selection of such an alternative is
inconsistent with law. As required by 42
U.S.C. 6295(d), (f), and (o), 6313(e), and
6316(a), today’s proposed rule would
establish energy conservation standards
for commercial refrigeration equipment
that are designed to achieve the
maximum improvement in energy
efficiency that DOE has determined to
be both technologically feasible and
economically justified. A full discussion
of the alternatives considered by DOE is
presented in the ‘‘Regulatory Impact
Analysis’’ section of the TSD for today’s
proposed rule.
SUPPLEMENTARY INFORMATION
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H. Review Under the Treasury and
General Government Appropriations
Act, 1999
Section 654 of the Treasury and
General Government Appropriations
Act, 1999 (Pub. L. 105–277) requires
Federal agencies to issue a Family
Policymaking Assessment for any rule
that may affect family well-being. This
rule would not have any impact on the
autonomy or integrity of the family as
an institution. Accordingly, DOE has
concluded that it is not necessary to
prepare a Family Policymaking
Assessment.
I. Review Under Executive Order 12630
DOE has determined, under Executive
Order 12630, ‘‘Governmental Actions
and Interference with Constitutionally
Protected Property Rights,’’ 53 FR 8859
(Mar. 18, 1988), that this regulation
would not result in any takings that
might require compensation under the
Fifth Amendment to the U.S.
Constitution.
J. Review Under the Treasury and
General Government Appropriations
Act, 2001
Section 515 of the Treasury and
General Government Appropriations
Act, 2001 (44 U.S.C. 3516, note)
provides for Federal agencies to review
most disseminations of information to
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the public under guidelines established
by each agency pursuant to general
guidelines issued by OMB. OMB’s
guidelines were published at 67 FR
8452 (Feb. 22, 2002), and DOE’s
guidelines were published at 67 FR
62446 (Oct. 7, 2002). DOE has reviewed
today’s NOPR under the OMB and DOE
guidelines and has concluded that it is
consistent with applicable policies in
those guidelines.
K. Review Under Executive Order 13211
Executive Order 13211, ‘‘Actions
Concerning Regulations That
Significantly Affect Energy Supply,
Distribution, or Use,’’ 66 FR 28355 (May
22, 2001), requires Federal agencies to
prepare and submit to OIRA at OMB a
Statement of Energy Effects for any
proposed significant energy action. A
‘‘significant energy action’’ is defined as
any action by an agency that
promulgates or is expected to lead to
promulgation of a final rule, and that:
(1) Is a significant regulatory action
under Executive Order 12866, or any
successor order; and (2) is likely to have
a significant adverse effect on the
supply, distribution, or use of energy, or
(3) is designated by the Administrator of
OIRA as a significant energy action. For
any proposed significant energy action,
the agency must give a detailed
statement of any adverse effects on
energy supply, distribution, or use
should the proposal be implemented,
and of reasonable alternatives to the
action and their expected benefits on
energy supply, distribution, and use.
DOE has tentatively concluded that
today’s regulatory action, which sets
forth proposed energy conservation
standards for commercial refrigeration
equipment, is not a significant energy
action because the proposed standards
are not likely to have a significant
adverse effect on the supply,
distribution, or use of energy, nor has it
been designated as such by the
Administrator at OIRA. Accordingly,
DOE has not prepared a Statement of
Energy Effects on the proposed rule.
L. Review Under the Information
Quality Bulletin for Peer Review
On December 16, 2004, OMB, in
consultation with the Office of Science
and Technology Policy (OSTP), issued
its Final Information Quality Bulletin
for Peer Review (the Bulletin). 70 FR
2664 (Jan. 14, 2005). The Bulletin
establishes that certain scientific
information shall be peer reviewed by
qualified specialists before it is
disseminated by the Federal
Government, including influential
scientific information related to agency
regulatory actions. The purpose of the
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55985
Bulletin is to enhance the quality and
credibility of the Government’s
scientific information. Under the
Bulletin, the energy conservation
standards rulemaking analyses are
‘‘influential scientific information,’’
which the Bulletin defines as scientific
information the agency reasonably can
determine will have, or does have, a
clear and substantial impact on
important public policies or private
sector decisions. 70 FR 2667 (Jan. 14,
2005).
In response to OMB’s Bulletin, DOE
conducted formal in-progress peer
reviews of the energy conservation
standards development process and
analyses and has prepared a Peer
Review Report pertaining to the energy
conservation standards rulemaking
analyses. Generation of this report
involved a rigorous, formal, and
documented evaluation using objective
criteria and qualified and independent
reviewers to make a judgment as to the
technical/scientific/business merit, the
actual or anticipated results, and the
productivity and management
effectiveness of programs and/or
projects. The ‘‘Energy Conservation
Standards Rulemaking Peer Review
Report,’’ dated February 2007, has been
disseminated and is available at the
following Web site:
www1.eere.energy.gov/buildings/
appliance_standards/peer_review.html.
VII. Public Participation
A. Attendance at the Public Meeting
The time, date, and location of the
public meeting are listed in the DATES
and ADDRESSES sections at the beginning
of this notice. If you plan to attend the
public meeting, please notify Ms.
Brenda Edwards at (202) 586–2945 or
Brenda.Edwards@ee.doe.gov. Please
note that foreign nationals visiting DOE
Headquarters are subject to advance
security screening procedures. Any
foreign national wishing to participate
in the meeting should advise DOE as
soon as possible by contacting Ms.
Edwards to initiate the necessary
procedures. Please also note that those
wishing to bring laptops into the
Forrestal Building will be required to
obtain a property pass. Visitors should
avoid bringing laptops, or allow an extra
45 minutes.
In addition, you can attend the public
meeting via webinar. Webinar
registration information, participant
instructions, and information about the
capabilities available to webinar
participants will be published on DOE’s
Web site at: www1.eere.energy.gov/
buildings/appliance_standards/
product.aspx/productid/52. Participants
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are responsible for ensuring their
systems are compatible with the
webinar software.
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B. Procedure for Submitting Prepared
General Statements for Distribution
Any person who has plans to present
a prepared general statement may
request that copies of his or her
statement be made available at the
public meeting. Such persons may
submit requests, along with an advance
electronic copy of their statement in
PDF (preferred), Microsoft Word or
Excel, WordPerfect, or text (ASCII) file
format, to the appropriate address
shown in the ADDRESSES section at the
beginning of this notice. The request
and advance copy of statements must be
received at least one week before the
public meeting and may be emailed,
hand-delivered, or sent by mail. DOE
prefers to receive requests and advance
copies via email. Please include a
telephone number to enable DOE staff to
make follow-up contact, if needed.
C. Conduct of the Public Meeting
DOE will designate a DOE official to
preside at the public meeting and may
also use a professional facilitator to aid
discussion. The meeting will not be a
judicial or evidentiary-type public
hearing, but DOE will conduct it in
accordance with section 336 of EPCA
(42 U.S.C. 6306). A court reporter will
be present to record the proceedings and
prepare a transcript. DOE reserves the
right to schedule the order of
presentations and to establish the
procedures governing the conduct of the
public meeting. After the public
meeting, interested parties may submit
further comments on the proceedings as
well as on any aspect of the rulemaking
until the end of the comment period.
The public meeting will be conducted
in an informal, conference style. DOE
will present summaries of comments
received before the public meeting,
allow time for prepared general
statements by participants, and
encourage all interested parties to share
their views on issues affecting this
rulemaking. Each participant will be
allowed to make a general statement
(within time limits determined by DOE),
before the discussion of specific topics.
DOE will allow, as time permits, other
participants to comment briefly on any
general statements.
At the end of all prepared statements
on a topic, DOE will permit participants
to clarify their statements briefly 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
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questions of participants concerning
other matters relevant to this
rulemaking. The official conducting the
public meeting will accept additional
comments or questions from those
attending, as time permits. The
presiding official will announce any
further procedural rules or modification
of the above procedures that may be
needed for the proper conduct of the
public meeting.
A transcript of the public meeting will
be included in the docket, which can be
viewed as described in the Docket
section at the beginning of this notice.
In addition, any person may buy a copy
of the transcript from the transcribing
reporter.
D. Submission of Comments
DOE will accept comments, data, and
information regarding this proposed
rule before or after the public meeting,
but no later than the date provided in
the DATES section at the beginning of
this proposed rule. Interested parties
may submit comments, data, and other
information using any of the methods
described in the ADDRESSES section at
the beginning of this notice.
Submitting comments via
regulations.gov. The regulations.gov
Web page will require you to provide
your name and contact information.
Your contact information will be
viewable to DOE Building Technologies
staff only. Your contact information will
not be publicly viewable except for your
first and last names, organization name
(if any), and submitter representative
name (if any). If your comment is not
processed properly because of technical
difficulties, DOE will use this
information to contact you. If DOE
cannot read your comment due to
technical difficulties and cannot contact
you for clarification, DOE may not be
able to consider your comment.
However, your contact information
will be publicly viewable if you include
it in the comment itself or in any
documents attached to your comment.
Any information that you do not want
to be publicly viewable should not be
included in your comment, nor in any
document attached to your comment.
Otherwise, persons viewing comments
will see only first and last names,
organization names, correspondence
containing comments, and any
documents submitted with the
comments.
Do not submit to regulations.gov
information for which disclosure is
restricted by statute, such as trade
secrets and commercial or financial
information (hereinafter referred to as
Confidential Business Information
(CBI)). Comments submitted through
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regulations.gov cannot be claimed as
CBI. Comments received through the
Web site will waive any CBI claims for
the information submitted. For
information on submitting CBI, see the
Confidential Business Information
section below.
DOE processes submissions made
through regulations.gov before posting.
Normally, comments will be posted
within a few days of being submitted.
However, if large volumes of comments
are being processed simultaneously,
your comment may not be viewable for
up to several weeks. Please keep the
comment tracking number that
regulations.gov provides after you have
successfully uploaded your comment.
Submitting comments via email, hand
delivery/courier, or mail. Comments and
documents submitted via email, hand
delivery, or mail also will be posted to
regulations.gov. If you do not want your
personal contact information to be
publicly viewable, do not include it in
your comment or any accompanying
documents. Instead, provide your
contact information in a cover letter.
Include your first and last names, email
address, telephone number, and
optional mailing address. The cover
letter will not be publicly viewable as
long as it does not include any
comments.
Include contact information each time
you submit comments, data, documents,
and other information to DOE. If you
submit via mail or hand delivery/
courier, please provide all items on a
CD, if feasible. It is not necessary to
submit printed copies. No facsimiles
(faxes) will be accepted.
Comments, data, and other
information submitted to DOE
electronically should be provided in
PDF (preferred), Microsoft Word or
Excel, WordPerfect, or text (ASCII) file
format. Provide documents that are not
secured, that are written in English, and
that are free of any defects or viruses.
Documents should not contain special
characters or any form of encryption
and, if possible, they should carry the
electronic signature of the author.
Campaign form letters. Please submit
campaign form letters by the originating
organization in batches of between 50 to
500 form letters per PDF or as one form
letter with a list of supporters’ names
compiled into one or more PDFs. This
reduces comment processing and
posting time.
Confidential Business Information.
According to 10 CFR 1004.11, any
person submitting information that he
or she believes to be confidential and
exempt by law from public disclosure
should submit via email, postal mail, or
hand delivery/courier two well-marked
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copies: One copy of the document
marked confidential including all the
information believed to be confidential,
and one copy of the document marked
non-confidential with the information
believed to be confidential deleted.
Submit these documents via email or on
a CD, if feasible. 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.
It is DOE’s policy that all comments
may be included in the public docket,
without change and as received,
including any personal information
provided in the comments (except
information deemed to be exempt from
public disclosure).
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E. Issues on Which DOE Seeks Comment
Although DOE welcomes comments
on any aspect of this proposal, DOE is
particularly interested in receiving
comments and views of interested
parties concerning the following issues.
1. Primary and Secondary Equipment
Classes
In the January 2009 final rule
analysis, DOE selected 15 ‘‘primary’’
classes to analyze directly in its
engineering analyses, and designated
the remaining 23 classes as ‘‘secondary’’
classes, for which standards were
developed based on the primary class
results. These designations were based
on shipment-volume data coupled with
input from stakeholders during that
rulemaking process. As this rulemaking
seeks to review and potentially amend
standards for the 38 total equipment
classes examined in the January 2009
final rule, DOE retained those primary
and secondary class designations in its
analyses. Additionally, equipment for
which EPACT 2005 directly set
standards was incorporated into the
scope of this rulemaking. DOE treated
all of these equipment classes
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previously covered by EPACT 2005
standards as primary classes. DOE seeks
comment regarding its designation of
primary and secondary equipment
classes.
proposed standards. DOE seeks
comment on its methodology for
developing offset factors for the
standard level equations presented in
this NOPR.
2. Design Option and Core Case Costs
During the NOPR analyses, DOE
performed physical teardowns on a
selection of units currently on the
market. From the bills of materials and
cost model developed using this
teardown data, DOE calculated an
estimate of the manufacturer production
cost of the core case assembly for each
of the primary equipment classes in the
engineering analysis. DOE also
developed estimates of the costs for
components that affect energy
consumption, namely those it
considered as design options. These
estimates were obtained from a
combination of sources, including
publicly available prices from vendors
and confidential estimates provided by
manufacturers. This price data was
aggregated for use in the engineering
analysis. DOE seeks comment and data
regarding the manufacturer production
costs for commercial refrigeration
equipment cases and components and
the technological feasibility of applying
technologies identified in the
engineering analysis to meeting the
proposed standards.
4. Extension of Standards
In its January 2009 final rule, DOE
developed a quantitative method for
applying the standards developed for its
primary equipment classes to the
remaining, secondary classes. This
approach involved extension
multipliers created using results from
the analysis of the primary equipment
classes and a set of focused matchedpair analyses. Additionally, DOE
applied standards developed for certain
primary equipment classes directly to
other similar secondary classes. In this
rulemaking, DOE retained the extension
multipliers from the January 2009 final
rule and reapplied them to the
equipment classes from that rulemaking
for which DOE is proposing amended
standards. DOE believes that the
relationship between the performances
of various types of equipment is still
adequately modeled by the use of those
multipliers. DOE’s approach in
developing extension multipliers in the
2009 rulemaking and its rationale for
retaining them in this rulemaking are
discussed in detail in section 5.9 of the
NOPR TSD. DOE seeks comment on its
approach to extending the results of the
engineering analysis to secondary
equipment classes. Specifically, DOE
requests comment on whether the
assumptions underlying its
development and application of
extension multipliers are appropriate, or
whether there are additional differences
between related equipment classes that
DOE should take into account.
3. Offset Factors
In its January 2009 final rule, DOE
developed offset factors as a way to
adjust the energy efficiency
requirements for smaller equipment in
each equipment class analyzed. These
offset factors accounted for certain
components of the refrigeration load
(such as conduction end effects) that
remain constant when equipment size
varies and thus affect smaller cases
disproportionately. The offset factors
were intended to approximate these
constant loads and provide a fixed end
point, corresponding to a zero-volume
or zero-TDA case, in an equation that
describes the relationship between
energy consumption and the
corresponding TDA or volume metric.
Similarly, the EPACT 2005 standards
also contained values that did not vary
with unit volume and which served a
similar purpose. In developing standard
level equations for the proposed
amended standards, DOE scaled the
existing offset factors by the ratio of the
amount of energy consumption allowed
by the existing standards for a given
representative unit and the energy use
calculated in the engineering analysis at
each TSL. This adjustment of the offset
factors ensures that neither larger nor
smaller units are disadvantaged by these
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5. Types of Refrigerant Analyzed
DOE based its analysis on
refrigeration equipment using R404A
and R134a, HFC refrigerants widely
used in the commercial refrigeration
industry. DOE received comments
regarding the consideration of
refrigerants with lower GWP due to
possible shifts in the marketplace
toward these refrigerants and notes that
a number of lower-GWP alternatives are
available for use within certain portions
of the commercial refrigeration sector.96
The use of alternative refrigerants could
be impacting to Climate Change and the
environment. DOE requests comment on
the extent of the current use or likely
future use of lower-GWP refrigerants,
96 For an overview of lower-GWP alternatives
available to certain sections of the commercial
refrigeration equipment sector, please see https://
www.epa.gov/ozone/downloads/
EPA_HFC_ComRef.pdf
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and asks manufacturers to submit data
related to the ability of equipment
(either existing or redesigned) using
these refrigerants to meet the proposed
standard. DOE seeks input as to the
impacts of alternative refrigerants to the
refrigeration system in this rulemaking.
6. Distribution Channel Market Shares
and Markups
DOE has revised the distribution
channel market shares for some of the
equipment classes based on comments
received during April 2011 preliminary
analysis public meeting. The markup
values associated with each distribution
channel have been updated based on
currently available industry profit data.
DOE welcomes comment on the
assumptions and values used for the
markups analysis.
7. Market Shares of Efficiency Levels
DOE seeks comments on the market
shares of efficiency levels used for this
NOPR analysis. DOE is currently using
a model to predict the market share of
efficiency levels. According to
commenters, the calculated market
shares are biased toward the higher
efficiency levels. However, DOE has
cited lack of data as the primary reason
for its lack of more accurate numbers.
DOE welcomes information from
stakeholders that would aid DOE in
improving upon the numbers for market
shares of efficiency levels.
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8. Maintenance and Repair Costs at
Higher Efficiency Levels.
Currently, DOE assumes no increase
in regular maintenance costs at higher
efficiency levels contemplated in the
proposed rule. Lighting maintenance
and repair costs are estimated based on
OEM costs; they vary with higher
efficiency levels. DOE welcomes
stakeholder input and additional
information to improve upon these
estimates with respect to maintenance
and repair costs. Data pertaining to cost
increases specifically associated with
the design options considered in this
rulemaking would be greatly
appreciated.
9. Impact of Amended Standards on
Future Shipments
Currently, DOE assumes that future
shipments of commercial refrigeration
equipment will not be affected by
amended standards. While DOE has
cited strong reasons to believe that this
assumption is true for display cases, the
assumption may not be entirely true in
the case of equipment used in the
foodservice industry. While there may
be a small effect in the initial years of
amended standards, DOE does not have
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data for the commercial refrigeration
industry to obtain a reasonably accurate
estimate of this effect. DOE welcomes
stakeholder input and estimates on the
effect of amended standards on future
commercial refrigeration equipment
shipments. DOE also welcomes input
and data on the demand elasticity
estimates used in the analysis.
10. Learning Impacts on Price Forecast
for Future Shipments
Currently, DOE projects future prices
by subtracting the cost reductions
associated with learning effects from the
cost associated with the amended
standards. DOE analyzes learning effects
using PPI, a quantity adjusted index of
wholesale prices, as a proxy for price of
commercial refrigerators. DOE is seeking
input, and price data that could be used
in place of PPI. Also DOE is seeking
input on the magnitude of the price data
and the cause of those price changes.
11. Product Attributes
DOE requests comment on whether
there are features or attributes of the
more energy-efficient commercial
refrigerators that manufacturers would
produce to meet the standards in this
proposed rule that might affect how
they would be used by different
customer categories (e.g., refrigeration in
grocery stores or restaurants). One
example of such an effect might be that
grocers or restaurant operators would
change where, how, and how long food
items would be stored or displayed.
DOE requests comment specifically on
how any such effects should be weighed
in the choice of standards for these
refrigerators for the final rule.
on discussions with industry experts
and concluded that a typical lifetime of
10 years is appropriate for most
commercial refrigeration equipment in
large grocery/multi-line stores and
restaurants. Operators of small food
retail stores, on the other hand, tend to
use display cases longer. DOE used 15
years as the average equipment lifetime
for display cases used in such retail
stores. DOE welcomes further input on
the average equipment lifetimes for the
LCC analysis and NIA.
14. Small Businesses
During the Framework and
preliminary analysis public meetings,
DOE received many comments
regarding the potential impacts of
amended energy conservation standards
on small business manufacturers of
commercial refrigeration equipment. In
its market and technology assessment
and manufacturer impact analysis
research, DOE developed a list of
companies falling under its
classification of small businesses, and
sought specific feedback regarding
potentially disproportionate impacts of
amended standards on these businesses.
DOE incorporated this feedback into its
analyses for the NOPR and has
presented its results in this notice and
the technical support document.
However, DOE seeks comment and, in
particular, data, in its efforts to quantify
the impacts of this rulemaking on small
business manufacturers. In addition,
DOE seeks comment on any
disproportionate impacts of amended
standards on any particular customer
groups, such as small businesses that
are small grocery, convenience stores,
and restaurants.
12. Analytical Timeline
For this rulemaking, DOE analyzed
the effects of this proposal assuming
that the commercial refrigerators would
be available to purchase for 30 years and
undertook a sensitivity analysis using 9
years rather than 30 years of product
shipments. The choice of a 30-year
period of shipments is consistent with
the DOE analysis for other products and
commercial equipment. The choice of a
9-year period is a proxy for the timeline
in EPCA for the review of certain energy
conservation standards and potential
revision of and compliance with such
revised standards. We are seeking input,
information and data on whether there
are ways to refine the analytic timeline
further.
15. Update to Social Cost of Carbon
Values
DOE solicits comment on the
application of the new SCC values used
to determine the social benefits of CO2
emissions reductions over the
rulemaking analysis period. The
rulemaking analysis period covers from
2017 to 2046 plus an additional 15 years
to account for the lifetime of the
equipment purchased between 2017 and
2046. In particular, the agency solicits
comment on the agency’s derivation of
SCC values after 2050 where the agency
applied the average annual growth rate
of the SCC estimates in 2040–2050
associated with each of the four sets of
values.
13. Equipment Lifetime
DOE defines lifetime as the age at
which a commercial refrigeration
equipment unit is retired from service.
DOE based expected equipment lifetime
16. Cumulative Regulatory Burdens
The agency seeks input on the
cumulative regulatory burden that may
be imposed on industry either from
recently implemented rulemakings for
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this product class or other rulemakings
that affect the same industry.
for ‘‘service over counter,’’ to read as
follows:
17. Compliance Date
§ 431.62 Definitions concerning
commercial refrigerators, freezers and
refrigerator-freezers.
Pursuant to EPCA, any amended
standards established in this rulemaking
must apply to equipment that is
manufactured on or after 3 years after
the final rule is published in the Federal
Register unless DOE determines, by
rule, that a 3-year period is inadequate,
in which case DOE may extend the
compliance date for that standard by an
additional 2 years. DOE proposes to
provide 3 years for compliance with this
standard, but seeks comment on
whether it should consider a longer
compliance date as authorized, and, if
so, by how much.
VIII. Approval of the Office of the
Secretary
The Secretary of Energy has approved
publication of today’s proposed rule.
List of Subjects in 10 CFR Part 431
Administrative practice and
procedure, Confidential business
information, Energy conservation, and
Reporting and recordkeeping
requirements.
*
*
*
*
Service over counter means
equipment with sliding or hinged doors
in the back intended for use by sales
personnel for loading and retrieving
items for sale and fixed, sliding or
hinged transparent panels in the front
for displaying merchandise. The
equipment has a height no greater than
66 inches and is intended to serve as a
counter for transactions between sales
personnel and customers.
*
*
*
*
*
■ 3. Section 431.66 is amended by:
■ a. Revising paragraph (a)(3);
■ b. Revising paragraph (b) introductory
text;
■ c. Revising paragraph (c);
■ d. Revising paragraph (d) introductory
text; and
■ c. Adding paragraph (e).
The revisions and addition read as
follows:
§ 431.66 Energy conservation standards
and their effective dates.
Issued in Washington, DC, on August 29,
2013.
Mike Carr,
Acting Assistant Secretary, Energy Efficiency
and Renewable Energy.
For the reasons set forth in the
preamble, DOE proposes to amend part
431 of chapter II of title 10, of the Code
of Federal Regulations, as set forth
below:
PART 431—ENERGY EFFICIENCY
PROGRAM FOR CERTAIN
COMMERCIAL AND INDUSTRIAL
EQUIPMENT
1. The authority citation for part 431
continues to read as follows:
■
Authority: 42 U.S.C. 6291–6317.
2. Section 431.62 is amended by
adding in alphabetical order a definition
■
*
(a) * * *
(3) For the purpose of paragraph (d)
of this section, the term ‘‘TDA’’ means
the total display area (ft2) of the case, as
defined in ARI Standard 1200–2006,
appendix D (incorporated by reference,
see § 431.63). For the purpose of
paragraph (e) of this section, the term
‘‘TDA’’ means the total display area (ft2)
of the case, as defined in AHRI Standard
1200 (I–P)-2010, appendix D
(incorporated by reference, see
§ 431.63).
(b) Each commercial refrigerator,
freezer, and refrigerator-freezer with a
self-contained condensing unit designed
for holding temperature applications
manufactured on or after January 1,
2010 and before [date 3 years after date
of publication of the final rule in the
Federal Register] shall have a daily
energy consumption (in kilowatt-hours
55989
per day) that does not exceed the
following:
*
*
*
*
*
(c) Each commercial refrigerator with
a self-contained condensing unit
designed for pull-down temperature
applications and transparent doors
manufactured on or after January 1,
2010 and before [date 3 years after date
of publication of the final rule in the
Federal Register] shall have a daily
energy consumption (in kilowatt-hours
per day) of not more than 0.126V + 3.51.
(d) Each commercial refrigerator,
freezer, and refrigerator-freezer with a
self-contained condensing unit and
without doors; commercial refrigerator,
freezer, and refrigerator-freezer with a
remote condensing unit; and
commercial ice-cream freezer
manufactured on or after January 1,
2012 and before [date 3 years after date
of publication of the final rule in the
Federal Register] shall have a daily
energy consumption (in kilowatt-hours
per day) that does not exceed the levels
specified:
*
*
*
*
*
(e) Each commercial refrigerator,
freezer, and refrigerator-freezer with a
self-contained condensing unit designed
for holding temperature applications
and with solid or transparent doors;
commercial refrigerator with a selfcontained condensing unit designed for
pull-down temperature applications and
with transparent doors; commercial
refrigerator, freezer, and refrigeratorfreezer with a self-contained condensing
unit and without doors; commercial
refrigerator, freezer, and refrigeratorfreezer with a remote condensing unit;
and commercial ice-cream freezer
manufactured on or after [date 3 years
after date of publication of the final rule
in the Federal Register], shall have a
daily energy consumption (in kilowatthours per day) that does not exceed the
levels specified:
(1) For equipment other than hybrid
equipment, refrigerator/freezers, or
wedge cases:
Operating
temp.
°F
mstockstill on DSK4VPTVN1PROD with PROPOSALS3
Condensing unit configuration
Equipment family
Rating temp.
°F
Remote Condensing
Commercial Refrigerators and Commercial Freezers.
Remote (RC) ..............
Vertical Open (VOP) ..
38 (M) ........................
0 (L) ...........................
≥32
<32
VOP.RC.M .................
VOP.RC.L ..................
0.61 × TDA + 3.03
2.11 × TDA + 6.36
Semivertical Open
(SVO).
Horizontal Open
(HZO).
Vertical Closed Transparent (VCT).
Horizontal Closed
Transparent (HCT).
Vertical Closed Solid
(VCS).
38 (M) ........................
0 (L) ...........................
38 (M) ........................
0 (L) ...........................
38 (M) ........................
0 (L) ...........................
38 (M) ........................
0 (L) ...........................
38 (M) ........................
0 (L) ...........................
≥32
<32
≥32
<32
≥32
<32
≥32
<32
≥32
<32
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 ..................
0.63 × TDA + 2.41
2.11 × TDA + 6.36
0.35 × TDA + 2.88
0.57 × TDA + 6.88
0.08 × TDA + 0.72
0.43 × TDA + 2.03
0.14 × TDA + 0.11
0.3 × TDA + 0.23
0.1 × V + 0.24
0.21 × V + 0.5
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Equipment class
designation*
Maximum daily energy
consumption
kWh/day
Equipment category
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Self-Contained ComSelf-Contained (SC) ...
mercial Refrigerators
and Commercial
Freezers With Doors.
38 (M) ........................
0 (L) ...........................
38 (M) ........................
0 (L) ...........................
≥32
<32
≥32
<32
HCS.RC.M .................
HCS.RC.L ..................
SOC.RC.M .................
SOC.RC.L ..................
0.1 × V + 0.24
0.21 × V + 0.5
0.39 × TDA + 0.08
0.83 × TDA + 0.18
Vertical Open (VOP) ..
38 (M) ........................
0 (L) ...........................
≥32
<32
VOP.SC.M .................
VOP.SC.L ..................
1.51 × TDA + 4.09
3.79 × TDA + 10.26
38 (M) ........................
0 (L) ...........................
38 (M) ........................
0 (L) ...........................
≥32
<32
≥32
<32
SVO.SC.M
SVO.SC.L
HZO.SC.M
HZO.SC.L
1.5 × TDA + 3.99
3.77 × TDA + 10.01
0.75 × TDA + 5.44
1.92 × TDA + 7.08
Vertical Closed Transparent (VCT).
38 (M) ........................
0 (L) ...........................
≥32
<32
VCT.SC.M ..................
VCT.SC.L ...................
0.04 × V + 1.07
0.22 × V + 1.21
Vertical Closed Solid
(VCS).
Horizontal Closed
Transparent (HCT).
Horizontal Closed
Solid (HCS).
Service Over Counter
(SOC).
Self-Contained (SC) ...
38 (M) ........................
0(L) .............................
38 (M) ........................
0 (L) ...........................
0 (L).
≥32
<32
≥32
<32
≥32
<32
≥32
<32
VCS.SC.M ..................
VCS.SC.L ...................
HCT.SC.M ..................
HCT.SC.L ...................
HCS.SC.M .................
HCS.SC.L ..................
SOC.SC.M .................
SOC.SC.L ..................
0.03
0.13
0.02
0.11
0.02
0.12
0.32
0.67
0 (L).
Equipment class
designation*
Maximum daily energy
consumption
kWh/day
Rating temp.
°F
Semivertical Open
(SVO).
Horizontal Open
(HZO).
Self-Contained Commercial Refrigerators
and Commercial
Freezers Without
Doors.
Condensing unit configuration
Operating
temp.
°F
Equipment family
Horizontal Closed
Solid (HCS).
Service Over Counter
(SOC).
Equipment category
.................
..................
.................
..................
×
×
×
×
×
×
×
×
V + 0.53
V + 0.43
V + 0.51
V + 0.6
V + 0.37
V + 0.42
TDA + 0.53
TDA + 1.12
Self-Contained Commercial Refrigerators
with Transparent
Doors for Pull-Down
Temperature Applications.
Self-Contained (SC) ...
Pull-Down (PD) ..........
38 (M) ........................
≥32
PD.SC.M ....................
0.03 × V + 0.83
Commercial Ice-Cream
Freezers.
Remote (RC) ..............
Vertical Open (VOP) ..
¥15 (I) .......................
≤¥5**
VOP.RC.I ...................
2.68 × TDA + 8.08
....................................
........................
SVO.RC.I ...................
2.68 × TDA + 8.08
....................................
........................
HZO.RC.I ...................
0.72 × TDA + 8.74
....................................
........................
VCT.RC.I ....................
0.51 × TDA + 2.37
....................................
........................
HCT.RC.I ...................
0.35 × TDA + 0.27
....................................
........................
VCS.RC.I ...................
0.25 × V + 0.58
....................................
........................
HCS.RC.I ...................
0.25 × V + 0.58
....................................
........................
SOC.RC.I ...................
0.97 × TDA + 0.21
Self-Contained (SC) ...
Semivertical Open
(SVO).
Horizontal Open
(HZO).
Vertical Closed Transparent (VCT).
Horizontal Closed
Transparent (HCT).
Vertical Closed Solid
(VCS).
Horizontal Closed
Solid (HCS).
Service Over Counter
(SOC).
Vertical Open (VOP) ..
Semivertical Open
(SVO)\.
Horizontal Open
(HZO).
Vertical Closed Transparent (VCT).
Horizontal Closed
Transparent (HCT).
Vertical Closed Solid
(VCS).
Horizontal Closed
Solid (HCS).
Service Over Counter
(SOC).
....................................
....................................
........................
........................
VOP.SC.I ...................
SVO.SC.I ...................
4.81 × TDA + 13.03
4.79 × TDA + 12.72
....................................
........................
HZO.SC.I ...................
2.44 × TDA + 9.0
....................................
........................
VCT.SC.I ....................
0.52 × TDA + 2.56
....................................
........................
HCT.SC.I ....................
0.49 × TDA + 0.37
....................................
........................
VCS.SC.I ....................
0.35 × V + 0.81
....................................
........................
HCS.SC.I ...................
0.35 × V + 0.81
....................................
........................
SOC.SC.I ...................
1.35 × TDA + 0.29
mstockstill on DSK4VPTVN1PROD with PROPOSALS3
* The meaning of the letters in this column is indicated in the columns to the left.
** Ice-cream freezer is defined in 10 CFR 431.62 as 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.
(2) For commercial refrigeration
equipment with two or more
compartments (i.e., hybrid refrigerators,
hybrid freezers, hybrid refrigeratorfreezers, and non-hybrid refrigeratorfreezers), the maximum daily energy
consumption for each model shall be
the sum of the MDEC values for all of
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18:35 Sep 10, 2013
Jkt 229001
its compartments. For each
compartment, measure the TDA or
volume of that compartment, and
determine the appropriate equipment
class based on that compartment’s
equipment family, condensing unit
configuration, and designed operating
temperature. The MDEC limit for each
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compartment shall be the calculated
value obtained by entering that
compartment’s TDA or volume into the
standard equation in paragraph (e)(1) of
this section for that compartment’s
equipment class. Measure the CDEC or
TDEC for the entire case as described in
§ 431.66(d)(2)(i) through (iii), except
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mstockstill on DSK4VPTVN1PROD with PROPOSALS3
that where measurements and
calculations reference ARI Standard
1200–2006 (incorporated by reference,
see § 431.63), AHRI Standard 1200 (I–P)2010 (incorporated by reference, see
§ 431.63) shall be used.
(3) For remote condensing and selfcontained wedge cases, measure the
CDEC or TDEC according to the AHRI
Standard 1200 (I–P)-2010 test procedure
(incorporated by reference, see
VerDate Mar<15>2010
18:35 Sep 10, 2013
Jkt 229001
§ 431.63). For wedge cases in equipment
classes for which a volume metric is
used, the MDEC shall be the amount
derived from the appropriate standards
equation in paragraph (e)(1) of this
section. For wedge cases of equipment
classes for which a TDA metric is used,
the MDEC for each model shall be the
amount derived by incorporating into
the standards equation in paragraph
(e)(1) of this section for the equipment
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55991
class a value for the TDA that is the
product of:
(i) The vertical height of the air
curtain (or glass in a transparent door)
and
(ii) The largest overall width of the
case, when viewed from the front.
[FR Doc. 2013–21531 Filed 9–10–13; 8:45 am]
BILLING CODE 6450–01–P
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Agencies
[Federal Register Volume 78, Number 176 (Wednesday, September 11, 2013)]
[Proposed Rules]
[Pages 55889-55991]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-21531]
[[Page 55889]]
Vol. 78
Wednesday,
No. 176
September 11, 2013
Part III
Department of Energy
-----------------------------------------------------------------------
10 CFR Part 431
Energy Conservation Program: Energy Conservation Standards for
Commercial Refrigeration Equipment; Proposed Rule
Federal Register / Vol. 78 , No. 176 / Wednesday, September 11, 2013
/ Proposed Rules
[[Page 55890]]
-----------------------------------------------------------------------
DEPARTMENT OF ENERGY
10 CFR Part 431
[Docket No. EERE-2010-BT-STD-0003]
RIN 1904-AC19
Energy Conservation Program: Energy Conservation Standards for
Commercial Refrigeration Equipment
AGENCY: Office of Energy Efficiency and Renewable Energy, Department of
Energy.
ACTION: Notice of proposed rulemaking and public meeting.
-----------------------------------------------------------------------
SUMMARY: The Energy Policy and Conservation Act of 1975 (EPCA), as
amended, prescribes energy conservation standards for various consumer
products and certain commercial and industrial equipment, including
commercial refrigeration equipment (CRE). EPCA also requires the U.S.
Department of Energy (DOE) to determine whether more-stringent, amended
standards would be technologically feasible and economically justified,
and would save a significant amount of energy. In this notice, DOE
proposes amended energy conservation standards for commercial
refrigeration equipment. The notice also announces a public meeting to
receive comment on these proposed standards and associated analyses and
results.
DATES: DOE will hold a public meeting on Thursday, October 3, 2013,
from 9 a.m. to 4 p.m., in Washington, DC. The meeting will also be
broadcast as a webinar. See section VII, ``Public Participation,'' for
webinar registration information, participant instructions, and
information about the capabilities available to webinar participants.
DOE will accept comments, data, and information regarding this
notice of proposed rulemaking (NOPR) before and after the public
meeting, but no later than November 12, 2013. See section VII, ``Public
Participation,'' for details.
ADDRESSES: The public meeting will be held at the U.S. Department of
Energy, Forrestal Building, Room 8E-089, 1000 Independence Avenue SW.,
Washington, DC 20585. To attend, please notify Ms. Brenda Edwards at
(202) 586-2945. Persons can attend the public meeting via webinar. For
more information, refer to section VII, Public Participation.
Any comments submitted must identify the NOPR for Energy
Conservation Standards for Commercial Refrigeration Equipment and
provide docket number EERE-2010-BT-STD-0003 and/or regulatory
information number (RIN) 1904-AC19. Comments may be submitted using any
of the following methods:
1. Federal eRulemaking Portal: www.regulations.gov. Follow the
instructions for submitting comments.
2. Email: CRE-2010-STD-0003@ee.doe.gov. Include the docket number
and/or RIN in the subject line of the message.
3. Mail: Ms. Brenda Edwards, U.S. Department of Energy, Building
Technologies Program, Mailstop EE-2J, 1000 Independence Avenue SW.,
Washington, DC 20585-0121. If possible, please submit all items on a
CD. It is not necessary to include printed copies.
4. Hand Delivery/Courier: Ms. Brenda Edwards, U.S. Department of
Energy, Building Technologies Program, 950 L'Enfant Plaza SW., Suite
600, Washington, DC 20024. Telephone: (202) 586-2945. If possible,
please submit all items on a CD, in which case it is not necessary to
include printed copies.
Written comments regarding the burden-hour estimates or other
aspects of the collection-of-information requirements contained in this
proposed rule may be submitted to Office of Energy Efficiency and
Renewable Energy through the methods listed above and by email to
Chad_S_Whiteman@omb.eop.gov.
For detailed instructions on submitting comments and additional
information on the rulemaking process, see section VII of this document
(``Public Participation'').
Docket: The docket, which includes Federal Register notices, public
meeting attendee lists and transcripts, comments, and other supporting
documents/materials, is available for review at regulations.gov. All
documents in the docket are listed in the regulations.gov index.
However, some documents listed in the index, such as those containing
information that is exempt from public disclosure, may not be publicly
available.
A link to the docket Web page can be found at: https://www.regulations.gov/#!docketDetail;D=EERE-2010-BT-STD-0003. This Web
page will contain a link to the docket for this notice on the
regulations.gov site. The regulations.gov Web page will contain simple
instructions on how to access all documents, including public comments,
in the docket. See section VII for further information on how to submit
comments through www.regulations.gov.
For further information on how to submit a comment, review other
public comments and the docket, or participate in the public meeting,
contact Ms. Brenda Edwards at (202) 586-2945 or by email:
Brenda.Edwards@ee.doe.gov.
FOR FURTHER INFORMATION CONTACT: Mr. Charles Llenza, U.S. Department of
Energy, Office of Energy Efficiency and Renewable Energy, Building
Technologies Program, EE-2J, 1000 Independence Avenue SW., Washington,
DC 20585-0121. Telephone: (202) 586-2192. Email: commercial_refrigeration_equipment@EE.Doe.Gov.
Ms. Jennifer Tiedeman, U.S. Department of Energy, Office of the
General Counsel, GC-71, 1000 Independence Avenue SW., Washington, DC
20585-0121. Telephone: (202) 287-6111. Email:
Jennifer.Tiedeman@hq.doe.gov.
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Summary of the Proposed Rule
A. Benefits and Costs to Customers
B. Impact on Manufacturers
C. National Benefits
II. Introduction
A. Authority
B. Background
1. Current Standards
2. History of Standards Rulemaking for Commercial Refrigeration
Equipment
III. General Discussion
A. Test Procedures and Normalization Metrics
1. Test Procedures
2. Normalization Metrics
B. Technological Feasibility
1. General
2. Maximum Technologically Feasible Levels
C. Energy Savings
1. Determination of Savings
2. Significance of Savings
D. Economic Justification
1. Specific Criteria
a. Economic Impact on Manufacturers and Commercial Customers
b. Life-Cycle Costs
c. Energy Savings
d. Lessening of Utility or Performance of Equipment
e. Impact of Any Lessening of Competition
f. Need of the Nation To Conserve Energy
g. Other Factors
2. Rebuttable Presumption
IV. Methodology and Discussion of Comments
A. General Rulemaking Issues
1. Statutory Authority
2. January 2009 Final Rule Equipment
3. Normalization Metrics
4. Treatment of Blast Chillers, Thawing Cabinets, Prep Tables,
Salad Bars, and Buffet Tables
5. Dedicated Remote Condensing Units
6. Small Units
7. Consideration of Impact of Amended Standards
8. CO2 Cascade Systems
9. Coverage of Existing Cases Undergoing Refurbishments or
Retrofits
10. Components Shipped as After-Market Additions
[[Page 55891]]
11. Definition of Hybrid Equipment
12. Coverage of Commercial Refrigeration Equipment With Drawers
B. Test Procedures
C. Market and Technology Assessment
1. Equipment Classes
a. Equipment Classification
b. Application Temperature Equipment
c. Open Cases
d. Service Over Counter Equipment
2. Technology Assessment
a. Technologies Applicable to All Equipment
b. Technologies Relevant Only to Equipment With Doors
c. Technologies Applicable Only to Equipment Without Doors
d. Self-Contained Equipment Technologies
D. Screening Analysis
E. Engineering Analysis
1. Representative Equipment for Analysis
a. Representative Unit Selection
b. Baseline Models
2. Design Options
3. Refrigerants
4. Cost Assessment Methodology
a. Teardown Analysis
b. Cost Model
c. Manufacturer Production Cost
d. Cost-Efficiency Relationship
e. Manufacturer Markup
f. Shipping Costs
g. Manufacturer Interviews
5. Energy Consumption Model
a. Energy Consumption Model Results
b. Anti-Sweat Heater Power
c. Evaporator Fan Motor Power
d. Condenser Energy Consumption
e. Evaporator Coil Design
F. Markups Analysis
1. Baseline and Incremental Markups
2. Distribution Channel Market Shares
G. Energy Use Analysis
H. Life-Cycle Cost Analysis
1. Effect of Current Standards
2. Equipment Cost
3. Installation, Maintenance, and Repair Costs
a. Maintenance and Repair Costs by Efficiency Level
b. Maintenance and Repair Cost Annualization
c. Maintenance Cost Estimates
d. Refrigerant Costs
e. Repair Costs
4. Annual Energy Consumption
5. Energy Prices
6. Energy Price Projections
7. Equipment Lifetime
8. Discount Rates
9. Compliance Date of Standards
10. Base-Case and Standards-Case Efficiency Distributions
11. Inputs to Payback Period Analysis
12. Rebuttable-Presumption Payback Period
I. National Impact Analysis--National Energy Savings and Net
Present Value
1. Shipments
a. VOP.RC.L Shipments
b. Shipments by End User Type
c. Shipments Forecasts
2. Forecasted Efficiency in the Base Case and Standards Cases
3. National Energy Savings
4. Net Present Value of Customer Benefit
5. Benefits From Effects of Amended Standards on Energy Prices
J. Customer Subgroup Analysis
K. Manufacturer Impact Analysis
1. Overview
2. Government Regulatory Impact Model
a. Government Regulatory Impact Model Key Inputs
b. Government Regulatory Impact Model Scenarios
3. Discussion of Comments
a. Testing and Certification
b. Cumulative Regulatory Burden
c. Small Manufacturers
d. Manufacturer Markup
4. Manufacturer Interviews
a. Enforcement
b. Certification and Compliance Costs
c. Disproportionate Impact on Small Businesses
d. Potential Loss of Product Utility and Decrease in Food Safety
L. Employment Impact Analysis
M. Utility Impact Analysis
N. Emissions Analysis
O. Monetizing Carbon Dioxide and Other Emissions Impacts
1. Social Cost of Carbon
a. Monetizing Carbon Dioxide Emissions
b. Social Cost of Carbon Values Used in Past Regulatory Analyses
c. Current Approach and Key Assumptions
2. Valuation of Other Emissions Reductions
P. Regulatory Impact Analysis
V. Analytical Results
A. Trial Standard Levels
1. Trial Standard Level Formulation Process and Criteria
2. Trial Standard Level Equations
B. Economic Justification and Energy Savings
1. Economic Impacts on Commercial Customers
a. Life-Cycle Cost and Payback Period
b. Life-Cycle Cost Subgroup Analysis
2. Economic Impacts on Manufacturers
a. Industry Cash-Flow Analysis Results
b. Impacts on Direct Employment
c. Impacts on Manufacturing Capacity
d. Impacts on Subgroups of Manufacturers
e. Cumulative Regulatory Burden
3. National Impact Analysis
a. Amount and Significance of Energy Savings
b. Net Present Value of Customer Costs and Benefits
c. Employment Impacts
4. Impact on Utility or Performance of Equipment
5. Impact of Any Lessening of Competition
6. Need of the Nation To Conserve Energy
7. Other Factors
C. Proposed Standard
VI. Procedural Issues and Regulatory Review
A. Review Under Executive Orders 12866 and 13563
B. Review Under the Regulatory Flexibility Act
1. Description and Estimated Number of Small Entities Regulated
2. Description and Estimate of Compliance Requirements
3. Duplication, Overlap, and Conflict With Other Rules and
Regulations
4. Significant Alternatives to the Rule
C. Review Under the Paperwork Reduction Act
D. Review Under the National Environmental Policy Act of 1969
E. Review Under Executive Order 13132
F. Review Under Executive Order 12988
G. Review Under the Unfunded Mandates Reform Act of 1995
H. Review Under the Treasury and General Government
Appropriations Act, 1999
I. Review Under Executive Order 12630
J. Review Under the Treasury and General Government
Appropriations Act, 2001
K. Review Under Executive Order 13211
L. Review Under the Information Quality Bulletin for Peer Review
VII. Public Participation
A. Attendance at the Public Meeting
B. Procedure for Submitting Prepared General Statements for
Distribution
C. Conduct of the Public Meeting
D. Submission of Comments
E. Issues on Which DOE Seeks Comment
1. Primary and Secondary Equipment Classes
2. Design Option and Core Case Costs
3. Offset Factors
4. Extension of Standards
5. Types of Refrigerant Analyzed
6. Distribution Channel Market Shares and Markups
7. Market Shares of Efficiency Levels
8. Maintenance and Repair Costs at Higher Efficiency Levels
9. Impact of Amended Standards on Future Shipments
10. Small Businesses
VIII. Approval of the Office of the Secretary
I. Summary of the Proposed Rule
Title III, Part C of the Energy Policy and Conservation Act of 1975
(EPCA), Public Law 94-163 (42 U.S.C. 6311-6317, as codified), added by
Public Law 95-619, Title IV, section 441(a), established the Energy
Conservation Program for Certain Industrial Equipment, a program
covering certain industrial equipment, which includes the commercial
refrigeration equipment that is the focus of this notice.1 2
EPCA specifies that any new or amended energy conservation standard
that DOE prescribes for the equipment covered shall be designed to
achieve the maximum improvement in energy efficiency that the Secretary
of Energy (Secretary) determines is technologically feasible and
economically justified. (42 U.S.C. 6295(o)(2)(A) and 6316(e)(1))
Furthermore, EPCA mandates that the new or amended standard must result
in significant conservation of energy. (42 U.S.C. 6295(o)(3)(B) and
6316(e)(1)) In accordance with these and other statutory criteria
discussed in this
[[Page 55892]]
notice, DOE proposes to adopt amended energy conservation standards for
commercial refrigeration equipment. The proposed standards, which
consist of maximum daily energy consumption (MDEC) values as a function
of either refrigerated volume or total display area (TDA), are shown in
Table I.1. DOE proposes that the standards proposed in this NOPR, if
adopted, would apply to all equipment listed in Table I.1 that is
manufactured in, or imported into, the United States on or after 3
years following the publication date of the final rule. (42 U.S.C.
6313(c)(6)(C)) For the NOPR analysis, DOE assumed a publication date in
2014 for this final rule and a compliance date in 2017 for the amended
standards established by the final rule.
---------------------------------------------------------------------------
\1\ For editorial reasons, upon codification in the U.S. Code,
Part C was re-designated Part A-1.
\2\ All references to EPCA in this document refer to the statute
as amended by the American Energy Manufacturing Technical
Corrections Act (AEMTCA), Public Law 112-210 (Dec. 18, 2012).
Table I.1--Proposed Energy Conservation Standards for Commercial
Refrigeration Equipment
[Assumes compliance beginning in 2017]
------------------------------------------------------------------------
Proposed standard level **
Equipment class * [dagger]
------------------------------------------------------------------------
VCT.RC.L.................................. 0.43 x TDA + 2.03
VOP.RC.M.................................. 0.61 x TDA + 3.03
SVO.RC.M.................................. 0.63 x TDA + 2.41
HZO.RC.L.................................. 0.57 x TDA + 6.88
HZO.RC.M.................................. 0.35 x TDA + 2.88
VCT.RC.M.................................. 0.08 x TDA + 0.72
VOP.RC.L.................................. 2.11 x TDA + 6.36
SOC.RC.M.................................. 0.39 x TDA + 0.08
VOP.SC.M.................................. 1.51 x TDA + 4.09
SVO.SC.M.................................. 1.5 x TDA + 3.99
HZO.SC.L.................................. 1.92 x TDA + 7.08
HZO.SC.M.................................. 0.75 x TDA + 5.44
HCT.SC.I.................................. 0.49 x TDA + 0.37
VCT.SC.I.................................. 0.52 x TDA + 2.56
VCS.SC.I.................................. 0.35 x V + 0.81
VCT.SC.M.................................. 0.04 x V + 1.07
VCT.SC.L.................................. 0.22 x V + 1.21
VCS.SC.M.................................. 0.03 x V + 0.53
VCS.SC.L.................................. 0.13 x V + 0.43
HCT.SC.M.................................. 0.02 x V + 0.51
HCT.SC.L.................................. 0.11 x V + 0.6
HCS.SC.M.................................. 0.02 x V + 0.37
HCS.SC.L.................................. 0.12 x V + 0.42
PD.SC.M................................... 0.03 x V + 0.83
SOC.SC.M.................................. 0.32 x TDA + 0.53
VOP.RC.I.................................. 2.68 x TDA + 8.08
SVO.RC.L.................................. 2.11 x TDA + 6.36
SVO.RC.I.................................. 2.68 x TDA + 8.08
HZO.RC.I.................................. 0.72 x TDA + 8.74
VOP.SC.L.................................. 3.79 x TDA + 10.26
VOP.SC.I.................................. 4.81 x TDA + 13.03
SVO.SC.L.................................. 3.77 x TDA + 10.01
SVO.SC.I.................................. 4.79 x TDA + 12.72
HZO.SC.I.................................. 2.44 x TDA + 9.0
SOC.RC.L.................................. 0.83 x TDA + 0.18
SOC.RC.I.................................. 0.97 x TDA + 0.21
SOC.SC.I.................................. 1.35 x TDA + 0.29
VCT.RC.I.................................. 0.51 x TDA + 2.37
HCT.RC.M.................................. 0.14 x TDA + 0.11
HCT.RC.L.................................. 0.3 x TDA + 0.23
HCT.RC.I.................................. 0.35 x TDA + 0.27
VCS.RC.M.................................. 0.1 x V + 0.24
VCS.RC.L.................................. 0.21 x V + 0.5
VCS.RC.I.................................. 0.25 x V + 0.58
HCS.SC.I.................................. 0.35 x V + 0.81
HCS.RC.M.................................. 0.1 x V + 0.24
HCS.RC.L.................................. 0.21 x V + 0.5
HCS.RC.I.................................. 0.25 x V + 0.58
SOC.SC.L.................................. 0.67 x TDA + 1.12
------------------------------------------------------------------------
* Equipment class designations consist of a combination (in sequential
order separated by periods) of: (1) an 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, SOC =
service over counter, or PD = pull-down); (2) an operating mode code
(RC = remote condensing or SC = self-contained); and (3) a rating
temperature code (M = medium temperature (382[emsp14][deg]F), L = low temperature (02[emsp14][deg]F), or I = ice-cream temperature (-152[emsp14][deg]F)). For example, ``VOP.RC.M'' refers to the
``vertical open, remote condensing, medium temperature'' equipment
class. See discussion in chapter 3 of the NOPR technical support
document (TSD) for a more detailed explanation of the equipment class
terminology.
** ``TDA'' is the total display area of the case, as measured in the Air-
Conditioning, Heating, and Refrigeration Institute (AHRI) Standard
1200-2010, appendix D.
[dagger] ``V'' is the volume of the case, as measured in American
National Standards Institute (ANSI)/Association of Home Appliance
Manufacturers (AHAM) Standard HRF-1-2004.
A. Benefits and Costs to Customers
Table I.2 presents DOE's evaluation of the economic impacts of the
proposed standards on customers of commercial refrigeration equipment,
as measured by the average life-cycle cost (LCC) savings \3\ and the
median payback period (PBP).\4\ The average LCC savings are positive
for all equipment classes under the standard proposed by DOE in this
notice. At TSL 4, the percentage of customers who experience net
benefits or no impacts ranges from 59 to 100 percent, and customers
experiencing a net cost range from 0 to 41 percent. Chapter 11 presents
the LCC subgroup analysis on groups of customers that may be
disproportionately affected by the proposed standard.
---------------------------------------------------------------------------
\3\ Life-cycle cost (LCC) of commercial refrigeration equipment
is the cost to customers of owning and operating the equipment over
the entire life of the equipment. Life-cycle cost savings are the
reductions in the life-cycle costs due to amended energy
conservation standards when compared to the life-cycle costs of the
equipment in the absence of amended energy conservation standards.
Further discussion of the LCC analysis can be found in Chapter 8 of
the TSD.
\4\ Payback period (PBP) refers to the amount of time (in years)
it takes customers to recover the increased installed cost of
equipment associated with new or amended standards through savings
in operating costs. Further discussion of the PBP can be found in
Chapter 8 of the TSD.
Table I.2--Impacts of Proposed Standards on Customers of Commercial
Refrigeration Equipment
------------------------------------------------------------------------
Average LCC
Equipment class * savings Median PBP
2012$ years
------------------------------------------------------------------------
VOP.RC.M...................................... $1,493.72 3.91
VOP.RC.L...................................... 1,129.51 2.22
VOP.SC.M...................................... 691.27 4.39
VCT.RC.M...................................... 1,108.13 2.70
VCT.RC.L...................................... 797.91 1.64
VCT.SC.M...................................... 641.05 2.54
VCT.SC.L...................................... 1,342.84 0.96
VCT.SC.I...................................... 431.88 1.97
VCS.SC.M...................................... 131.80 1.75
VCS.SC.L...................................... 220.83 1.15
VCS.SC.I...................................... 152.69 2.42
SVO.RC.M...................................... 1,008.46 4.50
SVO.SC.M...................................... 491.99 4.75
SOC.RC.M...................................... 494.51 4.41
HZO.RC.M **................................... 0.00 NA
HZO.RC.L **................................... 0.00 NA
HZO.SC.M...................................... 28.78 6.40
HZO.SC.L **................................... 0.00 NA
HCT.SC.M...................................... 253.60 3.08
HCT.SC.L...................................... 368.92 1.47
HCT.SC.I...................................... 42.48 4.28
HCS.SC.M...................................... 8.68 4.28
HCS.SC.L...................................... 80.72 2.57
PD.SC.M....................................... 310.43 2.27
SOC.SC.M...................................... 739.75 2.99
------------------------------------------------------------------------
* Values have been shown only for primary equipment classes, which are
equipment classes that have significant volume of shipments and,
therefore, were directly analyzed. See chapter 5 of the NOPR TSD,
Engineering Analysis, for a detailed discussion of primary and
secondary equipment classes.
** For equipment classes HZO.RC.M, HZO.RC.L, and HZO.SC.L, no efficiency
levels above the baseline were found to be economically justifiable.
Therefore, the proposed standards for these equipment classes are the
same as the current standards. As a result, LCC savings for these
equipment classes are shown as zero. The PBP values are indeterminate
and are shown as ``NA.''
B. Impact on Manufacturers
The industry net present value (INPV) is the sum of the discounted
cash flows to the industry from the base year (2013) through the end of
the analysis period (2046). Using a real discount rate of 10
percent,\5\ DOE estimates that the INPV for manufacturers of commercial
refrigeration equipment is $1,162.0 million in 2012$. Under the
proposed standards, DOE expects the industry net present value to
decrease by 3.95
[[Page 55893]]
percent to 7.97 percent. Total industry conversion costs are expected
to total $87.5 million.
---------------------------------------------------------------------------
\5\ This is the rate used to discount future cash flows in the
Manufacturer Impact Analysis. A discount rate of 10% was calculated
based on SEC filings and feedback from manufacturer interviews about
the current cost of capital in the industry. For more information,
refer to Chapter 12 of the NOPR TSD.
---------------------------------------------------------------------------
C. National Benefits
DOE's analyses indicate that the proposed standards would save a
significant amount of energy. The lifetime savings for commercial
refrigeration equipment purchased in the 30-year period that begins in
the year of the compliance with amended standards (2017-2046) amount to
1.001 quadrillion British thermal units (quads). The average annual
energy savings over the life of commercial refrigeration equipment
purchased in 2017 through 2046 is 0.04 quads.\6\
---------------------------------------------------------------------------
\6\ Total U.S. commercial sector energy (source energy) used for
refrigeration in 2010 was 1.21 quads. Source: U.S. Department of
Energy--Office of Energy Efficiency and Renewable Energy. Buildings
Energy Data Book, Table 3.1.4, 2010 Commercial Energy End-Use
Splits, by Fuel Type (Quadrillion Btu). 2012. (Last accessed April
23, 2013.) https://buildingsdatabook.eren.doe.gov/TableView.aspx?table=3.1.4.
---------------------------------------------------------------------------
The cumulative national net present value (NPV) of total customer
costs and savings of the proposed standards for commercial
refrigeration equipment in 2012$ ranges from $1.606 billion (at a 7-
percent discount rate) to $4.067 billion (at a 3-percent discount
rate). This NPV expresses the estimated total value to customers of
future operating cost savings minus the estimated increased installed
costs for equipment purchased in 2017-2046, discounted to 2013.
The proposed standards are expected to have significant
environmental benefits. The energy savings would result in cumulative
greenhouse gas (GHG) emission reductions of 54.88 million metric tons
(MMt) \7\ of carbon dioxide (CO2), 265.9 thousand tons of
methane, 1.1 thousand tons of nitrous oxide, 70.1 thousand tons of
sulfur dioxide (SO2), 81.1 thousand tons of NOX
and 0.1 tons of mercury (Hg).\8\ \9\
---------------------------------------------------------------------------
\7\ A metric ton is equivalent to 1.1 U.S. short tons. Results
for NOX and Hg are presented in short tons.
\8\ DOE calculated emissions reductions relative to the Annual
Energy Outlook (AEO) 2013 Reference case, which generally represents
current legislation and environmental regulations for which
implementing regulations were available as of December 31, 2012.
\9\ DOE also estimated CO2 and CO2
equivalent (CO2eq) emissions that occur through 2030
(CO2eq includes greenhouse gases such as CH4
and N2O). The estimated emissions reductions through 2030
are 16 million metric tons CO2, 1,687 thousand tons
CO2eq for CH4, and 72.27 thousand tons
CO2eq for N2O.
---------------------------------------------------------------------------
The value of the CO2 reductions is calculated using a
range of values per metric ton of CO2 (otherwise known as
the Social Cost of Carbon, or SCC) developed by a recent Federal
interagency process. The derivation of the SCC values is discussed in
section IV.O. DOE estimates that the net present monetary value of the
CO2 emissions reduction would be between $0.31 and $4.55
billion. DOE also estimates the present monetary value of the
NOX emissions reduction would be between $8.8 and $90.7
million at a 7-percent discount rate, and between $19.1 and $196.2
million at a 3-percent discount rate.\10\
---------------------------------------------------------------------------
\10\ DOE is currently investigating valuation of avoided Hg and
SO2 emissions.
---------------------------------------------------------------------------
Table I.3 summarizes the national economic costs and benefits
expected to result from the proposed standards for commercial
refrigeration equipment.
Table I.3--Summary of National Economic Benefits and Costs of Proposed
Commercial Refrigeration Equipment Energy Conservation Standards
------------------------------------------------------------------------
Present value Discount rate
Category million 2012$ (percent)
------------------------------------------------------------------------
Benefits
------------------------------------------------------------------------
Operating Cost Savings.............. 2,695 7
6,034 3
CO2 Reduction Monetized Value (at 308 5
$12.9/Metric Ton) *................
CO2 Reduction Monetized Value (at 1,504 3
$40.8/Metric Ton) *................
CO2 Reduction Monetized Value (at 2,452 2.5
$62.2/Metric Ton) *................
CO2 Reduction Monetized Value (at 4,552 3
$117.0/Metric Ton) *...............
NOX Reduction Monetized Value (at 50 7
$2639/Ton) **......................
108 3
Total Benefits [dagger]............. 4,249 7
7,646 3
------------------------------------------------------------------------
Costs
------------------------------------------------------------------------
Incremental Installed Costs......... 1,089 7
1,967 3
------------------------------------------------------------------------
Net Benefits
------------------------------------------------------------------------
Including CO2 and NOX Reduction 3,160 7
Monetized Value....................
5,679 3
------------------------------------------------------------------------
* The interagency group selected four sets of SCC values for use in
regulatory analyses. Three sets of values are based on the average SCC
from the integrated assessment models, at discount rates of 2.5, 3,
and 5 percent. The fourth set, which represents the 95th percentile
SCC estimate across all three models at a 3-percent discount rate, is
included to represent higher-than-expected impacts from temperature
change further out in the tails of the SCC distribution. The values in
parentheses represent the SCC in 2015. The SCC time series incorporate
an escalation factor.
** The value represents the average of the low and high NOX values used
in DOE's analysis.
[dagger] Total Benefits for both the 3% and 7% cases are derived using
the CO2 reduction monetized value series corresponding to average SCC
with 3-percent discount rate.
The benefits and costs of today's proposed standards, for
commercial refrigeration equipment sold in 2017-2046, can also be
expressed in terms of annualized values. The annualized monetary values
are the sum of (1) the annualized national economic value of the
benefits from the customer operation of equipment that meets the
proposed standards (consisting primarily of operating cost savings from
using less energy, minus increases in equipment
[[Page 55894]]
installed cost, which is another way of representing customer NPV); and
(2) the annualized monetary value of the benefits of emission
reductions, including CO2 emission reductions.\11\
---------------------------------------------------------------------------
\11\ DOE used a two-step calculation process to convert the
time-series of costs and benefits into annualized values. First, DOE
calculated a present value in 2013, the year used for discounting
the NPV of total consumer costs and savings, for the time-series of
costs and benefits using discount rates of 3 and 7 percent for all
costs and benefits except for the value of CO2
reductions. For the latter, DOE used a range of discount rates, as
shown in Table I.4. From the present value, DOE then calculated the
fixed annual payment over a 30-year period (2017 through 2046) that
yields the same present value. The fixed annual payment is the
annualized value. Although DOE calculated annualized values, this
does not imply that the time-series of cost and benefits from which
the annualized values were determined is a steady stream of
payments.
---------------------------------------------------------------------------
Although combining the values of operating savings and
CO2 emission reductions provides a useful perspective, two
issues should be considered. First, the national operating savings are
domestic U.S. customer monetary savings that occur as a result of
market transactions, while the value of CO2 reductions is
based on a global value. Second, the assessments of operating cost
savings and CO2 savings are performed with different methods
that use different time frames for analysis. The national operating
cost savings is measured over the lifetimes of commercial refrigeration
equipment shipped in 2017-2046. The SCC values, on the other hand,
reflect the present value of some future climate-related impacts
resulting from the emission of 1 ton of CO2 in each year.
These impacts continue well beyond 2100.
Table I.4 shows the annualized benefits and costs of the proposed
standards. The results of the primary estimate are as follows. Table
I.4 shows the primary, low net benefits, and high net benefits
scenarios. The primary estimate is the estimate in which the operating
cost savings were calculated using the Annual Energy Outlook 2013
(AEO2013) Reference Case forecast of future electricity prices. The
other two estimates, low net benefits estimate and high net benefits
estimate, are based on the low and high electricity price scenarios
from the AEO2013 forecast. At a 7-percent discount rate for benefits
and costs, the cost in the primary estimate of the standards proposed
in today's notice is $82 million per year in increased equipment costs.
The annualized benefits are $203 million per year in reduced equipment
operating costs, $75 million in CO2 reductions (note that
DOE used a 3-percent discount rate, along with the corresponding SCC
series that uses a 3-percent discount rate, to calculate the monetized
value of CO2 emissions reductions), and $3.75 million in
reduced NOX emissions. In this case, the annualized net
benefit amounts to $199 million. At a 3-percent discount rate for all
benefits and costs, the cost in the primary estimate of the amended
standards proposed in today's notice is $97 million per year in
increased equipment costs. The benefits are $299 million per year in
reduced operating costs, $75 million in CO2 reductions, and
$5.33 million in reduced NOX emissions. In this case, the
net benefit amounts to $281 million per year.
DOE also calculated the low net benefits and high net benefits
estimates by calculating the operating cost savings and incremental
installed costs at the AEO2013 low economic growth case and high
economic growth case scenarios, respectively. These scenarios do not
change the monetized emissions reductions values. The net benefits and
costs for low and high net benefits estimates were calculated in the
same manner as the primary estimate by using the corresponding values
of operating cost savings and incremental installed costs.
Table I.4--Annualized Benefits and Costs of Proposed Standards for Commercial Refrigeration Equipment
----------------------------------------------------------------------------------------------------------------
High net
Discount rate Primary Low net benefits benefits
(percent) estimate * estimate * estimate *
million 2012$ million 2012$ million 2012$
----------------------------------------------------------------------------------------------------------------
Benefits
----------------------------------------------------------------------------------------------------------------
Operating Cost Savings.................. 7 203 197 212
3 299 288 314
CO2 Reduction Monetized Value (at $12.9/ 5 19 19 19
Metric Ton) **.........................
CO2 Reduction Monetized Value (at $40.8/ 3 75 75 75
Metric Ton) **.........................
CO2 Reduction Monetized Value (at $62.2/ 2.5 114 114 114
Metric Ton) **.........................
CO2 Reduction Monetized Value (at $117.0/ 3 225 225 225
Metric Ton) **.........................
NOX Reduction Monetized Value (at $2,639/ 7 3.75 3.75 3.75
Ton) **................................
3 5.33 5.33 5.33
-----------------------------------------------------------------------
Total Benefits (Operating Cost Savings, 7 281 275 290
CO2 Reduction and NOX Reduction)
[dagger]...............................
3 379 368 394
----------------------------------------------------------------------------------------------------------------
Costs
----------------------------------------------------------------------------------------------------------------
Total Incremental Installed Costs....... 7 82 84 80
3 97 100 95
----------------------------------------------------------------------------------------------------------------
Net Benefits Less Costs
----------------------------------------------------------------------------------------------------------------
Total Benefits Less Incremental Costs... 7 199 191 210
3 281 268 299
----------------------------------------------------------------------------------------------------------------
* This table presents the annualized costs and benefits associated with equipment shipped in 2017-2046. These
results include benefits to consumers which accrue after 2046 from the products purchased in 2017-2046. The
primary, low, and high estimates utilize forecasts of energy prices from the AEO2013 Reference Case, Low
Economic Growth Case, and High Economic Growth Case, respectively. In addition, incremental equipment costs
reflect a medium decline rate for projected product price trends in the Primary Estimate, a low decline rate
for projected equipment price trends in the Low Benefits Estimate, and a high decline rate for projected
equipment price trends in the High Benefits Estimate. The methods used to derive projected price trends are
explained in Appendix 10B.
[[Page 55895]]
** The interagency group selected four sets of SCC values for use in regulatory analyses. Three sets of values
are based on the average SCC from the three integrated assessment models, at discount rates of 2.5, 3, and 5
percent. The fourth set, which represents the 95th percentile SCC estimate across all three models at a 3-
percent discount rate, is included to represent higher-than-expected impacts from temperature change further
out in the tails of the SCC distribution. The values in parentheses represent the SCC in 2015. The SCC time
series incorporate an escalation factor. The value for NOX is the average of the low and high values used in
DOE's analysis.
[dagger] Total Benefits for both the 3-percent and 7-percent cases are derived using the series corresponding to
average SCC with 3-percent discount rate. In the rows labeled ``7% plus CO2 range'' and ``3% plus CO2 range,''
the operating cost and NOX benefits are calculated using the labeled discount rate, and those values are added
to the full range of CO2 values.
DOE has tentatively concluded that the proposed standards meet the
requirements found in EPCA by representing maximum improvement in
energy efficiency that is technologically feasible and economically
justified, and would result in significant conservation of energy. (42
U.S.C. 6295 (o), 6316(e)) DOE further notes that technologies used to
achieve these standard levels are already commercially available for
the equipment classes covered by today's proposal. Based on the
analyses described above, DOE has tentatively concluded that the
benefits of the proposed standards to the Nation (energy savings,
positive NPV of customer benefits, customer LCC savings, and emission
reductions) would outweigh the burdens (loss of INPV for manufacturers
and LCC increases for some customers).
DOE also considered more-stringent and less-stringent energy use
levels as trial standard levels (TSLs), and is still considering them
in this rulemaking. However, DOE has tentatively concluded that the
potential burdens of the more-stringent energy use levels would
outweigh the projected benefits. Based on consideration of the public
comments DOE receives in response to this notice and related
information collected and analyzed during the course of this rulemaking
effort, DOE may adopt energy use levels presented in this notice that
are either higher or lower than the proposed standards, or some
combination of level(s) that incorporate the proposed standards in
part.
II. Introduction
The following section briefly discusses the statutory authority
underlying today's proposal, as well as some of the relevant historical
background related to the establishment of standards for commercial
refrigeration equipment.
A. Authority
Title III, Part C of EPCA, Public Law 94-163 (42 U.S.C. 6311-6317,
as codified), added by Public Law 95-619, Title IV, section 441(a),
established the Energy Conservation Program for Certain Industrial
Equipment, a program covering certain industrial equipment, which
includes the commercial refrigeration equipment that is the focus of
this notice.12 13 EPCA prescribes energy conservation
standards for commercial refrigeration equipment (42 U.S.C. 6313(c)(2)-
(4)), and directs DOE to conduct rulemakings to establish new and
amended standards for commercial refrigeration equipment. (42 U.S.C.
6313(c)(4)-(6)) (DOE notes that under 42 U.S.C. 6295(m) and 6316(e)(1)
the agency must periodically review its already established energy
conservation standards for covered equipment. Under this requirement,
the next review that DOE would need to conduct must occur no later than
6 years from the issuance of a final rule establishing or amending a
standard for covered equipment.)
---------------------------------------------------------------------------
\12\ For editorial reasons, upon codification in the U.S. Code,
Part C was re-designated Part A-1.
\13\ All references to EPCA in this document refer to the
statute as amended through the American Energy Manufacturing
Technical Corrections Act (AEMTCA), Public Law 112-210 (Dec. 18,
2012).
---------------------------------------------------------------------------
Pursuant to EPCA, DOE's energy conservation program for covered
equipment generally consists of four parts: (1) Testing; (2) labeling;
(3) the establishment of Federal energy conservation standards; and (4)
certification and enforcement procedures. For commercial refrigeration
equipment, DOE is responsible for the entirety of this program. Subject
to certain criteria and conditions, DOE is required to develop test
procedures to measure the energy efficiency, energy use, or estimated
annual operating cost of each type or class of covered equipment. (42
U.S.C. 6314) Manufacturers of covered equipment must use the prescribed
DOE test procedure as the basis for certifying to DOE that their
equipment complies with the applicable energy conservation standards
adopted under EPCA and when making representations to the public
regarding the energy use or efficiency of that equipment. (42 U.S.C.
6315(b), 6295(s), and 6316(e)(1)) Similarly, DOE must use these test
procedures to determine whether that equipment complies with standards
adopted pursuant to EPCA. The DOE test procedure for commercial
refrigeration equipment currently appears at title 10 of the Code of
Federal Regulations (CFR) part 431, subpart C.
DOE must follow specific statutory criteria for prescribing amended
standards for covered equipment. As indicated above, any amended
standard for covered equipment must be designed to achieve the maximum
improvement in energy efficiency that is technologically feasible and
economically justified. (42 U.S.C. 6295(o)(2)(A) and 6316(e)(1))
Furthermore, DOE may not adopt any standard that would not result in
the significant conservation of energy. (42 U.S.C. 6295(o)(3) and
6316(e)(1)) DOE also may not prescribe a standard: (1) For certain
equipment, including commercial refrigeration equipment, if no test
procedure has been established for the product; or (2) if DOE
determines by rule that the proposed standard is not technologically
feasible or economically justified. (42 U.S.C. 6295(o)(3)(A)-(B) and
6316(e)(1)) In deciding whether a proposed standard is economically
justified, DOE must determine whether the benefits of the standard
exceed its burdens. (42 U.S.C. 6295(o)(2)(B)(i) and 6316(e)(1)) DOE
must make this determination after receiving comments on the proposed
standard, and by considering, to the greatest extent practicable, the
following seven factors:
1. The economic impact of the standard on manufacturers and
consumers of the equipment subject to the standard;
2. The savings in operating costs throughout the estimated average
life of the covered equipment in the type (or class) compared to any
increase in the price, initial charges, or maintenance expenses for the
covered equipment that are likely to result from the imposition of the
standard;
3. The total projected amount of energy, or as applicable, water,
savings likely to result directly from the imposition of the standard;
4. Any lessening of the utility or the performance of the covered
equipment likely to result from the imposition of the standard;
5. The impact of any lessening of competition, as determined in
writing by the U.S. Attorney General (Attorney General), that is likely
to result from the imposition of the standard;
6. The need for national energy and water conservation; and
7. Other factors the Secretary considers relevant.
(42 U.S.C. 6295(o)(2)(B)(i)(I)-(VII) and 6316(e)(1))
[[Page 55896]]
EPCA, as codified, also contains what is known as an ``anti-
backsliding'' provision, which prevents the Secretary from prescribing
any amended standard that either increases the maximum allowable energy
use or decreases the minimum required energy efficiency of covered
equipment. (42 U.S.C. 6295(o)(1) and 6316(e)(1)) Also, the Secretary
may not prescribe an amended or new standard if interested persons have
established by a preponderance of the evidence that the standard is
likely to result in the unavailability in the United States of any
covered product type (or class) of performance characteristics
(including reliability), features, sizes, capacities, and volumes that
are substantially the same as those generally available in the United
States. (42 U.S.C. 6295(o)(4) and 6316(e)(1))
Further, EPCA, as codified, establishes a rebuttable presumption
that a standard is economically justified if the Secretary finds that
the additional cost to the consumer of purchasing 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. (See 42 U.S.C. 6295(o)(2)(B)(iii) and
6316(e)(1)) Section III.D.2 presents additional discussion about the
rebuttable presumption payback period.
Additionally, 42 U.S.C. 6295(q)(1) and 6316(e)(1) specify
requirements when promulgating a standard for a type or class of
covered equipment that has two or more subcategories that may justify
different standard levels. DOE must specify a different standard level
than that which applies generally to such type or class of equipment
for any group of covered products that has the same function or
intended use if DOE determines that products within such group (A)
consume a different kind of energy from that consumed by other covered
equipment within such type (or class); or (B) have a capacity or other
performance-related feature that other equipment within such type (or
class) do not have and such feature justifies a higher or lower
standard. (42 U.S.C. 6295(q)(1) and 6316(e)(1)) In determining whether
a performance-related feature justifies a different standard for a
group of equipment, DOE must consider such factors as the utility to
the consumer of the feature and other factors DOE deems appropriate.
Id. Any rule prescribing such a standard must include an explanation of
the basis on which such higher or lower level was established. (42
U.S.C. 6295(q)(2) and 6316(e)(1))
Federal energy conservation requirements generally supersede State
laws or regulations concerning energy conservation testing, labeling,
and standards. (42 U.S.C. 6297(a)-(c) and 6316(e))
B. Background
1. Current Standards
The current energy conservation standards for commercial
refrigeration equipment were established by two different legislative
actions and one DOE final rule. EPCA, as amended by the Energy Policy
Act of 2005 (EPACT 2005), established standards for self-contained
commercial refrigerators and freezer with solid or transparent doors,
self-contained commercial refrigerator-freezers with solid doors, and
self-contained commercial refrigerators designed for pull-down
applications. (42 U.S.C. 6313(c)(2)-(3)) On January 9, 2009, DOE
published a final rule (January 2009 final rule) prescribing standards
for commercial refrigeration equipment. 74 FR 1092. Specifically, this
final rule completed the first standards rulemaking for commercial
refrigeration equipment by establishing standards for equipment types
specified in 42 U.S.C. 6313(c)(5), and for which EPCA did not prescribe
standards in 42 U.S.C. 6313(c)(2)-(3). These types consisted of
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. More recently, the
American Energy Manufacturing Technical Corrections Act (AEMTCA),
Public Law 112-210 (Dec. 18, 2012), amended section 342(c) of EPCA to
establish a new standard for self-contained service over counter medium
temperature commercial refrigerators (this class is known as SOC.SC.M
per DOE's equipment class nomenclature). (42 U.S.C. 6313(c)(4)) As a
result, DOE's current energy conservation standards for commercial
refrigeration equipment include the following: standards established by
EPCA for commercial refrigeration equipment manufactured on or after
January 1, 2010; standards established in the January 2009 final rule
for commercial refrigeration equipment manufactured on or after January
1, 2012; and standards established by AEMTCA for SOC.SC.M equipment
manufactured on or after January 1, 2012.
Table II.1 and Table II.2 present DOE's current energy conservation
standards for commercial refrigeration equipment set by EPCA and the
January 2009 final rule, respectively. The AEMTCA standard for SOC.SC.M
equipment manufactured on or after January 1, 2012 is prescribed as 0.6
x TDA + 1.0. (42 U.S.C. 6313(c)(4)).
Table II.1--Commercial Refrigeration Equipment Standards Prescribed by EPCA--Compliance Required Beginning on
January 1, 2010
----------------------------------------------------------------------------------------------------------------
Category Maximum daily energy consumption kWh/day *
----------------------------------------------------------------------------------------------------------------
Refrigerators with solid doors............. 0.10 V ** + 2.04.
Refrigerators with transparent doors....... 0.12 V + 3.34.
Freezers with solid doors.................. 0.40 V + 1.38.
Freezers with transparent doors............ 0.75 V + 4.10.
Refrigerators/freezers with solid doors.... the greater of 0.27 AV [dagger] -0.71 or 0.70.
Self-contained refrigerators with 0.126V + 3.51.
transparent doors designed for pull-down
temperature applications.
----------------------------------------------------------------------------------------------------------------
* kilowatt-hours per day.
** Where ``V'' means the chilled or frozen compartment volume in cubic feet as defined in the Association of
Home Appliance Manufacturers Standard HRF-1-1979. 10 CFR 431.66.
[dagger] Where ``AV'' means that adjusted volume in cubic feet measured in accordance with the Association of
Home Appliance Manufacturers Standard HRF-1-1979. 10 CFR 431.66
[[Page 55897]]
Table II.2--Commercial Refrigeration Equipment Standards Established in
the January 2009 Final Rule--Compliance Required Beginning on January 1,
2012
------------------------------------------------------------------------
Standard level ** [dagger]
Equipment class * kWh/day
------------------------------------------------------------------------
VOP.RC.M.................................. 0.82 x TDA + 4.07
SVO.RC.M.................................. 0.83 x TDA + 3.18
HZO.RC.M.................................. 0.35 x TDA + 2.88
VOP.RC.L.................................. 2.27 x TDA + 6.85
HZO.RC.L.................................. 0.57 x TDA + 6.88
VCT.RC.M.................................. 0.22 x TDA + 1.95
VCT.RC.L.................................. 0.56 x TDA + 2.61
SOC.RC.M.................................. 0.51 x TDA + 0.11
VOP.SC.M.................................. 1.74 x TDA + 4.71
SVO.SC.M.................................. 1.73 x TDA + 4.59
HZO.SC.M.................................. 0.77 x TDA + 5.55
HZO.SC.L.................................. 1.92 x TDA + 7.08
VCT.SC.I.................................. 0.67 x TDA + 3.29
VCS.SC.I.................................. 0.38 x V + 0.88
HCT.SC.I.................................. 0.56 x TDA + 0.43
SVO.RC.L.................................. 2.27 x TDA + 6.85
VOP.RC.I.................................. 2.89 x TDA + 8.7
SVO.RC.I.................................. 2.89 x TDA + 8.7
HZO.RC.I.................................. 0.72 x TDA + 8.74
VCT.RC.I.................................. 0.66 x TDA + 3.05
HCT.RC.M.................................. 0.16 x TDA + 0.13
HCT.RC.L.................................. 0.34 x TDA + 0.26
HCT.RC.I.................................. 0.4 x TDA + 0.31
VCS.RC.M.................................. 0.11 x V + 0.26
VCS.RC.L.................................. 0.23 x V + 0.54
VCS.RC.I.................................. 0.27 x V + 0.63
HCS.RC.M.................................. 0.11 x V + 0.26
HCS.RC.L.................................. 0.23 x V + 0.54
HCS.RC.I.................................. 0.27 x V + 0.63
SOC.RC.L.................................. 1.08 x TDA + 0.22
SOC.RC.I.................................. 1.26 x TDA + 0.26
VOP.SC.L.................................. 4.37 x TDA + 11.82
VOP.SC.I.................................. 5.55 x TDA + 15.02
SVO.SC.L.................................. 4.34 x TDA + 11.51
SVO.SC.I.................................. 5.52 x TDA + 14.63
HZO.SC.I.................................. 2.44 x TDA + 9.
SOC.SC.I.................................. 1.76 x TDA + 0.36
HCS.SC.I.................................. 0.38 x V + 0.88
------------------------------------------------------------------------
* Equipment class designations consist of a combination (in sequential
order separated by periods) of: (1) an 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 [deg]F), L = low temperature (0 [deg]F),
or I = ice-cream temperature (-15 [deg]F)). For example, ``VOP.RC.M''
refers to the ``vertical open, remote condensing, medium temperature''
equipment class.
** TDA is the total display area of the case, as measured in ANSI/Air-
Conditioning and Refrigeration Institute (ARI) Standard 1200-2006,
appendix D.
[dagger] V is the volume of the case, as measured in AHAM Standard HRF-1-
2004.
2. History of Standards Rulemaking for Commercial Refrigeration
Equipment
EPCA, as amended by EPACT 2005, prescribes energy conservation
standards for certain self-contained commercial refrigeration equipment
designed for holding temperatures \14\ (i.e., commercial refrigerators,
freezers, and refrigerator-freezers with transparent and solid doors
designed for holding temperature applications) and self-contained
commercial refrigerators with transparent doors designed for pull-down
temperature applications.\15\ Compliance with these standards was
required as of January 1, 2010. (42 U.S.C. 6313(c)(2)-(3)) DOE
published a technical amendment final rule on October 18, 2005
codifying these standards into subpart C of part 431 under title 10 of
the Code of Federal Regulations (CFR). 70 FR 60407.
---------------------------------------------------------------------------
\14\ EPCA defines the term ``holding temperature application''
as 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))
\15\ EPCA defines the term ``pull-down temperature application''
as a commercial refrigerator with doors that, when fully loaded with
12 ounce beverage cans at 90 [deg]F, can cool those beverages to an
average stable temperature of 38 [deg]F in 12 hours or less. (42
U.S.C. 6311(9)(D))
---------------------------------------------------------------------------
In addition, EPCA requires DOE to set standards for additional
commercial refrigeration equipment that is not covered by 42 U.S.C.
6313(c)(2)-(3), namely commercial ice-cream freezers; self-contained
commercial refrigerators, freezers, and refrigerator-freezers without
doors; and remote condensing commercial refrigerators, freezers, and
refrigerator-freezers. (42 U.S.C. 6313(c)(5)) DOE published a final
rule establishing these standards on January 9, 2009 (74 FR 1092), and
manufacturers must comply with these standards starting on January 1,
2012. (42 U.S.C. 6313(c)(5)(A))
EPCA requires DOE to conduct a subsequent rulemaking to determine
whether to amend the standards established under 42 U.S.C. 6313(c),
which includes both the standards prescribed by EPACT 2005 and those
prescribed by DOE in the January 2009 final rule. (42 U.S.C.
6313(c)(6)) If DOE decides as part of this ongoing rulemaking to amend
the current standards, DOE must publish a final rule establishing any
such amended standards by January 1, 2013. Id.
To satisfy this requirement, DOE initiated the current rulemaking
on April 30, 2010 by publishing on its Web site its ``Rulemaking
Framework for Commercial Refrigeration Equipment.'' (The Framework
document is available at: www1.eere.energy.gov/buildings/appliance_standards/commercial/pdfs/cre_framework_04-30-10.pdf.) DOE also
published a notice in the Federal Register announcing the availability
of the Framework document, as well as a public meeting to discuss the
document. The notice also solicited comment on the matters raised in
the document. 75 FR 24824 (May 6, 2010). The Framework document
described the procedural and analytical approaches that DOE anticipated
using to evaluate energy conservation standards for commercial
refrigeration equipment, and identified various issues to be resolved
in the rulemaking.
DOE held the Framework public meeting on May 18, 2010, at which it:
(1) Presented the contents of the Framework document; (2) described the
analyses it planned to conduct during the rulemaking; (3) sought
comments from interested parties on these subjects; and (4) in general,
sought to inform interested parties about, and facilitate their
involvement in, the rulemaking. Major issues discussed at the public
meeting included: (1) the scope of coverage for the rulemaking; (2)
potential updates to the test procedure and appropriate test metrics
(being addressed in a concurrent rulemaking); (3) manufacturer and
market information, including distribution channels; (4) equipment
classes, baseline units,\16\ and design options to improve efficiency;
(5) life-cycle costs to customer, including installation, maintenance,
and repair costs; and (6) any customer subgroups DOE should consider.
At the meeting and during the comment period on the Framework document,
DOE received many comments that helped it identify and resolve issues
pertaining to commercial refrigeration equipment relevant to this
rulemaking. These are discussed in subsequent sections of this notice.
---------------------------------------------------------------------------
\16\ Baseline units consist of units possessing features and
levels of efficiency consistent with the least-efficient equipment
currently available and widely sold on the market.
---------------------------------------------------------------------------
DOE then gathered additional information and performed preliminary
analyses to help review energy conservation standards for this
equipment. This process culminated in DOE's notice of another public
meeting to discuss and receive comments regarding the tools and methods
DOE used in performing its preliminary analysis, as well as the
analyses results. 76 FR 17573 (March 30, 2011) (the March 2011 notice).
DOE also invited written comments on these subjects and announced the
availability on its Web site of a preliminary analysis technical
support document (preliminary analysis TSD). Id. (The preliminary
analysis TSD is available at: www.regulations.gov/#!documentDetail;D=EERE-2010-BT-STD-0003-0030.) Finally, DOE sought
comments concerning other relevant issues that could affect amended
energy
[[Page 55898]]
conservation standards for commercial refrigeration equipment, or that
DOE should address in this NOPR. 76 FR 17575 (March 30, 2011).
The preliminary analysis TSD provided an overview of DOE's review
of the standards for commercial refrigeration equipment, discussed the
comments DOE received in response to the Framework document, and
addressed issues including the scope of coverage of the rulemaking. The
document also described the analytical framework that DOE used (and
continues to use) in considering amended standards for commercial
refrigeration equipment, including a description of the methodology,
the analytical tools, and the relationships between the various
analyses that are part of this rulemaking. Additionally, the
preliminary analysis TSD presented in detail each analysis that DOE had
performed for this equipment up to that point, including descriptions
of inputs, sources, methodologies, and results. These analyses were as
follows:
A market and technology assessment addressed the scope of
this rulemaking, identified existing and potential new equipment
classes for commercial refrigeration equipment, characterized the
markets for this equipment, and reviewed techniques and approaches for
improving its efficiency;
A screening analysis reviewed technology options to
improve the efficiency of commercial refrigeration equipment, and
weighed these options against DOE's four prescribed screening criteria;
An engineering analysis estimated the manufacturer selling
prices (MSPs) associated with more energy efficient commercial
refrigeration equipment;
An energy use analysis estimated the annual energy use of
commercial refrigeration equipment;
A markups analysis converted estimated MSPs derived from
the engineering analysis to customer purchase prices;
A life-cycle cost analysis calculated, for individual
customers, the discounted savings in operating costs throughout the
estimated average life of commercial refrigeration equipment, compared
to any increase in installed costs likely to result directly from the
imposition of a given standard;
A payback period analysis estimated the amount of time it
would take customers to recover the higher purchase price of more
energy efficient equipment through lower operating costs;
A shipments analysis estimated shipments of commercial
refrigeration equipment over the time period examined in the analysis;
A national impact analysis (NIA) assessed the national
energy savings (NES), and the national NPV of total customer costs and
savings, expected to result from specific, potential energy
conservation standards for commercial refrigeration equipment; and
A preliminary manufacturer impact analysis (MIA) took the
initial steps in evaluating the potential effects on manufacturers of
amended efficiency standards.
The public meeting announced in the March 2011 notice took place on
April 19, 2011 (April 2011 preliminary analysis public meeting). At the
April 2011 preliminary analysis public meeting, DOE presented the
methodologies and results of the analyses set forth in the preliminary
analysis TSD. Interested parties provided comments on the following
issues: (1) Equipment classes; (2) technology options; (3) energy
modeling; (4) installation, maintenance, and repair costs; (5) markups
and distributions chains; (6) commercial refrigeration equipment
shipments; and (7) test procedures. The comments received since
publication of the March 2011 notice, including those received at the
April 2011 preliminary analysis public meeting, have contributed to
DOE's proposed resolution of the issues in this rulemaking as they
pertain to commercial refrigeration equipment. This NOPR responds to
the issues raised by the commenters.
In December 2012, AEMTCA established new standards for SOC.SC.M
equipment with a compliance date of January 1, 2012. (42 U.S.C.
6313(c)(4)) The SOC.SC.M equipment had previously been classified under
the category self-contained commercial refrigerators with transparent
doors for which standards were established by EPACT 2005. (42 U.S.C.
6313(c)(2)) The standard established by AEMTCA for SOC.SC.M equipment
reduces the stringency of the standard applicable to this equipment.
AEMTCA also directs DOE to determine, within three years of
enactment of the new SOC.SC.M standard, whether this standard should be
amended. (42 U.S.C. 6313(c)(4)(B)(i)) If DOE determines that the
standard should be amended, then DOE must issue a final rule
establishing an amended standard within this same three-year period.
(42 U.S.C. 6313(c)(4)(B)(ii))
III. General Discussion
A. Test Procedures and Normalization Metrics
1. Test Procedures
On December 8, 2006, DOE published a final rule in which it adopted
American National Standards Institute (ANSI)/Air-Conditioning and
Refrigeration Institute (ARI) Standard 1200-2006, ``Performance Rating
of Commercial Refrigerated Display Merchandisers and Storage
Cabinets,'' as the DOE test procedure for this equipment. 71 FR 71340,
71369-70. ANSI/ARI Standard 1200-2006 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.'' The standard also
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. During the 2006 test procedure rulemaking, DOE
determined that testing at a -15 [deg]F (2 [deg]F) rating
temperature was more representative of the actual energy consumption of
commercial freezers specifically designed for ice-cream application. 71
FR 71357 (Dec. 8, 2006). Therefore, in the test procedure final rule,
DOE adopted a -15 [deg]F (2 [deg]F) rating temperature for
commercial ice-cream freezers, rather than the -5 [deg]F (2
[deg]F) prescribed in the ANSI/ARI Standard 1200-2006. 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 (Dec. 8, 2006).
On February 21, 2012, DOE published a test procedure final rule
(2012 test procedure final rule) in which it adopted several amendments
to the DOE test procedure. This included an amendment to incorporate by
reference ANSI/Air-Conditioning, Heating, and Refrigeration Institute
(AHRI) Standard 1200-2010, ``Performance Rating of Commercial
Refrigerated Display Merchandisers and Storage Cabinets,'' as the DOE
test procedure for this equipment. 77 FR 10292, 10314 (Feb. 21, 2012).
The 2012 test procedure final rule also included an amendment to
incorporate by reference the updated ANSI/AHAM Standard HRF-1-2008,
[[Page 55899]]
``Energy, Performance, and Capacity of Household Refrigerators,
Refrigerator-Freezers, and Freezers,'' for determining compartment
volumes for this equipment.
In addition, the 2012 test procedure final rule included several
amendments designed to address certain energy efficiency features that
were not accounted for by the previous DOE test procedure, including
provisions for measuring the impact of night curtains \17\ and lighting
occupancy sensors and scheduled controls. 77 FR 10296-98 (Feb. 21,
2012). In the 2012 test procedure final rule, DOE also adopted
amendments to allow testing of commercial refrigeration equipment at
temperatures other than one of the three rating temperatures previously
specified in the test procedure. Specifically, the 2012 test procedure
final rule allows testing of commercial refrigeration equipment at its
lowest application product temperature, for equipment that cannot be
tested at the prescribed rating temperature. The 2012 test procedure
final rule also allows manufacturers to test and certify equipment at
the more-stringent temperatures and ambient conditions required by NSF
for food safety testing. 77 FR 10305 (Feb. 21, 2012). (The NSF was
founded in 1944 as the National Sanitation Foundation, and is now
referred to simply as NSF.)
---------------------------------------------------------------------------
\17\ Night curtains are devices made of an insulating material,
typically insulated aluminum fabric, designed to be pulled down over
the open front of the case to decrease infiltration and heat
transfer into the case when the merchandizing establishment is
closed.
---------------------------------------------------------------------------
The test procedure amendments established in the 2012 test
procedure final rule are required to be used in conjunction with any
amended standards promulgated as a result of this energy conservation
standard rulemaking. As such, use of the amended test procedure to show
compliance with DOE energy conservation standards or make
representations with respect to energy consumption of commercial
refrigeration equipment is required on the compliance date of any
revised energy conservation standards established as part of this
rulemaking. 77 FR 10308 (Feb. 21, 2012).
DOE has initiated a test procedure rulemaking for commercial
refrigeration equipment to address many issues raised by stakeholders
since the publication of the 2012 test procedure final rule. This
rulemaking will address the following issues:
A number of new definitions related to commercial
refrigeration equipment,
A description of the proper configuration and use of
energy management systems,
Clarifications on the use of calculation methods,
appropriate reporting requirements, and determination of the lowest
application product temperature,
Incorporation of Interpretations 1 through 5 to AHRI 1200-
2010, and
Updates and clarifications regarding the compliance dates
of test procedure amendments adopted in the 2012 test procedure final
rule by reorganizing the test procedure in two different appendices.
The issues that will be addressed in the test procedure rulemaking
are consistent with the analysis in this NOPR.
2. Normalization Metrics
Both the January 2009 final rule and EPACT 2005 contain energy
conservation standards for respective covered types of commercial
refrigeration equipment, expressed in the form of equations developed
as a function of unit size. This use of normalization metrics allows
for a single standard-level equation developed for an equipment class
to apply to a broad range of equipment sizes offered within that class
by manufacturers. In the aforementioned commercial refrigeration
equipment standards, the two normalization metrics used are
refrigerated compartment volume, as determined using AHAM HRF-1-2004,
and TDA, as determined using ANSI/ARI 1200-2006. In particular, the
EPACT 2005 standards utilize volume as the normalization metric for all
equipment types, with the exception of refrigerator-freezers with solid
doors, for which it specifies adjusted volume. (42 U.S.C. 6313(c)(2))
The January 2009 final rule, meanwhile, utilized TDA as the
normalization metric for all equipment with display capacity while
specifying volume as the metric for solid-door (VCS and HCS) equipment.
74 FR 1093 (Jan. 9, 2009).
At the May 2010 Framework public meeting, interested parties raised
several questions regarding the potential normalization metrics that
could be used in amended standards. DOE also received stakeholder
feedback pertaining to this issue following the publication of the
Framework document. In the preliminary analysis, DOE suggested that it
would consider retaining the normalization metrics in this rulemaking
for the respective classes to which they were applied in EPCA (42
U.S.C. 6313(c)(2)-(3)) and the January 2009 final rule. 74 FR 1093
(Jan. 9, 2009). In chapter 2 of the preliminary analysis TSD, DOE
presented its rationale for the continued use of TDA for equipment with
display areas addressed in the January 2009 final rule and the
continued use of volume as the metric for solid-door remote condensing
equipment and ice-cream freezers, as well as for the equipment covered
by EPACT 2005 standards. DOE did not receive any information or data
while conducting the NOPR analyses that would alter this position, and
thus DOE proposes continued use of the existing normalization metrics
in today's notice.
B. Technological Feasibility
1. General
In each standards rulemaking, DOE conducts a screening analysis,
which is based on information that the Department has gathered on all
current technology options and prototype designs that could improve the
efficiency of the products or equipment that are the subject of the
rulemaking. As the first step in such analysis, DOE develops a list of
design options for consideration, in consultation with manufacturers,
design engineers, and other interested parties. DOE then determines
which of these options for improving efficiency are technologically
feasible. DOE considers a design option to be technologically feasible
if it is used by the relevant industry or if a working prototype has
been developed. Technologies incorporated in commercially available
equipment or in working prototypes will be considered technologically
feasible. 10 CFR 430, subpart C, appendix A, section 4(a)(4)(i)
Although DOE considers technologies that are proprietary, it will not
consider efficiency levels that can only be reached through the use of
proprietary technologies (i.e., a unique pathway), which could allow a
single manufacturer to monopolize the market.
Once DOE has determined that particular design options are
technologically feasible, it further evaluates each of these design
options in light of the following additional screening criteria: (1)
Practicability to manufacture, install, or service; (2) adverse impacts
on product utility or availability; and (3) adverse impacts on health
or safety. 10 CFR part 430, subpart C, appendix A, section 4(a)(4)(ii)-
(iv) Chapter 4 of the NOPR TSD discusses the results of the screening
analyses for commercial refrigeration equipment. Specifically, it
presents the designs DOE considered, those it screened out, and those
that are the bases for the TSLs considered in this rulemaking.
[[Page 55900]]
2. Maximum Technologically Feasible Levels
When DOE proposes to adopt (or not adopt) an amended or new energy
conservation standard for a type or class of covered equipment such as
commercial refrigeration equipment, it determines the maximum
improvement in energy efficiency that is technologically feasible for
such equipment. (See 42 U.S.C. 6295(p)(1) and 6316(e)(1)) Accordingly,
in the preliminary analysis, DOE determined the maximum technologically
feasible (``max-tech'') improvements in energy efficiency for
commercial refrigeration equipment in the engineering analysis using
the design parameters that passed the screening analysis.
As indicated previously, whether efficiency levels exist or can be
achieved in commonly used equipment is not relevant to whether they are
considered max-tech levels. DOE considers technologies to be
technologically feasible if they are incorporated in any currently
available equipment or working prototypes. Hence, a max-tech level
results from the combination of design options predicted to result in
the highest efficiency level possible for an equipment class, with such
design options consisting of technologies already incorporated in
commercial equipment or working prototypes. DOE notes that it
reevaluated the efficiency levels, including the max-tech levels, when
it updated its results for this NOPR. See chapter 5 of the NOPR TSD for
the results of the analyses, and a list of technologies included in
max-tech equipment. Table III.1 shows the max-tech levels determined in
the engineering analysis for commercial refrigeration equipment.
Table III.1--``Max-Tech'' Levels for Commercial Refrigeration Equipment
Primary Classes
------------------------------------------------------------------------
Equipment class ``Max-Tech'' level kWh/day
------------------------------------------------------------------------
VCT.RC.L.................................. 0.41 x TDA + 1.93
VOP.RC.M.................................. 0.6 x TDA + 2.99
SVO.RC.M.................................. 0.62 x TDA + 2.38
HZO.RC.L.................................. 0.55 x TDA + 6.7
HZO.RC.M.................................. 0.34 x TDA + 2.83
VCT.RC.M.................................. 0.07 x TDA + 0.66
VOP.RC.L.................................. 2.07 x TDA + 6.26
SOC.RC.M.................................. 0.39 x TDA + 0.08
VOP.SC.M.................................. 1.5 x TDA + 4.06
SVO.SC.M.................................. 1.5 x TDA + 3.97
HZO.SC.L.................................. 1.91 x TDA + 7.03
HZO.SC.M.................................. 0.74 x TDA + 5.35
HCT.SC.I.................................. 0.36 x TDA + 0.28
VCT.SC.I.................................. 0.5 x TDA + 2.44
VCS.SC.I.................................. 0.33 x V + 0.76
VCT.SC.M.................................. 0.03 x V + 0.97
VCT.SC.L.................................. 0.21 x V + 1.16
VCS.SC.M.................................. 0.02 x V + 0.41
VCS.SC.L.................................. 0.11 x V + 0.38
HCT.SC.M.................................. 0.01 x V + 0.38
HCT.SC.L.................................. 0.08 x V + 0.45
HCS.SC.M.................................. 0.01 x V + 0.18
HCS.SC.L.................................. 0.07 x V + 0.24
PD.SC.M................................... 0.03 x V + 0.72
SOC.SC.M.................................. 0.32 x TDA + 0.53
------------------------------------------------------------------------
C. Energy Savings
1. Determination of Savings
For each TSL, DOE projected energy savings from the products that
are the subjects of this rulemaking, purchased during the 30-year
period that begins in the year of compliance with amended standards
(2017-2046). The savings are measured over the entire lifetime of
products purchased in the 30-year period.\18\ DOE used the NIA model to
estimate the NES for equipment purchased over the period 2017-2046. The
model forecasts total energy use over the analysis period for each
representative equipment class at efficiency levels set by each of the
five considered TSLs. DOE then compares the energy use at each TSL to
the base-case energy use to obtain the NES. The NIA model is described
in section IV.I of this notice and in chapter 10 of the NOPR TSD.
---------------------------------------------------------------------------
\18\ In the past, DOE presented energy savings results for only
the 30-year period that begins in the year of compliance. In the
calculation of economic impacts, however, DOE considered operating
cost savings measured over the entire lifetime of products purchased
during the 30-year period. DOE has chosen to modify its presentation
of national energy savings to be consistent with the approach used
for its national economic analysis.
---------------------------------------------------------------------------
DOE used its national impact analysis (NIA) spreadsheet model to
estimate energy savings from amended standards for the products that
are the subject of this rulemaking. The NIA spreadsheet model
(described in section IV.I of this notice) calculates energy savings in
site energy, which is the energy directly consumed by products at the
locations where they are used. For electricity, DOE reports national
energy savings in terms of the savings in the energy that is used to
generate and transmit the site electricity. To calculate this quantity,
DOE derives annual conversion factors from the model used to prepare
the Energy Information Administration's (EIA) Annual Energy Outlook
(AEO).
DOE has begun to also estimate full-fuel-cycle (FFC) energy
savings. 76 FR 51282 (Aug. 18, 2011), as amended at 77 FR 49701 (August
17, 2012). The FFC metric includes the energy consumed in extracting,
processing, and transporting primary fuels, and thus presents a more
complete picture of the impacts of energy efficiency standards. DOE's
approach is based on calculation of an FFC multiplier for each of the
energy types used by covered products.
2. Significance of Savings
EPCA prohibits DOE from adopting a standard that would not result
in significant additional energy savings. (42 U.S.C. 6295(o)(3)(B),(v)
and 6316(e)(1)) While the term ``significant'' is not defined in EPCA,
the U.S. Court of Appeals for the District of Columbia in Natural
Resources Defense Council v. Herrington, 768 F.2d 1355, 1373 (D.C. Cir.
1985), indicated that Congress intended significant energy savings to
be savings that were not ``genuinely trivial.'' The estimated energy
savings in the 30-year analysis period for the TSLs considered in this
rulemaking range from 0.236 to 1.278 quads (see section V.B.2 for
additional details); therefore, DOE considers them significant within
the meaning of section 325 of the Act.
D. Economic Justification
1. Specific Criteria
As discussed in section II.A, EPCA provides seven factors to be
evaluated in determining whether a potential energy conservation
standard is economically justified. (42 U.S.C. 6295(o)(2)(B)(i) and
6316(e)(1)) The following sections generally discuss how DOE is
addressing each of those seven factors in this rulemaking. For further
details and the results of DOE's analyses pertaining to economic
justification, see sections IV and V of today's notice.
a. Economic Impact on Manufacturers and Commercial Customers
In determining the impacts of a potential new or amended energy
conservation standard on manufacturers, DOE first determines its
quantitative impacts using an annual cash flow approach. This includes
both a short-term assessment (based on the cost and capital
requirements associated with new or amended standards during the period
between the announcement of a regulation and the compliance date of the
regulation) and a long-term assessment (based on the costs and marginal
impacts over the 30-year analysis period). The impacts analyzed include
INPV (which values the industry based on expected future cash
[[Page 55901]]
flows), cash flows by year, changes in revenue and income, and other
measures of impact, as appropriate. Second, DOE analyzes and reports
the potential impacts on different types of manufacturers, paying
particular attention to impacts on small manufacturers. Third, DOE
considers the impact of new or amended standards on domestic
manufacturer employment and manufacturing capacity, as well as the
potential for new or amended standards to result in plant closures and
loss of capital investment. Finally, DOE takes into account cumulative
impacts of other DOE regulations and non-DOE regulatory requirements on
manufacturers.
For individual customers, measures of economic impact include the
changes in LCC and the PBP associated with new or amended standards.
The LCC, which is also separately specified as one of the seven factors
to be considered in determining the economic justification for a new or
amended standard (42 U.S.C. 6295(o)(2)(B)(i)(II), and 6316(e)(1)), is
discussed in the following section. For customers in the aggregate, DOE
also calculates the NPV from a national perspective of the economic
impacts on customers over the analysis period used in a particular
rulemaking. For a description of the methodology used for assessing the
economic impact on customers, see sections IV.H and IV.I; for results,
see sections V.B.1 and V.B.2 of this notice. Additionally, chapters 8
and 10 and the associated appendices of the NOPR TSD contain a detailed
description of the methodology and discussion of the results. For a
description of the methodology used to assess the economic impact on
manufacturers, see section IV.K; for results, see section V.B.2 of this
notice. Additionally, chapter 13 of the NOPR TSD contains a detailed
description of the methodology and discussion of the results.
b. Life-Cycle Costs
The LCC is the sum of the purchase price of equipment (including
the cost of its installation) and the operating costs (including energy
and maintenance and repair costs) discounted over the lifetime of the
equipment. The LCC savings for the considered efficiency levels are
calculated relative to a base-case scenario, which reflects likely
trends in the absence of new or amended standards. DOE carried out the
LCC analysis for this rulemaking by analyzing the LCC impacts on those
customers who purchase the equipment in the year in which compliance
with the new standard is required. To account for uncertainty and
variability in specific inputs, such as equipment lifetime and discount
rate, DOE uses a range of values, each with its own probability of
selection. In addition to identifying distribution of customer impacts,
DOE evaluates the LCC impacts of potential standards on identifiable
subgroups of customers who may be disproportionately affected by a new
national standard. For the results of DOE's analyses related to the
LCC, see section V.B.1 of this notice and chapter 8 of the NOPR TSD;
for LCC impacts on identifiable subgroups, see section V.B.1 of this
notice and chapter 11 of the NOPR TSD.
c. Energy Savings
While significant conservation of energy is a statutory requirement
for imposing an energy conservation standard, EPCA also requires DOE,
in determining the economic justification of a standard, to consider
the total projected energy savings that are expected to result directly
from the standard. (42 U.S.C. 6295(o)(2)(B)(i)(III) and 6316(e)(1)) DOE
uses NIA spreadsheet results in its consideration of total projected
savings. For the results of DOE's analyses related to the potential
energy savings, see section VI.B.3 of this notice and chapter 10 of the
NOPR TSD.
d. Lessening of Utility or Performance of Equipment
In establishing classes of equipment, and in evaluating design
options and the impact of potential standard levels, DOE seeks to
develop standards that would not lessen the utility or performance of
the equipment under consideration. None of the TSLs presented in
today's NOPR would reduce the utility or performance of the equipment
considered in the rulemaking. (42 U.S.C. 6295(o)(2)(B)(i)(IV) and
6316(e)(1)) During the screening analysis, DOE eliminated from
consideration any technology that would adversely impact customer
utility. For the results of DOE's analyses related to the potential
impact of amended standards on equipment utility and performance, see
section IV.D of this notice and chapter 4 of the NOPR TSD.
e. Impact of Any Lessening of Competition
EPCA directs DOE to consider the impact of any lessening of
competition, as determined in writing by the Attorney General, that is
likely to result from the imposition of a standard. (42 U.S.C.
6295(o)(2)(B)(i)(V) Specifically, it directs the Attorney General to
determine in writing the impact, if any, of any lessening of
competition likely to result from a proposed standard and to transmit
such determination to the Secretary, not later than 60 days after the
publication of a proposed rule, together with an analysis of the nature
and extent of such impact. (42 U.S.C. 6295(o)(2)B(ii) and 6316(e)(1))
For the results of DOE's analysis related to lessening of competition,
see section V.B.5 of this notice.
f. Need of the Nation To Conserve Energy
Another factor that DOE must consider in determining whether a new
or amended standard is economically justified is the need for national
energy and water conservation. (42 U.S.C. 6295(o)(2)(B)(i)(VI) and
6316(e)(1)) The energy savings from new or amended standards are likely
to provide improvements to the security and reliability of the Nation's
energy system. Reductions in the demand for electricity may also result
in reduced costs for maintaining the reliability of the Nation's
electricity system. DOE conducts a utility impact analysis to estimate
how new or amended standards may affect the Nation's needed power
generation capacity.
Energy savings from amended standards for commercial refrigeration
equipment are also likely to result in environmental benefits in the
form of reduced emissions of air pollutants and GHGs associated with
energy production (i.e., from power plants). For a discussion of the
results of the analyses relating to the potential environmental
benefits of the amended standards, see sections IV.N, IV.O and V.B.6 of
this notice. DOE reports the expected environmental effects from the
proposed standards, as well as from each TSL it considered for
commercial refrigeration equipment, in the emissions analysis contained
in chapter 13 of the NOPR TSD. DOE also reports estimates of the
economic value of emissions reductions resulting from the considered
TSLs in chapter 14 of the NOPR TSD.
g. Other Factors
EPCA allows the Secretary, in determining whether a new or amended
standard is economically justified, to consider any other factors that
the Secretary deems to be relevant. (42 U.S.C. 6295(o)(2)(B)(i)(VII)
and 6316(e)(1)) In developing the TSLs set forth in this notice, DOE
has also considered the comments submitted by interested parties. For
the results of
[[Page 55902]]
DOE's analyses related to other factors, see section V.B.7 of this
notice.
2. Rebuttable Presumption
As set forth in 42 U.S.C. 6295(o)(2)(B)(iii) and 6316(e)(1), EPCA
provides for a rebuttable presumption that an energy conservation
standard is economically justified if the additional cost to the
customer of equipment that meets the new or amended standard level is
less than three times the value of the first-year energy (and, as
applicable, water) savings resulting from the standard, as calculated
under the applicable DOE test procedure. DOE's LCC and PBP analyses
generate values that calculate the PBP for customers of potential new
and amended energy conservation standards. These analyses include, but
are not limited to, the 3-year PBP contemplated under the rebuttable
presumption test. However, DOE routinely conducts a full economic
analysis that considers the full range of impacts to the customer,
manufacturer, Nation, and environment, as required under 42 U.S.C.
6295(o)(2)(B)(i) and 6316(e)(1). The results of these analyses serve as
the basis for DOE to evaluate the economic justification for a
potential standard level definitively (thereby supporting or rebutting
the results of any preliminary determination of economic
justification). The rebuttable presumption payback calculation is
discussed in section IV.H.12 of this notice and chapter 8 of the NOPR
TSD.
IV. Methodology and Discussion of Comments
A. General Rulemaking Issues
During the April 2011 preliminary analysis public meeting and in
subsequent written comments, stakeholders provided input regarding
general issues pertinent to the rulemaking, such as issues of scope of
coverage and DOE's authority in setting standards. These issues are
discussed in this section.
1. Statutory Authority
In the preliminary analysis, DOE stated its position that EPCA
prevents the setting of both energy performance standards and
prescriptive design requirements (see chapter 2 of the preliminary
analysis TSD \19\). DOE also stated its intent to amend the energy
performance standards for commercial refrigeration equipment, and not
to set prescriptive design requirements at this time (see chapter 2 of
the preliminary analysis TSD). In a written comment, Earthjustice
opined that DOE misread EPCA in suggesting that DOE does not have
authority to establish design requirements for commercial refrigeration
equipment. More specifically, Earthjustice asserted that DOE's
interpretation of 42 U.S.C. 6311(18) ignores that EPCA uses the plural
form in compelling this rulemaking to amend energy conservation
``standards.'' Further, Earthjustice stated, even if DOE were only
authorized to promulgate a single standard or single design requirement
in any one rulemaking, nothing in EPCA indicates that prior
establishment of performance standards would foreclose the issuance of
design requirements in a subsequent rulemaking, provided that those
design requirements achieved the maximum technologically feasible and
economically justified energy savings. (Earthjustice, No. 35 at pp. 4-
5) \20\
---------------------------------------------------------------------------
\19\ U.S. Department of Energy--Office of Energy Efficiency and
Renewable Energy. Preliminary Technical Support Document (TSD):
Energy Conservation Program for Certain Commercial and Industrial
Equipment: Commercial Refrigeration Equipment. Chapter 2. Analytical
Framework, Comments from Interested Parties, and DOE Responses.
March 2011. Washington, DC www.regulations.gov/#!documentDetail;D=EERE-2010-BT-STD-0003-0030.
\20\ A notation in this form provides a reference for
information that is in the docket of DOE's rulemaking to develop
energy conservation standards for commercial refrigeration equipment
(Docket No. EERE-2010-BT-STD-0003), which is maintained at
www.regulations.gov. This notation indicates that the statement
preceding the reference is document number 35 in the docket for the
commercial refrigeration equipment energy conservation standards
rulemaking, and appears at pages 4-5 of that document.
---------------------------------------------------------------------------
EPCA defines the phrase ``energy conservation standard'' as a
performance standard that prescribes a minimum level of energy
efficiency or a maximum quantity of energy use for a product or as a
design requirement for a product. (42 U.S.C. 6311(18)(A)-(B))
Therefore, based on a clear reading of EPCA, DOE must use either a
performance standard or a design (prescriptive) requirement in
prescribing energy conservation standards. It has been DOE's
longstanding interpretation that the term ``standard'' means either a
performance standard or a design requirement, and that the plural term
``standards'' refers to the setting of a collective group of standards
across all covered equipment or product classes. Thus, it is not DOE's
interpretation of EPCA that the statute's use of the plural term
``standards,'' in referring to a collective group of equipment classes,
grants DOE the authority to set both prescriptive and performance
standards for a given class within that group. In the case of
commercial refrigeration equipment, all of the equipment that is the
subject of this rulemaking is currently covered either by a statutorily
mandated performance standard or by a performance standard set by DOE
in the January 2009 final rule. (42 U.S.C. 6313(c)(1)-(4)); 74 FR 1093
(Jan. 9, 2009). In this rulemaking, DOE is considering amendments to
these performance standards for commercial refrigeration equipment, and
is therefore not considering design requirements at this time.
2. January 2009 Final Rule Equipment
At the April 2011 preliminary analysis public meeting, AHRI stated
that in 2005 when the legislation that was to become EPACT 2005 was
drafted, the drafters' intent was not for DOE to start a rulemaking on
remote cases in 2010. According to AHRI, the drafters' intent was that
DOE start the rulemaking on self-contained units. AHRI pointed out that
manufacturers would have to redesign products (those covered by the
2009 DOE final rule) twice in a 4-year period, first to meet the 2009
DOE standards in 2012, and then again to meet the 2013 standards in
2016. AHRI asked DOE to take that into account, a situation AHRI
described as unprecedented. (AHRI, Public Meeting Transcript, No. 31 at
pp. 204-05) AHRI elaborated on this situation in its written comment,
expressing its belief that it is illogical that DOE decided to analyze
equipment types for which standards exist, but with which manufacturers
are not yet required to comply. AHRI stated that the intent of Congress
was never to require DOE to start a rulemaking on this equipment, and
questioned how DOE could possibly assess whether amended standards are
appropriate before the January 2009 final rule standards reach the
stage where manufacturers must comply. AHRI urged DOE to focus on self-
contained refrigerators and freezers with doors in this rulemaking.
(AHRI, No. 43 at pp. 1-2)
Similarly, Zero Zone expressed disappointment with the fact that
the current rulemaking was initiated before the standards compliance
date of January 1, 2012 specified in the January 2009 final rule. Zero
Zone went on to state that waiting until after this compliance date to
initiate a rulemaking would have allowed DOE to determine the accuracy
of its models and the impacts on industry. (Zero Zone, No. 37 at p. 1)
The EPACT 2005 amendments to EPCA require DOE to conduct a
rulemaking to determine whether to amend the standards for commercial
refrigeration equipment established under 42 U.S.C. 6313(c), which
covers both the standards prescribed by EPACT
[[Page 55903]]
2005 and the standards set by DOE in the January 2009 final rule. (42
U.S.C. 6313(c)(6)) If DOE determines that these standards should be
amended, DOE must publish a final rule establishing such amended
standards by January 1, 2013. Id. Regarding AHRI's comment, DOE is thus
compelled by statute to conduct this rulemaking with a scope of
coverage including the equipment specified in both EPACT 2005 and in
the January 2009 final rule. In response to Zero Zone's comments
concerning the burden imposed by amended standards, DOE has considered
manufacturer impacts in the MIA, as required by 42 U.S.C.
6295(o)(2)(B)(i)(I) and 6316(e)(1). DOE has also used its manufacturer
interviews as a forum to discuss and receive feedback on the inputs to
and accuracy of its models.
3. Normalization Metrics
In chapter 2 of the preliminary analysis TSD, DOE stated its
proposal to retain the current normalization metrics for all equipment
classes and requested comment from interested parties. Traulsen agreed
with DOE's tentative plan to use cabinet volume as the normalization
metric for ``appropriate'' equipment, but noted that there are other
(unspecified) design factors that need to be considered. (Traulsen, No.
45 at p. 2) Zero Zone stated that evaluation of the normalization
metrics should take place after the January 2009 final rule compliance
date. (Zero Zone, No. 37 at p. 4)
During the NOPR analyses, DOE took into account stakeholder input
when reviewing normalization metrics for covered equipment. DOE agrees
with Traulsen that volume is the appropriate normalization metric for
most self-contained equipment classes. With respect to the comment by
Zero Zone, the timing of this proceeding made it difficult for
significant amounts of data on sales and other factors to be acquired
after the January 2009 final rule compliance date of January 1, 2012.
DOE took into account information regarding the size and composition of
the commercial refrigeration equipment market obtained through
manufacturer interviews, market research publications, and other
sources during the NOPR stage.
4. Treatment of Blast Chillers, Thawing Cabinets, Prep Tables, Salad
Bars, and Buffet Tables
In its written comment, Traulsen expressed concern that DOE may
inadvertently include equipment such as prep tables, blast chillers,
and thawing cabinets in standards it develops. (Traulsen, No. 45 at p.
1) During the ongoing rulemaking, DOE also received several inquiries
from interested parties regarding the coverage, under current or
amended energy conservation standards, of salad bars, buffet tables,
and other refrigerated holding and serving equipment.
EPCA, in its definition of ``commercial refrigerator, freezer, and
refrigerator-freezer,'' states that such equipment must display or
store merchandise or other perishable materials horizontally,
vertically, or semi-vertically, and must be designed for pull-down
temperature applications or holding temperature applications, among
other factors. (42 U.S.C. 6311(9)(A)) Moreover, 42 U.S.C. 6311(9)
defines ``holding temperature application'' as specifically omitting
blast chillers or freezers, and specifies that ``pull-down temperature
application'' refers solely to equipment designed to cool 12 ounce
beverage cans from 90 to 38[emsp14][deg]F in 12 hours or less. Thus,
blast chillers and thawing cabinets do not meet the relevant statutory
definition, and will not be addressed in this rulemaking.
With regard to prep tables with open bins or trays, salad bars, and
buffet tables, DOE does not currently have energy conservation
standards that cover this equipment. DOE notes that some of this
equipment is designed for the temporary placement of food during
preparation or service, rather than storage or retailing, and may
operate very differently from the commercial refrigeration equipment
considered in this rulemaking. Moreover, DOE's current test procedure
does not include provisions for testing this type of equipment. For
example, some types of foodservice equipment (such as salad bars,
buffet tables, and prep tables) do not have doors, drawers, or openings
typical of conventional commercial refrigeration equipment. While DOE
has the authority to set standards for other types of commercial
refrigeration equipment (42 U.S.C. 6313(c)(5)(B)), this rulemaking is
not currently considering standards for equipment types other than
those covered by DOE's existing standards. 10 CFR 431.66
5. Dedicated Remote Condensing Units
Several stakeholders inquired whether equipment consisting of a
refrigerated case served by a single, dedicated remote condensing unit
that serves only that unit would be covered under DOE's proposed
standards. True Manufacturing (True) stated that smaller units are more
likely to have such a condensing unit, and that continuous cases \21\
are almost exclusively rack condensing systems \22\ due to the energy
savings gained in the long term by rejecting heat outside of the
building. (True, Public Meeting Transcript, No. 31 at pp. 268-69)
Southern Store Fixtures stated that it is very difficult for the
company to predict whether a given case that it builds will ultimately
be connected to an individual condensing unit or to a compressor rack.
(Southern Store Fixtures, Public Meeting Transcript, No. 31 at p. 268)
Zero Zone commented that 20 to 40 percent of the units it sells are
served by dedicated condensing units, and that the remainder are served
by racks, noting that businesses such as convenience stores and dollar
stores use dedicated condensing units in the interest of simplicity.
(Zero Zone, Public Meeting Transcript, No. 31 at p. 269) In its written
comment, Earthjustice referenced Zero Zone's statement that 20 to 40
percent of remote condensing commercial refrigeration equipment is
served by dedicated remote condensing units, and stated that because
there is a significant market share for such equipment, DOE should
explore standards that address the performance of such units.
(Earthjustice, No. 35 at p. 4)
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\21\ In most supermarket and large food retail settings,
multiple display cases from a manufacturer are attached together
into a single continuous lineup without internal partitions; these
are referred to as ``continuous cases.''
\22\ Rack condensing systems utilize a ``rack'' of multiple
compressors and a condenser that serves to deliver liquid
refrigerant to a number of different pieces of equipment served by
the single rack. For example, most supermarkets have one or more
compressor racks to serve their display cases, walk-in coolers and
freezers, and other equipment.
---------------------------------------------------------------------------
DOE understands that some stakeholders are concerned that shipments
of equipment utilizing dedicated remote condensing units may comprise a
nontrivial portion of the market. However, the DOE test procedure does
not contain a methodology for testing such condensing units. DOE
anticipates working with the industry in the future to develop testing
methodologies that can be used in future commercial refrigeration
equipment rulemakings. For this current rulemaking, display cases
connected to dedicated remote condensers will be treated like any other
piece of remote condensing equipment under the DOE test procedure, with
the energy of the remote condensing unit calculated as specified in
AHRI 1200 and added to the measured energy consumption of the display
case. As there is no industry-accepted method of test for dedicated
remote condensers, DOE proposes to continue to treat
[[Page 55904]]
equipment utilizing this condensing unit configuration in the same
manner as all other display cases connected to remote condensers.
Also, as Southern Store Fixtures noted, it is often difficult or
impossible for the display case manufacturer to know ahead of time
whether a given case will be attached to a dedicated remote condensing
unit or a remote condensing rack by an end user. In some cases, the
dedicated condensing unit is produced by a separate manufacturer and
purchased independently. As Zero Zone stated, the majority of remote
condensing cases are still sold to be connected to a remote condensing
rack system that serves multiple pieces of equipment. Thus, DOE
believes that comparing remote condensing cases based on the calculated
performance of a typical remote condensing rack, in the manner
prescribed by AHRI 1200, is a consistent way to compare performance of
remote condensing display cases.
In chapter 2 of the preliminary analysis TSD, DOE discussed the
potential of addressing coverage of remote condensers in a separate
future rulemaking. DOE believes that, should any such action take place
in the future, such a proceeding would be the appropriate venue in
which to investigate dedicated remote condensers.
6. Small Units
Traulsen stated that it believes that smaller units are effectively
prohibited under current DOE regulations, and that it recognizes that
legislative change is the proper avenue for resolution of this issue.
(Traulsen, No. 45 at p. 5)
DOE understands manufacturer concerns regarding the performance of
small units, and took steps to account for them in its analyses. In its
engineering analysis, DOE selected specifications for units that it
found to be representative of typical, high sales volume models for
each of the equipment classes directly analyzed. These selections were
based on market and industry research, and the representative unit
specifications were presented to manufacturers for their feedback and
input during manufacturer interviews. The representative units were
then used as one analysis point in developing the standard-level
equations for their respective classes. DOE also developed ``offset
factors'' that form the second analysis point used in developing the
linear equations that represent the equipment standards. The purpose of
the offset factor is to account for energy consumption end effects
inherent in equipment of all sizes so that certain groups of units,
including small units, would not be disadvantaged by the standard-level
equations. To understand how the offset accounts for size effects,
consider the energy consumption of a single lighting fixture--a feature
common to all sizes of VCT display cases. The development of offset
factors resulted in energy allowances at zero case volume or TDA, thus
preventing even the smallest cases from being disadvantaged by the
standards. The procedure that DOE used to develop the offset factors
implicitly assumes that small units are relatively less efficient than
larger units, particularly in the case of the smallest-sized equipment.
Therefore, DOE believes that its analysis adequately accounts for
smaller units. A detailed discussion of offset factors can be found in
chapter 5 of the NOPR TSD.
7. Consideration of Impact of Amended Standards
Traulsen stated that there are many niches of commercial
refrigeration equipment that are essential to manufacturers and
customers, and that setting overly aggressive standards may lead to
inadvertent equipment design obsolescence. Traulsen thus urged DOE to
take a conservative approach when setting mandatory standards.
(Traulsen, No. 45 at p. 1)
DOE performed an MIA, as required by 42 U.S.C. 6295(o)(2)(B)(i)(I)
and 6316(e)(1), in which it assessed both the qualitative issues of
concern to manufacturers and the quantitative potential impacts to the
commercial refrigeration equipment industry. These impacts were weighed
and taken into consideration during the selection of the proposed
standard level in an effort to minimize adverse impacts on the
industry. DOE also notes it considers the design configurations offered
in the commercial refrigeration equipment market in its analysis and
selection of equipment classes. As required by EPCA, DOE does not set
standards that eliminate equipment designs that deliver unique utility
or features for consumers. (42 U.S.C. 6295(o)(4) and 6316(e)(1))
8. CO2 Cascade Systems
Hussmann stated that, in California, Title 24 \23\ allows the use
of CO2 cascade systems,\24\ and that compliance with both
Title 24 and amended DOE standards could make development of a
CO2 cascade system difficult. (Hussmann, Public Meeting
Transcript, No. 31 at p. 153) True stated that there is no DOE test
procedure for cascade systems, and that there has been no consideration
of cascade systems in the standards-setting process. (True, Public
Meeting Transcript, No. 31 at p. 154)
---------------------------------------------------------------------------
\23\ ``Title 24'' refers to Title 24, part 6 of the California
Code of Regulations, and includes California's energy efficiency
standards for residential and nonresidential buildings. This is
available at: www.energy.ca.gov/title24/.
\24\ A cascade system is a type of secondary-loop refrigeration
cycle that uses a higher-temperature refrigerant to condense the
secondary refrigerant, in this case carbon dioxide, which is then
used to cool the refrigerated space.
---------------------------------------------------------------------------
DOE agrees with True that secondary coolant systems, including
CO2 cascade systems, are not being addressed in this
rulemaking, partially due to the lack of an industry-accepted method of
test for this type of equipment. DOE articulated its rationale in the
preliminary analysis TSD chapter 2 and maintains the position in this
notice.
9. Coverage of Existing Cases Undergoing Refurbishments or Retrofits
During the NOPR analysis period, DOE received a stakeholder inquiry
as to whether the Department's energy conservation standards apply only
to new equipment manufactured or imported after the compliance date, or
to existing equipment undergoing retrofits and refurbishments as well.
DOE wishes to clarify that energy conservation standards apply only
to new equipment, and not to previously installed equipment undergoing
retrofits or refurbishments. As DOE stated in its Certification,
Compliance and Enforcement final rule published on March 7, 2011,
manufacturers and private labelers must certify to DOE that any covered
equipment meets the applicable standard before distributing that
equipment into U.S. commerce. DOE's authority covers newly manufactured
equipment and does not extend to rebuilt and refurbished equipment. 76
FR 12422, 12426 and 12437 (March 7, 2011).
10. Components Shipped as After-Market Additions
DOE has received inquiries regarding open commercial refrigerated
display cases that may be shipped with doors to be installed in the
field. Stakeholders have sought guidance on whether equipment that is
produced and shipped in this manner would be subject to the standards
applicable to an open case or subject to the standards applicable to a
closed case.
DOE's response to the issue of components shipped as after-market
additions will be addressed in the on-going test procedure rulemaking.
11. Definition of Hybrid Equipment
During the NOPR analysis period, DOE received a comment regarding
the definition of hybrid equipment.
[[Page 55905]]
Specifically, the stakeholder inquired about the proper definition of
commercial hybrid refrigerator-freezer and the applicable standards.
DOE's response to the issue of hybrid equipment will be addressed
in the on-going test procedure rulemaking.
12. Coverage of Commercial Refrigeration Equipment With Drawers
DOE has received several comments from interested parties regarding
the coverage of commercial refrigeration equipment units with drawers.
Specifically, interested parties inquired if commercial refrigeration
equipment units with drawers were covered under the existing and
proposed energy conservation standards for commercial refrigeration
equipment and, so, (1) which equipment families they belong to; and (2)
what the test procedure requirements are for these units.
DOE's response to the issue of commercial refrigeration equipment
with drawers will be addressed in the on-going test procedure
rulemaking.
B. Test Procedures
DOE received several comments that pertain only to the test
procedure rulemaking. DOE responded to these and similar comments in
the 2012 test procedure final rule. 77 FR 10298, 10300, and 10307 (Feb.
21, 2012). Specifically, DOE received comments from multiple interested
parties that many cases are installed with remote lighting controls
that are operated at the aisle or store level (Southern Store Fixtures,
Public Meeting Transcript, No. 31 at pp. 190-91, 194; Zero Zone, Public
Meeting Transcript, No. 31 at p. 196; California Investor Owned
Utilities, No. 42 at p. 4) and, according to the Northwest Energy
Efficiency Alliance (NEEA), that cases wired uniquely to receive a
remote energy management system should receive credit in the DOE test
procedure. (NEEA, Public Meeting Transcript, No. 31 at p. 195) DOE also
received comments from interested parties that an accepted test method
for secondary coolant systems, especially those with two-phase flow,
had not been developed and validated. (True, Public Meeting Transcript,
No. 31 at pp. 162-64; Southern Store Fixtures, Public Meeting
Transcript, No. 31 at pp. 164-65; AHRI, Public Meeting Transcript, No.
31 at pp. 165-66) Because these comments pertain only to the test
procedure for commercial refrigeration equipment and not the potential
standards or analysis discussed in this rulemaking, DOE addressed these
comments in the 2012 test procedure final rule and has not addressed
them further here.
NEEA stated that DOE's efforts to conduct a robust standards
analysis are hindered by DOE's failure to resolve some test procedure
issues and the fact that test procedure limitations have resulted in
the removal of some technologies from consideration. Among these
issues, according to NEEA, are the inability of the test procedure to
measure savings from anti-sweat heater controls and the screening out
of variable-speed and variable-capacity components based on the
perceived limitations of the test procedure. (NEEA, No. 36 at p. 1)
DOE recognizes stakeholders' desire that the DOE test procedure
better measure the performance of variable-speed and variable-capacity
devices. However, in the 2012 test procedure final rule, DOE stated
that testing of part-load technologies would significantly increase the
burden on manufacturers to test and certify equipment and is not
justified given the minimal efficiency gains achieved by this
equipment. 77 FR 10308 (Feb. 21, 2012). As such, DOE maintained that
the fluctuations in refrigeration load experienced by equipment
undergoing the DOE test procedure are sufficiently representative of
average use, and that the establishment of additional test requirements
would impose an undue burden on manufacturers. When evaluating amended
energy conservation standards, DOE bases its engineering analysis on
the energy efficiency of a unit as tested by the DOE test procedure.
DOE has assessed the potential energy savings associated with
technologies as tested under the test procedure established in DOE's
2012 test procedure final rule and considered technologies based on the
factors prescribed by EPCA. (42 U.S.C. 6295(o)(2)(B)(i) and 6316(e)(1))
C. Market and Technology Assessment
When beginning an energy conservation standards rulemaking, DOE
develops information that provides an overall picture of the market for
the equipment concerned, including the purpose of the equipment, the
industry structure, and market characteristics. This activity includes
both quantitative and qualitative assessments based primarily on
publicly available information (e.g., manufacturer specification
sheets, industry publications) and data submitted by manufacturers,
trade associations, and other stakeholders. The subjects addressed in
the market and technology assessment for this rulemaking include: (1)
Quantities and types of equipment sold and offered for sale; (2) retail
market trends; (3) equipment covered by the rulemaking; (4) equipment
classes; (5) manufacturers; (6) regulatory requirements and non-
regulatory programs (such as rebate programs and tax credits); and (7)
technologies that could improve the energy efficiency of the equipment
under examination. DOE researched manufacturers of commercial
refrigeration equipment and made a particular effort to identify and
characterize small business manufacturers. See chapter 3 of the NOPR
TSD for further discussion of the market and technology assessment.
1. Equipment Classes
In evaluating and establishing energy conservation standards, DOE
generally divides covered equipment into classes by the type of energy
used, or by capacity or other performance-related feature that
justifies a different standard for equipment having such a feature. (42
U.S.C. 6295(q) and 6316(e)(1)) In deciding whether a feature justifies
a different standard, DOE must consider factors such as the utility of
the feature to users. Id. DOE normally establishes different energy
conservation standards for different equipment classes based on these
criteria.
Commercial refrigeration equipment can be divided into various
equipment classes categorized by specific physical and design
characteristics. These characteristics impact equipment efficiency,
determine the kind of merchandise that the equipment can be used to
display, and affect how the customer can access that merchandise. Key
physical and design characteristics of commercial refrigeration
equipment are the operating temperature, the presence or absence of
doors (i.e., closed cases or open cases), the type of doors used
(transparent or solid), the angle of the door or air curtain \25\
(horizontal, semivertical, or vertical), and the type of condensing
unit (remote condensing or self-contained). The following list shows
the key characteristics of commercial refrigeration equipment that DOE
developed as part of the January 2009 final rule (74 FR 1099-1100 (Jan.
9, 2009)), and used during the Framework and preliminary analysis for
this rulemaking:
---------------------------------------------------------------------------
\25\ An air curtain is a continuously moving stream of air,
driven by fans, which exits on one side of the opening in an open
refrigerated case and re-enters on the other side via an intake
grille. The function of the air curtain is to cover the opening in
the case with this sheet of air, which minimizes the infiltration of
warmer ambient air into the refrigerated space.
---------------------------------------------------------------------------
1. Operating Temperature
Medium temperature (38 [deg]F, refrigerators)
[[Page 55906]]
Low temperature (0 [deg]F, freezers)
Ice-cream temperature (-15 [deg]F, ice-cream freezers)
2. Door Type
Equipment with transparent doors
Equipment with solid doors
Equipment without doors
3. Orientation (air-curtain or door angle)
Horizontal
Semivertical
Vertical
4. Type of Condensing Unit
Remote condensing
Self-contained
Additionally, because EPCA specifically sets a separate standard
for refrigerators with a self-contained condensing unit designed for
pull-down temperature applications and transparent doors, DOE plans to
create a separate equipment class for this equipment. (42 U.S.C.
6313(c)(3)) DOE included this equipment in the form of a separate
family with a single class (PD.SC.M) for the preliminary analysis. A
total of 49 equipment classes were created, and these are listed in
chapter 3 of the NOPR TSD using the nomenclature developed in the
January 2009 final rule. 74 FR 1100 (Jan. 9, 2009).
During the April 2011 preliminary analysis public meeting and in
subsequent written comments, a number of stakeholders addressed issues
related to proposed equipment classes and the inclusion of certain
types of equipment in the analysis. These topics are discussed in this
section.
a. Equipment Classification
Several stakeholders commented on the general equipment
classification structure used by DOE in the preliminary analysis.
Traulsen stated that, with respect to the currently defined classes of
equipment, there are subcategories DOE failed to specify, including
upright units (1-, 2-, and 3-section; reach-in; pass-through; roll-in;
and roll-through) and undercounter units (categorized by length in
inches). (Traulsen, No. 45 at p. 1) On the other hand, Zero Zone
approved of DOE's proposed equipment classes, as presented in the
preliminary analysis TSD. (Zero Zone, No. 37 at p. 4) AHRI stated that
the equipment class nomenclature developed by DOE in the January 2009
final rule was appropriate. (AHRI, No. 43 at p. 2)
In response to Traulsen's comment, DOE recognizes that there are
subcategories of equipment within certain equipment families and
classes, each with varying geometries. However, DOE believes that the
equipment classes it has developed and modeled are broad enough to
account for the variety of equipment incorporated within each of them,
including the unit types described in Traulsen's comment. In performing
its engineering analysis, DOE selected representative unit sizes and
feature sets for modeling so as to best represent a typical unit for
each given class. Regarding the comments from Zero Zone and AHRI, DOE
has retained the equipment classes and nomenclature adopted in the
January 2009 final rule (74 FR 1100 (Jan. 9, 2009)) and used in the
Framework document and preliminary analysis for this NOPR.
b. Application Temperature Equipment
DOE received feedback on the subject of application temperature
equipment \26\ at the April 2011 preliminary analysis public meeting
and in written comments. NEEA stated that the difference between DOE
rating temperatures and application temperatures can be significant,
and commented that allowing manufacturers to demonstrate that equipment
meets a standard defined by rating temperature by testing at
(presumably higher) application temperatures would equate to a very
lenient standard for such equipment. (NEEA, Public Meeting Transcript,
No. 31 at pp. 26-27) NEEA added that, for such equipment, the
difference between ambient conditions and internal conditions would be
much lower than for equipment maintaining a temperature of 38 [deg]F,
and that daily energy use for this equipment would be lower as well.
Thus, while NEEA agreed that cabinets should be tested at the lowest
temperature they can achieve, NEEA stated that, if the standard for
such cabinets is set equal to the level of energy use of cabinets
designed to hold 38[emsp14][deg]F, that equipment may be much less
efficient than what could be cost-effectively possible were separate
standards set for the equipment. (NEEA, No. 36 at p. 2) NEEA further
asked why DOE was not proposing to set separate standards for
application temperature equipment. (NEEA, Public Meeting Transcript,
No. 31 at pp. 26-27) NEEA stated that, while DOE has dismissed concerns
regarding application temperature equipment because it is roughly 2
percent of the market, NEEA has heard from manufacturers that it is a
growing market segment and added that 2 percent is, in its opinion, a
nontrivial portion of the market. (NEEA, No. 36 at pp. 1-2)
---------------------------------------------------------------------------
\26\ Application temperature equipment is equipment that is
designed to operate at temperatures distinctly different from the
DOE rating temperatures of 38 [deg]F, 0 [deg]F, and -15 [deg]F.
Examples include wine chillers and candy cases, which operate in the
range of 45 to 60 [deg]F.
---------------------------------------------------------------------------
Moreover, NEEA asserted that DOE failed to acknowledge the
differences between high-temperature equipment (e.g., floral cases) and
ice storage cabinets, and suggested two new equipment classes for these
products: One for equipment with cabinet temperature greater than
40[emsp14][deg]F and one for ice storage cabinets that can operate
outdoors and are designed to hold temperatures between 20 and
30[emsp14][deg]F. (NEEA, No. 36 at p. 2; NEEA, Public Meeting
Transcript, No. 31 at pp. 26-27) NEEA further opined that ice storage
cabinets in particular are often used in environments not well
represented by the test procedure conditions, namely outdoor
environments. NEEA added that to allow the test procedure to not
represent the operating conditions of this equipment would violate 42
U.S.C. 6295(2). (NEEA, No. 36 at pp. 1-2)
True stated that, during the test procedure public meeting,
interested parties suggested that the lowest application temperature
should include ice storage and be in the mid-twenties. (True, Public
Meeting Transcript, No. 31 at p. 177) Traulsen commented that it did
not have an issue with testing equipment at internal temperatures that
are higher than the rating temperatures, such as 50[emsp14][deg]F or
10[emsp14][deg]F. However, Traulsen expressed concern regarding
equipment that is designed to run at internal temperatures that are
lower than the rating temperature, or ambient temperatures that are
higher than the test ambient temperature. Specifically, Traulsen stated
that this equipment inherently uses more energy at the design
conditions (often very high ambient temperatures and relative
humidities) and may also use more energy at the designated rating
conditions (the temperature and relative humidity values specified by
ASHRAE 72-2005) as well. Traulsen provided the examples of a piece of
equipment designed to hold ice cream at -40[emsp14][deg]F and a unit
designed for 105[emsp14][deg]F ambient conditions. (Traulsen, No. 45 at
p. 2)
In the 2012 test procedure final rule, DOE adopted provisions that
allow for the testing of commercial refrigeration equipment that cannot
operate at its prescribed rating temperature at the ``lowest
application product temperature.'' DOE defined ``lowest application
product temperature'' as ``the integrated average temperature closest
to the specified rating temperature for a given piece of equipment
achievable and repeatable, such that the integrated average temperature
of a given unit is within 2[emsp14][deg]F of the reported
lowest application
[[Page 55907]]
product temperature for that basic model.'' DOE also applied this
provision to all refrigerators, freezers, and ice-cream freezers. 77 FR
10302 (Feb. 21, 2012).
DOE maintains that units tested at the lowest application product
temperature will still be required to meet the applicable energy
conservation standard based on their equipment class. The required
standard level will not change based on the different internal
temperature at which a particular unit is tested. While DOE understands
that this requirement makes it easier for a small number of units (that
cannot be tested at the prescribed rating temperatures) to meet the
current standards, DOE does not believe that establishing separate
equipment categories for these niche types of equipment would be
justified because the energy savings achievable with such standards
would be relatively small. In response to NEEA's suggestion that ice
chests designed to operate outdoors be tested at alternate ambient
conditions, DOE notes that its test procedure prescribes only one
ambient condition. DOE believes this ambient condition is adequately
representative of the operating conditions for the majority of
commercial refrigeration equipment. Additionally, DOE has seen no
evidence that a unit designed to perform at stricter conditions than
the DOE test procedure (i.e., higher ambient temperature and/or
humidity) would have difficulty meeting a standard at the conditions
prescribed in the test procedure.
In response to NEEA's assertion that application temperature
equipment is a growing commercial refrigeration equipment market
segment, DOE has no data to substantiate the assertion. DOE has not
collected shipments data indicating that such a trend exists, nor have
manufacturer interviews indicated that this is the case. Application
temperature equipment represents a niche equipment market, and this
equipment has been in existence for a long time (e.g., candy cases,
wine cases, floral cases). DOE has no evidence indicating that this
market segment will grow disproportionately to other equipment types.
DOE also agrees with Traulsen that testing these units at a higher
integrated average temperature does not necessarily mean that the unit
will use less energy. The variability in energy use and the impact of
variation in integrated average temperature will vary based on case
type, geometry, and configuration. This variation would make setting a
consistent standard for high-temperature or intermediate-temperature
equipment impractical, because any value chosen would not be
representative of all cases.
c. Open Cases
At the April 2011 preliminary analysis public meeting and in
written comments, numerous stakeholders revisited the issue of DOE's
proposed decision to retain separate standards for open and closed
cases. Earthjustice first raised the issue, inquiring about the
evidence behind DOE's assertion that open cases provide distinct
utility with respect to features such as unobstructed view and access
to product, as well as simplified stocking, cleaning, and maintenance.
Earthjustice continued by stating that it wished to renew its request
that DOE continue grouping open and doored cases together, adding that
any determination of utility is required to be based on substantial
evidence. (Earthjustice, Public Meeting Transcript, No. 31 at pp. 23,
25) AHRI responded that the distinction between the two types of cases
was made in the language of EPACT 2005, which was developed through
negotiations among AHRI and other parties, including advocacy groups.
(AHRI, Public Meeting Transcript, No. 31 at pp. 24-25) Southern Store
Fixtures added that open and doored cases are two distinct types of
equipment with different applications, and that they cannot be combined
into a single category. Southern Store Fixtures also stated that
substantial analysis and evidence would have to be provided in order to
show that there would be no product loss or sales loss as a result of
moving from open to doored cases. (Southern Store Fixtures, Public
Meeting Transcript, No. 31 at pp. 28-29)
In further discussion at the public meeting, Earthjustice stated
that it had submitted to DOE a study conducted by ASHRAE,\27\ as well
as a Swedish study, to support Earthjustice's assertion that product
sales are unaffected by the presence of door on cases. (Earthjustice,
Public Meeting Transcript, No. 31 at p. 29) However, Southern Store
Fixtures stated that it would dispute the ASHRAE study regarding open
cases, and that it would articulate its argument later. (Southern Store
Fixtures, Public Meeting Transcript, No. 31 at pp. 29-30) Additionally,
the Swedish study was retracted from submission due to copyright
issues.
---------------------------------------------------------------------------
\27\ Fricke, B.A., and B.R. Becker. Comparison of Vertical
Display Cases: Energy and Productivity Impacts of Glass Doors Versus
Open Vertical Display Cases. December 2009. American Society of
Heating, Refrigerating and Air-Conditioning Engineers, Atlanta, GA.
Report No. RP-1402. https://rp.ashrae.biz/researchproject.php?rp_id=580
---------------------------------------------------------------------------
Stakeholders also provided comments regarding the subject of
metrics of utility. Pacific Gas and Electric (PG&E) stated that, in its
opinion, sales would be the most obvious metric, along with the ability
to keep product at the desired temperature. However, PG&E asked that
DOE elaborate on how it would quantify what constitutes utility. (PG&E,
Public Meeting Transcript, No. 31 at pp. 30-31) The California Investor
Owned Utilities (CA IOUs) included a similar request in its written
comment, asking that DOE clarify what it specifically considers as
criteria to justify unique utility. CA IOUs also asked that DOE
continue to assess options that would enable open cases to consume
amounts of energy similar to those used by equivalent closed cases. (CA
IOUs, No. 42 at p. 5) Zero Zone, continuing on the subject of utility,
stated that, in its opinion, there may have been utility differences
between open and doored cases at one time, but since that time it
believed the market had changed and this difference no longer exists.
As a result, Zero Zone supported the comments suggesting that DOE
combine the open and doored display case classes. (Zero Zone, Public
Meeting Transcript, No. 31 at p. 32)
The Appliance Standards Awareness Project (ASAP), while not
commenting specifically on equipment utility, stated that it believed
the issue of open versus closed cases is very important from an NES
perspective, as the preliminary analysis documents showed that open
cases consume two to three times as much energy as comparable doored
cases. (ASAP, Public Meeting Transcript, No. 31 at p. 32) CA IOUs
agreed with DOE's assessment that open, low-temperature vertical and
semivertical cases represent small portions of the market. Further, it
pointed out that the California Energy Commission (CEC) is proposing to
require doors on all upright, low-temperature cases at the State level.
(CA IOUs, No. 42 at p. 5)
During the preliminary analysis comment period, Earthjustice
submitted a detailed comment outlining its position on the issue of
open cases. Earthjustice expressed its belief that separate standards
for open cases are neither warranted nor required by EPCA, as well as
its opinion that such cases provide no capacity or performance features
justifying separate standards, once again referencing the previously
submitted ASHRAE and Swedish studies. Implicitly in response to
statements made by AHRI at the public meeting, Earthjustice added that
EPACT 2005's codification of standards for equipment with doors does
not require DOE to maintain separate
[[Page 55908]]
classes for equipment without doors. (Earthjustice, No. 35 at p.1)
Earthjustice expressed the belief that DOE's intention to adhere to its
previous stance that the presence or absence of doors on cases affects
case utility ignores the evidence that has been presented in the form
of the aforementioned ASHRAE and Swedish sales studies, and that EPCA
requires DOE's factual conclusions to be supported by substantial
evidence which, according to Earthjustice, DOE has not provided.
(Earthjustice, No. 35 at p. 2)
Earthjustice reiterated its disagreement with DOE's assertion in
the preliminary analysis that open cases provide utility in the form of
``unobstructed view of and access to product,'' citing the two sales
studies that it believed to conclude otherwise. Earthjustice also
disagreed with DOE's statement that open cases simplify stocking,
cleaning, and maintenance, questioning how the need to prop a door open
would impede stocking a case. On the contrary, Earthjustice asserted,
the presence of doors would reduce warm air infiltration and the
opportunities for items to fall out of the case onto the store floor,
thereby reducing stocking burdens and losses due to products damaged
during stocking. Furthermore, Earthjustice stated that DOE has not
suggested shorter life cycles for equipment with doors, something it
believes would be a logical outcome were the presence of doors to
impair cleaning and maintenance operations. (Earthjustice, No. 35 at p.
2)
Earthjustice then presented a legal argument, stating that, in
maintaining that 42 U.S.C. 6295(o) prevents the merging of equipment
classes for equipment with and without doors, DOE has misconstrued the
statutory authority for whether separate classes are required.
Earthjustice asserted that DOE has, in its preliminary analysis TSD,
attempted to shift the evidentiary burden onto the stakeholders who
support equivalent standards for the two equipment types. Earthjustice
commented that, in dismissing the findings of the ASHRAE study, DOE has
violated the plain language of EPCA, which requires that a
preponderance of the evidence must support the position that open cases
provide a unique feature in order for DOE to conclude that separate
equipment classes are required. (Earthjustice, No. 35 at pp. 2-3)
Earthjustice suggested that, should DOE decide not to merge classes
for open and closed cases, DOE should adopt standards reflecting the
overlapping applications for the equipment. Earthjustice stated that
because equipment with doors is economically advantageous on an LCC
basis, encouraging a shift to equipment with doors will increase the
monetary savings from this rulemaking. (Earthjustice, No. 35 at p. 3)
By adopting highly cost-effective standards for equipment with doors as
well as standards that would result in LCC increases for open cases,
Earthjustice suggested, DOE could encourage consumers to purchase cases
with transparent doors. Earthjustice stated that DOE has taken a
market-transforming approach in the past. Specifically, Earthjustice
referenced the small electric motors rulemaking (75 FR 10874 (March 9,
2010)), in which DOE maintained standards for two types of general
purpose single-phase motors but tailored those standards to encourage
the market to shift to one of those types. (Earthjustice, No. 35 at p.
3) Similarly, Earthjustice added, in the rulemaking for commercial
clothes washers (75 FR 1122 (Jan. 8, 2010)), DOE adopted standards set
at the max-tech level for top-loading washers, but less aggressive
standards for front-loading washers, partially to encourage the growth
of front-loader market share. In conclusion, Earthjustice suggested
that DOE adopt the max-tech level for equipment without doors and a
more economically advantageous standard for equipment with doors, thus
encouraging the market to shift to doored cases. (Earthjustice, No. 35
at pp. 3-4)
DOE understands the concern of some stakeholders regarding the
issue of open cases. While some stakeholders have reiterated their
previous positions on this topic, DOE does not believe that any new
data has been presented since the Framework document public meeting
(May 2010) that would warrant a change in DOE's stance as outlined in
chapter 2 of the preliminary analysis TSD. DOE maintains that to set
standards discouraging users from purchasing open cases would violate
its statutory charge to preserve the availability of features and
performance characteristics currently on the market. While Earthjustice
again cited the ASHRAE study and the Swedish study comparing sales from
open and closed cases, DOE still maintains its position from the
preliminary analysis. After having reviewed the ASHRAE study, DOE
believes that because the data were collected only under very specific
conditions in a controlled environment and with a limited range of
merchandise types, the data are insufficient to drive a conclusion
applicable across the broad wide range of open case applications and
end uses. As one example, DOE points out that neither study includes
fresh produce and packaged meat products in the analysis of impact on
product sales, and that these are types of merchandise that
manufacturers have mentioned as benefiting from the use of open cases.
Regarding the questions about the definition of utility raised by
Earthjustice and PG&E, EPCA states that, in setting or amending
standards, the Secretary must consider, among other factors, any
lessening of the utility or performance of the covered products likely
from the imposition of the standard. (42 U.S.C. 6295(o)(2)(B)(i)(IV)
and 6316(e)(1)) EPCA further states that the Secretary may not
prescribe an amended or new standard under this section if the
Secretary finds (and publishes such finding) that interested persons
have established by a preponderance of the evidence that the standard
is likely to result in the unavailability in the United States in any
covered product type (or class) of performance characteristics
(including reliability), features, sizes, capacities, and volumes that
are substantially the same as those generally available in the United
States at the time of the Secretary's finding. (42 U.S.C. 6295(o)(4)
and 6316(e)(1))
Thus, while the term ``utility'' is not specifically defined in
EPCA, it is used in conjunction with the term ``performance''; the
statute further prohibits DOE from setting standards that result in the
unavailability of performance characteristics or features from the U.S.
market. In this case, DOE has determined that customer access to
product is a distinct performance characteristic or feature in the case
of commercial refrigeration equipment and believes, based on its
research and discussions with experts and members of industry, that
open cases provide more convenient access to products than do closed
cases, as well as providing other measures of utility, such as ease of
stocking and cleaning.
In response to the comment by Earthjustice that DOE violated the
plain language of EPCA, which requires that a preponderance of the
evidence must support the position that open cases provide a unique
feature in order to conclude that separate equipment classes are
required, DOE refers to the language found at 42 U.S.C. 6295(o)(4) and
6316(e)(1). This language states that the Secretary may not issue a
standard if interested persons have established by a preponderance of
the evidence that the standard is likely to result in the
unavailability in the United States of any covered product type (or
class) of performance characteristics (including
[[Page 55909]]
reliability), or features currently available. One statement suggesting
that the elimination of open cases would have this effect was presented
at the April 2011 preliminary analysis public meeting, when Southern
Store Fixtures explicitly stated that open and doored cases are two
different equipment types, adding that ``substantial analysis and
evidence would have to be provided'' to ensure that there would be no
detriment to performance by combining the classes. (Southern Store
Fixtures, Public Meeting Transcript, No. 31 at pp. 28-29) DOE has
agreed with this stance in its past and current proceedings, as
evidenced by the retention of separate equipment types for open and
closed cases in its analyses. At the commercial refrigeration equipment
test procedure NOPR public meeting, Coca-Cola, a major purchaser of
display cases, cited internal studies concluding that the presence of
doors on displays near registers can decrease sales by 35 to 50
percent. (Docket No. EERE-2010-BT-TP-0034, Coca-Cola, No. 19 at p. 90)
These study results stand in contrast to the assertion by Earthjustice
that the two sales studies it provided show that open cases do not
provide utility in the form of unobstructed view of and access to
product. The conflict between the sets of data suggests that, while
both conclusions may be correct in the specific contexts of the
respective studies, in some applications the presence of doors on cases
can adversely affect visibility and access to product. Therefore,
elimination of open cases from the market would equate to the
unavailability of this performance characteristic, in direct violation
of (42 U.S.C. 6295(o)(2)(B)(i)(IV) and 6316(e)(1)).
In its manufacturer interviews, DOE spoke with several
manufacturers who provided anecdotal data regarding the utility of open
cases. They pointed to increased sales due to ``impulse buys,'' stating
that users of open cases reported generating higher revenues out of
those cases. Manufacturers also stated that open cases allow for vastly
easier stocking of high-margin items including produce and meat. The
ease of stocking these items is particularly important to retailers,
because open cases are stocked continuously while shoppers are in the
store, making simultaneous, unobstructed access to the case by both the
employee and customer an important utility issue. Manufacturers
reaffirmed during these interviews that unobstructed view of and access
to product, as well as simplified stocking, as previously referenced by
DOE, were significant attributes of open cases. Furthermore, the
manufacturers pointed to better accommodation of non-standard-sized
merchandise within these cases. The information that DOE has gathered
regarding market perceptions at conferences and other venues has
indicated that many grocery store managers and operators strongly
prefer open cases to closed cases, as they perceive that product
visibility from a distance is a very strong factor in sales. Engineers
for large chain grocery stores have stated that their efforts to
convert even part of the grocery store equipment from open cases to
closed cases, during store remodeling, have been met with opposition
from store managers due to their perception that open cases lead to
higher sales compared to closed cases. This finding is in contrast to
the statement by Zero Zone that utility differences between open and
doored cases no longer exist. The statement by Zero Zone also conflicts
with the internal study data quoted by Coca-Cola, in which that company
noted a significant loss in sales due to the presence of doors on
display cases in certain settings. As the result of a collective review
of the data obtained through its public meetings, manufacturer
interviews, and conferences, DOE believes that its position of setting
separate standards for open and closed cases is reasonable and based on
the distinct performance characteristics of each class, as shown by a
preponderance of the evidence presented. DOE notes that manufacturers
did not cite differences in maintenance and cleaning between open and
closed cases, but DOE believes the other utility and performance
factors cited, including ease of access to the product, increased
visibility, and ease of use during operations and maintenance, are
sufficient to warrant maintenance of two separate equipment classes.
DOE understands AHRI's statement that the distinction between case
types was made in the EPACT 2005 language, which set standards for
closed cases and required DOE to set standards for open cases (42
U.S.C. 6313(c)), and Earthjustice's response that the codification of
separate standards does not require DOE to maintain different classes.
However, DOE is restricted by EPCA from prescribing energy conservation
standards in any manner that would lessen utility to the customer or
result in the unavailability of performance characteristics or features
currently on the market. (42 U.S.C. 6295(o)(2)(B)(IV), 6295(o)(4), and
6316(e)(1)) Therefore, DOE continues to consider open and doored cases
to be two distinct equipment types due to the evident performance and
feature differences between them.
DOE acknowledges ASAP's statement that open cases have been shown
to consume more energy than doored cases and CA IOU's assertion that
open, low-temperature cases comprise a small market share. However,
independent of these factors, as stated above, DOE is forbidden by EPCA
from setting standards that would result in the unavailability on the
market of the performance characteristics and features that open cases
exhibit. (42 U.S.C. 6295(o)(4) and 6316(e)(1)) Therefore, DOE, through
its analyses, sought to develop separate proposed standard levels for
open and closed cases that would result in the maximum economically
justified and technologically feasible energy savings for the
respective equipment.
Regarding Earthjustice's assertion that DOE failed to suggest
shorter life cycles for commercial refrigeration equipment with doors,
DOE points out that the replacement of doors is one of the factors
contributing to repair costs (see chapter 8 of the NOPR TSD). Damage to
doors does not necessarily shorten the life of the equipment itself.
With respect to Earthjustice's suggestion that DOE force a market
shift from open to closed cases by adopting cost-effective standards
for doored cases but less economically attractive standards for open
cases, DOE is compelled by EPCA to examine the economic and technical
justification of all equipment under the same criteria and with the
same rigor. (42 U.S.C. 6295(o) and 6316(e)(1)) In other words, DOE must
independently determine the maximum technologically feasible and
economically justified standard level for each equipment class.
Therefore, DOE examined all TSLs equally using the same quantitative
metrics, such as LCC and national NPV, and selected a proposed standard
level using these criteria. In response to the suggestion that DOE
adopt a market-transforming approach in which it would intentionally
shift market share toward doored cases, DOE believes that to do so
would violate the EPCA provision barring DOE from setting standards
that result in the lessening of utility or unavailability of
performance characteristics. (42 U.S.C. 6295(o)(4) and 6316(e)(1))
Because DOE has determined that open cases present a unique set of
performance characteristics and features to the market, to set
standards eliminating their manufacture and sale would violate 42
U.S.C. 6295(o)(4) and 6316(e)(1). DOE notes that in the
[[Page 55910]]
rulemakings for small electric motors and commercial clothes washers
that Earthjustice cited, DOE was careful to set standards such that
they would not result in the unavailability of features or performance
characteristics. For example, the commercial clothes washers final
rule, published by DOE on January 8, 2010, states that the amended
efficiency levels can be met by either top- or front-loading designs.
In fact, the clothes washers final rule notes that there were vertical-
axis top-loading and horizontal-axis frontloading washers on the market
at the time that already met the higher standard. Thus, DOE concluded,
consumers would have the same range of clothes washer options,
including features valued by consumers such as door placement,
capacity, water temperature, and adjustable load sizes. 75 FR 1122,
1133-34 (Jan. 8, 2010). In the case of commercial refrigeration
equipment, DOE believes that separate equipment classes are necessary
to preserve the unique features provided by open refrigerated display
cases, established by interested parties as discussed above. DOE does
not believe it would be possible to combine standards classes or
arbitrarily set more aggressive standards for open cases without
violating EPCA provisions regarding utility/product availability. (42
U.S.C. 6295(o)(2)(B) and 6316(e)(1)) As a result, DOE has maintained
the position regarding utility of open cases that it asserted in the
January 2009 final rule and in its preliminary analysis and framework
document. 74 FR 1099 (Jan. 9, 2009).
DOE understands that there are other options available in the
market to reduce the energy consumption of open cases, such as
retrofitting doors to open cases, and that DOE's energy conservation
standards may not be the only factor related to improving the energy
efficiency of open cases. DOE believes that, in general, management
staff of grocery stores is well aware of high energy costs because
energy costs consistently figure as one of the top five issues in the
Food Marketing Institute (FMI) Worry Index,\28\ which is obtained
through surveys of the food retailers regarding the most important
issues in their businesses that cause them to ``worry.'' Some stores
have retrofitted their open cases with transparent doors to achieve
substantial savings in energy costs. DOE also recognizes that the
market for retrofitting open, multi-deck display cases with transparent
doors is steadily increasing. In addition, features such as night
curtains and more-efficient air curtains are also available in the
market to reduce the energy consumption of open cases.
---------------------------------------------------------------------------
\28\ FMI Research. The Food Retailing Industry Speaks 2011.
2011. Food Marketing Institute, Arlington, VA.
---------------------------------------------------------------------------
In its NOPR analyses, DOE modeled open and closed display cases
separately, and has included separate proposed standards for the two
types of equipment in this notice.
d. Service Over Counter Equipment
AHRI voiced concerns about self-contained service over counter
(SOC) equipment,\29\ stating that DOE incorrectly determined that SOC
equipment was covered by EPACT 2005 and that this error resulted in an
overly stringent standard being applied to the equipment. (AHRI, No. 43
at p. 2) AHRI commented that it, working with other stakeholders, had
proposed legislative language that defines SOC equipment and
establishes minimum standards for that equipment, which is included in
the Implementation of National Consensus Appliance Agreements Act of
2011, S. 398, 112th Cong. (2011). AHRI asked that DOE adopt the
definition of SOC equipment that AHRI had proposed in that legislation,
and also asked DOE to use TDA as a normalization metric for this
equipment. (AHRI, No. 43 at p. 2)
---------------------------------------------------------------------------
\29\ ``Service over counter'' means equipment with sliding or
hinged doors in the back intended for use by sales personnel for
loading and retrieving items for sale, and fixed, sliding or hinged
transparent panels in the front for displaying merchandise. The
equipment has a height no greater than 66 inches and is intended to
serve as a counter for transactions between sales personnel and
customers.
---------------------------------------------------------------------------
With respect to the statement by AHRI that DOE has incorrectly
determined that SOC equipment is within the scope of coverage of EPACT
2005, DOE disagrees, having determined that SOC.SC.M equipment meets
the statutory definition of a self-contained commercial refrigerator
with transparent doors in 42 U.S.C. 6311(9)(A). EPCA does not specify
equipment subsets such as SOC equipment beyond defining the terms
``commercial refrigerator,'' ``freezer,'' and ``refrigerator-freezer''
and ``self-contained condensing unit,'' among other definitions related
to this equipment. (42 U.S.C. 6311(9)) In December 2009, DOE's Office
of Hearings and Appeals (OHA) responded to an application for exception
relief from a manufacturer of SOC equipment. This manufacturer argued
that it was entitled to relief because its SOC units could not meet the
EPACT 2005 standards for self-contained equipment with doors. OHA
responded that DOE did not have jurisdiction to consider such
exceptions for equipment covered by the statutorily mandated standards.
(Case No. TEE-0066, Dec. 29, 2009)
During the preliminary engineering analysis for this rulemaking,
DOE confirmed that the EPACT 2005 standards for SOC.SC.M (42 U.S.C.
6313(c)(2)) could not be achieved at even the max-tech level (see
chapter 2, section 2.2.1.5, of the preliminary analysis TSD).
Therefore, DOE agrees with AHRI's comment that the standard set by
EPACT 2005 was too stringent for equipment belonging to equipment class
SOC.SC.M. Consequently, DOE had excluded SOC.SC.M equipment from the
preliminary analysis.\30\
---------------------------------------------------------------------------
\30\ DOE had also excluded SOC.SC.L, a low-shipments-volume
equipment class, from the preliminary analysis as well, as it too is
covered under standards prescribed by EPACT 2005 for freezers with
transparent doors found at 10 CFR 431.66(b). Due to its similarity
in design, construction, and performance to SOC.SC.M equipment, DOE
presumed that it too would not be able to meet the standards set by
EPACT 2005 for self-contained equipment with transparent doors.
---------------------------------------------------------------------------
In December 2012, during the NOPR analysis for this rulemaking, the
American Energy Manufacturing Technical Corrections Act (AEMTCA),
Public Law 112-210 (Dec. 18, 2012) amended EPCA to establish new
standards for self-contained service over counter medium temperature
commercial refrigerators. (42 U.S.C. 6313(c)(4)) The amendment reduces
the stringency of the standard applicable to this equipment. AEMTCA
prescribed the standard for SOC.SC.M equipment manufactured on or after
January 1, 2012 as 0.6 x TDA + 1.0, expressed in kilowatt hours per
day. (42 U.S.C. 6313(c)(4)(A))
AEMTCA also amended EPCA to direct DOE to determine, within 3 years
of enactment of the new standard for SOC.SC.M, whether the standard
should be amended. (42 U.S.C. 6313(c)(4)(B)(1) If DOE determines that
the standard should be amended, then DOE must issue a final rule
establishing an amended standard within this same 3-year period. (42
U.S.C. 6313(c)(4)(B))
DOE conducted the analysis for this determination of whether to
amend the standard for equipment class SOC.SC.M as part of this NOPR
analysis. The analysis was carried out in a manner similar to that of
all the other equipment classes being analyzed as part of the current
rulemaking. DOE used the standard established by AEMTCA as the baseline
efficiency level for equipment class SOC.SC.M.\31\ The results of the
analysis indicated that if an amendment to the AEMTCA standard for
equipment
[[Page 55911]]
class SOC.SC.M, based on same criteria established for all the other
equipment classes of the current rulemaking,\32\ would represent a
reduction in energy consumption of roughly 30 percent as compared to
the AEMTCA standard. Based on this result, DOE has proposed an amended
standard for equipment class SOC.SC.M in this NOPR (see section I and
section V.A.2).
---------------------------------------------------------------------------
\31\ This approach is similar to that adopted for all the other
equipment classes, as explained in section IV.H.1.
\32\ The criteria for trial standard level selection can be
found in section V.A.1, and discussion concerning the selection of
the proposed standard level can be found in section V.C.
---------------------------------------------------------------------------
In response to AHRI's request that DOE use TDA as a normalization
metric for this equipment, the January 2009 final rule standards for
remote condensing SOC equipment were expressed using TDA as a
normalization metric. 74 FR 1093 (Jan. 9, 2009). As AHRI suggested, DOE
proposes in this NOPR to continue to use TDA as the normalization
metric for SOC equipment.
DOE is also proposing to adopt a new definition of the ``service
over counter'' equipment family, which is included in this notice. DOE
based its proposed definition on the definition of self-contained
service-over-counter refrigerators (SOC.SC.M) found in Paragraph (1) of
section 4 of AEMTCA. (42 U.S.C. 6313(c)(1)(C)) However, DOE proposes to
adopt a broader definition of SOC equipment that DOE believes is
applicable to all of the equipment classes that belong to the SOC
equipment family, not just the single SOC.SC.M equipment class
described by the AEMTCA language. The proposed definition can be found
in section 0 of this NOPR.
2. Technology Assessment
As part of the market and technology assessment performed for the
NOPR analysis, DOE developed a comprehensive list of technologies that
would be expected to improve the energy efficiency of commercial
refrigeration equipment. Chapter 3 of the NOPR TSD contains a detailed
description of each technology that DOE identified. Although DOE
identified a complete list of technologies that improve efficiency, DOE
only considered in its analysis technologies that would impact the
efficiency rating of equipment as tested under the DOE test procedure.
Therefore, DOE excluded several technologies from the analysis during
the technology assessment because they do not improve the rated
efficiency of equipment as measured under the specified test procedure.
Technologies that DOE determined impact the rated efficiency were
carried through to the screening analysis and are discussed in section
IV.D.
a. Technologies Applicable to All Equipment
In the preliminary analysis market and technology assessment, DOE
listed the following technologies that would be expected to improve the
efficiency of all equipment: higher efficiency lighting, higher
efficiency lighting ballasts, remote lighting ballast location, higher
efficiency expansion valves, higher efficiency evaporator fan motors,
variable-speed evaporator fan motors and evaporator fan motor
controllers, higher efficiency evaporator fan blades, increased
evaporator surface area, low-pressure differential evaporators,
increased case insulation or improvements, defrost mechanisms, defrost
cycle controls, vacuum insulated panels, and occupancy sensors for
lighting controls. Not all of these technologies were considered in the
preliminary engineering analysis; some were screened out or removed
from consideration on technical grounds, as described in chapters 3 and
4 of the NOPR TSD. After the publication of the preliminary analysis,
DOE received numerous stakeholder comments regarding these
technologies, discussed below.
Lighting Technologies
In response to DOE's request for comment, Southern Store Fixtures
questioned DOE's specification for light-emitting diode (LED) lighting
because it appeared that LEDs had a lower efficacy in terms of lumens
per watt compared to T8 fluorescent lighting (the standard baseline
lighting technology) in DOE's model. (Southern Store Fixtures, Public
Meeting Transcript, No. 31 at pp. 59-60) Zero Zone observed that while
fluorescent lighting is a mature technology, LED lighting is constantly
evolving. (Zero Zone, Public Meeting Transcript, No. 31 at p. 63)
Additionally, Southern Store Fixtures suggested that the efficiency of
the driver powering the LEDs be explicitly considered, as it is a key
aspect of lighting energy consumption. (Southern Store Fixtures, Public
Meeting Transcript, No. 31 at p. 62) True noted that light output from
LEDs is highly directional, and the additional heat load from the LEDs
increases the load on the compressor, which is less efficient than the
lighting system. (True, Public Meeting Transcript, No. 31 at pp. 60-61)
Regarding the comment by Southern Store Fixtures, the output of LED
light fixtures used in commercial refrigeration equipment is indeed
lower in terms of lumens per watt when compared to T8 fluorescent
bulbs. However, for commercial refrigerated display applications, the
advantage of LED lighting lies in the directionality of its light
output. While T8 lighting produces greater output in lumens, much of
that light is directed toward the ambient space rather than the
merchandise to be illuminated, and thus is wasted from a product
merchandising perspective. LED lighting, on the other hand, is very
directional, and the light can be aimed directly at the product on
display. This difference allows for more conservative sizing of LED
fixtures and, as a result, overall power consumption is lower compared
to T8 fluorescent lamps.
DOE agrees with the comment by Zero Zone that LED lighting is an
evolving technology. As a result, DOE has taken efforts to update its
LED fixture cost estimates throughout the rulemaking process, gathering
the most current data available from publicly available sources as well
as from manufacturer interviews. Regarding Southern Store Fixtures'
concern about driver power, this power consumption is considered in the
engineering model and is incorporated into the calculation of
calculated daily energy consumption (CDEC). Similarly, with respect to
True's comment, the impact of lighting on case heat load, and thus
compressor power consumption, is accounted for in the engineering model
through the use of a multiplier to estimate the fraction of light
produced that is retained inside the case as heat.
Lighting Controls
In addition to discussing lighting, stakeholders also commented on
the location of lighting controls. Southern Store Fixtures observed
that certain operators use central energy management systems to control
the display case lighting, and asked if this approach would be
considered instead of just the placement of occupancy sensors in
individual display cases. The company added that when customers ask
them to supply a case to be controlled by a central energy management
system, the lights in the display cases must be wired separately from
the other energy-consuming components. (Southern Store Fixtures, Public
Meeting Transcript, No. 31 at pp. 190-91, 194) Further, Southern Store
Fixtures pointed out that CEC is considering these central lighting
systems in its proceedings. (Southern Store Fixtures, Public Meeting
Transcript, No. 31 at p. 197) Zero Zone stated that it typically wires
cases with a separate lighting circuit to allow for
[[Page 55912]]
independent lighting control, while NEEA stated that if a case is wired
differently to interface with centralized controls, it should be
treated identically to a self-contained set of controls. (Zero Zone,
Public Meeting Transcript, No. 31 at p. 196; NEEA, Public Meeting
Transcript, No. 31 at p. 195) CA IOUs supported the manufacturer
assertion made during the April 2011 preliminary analysis public
meeting that it is possible to distinguish between cases designed for
remote energy controls and those that are not. (CA IOUs, No. 42 at p.
4) For this reason, the CA IOUs suggested that DOE develop a
calculation to measure energy savings due to the use of such remote
systems in the test procedure. (CA IOUs, No. 42 at p. 4)
DOE acknowledges that there are several ways to implement lighting
controls (e.g., individual case controls, controls for a case lineup,
storewide energy management systems), and that allowing certain systems
to be included in calculating energy consumption may set a precedent
for how DOE defines the boundaries of covered equipment and what
technologies are allocated energy savings for a piece of equipment in
the test procedure. For example, cases set up to accept remote control
systems have a dedicated circuit for lights so that the lights can be
controlled separately from the rest of the case. However, this lighting
circuit configuration does not inherently save energy and must be
paired with an expensive energy management control system, which is
sold separately from the piece of commercial refrigeration equipment,
is produced by different manufacturers, and is not integral to the
commercial refrigeration equipment. In addition, the existence of an
energy management system does not necessarily mean it will be used with
commercial refrigeration equipment; for example, energy management
systems are used in many stores and offices to control room lighting
and temperature set points.
DOE acknowledges that remote lighting controls do save energy and
may be the more commonly used technology to dim or turn off lights.
However, energy consumption for a piece of commercial refrigeration
equipment must be determined using the DOE test procedure to measure
the energy consumption of a representative unit, as shipped to
customers. Because the remote energy management system is not part of
the piece of commercial refrigeration equipment as shipped from the
manufacturer, but rather is a separate piece of equipment supplied by a
separate manufacturer, remote energy management controls will not be
considered as an energy conservation feature in this commercial
refrigeration equipment rulemaking.
Part-Load Technologies
Stakeholders also submitted comments on the subject of part-load
and variable-capacity technologies. These are technologies that allow
the performance of the system components to be varied in response to
changes in the load placed on them, such as changes due to varying
ambient conditions or product loading. PG&E requested that DOE clarify
its stance on part-load technologies, suggesting that there was a
disparity between the NOPR DOE published on November 24, 2010, which
proposed amendments to DOE's test procedures for commercial
refrigeration equipment (November 2010 test procedure NOPR (75 FR 71596
(Nov. 24, 2010)) and the screening analysis presented in chapter 2 of
the preliminary analysis TSD. Specifically, in the November 2010 test
procedure NOPR, DOE stated that the proposed test procedure, which
relied on AHRI Standard 1200 and ASHRAE Standard 72,\33\ is able to
capture the energy-saving effects of some part-load technologies. (76
FR 71601 (Nov. 24, 2010)). Conversely, in the screening analysis in
chapter 2 of the preliminary analysis TSD, DOE removed some
technologies from the analysis and stated that their effects could not
be measured by the steady-state test procedure. PG&E asked DOE to
clarify its stance and asked that, if DOE determines that the effects
of these technologies can be measured, to include them in the screening
and engineering analyses. PG&E later reiterated its desire that DOE be
consistent in its approach toward technologies that maintain energy
savings at variable ambient conditions or variable load. (PG&E, Public
Meeting Transcript, No. 31 at pp. 51-52, 178)
---------------------------------------------------------------------------
\33\ ANSI/ASHRAE Standard 72-2005. ``Method of Testing
Commercial Refrigerators and Freezers.'' 2005. American Society of
Heating, Refrigerating, and Air-Conditioning Engineers, Inc.
Atlanta, GA.
---------------------------------------------------------------------------
Similarly, CA IOUs noted a perceived disparity between DOE's
statement in the preliminary analysis TSD chapter 2, where DOE stated
that it ``believes that the energy saving potential of these
technologies is already captured to some degree in the current test
procedure,'' and chapter 4, where DOE stated that ``[t]echnologies that
reduce energy use only under transient conditions, such as fluctuations
in ambient temperature and humidity, periods of product loading, and
frequent door openings, will not affect the measured CDEC. Therefore,
DOE removed from consideration these technologies that do not affect or
do not reduce CDEC during the tests.'' CA IOUs requested clarification
of DOE's rationale for eliminating those technologies from
consideration, and also requested that DOE include in its engineering
analysis all technologies that can be measured in part by the test
procedure, notably those that save energy at variable load or under
fluctuating ambient conditions. (CA IOUs, No. 42 at p. 2) NEEA
expressed its opinion that DOE had not yet adequately justified its
lack of initiative in examining part-load technologies. (NEEA, No. 36
at p. 4)
Stakeholders questioned the ability of the DOE test procedure to
reflect the performance of part-load technologies. In a written comment
submitted jointly, ASAP and the Natural Resources Defense Council
(NRDC) encouraged DOE to consider technologies that improve efficiency
under part-load conditions in the engineering analysis, stating that
DOE referenced in its test procedure NOPR the fact that units tested
using ASHRAE 72, namely those with doors, experience variation in load
due to the door opening requirements of the test. ASAP and NRDC
mentioned that there is clearly a variation in refrigeration load
during the test for this equipment, due to the door opening
requirement. ASAP and NRDC added that, in its proposed test procedure,
DOE also referred to transient load variation effects (76 FR 71601
(Nov. 24, 2010)). ASAP and NRDC stated that, if single-speed
compressors cycle on and off during the test, there is likely
opportunity for variable-speed compressors to reduce energy consumption
by increasing the operating effectiveness of heat exchangers and
reducing cycling losses. (ASAP and NRDC, No. 34 at pp. 1-2)
Interested parties also commented that it is important to
distinguish between steady-state and full-load modes of operation,
since equipment experiencing relatively constant loads is not
necessarily operating at full load. ASAP and NRDC stated that if the
compressor is cycling, this indicates that the equipment is operating
at part load. ASAP and NRDC continued, stating that if a commercial
refrigerator or freezer did operate at full load during a test, then it
would not be able to maintain the necessary case temperature under the
more extreme conditions that it would likely encounter in the field,
posing a risk to food safety. Therefore, ASAP and NRDC stated, it is
likely that manufacturers design equipment to meet a higher load than
that experienced during a test, and that
[[Page 55913]]
technologies that improve part-load performance could reduce energy
consumption for both open and doored cases. (ASAP and NRDC, No. 34 at
p. 2) NEEA expressed a similar viewpoint, commenting that the door
opening provision in ASHRAE 72 leads to load variation and that, even
for open cases, it is unlikely that the refrigeration system is
operating at full capacity during the test period, as this would make
the system unable to meet load requirements and guarantee food safety
under more extreme environmental conditions. (NEEA, No. 36 at p. 4)
NEEA stated that, unless a refrigeration system is sized exactly for
its operating load, and that load remains constant, there is good
reason to examine part-load system performance. NEEA added that, since
most refrigeration systems must perform under a variety of conditions,
they will operate cyclically, leaving room for more-efficient operation
during times of lower load. NEEA urged DOE to explore the use of
variable-speed and variable-capacity components. (NEEA, No. 36 at p. 4)
DOE received comments regarding the treatment and modeling of
specific part-load technologies. ASAP stated that, in its proposed
energy conservation standards for residential refrigerators (75 FR
59470 (Sept. 27, 2010)), DOE had included variable-speed compressors as
a design option, and that the residential refrigerators test procedure
was also a steady-state test. ASAP asked why variable-speed compressors
were considered for residential refrigerators but not for commercial
refrigeration equipment. (ASAP, Public Meeting Transcript, No. 31 at p.
54) NEEA commented that variable-speed condenser fans and condenser fan
motor controllers could enable improved part-load performance, and that
screening them out due to test procedure limitations is shortsighted.
(NEEA, No. 36 at p. 3) NEEA added that high-efficiency expansion valves
are becoming much more prevalent in refrigeration systems, and that
they should be included in the analysis. NEEA stated that savings
associated with high-efficiency expansion valves may arise in
conjunction with other technologies installed as part of a part-load
package and that, while these energy savings may be small, this should
be proven by analysis. (NEEA, No. 36 at p. 3) CA IOUs requested
clarification on how variable-speed compressors and modulating capacity
compressors \34\ are covered in this rulemaking. CA IOUs stated that
such compressor technologies did not appear to have been screened out
or listed as an option, and appeared to have been included in the
engineering analysis TSD chapter under the section discussing higher
efficiency compressors. (CA IOUs, No. 42 at p. 2) Finally, ASAP and
NRDC stated that the model used in the engineering analysis should be
able to capture the potential benefits of technologies that improve
part-load performance and that, if this is not the case, DOE should
consider a different methodology. (ASAP and NRDC, No. 34 at p. 3)
---------------------------------------------------------------------------
\34\ Variable-speed compressors are able to control the rate at
which they operate in order to tailor their performance to varying
conditions and thus reduce compressor cycling. Modulating capacity
compressors, most commonly found in larger sizes used in compressor
racks, allow for the volume of fluid being compressed by the moving
pistons (and thus the throughput of the compressor) to be changed in
response to load variations.
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After receiving these stakeholder comments, DOE reviewed its
position on part-load and variable-capacity technologies, as
articulated in chapter 2 of the preliminary analysis and test procedure
NOPR publications (75 FR 71601 (Nov. 24, 2010)). DOE agrees there was a
disparity between the preliminary analysis, in which DOE reiterated its
position from the January 2009 final rule that part-load technologies
could not be captured by the steady-state ASHRAE 72 method of test,\35\
and the test procedure NOPR, in which DOE stated that the door opening
and night curtain testing portions of the test would in fact create
part-load conditions. 75 FR 71601 (Nov. 24, 2010). DOE believes that
the position presented in the test procedure NOPR is accurate, as the
variation in operating conditions introduced by door openings and the
use of night curtains could create an opportunity for part-load
technologies to produce quantifiable energy impacts. DOE revised its
position after reviewing the test procedure established in the 2012
test procedure final rule (77 FR 10292 (Feb. 21, 2012)) and the energy
consumption profile of equipment observed during testing conducted
using the DOE test procedure. DOE believes the confusion arose due to
the way in which the industry refers to the ASHRAE 72 method of test.
As mentioned above, part load technologies allow a piece of commercial
refrigeration equipment to respond to changes in refrigeration load
that occur due to changes in ambient conditions or internal loads on
the case. The ASHRAE 72 method of test prescribes a single fixed set of
ambient conditions, so no major changes in refrigeration load are
intentionally introduced through changes in ambient condition. Thus,
the ASHRAE 72 method of test is often referred to as steady-state.
However, as stated in the November 2010 test procedure NOPR, commercial
refrigeration equipment tested using ASHRAE 72 experiences variation in
refrigeration load due to door openings, drawing of the night curtain,
and inherent compressor cycling that occur during the test. 77 FR 10308
(Feb. 21, 2012). Realizing this, DOE has revised its position and
agrees with ASAP, NRDC, and NEEA that the nature of the ASHRAE 72
method of test, while conducted at fixed ambient operating conditions,
is not strictly thermodynamically steady-state, as evidenced by
compressor cycling and minor fluctuations in internal temperatures
throughout the duration of the test. DOE also agrees with these
stakeholders that the presence of compressor cycling demonstrates that
commercial refrigeration units generally do not operate at full load
during the test. From its discussions with manufacturers, DOE
understands that most equipment can operate at temperatures lower than
the equipment's given DOE rating temperature, and thus performance at
the test procedure conditions would likely not constitute full-capacity
operation.
---------------------------------------------------------------------------
\35\ U.S. Department of Energy-Office of Energy Efficiency and
Renewable Energy. Preliminary Technical Support Document (TSD):
Energy Conservation Program for Certain Commercial and Industrial
Equipment: Commercial Refrigeration Equipment. Chapter 5,
Engineering Analysis. March 2011. Washington, DC.
www.regulations.gov/#!documentDetail;D=EERE-2010-BT-STD-0003-0030.
---------------------------------------------------------------------------
In response to the stakeholder suggestions that DOE include
specific part-load technologies in the NOPR analyses, DOE investigated
the technologies referenced by these commenters. DOE researched the
state of part-load and variable-capacity technologies such as fan motor
controllers and variable-speed compressors through available
manufacturer and component supplier literature, as well as through its
discussions with manufacturers during interviews. DOE found that that
many of these part-load technologies had not yet been developed for the
commercial refrigeration equipment industry to the extent that they
could be adopted by manufacturers in the near future. For example,
while variable-speed compressors are indeed, as some stakeholders
mentioned, prevalent in residential refrigeration applications, their
availability for commercial application is very limited and is not
applicable to many equipment types. Some technologies were also removed
[[Page 55914]]
for functional purposes or because of concerns over food safety
performance. Others were removed from consideration because they would
not have measurable impacts under the test procedure. Therefore, while
DOE did not screen out or preclude the analysis of part-load
technologies, DOE did not utilize any of these technologies explicitly
as design options in its engineering analysis. For further discussion
of DOE's examination of these technologies, see chapters 3 through 5 of
the NOPR TSD.
DOE reiterates that the design options that it has chosen for this
particular analysis, and the design paths used in modeling the proposed
standard levels, do not constitute a prescriptive design requirement.
In other words, DOE does not claim that the combinations of design
options presented in the engineering analysis form unique paths for
achieving higher energy efficiency. Manufacturers are free to utilize
any design features available to them in order to develop compliant
units, provided that those units meet all the requirements for testing
under the DOE test procedure and other applicable regulations. Thus,
should manufacturers develop part-load features that produce
quantifiable reductions in energy consumption under the DOE test
procedure, they are not prohibited from taking advantage of those
features, even if particular technologies were not modeled in the
analysis for this rulemaking.
b. Technologies Relevant Only to Equipment With Doors
In chapter 3 of the preliminary analysis TSD, DOE mentioned three
technologies that could apply only to doored equipment: anti-fog films,
anti-sweat heater controllers, and high-performance doors. Not all of
these technologies were considered in the preliminary engineering
analysis, as some were screened out or removed from consideration on
technical grounds. The following sections discuss stakeholder comments
regarding these technologies.
Anti-Fog Films
Zero Zone stated that research by Southern California Edison
indicated that anti-fog films do not allow for the reduction of anti-
sweat heat. (Zero Zone, Public Meeting Transcript, No. 31 at p. 47)
DOE reviewed the available literature regarding anti-fog films, and
understands that these films alone do not necessarily eliminate the
need for anti-sweat heaters under many conditions, including high
ambient humidity, as they cannot prevent condensation from forming on
the outside of the case. This shortcoming of anti-fog films can present
a major problem for customers. Discussions with manufacturers have led
DOE to believe that alternative improvements in door construction
provide the capacity to reduce anti-sweat heat without the drawbacks
mentioned here. Because of these issues, DOE did not consider anti-fog
films on transparent doors as a design option. For further discussion
of this subject, see chapter 5 of the NOPR TSD.
Anti-Sweat Heater Controllers
During the April 2011 preliminary analysis public meeting, Zero
Zone stated that anti-sweat controllers have the potential to save
energy because the controllers would allow heaters to be designed with
extra capacity for more humid climates. (Zero Zone, Public Meeting
Transcript, No. 31 at p. 53) NEEA, ASAP, and NRDC all suggested DOE
investigate Zero Zone's comment further, while the CA IOUs noted it may
be possible to include a calculation method to address the benefit of
these controllers. (NEEA, No. 36 at p. 3; ASAP and NRDC, No. 34 at p.
2; CA IOUs, No. 42 at pp. 2-4)
DOE raised the subject of anti-sweat heater controllers during its
manufacturer interviews for this NOPR. Several manufacturers agreed
that, within the context of the test procedure, anti-sweat heater
controllers will effectively keep the power to anti-sweat heaters at
the levels necessary for the test conditions. While anti-sweat
controllers could also modulate the anti-sweat power further in the
field to account for more or less extreme ambient conditions, a system
equipped with anti-sweat heater controllers will not likely exhibit
significantly different performance at test procedure conditions than
will a unit with anti-sweat heaters tuned for constant
75[emsp14][deg]F, 55 percent relative humidity conditions. Therefore,
DOE did not consider anti-sweat heater controllers in the engineering
analysis, as modeling these devices within the context of the test
procedure would not yield appreciable energy savings over anti-sweat
heaters that are properly sized for the test procedure ambient
conditions. DOE notes that manufacturers that produce cases with anti-
sweat heater controls for higher temperature and humidity environments
may use anti-sweat heater controllers in the test procedure, however.
High-Performance Doors
Zero Zone also commented on high-performance doors, stating that
when they were incentivized in California, retail stores used more
energy because they had to set their air conditioning to a lower set
point to avoid condensation. Zero Zone added that high-performance
doors also sweat under conditions that are less favorable than the
ASHRAE test conditions, and that DOE should evaluate technologies
intended to be used for performance under actual conditions, not just
under ASHRAE 72 test procedure conditions. Zero Zone stated that DOE
should remove high-performance doors from the analysis. (Zero Zone, No.
37 at pp. 1 and 3)
During the NOPR engineering analysis, DOE reviewed its data for all
design options, including high-performance doors. Transparent door
performance was discussed at manufacturer interviews during the
preliminary analysis and NOPR stages of the rulemaking, and the glass
door designs considered in the engineering analysis are based on door
models currently available on the market. The performance of these door
designs was analyzed using Lawrence Berkeley National Laboratory's
(LBNL's) WINDOW 5 software \36\ in conjunction with the analyses for
DOE's ongoing energy conservation standards rule for walk-in coolers
and freezers, an equipment type in which the same models of glass
display doors are often employed. While it is true that extreme
conditions could adversely impact glass door performance, as mentioned
by Zero Zone, the performance of the equipment for this analysis was
based on the standardized ASHRAE 72 test conditions of 75[deg]F and 55
percent relative humidity, ambient conditions that have been accepted
by industry, the ASHRAE working group, and DOE as being generally
representative of the environments typically encountered by commercial
refrigeration equipment.
---------------------------------------------------------------------------
\36\ LBNL's WINDOW 5 software is a program designed for modeling
the performance of windows, doors, and other fenestration devices.
---------------------------------------------------------------------------
DOE believes that high-performance doors, such as those offered on
the market by several door manufacturers and analyzed in this
rulemaking, have the potential to save significant amounts of energy
for transparent-door cases. Based on its market research and
discussions with manufacturers, DOE has concluded that high-performance
doors meet all the criteria for inclusion in its analysis, and has thus
considered them as a design option in the engineering analysis.
[[Page 55915]]
c. Technologies Applicable Only to Equipment Without Doors
In chapter 3 of the preliminary analysis TSD, DOE mentioned two
technologies, air-curtain design and night curtains, that could
potentially be used to improve the efficiency of commercial
refrigeration equipment without doors. Air curtain design was not
considered in the preliminary engineering analysis, as it was screened
out and removed from consideration because, according to the
information available to DOE, advanced air curtain designs are still in
research and development stages and are not yet available for use in
the manufacture of commercial refrigeration equipment. The following
sections address stakeholder comments regarding technologies applicable
to equipment without doors.
Night Curtains
At the April 2011 preliminary analysis public meeting and in
written comments, DOE received numerous comments from stakeholders
regarding night curtains and their use in equipment without doors. CA
IOUs agreed with DOE's decision to include night curtains in the
analysis, but pointed out that such energy savings are only significant
if the night curtains are properly deployed, and encouraged DOE to
review and update its assumptions. (CA IOUs, No. 42 at pp. 4-5) Zero
Zone also commented on the potential of night curtains to conserve
energy, and stated that this technology should not be included in this
rulemaking because there is no reasonable way to estimate how it will
actually be used and because it cannot be used in 24-hour stores. (Zero
Zone, No. 37 at p. 4) Southern Store Fixtures agreed with respect to
these operational challenges, and also pointed out that CEC did not
consider night curtains due to long PBPs, labor costs, and questions
about the reliability of energy savings. (Southern Store Fixtures, No.
38 at p. 1; Southern Store Fixtures, Public Meeting Transcript, No. 31
at p. 42)
Southern Store Fixtures expressed concern that the use of night
curtains on open cases could create design and operational challenges,
potentially resulting in an inefficient case with product temperature
issues and the potential for noncompliance with food safety
regulations. (Southern Store Fixtures, No. 38 at p. 1) Southern Store
Fixtures also noted that major design changes will be needed for cases
with night curtains. Specifically, the evaporator coil and expansion
devices currently used in open cases will be significantly oversized
for use with night curtains; the number of fans needed and airflow
characteristics will change; and lighting and temperature controls will
need to be altered in converting a standard open case to accommodate
night curtains. Cases with night curtains would also, Southern Store
Fixtures stated, require duplication of controls to be able to operate
with and without the curtains. (Southern Store Fixtures, No. 38 at p.
1) In summary, Southern Store Fixtures asserted that these issues would
require a redesign of an open case for compatibility with night
curtains and that, when considering the potential energy savings
associated with the use of a night curtain, DOE should include the cost
of performing such a redesign in its analysis. (Southern Store
Fixtures, No. 38 at p. 1)
During the public meeting, Zero Zone observed that doored and open
cases have a similar energy profile, and therefore, night curtains
could be used as a design option for doored equipment as well. (Zero
Zone, Public Meeting Transcript, No. 31 at pp. 40-41)
DOE acknowledges that the use of night curtains may not be
consistent in the field. However, DOE's test procedures and energy
conservation standards cannot control for equipment application and
actual end use. Night curtains are an available technology for reducing
energy consumption in commercial refrigeration equipment and DOE
believes that including night curtains in its test procedure and energy
conservation standards would allow manufacturers to take credit for the
energy savings associated with this technology. In the 2012 test
procedure final rule, DOE assumed 6 hours as the time period that night
curtains would be implemented. 77 FR 10310 (Feb. 21, 2012). DOE
believes that 6 hours conservatively represents the amount of time a
night curtain would be drawn in a typical, non-24-hour store, when
accounting for stocking and the fact that not all night curtains can be
deployed at once. In addition, 6 hours is consistent with field data
and studies that DOE has identified.37 38 39
---------------------------------------------------------------------------
\37\ Southern California Edison, Refrigeration and Technology
and Test Center, Energy Efficiency Division. Effects of the Low
Emissivity Shields on Performance and Power Use of a Refrigerated
Display Case. August 1997. Irwindale, CA. www.econofrost.com/acrobat/sce_report_long.pdf.
\38\ Faramarzi, R. and Woodworth-Szieper, M. Effects of Low-E
Shields on the Performance and Power Use of a Refrigerated Display
Case. ASHRAE Transactions. 1999. 105(1).
\39\ Portland Energy Conservation, Inc. Query of Database of
GrocerySmart Data. Portland, OR. Received October 18, 2011. Last
viewed July 23, 2011.
---------------------------------------------------------------------------
With respect to Zero Zone's concern regarding the use of night
curtains in 24-hour stores, DOE is not mandating the use of night
curtains, but is simply accounting for them as one available energy
efficiency technology. In addition, DOE notes that night curtains may
be used in 24-hour stores during periods of low customer traffic. DOE
further acknowledges that accounting for the energy savings associated
with night curtains on open cases would, by definition, result in the
setting of a more-stringent standard for open cases. DOE believes such
a standard may encourage migration to the use of more-efficient doored
cases for those cases used in contexts where the distinct utility of an
open case is not required, while preserving the availability of open
cases.
Regarding Southern Store Fixtures' comment about the cost-
effectiveness of night curtains, DOE points out that the LCC analysis
and NIA conducted by DOE are specifically aimed at assessing the cost-
effectiveness of all the design options used to achieve greater energy
efficiency.
DOE acknowledges Southern Store Fixtures' concerns regarding the
costs associated with the need for equipment redesign due to presence
of night curtains. After discussions with multiple manufacturers, DOE
did not incorporate additional material costs and redesign costs
associated with a secondary set of controls because most manufacturers
do not implement this design according to information that DOE has
obtained through market research and manufacturer interviews. DOE
recognizes that individual manufacturers may select different design
options and incur different conversion costs than those modeled by DOE.
However, DOE attempts in its analysis to represent the choices most
likely to be selected by the industry.
Southern Store Fixtures also commented that use of night curtains
on open cases could create design and operational challenges that would
result in inefficient cases with product temperature issues and the
potential for noncompliance with food safety regulations. (Southern
Store Fixtures, No. 38 at p. 1) DOE acknowledges that, as with any new
technology, implementation of night curtains on open cases may require
slight adjustments to equipment design to ensure the case operates
efficiently and effectively. During manufacturer interviews for the
MIA, data was collected by manufacturer (under confidentiality
agreements) and, in aggregate, DOE's resulting conclusion was that
night curtains would not result
[[Page 55916]]
in the challenges discussed by Southern Store Fixtures. The prevalence
of night curtains as retrofit options supports this conclusion as well.
Thus, DOE believes that modifications can be made that allow open cases
to be used with night curtains to achieve energy savings and improve
temperature control, and has accounted for the cost to achieve these
modifications in the MIA.
In response to Zero Zone's comment regarding the use of night
curtains on doored cases, it is DOE's understanding that night curtains
can be applied to all types of open cases (i.e., vertical,
semivertical, and horizontal), and that night curtains are most
effective and commonly used on open cases rather than doored cases. DOE
was not able to identify any public data regarding the use or potential
for energy savings of night curtains on doored cases. Lacking a sound
technical basis for including night curtains on doored cases in its
analysis, DOE is hesitant to expand the definition of night curtain, as
established in the 2012 test procedure final rule (77 FR 10296 (Feb.
21, 2012)), to explicitly include doored cases at this time. On January
6, 2011, DOE held a public meeting to discuss amendments to the DOE
test procedure for commercial refrigeration equipment proposed in a
NOPR DOE published on November 24, 2010. 75 FR 71596. At that January
2011 test procedure NOPR public meeting, True stated that it had seen
night curtains implemented on doored cases and that this does save a
minimal amount of energy, but that these minor savings did not justify
consideration of night curtains in the DOE test procedure. (Docket No.
EERE-BT-2010-TP-0034, True, Public Meeting Transcript, No. 19 at pp.
146-47) DOE agrees with True and believes that use of night curtains on
doored cases will not significantly impact the daily energy consumption
of the display case. Therefore, DOE did not incorporate the use of
night curtains on cases with doors in the 2012 test procedure final
rule. 77 FR 10297 (Feb. 21, 2012). Because night curtains on doored
cases cannot be accounted for in the DOE test procedure, they are not
included as a design option in the energy conservation standards
analyses.
Strip Curtains
While not providing specific comments on the included technologies,
Earthjustice questioned DOE's grounds for not considering strip
curtains \40\ in the analysis, stating that the criteria for
considering design options in the analysis should be whether a
technology is technologically feasible, economically justified, and
reduces energy consumption, not whether it is currently used by
manufacturers. (Earthjustice, Public Meeting Transcript, No. 31 at p.
36) Earthjustice stated that DOE should include strip curtains as a
design option because these devices can be installed by equipment
purchasers, and this illustrates the ease and practicality of their
use. (Earthjustice, No. 35 at p. 4) True stated that manufacturers do
not install strip curtains at the factory because customers can often
receive a secondary rebate for installing strip curtains at the point
of end use. (True, Public Meeting Transcript, No. 31 at p. 40)
---------------------------------------------------------------------------
\40\ Strip curtains consist of a series of strips of
transparent, flexible material (usually plastic) that hang down and
cover the opening of a case without doors. This creates a physical
barrier that reduces ambient air infiltration into the case while
still allowing customers and employees to access the product
contained inside.
---------------------------------------------------------------------------
While DOE understands that some end users purchase and install
strip curtains on some open refrigerated display cases, DOE has no
information as to the prevalence of use of these accessories. DOE has
concerns that incorporating strip curtains into its analyses, and thus
potentially into an amended standard, could impose restrictions similar
to requiring the use of doors. Doing so would compromise one of the
major utility factors of an open case. Namely, manufacturers have
reported to DOE that the major utility of an open case is enhanced
product visibility to the customer and easy access to product.
Installation of a strip curtain would, by definition, inhibit both of
these functions. Moreover, on technical grounds, strip curtains could
potentially interfere with the operation of the existing air curtain in
cases in which the air curtain is less than vertical. Thus, in response
to the comment by Earthjustice, the latter issue described above is one
of technical feasibility, while the former concern, reduction of
utility, could make the consideration of strip curtains inconsistent
with the requirements of EPCA. (42 U.S.C. 6295(o)(4) and 6316(e)(1))
While some end users may decide to install strip curtains on their own
accord for their specific applications, DOE does not intend to explore
their use as applicable to entire equipment classes.
d. Self-Contained Equipment Technologies
In chapter 3 of the preliminary analysis, DOE listed several
technologies that are applicable only to the self-contained equipment
classes. One of the technologies mentioned in the preliminary market
and technology assessment, but not considered for analysis as a design
option, was liquid suction heat exchangers (LSHXs).\41\ NEEA commented
that it did not see a reason for excluding LSHXs from the analysis for
systems in which they are likely to be used, and that DOE should
include them to the extent that the test procedure can be structured to
capture their savings. (NEEA, No. 36 at p. 3) Southern Store Fixtures
suggested that DOE investigate why CEC decided not to consider LSHXs
because of potential refrigerant leaks. (Southern Store Fixtures,
Public Meeting Transcript, No. 31 at p. 44)
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\41\ A liquid suction heat exchanger is a device intended to
further cool the flow of liquid refrigerant entering the expansion
valve from the condenser using the flow of gaseous refrigerant
leaving the evaporator. The exchanger provides sub-cooling for the
entering liquid by super-heating the exiting suction vapor. Hotter
suction vapor is less susceptible to heat gains in the return piping
to the compressor.
---------------------------------------------------------------------------
During the NOPR stage of this rulemaking, DOE further investigated
the subject of LSHXs as applicable to commercial refrigeration
equipment. The information obtained by DOE indicated that LSHX
performance depends on the specific design of a given system, as well
as other factors, including refrigerant type, operating temperature,
and ambient conditions. These factors all combine to determine whether
an LSHX will reduce the energy consumption of a given system; in some
systems, the use of an LSHX will actually increase energy consumption
by introducing a greater pressure drop within the refrigeration
circuit. DOE also heard comments from parties during manufacturer
interviews and conferences concerning potential reliability and leakage
issues such as those mentioned by Southern Store Fixtures. Because
LSHXs may not improve efficiency in all systems and may experience
reliability issues, DOE did not include LSHXs in its analysis. For more
discussion of LSHXs, see chapter 3 of the NOPR TSD.
D. Screening Analysis
DOE uses four screening criteria to determine which design options
are suitable for further consideration in a standards rulemaking.
Namely, design options will be removed from consideration if they are
not technologically feasible; are not practicable to manufacture,
install, or service; have adverse impacts on product utility or product
availability; or have adverse impacts on health or
[[Page 55917]]
safety. 10 CFR part 430, subpart C, appendix A, sections (4)(a)(4) and
(5)(b)
In written comments submitted following the April 2011 preliminary
analysis public meeting, Zero Zone stated that DOE was correct in
screening out a number of technologies, as any technology needs to be
thoroughly researched and proven reliable before inclusion for
consideration in a standards rulemaking. Zero Zone cited demand defrost
as an example of an unproven technology that, if its use were
encouraged by an energy conservation standard, would produce poor
results in the field. (Zero Zone, No. 37 at p. 1) DOE agrees with Zero
Zone's comment, as it is compelled by the screening criteria to ensure
that any technology considered is feasible to implement; practicable to
manufacture, install, and service; does not adversely impact utility or
availability; and would not lead to adverse impacts on health or
safety.
Based on all available information, DOE has concluded that: (1) All
of the efficiency levels discussed in today's notice are
technologically feasible; (2) equipment at these efficiency levels
could be manufactured, installed, and serviced on a scale needed to
serve the relevant markets; (3) these efficiency levels would not force
manufacturers to use technologies that would adversely affect product
utility or availability; and (4) these efficiency levels would not
adversely affect consumer health or safety. Thus, the efficiency levels
that DOE analyzed and discusses in this notice are all achievable
through technology options that were ``screened in'' during the
screening analysis.
E. Engineering Analysis
The engineering analysis determines the manufacturing costs of
achieving increased efficiency or decreased energy consumption. DOE
historically has used the following three methodologies to generate the
manufacturing costs needed for its engineering analyses: (1) The
design-option approach, which provides the incremental costs of adding
to a baseline model design options that will improve its efficiency;
(2) the efficiency-level approach, which provides the relative costs of
achieving increases in energy efficiency levels, without regard to the
particular design options used to achieve such increases; and (3) the
cost-assessment (or reverse engineering) approach, which provides
``bottom-up'' manufacturing cost assessments for achieving various
levels of increased efficiency, based on detailed data as to costs for
parts and material, labor, shipping/packaging, and investment for
models that operate at particular efficiency levels.
As discussed in the Framework document and preliminary analysis,
DOE conducted the engineering analyses for this rulemaking using a
design-option approach for commercial refrigeration equipment. The
decision to use this approach was made due to several factors,
including the wide variety of equipment analyzed, the lack of numerous
levels of equipment efficiency currently available in the market, and
the prevalence of relatively easily implementable energy-saving
technologies applicable to this equipment. More specifically, DOE
identified design options for analysis and used a combination of
industry research and teardown-based cost modeling to determine
manufacturing costs, then employed numerical modeling to determine the
energy consumption for each combination of design options employed in
increased equipment efficiency. DOE selected a set of 24 high-shipment
classes, referred to as ``primary'' classes, to analyze directly in the
engineering analysis. Additional details of the engineering analysis
are available in chapter 5 of the NOPR TSD.
1. Representative Equipment for Analysis
a. Representative Unit Selection
In performing its engineering analysis, DOE selected representative
units for each primary equipment class to serve as analysis points in
the development of cost-efficiency curves. In selecting these units,
DOE researched the offerings of major manufacturers to select models
that were generally representative of the typical offerings produced
within the given equipment class. Unit sizes, configurations, and
features were based on high-shipment-volume designs prevalent in the
market. Using this data, a set of specifications was developed defining
a representative unit for each primary equipment class. These
specifications include geometric dimensions, quantities of components
(such as fans), operating temperatures, and other case features that
are necessary to calculate energy consumption. Modifications to the
units modeled were made as needed to ensure that those units were
representative of typical models from industry, rather than a specific
unit offered by one manufacturer. This process created a representative
unit for each equipment class with typical characteristics for physical
parameters (e.g., volume, TDA), and minimum performance of energy-
consuming components (e.g., fans, lighting).
In its written comment following the preliminary analysis, Traulsen
stated that DOE's choice of representative unit sizes for self-
contained commercial refrigeration equipment with doors was generally
suitable, but added that factors such as cabinet sizes, door
quantities, and door types contribute significantly to overall
equipment performance. Traulsen cautioned that a failure to factor
these variables into the analysis could lead to unintended obsolescence
of models with these features. (Traulsen, No. 45 at p. 2) DOE agrees
with Traulsen that there are numerous design factors that can influence
the performance of commercial refrigeration equipment. In selecting
representative units for analysis, DOE sought unit sizes and
configurations that generally represented the most commonly sold
equipment on the market. The geometric features DOE considered included
unit volume, height, length and width, number of doors, and door
orientation. DOE avoided considering any features or unit
configurations that could skew the analysis away from sound
representation of the majority of units produced within a chosen
equipment class. As a result, DOE believes that its analysis and
resulting proposed standards are applicable and extensible to the range
of covered equipment in each class. In response to Traulsen's concern,
DOE wishes to point out that it is compelled by statute to avoid the
elimination of features or utility currently present in equipment on
the market, and that the obsolescence of specific unique equipment
types would be included in this provision. (42 U.S.C.
6295(o)(2)(B)(IV), 6295(o)(4), and 6316(e)(1))
b. Baseline Models
DOE created a set of baseline design specifications for each
equipment class analyzed directly in the engineering model. Each set of
representative baseline unit specifications, when combined with the
lowest technological level of each design option applicable to the
given equipment class, defines the energy consumption and cost of the
lowest efficiency equipment analyzed for that class. DOE established
baseline specifications by reviewing available manufacturer data for
equipment manufactured at the time of the analysis, and by selecting
components and design features that were representative of the most
basic models being manufactured at the time of the analysis. Chapter 5
of the NOPR TSD sets forth the specifications that DOE chose for each
equipment class and
[[Page 55918]]
discusses baseline models in greater detail.
One complexity involved in developing an engineering baseline was
due to the timing of the analysis, which was conducted in 2010 and
2011. Because the analysis was performed in proximity to the January
2009 final rule compliance date of January 1, 2012 (74 FR 1092 (Jan. 9,
2009)), and the compliance date for the standards established in EPCA
of January 1, 2010 (42 U.S.C. 6313(c)(2)-(3)), it was difficult for DOE
to establish a market baseline reflecting compliance with any specific
set of standards. In particular, the equipment covered by the January
2009 final rule was not required to comply with amended standards until
after the preliminary and NOPR analyses had been performed. As a
result, DOE retained the engineering baseline and associated
technologies used in its January 2009 final rule engineering analysis
and expanded them to accommodate the new equipment classes covered by
the standards initially established by EPCA. (42 U.S.C. 6313(c)(2)-(3))
DOE then added technologies to this baseline to develop its cost-
efficiency curves. As a result, some of the engineering results
represent units that are below the standard levels for equipment
currently on the market and subject to the DOE's existing standards. 10
CFR 431.66 However, in its LCC and other downstream analyses, DOE
accounted for this fact by utilizing a standards baseline as the
minimum efficiency level examined, thereby truncating the engineering
design option levels so that the lowest efficiency point analyzed
corresponded to the current standard level with which that particular
piece of equipment would have to comply. The exact procedure is
described in section IV.H.1, and additional details are provided in
chapter 8 of NOPR TSD.
2. Design Options
After conducting the screening analysis and removing from
consideration technologies that did not warrant inclusion on technical
grounds, DOE included the remaining technologies as design options in
the energy consumption model for its NOPR engineering analysis:
Higher efficiency lighting and occupancy sensors for VOP,
SVO, and SOC equipment families (horizontal fixtures);
Higher efficiency lighting and occupancy sensors for VCT
and PD equipment families (vertical fixtures);
Improved evaporator coil design;
Higher efficiency evaporator fan motors;
Improved case insulation;
Improved doors for VCT equipment family, low temperature
and ice-cream temperature (hinged);
Improved doors for VCT and PD equipment families, medium
temperature (hinged);
Improved doors for HCT equipment family, low temperature
and ice-cream temperature (sliding);
Improved doors for HCT equipment family, medium
temperature (sliding);
Improved doors for SOC equipment family, medium
temperature (sliding);
Improved condenser coil design (for self-contained
equipment only);
Higher efficiency condenser fan motors (for self-contained
equipment only);
Higher efficiency compressors (for self-contained
equipment only); and
Night curtains (equipment without doors only).
3. Refrigerants
For the preliminary analysis, DOE considered two refrigerants,
hydrofluorocarbons (HFCs) R-134a and R-404a, because these are the
industry-standard choices for use in the vast majority of commercial
refrigeration equipment covered by this rulemaking. This selection was
consistent with the modeling performed in the January 2009 final rule,
which was based on industry research and stakeholder feedback at that
time. After the publication of the preliminary analysis, DOE received
several comments on potential future issues relating to refrigerants
for this equipment. Emerson noted that possible future EPA actions
could prohibit certain refrigerants, which would reduce equipment
efficiency, and suggested that if EPA is going to use total emissions
as the basis for Significant New Alternatives Policy (SNAP) \42\
regulations, then energy efficiency must also be considered by the EPA
when making those determinations. However, Emerson conceded that the
discussion of potential action by EPA was speculative at this point.
(Emerson, Public Meeting Transcript, No. 31 at pp. 48, 157-58)
Similarly, True observed that EPA proposals could result in the banning
of R134a and R404a, and that while there are replacements for R134a, it
would be difficult to replace R404a. (True, Public Meeting Transcript,
No. 31 at p. 154) However, AHRI remarked that it believed that EPA was
only considering NRDC's petition for removal of R134a \43\ from the
list of acceptable substitutes under the SNAP program in the context of
automotive air-conditioning applications, and that EPA is not currently
seeking to restrict the use of R134a in the commercial refrigeration
industry. (AHRI, Public Meeting Transcript, No. 31 at pp. 155-56) True
also pointed out that the removal of HFCs from remote condensing
equipment would likely necessitate a total system design and a shift
toward cascade equipment. (True, Public Meeting Transcript, No. 31 at
pp. 152-53) However, True stated that 90 percent of its market is for
self-contained equipment, and that 85 percent of its products could be
converted to alternative refrigerants with minimal cost increases and
efficiency losses. (True, Public Meeting Transcript, No. 31 at p. 155)
---------------------------------------------------------------------------
\42\ SNAP is EPA's program to evaluate and regulate substitutes
for the ozone-depleting chemicals that are being phased out under
the stratospheric ozone protection provisions of the Clean Air Act.
For more information, please see: www.epa.gov/ozone/snap/.
\43\ In May 2010, the Natural Resources Defense Council
petitioned the EPA to remove HFC-134a from the list of acceptable
substitutes under the SNAP program. In February 2011, the EPA
concluded that NRDC's petition was complete with respect to the end
use of motor vehicle air conditioners, and expressed its intent to
begin a rulemaking on the topic. For more information, please see:
www.epa.gov/ozone/downloads/NRDC_petition_responses.pdf.
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Commenters also provided information regarding the performance and
regulatory status of specific alternative refrigerants. True noted that
it had tested a large amount of isobutene and propane-driven equipment,
which exhibited an efficiency gain of 7 to 11 percent in smaller
equipment. True stated that the use of these alternative refrigerants
was not overly cost burdensome because of the recent increase in the
cost of HFC refrigerants, but that they could not be used on larger
equipment because of SNAP regulations involving refrigerant charge
levels. (True, Public Meeting Transcript, No. 31 at pp. 151-52, 155)
However, True added, the need to address flammability concerns in the
interest of safety could result in significant cost increases for
certain components. True further stated that the EPA SNAP program's
discussion of allowing 150-gram charges of propane as a refrigerant in
self-contained commercial applications would not be a factor that could
prevent use of these refrigerants, and that propane is not currently
excluded from use by most building codes. (True, Public Meeting
Transcript, No. 31 at p. 152, 159) Emerson asked whether building codes
could be changed to allow for numerous 150-gram charges within a
supermarket. (Emerson, Public Meeting Transcript, No. 31 at p. 158)
Coca-Cola mentioned that it had
[[Page 55919]]
selected transcritical \44\ CO2 as an alternative for
applications in the United States, but could not provide efficiency
data. (Coca-Cola, Public Meeting Transcript, No. 31 at p. 157) NEEA
noted that Daikin Industries, Ltd., the world's largest central air
conditioner manufacturer, was progressing toward using only non-halogen
refrigerants in its products. (NEEA, Public Meeting Transcript, No. 31
at p. 161) AHRI encouraged DOE to not assume constant refrigerant
prices over the analysis period it considers because legislation has
been introduced that could result in the unavailability of HFC
refrigerants and lead to significant price increases. (AHRI, No. 43 at
p. 3)
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\44\ A transcritical system is one in which the refrigerant
changes phase during the course of the refrigeration cycle.
---------------------------------------------------------------------------
In its written comments, NEEA provided an alternative viewpoint,
stating that it did not believe refrigerant issues are significant for
this rulemaking. This is because, according to NEEA, refrigerant issues
(referring to past phase-outs of CFCs, HCFCs, and other refrigerant
types used in the past) have been known for almost 20 years.
Historically, these issues have included the phase-outs of
chlorofluorocarbons (CFCs) and HFCs in accordance with the Montreal
Protocol.\45\ Manufacturers have contended with these issues over time,
and understand the design changes needed to adapt to new refrigerants.
NEEA added that shifts to different refrigerants will have to be made
regardless of the course that any one rulemaking takes. Further, NEEA
pointed to the statements by several manufacturers that a reduction of
system efficiency due to implementation of new refrigerants should not
be assumed. NEEA agreed with these manufacturers and suggested that it
is likely that these parties will resolve refrigerant issues in a way
that will not compromise efficiency and that will not be cost-
prohibitive. In conclusion, NEEA stated that refrigerant issues are not
new and that the outcome of the standards-setting process is not likely
to affect how manufacturers resolve these issues. (NEEA, No. 36 at pp.
6-7)
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\45\ The Montreal Protocol on Substances that Deplete the Ozone
Layer is an international treaty that was designed to protect the
ozone layer by phasing out many ozone depleting substances.
---------------------------------------------------------------------------
While future regulations may cap or eliminate the use of the
currently prevalent refrigerants, and proposed legislation, such as the
American Clean Energy and Security Act of 2009,\46\ has included HFC
phase-downs, DOE does not speculate on the impact of proposed
legislation in current rulemaking analyses. Additionally, as mentioned
above, many low global warming potential (GWP) refrigerants, such as
CO2 and propane, are being introduced to the market, and use
of these new refrigerants may influence the cost and efficiency of
equipment. However, DOE is not in a position to predict future trends
of the refrigerants market or the performance of alternative
refrigerants, and any analysis conducted at this time would be
speculative. Consequently, DOE is not considering the potential effects
of alternative refrigerants or current or future legislation on
refrigerants within the scope of this rulemaking. Instead, DOE will
continue to model equipment as currently designed for the U.S. market,
utilizing the most common HFC refrigerants, R-134A and R-404A, accepted
and broadly used by the industry. To the extent that there has been
experience within the industry, domestically or internationally, with
the use of alternative low-GWP refrigerants, DOE requests any available
information, specifically cost and efficiency information relating to
use of alternative refrigerants. DOE acknowledges that there are
government-wide efforts to reduce emissions of HFCs, and such actions
are being pursued both through international diplomacy as well as
domestic actions. DOE, in concert with other relevant agencies, will
continue to work with industry and other stakeholders to identify safer
and more sustainable alternatives to HFCs while evaluating energy
efficiency standards for this equipment.
---------------------------------------------------------------------------
\46\ Colloquially known as the Waxman-Markey Bill, this
legislation (H.R. 2454) would have established an emissions cap and
trade system in the United States. It was passed by the House of
Representatives in June 2009, but was tabled by the Senate. For more
information, please see https://thomas.loc.gov/cgi-bin/bdquery/z?d111:H.R.2454:.
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4. Cost Assessment Methodology
During the preliminary analysis, DOE developed costs for the core
case structure of the representative units it modeled, based on cost
estimates performed in the analysis for the January 2009 final rule.
For more information, see chapter 5 of the preliminary analysis TSD,
pp. 5-3 to 5-8. DOE also developed costs for the design option levels
implemented, based on publicly available information and price quotes
provided during manufacturer interviews. These costs were combined in
the engineering cost model based on the specifications of a given
modeled unit in order to yield manufacturer production cost (MPC)
estimates for each representative unit at each configuration modeled.
At the preliminary analysis rulemaking stage, DOE's component cost
estimates were based on data developed from manufacturer interviews,
estimates from the January 2009 final rule, and publicly available cost
information. During the NOPR analysis, DOE augmented this information
with data from physical teardowns of commercial refrigeration equipment
currently on the market.
During the development of the engineering analysis for this NOPR,
DOE interviewed manufacturers to gain insight into the commercial
refrigeration industry, and to request feedback on the engineering
analysis methodology, data, and assumptions that DOE used. Based on the
information gathered from these interviews, along with the information
obtained through a teardown analysis and public comments, DOE refined
the engineering cost model. Next, DOE derived manufacturer markups
using publicly available commercial refrigeration industry financial
data, in conjunction with manufacturer feedback. The markups were used
to convert the MPCs into MSPs. Further discussion of the comments
received and the analytical methodology used is presented in the
following subsections. For additional detail, see chapter 5 of the NOPR
TSD.
a. Teardown Analysis
In the preliminary analysis TSD, DOE expressed its intent to update
its core case cost estimates, which were at that time developed based
on estimates from the January 2009 final rule, through performing
physical teardowns of selected units. These core case costs consist of
the costs to manufacture the structural members, insulation, shelving,
wiring, etc., but not the costs associated with the components that
could directly affect energy consumption, which were considered
collectively as design options and served as one of many inputs to the
engineering cost model. DOE first selected representative units for
physical teardown based on available offerings from the catalogs of
major manufacturers. DOE selected units that had sizes and feature sets
similar to those of the representative units modeled in the engineering
analytical model. DOE selected units for teardown representing each of
the proposed equipment families, with the exception of the HZO
family.\47\ The units were
[[Page 55920]]
then disassembled into their base components, and DOE estimated the
materials, processes, and labor required for the manufacture of each
individual component. This process is referred to as a ``physical
teardown.'' Using the data gathered from the physical teardowns, DOE
characterized each component according to its weight, dimensions,
material, quantity, and the manufacturing processes used to fabricate
and assemble it. These component data were then entered into a
spreadsheet and organized by system and subsystem levels to produce a
comprehensive bill of materials (BOM) for each unit analyzed through
the physical teardown process.
---------------------------------------------------------------------------
\47\ The reason why no HZO units were torn down was that the HZO
family is the least complex of the equipment classes with respect to
its construction. DOE felt that there was no additional data which
could be gained from teardown of this equipment which would not have
already been captured by the teardowns of other units.
---------------------------------------------------------------------------
The physical teardowns allowed DOE to identify the technologies,
designs, and manufacturing techniques that manufacturers incorporated
into the equipment that DOE analyzed. The result of each teardown was a
structured BOM, incorporating all materials, components, and fasteners,
classified as either raw materials or purchased parts and assemblies,
and characterizing the materials and components by weight,
manufacturing processes used, dimensions, material, and quantity. The
BOMs from the teardown analysis were then modified, and the results
used as one of the inputs to the cost model to calculate the MPC for
each representative unit modeled. The MPCs resulting from the teardowns
were then used to develop an industry average MPC for each equipment
class analyzed. See chapter 5 of the NOPR TSD for more details on the
teardown analysis.
b. Cost Model
The cost model for this rulemaking was divided into two parts. The
first of these was a standalone core case cost model, based on physical
teardowns, that was used for developing the core case costs for the 24
directly analyzed equipment classes. This cost model is a spreadsheet
that converts the materials and components in the BOMs from the
teardowns units into MPC dollar values based on the price of materials,
average labor rates associated with manufacturing and assembling, and
the cost of overhead and depreciation, as determined based on
manufacturer interviews and DOE expertise. To convert the information
in the BOMs to dollar values, DOE collected information on labor rates,
tooling costs, raw material prices, and other factors. For purchased
parts, the cost model estimates the purchase price based on volume-
variable price quotations and detailed discussions with manufacturers
and component suppliers. For fabricated parts, the prices of raw metal
materials (e.g., tube, sheet metal) are estimated based on 5-year
averages calculated from cost estimates obtained from sources including
the American Metal Market and manufacturer interviews. The cost of
transforming the intermediate materials into finished parts is
estimated based on current industry pricing.
The function of the cost model described above is solely to convert
the results of the physical teardown analysis into core case costs. To
achieve this, components immaterial to the core case cost (lighting,
compressors, fans, etc.) were removed from the BOMs, leaving the cost
model to generate values for the core case costs for each of the
teardown points. Then, these teardown-based core case BOMs were used to
develop a ``parameterized'' computational cost model, which allows a
user to virtually manipulate case parameters such as height, length,
insulation thickness, and number of doors by inputting different
numerical values for these features to produce new cost estimates. For
example, a user could start with the teardown data for a two-door case
and expand the model of the case computationally to produce a cost
estimate for a three-door case by changing the parameter representing
the number of doors. This parameterized model, coupled with the design
specifications chosen for each representative unit modeled in the
engineering analysis, was used to develop core case MPC cost estimates
for each of the 24 directly analyzed representative units. These values
served as one of several inputs to the engineering cost model.
The engineering analytical model, as implemented by DOE in a
Microsoft Excel spreadsheet, also incorporated the engineering cost
model, the second cost modeling tool used in this analysis. In the
engineering cost model, core case costs developed based on physical
teardowns were one input, and costs of the additional components
required for a complete piece of equipment (design options) were
another input. The two inputs were added together to arrive at an
overall MPC value for each equipment class. Based on the configuration
of the system at a given design option level, the appropriate design
option costs were added to the core case cost to reflect the cost of
the entire system. Costs for design options were calculated based on
price quotes from publicly available sources and discussions with
commercial refrigeration equipment manufacturers. Chapter 5 of the NOPR
TSD describes DOE's cost model and definitions, assumptions, data
sources, and estimates.
Some stakeholders expressed concern with the potential variability
in prices that served as inputs to the cost model. NEEA suggested that
using a forecast of materials futures market pricing might be a better
approach than using a historical average, and Hill Phoenix questioned
whether the 2009 cost model had been updated, as its cost structure had
significantly increased since that time. (NEEA, Public Meeting
Transcript, No. 31 at pp. 85-86; Hill Phoenix, Public Meeting
Transcript, No. 31 at p. 84) Southern Store Fixtures agreed with Hill
Phoenix, and noted that it would be advisable to use 2011 costs for
equipment that complies with the January 2009 final rule, instead of a
current market baseline. (Southern Store Fixtures, Public Meeting
Transcript, No. 31 at pp. 86-87)
Regarding the comments from Hill Phoenix and Southern Store
Fixtures, DOE has updated all of its cost modeling information. This
information includes component costs, which were based on public-source
data and estimates provided during manufacturer interviews, and core
case costs, which were developed based on DOE's teardown analysis
performed during the NOPR stage of the rulemaking. In response to
Southern Store Fixtures' comment that DOE should use 2011 costs in its
analyses for equipment that complies with the January 2009 final rule,
DOE believes that materials prices depend on broader market conditions
and are unlikely to be influenced by equipment that complies with the
January 2009 final rule. DOE calculates the materials cost based on
price information gathered from the market, and uses a methodology
based on the Bureau of Labor Statistics (BLS) Producer Price Indices to
account for fluctuations in materials prices and processing costs.
Regarding NEEA's suggestion that using a forecast of materials futures
market pricing might be preferable to using an historical average, DOE
believes that such price forecasting is speculative, and therefore DOE
has continued to use actual prices and averages thereof as the basis
for its analyses.
c. Manufacturer Production Cost
Once the cost estimates for all the components of each
representative unit, including the core case cost and design option
costs, were finalized, DOE totaled the costs in the engineering cost
model to calculate the MPC. DOE estimated the MPC at each efficiency
[[Page 55921]]
level considered for each directly analyzed equipment class, from the
baseline through the max-tech. After incorporating all of the
assumptions into the cost model, DOE calculated the percentages
attributable to each element of total production cost (i.e., materials,
labor, depreciation, and overhead). DOE used these production cost
percentages in the MIA (see section IV.K). DOE revised the cost model
assumptions used for the preliminary analysis based on teardown
analysis, updated pricing, and additional manufacturer feedback, which
resulted in refined MPCs and production cost percentages. DOE
calculated the average equipment cost percentages by equipment class.
Chapter 5 of the NOPR TSD presents DOE's estimates of the MPCs for this
rulemaking, along with the different percentages attributable to each
element of the production costs that comprise the total MPC.
d. Cost-Efficiency Relationship
The result of the engineering analysis is a cost-efficiency
relationship. DOE created a separate relationship for each input
capacity associated with each commercial refrigeration equipment class
examined for this NOPR. DOE also created 24 cost-efficiency curves,
representing the cost-efficiency relationship for each commercial
refrigeration equipment class.
To develop cost-efficiency relationships for commercial
refrigeration equipment, DOE examined the cost differential to move
from one design option to the next for manufacturers. DOE used the
results of teardowns to develop core case costs for the equipment
classes modeled, and added those results to costs for design options
developed from publicly available pricing information and manufacturer
interviews. Additional details on how DOE developed the cost-efficiency
relationships and related results are available in the chapter 5 of the
NOPR TSD. Chapter 5 of the NOPR TSD also presents these cost-efficiency
curves in the form of energy efficiency versus MPC. After the
publication of the preliminary analysis, several stakeholders provided
input and feedback regarding DOE's cost estimates, specifically
regarding insulation costs, LED lighting costs, and DOE's methodology
for estimating manufacturer overhead in its cost model. The following
sections address these stakeholder comments and concerns.
Insulation Cost Specifications
Several stakeholders submitted comments regarding DOE's estimated
costs and specifications for insulation. Traulsen observed that DOE's
estimates for the number of foaming fixtures \48\ present in a
manufacturing facility and units per year are high if they are meant to
represent the production of a base model by an average manufacturer.
(Traulsen, No. 45 at p. 4) Zero Zone noted that the material costs for
increasing foamed-in-place panels are not trivial, and that its foam
cost associated with adding a half inch of insulation to a five-door
case is approximately $25. (Zero Zone, No. 37 at p. 3) Zero Zone also
commented that the engineering costs modeled by DOE do not include any
redesign costs that are incurred as wall thickness changes, and that
foamed-in-place sheet metal panels are an integral part of the
structural design of cases. However, Zero Zone expressed concern that
the ability of vacuum insulated panels to perform as structural members
has not been verified and should be validated before vacuum insulated
panels are included in the analysis. (Zero Zone, No. 37 at p. 3) Zero
Zone concluded by stating that increased foam panel thickness should be
dropped from the analysis because DOE had not collected sufficient,
accurate cost information regarding this design option. (Zero Zone, No.
37 at p. 3)
---------------------------------------------------------------------------
\48\ Foaming fixtures are pieces of equipment consisting of
molds to guide the injection of foamed-in-place insulation so that
that the foam takes a desired shape once hardened.
---------------------------------------------------------------------------
DOE considered these comments in revising its implementation of
improved insulation during the NOPR analyses. Regarding Traulsen's
statement, DOE based its estimates of costs and specifications on
discussions with manufacturers and site visits of manufacturing
facilities and, while DOE understands the variability in manufacturing
practices and equipment utilization that exists across manufacturers
and product line offerings, DOE believes those estimates are sound. DOE
took into account the comment from Zero Zone regarding additional foam
costs and, in response, accounted for the differential cost of
additional foam due to changes in wall thickness in its engineering
analysis for the NOPR. However, regarding Zero Zone's assertion that
redesign costs are not accounted for in the engineering analysis, the
engineering model does include an estimate of engineering cost to
account for the design efforts that must be incurred in developing a
case with higher wall thickness. DOE has also discussed the
implementation of vacuum insulated panels with manufacturers, cross-
referenced its data with other rulemaking analyses in which vacuum
insulated panels were used, and revised its data accordingly. As a
result, DOE believes that its estimates and assumptions for improved
insulation are valid, and has retained those design options for the
NOPR.
Light-Emitting Diode Cost Specifications
Stakeholders also provided feedback on pricing and performance
related to DOE's LED specifications in the engineering model. ASAP and
NRDC stated that DOE should not assume LED prices remain constant
because LEDs are an emerging technology and will likely experience a
dramatic price decline in the near future. The comment cited DOE's 2011
Solid-State Lighting Research and Development (R&D) Multi-Year Program
Plan (MYPP),\49\ which projects that, between 2010 and 2015, prices of
some LEDs will decrease by 85 percent, while LED lighting will
experience a significant increase in efficacy during the same period.
(ASAP and NRDC, No. 34 at p. 3) These stakeholders added that it is
important for DOE to capture cost decreases not only during the
analysis period (2017-2046), but prior to the proposed 2017 compliance
date for the amended standards considered in this rulemaking as well,
stating that a price estimate for 2017 will be needed for the LCC
calculations to be accurate. ASAP and NRDC stated that, according to
the DOE solid-state lighting documents referenced, if today's LED
prices are held constant through the 2017 compliance date, the result
will be a misrepresentation in the LCC of the value of potential LED
energy savings; as a result, ASAP and NRDC urged DOE to develop cost
estimates reflecting this price decline. (ASAP and NRDC, No. 34 at p.
3) NEEA referenced the DOE 2011 MYPP as well, and agreed that it
believed that DOE is grossly overestimating the future cost of LED
lighting. (NEEA, No. 36 at pp. 3-4)
---------------------------------------------------------------------------
\49\ The DOE Solid-State Lighting Research and Development
Multi-Year Program Plan outlines DOE's research goals and planned
methodologies with respect to the advancement of solid-state
lighting technologies in the United States. The complete document is
available at: https://apps1.eere.energy.gov/buildings/publications/pdfs/ssl/ssl_mypp2011_web.pdf.
---------------------------------------------------------------------------
DOE agrees with these stakeholders that forecasts of the LED
lighting industry, including those performed by DOE, suggest that LED
lighting is an emerging technology that will continue to experience
significant price decreases in coming years. For this reason, to
capture the anticipated cost reduction in LED fixtures in the analyses
for this
[[Page 55922]]
rulemaking, DOE incorporated price projections from its Solid-State
Lighting Program into its MPC values for the primary equipment classes.
The price projections for LED case lighting were developed from
projections developed for the DOE Solid-State Lighting Program 2012
report, Energy Savings Potential of Solid-State Lighting in General
Illumination Applications 2010 to 2030 (``the energy savings
report'').\50\ In the appendix of this report, price projections from
2010 to 2030 were provided in ($/klm) for LED lamps and LED luminaires.
DOE analyzed the models used in the Solid-State Lighting Program work
and determined that the LED luminaire projection would serve as an
appropriate proxy for a cost projection to apply to refrigerated case
LEDs.
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\50\ Navigant Consulting, Inc., Energy Savings Potential for
Solid-State Lighting in General Illumination Applications. 2012.
Prepared for the U.S. Department of Energy--Office of Energy
Efficiency and Renewable Energy Building Technologies Office,
Washington, DC.
---------------------------------------------------------------------------
The price projections presented in the Solid-State Lighting
Program's energy savings report are based on the DOE's 2011 MYPP. The
MYPP is developed based on input from manufacturers, researchers, and
other industry experts. This input is collected by the DOE at annual
roundtable meetings and conferences. The projections are based on
expectations dependent on the continued investment into solid-state
lighting by the DOE.
DOE incorporated the price projection trends from the energy
savings report into its engineering analysis by using the data to
develop a curve of decreasing LED prices normalized to a base year.
That base year corresponded to the year when LED price data was
collected for the NOPR analyses of this rulemaking from catalogs,
manufacturer interviews, and other sources. DOE started with this
commercial refrigeration equipment-specific LED cost data and then
applied the anticipated trend from the energy savings report to
forecast the projected cost of LED fixtures for commercial
refrigeration equipment at the time of compliance with the proposed
rule (2017). These 2017 cost figures were incorporated into the
engineering analysis as comprising the LED cost portions of the MPCs
for the primary equipment classes. Table IV.1 shows the normalized LED
price deflators used in this NOPR analysis.
Table IV.1--LED Price Deflators Used in the NOPR Analysis
----------------------------------------------------------------------------------------------------------------
Normalized to Normalized to Normalized to Normalized to
Year 2013 2017 Year 2013 2017
----------------------------------------------------------------------------------------------------------------
2010.......................... 2.998 5.652 2021............ 0.361 0.681
2011.......................... 1.799 3.392 2022............ 0.335 0.631
2012.......................... 1.285 2.423 2023............ 0.312 0.588
2013.......................... 1.000 1.885 2024............ 0.292 0.550
2014.......................... 0.819 1.543 2025............ 0.274 0.517
2015.......................... 0.693 1.306 2026............ 0.259 0.488
2016.......................... 0.601 1.133 2027............ 0.245 0.462
2017.......................... 0.530 1.000 2028............ 0.232 0.438
2018.......................... 0.475 0.895 2029............ 0.221 0.417
2019.......................... 0.430 0.810 2030............ 0.211 0.398
2020.......................... 0.393 0.740 2031-2046 *..... 0.211 0.398
----------------------------------------------------------------------------------------------------------------
* DOE did not have data available to project prices beyond 2030. Therefore, for the NOPR analysis, it was
assumed that the LED prices stay constant after 2030.
The LCC analysis (section IV.H) was carried out with the
engineering numbers that account for the 2017 prices of LED luminaires.
The reduction in price of LED luminaires from 2018 through 2030 was
taken into account in the NIA (section IV.I). The cost reductions were
calculated for each year from 2018 through 2030 and subtracted from the
equipment costs in the NIA. The reduction in lighting maintenance costs
\51\ due to reduction in LED prices for equipment installed in 2018 to
2030 were also calculated and appropriately deducted from the lighting
maintenance costs.
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\51\ Discussion related to lighting maintenance costs for
commercial refrigeration equipment can be found in section IV.H.3,
and a more detailed explanation can be found in chapter 8 of the
NOPR TSD.
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Manufacturer Overhead Costs
NEEA commented that, in the DOE rulemaking on distribution
transformers, manufacturers had stated that they do not apply overhead
to material costs, but to labor costs only, and that the application of
overhead to both of these cost components can have a major impact on
MPCs, depending on how much of the product cost is attributed to each
component. (NEEA, Public Meeting Transcript, No. 31 at pp. 70-71) In
another comment, NEEA elaborated on this statement, adding that during
the distribution transformers public meeting, manufacturers stated that
they do not apply factory overhead rates to the cost of materials, but
only to labor. NEEA went on to suggest that DOE use this methodology to
the extent applicable to commercial refrigeration equipment, and adjust
its cost estimation methods to take this approach into account. (NEEA,
No. 36 at pp. 4-5)
In DOE's cost model for commercial refrigeration equipment, the
following three overhead components are dependent on labor or
materials: utilities, property tax, and insurance. The cost of
utilities is a function of equipment costs only (no labor included) and
is calculated using a ratio derived in the past from U.S. Securities
and Exchange Commission (SEC) 10-K forms for appliance
manufacturers.\52\ The ratios for property tax and insurance costs are
also based on past 10-K form analysis, but are dependent on overall
unit costs (i.e., cost of goods sold). Altogether, these three
components represent only about 3 percent of the total cost of a unit,
so whether they are based on labor and materials or on labor only, they
are unlikely to have a significant effect on MPCs, especially on an
incremental cost basis. DOE welcomes suggestions on how to improve its
methodology and hopes that stakeholders can provide DOE with
documentation for improved insurance, property tax, and utility
calculations. In particular, DOE would welcome nationwide data on
property tax rates based on property, plant, and
[[Page 55923]]
equipment valuations; average power consumption for conditioned as well
as unconditioned factory spaces; and insurance rates and how they are
applied.
---------------------------------------------------------------------------
\52\ A searchable directory of SEC filings is available at:
www.sec.gov/edgar/searchedgar/companysearch.html.
---------------------------------------------------------------------------
For the distribution transformers energy conservation standards
rulemaking, DOE did not apply overhead rates to labor--overhead was
only applied to direct material production costs. For more details on
material and labor inputs for distribution transformers, see chapter 5
of the TSD for the distribution transformers preliminary analysis
(www1.eere.energy.gov/buildings/appliance_standards/commercial/pdfs/transformer_preanalysis_ch5.pdf). Furthermore, due to the different
industries in which distribution transformer and commercial
refrigeration manufacturers operate, the same cost model may not
necessarily be applicable to both.
e. Manufacturer Markup
To account for manufacturers' non-production costs and profit
margin, DOE applies a non-production cost multiplier (the manufacturer
markup) to the full MPC. The resulting MSP is the price at which the
manufacturer can recover all production and non-production costs and
earn a profit. To meet new or amended energy conservation standards,
manufacturers often introduce design changes to their product lines
that result in increased MPCs. Depending on the competitive environment
for this equipment, some or all of the increased production costs may
be passed from manufacturers to retailers and eventually to customers
in the form of higher purchase prices. The MSP should be high enough to
recover the full cost of the equipment (i.e., full production and non-
production costs) and yield a profit. The manufacturer markup has an
important bearing on profitability. A high markup under a standards
scenario suggests manufacturers can readily pass along the increased
variable costs and some of the capital and equipment conversion costs
(one-time expenditures) to customers. A low markup suggests that
manufacturers will not be able to recover as much of the necessary
investment in plant and equipment.
To calculate the manufacturer markups, DOE used 10-K reports
submitted to the SEC by the six publicly owned commercial refrigeration
equipment companies in the United States. (SEC 10-K reports can be
found using the search database available at www.sec.gov/edgar/searchedgar/webusers.htm.) The financial figures necessary for
calculating the manufacturer markup are net sales, costs of sales, and
gross profit. DOE averaged the financial figures spanning the years
from 2004 to 2010 \53\ to calculate the markups. For commercial
refrigeration equipment, to calculate the average gross profit margin
for the periods analyzed for each firm, DOE summed the gross profit
earned during all of the aforementioned years and then divided the
result by the sum of the net sales for those years. DOE presented the
calculated markups to manufacturers during the manufacturer interviews
for the NOPR (see section IV.E.4.g). DOE considered manufacturer
feedback to supplement the calculated markup, and refined the markup to
better reflect the commercial refrigeration market. DOE developed the
manufacturer markup by weighting the feedback from manufacturers on a
market share basis because manufacturers with larger market shares more
significantly affect the market average. DOE used a constant markup to
reflect the MSPs of both the baseline equipment and higher efficiency
equipment. DOE used this approach because amended standards may
transform high-efficiency equipment, which currently is considered to
be premium equipment, into baseline equipment. See chapter 5 of the
NOPR TSD for more details about the manufacturer markup calculation.
---------------------------------------------------------------------------
\53\ Typically, DOE uses the data for the 5 years preceding the
year of analysis. However, in this case additional data were
available up to 2004. Hence, data from 2004 to 2010 were used for
these calculations.
---------------------------------------------------------------------------
f. Shipping Costs
The final component of the MSP after the MPC and manufacturer
markup is the shipping cost associated with moving the equipment from
the factory to the first point on the distribution chain. During
interviews, manufacturers stated that the specific party (manufacturer
or buyer) that incurs that cost for a given shipment may vary based on
the terms of the sale, the type of account, the manufacturer's own
business practices, and other factors. However, for consistency, DOE
includes shipping costs as a component of MSP. In calculating the
shipping costs for use in its analysis, DOE first gathered estimates of
the cost to ship a full trailer of manufactured equipment an average
distance in the United States, generally representative of the distance
from a typical manufacturing facility to the first point on the
distribution chain. DOE then used representative unit sizes to
calculate a volume for each unit. Along with the dimensions of a
shipping trailer and a loading factor to account for inefficiencies in
packing, DOE used this cost and volume information to develop an
average shipping cost for each equipment class directly analyzed.
g. Manufacturer Interviews
Throughout the rulemaking process, DOE has sought and continues to
seek feedback and insight from interested parties that would improve
the information used in its analyses. DOE interviewed manufacturers as
a part of the NOPR MIA (see section IV.K). During the interviews, DOE
sought feedback on all aspects of its analyses for commercial
refrigeration equipment. For the engineering analysis, DOE discussed
the analytical assumptions and estimates, cost model, and cost-
efficiency curves with manufacturers. DOE considered all of the
information learned from manufacturers when refining the cost model and
assumptions. However, DOE incorporated equipment and manufacturing
process figures into the analysis as averages to avoid disclosing
sensitive information about individual manufacturers' equipment or
manufacturing processes. More details about the manufacturer interviews
are contained in chapter 12 of the NOPR TSD.
5. Energy Consumption Model
The energy consumption model is the second key analytical model
used in constructing cost-efficiency curves. This model estimates the
daily energy consumption, calculated using the DOE test procedure, of
commercial refrigeration equipment in kilowatt-hours at various
performance levels using a design-option approach. In this methodology,
a unit is initially modeled at a baseline level of performance, and
higher-efficiency technologies, referred to as design options, are then
implemented and modeled to produce incrementally more-efficient
equipment designs. The model is specific to the types of equipment
covered under this rulemaking, but is sufficiently generalized to model
the energy consumption of all covered equipment classes. DOE developed
the energy consumption model as a Microsoft Excel spreadsheet.
For a given equipment class, the model estimates the daily energy
consumption for the baseline, as well as the energy consumption of
subsequent levels of performance above the baseline. The model
calculates each performance level separately. For the baseline level, a
corresponding cost is calculated using the cost model, which is
described in section IV.E.4.b. For each level above the baseline, the
changes in system cost due to the implementation
[[Page 55924]]
of various design options are used to recalculate the cost.
Collectively, the data from the energy consumption model are paired
with the cost model data to produce points on cost-efficiency curves
corresponding to specific equipment configurations. After the
publication of the preliminary analysis, DOE received numerous
stakeholder comments regarding the methodology and results of the
energy consumption model.
a. Energy Consumption Model Results
Zero Zone noted that, while the overall modeling approach is
appropriate, the results for the VCT.RC.M class are, in its opinion,
too restrictive. (Zero Zone, No. 37 at p. 1) Similarly, Traulsen
believed that DOE's numbers were slightly high for the VCT.SC.L
equipment class, and that the incremental energy change may have been
overstated, while the cost was understated, for technologies such as
LED lighting, high-performance doors, and vacuum insulated panels.
(Traulsen, No. 45 at p. 4)
In its analyses for the NOPR stage of this rulemaking, DOE reviewed
its inputs to the engineering cost model and energy consumption model.
This included reviewing publicly available data from sources such as
manufacturer specification sheets and catalogs, as well as
incorporating information drawn from stakeholder comments and
manufacturer interviews conducted as part of the MIA process. The
process included discussion and investigation of specific design
options, such as the aforementioned LED lighting and vacuum insulated
panels. DOE has taken efforts to incorporate all available information
into its models to produce the most accurate results possible. In
response to the comments by Zero Zone and Traulsen regarding energy
consumption and cost results for the VCT.RC.M and VCT.SC.L classes,
respectively, DOE has reviewed and updated its methodologies during the
NOPR analyses to account for the latest information available, and is
confident that its current results best reflect this information.
b. Anti-Sweat Heater Power
Traulsen suggested that DOE investigate whether the anti-sweat
power consumed by the VCT.SC.L and VCT.SC.I equipment classes can truly
be zero when high-performance doors are used, and suggested that DOE
review its data. Traulsen added that it believed that, even with these
door types, anti-sweat heaters are often still found on the cabinet
body, especially in low-temperature equipment, which is prone to
condensation due to conduction. (Traulsen, No. 45 at pp. 6-7)
In DOE's preliminary engineering analysis, anti-sweat heater power
values were assigned for each of the transparent door configurations
based on available data from manufacturer specification sheets and data
obtained during manufacturer interviews. For medium-temperature doors,
both commercial refrigeration equipment manufacturer and door
manufacturer literature indicated that truly energy-free door designs
with no anti-sweat heat are available on the market. This finding was
confirmed through discussions with commercial refrigeration equipment
manufacturers. However, for low- and ice-cream temperature doors, DOE
has found that, as Traulsen stated, anti-sweat heat is still required,
at a minimum, on the door frame. Table 5.6.9 of the preliminary
analysis TSD chapter 5 lists anti-sweat heater powers of 165 and 80
watts for standard and high-performance doors, respectively, at low and
ice-cream temperatures. These values are consistent with those that DOE
has found through its research, and were retained in the NOPR analysis.
c. Evaporator Fan Motor Power
Zero Zone observed that, while DOE's assumptions regarding motor
efficiency are valid, the evaporator fan specifications used by DOE for
freezers of 6 rated watts per fan were flawed because freezer fans are
generally higher in wattage (i.e., 9 or 12 watts) to increase airflow
and decrease frost formation. (Zero Zone, No. 37 at p. 2)
After receiving the comment by Zero Zone, DOE further researched
evaporator fan motor power values through manufacturer catalogs and
discussed the subject in manufacturer interviews during the NOPR stage
of the rulemaking. The data yielded by this effort showed that remote
condensing freezer cases do utilize evaporator fan motors with rated
shaft powers generally closer to 9 watts. As a result, DOE updated the
design specifications for those representative units in its engineering
model to more accurately reflect the standard design of those units.
d. Condenser Energy Consumption
Southern Store Fixtures stated that the energy usage of the
condenser is missing from the energy consumption model diagram
contained in chapter 5 of the preliminary analysis TSD (Figure 5.6.1).
Regarding the comment by Southern Store Fixtures, Figure 5.6.1 of
the preliminary analysis TSD chapter 5 does include a representation of
the condenser fan motor energy consumption under the category of
component energy consumption. The energy usage attributed to the
condenser fan, found in self-contained units, is accounted for in the
energy consumption model by the compressor duty cycle. For remote
condensing units, the condenser fan energy consumption is not
explicitly calculated; instead, remote case compressor energy
consumption is calculated based on the energy efficiency ratio values
given in AHRI 1200.
e. Evaporator Coil Design
Zero Zone expressed concerns about DOE's assumptions regarding
evaporator coils, and noted that reduced fin spacing \54\ will result
in coils that do not function well in the field due to excessive frost
loading. (Zero Zone, No. 37 at p. 2) Zero Zone also observed that the
improved evaporator coil described in the preliminary analysis TSD for
the VCT.RC.M and VCT.RC.L equipment classes would raise evaporator
temperatures to the same level as the discharge air temperature, which
is not feasible. (Zero Zone, No. 37 at pp. 2-3) Additionally, Zero Zone
recommended that DOE conduct performance testing before assuming that
high-performance coils will work in all situations because, Zero Zone
asserted, DOE failed to address issues with superheat control for these
advanced coils, namely that as the evaporating temperature becomes
closer to the return air temperature, the ability of the expansion
valve to maintain a stable superheat is decreased. (Zero Zone, No. 37
at p. 3)
---------------------------------------------------------------------------
\54\ Fin spacing, or fin pitch, refers to the distance between
the flat fins that are oriented transverse to the direction of
airflow across a fin-and-tube heat exchanger.
---------------------------------------------------------------------------
With respect to Zero Zone's comment on reduction of fin spacing,
DOE confirmed during manufacturer interviews that excessive frost
loading becomes a concern once fin spacing is reduced below certain
thresholds. As a result, DOE sought to ensure that its coil models
reflected coil geometries that are suitable for production and field
use without incurring such negative secondary effects as increased
frost buildup. With respect to Zero Zone's second comment involving the
evaporator coil temperatures, the referenced statement in the
preliminary analysis TSD was intended to be a single example, and was
incorrectly presented as applying to all equipment classes. The
engineering model never utilized evaporator temperatures that
[[Page 55925]]
were physically infeasible or impossible to attain.
During its NOPR analyses, DOE performed independent modeling of
evaporator and condenser coils based on physical teardowns of coils
available on the market, coupled with numerical modeling of the coil
performance. Design parameters were varied from the baseline, and the
heat transfer performance of the coils was iteratively analyzed to
yield higher efficiency coil designs. Cost modeling was utilized to
produce cost estimates for the baseline and high-performance coil
designs. This analysis served as the basis for the coil cost and
performance values input into the engineering model. While DOE was
unable to perform physical testing of its high-performance coil
designs, as those designs were solely analytically derived and not
constructed as prototypes, DOE controlled the parameters of its
analysis to retain the required conditions for proper system
performance. DOE believes that this analysis addresses the concerns
presented by Zero Zone in its comments. For more details on the coil
modeling process, see chapter 5 of the NOPR TSD.
F. Markups Analysis
DOE applies multipliers called ``markups'' to the MSP to calculate
the customer purchase price of the analyzed equipment. These markups
are in addition to the manufacturer markup (discussed in section
IV.E.4.e) and are intended to reflect the cost and profit margins
associated with the distribution and sales of the equipment. DOE
identified three major distribution channels for commercial
refrigeration equipment, and markup values were calculated for each
distribution channel based on industry financial data. The overall
markup values were then calculated by weighted-averaging the individual
markups with market share values of the distribution channels. See
chapter 6 of the NOPR TSD for more details on DOE's methodology for
markups analysis.
DOE received a number of comments regarding markups after the
publication of the preliminary analysis.
1. Baseline and Incremental Markups
Traulsen stated that, in its experience, the initial markup on
equipment will be consistent with production costs, and that the
incremental markups will increase with higher levels of product
efficiency due to product differentiation. (Traulsen, No. 45 at p. 4)
However, Traulsen also stated that it did not believe that wholesalers
differentiate markups based on the technologies inherently present in
this equipment and that, in its experience, wholesalers/resellers will
use traditional markup rates regardless of equipment's energy
efficiency. (Traulsen, No. 45 at p. 7)
In general, DOE has found that markup values vary over a wide range
according to general economic outlook, manufacturer brand value,
inventory levels, manufacturer rebates to distributors based on sales
volume, newer versions of the same equipment model introduced into the
market by the manufacturers, and availability of cheaper or more
technologically advanced alternatives. Based on market data, DOE
divided distributor costs into: (1) Direct cost of equipment sales; (2)
labor expenses; (3) occupancy expenses; (4) other operating expenses
(such as depreciation, advertising, and insurance); and (5) profit. DOE
assumed that, for higher efficiency equipment only, the ``other
operating costs'' and ``profit'' scale with MSP, while the remaining
costs scale the same way as does the MSP of baseline equipment. In
other words, the remaining costs stay constant irrespective of
equipment efficiency level. Incremental markups were applied as
multipliers only to the MSP increments (of higher efficiency equipment
compared to baseline) and not to the entire MSP. This assumption is in
line with Traulsen's first comment. Further, while DOE's use of
separate values for baseline and incremental markup rates will lead to
higher marked-up values for equipment at higher efficiency levels, the
rate of markup will be same for all higher efficiency levels, which is
consistent with Traulsen's second comment.
2. Distribution Channel Market Shares
True stated that national chains are a major part of the glass-
doored, self-contained equipment market. True stated that it serves
these via national accounts, adding that the market shares of the
national accounts channel and the distributor channel that were used
for the preliminary analysis of this rulemaking should be reversed.
(True, Public Meeting Transcript, No. 31 at p. 80) NEEA agreed with
True, stating that DOE had more or less reversed the market shares of
the distribution channels for glass door and open self-contained
equipment. NEEA also agreed with other commenters who stated that DOE's
market channel fractions applied more to specialty and solid-door self-
contained equipment. (NEEA, No. 36 at p. 5) Southern Store Fixtures
added that it sells many remote condensing units directly to the end
users, and that it also sells many self-contained units directly to
supermarket and convenience store chains without using an intermediary.
(Southern Store Fixtures, Public Meeting Transcript, No. 31 at pp. 80-
81) Traulsen commented that it believed that DOE's distribution channel
data were reasonably accurate, within plus or minus 10 percent.
(Traulsen, No. 45 at p. 3)
DOE agrees with comments from True, NEEA, and Southern Store
Fixtures regarding market shares for self-contained display cases.
Consequently, DOE made the distribution channel market shares for all
display cases (VOP, SVO, HZO, VCT, HCT, SOC, and PD), irrespective of
self-contained or remote condensing configuration, equal to that of the
remote condensing equipment market shares that were proposed in the
preliminary analysis TSD. DOE kept the market shares of VCS and HCS
equipment families same as the self-contained equipment market shares
proposed in the preliminary analysis TSD. The distribution channel
market shares used for this NOPR are shown in Table IV.2. Chapter 6 and
appendix 6A of the NOPR TSD provide complete details of the methodology
and data used in the estimation of the markups.
Table IV.2--Distribution Channel Market Shares
----------------------------------------------------------------------------------------------------------------
National
account Wholesaler Contractor
Equipment family channel channel channel
(percent) (percent) (percent)
----------------------------------------------------------------------------------------------------------------
VOP, SVO, HZO, VCT, HCT, SOC, and PD............................ 70 15 15
VCS and HCS..................................................... 30 60 10
----------------------------------------------------------------------------------------------------------------
[[Page 55926]]
G. Energy Use Analysis
Several stakeholders commented on DOE's methodology for
investigating secondary impacts of efficiency improvement, as described
in the preliminary analysis. Southern Store Fixtures agreed with DOE's
conclusion that efficiency improvements in self-contained equipment do
not have a noticeable impact on building heating and cooling loads.
Southern Store Fixtures further stated that a kitchen area, with
limited space and limited equipment, differs from larger settings such
as supermarkets, which contain a large quantity of self-contained
equipment. Southern Store Fixtures asked whether the impact of large
numbers of self-contained units on the heating and cooling loads of
buildings had been investigated. (Southern Store Fixtures, Public
Meeting Transcript, No. 31 at pp. 93-94)
Other stakeholders, however, had questions regarding DOE's methods.
NRDC asked why only self-contained units were reviewed for secondary
impacts, and whether any rack-based units had been reviewed. (NRDC,
Public Meeting Transcript, No. 31 at p. 100) NEEA stated that the
placement of multiple cases in a supermarket will affect heating,
ventilation, and air-conditioning (HVAC) loads, and suggested that DOE
reexamine the subject by modeling the performance of commercial
refrigeration equipment in a business type other than a restaurant,
such as a grocery store. NEEA added that restaurants typically have
high ventilation loads, and opined that, in a space such as a
supermarket, where the refrigeration loads approximate the ventilation
loads, DOE's results are inaccurate. NEEA added that mechanical
engineers use DOE-2 \55\ to model secondary impacts. (NEEA, Public
Meeting Transcript, No. 31 at pp. 98-100)
---------------------------------------------------------------------------
\55\ DOE-2 is a widely used and accepted freeware building
energy analysis program that can predict the energy use and cost for
different types of buildings. DOE-2 uses a description of the
building layout, construction, usage, conditioning systems and
utility rates provided by the user, along with weather data, to
perform an hourly simulation of the building and to estimate utility
bills.
---------------------------------------------------------------------------
NEEA continued, stating that self-contained equipment, because it
is not perfectly efficient, will emit more heat into its surroundings
than it absorbs, which could be of benefit in the heating season but
which is definitely a detriment in the cooling season. While the
magnitude of these effects will depend on the equipment's geographic
location, NEEA expressed its belief that DOE should not ignore this
issue. NEEA added that DOE should quantify the contributions to space
cooling and heating loads being generated by self-contained equipment
so that stakeholders can make an informed judgment as to their
significance. (NEEA, No. 36 at p. 5)
In response to NRDC's comment regarding modeling rack-based units,
DOE points to the January 2009 final rule analysis that presents an
extensive energy use analysis for remote condensing equipment and self-
contained equipment without doors. The analysis was carried out by
simulating display cases in supermarkets using the DOE-2.2 software
package. Details of this analysis can be found in chapter 7 of the
January 2009 final rule TSD (www1.eere.energy.gov/buildings/appliance_standards/commercial/pdfs/chp_7_cre_energy_final.pdf). Based on
this energy use analysis, DOE concluded that the overall impact of the
considered design options had only a minor differential impact on the
overall HVAC energy consumption of supermarkets. Further, DOE concluded
that the energy consumption model used in the engineering analysis
simulated the energy consumption of the various equipment classes with
adequate accuracy, and therefore DOE used the estimates from the
engineering analysis for the LCC and subsequent analyses.
For the current rulemaking, DOE received comments during the May
2010 Framework document public meeting regarding the proportionally
larger share of self-contained equipment examined in this rulemaking
compared to that examined in the January 2009 final rule, and the
impact of this equipment on building HVAC loads. DOE evaluated the
impact of self-contained equipment through whole-building simulations
with a VCT.SC.L freezer in restaurant buildings using the whole-
building energy use simulation tool EnergyPlus, which is the primary
software tool supported by DOE's Building Technologies Program for
energy use analysis of buildings. Through these simulations, DOE found
that the differential impact of efficiency improvements in VCT.SC.L
equipment on the HVAC loads of restaurant buildings was negligible.
Since VCT.SC.L energy consumption is one of the highest among the major
self-contained equipment classes, DOE concluded that the incremental
impact of efficiency improvements in all self-contained refrigerators
and freezers on HVAC loads of restaurant buildings is negligible. While
it is true, as stated in NEEA's comment, that restaurant building
models have higher ventilation loads than other building models, DOE
decided, as a matter of policy, that it would not assess the secondary
impacts of amended standards such as the impacts of improved equipment
efficiency on building HVAC loads. Therefore, DOE did not pursue this
matter any further in its NOPR analysis.
In response to NEEA's comment regarding the equipment's heat
emitted by self-contained equipment and the geographic location of
these units, DOE points to chapter 7 of the preliminary analysis TSD
for complete details of the analysis. The whole-building simulations
conducted for the preliminary analysis were carried out in 15 different
climates zones, representing all the major climate zones in the United
States, with an appropriate weighting factor applied to each climate
zone. Further, the analysis was carried out over 1 full year (365
days). The results of the preliminary energy use analysis were obtained
by averaging the energy consumption of the equipment over 1 full year
and over all the major climate zones in the United States.
DOE understands that the presence of many self-contained
refrigeration units may have a considerable impact on the HVAC loads of
a business establishment, as stated by Southern Store Fixtures.
However, DOE reiterates that the objective of its analysis is to assess
only the differential impact of equipment efficiency improvements, and
not to assess the impact of total heat output by a self-contained unit.
Moreover, DOE's energy use analysis is concerned with the impact of
only one unit of commercial refrigeration equipment. As stated above,
DOE found that the differential impact of equipment efficiency
improvements to a VCT.SC.L freezer on the building HVAC loads was
negligible.
As a matter of policy, DOE has determined that it will not carry
out studies to determine the impact of efficiency improvements to
equipment on building HVAC loads in appliance and commercial equipment
standards rulemakings.
H. Life-Cycle Cost Analysis
DOE conducts LCC analysis to evaluate the economic impacts of
potential amended energy conservation standards on individual
commercial customers--that is, buyers of the equipment. LCC is defined
as the total customer cost over the life of the equipment, and consists
of purchase price, installation costs, and operating costs
(maintenance, repair, and energy costs). DOE discounts future operating
costs to the time of purchase and sums them over the expected lifetime
of the piece of equipment. PBP is defined as
[[Page 55927]]
the estimated amount of time it takes customers to recover the higher
installed costs of more-efficient equipment through savings in
operating costs. DOE calculates the PBP by dividing the increase in
installed costs by the average savings in annual operating costs.
As part of the engineering analysis, design option levels were
ordered based on increasing efficiency (i.e., decreasing energy
consumption) and increasing MSP. For the LCC analysis, DOE chose a
maximum of eight levels, henceforth referred to as ``efficiency
levels,'' from the list of engineering design option levels. For
equipment classes for which fewer than eight design option levels were
defined in the engineering analysis, all design option levels were
used. However, for equipment classes where more than eight design
option levels were defined, DOE selected specific levels to analyze in
the following manner:
1. The lowest and highest energy consumption levels provided in the
engineering analysis were preserved.
2. If the difference in reported energy consumptions and reported
manufacturer price between sequential levels was minimal, only the
higher efficiency level was selected.
3. If the energy consumption savings benefit between efficiency
levels relative to the increased cost was very similar across multiple
sequential levels, an intermediate level was not selected as an
efficiency level.
The first efficiency level (Level 1) in each equipment class is the
least efficient and the least expensive equipment in that class. The
higher efficiency levels (Level 2 and higher) exhibit progressive
increases in efficiency and cost from Level 1. The highest efficiency
level in each equipment class corresponds to the max-tech level. DOE
treats the efficiency levels as ``candidate standard levels,'' as each
higher efficiency level represents a potential new standard level.
The installed cost of equipment to a customer is the sum of the
equipment purchase price and installation costs. The purchase price
includes MPC, to which a manufacturer markup and outbound freight cost
are applied to obtain the MSP. This value is calculated as part of the
engineering analysis (chapter 5 of the NOPR TSD). DOE then applies
additional markups to the equipment to account for the markups
associated with the distribution channels for the particular type of
equipment (chapter 6 of the NOPR TSD). Installation costs varied by
State, depending on the prevailing labor rates.
Operating costs for commercial refrigeration equipment are the sum
of maintenance costs, repair costs, and energy costs. These costs are
incurred over the life of the equipment and therefore are discounted to
the base year (2017, which is the compliance date of any amended
standards that are established as part of this rulemaking). The sum of
the installed cost and the operating cost, discounted to reflect the
present value, is termed the life-cycle cost or LCC.
Generally, customers incur higher installed costs when they
purchase higher efficiency equipment, and these cost increments will be
partially or wholly offset by savings in the operating costs over the
lifetime of the equipment. Usually, the savings in operating costs are
due to savings in energy costs because higher efficiency equipment uses
less energy over the lifetime of the equipment. Often, the LCC of
higher efficiency equipment is less than lower efficiency equipment.
LCC savings are calculated for each efficiency level of each equipment
class.
The PBP of higher efficiency equipment is obtained by dividing the
increase in the installed cost by the decrease in annual operating
cost. In addition to energy costs (calculated using the electricity
price forecast for the first year), the annual operating cost includes
annualized maintenance and repair costs. PBP is calculated for each
efficiency level of each equipment class.
Apart from MSP, installation costs, and maintenance and repair
costs, other important inputs for the LCC analysis are markups and
sales tax, equipment energy consumption, electricity prices and future
price trends, expected equipment lifetime, and discount rates.
Many inputs for the LCC analysis are estimated from the best
available data in the market, and in some cases the inputs are
generally accepted values within the industry. In general, each input
value has a range of values associated with it. While single
representative values for each input may yield an output that is the
most probable value for that output, such an analysis does not provide
the general range of values that can be attributed to a particular
output value. Therefore, DOE carried out the LCC analysis in the form
of Monte Carlo simulations,\56\ in which certain inputs were expressed
as a range of values and probability distributions to account for the
ranges of values that may be typically associated with the respective
input values. The results, or outputs, of the LCC analysis are
presented in the form of mean and median LCC savings; percentages of
customers experiencing net savings, net cost and no impact in LCC; and
median PBP. For each equipment class, 10,000 Monte Carlo simulations
were carried out. The simulations were conducted using Microsoft Excel
and Crystal Ball, a commercially available Excel add-in used to carry
out Monte Carlo simulations.
---------------------------------------------------------------------------
\56\ Monte Carlo simulation is, generally, a computerized
mathematical technique that allows for computation of the outputs
from a mathematical model based on multiple simulations using
different input values. The input values are varied based on the
uncertainties inherent to those inputs. The combination of the input
values of different inputs is carried out in a random fashion to
simulate the different probable input combinations. The outputs of
the Monte Carlo simulations reflect the various outputs that are
possible due to the variations in the inputs.
---------------------------------------------------------------------------
LCC savings and PBP are calculated by comparing the installed costs
and LCC values of standards-case scenarios against those of base-case
scenarios. The base-case scenario is the scenario in which equipment is
assumed to be purchased by customers in the absence of the proposed
energy conservation standards. Standards-case scenarios are scenarios
in which equipment is assumed to be purchased by customers after the
amended energy conservation standards, determined as part of the
current rulemaking, go into effect. The number of standards-case
scenarios for an equipment class is equal to one less than the total
number of efficiency levels in that equipment class, since each
efficiency level above Efficiency Level 1 represents a potential
amended standard. Usually, the equipment available in the market will
have a distribution of efficiencies. Therefore, for both base-case and
standards-case scenarios, in the LCC analysis, DOE assumed a
distribution of efficiencies in the market, and the distribution was
assumed to be spread across all efficiency levels in the LCC analysis
(see NOPR TSD chapter 10).
Recognizing that each building that uses commercial refrigeration
equipment is unique, DOE analyzed variability in the LCC and PBP
results by performing the LCC and PBP calculations for seven types of
businesses: (1) Supermarkets; (2) wholesaler/multi-line retail stores,
such as ``big-box stores,'' ``warehouses,'' and ``supercenters''; (3)
convenience and small specialty stores, such as meat markets and wine,
beer, and liquor stores; (4) convenience stores associated with
gasoline stations; (5) full-service restaurants; (6) limited service
restaurants; and (7) other foodservice businesses, such as caterers and
cafeterias. Different types of businesses
[[Page 55928]]
face different energy prices and also exhibit differing discount rates
that they apply to purchase decisions.
Expected equipment lifetime is another input whose value varies
over a range. Therefore, DOE assumed a distribution of equipment
lifetimes that are defined by Weibull survival functions.\57\
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\57\ Weibull survival function is a continuous probability
distribution function that is used to approximate the distribution
of equipment lifetimes of commercial refrigeration equipment.
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Another important factor influencing the LCC analysis is the State
in which the commercial refrigeration equipment is installed. Inputs
that vary based on this factor include energy prices and sales tax. At
the national level, the spreadsheets explicitly modeled variability in
the inputs for electricity price and markups, using probability
distributions based on the relative shipments of units to different
States and business types.
Detailed descriptions of the methodology used for the LCC analysis,
along with a discussion of inputs and results, are presented in chapter
8 and appendices 8A and 8B of the NOPR TSD.
1. Effect of Current Standards
DOE notes that, beginning January 1, 2012, manufacturers were
required to comply with the standards set by the January 2009 final
rule.\58\ 74 FR 1092 (Jan. 9, 2009). DOE concludes that the efficiency
level of the equipment on the market increased during this time. The
engineering analysis for this NOPR was first developed in 2011, and
therefore the engineering design option levels include efficiency
levels of equipment available in the market in 2011. This means that
the engineering efficiency levels were built up starting from levels
which are below the standards set by the January 2009 final rule. These
levels were included for analytical purposes, solely to represent the
manner in which manufacturers may have achieved compliance with the
January 2009 final rule standard levels, and were not considered in the
development of proposed standard levels. The LCC analysis and NIA
assume the first year for the analyses as 2017. As noted above, the
market in 2017 will be different from that in 2011 in terms of
efficiency distribution of the equipment, mainly due to the effect of
the standards established by the January 2009 final rule. Therefore,
the market baseline (from the year 2011) used as the starting point for
the engineering analysis is not the same as the market baseline in
2017, when any amended standards prescribed by the current rulemaking
are scheduled to go into effect.
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\58\ DOE extended the compliance date for manufacturers to
submit certification reports tor commercial refrigeration equipment
until December 31, 2013. 77 FR 76825 (Dec. 31, 2012). DOE
emphasizes, however, that the testing and sampling requirements for
commercial refrigeration equipment are unchanged by this extension.
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To estimate the state of the market baseline level in 2017, DOE
introduced a baseline level termed the ``standards baseline.'' The
energy consumption of the standards baseline level of an equipment
class is equal to the standard prescribed by the January 2009 final
rule for that equipment class. 74 FR 1093 (Jan. 9, 2009). The design
option levels that are less efficient than the standards baseline were
disregarded, and the more-efficient design option levels were carried
forward for downstream analyses. A detailed description of this
procedure is presented with the aid of an example in chapter 8 of NOPR
TSD.
At the April 2011 preliminary analysis public meeting, AHRI asked
whether DOE intended to update the LCC analysis once the standards set
in the January 2009 final rule became effective in order to change the
baseline. (AHRI, Public Meeting Transcript, No. 31 at pp. 99-100)
The engineering analysis for this NOPR was first developed in 2011,
and updated with new information as it became available up to the time
of this publication. However, DOE continued to use in its engineering
baseline characteristics reflecting the construction of equipment prior
to required compliance with the standards set by the January 2009 final
rule. As a result, some of the engineering efficiency levels reflect
levels which do not correspond to equipment performance currently
permitted on the market after January 1, 2012. These levels, however,
are solely used to reflect the manner in which DOE believes
manufacturers could have attained the 2009 final rule standard levels
through implementation of design options, and were not used in the
downstream analysis for the purposes of calculating standard levels
proposed in this NOPR.
Consistent with the methodology described above and explained in
detail in Chapter 8 of the NOPR TSD, DOE developed a ``standards
baseline'' for use as the starting point for its downstream (LCC and
PBP, NIA, etc.) analyses. This standards baseline corresponds to the
lowest efficiency level which would be compliant with current (January
2009 final rule) standards. From there, higher efficiency levels were
studied as the basis for developing potential standard levels as
proposed in today's NOPR. In response to AHRI's comment, DOE used
updated inputs to the baseline in order to reflect the compliance date
of the January 2009 final rule standards having passed. This includes
updates to the non-standards case efficiency distribution and other
inputs to the downstream analyses. These inputs were updated based on
the most recent available information for use in conducting the
analysis described in today's NOPR.
2. Equipment Cost
To calculate customer equipment costs, DOE multiplied the MSPs
developed in the engineering analysis by the distribution channel
markups, described in section IV.F. DOE applied baseline markups to
baseline MSPs, and incremental markups to the MSP increments associated
with higher efficiency levels.
3. Installation, Maintenance, and Repair Costs
Installation cost includes labor, overhead, and any miscellaneous
materials and parts needed to install the equipment. The installation
costs may vary from one equipment class to another, but they do not
vary with efficiency levels within an equipment class. Costs that do
not vary with efficiency levels do not impact the LCC, PBP, or NIA
results. DOE retained the nationally representative installation cost
values from the January 2009 final rule of $2,000 for all remote
condensing equipment and $750 for all self-contained equipment, and
simply escalated the values from 2007$ to 2012$, resulting in 2012
installation costs of $2,299 and $862, respectively.
True stated that the average glass-doored merchandiser is moved and
installed twice in its lifetime, and that self-contained, solid-doored
units, which are used in commercial kitchens, are moved and installed
in different locations at least three times, on average, during their
lifetimes. Therefore, True suggested that DOE double or triple its
estimated installation cost. (True, Public Meeting Transcript, No, 31
at p. 110)
Based on the design options for higher efficiency levels, DOE
determined that installation costs do not vary by efficiency levels
within a given equipment class. Costs that do not vary with efficiency
levels do not impact the LCC, PBP, or NIA results. Because doubling or
tripling of installation costs would not impact the net results, DOE
did not alter the installation costs for the NOPR analyses based on
True's comment.
[[Page 55929]]
Maintenance costs are associated with maintaining the operation of
the equipment. DOE split the maintenance costs into regular maintenance
costs and lighting maintenance costs. Regular maintenance activities,
which include cleaning evaporator and condenser coils, drain pans,
fans, and intake screens; inspecting door gaskets and seals;
lubricating hinges; and checking starter panel, control, and defrost
system operation, were considered to be equivalent for equipment at all
efficiency levels. Lighting maintenance costs are the costs incurred to
replace display case lighting at regular intervals in a preventative
fashion. Because lights and lighting configuration change with
efficiency levels, lighting maintenance costs vary with efficiency
levels. As stated in section IV.E.4.d, for efficiency levels that
incorporate LED lights as a design option, the reduction in LED costs
beyond 2017 were taken into account when calculating the lighting
maintenance costs.
Repair cost is the cost to the customer of replacing or repairing
failed components. DOE calculated repair costs based on the typical
failure rate of refrigeration system components, original equipment
manufacturer (OEM) cost of the components, and an assumed markup value
to account for labor cost.
a. Maintenance and Repair Costs by Efficiency Level
Traulsen commented that it agreed with DOE that installation and
maintenance costs would be flat across all efficiency levels.
(Traulsen, No. 45 at p. 4) AHRI, however, disagreed with DOE's
assumption that repair and maintenance costs would not vary with
efficiency. AHRI stated that the industry's experience has been that
higher efficiency equipment is more expensive to repair and maintain
since it uses more sophisticated components. AHRI also added that, if
repair and maintenance cost data are not available by efficiency level,
DOE should correlate repair and maintenance cost with equipment cost.
(AHRI, No. 43 at p. 3)
DOE does not believe that any design option used in the higher
efficiency equipment considered in this rulemaking would lead to higher
costs for regular maintenance activities. Repair costs and lighting
maintenance costs, on the other hand, have been modeled to be
proportional to the OEM cost of the components and, consequently, are
higher for higher efficiency equipment. DOE requested information from
stakeholders regarding maintenance and repair costs specifically
related to any of the design options used for this rulemaking, but did
not receive any such information. Therefore, DOE retained its approach
of using flat costs for regular maintenance, and costs proportional to
OEM cost for repair costs and lighting maintenance costs.
Southern Store Fixtures questioned whether DOE would examine the
economic impact of night curtains and lighting occupancy sensors on
equipment cost and operating cost. (Southern Store Fixtures, Public
Meeting Transcript, No. 31 at pp. 185-86) CA IOUs stated that labor
costs related to night curtain deployment can be significant. CA IOUs
urged DOE to review and update its assumptions involving night
curtains. (CA IOUs, No. 42 at p. 5)
Equipment costs, which include costs of night curtains and lighting
occupancy sensors, were covered in the engineering analysis used to
obtain the MSP (see section IV.E). Based on discussions with
specialists in display case retrofits who are familiar with lighting
occupancy sensor installation and setup, DOE concluded that lighting
occupancy sensors do not increase maintenance costs of commercial
refrigeration equipment. With respect to repair or replacement costs,
DOE determined that the manufacturing processes used today produce
highly reliable products, making the failure of occupancy sensors
relatively rare. Typically, according to the available data, lighting
occupancy sensors last nearly 15 years, which is longer than the
average lifetime of commercial refrigeration equipment. Therefore, DOE
did not include lighting occupancy sensor repair or replacement costs
in the LCC analysis.
DOE believes that the night curtains currently available in the
market are designed for easy deployment and retraction. In most
instances, it takes less than 15 seconds per refrigerated display case
to deploy or retract a night curtain. DOE believes that deployment and
retraction of night curtains can be easily assimilated into the
activities associated with store closing or opening operations, and
will not amount to an added expense. Therefore, DOE did not add labor
costs for night curtain deployment and retraction to the LCC analysis
or NIA.
b. Maintenance and Repair Cost Annualization
Stakeholders provided feedback on DOE's methodology in annualizing
the costs of equipment maintenance and repair. ASAP stated that
annualizing lighting maintenance costs results in a present value that
is greater than it would be if DOE were to model lighting replacement
costs in the years in which they actually were incurred. (ASAP, Public
Meeting Transcript, No. 31 at p. 104) NEEA agreed that DOE should try
to characterize maintenance costs as accurately as possible, modeling
truly annual costs on an annual basis, and other costs as they occur
(i.e., as capital equipment costs). NEEA added that it is not
appropriate to annualize all costs because, while some costs are truly
annual or biannual, others are periodic maintenance investments and
should be treated as such. NEEA referenced the fluorescent lamp ballast
rulemaking (Docket No. EE-2007-BT-STD-0016), in which DOE accounted for
lamp replacement costs in the years in which they occurred, and urged
DOE to adopt a similar methodology in this rulemaking. (NEEA, Public
Meeting Transcript, No. 31 at p. 105, No. 36 at pp. 5-6) ASAP and NRDC
echoed this stance in their jointly submitted written comment, stating
that, while it is reasonable to annualize costs that are indeed
incurred annually or biannually, annualizing costs that only occur in
certain years could distort the LCC output, resulting in a higher
present value of annualized costs. ASAP and NRDC also referenced the
fluorescent ballast rulemaking, and suggested that DOE account for
costs similarly in this rulemaking's analyses. (ASAP and NRDC, No. 34
at p. 4) Southern Store Fixtures, however, offered a dissenting
opinion, adding that it is a common practice in supermarkets to have
lighting contracts under which a maintenance worker changes the lights
on a scheduled basis, whether they are broken or not, making lighting
costs indeed annual. (Southern Store Fixtures, Public Meeting
Transcript, No. 31 at p. 107)
DOE has determined that, if the costs of known items occurring at
predictable intervals are appropriately discounted when annualized,
there will be no impact on LCC and NIA results, regardless of whether
or not the costs are annualized. Additionally, in the commercial
refrigeration equipment analyses, repairs and replacements have been
modeled as a combination of known, expected items, plus others modeled
simply as a fraction of failed components that are expected to be
replaced during equipment lifetime. Such a characterization of
maintenance and repair costs does not lend itself to specification of a
particular time, during the equipment lifetime, when such repairs are
likely to occur. Further, the PBP by its very definition cannot be
calculated unless the costs are annualized. Finally, if multiple
explicit
[[Page 55930]]
repair and maintenance line items were tracked individually in the NIA
model, the size and complexity of the computer model would grow
exponentially without a commensurate improvement in value. Therefore,
DOE has retained its conventional approach of annualizing the
maintenance and repair costs.
c. Maintenance Cost Estimates
At the April 2011 preliminary analysis public meeting, Coca-Cola
stated that its largest maintenance cost is condenser cleaning, which
is much more expensive than lighting maintenance. (Coca-Cola, Public
Meeting Transcript, No. 31 at p. 109) NEEA commented that, in the case
of actual maintenance costs, it agreed with Coca-Cola's assertion that
$35 per year, the maintenance cost presented by DOE in its preliminary
analysis, is too low based on its intuition regarding the cost of labor
and travel to maintain equipment. (NEEA, No. 36 at p. 6)
DOE obtained its annualized maintenance costs for commercial
refrigeration equipment from RS Means Facilities Maintenance and Repair
Cost Data.\59\ RS Means data provide estimates of the person-hours,
labor rates, and materials required to maintain commercial
refrigeration equipment. While it could be true that an amount of $35
per year does not reflect travel and other overhead charges, DOE
believes that the value reflects the cost incurred for labor if the
maintenance were to be performed by in-house personnel of the business
establishment. In any case, the actual amount allocated to the regular
maintenance costs has no effect on the LCC analysis or the NIA because
maintenance costs do not vary based on efficiency levels in any
equipment class. DOE believes the higher efficiency design options
selected for this rulemaking do not result in changes to the regular
maintenance costs of the commercial refrigeration equipment. Therefore,
DOE believes that a value of $35 is reasonably representative of the
regular maintenance costs for self-contained equipment.
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