Energy Conservation Program: Energy Conservation Standards for Commercial Refrigeration Equipment, 17725-17818 [2014-05082]
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Vol. 79
Friday,
No. 60
March 28, 2014
Part III
Department of Energy
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10 CFR Part 431
Energy Conservation Program: Energy Conservation Standards for
Commercial Refrigeration Equipment; Final Rule
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Federal Register / Vol. 79, No. 60 / Friday, March 28, 2014 / Rules and Regulations
DEPARTMENT OF ENERGY
10 CFR Part 431
[Docket Number 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: Final rule.
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
standards would be technologically
feasible and economically justified, and
would save a significant amount of
energy. In this final rule, DOE is
adopting more-stringent energy
conservation standards for some classes
of commercial refrigeration equipment.
It has determined that the amended
energy conservation standards for these
products would result in significant
conservation of energy, and are
technologically feasible and
economically justified.
DATES: The effective date of this rule is
May 27, 2014. Compliance with the
amended standards established for
commercial refrigeration equipment in
today’s final rule is required on March
27, 2017.
The incorporation by reference of
certain publications listed in this final
rule were approved by the Director of
the Office of the Federal Register on
January 9, 2009 and February 21, 2012.
ADDRESSES: The docket, which includes
Federal Register notices, public meeting
attendee lists and transcripts,
comments, and other supporting
documents/materials, is available for
review at www.regulations.gov. All
documents in the docket are listed in
the 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. The regulations.gov Web page will
contain simple instructions on how to
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SUMMARY:
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access all documents, including public
comments, in the docket.
For further information on how to
review the docket, contact Ms. Brenda
Edwards at (202) 586–2945 or by email:
Brenda.Edwards@ee.doe.gov.
FOR FURTHER INFORMATION CONTACT:
John Cymbalsky, 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: (202 287–1692. 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 Final Rule and Its Benefits
A. Benefits and Costs to Customers
B. Impact on Manufacturers
C. National Benefits and Costs
D. Conclusion
II. Introduction
A. Authority
B. Background
1. Current Standards
2. History of Standards Rulemaking for
Commercial 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. Savings in Operating Costs Compared To
Increase in Price
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. Trial Standard Levels
2. Proposed Standard Levels
3. Rulemaking Timeline
4. Normalization Metrics
5. Conformance With Executive Orders and
Departmental Policies
6. Offset Factors
B. Market and Technology Assessment
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1. Equipment Classes
a. Equipment Subcategories
b. Floral 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
C. Screening Analysis
D. Engineering Analysis
1. Representative Equipment for Analysis
a. Representative Unit Selection
b. Baseline Models
2. Design Options
a. Fluorescent Lamp Ballasts
b. Condenser Fans
c. Evaporator Fans
d. Design Options Impacting Equipment
Form Factor
e. Vacuum Insulated Panels (VIPs)
f. Variable-Speed Fan Motors
g. Improved Transparent Door Designs
h. High-Performance Coil Designs
i. Higher-Efficiency Fan Blades
j. ECM Fan Motors
k. Lighting Occupancy Sensors and
Controls
l. Night Curtains
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. Release of Engineering Model for Review
b. Anti-Sweat Heater Power
c. Coil Performance Modeling
d. Compressor Performance Modeling
e. Insulation Modeling
f. Lighting Performance
g. Transparent Door Performance
h. Validation of Engineering Results
E. Markups Analysis
F. Life-Cycle Cost and Payback Period
Analysis
1. Equipment Cost
2. Installation Costs
3. Maintenance and 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 Efficiency Distributions
11. Inputs to Payback Period Analysis
12. Rebuttable-Presumption Payback
Period
G. Shipments
1. Impact of Standards on Shipments
H. National Impact Analysis—National
Energy Savings and Net Present Value
1. Forecasted Efficiency in the Base Case
and Standards Cases
2. National Energy Savings
3. Net Present Value of Customer Benefit
I. Customer Subgroup Analysis
J. Manufacturer Impact Analysis
1. Overview
2. Government Regulatory Impact Model
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a. Government Regulatory Impact Model
Key Inputs
b. Government Regulatory Impact Model
Scenarios
3. Discussion of Comments
a. Volume Purchasing of Components
b. Refrigerants
c. Redesign Issues
d. LED Material Costs
e. GRIM
f. Cumulative Regulatory Burden
g. Certification Costs
h. Small Manufacturers
K. Emissions Analysis
L. 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
M. Utility Impact Analysis
N. Employment 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. Customer Subgroup Analysis
c. Rebuttable Presumption Payback
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. 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. Summary of National Economic Impact
8. Other Factors
C. Conclusions
1. Benefits and Burdens of Trial Standard
Levels Considered for Commercial
Refrigeration Equipment
2. Summary of Benefits and Costs
(Annualized) of the Standards
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
M. Congressional Notification
VII. Approval of the Office of the Secretary
17727
I. Summary of the Final Rule and Its
Benefits
Title III, Part C 1 of the Energy Policy
and Conservation Act of 1975 (EPCA or
the Act), Public Law 94–163 (42 U.S.C.
6291–6309, as codified), added by
Public Law 95–619, Title IV, section
441(a), established the Energy
Conservation Program for Certain
Industrial Equipment.2 Pursuant to
EPCA, any new or amended energy
conservation standard that DOE
prescribes for certain products, such as
commercial refrigeration equipment,
shall be designed to achieve the
maximum improvement in energy
efficiency that DOE determines is both
technologically feasible and
economically justified. (42 U.S.C.
6295(o)(2)(A)) Furthermore, the new or
amended standard must result in
significant conservation of energy. (42
U.S.C. 6295(o)(3)(B) and 6316(e)(1)) In
accordance with these and other
statutory provisions discussed in this
document, DOE is adopting amended
energy conservation standards for
commercial refrigeration equipment.
The amended 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. These
amended standards apply to all
equipment listed in Table I.1 and
manufactured in, or imported into, the
United States on or after March 27,
2017.
TABLE I.1—ENERGY CONSERVATION STANDARDS FOR COMMERCIAL REFRIGERATION EQUIPMENT
[Compliance required starting March 27, 2017]
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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 .....................................
SOC.SC.M .....................................
HZO.RC.M .....................................
HZO.RC.L ......................................
HZO.SC.M .....................................
HZO.SC.L ......................................
HCT.SC.M ......................................
HCT.SC.L .......................................
HCT.SC.I ........................................
0.64 × TDA + 4.07
2.2 × TDA + 6.85
1.69 × TDA + 4.71
0.15 × TDA + 1.95
0.49 × TDA + 2.61
0.1 × V + 0.86
0.29 × V + 2.95
0.62 × TDA + 3.29
0.05 × V + 1.36
0.22 × V + 1.38
0.34 × V + 0.88
0.66 × TDA + 3.18
1.7 × TDA + 4.59
0.44 × TDA + 0.11
0.52 × TDA + 1
0.35 × TDA + 2.88
0.55 × TDA + 6.88
0.72 × TDA + 5.55
1.9 × TDA + 7.08
0.06 × V + 0.37
0.08 × V + 1.23
0.56 × TDA + 0.43
1 For editorial reasons, upon codification in the
U.S. Code, Part C was redesignated Part A–1.
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Equipment class*
Standard level** †
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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 .....................................
2 All references to EPCA in this document refer
to the statute as amended through the American
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Standard level** †
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2.79 × TDA + 8.7
2.2 × TDA + 6.85
2.79 × TDA + 8.7
0.7 × TDA + 8.74
4.25 × TDA + 11.82
5.4 × TDA + 15.02
4.26 × TDA + 11.51
5.41 × TDA + 14.63
2.42 × TDA + 9
0.93 × TDA + 0.22
1.09 × TDA + 0.26
1.53 × TDA + 0.36
0.58 × TDA + 3.05
0.16 × TDA + 0.13
0.34 × TDA + 0.26
0.4 × TDA + 0.31
0.1 × V + 0.26
0.21 × V + 0.54
0.25 × V + 0.63
0.34 × V + 0.88
0.1 × V + 0.26
0.21 × V + 0.54
Energy Manufacturing Technical Corrections Act
(AEMTCA), Public Law 112–210 (Dec. 18, 2012).
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Federal Register / Vol. 79, No. 60 / Friday, March 28, 2014 / Rules and Regulations
TABLE I.1—ENERGY CONSERVATION STANDARDS FOR COMMERCIAL REFRIGERATION EQUIPMENT—Continued
[Compliance required starting March 27, 2017]
Equipment class*
Equipment class*
Standard level** †
HCS.SC.M .....................................
HCS.SC.L ......................................
PD.SC.M ........................................
0.05 × V + 0.91
0.06 × V + 1.12
0.11 × V + 0.81
Standard level** †
HCS.RC.I ......................................
SOC.SC.L .....................................
..................................................
0.25 × V + 0.63
1.1 × TDA + 2.1
* 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 closed with transparent doors, VCS = vertical closed with solid
doors, HCT = horizontal closed with transparent doors, HCS = horizontal closed with solid doors, SOC = service over counter, or PD = pulldown); (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 final rule 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.
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A. Benefits and Costs to Customers
Table I.2 presents DOE’s evaluation of
the economic impacts of today’s
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 for
which customers are impacted by the
amended standards.
TABLE I.2—IMPACTS OF TODAY’S
STANDARDS ON CUSTOMERS OF
COMMERCIAL
REFRIGERATION
EQUIPMENT—Continued
Average
LCC savings
2012$
Equipment
class*
Median PBP
years
conversion costs are expected to total
$184.0 million. Additionally, based on
DOE’s interviews with the
manufacturers of commercial
refrigeration equipment, DOE does not
expect significant loss of domestic
employment.
C. National Benefits and Costs
DOE’s analyses indicate that today’s
standards would save a significant
amount of energy. The lifetime savings
TABLE I.2—IMPACTS OF TODAY’S
for commercial refrigeration equipment
purchased in the 30-year period that
STANDARDS ON CUSTOMERS OF
begins in the year of compliance with
COMMERCIAL
REFRIGERATION
amended standards (2017–2046) amount
EQUIPMENT
to 2.89 quadrillion British thermal units
* Values have been shown only for primary (quads). The annualized energy savings
Average
Equipment
LCC savMedian PBP equipment classes, which are equipment (0.10 quads) are equivalent to 0.5
classes that have significant volume of shipclass*
ings
years
ments and, therefore, were directly analyzed. percent of total U.S. commercial
2012$
See chapter 5 of the final rule TSD, Engineer- primary energy consumption in 2014.6
VOP.RC.M ........
922
5.7 ing Analysis, for a detailed discussion of priThe cumulative net present value
mary and secondary equipment classes.
VOP.RC.L .........
53
6.1
* For
equipment
classes
VOP.SC.M, (NPV) of total consumer costs and
VOP.SC.M ........ .................... .................... SVO.SC.M, SOC. RC.M, SOC. SC.M,
savings of today’s standards for
VCT.RC.M ........
542
2.1 HZO.RC.M, HZO.RC.L, HZO.SC.L, and
VCT.RC.L .........
526
2.7 HCT.SC.I, no efficiency levels above the base- commercial refrigeration equipment
VCT.SC.M .........
226
5.3 line were found to be economically justifiable. ranges from $4.93 billion (at a 7-percent
VCT.SC.L ..........
5001
1.1 Therefore, the standard levels contained in to- discount rate) to $11.74 billion (at a 3VCT.SC.I ...........
18
7.2 day’s document for these equipment classes percent discount rate).7 This NPV
VCS.SC.M ........
363
1.4 are the same as those set in the 2009 final expresses the estimated total value of
VCS.SC.L .........
507
2.5 rule. As a result, LCC savings and PBP values future operating cost savings minus the
for these equipment classes are not relevant.
VCS.SC.I ..........
113
5.0
Note: Equipment lifetimes are between 10 estimated increased product costs for
SVO.RC.M ........
564
6.2 and 15 years for all equipment classes.
products purchased in 2016–2047.
SVO.SC.M ........ .................... ....................
SOC.RC.M ........ .................... .................... B. Impact on Manufacturers
In addition, today’s standards are
SOC.SC.M ........ .................... ....................
expected to have significant
The industry net present value (INPV)
HZO.RC.M ........ .................... ....................
environmental benefits. The energy
HZO.RC.L ......... .................... .................... is the sum of the discounted cash flows
to the industry from the base year (2013) savings would result in cumulative
emission reductions of approximately
through the end of the analysis period
3 Life-cycle cost of commercial refrigeration
8
(2046). Using a real discount rate of 10.0 142 million metric tons (Mt) of carbon
equipment is the cost to customers of owning and
dioxide (CO2), 762 thousand tons of
operating the equipment over the entire life of the
percent, DOE estimates that the INPV
equipment. Life-cycle cost savings are the
methane, 207 thousand tons of sulfur
for manufacturers of commercial
reductions in the life-cycle costs due to amended
dioxide (SO2), 94 tons of nitrogen oxides
refrigeration equipment is $2,660.0
energy conservation standards when compared to
5 Under today’s
million in 2012$.
the life-cycle costs of the equipment in the absence
6 Based on U.S. Department of Energy, Energy
of amended energy conservation standards.
standards, DOE expects the industry net
Information Administration, Annual Energy
4 Payback period refers to the amount of time (in
present value to decrease by 3.53
Outlook 2013 (AEO 2013) data.
years) it takes customers to recover the increased
percent to 6.60 percent. Total industry
7 All present value results reflect discounted to
installed cost of equipment associated with new or
amended standards through savings in operating
cost. Further discussion can be found in chapter 8
of the final rule TSD.
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HZO.SC.M ........
HZO.SC.L .........
HCT.SC.M ........
HCT.SC.L .........
HCT.SC.I ..........
HCS.SC.M ........
HCS.SC.L .........
PD.SC.M ...........
55
....................
101
293
....................
15
64
165
5 All
6.9
....................
5.8
2.5
....................
5.5
2.5
5.6
monetary values in this notice are expressed
in 2012 dollars.
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beginning of 2014.
8 A metric ton is equivalent to 1.1 short tons.
Results for NOX and Hg are presented in short tons.
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(NOX) and 0.25 tons of mercury (Hg).9
Through 2030, the estimated energy
savings would result in cumulative
emissions reductions of 48 Mt of CO2.
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.10 The derivation of
the SCC values is discussed in section
IV.M. Using discount rates appropriate
for each set of SCC values, DOE
estimates that the net present monetary
value of the CO2 emissions reductions is
between $1.0 billion and $14.0 billion.
DOE also estimates that the net present
17729
monetary value of the NOX emissions
reductions is $33 million at a 7-percent
discount rate, and $104 million at a 3percent discount rate.11
Table I.3 summarizes the national
economic costs and benefits expected to
result from today’s standards for
commercial refrigeration equipment.
TABLE I.3—SUMMARY OF NATIONAL ECONOMIC BENEFITS AND COSTS OF AMENDED COMMERCIAL REFRIGERATION
EQUIPMENT ENERGY CONSERVATION STANDARDS*
Present value
Billion
2012$
Category
Discount rate
(percent)
Benefits
Operating Cost Savings ...................................................................................................................................
CO2 Reduction Monetized Value ($11.8/t case)** ..........................................................................................
CO2 Reduction Monetized Value ($39.7/t case)** ..........................................................................................
CO2 Reduction Monetized Value ($61.2/t case)** ..........................................................................................
CO2 Reduction Monetized Value ($117/t case)** ...........................................................................................
NOX Reduction Monetized Value (at $2,591/ton )** .......................................................................................
7.70
16.63
1.01
4.55
7.20
14.05
0.03
0.10
7
3
5
3
2.5
3
7
3
Total Benefits† ..........................................................................................................................................
12.28
21.28
7
3
2.77
4.89
7
3
9.51
16.40
7
3
Costs
Incremental Installed Costs .............................................................................................................................
Net Benefits
Including CO2 and NOX † Reduction Monetized Value ..................................................................................
* This table presents the costs and benefits associated with commercial refrigeration equipment shipped in 2017–2046. These results include
benefits to customers which accrue after 2046 from the equipment purchased in 2017–2046. The results account for the incremental variable and
fixed costs incurred by manufacturers due to the amended standard, some of which may be incurred in preparation for this final rule.
** The CO2 values represent global monetized values of the SCC, in 2012$, in 2015 under several scenarios of the updated SCC values. The
first three cases use the averages of SCC distributions calculated using 5%, 3%, and 2.5% discount rates, respectively. The fourth case represents the 95th percentile of the SCC distribution calculated using a 3% discount rate. The SCC time series used by DOE incorporates 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% and 7% cases are derived using the series corresponding to average SCC with 3-percent discount rate.
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The benefits and costs of today’s
standards, for 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 operating the product
(consisting primarily of operating cost
savings from using less energy, minus
increases in equipment purchase and
installation costs, which is another way
of representing consumer NPV, plus (2)
the annualized monetary value of the
benefits of emission reductions,
including CO2 emission reductions.12
Although adding the value of
consumer 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. consumer
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 for the lifetime of
commercial refrigeration equipment
shipped in 2017–2046. The SCC values,
on the other hand, reflect the present
value of all future climate-related
impacts resulting from the emission of
one metric ton of carbon dioxide in each
9 DOE calculated emissions reductions relative to
the AEO 2013 Reference case, which generally
represents current legislation and environmental
regulations for which implementing regulations
were available as of December 31, 2012.
10 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; revised November 2013. https://
www.whitehouse.gov/sites/default/files/omb/assets/
inforeg/technical-update-social-cost-of-carbon-forregulator-impact-analysis.pdf.
11 DOE is investigating the valuation of avoided
Hg and SO2 emissions.
12 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 customer costs and savings, for the
time-series of costs and benefits, using discount
rates of three and seven 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.3. From the present value, DOE
then calculated the fixed annual payment over a 30year 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.
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year. These impacts continue well
beyond 2100.
Estimates of annualized benefits and
costs of today’s standards are shown in
Table I.4. The results under the primary
estimate are as follows. Using a 7percent discount rate for benefits and
costs other than CO2 reduction, for
which DOE used a 3-percent discount
rate along with the average SCC series
that uses a 3-percent discount rate, the
cost of the amended standards in
today’s rule is $256 million per year in
increased equipment costs, while the
benefits are $710 million per year in
reduced equipment operating costs,
$246 million in CO2 reductions, and
$3.01 million in reduced NOX
emissions. In this case, the net benefit
amounts to $704 million per year. Using
a 3-percent discount rate for all benefits
and costs and the average SCC series,
the cost of the standards in today’s rule
is $264 million per year in increased
equipment costs, while the benefits are
$900 million per year in reduced
operating costs, $246 million in CO2
reductions, and $5.64 million in
reduced NOX emissions. In this case, the
net benefit amounts to $888 million per
year.
TABLE I.4—ANNUALIZED BENEFITS AND COSTS OF AMENDED STANDARDS FOR COMMERCIAL REFRIGERATION EQUIPMENT*
million 2012$/year
Discount rate
Primary estimate*
Low net benefits estimate*
High net benefits estimate*
Benefits
Operating Cost Savings ....
CO2 Reduction at ($11.8/t
case)**.
CO2 Reduction at ($39.7/t
case)**.
CO2 Reduction at ($61.2/t
case)**.
CO2 Reduction at ($117.0/t
case)**.
NOX Reduction at ($2,591/
ton)**.
Total Benefits† ...........
7% .....................................
3% .....................................
5% .....................................
710 ....................................
900 ....................................
73 ......................................
688 ....................................
865 ....................................
73 ......................................
744.
947.
73.
3% .....................................
246 ....................................
246 ....................................
246.
2.5% ..................................
361 ....................................
361 ....................................
361.
3% .....................................
760 ....................................
760 ....................................
760.
7% .....................................
3.01 ...................................
3.01 ...................................
3.01.
3%
7%
7%
3%
3%
5.64 ...................................
786 to 1,474 ......................
960 ....................................
978 to 1,666 ......................
1,152 .................................
5.64 ...................................
764 to 1,451 ......................
937 ....................................
943 to 1,631 ......................
1,117 .................................
5.64.
820 to 1,508.
994.
1,026 to 1,713.
1,200.
.....................................
plus CO2 range ...........
.....................................
plus CO2 range ...........
.....................................
Costs
Incremental Equipment
Costs.
7% .....................................
256 ....................................
250 ....................................
261.
3% .....................................
264 ....................................
258 ....................................
271.
513
687
685
859
559 to 1,246.
733.
755 to 1,442.
929.
Net Benefits
Total† .........................
7%
7%
3%
3%
plus CO2 range ...........
.....................................
plus CO2 range ...........
.....................................
530
704
714
888
to 1,218 ......................
....................................
to 1,402 ......................
....................................
to 1,201 ......................
....................................
to 1,373 ......................
....................................
* This table presents the annualized costs and benefits associated with commercial refrigeration equipment shipped in 2017–2046. These results include benefits to customers which accrue after 2046 from the products purchased in 2017–2046. The results account for the incremental
variable and fixed costs incurred by manufacturers due to the amended standard, some of which may be incurred in preparation for the final rule.
The primary, low, and high estimates utilize projections of energy prices from the AEO 2013 Reference case, Low Estimate, and High Estimate,
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 product price trends in the Low Benefits Estimate, and a high decline rate for projected product price trends in the
High Benefits Estimate. The method used to derive projected price trends are explained in section IV.H.
** The CO2 values represent global monetized values of the SCC, in 2012$, in 2015 under several scenarios of the updated SCC values. The
first three cases use the averages of SCC distributions calculated using 5%, 3%, and 2.5% discount rates, respectively. The fourth case represents the 95th percentile of the SCC distribution calculated using a 3% discount rate. The SCC time series used by DOE 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.
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D. Conclusion
Based on the analyses culminating in
this final rule, DOE found the benefits
to the nation of the amended standards
(energy savings, consumer LCC savings,
positive NPV of consumer benefit, and
emission reductions) outweigh the
burdens (loss of INPV and LCC
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increases for some users of this
equipment). DOE has concluded that the
standards in today’s final rule represent
the maximum improvement in energy
efficiency that is both technologically
feasible and economically justified, and
would result in significant conservation
of energy. (42 U.S.C. 6295(o), 6316(e))
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II. Introduction
The following section briefly
discusses the statutory authority
underlying today’s final rule, as well as
some of the relevant historical
background related to the establishment
of amended standards for commercial
refrigeration equipment.
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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 document.13 14 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.
13 For editorial reasons, upon codification in the
U.S. Code, Part C was re-designated Part A–1.
14 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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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))
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
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17731
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
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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 at 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 (December 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*
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.
TABLE II.2—COMMERCIAL REFRIGERATION EQUIPMENT STANDARDS ESTABLISHED IN THE JANUARY 2009
FINAL
RULE—COMPLIANCE
REQUIRED BEGINNING ON JANUARY 1,
2012
tkelley on DSK3SPTVN1PROD with RULES2
Equipment class *
VOP.RC.M ................
SVO.RC.M ................
HZO.RC.M ................
VOP.RC.L .................
HZO.RC.L .................
VCT.RC.M .................
VCT.RC.L ..................
SOC.RC.M ................
VOP.SC.M .................
SVO.SC.M .................
HZO.SC.M .................
HZO.SC.L ..................
VCT.SC.I ...................
VCS.SC.I ...................
HCT.SC.I ...................
SVO.RC.L .................
VOP.RC.I ..................
SVO.RC.I ..................
VerDate Mar<15>2010
Standard level **
kWh/day
0.82
0.83
0.35
2.27
0.57
0.22
0.56
0.51
1.74
1.73
0.77
1.92
0.67
0.38
0.56
2.27
2.89
2.89
×
×
×
×
×
×
×
×
×
×
×
×
×
×
×
×
×
×
19:39 Mar 27, 2014
TDA + 4.07
TDA + 3.18
TDA + 2.88
TDA + 6.85
TDA + 6.88
TDA + 1.95
TDA + 2.61
TDA + 0.11
TDA + 4.71
TDA + 4.59
TDA + 5.55
TDA + 7.08
TDA + 3.29
V + 0.88
TDA + 0.43
TDA + 6.85
TDA + 8.7
TDA + 8.7
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TABLE II.2—COMMERCIAL REFRIGERATION EQUIPMENT STANDARDS ESTABLISHED IN THE JANUARY 2009
FINAL
RULE—COMPLIANCE
REQUIRED BEGINNING ON JANUARY 1,
2012—Continued
Equipment class *
HZO.RC.I ..................
VCT.RC.I ...................
HCT.RC.M .................
HCT.RC.L ..................
HCT.RC.I ...................
VCS.RC.M .................
VCS.RC.L ..................
VCS.RC.I ...................
HCS.RC.M ................
HCS.RC.L .................
HCS.RC.I ..................
SOC.RC.L .................
SOC.RC.I ..................
VOP.SC.L ..................
VOP.SC.I ...................
SVO.SC.L ..................
SVO.SC.I ...................
HZO.SC.I ...................
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Standard level **
kWh/day
0.72 × TDA + 8.74
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
0.11 × V + 0.26
0.23 × V + 0.54
0.27 × V + 0.63
1.08 × TDA + 0.22
1.26 × TDA + 0.26
4.37 × TDA + 11.82
5.55 × TDA + 15.02
4.34 × TDA + 11.51
5.52 × TDA + 14.63
2.44 × TDA + 9.
Sfmt 4700
TABLE II.2—COMMERCIAL REFRIGERATION EQUIPMENT STANDARDS ESTABLISHED IN THE JANUARY 2009
FINAL
RULE—COMPLIANCE
REQUIRED BEGINNING ON JANUARY 1,
2012—Continued
Equipment class *
SOC.SC.I ..................
HCS.SC.I ...................
Standard level **
kWh/day
1.76 × TDA + 0.36
0.38 × 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
closed with transparent doors, VCS = vertical
closed with solid doors, HCT = horizontal
closed with transparent doors, HCS = horizontal closed with solid doors, or SOC = service over counter); (2) an operating mode code
(RC = remote condensing or SC = self-contained); and (3) a rating temperature code (M
= medium temperature (38 °F), L = low temperature (0 °F), or I = ice-cream temperature
(¥15 °F)). For example, ‘‘VOP.RC.M’’ refers
to the ‘‘vertical open, remote condensing, medium temperature’’ equipment class.
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** TDA is the total display area of the case,
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.
In December 2012, AEMTCA
amended EPCA by establishing 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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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 15
(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.16
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 at 60407.
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,
15 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))
16 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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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 document in the Federal
Register announcing the availability of
the Framework document, as well as a
public meeting to discuss the document.
The document 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,17 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 document.
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 a 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.)
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
17 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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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.
On September 11, 2013, DOE
published a notice of proposed
rulemaking (NOPR) in this proceeding
(September 2013 NOPR). 78 FR 55890.
In the September 2013 NOPR, DOE
addressed, in detail, the comments
received in earlier stages of rulemaking,
and proposed amended energy
conservation standards for commercial
refrigeration equipment. In conjunction
with the September 2013 NOPR, DOE
also published on its Web site the
complete technical support document
(TSD) for the proposed rule, which
incorporated the analyses DOE
conducted and technical documentation
for each analysis. Also published on
DOE’s Web site were the engineering
analysis spreadsheets, the LCC
spreadsheet, and the national impact
analysis standard spreadsheet. These
materials are available at https://
www1.eere.energy.gov/buildings/
appliance_standards/rulemaking.aspx/
ruleid/27.
The standards which DOE proposed
for commercial refrigeration equipment
at the NOPR stage of this rulemaking are
shown in Table II.3. They are provided
solely for background informational
purposes and differ from the amended
standards set forth in this final rule.
TABLE II.3—PROPOSED ENERGY CONSERVATION STANDARDS FOR COMMERCIAL REFRIGERATION EQUIPMENT
[For compliance in 2017]
Equipment class*
Proposed level ** †
tkelley on DSK3SPTVN1PROD with RULES2
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 .....................................
Equipment class *
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
Proposed standard level **
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 ......................................
SOC.SC.L .....................................
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
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 closed with transparent doors, VCS = vertical closed with solid doors, HCT = horizontal closed with
transparent doors, HCS = horizontal closed with 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 final rule 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.
In the September 2013 NOPR, DOE
identified seven issues on which it was
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particularly interested in receiving
comments and views of interested
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parties: light-emitting diode (LED) price
projections, base case efficiency trends,
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operating temperature ranges, offset
factors for smaller equipment, extension
of standards developed for the 25
primary classes to the remaining 24
secondary classes, standards for hybrid
cases and wedges, and standard levels.
78 FR 55987 (September 11, 2013) After
the publication of the September 2013
NOPR, DOE received written comments
on these and other issues. DOE also held
a public meeting in Washington, DC, on
October 3, 2013, to hear oral comments
on and solicit information relevant to
the proposed rule. These comments are
addressed in today’s document.
III. General Discussion
A. Test Procedures and Normalization
Metrics
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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 at 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 at 71357 (December 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 at 71369–70
(December 8, 2006).
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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
(February 21, 2012). The 2012 test
procedure final rule also included an
amendment to incorporate by reference
the updated ANSI/AHAM Standard
HRF–1–2008, ‘‘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 18 and lighting occupancy
sensors and scheduled controls. 77 FR
at 10296–98 (February 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.19 77 FR at 10305
(February 21, 2012).
The test procedure amendments
established in the 2012 test procedure
final rule are required to be used in
conjunction with the amended
standards promulgated in this energy
conservation standards final rule. As
such, use of the amended test procedure
to show compliance with DOE energy
conservation standards or make
representations with respect to energy
18 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.
19 The NSF was founded in 1944 as the National
Sanitation Foundation, and is now referred to
simply as NSF.
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consumption of commercial
refrigeration equipment is required on
the compliance date of the revised
energy conservation standards
established by today’s document. 77 FR
at 10308 (February 21, 2012).
DOE has initiated a test procedure
rulemaking for commercial refrigeration
equipment to revise and reorganize its
test procedure for commercial
refrigeration equipment in order to
clarify certain terms, procedures, and
compliance dates. A NOPR for this
rulemaking was published on October
28, 2013. 78 FR 64206 (October 28.
2013). In the NOPR, DOE addressed:
• Several inquiries received from
interested parties regarding the
applicability of DOE’s test procedure
and current Federal energy conservation
standards;
• The definitions of certain terms
pertinent to commercial refrigeration
equipment;
• The proper configuration and use of
certain components and features of
commercial refrigeration equipment
when testing according to the DOE test
procedure;
• The proper application of certain
test procedure provisions;
• The compliance date of certain
provisions specified in the DOE test
procedure final rule published on
February 21, 2012; and
• A number of test procedure
clarifications which arose as a result of
the negotiated rulemaking process for
certification of commercial heating,
ventilation, air conditioning,
refrigeration, and water heating
equipment.
DOE also held a public meeting in
Washington, DC, on December 5, 2013,
to hear oral comments on and solicit
information relevant to the proposed
rule.
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
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utilize volume as the normalization
metric for all equipment types, with the
exception of refrigerator-freezers with
solid doors, for which the standard
specifies adjusted volume. (42 U.S.C.
6313(c)(2)) The January 2009 final rule,
meanwhile, utilizes 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 at
1093 (January 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 at 1093
(January 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 icecream freezers, as well as for the
equipment covered by EPACT 2005
standards. DOE maintained this stance
in the NOPR document and TSD. DOE
did not receive any significant
information or data while conducting
the final rule analyses that would alter
this position, and thus DOE includes
continued use of the existing
normalization metrics in today’s
document.
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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.
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Technologies incorporated in
commercially available equipment or in
working prototypes will be considered
technologically feasible. 10 CFR part
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 final rule
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.
2. Maximum Technologically Feasible
Levels
When DOE adopts (or does 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, 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
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updated its results for this final rule.
See chapter 5 of the 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
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 ............................
‘‘Max-Tech’’
level
kWh/day
33.044
35.652
27.702
31.078
14.15
10.988
100.006
21.560
29.714
25.400
29.922
13.748
2.327
18.106
16.042
5.148
16.048
3.028
11.130
0.614
1.315
0.981
0.713
3.405
26.119
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 a 30-year period that begins in
the year of compliance with amended
standards (2017–2046).20 The savings
are measured over the entire lifetime of
products purchased in the 30-year
period.21 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
considered TSLs. DOE then compares
20 DOE also presents a sensitivity analysis that
considers impacts for products shipped in a 9-year
period.
21 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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the energy use at each TSL to the basecase energy use to obtain the NES. The
NIA model is described in section IV.H
of this document and in chapter 10 of
the final rule TSD.
DOE used its NIA spreadsheet model
to estimate energy savings from
amended standards for the equipment
that is the subject of this rulemaking.
The NIA spreadsheet model (described
in section IV.H of this document)
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 also has begun to estimate fullfuel-cycle energy savings. 76 FR 51282
(August 18, 2011), as amended at 77 FR
49701 (August 17, 2012). The full-fuelcycle (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 evaluation of FFC savings is
driven in part by the National Academy
of Science’s (NAS) report on FFC
measurement approaches for DOE’s
Appliance Standards Program.22 The
NAS report discusses that FFC was
primarily intended for energy efficiency
standards rulemakings where multiple
fuels may be used by a particular
product. In the case of this rulemaking
pertaining to commercial refrigeration
equipment, only a single fuel—
electricity—is consumed by the
equipment. DOE’s approach is based on
the calculation of an FFC multiplier for
each of the energy types used by
covered equipment. Although the
addition of FFC energy savings in the
rulemakings is consistent with the
recommendations, the methodology for
estimating FFC does not project how
fuel markets would respond to this
particular standard rulemaking. The
FFC methodology simply estimates how
much additional energy, and in turn
how many tons of emissions, may be
displaced if the estimated fuel were not
consumed by the equipment covered in
this rulemaking. It is also important to
note that inclusion of FFC savings does
22 ‘‘Review of Site (Point-of-Use) and Full-FuelCycle Measurement Approaches to DOE/EERE
Building Appliance Energy- Efficiency Standards,’’
(Academy report) was completed in May 2009 and
included five recommendations. A copy of the
study can be downloaded at: https://www.nap.edu/
catalog.php?record_id=12670.
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not affect DOE’s choice of proposed
standards. 76 FR 51282 (August 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 (i.e., coal, natural gas,
petroleum fuels), and thus presents a
more complete picture of the impacts of
energy efficiency standards. For more
information on FFC energy savings, see
section IV.H.2.
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.’’
D. Economic Justification
1. Specific Criteria
As discussed in section III.D.1, 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
III.C and V of today’s document.
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
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
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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. These measures
are discussed further in the following
section. For consumers in the aggregate,
DOE also calculates the national net
present value of the economic impacts
applicable to a particular rulemaking.
DOE also evaluates the LCC impacts of
potential standards on identifiable
subgroups of consumers that may be
affected disproportionately by a national
standard.
b. Savings in Operating Costs Compared
To Increase in Price
EPCA requires DOE to consider the
savings in operating costs throughout
the estimated average life of the covered
product compared to any increase in the
price of the covered product that are
likely to result from the imposition of
the standard. (42 U.S.C.
6295(o)(2)(B)(i)(II) and 6316(e)(1)) DOE
conducts this comparison in its LCC and
PBP analysis.
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. To account for uncertainty
and variability in specific inputs, such
as product lifetime and discount rate,
DOE uses a distribution of values, with
probabilities attached to each value. For
its analysis, DOE assumes that
consumers will purchase the covered
products in the first year of compliance
with amended standards.
The LCC savings and the PBP 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 identifies the percentage
of consumers estimated to receive LCC
savings or experience an LCC increase,
in addition to the average LCC savings
associated with a particular standard
level.
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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
I.A.3 of this document and chapter 10
of the final rule 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. DOE has determined that
none of the TSLs presented in today’s
final rule 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.C of this document and
chapter 4 of the final rule TSD.
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e. Impact of Any Lessening of
Competition
EPCA requires DOE to consider any
lessening of competition that is likely to
result from setting new or amended
standards for covered equipment.
Consistent with its obligations under
EPCA, DOE sought the views of the
United States Department of Justice
(DOJ). DOE asked DOJ to provide a
written determination of the impact, if
any, of any lessening of competition
likely to result from the amended
standards, together with an analysis of
the nature and extent of such impact. 42
U.S.C. 6295(o)(2)(B)(i)(V) and (B)(ii).
To assist DOJ in making such a
determination, DOE provided DOJ with
copies of both the NOPR and NOPR TSD
for review. DOJ subsequently
determined that the amended standards
are unlikely to have a significant
adverse impact on competition.
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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.K, IV.L and
V.B.6 of this document. DOE reports the
expected environmental effects from the
amended standards, as well as from
each TSL it considered for commercial
refrigeration equipment, in the
emissions analysis contained in chapter
13 of the final rule TSD. DOE also
reports estimates of the economic value
of emissions reductions resulting from
the considered TSLs in chapter 14 of the
final rule 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)) There were no other factors
considered for today’s final rule.
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
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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.F.12 of this
document and chapter 8 of the final rule
TSD.
IV. Methodology and Discussion of
Comments
A. General Rulemaking Issues
During the October 2013 NOPR public
meeting, and in subsequent written
comments, stakeholders provided input
regarding general issues pertinent to the
rulemaking, including the trial standard
levels and proposed standard levels
presented, the rulemaking timeline, the
metrics used to normalize equipment
size, and other subjects. These issues are
discussed in this section.
1. Trial Standard Levels
In his comment, Mr. R. Kopp (Kopp)
suggested that using continuous energyefficiency cost-curves as opposed to
discrete TSLs would provide a more
accurate analysis. Further, he suggested
that instead of setting a single TSL
standard, DOE should adopt pathways
to improve efficiency. (Kopp, No. 60 at
p. 5)
In its engineering analysis, DOE
utilized a design-option approach, in
which it began by modeling baseline
units and then modeled increasingly
efficient designs up to max-tech by
adding design options one at a time in
order of ascending payback period. This
methodology reflects the options
available to manufacturers in increasing
the efficiency of their equipment, which
consist of piecewise design
improvements corresponding to the
design options modeled in the
engineering analysis. Therefore, the
efficiency levels generated from the
engineering analysis and carried
through the downstream analyses to the
development of TSLs correspond to
specific packages of technologies and
design features which could be
developed and built by manufacturers.
Since the stepwise increments along the
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2. Proposed Standard Levels
Traulsen, Structural Concepts Corp.
(Structural Concepts), National Rural
Electric Cooperative Association
(NRECA), and the Edison Electric
Institute (EEI) asserted that TSL4, the
level proposed in the NOPR, was not
economically viable, noting that the
marginal efficiency increase over TSL 3
did not justify the increased costs of
compliance. (Traulsen, No. 65 at p.
16; 23 Structural Concepts, Public
Meeting Transcript, No. 62 at p. 337;
NRECA, No. 88 at p. 2; EEI, No. 89 at
p. 4) Traulsen opined that any TSL with
a payback period longer than 3 years
was not feasible for most manufacturers.
(Traulsen, No. 65 at p. 21) Further,
NRECA and EEI urged DOE to select
TSL 3 instead of TSL 4. However, the
joint comments from the American
Council for an Energy-Efficient
Economy (ACEEE), National Resources
Defense Council (NRDC), Appliance
Standards Awareness Project (ASAP),
Alliance to Save Energy (ASE), and
Northwest Energy Efficiency Alliance
(NEEA) (hereafter referred to as the
‘‘Joint Comment’’) supported DOE’s
proposal to adopt TSL 4, noting that it
represented maximum energy savings
with a positive NPV. (Joint Comment,
No. 91 at p. 1)
Several manufacturers expressed an
expected inability to meet the proposed
standard levels, even with the best
available technology. At the October
public meeting, Zero Zone Inc. (Zero
Zone) noted that there had been no
significant technological advancements
since the previous rulemaking which
would make an amended standard
feasible. (Zero Zone, Public Meeting
Transcript, No. 62 at p. 62) Structural
Concepts raised a similar concern,
noting that despite using the most
efficient technology currently available,
its minimum attainable daily energy
consumption was 30–40% above the
proposed standard level. (Structural
Concepts, Public Meeting Transcript,
No. 62 at p. 133) Royal Vendors Inc.
(Royal Vendors), in its written
comment, noted that even with the most
efficient currently-available technology,
the maximum possible efficiency gain
was 10% over the levels contained in
the ENERGY STAR 24 Version 3
specification. However, the Joint
Comment opined that most of these
concerns were limited to pull-down
equipment, and that if the standard for
that class were revised, there would be
no need to revise standards for other
classes. (Joint Comment, No. 91 at p. 2)
Additionally, manufacturers opined that
the percentage reduction in energy
consumption between the existing
standard and the proposed rule was not
achievable. Hussmann Corp.
(Hussmann), True Manufacturing Co.,
Inc. (True), and Hoshizaki America, Inc.
(Hoshizaki) all commented that the
efficiency improvements in excess of
60%, as proposed for SC equipment and
the VCT.RC.M class, were neither
economically feasible nor
technologically possible. (Hussmann,
No. 77 at p. 10) (True, No. 76 at p. 1)
(Hoshizaki, No. 84 at p. 1)
Hoshizaki noted in its written
comment that a large majority of
currently ENERGY STAR-certified
equipment would fail to meet the
proposed standard. (Hoshizaki, No. 84
at p. 1) During the public meeting,
Structural Concepts pointed out the
relationship between the proposed
standard and the ENERGY STAR
Version 3.0 requirement, opining that it
was impractical for a standard to be
more stringent than the ENERGY STAR
requirement. (Structural Concepts,
Public Meeting Transcript, No. 62 at p.
305) The Joint Comment, however,
noted that according to the ENERGY
STAR-qualified products list, there
already are products in five major selfcontained equipment classes that meet
or exceed the proposed standard.
Further, the Joint Comment drew
comparison to the 2009 final rule for
residential refrigerators, noting that
proceeding to be a precedent in which
units on the market were not reaching
the maximum technically feasible
efficiency level modeled, since no
product was using all the design options
considered in DOE’s analysis. (Joint
Comment, No. 91 at p. 3) Additionally,
joint comments from the California
Investor Owned Utilities (CA IOUs)
23 In the comment citation format used in this
document, the citation first presents the name of the
commenter, followed by the number on the docket
corresponding to the document in which the
comment is contained, followed by a reference to
the page in that document on which the comment
can be found.
24 ENERGY STAR is a joint program of the U.S.
Environmental Protection Agency (EPA) and DOE
that establishes a voluntary rating, certification, and
labeling program for highly energy efficient
consumer products and commercial equipment.
Information on the program is available at:
www.energystar.gov.
tkelley on DSK3SPTVN1PROD with RULES2
cost-efficiency curve represent tangible
efficiency improvements attainable
through the implementation of design
options, DOE asserts that a smooth costefficiency curve would not be realistic,
as the areas on the curve between the
current efficiency levels would not
correspond to any design that exists.
Therefore, DOE has retained the
approach used in the NOPR in
developing this final rule.
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noted that all equipment currently listed
in the CEC product database for the
VOP.SC.M, SVO.SC.M, HZO.SC.M, and
HZO.RC.M classes already met the
proposed standard. (CA IOUs, No. 63 at
p. 1)
Stakeholders noted that, in the
proposed rule, the expected efficiency
improvement over existing standards
was more stringent for some equipment
classes than for others. Lennox
International Inc. (Lennox) urged DOE
to set standards for VCT classes which
had the same percentage reduction from
existing standard levels as open-case
classes, and suggested that stricter VCT
standards would encourage consumers
to switch from closed to open
equipment. (Lennox, No. 73 at p. 4)
Structural Concepts opined that the
proposed change in MDEC for SOC
equipment was too drastic, further
noting that for SOC and VCS equipment
classes, it is counterintuitive for DOE to
propose a greater relationship between
size and daily energy consumption for
remote condensing units than for selfcontained units, since SC units are
inherently less efficient. (Structural
Concepts, No. 85 at p. 3) Coca-Cola, Inc.
(Coca-Cola) commented that the TSL 4
standard was more stringent for
PD.SC.M units than for VCT.SC.M, and
that this was counterintuitive. (CocaCola, Public Meeting Transcript, No. 62
at p. 100) The CA IOUs pointed out in
its written comment that the current
standards for PD.SC.M were set through
a negotiated process, whereas the
standards for other classes were
modeled. (CA IOUs, No. 63 at p. 6)
China commented that while DOE
proposed stricter standards for the
VCT.RC.M class since the 2009 final
rule, DOE was not suggesting amended
standards for the HZO class. (China, No.
92 at p. 3)
Another concern amongst
manufacturers and consumers was the
belief that the proposed standard levels
were based on technology that was
currently not available, but rather which
DOE projected would be available at the
time of required compliance with the
proposed rule. Continental opined that
it was impractical to develop standards
based on currently unavailable
technologies. (Continental, Public
Meeting Transcript, No. 62 at p. 96)
Coca-Cola commented that since the
proposed standards were based on
technology which was not yet available,
the proposed standards, specifically
TSL4 for VCT.SC.M units, were not
technologically feasible. (Coca-Cola,
Public Meeting Transcript, No. 62 at p.
74) True expressed agreement with
Coca-Cola, stating that the proposed
efficiency levels were beyond the level
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of what industry can meet at the current
time. (True, Public Meeting Transcript,
No. 62 at p. 307) Lennox commented
that the proposed standards for VCT
units were unattainable with currently
known technology and were not
economically justified. Lennox further
commented that under the proposed
rule, only a very limited number of
compliant VCT products would be
produced and sold. (Lennox, No. 73 at
p. 2) The North American Association of
Food Equipment Manufacturers
(NAFEM) noted that none of its member
manufacturers were able to identify
current technology options or prototype
designs which met the proposed
standard levels, and that using
assumptions beyond what was available
in the current market landscape would
also improperly quantify the impact of
the proposed rule on manufacturer
costs. (NAFEM, No. 93 at p. 3)
Additionally, during the October
public meeting Coca-Cola and True
commented that food safety was of
prime importance in the design of their
equipment, and should take precedence
over energy savings. (Coca-Cola, Public
Meeting Transcript, No. 62 at p. 86)
(True, Public Meeting Transcript, No. 62
at p. 350) National Restaurant
Association (NRA) noted that the
proposed standards had the potential to
reduce cooling ability and recovery time
for equipment subject to constant
opening and closing, and that this
reduced performance could compromise
food safety. (NRA, No. 90 at p. 3)
Similarly, NAFEM also noted that the
implementation of the proposed
standards would have potential negative
effects on food safety for end-users.
(NAFEM, No. 93 at p. 5)
DOE understands the concerns voiced
by stakeholders regarding their future
ability to meet standard levels as
proposed in the NOPR. Between the
NOPR and final rule stages, DOE revised
and updated its analysis based on
stakeholders comments received at the
NOPR public meeting and in written
comments. These updates included
improvements to the modeling of
equipment geometries, design
specifications, and design option
performance and costs so as to provide
a more accurate model of baseline and
higher-efficiency designs across the
classes analyzed. After applying these
updates, DOE amended its TSLs and
standard level equations accordingly.
With respect to the comments from Zero
Zone, Structural Concepts, and Royal
Vendors regarding the ability of
technologies needed to meet the
proposed standard level, DOE analyzed
the available technologies in its market
and technology assessment and
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screening analyses, and incorporated
appropriate and available technology
options in the modeling performed as
part of its engineering analysis.
Therefore, DOE believes that the
technologies and designs included in
the analysis accurately reflect what is
available to industry for improving
equipment efficiency.
In response to the Joint Comment,
DOE notes that it evaluated equipment
performance independently for each
equipment class and thus did not revise
standards for any one class solely based
upon factors affecting another class.
DOE believes that the updates and
improvements to the modeling applied
between the NOPR and final rule stages
of this rulemaking have resulted in
standard levels presented in today’s
final rule which address the concerns
voiced by stakeholders after publication
of the NOPR.
In response to stakeholder comments
comparing the proposed standard levels
to ENERGY STAR levels, DOE cautions
against direct comparisons between its
standards and those set forth by
ENERGY STAR due to the different
natures of the programs and how the
two different sets of standard levels are
set. ENERGY STAR is a voluntary
program which derives its standard
levels from market data based on the
performance of certain models of
equipment currently available for
purchase. ENERGY STAR also does not
model performance or include
consumer economics in its standardsetting process. DOE sets its standards
as applicable to all covered equipment
and develops them through specific
analyses of equipment performance and
modeling of economic impacts and
other downstream effects. Due to the
different goals and methodologies of
these two programs, a direct comparison
may not be entirely relevant. However,
during the final rule stage, for relevant
equipment classes,25 DOE did compare
its engineering results to available
ENERGY STAR data as a means of
checking the modeled performance
levels against empirical test data. With
respect to the comparison by the
California IOUs of performance of open
cases to certified values from the CEC
directory, DOE also cautions that this
directory is not exhaustive. For
example, a search of the directory shows
that, for some equipment classes, only
equipment from a single manufacturer is
25 ENERGY STAR only maintains standard levels
applying to equipment classes VCS.SC.M,
VCS.SC.L, VCT.SC.M, VCT.SC.L, HCS.SC.M,
HCS.SC.L, HCT.SC.M, and HCT.SC.L. Thus, these
were the only classes for which a comparison
between the DOE and ENERGY STAR levels could
be made.
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included. Therefore, while directory
data is helpful in providing a check on
DOE’s results, DOE has performed
independent modeling and analysis to
derive its standard levels.
With respect to the concerns about the
relative perceived stringencies of
proposed standards for different classes,
in the NOPR analyses, DOE examined
each equipment class independently
based on standard geometries and
feature sets for representative units
within the classes. DOE then conducted
the engineering simulations and
downstream economic analyses
separately for each primary class
examined. The results presented at the
NOPR stage represent the suggested
performance and cost values for each
class based on the best available
information at the time of that analysis.
Therefore, DOE cautions against
comparative examination of the relative
stringencies of the various standard
levels, as each was calculated
independently and the performance and
economic benefits of individual design
options vary specific to each class. DOE
also agrees with the California IOUs that
previous standard levels should not
necessarily be used as a check on
current analytical results because the
origins of those standards are not
completely transparent, meaning that a
direct comparison may be inappropriate
due to differences between the
methodologies used to set those
standards and those used by DOE in the
current rulemaking. At the final rule
stage, DOE continued to examine each
class independently based on the merits
of the available efficiency-improving
features, and has set amended standards
for each class based on the results of
those analyses.
In response to the assertions that
DOE’s standard levels were not based
upon currently available technologies,
but rather were dependent upon future
potential technological developments,
DOE maintains that all technology
options and equipment configurations
included in its NOPR reflect
technologies currently in use in
commercial refrigeration equipment or
related equipment types. DOE has
observed these design options and
features used in current manufacturer
models offered for sale. The specific
inputs which it used to model these
design options, such as compressor
efficiency improvements over the
market baseline, glass door U-factor, or
heat exchanger UA, were provided to
the public for comment in the NOPR
TSD and engineering analysis
spreadsheet, and DOE has updated
those inputs according to stakeholder
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feedback and other information
available during the final rule stage.
DOE understands the concerns voiced
by Coca-Cola, True, NAFEM, and NRA
regarding food safety. DOE realizes that
food safety is of the utmost importance
to the industry, and is in fact a
definitional aspect of the design of
equipment for food storage
temperatures. In its screening analysis,
DOE is compelled by sections 4(b)(4)
and 5(b) of the Process Rule 26 to
eliminate from consideration any
technology that presents unacceptable
problems with respect to a specific set
of criteria, including impacts on
equipment utility. Therefore, DOE
removed from consideration
technologies and design options which
could result in such adverse impacts.
Additionally, in its engineering
analysis, DOE modeled mediumtemperature equipment as having an
average product temperature of 38°F,
consistent with the rating temperature
specified in the DOE test procedure and
below the 41°F requirement of the NSF
7 27 food safety rating procedure. Thus,
the daily energy consumption values
produced in the engineering analysis
reflect a level of equipment performance
which ensures preservation of the
ability to maintain food safety
temperatures.
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3. Rulemaking Timeline
Some stakeholders felt that in light of
the large number of analytical changes
that could be required between the
NOPR and final rule, DOE should
extend the target date for publication of
the final rule. Traulsen requested that
DOE slow the rulemaking process down
due to the aggressiveness of the final
rule date. (Traulsen, Public Meeting
Transcript, No. 62 at p. 347)
Hillphoenix and Lennox also expressed
the same concern, noting that a
February 2014 deadline for publication
of the final rule allowed insufficient
time for the reevaluation of DOE’s
engineering analysis. (Hillphoenix, No.
71 at p. 3) (Lennox, No. 73 at p. 2) In
contrast, the New York State Attorney
General (NYSAG) commented that the
delay in amending these efficiency
standards not only violated
Congressional mandates, but has also
prolonged the time that inefficient
products stay in the market. NYSAG
further commented that these delays
have led to avoidable pollution and
26 Appendix A to subpart C of 10 CFR part 430,
‘‘Procedures, Interpretations, and Policies for
Consideration of New or Revised Energy
Conservation Standards for Consumer Products’’ is
known as ‘‘The Process Rule.’’
27 This refers to the NSF/ANSI 7 procedure used
to test equipment performance for food safety.
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waste of resources. (NYSAG, No. 92 at
p. 1)
While DOE appreciates the input from
commenters requesting that the timeline
for this rulemaking be extended, none of
the commenters has provided any
details or specifics with regard to what
specifically they believe would require
extra time. In reviewing its analyses to
date, the inputs received at the NOPR
public meeting and in subsequent
written comment, DOE believes that the
time allotted is sufficient in order to
allow for full and proper analysis
required in order to develop the final
rule. In fact, DOE conducted an efficient
and thorough effort to promulgate the
final rule within the constraints of the
time allotted. With regard to NYSAG’s
comment, DOE notes that it has moved
as efficiently as possible while
conducting the thorough analysis
required to set appropriate standards.
4. Normalization Metrics
Following publication of the NOPR,
DOE received comment on the
normalization metrics used to scale
allowable daily energy consumption
under the standard levels as a function
of equipment size. Depending on the
design and intended application of each
equipment class, DOE proposed energy
standard levels using either total display
area or volume as a metric. Structural
Concepts commented that DOE’s
metrics for the VCT and HCT families
were inconsistent, since some proposed
standards for classes within the families
were based on total display area (TDA)
while others were based on volume,
NAFEM stated that industry
participants use volume, rather than
linear feet, to estimate total market size.
(Structural Concepts, No. 85 at p. 3)
(NAFEM, No. 93 at p. 6)
DOE understands that the selection of
appropriate measures of case size is
important to the standards-setting
process across all covered equipment
classes. For the self-contained
equipment with doors for which
standards were set in the EPACT 2005
legislation, volume was identified in the
statute as the normalization metric. (42
U.S.C. 6313(c)(2)) For the equipment
covered by the 2009 final rule, DOE
selected the metrics of volume for
equipment with solid doors and TDA
for display-type equipment. Because
radiation and conduction through doors
are the primary heat transfer pathways
for CRE equipment with transparent
doors, DOE concluded that TDA is the
metric that best quantifies this effect.
Likewise, for equipment without doors,
the majority of heat load occurs due to
warm air infiltration, and DOE
determined that TDA would also be the
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most appropriate metric for capturing
these effects. DOE also stated its
conclusion that for these equipment
types, where the function is to display
merchandise for sale, TDA best
quantifies the ability of a piece of
equipment to perform that function. On
the other hand, equipment with solid
doors is designed for storage, and
volume was determined to be the most
appropriate metric for quantifying the
storage capacity of the unit. 72 FR
41177–78 (July 26, 2007).
DOE does not believe, based on its
discussions with manufacturers and
comments solicited over the course of
this rulemaking that the fundamental
concepts underlying the choices of TDA
or volume as the normalization metric
for any given class of equipment have
changed. In line with the reasons stated
above, DOE is retaining the current
normalization metrics for the respective
equipment classes, consisting of both
the metrics set forth in the 2009 final
rule and those prescribed by the EPACT
2005 standards for self-contained
equipment with doors.
In response to the comment from
NAFEM regarding the usage of linear
feet, DOE wishes to clarify that it did
not use linear feet of equipment as a
measure of equipment size in its
engineering analysis, nor as a metric
when estimating total market size in its
shipments analysis. Rather, DOE
utilized linear feet as a normalization
metric in the national impacts and other
downstream analyses when accounting
for the aggregate costs and benefits of
today’s final rule. DOE believes that the
units used in making representations of
equipment market size are accurate, and
DOE did not modify them for the final
rule analysis.
5. Conformance With Executive Orders
and Departmental Policies
At the NOPR public meeting, and in
a subsequent written comment,
Traulsen opined that the proposed rule
violates Executive Order 12866.
Specifically, Traulsen stated that the
rule failed to identify the failures of
private markets or public institutions
that warrant new agency action, since
the industry had actively embraced
voluntary efficiency goals and
standards. (Traulsen, No. 65 at p.16)
Section 1(b)(1) of Executive Order 12866
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. In section VI.A of today’s
document (and also in the NOPR), DOE
has identified the problems that it has
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addressed by amending energy
conservation standards for commercial
refrigeration equipment. For certain
segments of the companies that
purchase commercial refrigeration
equipment, such as small grocers, these
problems may include a lack of
consumer information and/or
information processing capability about
energy efficiency opportunities in the
commercial refrigeration equipment
market. In addition, the market for
commercial refrigeration equipment is
affected by electricity prices that do not
reflect all of the social and
environmental costs associated with
electricity use. When such externalities
are not included in the decisions made
by market actors, this is considered a
market failure by economists.
Traulsen asserted that the proposed
rule was in violation of Executive Order
13563 and the Information Quality Act
since the assumptions in DOE’s analysis
did not use the best available techniques
to quantify the benefits of the rule.
(Traulsen, No. 65 at pp.16–17) DOE
believes that the analysis described in
today’s document is based on the best
available techniques that were suited to
the data available to analyze commercial
refrigeration equipment. Further,
Traulsen did not point to any specific
techniques in its comment that would
have been superior to those employed
by DOE.
NAFEM expressed concern that the
proposed rule was in violation of
Executive Orders because it had a
disproportionate negative impact on
small businesses, failed to consider nonregulatory alternatives, and since DOE
had made no contact with end-users in
order to understand impact on users.
(NAFEM, No. 93 at p. 14) Traulsen
stated that DOE should consider
supplementing regulatory action with
other forms of non-regulatory
alternatives, such as expanded
collaboration with ENERGY STAR,
rebates, and incentive programs.
(Traulsen, No. 65 at p. 15)
As discussed in section V.B.1.b of this
document, DOE believes that today’s
rule would not have a disproportionate
negative impact on small businesses.
DOE did consider non-regulatory
alternatives to amended standards, as
described in detail in chapter 17 of the
final rule TSD. Finally, DOE requested
comment from the public and held
public meetings that were attended by
representatives of end-users of
commercial refrigeration equipment
(e.g., ACCA, Coca-Cola, and NAFEM).
NAFEM also opined that the proposed
rule violated the Secretarial Policy
Statement of Scientific Integrity, since
the analysis was not independently
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peer-reviewed by qualified experts,
underlying assumptions were not
clearly explained, and since DOE failed
to accurately contextualize uncertainties
pertaining to non-regulatory
alternatives. (NAFEM, No. 93 at p. 14)
The Secretary’s March 23, 2012
‘‘Secretarial Policy Statement of
Scientific Integrity’’ 28 sets forth a policy
for DOE employees and states, in
relevant part, that ‘‘DOE will ensure that
data and research used to support policy
decisions are of high scientific and
technical objectivity. Scientific and
technical objectivity will be supported
through independent peer review by
qualified experts, where feasible and
appropriate, and consistent with law.’’
With respect to DOE’s analysis
underlying this final rule, DOE has
solicited and thoroughly considered
comment and data from expert CRE
manufacturers throughout the
rulemaking process. DOE does not
believe that any additional expert
review of its analysis is either necessary
or appropriate.
Further, the assumptions used in
DOE’s analysis are described in detail in
the NOPR TSD and in the final rule
TSD. DOE is not aware of the
uncertainties pertaining to nonregulatory alternatives mentioned only
in a general sense by NAFEM.
6. Offset Factors
In presenting the NOPR standard
levels, DOE adopted and modified the
offset factors from the 2009 final rule
and EPACT 2005 standard levels to
define the energy consumption of a unit
at zero volume or TDA, thus setting the
y-intercepts of the linear standard level
equations proposed at levels intended to
represent ‘‘end effects’’ inherent in all
equipment. Some stakeholders
expressed disagreement with DOE’s
modeling of offset factors. Hillphoenix
commented that offset factors were
designed to account for factors which
remained constant over a range of
equipment sizes. Hillphoenix further
commented that such factors as
conduction end effects typically do not
vary with size. (Hillphoenix, No. 71 at
p. 2) Traulsen commented that DOE’s
modeled offset factors were not
empirically determined. (Traulsen, No.
65 at p. 19) The Air-Conditioning,
Heating, and Refrigeration Institute
(AHRI) commented that it was
impossible for stakeholders to compare
the offset factors within the current
rulemaking with the previous
28 https://www.directives.doe.gov/references/
secretarial_policy_statement_on_scientific_
integrity/view.
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rulemaking’s values. (AHRI, No. 75 at p.
14)
In developing offset factors for the
NOPR, DOE scaled existing offset factors
from the EPACT 2005 and 2009 final
rule standard levels based on the
percentage reduction in energy use
modeled at the representative unit size.
This allowed the NOPR standard level
equations to reflect energy allowances
which proposed a standard percentage
reduction in allowable consumption
across all equipment sizes. While DOE
agrees with Traulsen that the offset
factors were not empirically
determined, the factors were based upon
scaling proportional to modeled
equipment performance and applied to
the existing offset factors which have
been well-established and vetted
through development of and compliance
with the existing standards containing
them.
In response to the comment from
Hillphoenix, DOE agrees that there are
certain fixed effects which will be
encountered by any piece of equipment,
such as a minimum amount of
conduction, or energy consumption
attributable to the presence of a
minimum of a single fan motor, for
example. For the final rule, and in
response to the concern of stakeholders,
DOE adjusted its offset factors to
account for these constant effects. In
equipment for which DOE developed
offset factors for use in standard level
equations in its 2009 final rule, DOE
retained the same offset factors in the
development of the trial standard levels
presented in today’s document. DOE
believes that the retention of these
factors accurately reflects the presence
of fixed end-effect behavior in this
equipment, which remains independent
of the design options elsewise
implemented in the equipment. For the
equipment for which standard levels
were set by EPACT 2005, DOE had no
background information as to how those
offset factors were developed. Therefore,
in developing trial standard levels for
today’s final rule, DOE adjusted those
offset factors based on available data
from directories of certified product
performance. For more information on
the development of offset factors, please
see chapter 5 of the final rule TSD.
B. 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
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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 final
rule TSD for further discussion of the
market and technology assessment.
tkelley on DSK3SPTVN1PROD with RULES2
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. 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 29 (horizontal,
semivertical, or vertical), and the type of
condensing unit (remote condensing or
self-contained). The following list
29 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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shows the key characteristics of
commercial refrigeration equipment that
DOE developed as part of the January
2009 final rule (74 FR at 1099–1100
(January 9, 2009)), and used during this
rulemaking:
1. Operating Temperature
• Medium temperature (38 °F,
refrigerators)
• 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 has created 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). A total of 49 equipment
classes were created, and these are
listed in chapter 3 of the TSD using the
nomenclature developed in the January
2009 final rule. 74 FR at 1100 (January
9, 2009).
During the October 2013 NOPR 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 Subcategories
In their written comments,
Continental, NAFEM, True and
Traulsen all expressed concern that the
equipment classes defined by DOE in
the proposed rule did not sufficiently
encompass various sub-classifications,
especially with regard to pass-through
and reach-in cases. (Continental, No. 87
at p. 1) (NAFEM, No. 93 at p. 7) (True,
No. 76 at p. 3) (Traulsen, No. 65 at p.
16) Further, Traulsen and True pointed
out that a multitude of custom-built and
niche equipment exists, which would
require further analysis in order to
determine a viable standard. (Traulsen,
No. 65 at p. 20) (True, No. 76 at p. 1)
In response to the concerns of
interested parties, DOE believes that its
existing equipment class structure is
sufficient to account for the majority of
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variation in type and combination of
equipment geometry, condensing unit
configuration, and operating
temperature. DOE provides allowances
in its standards to account for the
energy needs of different equipment
sizes through its use of standard level
equations constructed in the form of
linear equations varying with
equipment size (as measured by volume
or TDA) and through its use of offset
factors to represent energy end-effects.
DOE also accommodates variation in
operating temperature outside of its
three rating temperatures through the
use of a lowest application product
temperature provision in its test
procedure. 77 FR at 10305 (February 21,
2012)
b. Floral Equipment
In the context of niche equipment
classes, the Society of American Florists
(SAF) noted that the floral industry uses
purpose-designed refrigeration
equipment, including sliding door floral
display coolers (self-contained), open
air access floral display coolers (reachin), countertop floral display coolers
and long door floral display coolers
(swinging or sliding doors, top-mounted
or remote condensing unit). SAF further
added that most of these units are
custom-built, since floral cooling
systems are balanced to keep humidity
high, and that special low-velocity coils
are utilized to blow air through the unit
while maintaining temperature and high
humidity levels—features not available
in stock equipment. (SAF, No. 74 at p.
3)
DOE believes that its division of
covered equipment into numerous
classes is sufficiently broad to capture
the level of differentiation present
within the commercial refrigeration
equipment market. The equipment types
described in the comment from SAF
would fall into a number of existing
equipment classes for which DOE has
conducted analyses in this rulemaking.
Additionally, DOE has recognized the
temperature issues which may be
present in floral cases, and has
accommodated those different operating
temperatures by developing and
implementing a provision in its test
procedure allowing equipment which
cannot reach the specified DOE rating
temperature to be tested at its lowest
application product temperature. 77 FR
at 10305 (February 21, 2012)
2. Technology Assessment
As part of the market and technology
assessment performed for the final rule
analysis, DOE developed a
comprehensive list of technologies that
would be expected to improve the
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energy efficiency of commercial
refrigeration equipment. Chapter 3 of
the 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.C.
tkelley on DSK3SPTVN1PROD with RULES2
a. Technologies Applicable to All
Equipment
In the NOPR 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. These technologies are
discussed in depth in chapter 3 of the
NOPR TSD. Not all of these technologies
were considered in the engineering
analysis; some were screened out or
removed from consideration on
technical grounds. After the publication
of the NOPR analysis, DOE received
numerous stakeholder comments
regarding these technologies, discussed
below.
Low Pressure Differential Evaporators
Traulsen commented that low
pressure differential evaporators would
require larger spaces between fins and
tubes, which could in turn reduce
overall efficiency by allowing frost
build-up. (Traulsen, No. 65 at p. 7) Lowpressure differential evaporators reduce
energy consumption by reducing the
power of evaporator fan motors, often by
increasing the air gap between fins.
However, as noted in chapter 5 of the
NOPR TSD, in space-constrained
equipment such as commercial
refrigeration equipment, this reduction
usually comes from a decrease in
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evaporator coil surface area, which
generally requires a lower saturated
evaporator temperature (SET) to achieve
the same discharge air temperature and
cooling potential. This, in turn, results
in a reduction in compressor efficiency.
Therefore, DOE agrees with Traulsen
that low pressure differential
evaporators are not a viable option for
consideration in this rulemaking and
did not consider them as a design
option.
Defrost Mechanisms
Traulsen commented that in order for
DOE to advocate for improved defrost
sensors, new designs would need to be
implemented, and that the compliance
date suggested in the NOPR would not
allow for the levels of research and
development (R&D) necessary to achieve
this improvement. (Traulsen, No. 65 at
p. 8) DOE wishes to clarify that it did
not consider advanced defrost sensors
as a design option within the analyses
conducted at the NOPR or final rule
stages of this rulemaking. Much
equipment currently manufactured
already uses partial defrost cycle control
in the form of cycle temperaturetermination control. However, defrost
cycle initiation is still scheduled at
regular intervals. Full defrost cycle
control would involve a method of
detecting frost buildup and initiating
defrost. This could be accomplished
using an optical sensor or through use
of a sensor to detect the temperature
differential across the evaporator coil.
However, DOE understands that both of
these methods are currently unreliable
due to fouling of the coil with dust and
other surface contaminants, which
becomes more of an issue as cases age.
Because of these issues, DOE agrees
with Traulsen’s concerns and did not
consider defrost cycle control as a
design option at the NOPR or final rule
stages. Instead, the defrost lengths
modeled in the engineering analysis
were based on defrost times gathered
through review of manufacturer
literature, manufacturer interviews, and
data collected through laboratory testing
of equipment currently available on the
market.
Light Emitting Diode Lighting
After publication of the NOPR,
Traulsen commented that DOE’s
assertion of consumer enthusiasm
towards LEDs lacked basis in reality.
Further, Traulsen commented that any
weight given to this assertion in the
calculations was null. (Traulsen, No. 65
at p. 4) During its analysis, DOE
considered design options based on
their availability on the market and on
the screening criteria set forth by the
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Process Rule. In considering LED
lighting as a design option, DOE did so
after researching existing product
offerings on the market and conferring
with manufacturers in confidential
interviews. DOE did not factor
‘‘consumer enthusiasm’’ into its
decision to include LED lighting as
asserted by Traulsen, but instead
considered this design option based on
the information available from the
current equipment market and the
technology’s ability to reduce the
measured energy consumption of
covered equipment.
b. Technologies Relevant Only to
Equipment With Doors
In chapter 3 of the NOPR TSD, DOE
mentioned three technologies that could
apply only to doored equipment: antifog films, anti-sweat heater controllers,
and high performance doors. Not all of
these technologies were considered in
the NOPR 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
Traulsen commented that while DOE
called for the use of advanced
hydrophobic materials in the form of
anti-fog films to prevent condensation
build-up, there were concerns with
regard to the NSF certification of this
feature. (Traulsen, No. 65 at p. 11) DOE
wishes to clarify that, while it included
anti-fog films for consideration in the
NOPR market and technology
assessment, it did not include them as
a design option in the engineering
analysis. For a full discussion of why
DOE did not consider anti-fog films,
please see chapter 5 of the NOPR TSD.
DOE agrees with Traulsen’s concerns,
amongst others, and continued to
exclude this technology from its
analysis at the final rule stage.
Anti-Sweat Heater Controllers
In its statements at the NOPR public
meeting, the California IOUs urged DOE
to consider anti-sweat heater controllers
as a design option due to their large
savings potential. (CA IOUs, Public
Meeting Transcript, No. 62 at p. 19)
However, in its written comment,
Traulsen pointed out that these may be
impractical, since sensor technologies
had high failure rates in kitchen
environments. (Traulsen, No. 65 at p.
11)
DOE addressed consideration of this
technology in chapter 4 of the NOPR
TSD. Anti-sweat heater controllers
modulate the operation of anti-sweat
heaters by reducing heater power when
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humidity is low, and operate most
effectively when a constant ambient
dew point cannot be maintained.
However, in the context of the DOE test
procedure, anti-sweat heater controllers
solely serve to keep the power to the
anti-sweat heaters at the levels
necessary for the test conditions. These
fixed conditions of 75 °F and 55 percent
relative humidity are the conditions that
ASHRAE has determined to be generally
representative of commercial
refrigeration equipment operating
environments and which DOE has
adopted in its test procedure. While
anti-sweat heater controllers could
modulate the anti-sweat power to a
further extent in the field so as 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 a unit with anti-sweat
heaters tuned for constant 75/55
conditions. Because they would have no
impact on measured energy
consumption under the DOE test
procedure, DOE did not consider antisweat heater controllers in the
engineering analysis.
tkelley on DSK3SPTVN1PROD with RULES2
c. Technologies Applicable Only to
Equipment Without Doors
In chapter 3 of the NOPR TSD, DOE
mentioned two technologies, air-curtain
design and night curtains, that
potentially could be used to improve the
efficiency of commercial refrigeration
equipment without doors. Air curtain
design was not considered in the NOPR
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.
Air-Curtain Design
In its written comment, Traulsen
expressed concern over the use of
advanced air curtain designs. (Traulsen,
No. 65 at p. 11) DOE agrees with
Traulsen that advanced air curtain
designs are not currently a feasible
option for use in commercial
refrigeration equipment. Sections 4(a)
and 5(b) of the Process Rule specifically
set ‘‘practicability to manufacture,
install, and service’’ as a criterion that
should be satisfied for technology to be
considered as a design option. In
chapter 4 of the NOPR TSD, DOE
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explained that advanced air curtain
designs are only in the research stage
and, therefore, that it would be
impracticable to manufacture, install,
and service this technology on the scale
necessary to serve the relevant market at
the time an amended standard would
become effective. For that reason, DOE
screened out improved air curtains as a
design option for improving the energy
efficiency of commercial refrigeration
equipment.
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
document are all achievable through
technology options that were ‘‘screened
in’’ during the screening analysis.
C. 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
safety. 10 CFR part 430, subpart C,
appendix A, sections (4)(a)(4) and (5)(b).
In comments received after the NOPR
publication, Traulsen commented that,
while DOE screened out certain
technology options due to impacts on
end-users, it was unclear why the same
technology option was screened out for
some equipment classes but not others.
(Traulsen, No. 65 at p. 2)
During the screening analysis, DOE
considered sections 4(b)(4) and 5(b) of
the Process Rule, which provide
guidance in determining whether to
eliminate from consideration any
technology that presents unacceptable
problems with respect to certain criteria.
These criteria include technological
feasibility, practicability to
manufacture, install, and service,
impacts on equipment utility or
equipment availability, and adverse
impacts on health or safety. If DOE
determines that a technology, or a
combination of technologies, meet any
of the criteria set forth in section 5(b) of
the Process Rule, it will be eliminated
from consideration. This screening
process is applied to each candidate
technology being considered, and is
applicable across all equipment classes.
Therefore, in response to the comment
from Traulsen, DOE does not believe
that it screened out any particular
technology options for some classes but
not others.
Based on all available information,
DOE has concluded that: (1) All of the
efficiency levels discussed in today’s
document 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
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, preliminary analysis, and
NOPR 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 energysaving technologies applicable to this
equipment. More specifically, DOE
identified design options for analysis,
used a combination of industry research
and teardown-based cost modeling to
determine manufacturing costs, and
employed numerical modeling to
determine the energy consumption for
each combination of design options
used to increase equipment efficiency.
DOE selected a set of 25 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 final rule TSD.
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1. Representative Equipment for
Analysis
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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).
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. Chapter 5 of the final rule
TSD sets forth the specifications that
DOE chose for each equipment class and
discusses baseline models in greater
detail.
One complexity involved in
developing an engineering baseline was
due to the variety of designs and
technology options that manufacturers
could utilize in order to meet the
recently-implemented standards arising
from EPACT 2005 and the 2009 final
rule. Through its analyses, DOE
determined that manufacturers were
utilizing a wide variety of design paths
in order to meet the necessary
performance level. Therefore, in order to
develop its engineering results for the
current rule, DOE retained the
engineering baseline and associated
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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, and
ordered the technology options from
lowest to highest payback period. The
result was a set of cost-efficiency curves
reflecting what DOE believes to be the
most cost-effective means of meeting the
existing standards, as well as that of
attaining the higher levels of
performance reflected in today’s rule.
As a result, some of the engineering
results represent levels of unit
performance that are below the standard
levels for equipment currently on the
market and subject to 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 model of equipment would
have to comply. The exact procedure is
described in section IV.F and additional
details are provided in chapter 8 of the
final rule TSD.
After publication of the NOPR and the
NOPR public meeting, DOE received a
number of comments from interested
parties regarding its establishment of
baseline models, and the features and
design specifications included in those
baseline models. The subsequent
sections contain those comments and
DOE’s responses.
Composition of Baseline
Southern Store Fixtures Inc.
(Southern Store Fixtures), AHRI,
Hussmann and Structural Concepts
expressed concern that, by keeping the
baseline consistent between the
previous rule and the proposed rule,
DOE had failed to account for the
efficiency improvement brought about
by the previous standard, thereby
overestimating the potential for energy
savings. (Southern Store Fixtures, No.
67 at p. 2) (AHRI, No. 75 at p. 2)
(Hussmann, No. 77 at p. 9) (Structural
Concepts, No. 85 at p. 1) Additionally,
AHRI noted that although the current
rulemaking retains the baseline
specifications and some related
technologies from the previous
rulemaking, there are differences in the
baseline energy consumption across the
two rulemakings. (AHRI, No. 75 at p. 4)
The Joint Comment pointed out that,
for some equipment classes, many
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ENERGY STAR-qualified products were
rated as being less efficient than the
modeled baseline. Further, the Joint
Comment urged DOE to re-evaluate the
baseline levels for equipment classes for
which the current standards were
established by EPACT 2005. (Joint
Comment, No. 91 at p. 5)
In response to the comments raised by
interested parties regarding the modeled
equipment baseline, DOE points out that
there is currently no prescriptive
requirement that commercial
refrigeration equipment use any specific
combination of features to meet the
existing EPACT 2005 or 2009 final rule
standard levels. For this reason, and in
order to ensure a proper ordering of the
implementation of efficiency-improving
technologies in its engineering analysis,
DOE started with an engineering
baseline which was, in many cases,
below the performance level mandated
by the current standards. DOE then
modeled equipment with increasingly
higher levels of performance by
implementing the applicable design
options in order of ascending payback
period. The result of this was a modeled
configuration reflecting, based on the
information available to DOE, the most
cost-effective way to build a model
which complies with the existing
standards. Then, DOE continued to add
the remaining design options until it
reached the max-tech level. It was these
additional efficiency levels above the
performance level required by the
existing standard that were considered
as offering incremental efficiency
improvements beyond the level required
at the time of the analysis.
Energy savings and downstream
impacts (such as life-cycle cost and
national net present value results) were
calculated based on a base case
efficiency distribution in which
minimum-efficiency products available
today are assumed to comply with
existing standards. Therefore the
modeled design options up to the level
of performance required by existing
standards did not have any impact on
the energy or cost savings attributed to
the amended standards prescribed
today, but rather, served only to align
the engineering cost-efficiency curve
with the technologies which present the
shortest-payback options for reducing
energy consumption. As a result, DOE
believes that the assertion of some
stakeholders that its methodology
overstates the energy savings
attributable to today’s rule is inaccurate.
With regard to the specific technology
modeling that was discussed by AHRI,
DOE updated modeling of some baseline
design options and components from
the 2009 final rule to the current
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rulemaking to ensure the most accurate
possible depiction of components
currently available on the market. In the
final rule stage, DOE revisited these
design option parameters based on
stakeholder comments and further
revised them where appropriate so as to
ensure a greater degree of accuracy in
the engineering model inputs.
Therefore, DOE understands that there
may be adjustments to the numerical
outputs of the modeling of baseline
units between rulemakings and
rulemaking stages.
In response to the issue raised in the
Joint Comment, DOE wishes to point out
that the ENERGY STAR-qualified
directory 30 is, by design, not necessarily
an exhaustive source of information for
all models available on the market.
However, DOE has adjusted its
modeling of baseline units in the final
rule stage of the analysis and, in
conducting comparisons between its
engineering results and market data
such as the ENERGY STAR directory,
has found agreement between the
performance results obtained from its
engineering analysis and the data points
contained in the ENERGY STAR
directory.
Condensate Pan Heaters
In their written comments,
manufacturers provided input on the
modeling of condensate pan heaters in
baseline and higher-performance units.
Traulsen noted that closed door
refrigerators were modeled in the NOPR
engineering analysis as not requiring
electric condensate pan heaters, while
freezers were modeled as using this
component, even though refrigerators
face the same physical limitations as
freezers. Further, Traulsen commented
that DOE should consider the power
required to bring condensate pan
heaters to operating temperature and the
idle power consumption of empty
condensate pans when reviewing energy
conservation strategies. Further,
Traulsen expressed the belief that
electric condensate pan heaters are an
important feature which cannot be
ignored. (Traulsen, No. 65 at p. 1)
Similarly, Hussmann also commented
that in self-contained mediumtemperature units, manufacturers are
required to use condensate evaporator
pans, the lack of which would reduce
utility to end-users. (Hussmann, No. 77
at p. 7)
In response to the comments provided
by Traulsen and Hussmann, DOE
revisited its engineering analysis and
added condensate pan heaters for
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medium-temperature vertical closeddoor cases to its analytical model.
Additionally, in response to Traulsen’s
suggestion, DOE added a factor of an
additional 10% pan energy
consumption to its modeling of
condensate pan energy use in order to
account for the energy needed to bring
the pan up to temperature. However,
DOE did not add further energy in its
engineering simulation to account for
idle consumption of empty condensate
pans, as DOE understands that most
condensate pan heaters use float
switches or other sensor devices to
activate the pan heater only when the
water level is sufficiently high to require
it, minimizing operation of heaters with
empty pans.
Defrost
In its written comment, Traulsen
provided additional information to
assist in DOE’s modeling of defrost
systems. Traulsen commented that
while the DOE model assumed that all
VCT.SC.M and VCS.SC.M units employ
off-cycle defrost systems, this is not true
in real-life applications. Traulsen
further commented that, for most
refrigerator models, it uses an electric
defrost element. Traulsen further noted
that if electric defrost were included, all
theoretical models would fail to meet
the proposed standard. Additionally,
Traulsen commented that DOE’s model
seems to ignore desired features such as
hot-gas defrost and electric defrost
systems, even though they are widely
available in the market.
Traulsen commented that defrost
cycles tend to terminate when the
evaporator coil reaches a predetermined
temperature, but the time period
required for melting all accumulated
frost varies with the mass of the
evaporator coil and surrounding
components. Further, Traulsen noted
that the DOE spreadsheet appears not to
account for these accommodations, and
fails to account for increased defrost
length when using enhanced evaporator
coils, which have a 50% higher mass
than the baseline coil designs. Traulsen
commented that, in the DOE NOPR
engineering model, defrost heater
wattage only varied in proportion to the
length of the cabinet, and not with the
cabinet height or volume. Furthermore,
Traulsen noted that the heater wattage
calculated for full-height closed door
cabinets appear to be too high.
(Traulsen, No. 65 at p. 11) Structural
Concepts commented that the
multipliers used to model defrost cycles
should differ between open and closed
type cases. (Structural Concepts, No. 85
at p. 3)
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After the NOPR public meeting and
upon receipt of comments, DOE
researched defrost mechanisms applied
in medium-temperature applications.
Specifically, DOE investigated this
subject through review of manufacturer
literature such as manuals and
replacement parts catalogs, as well as
through testing and teardown of
selected units. The results of this
investigation contradicted Traulsen’s
assertion that electric defrost is
commonly used in medium-temperature
units, as DOE did not find evidence of
this. Additionally, examination of
public certification databases such as
the ENERGY STAR directory showed
equipment performance levels
inconsistent with the use of substantial
amounts of electric defrost. Therefore,
DOE did not find sufficient evidence to
warrant adding the modeling of electric
defrost to its engineering analysis. With
respect to the discussion of hot gas
defrost, DOE understands that this
feature is currently used by some
manufacturers in the market, but did not
explicitly model it due to concerns
raised through comments and in
manufacturer interviews regarding
reliability issues with this feature.
In response to the comments from
Traulsen and Structural Concepts
regarding defrost cycle lengths, DOE
based its modeling of defrost cycles for
various equipment classes based on a
number of sources, including
manufacturer literature, manufacturer
interviews, and testing of equipment
currently on the market. Thus DOE
agrees that the defrost length values
should vary by equipment class, and has
modeled them as such in its engineering
analysis. With respect to Traulsen’s
comment on additional defrost power
being needed for larger evaporator coils,
DOE constrained the size of the
evaporator coils modeled in the final
rule analysis, thus mitigating concern
over this issue. Additionally, in the final
rule engineering analysis, for vertical
freezers, DOE adjusted the modeled
defrost heater wattages based on inputs
from Traulsen’s comment and other
sources. DOE believes that these
changes better reflects the actuality of
defrost mechanisms utilized in these
equipment classes.
Lighting Configurations
Hillphoenix commented that the
number of shelves, and therefore shelf
lights, varies greatly for SVO cases
depending on the height of the case.
Hillphoenix further commented that
there exist ‘‘extreme configuration
differences’’ among cases within the
same class. (Hillphoenix, No. 71 at p. 4)
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In developing its engineering analysis
for this rulemaking, DOE collected data
on common designs within the industry.
This information included
specifications on lighting configurations
and formed the basis for the
representative units modeled within the
engineering analysis. Based on input
collected over the course of the current
rulemaking and in the development of
the 2009 final rule, DOE believes that its
design specifications, including lighting
configurations, are accurate and
representative of the various covered
classes, including SVO cases.
Additionally, DOE notes that for SVO
cases, the allowable energy
consumption under the existing and
amended standards is a function of
TDA. Cases with greater height, such as
those suggested by Hillphoenix, would
have a greater measured total display
area and thus would be allowed a
proportionally larger amount of energy.
Therefore, DOE believes that its existing
analytical methodology accounts for the
concerns raised by Hillphoenix.
Infiltration Loads
Manufacturers opined that DOE’s
modeling of air infiltration caused by
door openings could be improved.
Continental Refrigerator (Continental),
Hussmann, and Traulsen all commented
that air exchange during door openings
significantly affects system energy
consumption. (Hussmann, No. 77 at p.
3) (Traulsen, No. 65 at p. 10)
(Continental, No. 87 at p. 2)
Specifically, True commented that door
openings and the resultant air exchange
could account for between 15% and
25% of a unit’s energy consumption.
(True, Public Meeting Transcript, No. 62
at p. 151)
Traulsen commented that the energy
consumption formulas for closed door
models fail to account for gasket losses
(heat gain or added load), and that it
was concerned with the use of the air
infiltration load models applied,
especially with respect to closed door
units, since real world conditions can
vary from those experienced during the
ASHRAE test procedure. (Traulsen, No.
65 at p. 10) Moreover, Continental noted
that the percentage of air that is
exchanged varies greatly with the
configuration and type of cabinet.
Continental further commented that the
DOE model did not provide sufficient
explanation of how air infiltration loads
were calculated for different cabinet
types. (Continental, Public Meeting
Transcript, No. 62 at p. 123) Structural
Concepts commented that the
multipliers used to model infiltration
should differ between open and closed
type cases. (Structural Concepts, No. 85
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at p. 3) ACEEE commented that tracer
gas analysis, a well-established
technology, could be used to analyze the
actual air exchange that occurs during
door openings. (ACEEE, Public Meeting
Transcript, No. 62 at p. 154)
DOE understands the significance of
air infiltration and is aware of its impact
on the modeled energy consumption of
commercial refrigeration equipment. In
response to these comments, DOE
reviewed its modeled infiltrated air
mass values between the NOPR and
final rule stages of the rulemaking.
Specifically, DOE adjusted the values
for a variety of classes to better align
with new information presented in
stakeholder comments and other
sources. This included adjustments to
account for the impacts of the respective
air densities at the three DOE rating
temperatures, and scaling to better
simulate the impacts of case geometry.
For full details on the infiltration levels
modeled, please refer to chapter 5 and
appendix 5A of the final rule TSD.
With respect to the comment from
True regarding the percentage of case
heat load attributable to infiltration,
DOE’s engineering model provides a
specific breakdown of the constituent
components of the case heat loads
modeled in its simulation. A review of
the DOE engineering model shows the
contribution of infiltration to case heat
load for closed-door units to be in line
with the figures provided by True. In
response to the comment from Traulsen,
DOE believes that gasket losses are
accounted for in its infiltrated air mass
values. These values were derived from
manufacturer literature based upon test
performance under ASHRAE
conditions, and thus would encapsulate
all phenomena, including gasket losses,
encountered by the unit which
contribute to the infiltration load during
operation. The engineering model
simulates performance under the DOE
test procedure, and thus changes which
may be encountered in the field such as
those noted by Traulsen are not
specifically relevant to the calculated
daily energy consumption values used
for standards setting purposes.
Therefore, DOE does not see a need to
change its methodology to account for
this attribute.
DOE agrees with Continental and
Structural Concepts that wide variation
in infiltration is observed among
different equipment classes, particularly
between open and closed cases. DOE
believes that its updated air infiltration
values better account for differences that
exist in infiltration loads among cases of
different configurations, geometries,
sizes, and operating temperatures.
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With respect to the comment from
ACEEE, DOE understands that tracer gas
analysis could be used in a controlled
laboratory environment to possibly
determine infiltration rates into
commercial refrigeration equipment.
However, within the scope, time frame,
and resources of this rulemaking
process, DOE did not pursue that
method to further investigate infiltration
effects. Instead, DOE continued to base
its approach on infiltration load values
calculated from manufacturer literature,
and adjusted those values based upon
comments received after publication of
the NOPR. DOE believes that this is an
accurate approach, consistent with
methodologies employed in other past
and current rulemakings, which is
substantiated by the best available data
as of the time of this analysis.
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
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).
After publication of the NOPR, DOE
received a number of comments on its
choice and implementation of certain
design options within the engineering
analysis. The following sections address
these stakeholder comments.
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a. Fluorescent Lamp Ballasts
Traulsen commented that markets
have already trended towards electronic
(solid-state) ballasts to modulate power
provided by T8 lights. Traulsen raised
concern that DOE analysis might
therefore be unfairly overstating savings
from the adoption of TSL4 by including
electronic ballasts as a design option in
its analysis. (Traulsen, No. 65 at p. 4)
DOE understands that electronic
ballasts are ubiquitous in the
commercial refrigeration equipment
market within cases that use fluorescent
lighting and agrees with the comment
presented by Traulsen. In its NOPR
engineering analysis, DOE modeled the
baseline design option in cases with
lighting as comprised of T8 fluorescent
fixtures with electronic ballasts. At
improved levels of efficiency, DOE
implemented super-T8 fluorescent
lighting, LED lighting, and LED lighting
with occupancy sensors. DOE did not
model magnetic ballasts within its
NOPR engineering analysis. Given the
comments received at the NOPR stage,
DOE retained this stance in its final rule
engineering analysis.
With regard to Traulsen’s assertion
that DOE might be overstating savings,
DOE wishes to clarify that energy
savings and downstream impacts (such
as life-cycle cost and national net
present value results) were calculated
using a base case efficiency distribution
in which minimum-efficiency products
available today are assumed to comply
with existing standards. Therefore, the
modeled design options up to the level
of performance required by existing
standards did not have any impact on
the energy or cost savings attributed to
the amended standards set forth today,
but rather, served only to align the
engineering cost-efficiency curve with
the technologies which present the
shortest-payback options for reducing
energy consumption.
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b. Condenser Fans
Southern Store Fixtures and AHRI
commented that the modeling of
electronically commutated motors
(ECMs) in condenser fan applications
was redundant, since they believe that
all equipment in compliance with the
2009 final rule are already using ECMs.
(Southern Store Fixtures, No. 67 at p. 4)
(AHRI, No. 75 at p. 7)
DOE understands that manufacturers
may currently be choosing to utilize
ECM fan motors as part of their designs
on the market. However, the 2009 final
rule and EPACT 2005 standards do not
include prescriptive requirements, so
DOE is unable to assume that
manufacturers have all used any one
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single design path in order to achieve
the necessary performance levels.
Instead, DOE started its analysis with an
engineering baseline representing
designs less sophisticated than needed
to meet the current standard levels, and
added all available design options,
including some previously considered
in the 2009 final rule, until reaching the
max tech efficiency level. This method
allowed DOE to order all design options
in the most cost-effective manner.
However, only those modeled efficiency
levels having performance above the
level required by existing standards
were considered as contributing to the
energy and cost savings attributable to
this rule. For a further explanation of
this methodology, please see section
IV.D.1.b, ‘‘Baseline Models.’’
c. Evaporator Fans
Southern Store Fixtures and AHRI
commented that the modeling of ECM
fan motors in evaporators was
redundant, since they believe that all
equipment in compliance with the 2009
final rule is already using ECMs.
(Southern Store Fixtures, No. 67 at p. 4)
(AHRI, No. 75 at p. 7) Continental
commented that shutting off the fans
during door-opening could cause the
evaporator coil to freeze up, and thus
that this should not be considered as an
option. (Continental, Public Meeting
Transcript, No. 62 at p. 153)
DOE understands that many
manufacturers may currently be
choosing to utilize ECM fan motors as
part of their designs on the market at
this time. However, the 2009 final rule
and EPACT 2005 standards do not
include prescriptive requirements, so
DOE was unable to assume that
manufacturers all chose any one single
design path in order to achieve the
necessary performance levels. Instead,
DOE started with a simpler engineering
baseline representing equipment
performance at a lower level than that
permitted by current standards, and
added all design options, including
some previously considered in the 2009
final rule, until reaching the max tech
level. This method allowed DOE to
order all design options in the most
cost-effective manner. However, only
those modeled efficiency levels
performance above the level required by
existing standards were considered as
contributing to the energy and cost
savings attributable to this rule. For a
further explanation of this methodology,
please see section IV.D.1.b, ‘‘Baseline
Models.’’
DOE agrees with the concerns of
Continental regarding turning off
evaporator fans, and did not model
evaporator fan controls as a design
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option in this rulemaking due to a
number of issues including the integrity
of the air curtain on open cases and food
safety issues due to lack of air
circulation arising from stopping the
evaporator fans. For a full discussion of
this issue, please see chapter 5 of the
final rule TSD.
d. Design Options Impacting Equipment
Form Factor
Some manufacturers and consumer
groups urged DOE to screen out any
design options which would even
marginally affect the geometry of a
model, either by increasing its total
footprint or reducing the cooled internal
space. Specifically, these comments
referred to DOE’s consideration of
added insulation thickness as a design
option. True commented that it was
impractical to increase the total
footprint of equipment since almost all
commercial kitchen equipment has a
fixed footprint and replacement units
must fit into the same space as old
units. (True, No. 76 at p. 1) Continental
commented that a 1⁄2″ increase in
insulation of walls could have a
significant impact on end-users and
manufacturers, since equipment is often
designed for very specific footprints and
layouts. Continental further commented
that while an inch less inside space or
an inch larger cabinet may seem
insignificant, it may be important to
end-users. (Continental, Public Meeting
Transcript, No. 62 at p. 103) Traulsen,
too, noted that both internal capacity
and footprint of a unit were its key
selling points. (Traulsen, No. 65 at p. 7)
Hoshizaki, True, AHRI, NAFEM, SAF,
Continental, Structural Concepts and
Hillphoenix all opined that increasing
the case insulation requirement by even
1⁄2″, would lead to a significant increase
in footprint, or decrease in internal
volume—both of which would
detrimentally affect consumer utility,
since many commercial environments
have very limited floor space.
(Hoshizaki, No. 84 at p. 2) (True, No. 76
at p. 3) (AHRI, No. 75 at p. 6) (NAFEM,
No. 93 at p. 5) (SAF, No. 74 at p. 6)
(Continental, No. 87 at p. 3) (Structural
Concepts, No. 85 at p. 2) (Hillphoenix,
No. 71 at p. 3)
DOE understands stakeholder
concerns over unit form factor, and
discussed these concerns thoroughly in
its manufacturer interviews conducted
at the NOPR stage of the rulemaking. At
that time, manufacturers agreed that the
addition of 1⁄2″ of insulation above the
baseline thicknesses modeled (1.5″, 2″,
and 2.5″ for refrigerators, freezers, and
ice cream freezers, respectively) was
feasible, albeit at the expense of
equipment redesign and replacement of
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foaming fixtures. DOE incorporated cost
figures for these factors into the
engineering and manufacturer impact
analyses so as to account for the costs
of additional foam as a design option.
With respect to the concerns over
additional foam thickness having an
impact on the usefulness of the product
to consumers, DOE notes that in its
teardown analyses it encountered a
number of models currently on the
market utilizing the increased foam wall
thicknesses which it modeled. Since
manufacturers are already employing
these wall thicknesses in currentlyavailable models, DOE believes that this
serves as a proof of concept and that the
resulting changes to form factor would
be of minimal impact to end users. DOE
also would like to remind stakeholders
that it is not setting prescriptive
standards, and should manufacturers
value some features over others, they are
free to use different design paths in
order to attain the performance levels
required by today’s rule.
e. Vacuum Insulated Panels (VIPs)
True, Structural Concepts, and
Traulsen commented that the use of
VIPs is very cost-prohibitive and can
reduce the structural strength of the
unit. Additionally, Traulsen
recommended further discussion on the
use of vacuum insulated panels,
specifically on the structural integrity
and associated trade-offs of this
technology. (Traulsen, No. 65 at p. 10)
(True, No. 76 at p. 3) (Structural
Concepts, No. 85 at p. 2)
DOE considered vacuum insulated
panels as a design option in its
engineering analysis because they have
the potential to improve equipment
efficiency, are available on the market
today, are currently used in refrigeration
equipment, and pass the screening
criteria set forth in sections 4(b)(4) and
5(b) of the Process Rule. However, DOE
understands that there is a high level of
cost required to implement this design
option, including redesign costs, and
sought to reflect that fact through
appropriate cost values obtained from
manufacturer interviews and other
sources and included in its analyses. As
a result, vacuum insulated panels
appear only in max-tech designs for
each equipment class, and are not
included in any of the modeled
configurations selected in setting the
standard levels put forth in today’s
document.
f. Variable-Speed Fan Motors
Traulsen commented that while DOE
suggested varying condenser and
evaporator fan speeds to improve
performance, Traulsen equipment is
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used in applications in which food
safety concerns make this option
infeasible. Traulsen further commented
that NSF issues related to food safety
and sanitation must be a primary
consideration over energy savings.
(Traulsen, No. 65 at p. 5) However, ebmpapst, Inc. (ebm-papst) noted that
variable speed condenser fans have
successfully been deployed in the
European market. (ebm-papst, No. 70 at
p. 3)
DOE agrees with Traulsen’s concerns
over food safety issues arising from
possible implementation of evaporator
fan control schemes. DOE noted in
chapter 5 of its NOPR TSD that the
effectiveness of the air curtain in
equipment without doors is very
sensitive to changes in airflow, and fan
motor controllers could disrupt the air
curtain. The potential of disturbance to
the air curtain, which could lead to
higher infiltration loads, does not
warrant the use of evaporator fan motor
controllers in equipment without doors,
even if there were some reduction in fan
energy use. With respect to equipment
with doors, DOE, in its discussions with
manufacturers, found that there are
concerns in industry about the
implementation of variable-speed fan
technology due to the need to meet food
safety and maximum temperature
requirements. Varying the fan speed
would reduce the movement of air
within the case, potentially leading to
the development of ‘‘hot spots’’ in some
areas of the case, where temperatures
could exceed the desired value. This
finding aligns with the concerns raised
by Traulsen. Some industry
representatives also stated during
interviews that the use of such
controllers could have unintended
consequences, in which fans would be
inadvertently run at full power to
attempt to overcome a frosted or dirty
coil, resulting in wasted energy. Due to
the uncertainties that exist with respect
to these technologies, DOE did not
consider variable-speed evaporator fan
motors or evaporator fan motor
controllers as a design option in its
NOPR or final rule analyses.
In response to the comment from
ebm-papst, DOE points out that it
discussed condenser fan controls in
chapter 4 of its NOPR TSD. Because
testing under the ANSI/ASHRAE
Standard 72 test procedure is conducted
at a constant ambient temperature, there
is little opportunity to account for the
adaptive technology of varying
condenser fan motor speed to reduce
daily energy consumption of a given
model. Moreover, DOE understands that
condenser fan motor controllers
function best when paired with a
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variable-speed modulating compressor,
a technology that DOE understands to
be only in the early stages of
implementation in this industry.
Therefore, DOE did not consider
variable-speed condenser fan motors or
condenser fan motor controllers as
design options in its engineering
analysis.
g. Improved Transparent Door Designs
In the NOPR, DOE modeled triple
pane, low-e coated glass in the
configuration of an advanced design
option for vertical medium-temperature
cases with transparent doors. Hussmann
commented that low-e coatings have an
inherent tint to them, which reduces the
visibility of merchandise through a
triple-paned, low-e coated glass door.
(Hussmann, Public Meeting Transcript,
No. 62 at p. 99) SAF, AHRI and NRA
also expressed concern over product
visibility associated with this
technology. (SAF, No. 74 at p. 6) (AHRI,
No. 75 at p. 6) (NRA, No. 90 at p. 5)
Traulsen, NAFEM, Continental, Royal
Vendors, and True noted that triplepane glass doors are much heavier than
double-paned doors, and increase the
risk of the unit tipping over, especially
when it is near empty. Additionally,
True pointed out that triple-paned glass
led to reduced thermo-break in hinge
areas, reduction in internal volume of
sliding doors, failure to clear the
Underwriters Laboratories (UL) 471 tiptest,31 door opening difficulties due to
added mass and easier breakage.
Traulsen also noted that an enhanced
door would require design changes
including heavier hinges, and a
complete redesign of sliding doors with
applications in narrow aisles.
(Continental, No. 87 at p. 3) (NAFEM,
No. 93 at p. 7) (True, No. 76 at p. 2)
(Traulsen, No. 65 at p. 10)
Additionally, AHRI commented that,
for HCT equipment, the NOPR TSD
considered two extra panes of glass for
high-performance doors that were used
in low and ice-cream temperatures,
whereas only a single extra pane of glass
was used for medium temperature highperformance doors. (AHRI, No. 75 at p.
7)
The CA IOUs disagreed with the
comments from many manufacturers
and trade associations, and in a written
comment opined that triple-pane, low-e
transparent doors were feasible in
medium temperature applications and
were already found in existing
31 UL standard 471, ‘‘Commercial Refrigerators
and Freezers,’’ is a safety standard applicable to this
equipment. Part of this procedure includes a test of
the ability of the unit to avoid tipping over under
certain conditions. This is the ‘‘tip test’’ referenced
by the commenter.
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equipment. (CA IOUs, No. 63 at p. 6)
The Joint Comment suggested that if the
use of triple-pane, low-e doors were to
reduce product visibility, then increased
lighting levels may be more energyefficient than reverting to double-pane
glass. (Joint Comment, No. 91 at p. 4)
DOE understands the concern of
manufacturers and other interested
parties regarding the applicability and
appropriateness of triple-pane, low-e
doors in medium temperature
equipment. The range of concerns
suggests that manufacturers may
encounter significant issues of redesign,
recertification, consumer choice, and
possible loss of some functionality were
this feature to be implemented across all
medium-temperature glass-door units.
Therefore, in its final rule modeling of
glass doors, DOE restricted its highperformance design to consider only
two panes of glass for mediumtemperature cases.
In response to AHRI’s comments
regarding HCT doors, DOE asserts that
HCT doors as modeled in its
engineering analysis for the NOPR
featured the same number of panes of
glass in both low/ice cream and medium
temperature designs. For these
equipment types, the baseline door
featured a single pane of glass, while the
high-performance door featured a
second pane of glass. These designs are
consistent with what DOE has observed
on the market and in the design of
similar equipment. Therefore, DOE
retained these designs, with respect to
the number of panes of glass modeled,
in its final rule engineering analysis.
DOE agrees with the CA IOUs that
some equipment currently on the
market for medium-temperature
applications does feature triple-pane,
low-e glass doors. However, this is not
a standard design and DOE understands
the concerns of manufacturers in
applying this feature to the entirety of
their product lines. Due to concerns
over applicability and implementation
of triple-pane, low-e doors in all
medium-temperature products, DOE
retained a double-pane design in its
final rule engineering analysis
simulation of improved glass door
performance. However, DOE wishes to
point out again that it is not setting
prescriptive design requirements, and
thus manufacturers are free to use only
those designs and technologies they see
fit in order to attain the level of
performance specified in today’s final
rule.
h. High-Performance Coil Designs
In order to model improved
performance, DOE considered the use of
improved evaporator and condenser
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coils as design options. However, many
manufacturers felt that while these
design options provided theoretical
efficiency gain, there are several
practical issues which mitigated these
gains in the field. Heatcraft commented
that the phrase ‘‘improved evaporator
coil design’’ was a very generic term,
and that coils that can be designed for
high efficiency in a laboratory
environment may not serve the purpose
of the equipment functionally in the
field. (Heatcraft, Public Meeting
Transcript, No. 62 at p. 77) Danfoss,
Traulsen, Southern Store Fixtures,
Royal Vendors and True commented
that higher fin density for evaporators
and condensers would lead to frequent
clogging and freezing, which could not
only cause an increase in energy use,
but also cause the unit to not maintain
temperature levels required for safe
storage of food. (Danfoss, No. 61 at p. 4)
(Traulsen, No. 65 at p. 6) (Southern
Store Fixtures, No. 67 at p. 3) (Royal,
No. 68 at p. 1) (True, Public Meeting
Transcript, No. 62 at p. 67)
At the NOPR stage, DOE modeled an
improved evaporator coil with a larger
number of tube passes than the baseline
design; however, Traulsen commented
that if an evaporator with a larger
number of tube passes is selected, there
is an increased risk of refrigerant
pressure drop through the coils.
Traulsen further commented that, with
multiple tubing circuits, this drop could
be so substantial that the refrigerant
could fail to make its way back to the
compressor. (Traulsen, No. 65 at p. 6)
DOE also modeled rifled evaporator
tubes to improve coil performance in its
NOPR analyses. Southern Store Fixtures
commented that the use of rifled tubing
for evaporator coils may have no
significant improvement in coil
performance for commercial
refrigeration systems. (Southern Store
Fixtures, No. 67 at p. 3) AHRI
commented that rifling of evaporator
coil tubes is common in the industry,
but that in practical applications, lower
evaporation temperatures and lower
flow rates result in no significant
efficiency improvement attributable to
internally enhanced tubing. (AHRI, No.
75 at p. 3) Continental commented that
rifled tubing for evaporator coils causes
turbulence in refrigerant flow, leading to
slugging and stress concentrations,
which lead to increased maintenance
costs and failure possibilities.
(Continental, No. 87 at p. 2)
Another concern amongst
manufacturers was the effect of
incorporating larger evaporator and
condenser coils into a unit. AHRI noted
that there had been drastic reductions in
the overall width and depth of the
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17751
modeled evaporator coils since the last
rulemaking. Further, AHRI noted that
while DOE relied on its contractors for
details on coil construction, it did not
provide any references to studies that
justify changes in coil dimensions.
(AHRI, No. 75 at p. 5) Traulsen
commented that larger coils would
require equipment redesign, resulting in
possible obsolescence of smaller lines
and custom applications. (Traulsen, No.
65 at p. 6) Hillphoenix commented that
the use of taller coils would decrease
the amount of product that could be put
in the case, or would move the product
further away from consumers, and that
this would be unacceptable to retailers.
(Hillphoenix, No. 71 at p. 4) Hussmann
commented that increasing evaporator
and condenser coil dimensions would
involve engineering costs associated
with redesigning parts of the case that
interface with the coil. (Hussmann, No.
77 at p. 2) Structural Concepts
commented that changing the overall
height of heat exchangers would require
that either the display capacity to be
reduced, or the overall height of a unit
be increased, which would impact
utility negatively. (Structural Concepts,
No. 85 at p. 2) Continental commented
that in under-counter and worktop
units, limited space is available for a
condensing unit, and increasing the size
of the condenser coil is not practical.
(Continental, No. 87 at p 2)
In response to the comment from
Heatcraft regarding DOE’s reference to
‘‘improved evaporator coil design,’’ DOE
points to chapter 5 of its TSD, where it
specifically outlines the geometries and
features included in this coil design.
With respect to the concerns of
Heatcraft, Danfoss, Traulsen, Southern
Store Fixtures, Royal Vendors, and True
that coil designs must remain functional
in the field, DOE only considered
features which were proven through
field use in current coil designs. In a
review of the coil designs at the final
rule stage, DOE removed from
consideration designs featuring
increased fin pitch, and instead retained
the modeled fin pitches at levels seen in
teardown units. DOE believes that this
action addresses the concerns of these
stakeholders over the issues of clogging
and freezing that could be encountered
with higher-fin-pitch coils.
When modeling coil configurations at
baseline and improved levels of
efficiency, DOE evaluated the overall
performance of the coils within the
context of specific refrigeration systems
in which they would be used. This
included numerical simulation of coil
performance accounting for pressure
drops. DOE excluded from
consideration coil designs which proved
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impractical, or which had negative
energy impacts. Therefore, DOE believes
Traulsen’s concern regarding pressure
drops over larger numbers of tube
passes to be unsubstantiated.
Additionally, DOE re-evaluated its coil
designs at the final rule stage based on
stakeholder comments and additional
data from teardowns, incorporating
many of the concerns expressed in these
comments during coil modeling at the
final rule stage.
Based on stakeholder comments
including those of Southern Store
Fixtures, AHRI, and Continental, DOE
removed consideration of coil tube
rifling from its analysis of improved
heat exchanger performance at the final
rule stage of this rulemaking. DOE
believes that this action addresses the
concerns voiced by stakeholders over
the inapplicability of rifled tubing to
some commercial refrigeration designs
and issues with reduced refrigerant
flow, slugging, and other negative
effects.
During the final rule stage, DOE
revised its modeling of evaporator and
condenser coils based on new
information gained through stakeholder
comments and additional teardowns. In
this analysis, it addressed the concerns
expressed by manufacturers and other
parties regarding the size constraints
imposed upon heat exchangers in
commercial refrigeration applications.
With respect to the comments from
AHRI, DOE notes that it did re-evaluate
its coil designs from the 2009
rulemaking to produce designs that
better approximate the configurations
and performance attributes of coils
found in the market. In response to the
concerns of Hillphoenix, Hussmann,
Structural Concepts, and Continental,
during its final rule engineering
modeling, DOE kept the size of modeled
evaporator coils constant based on
geometries seen in teardown units, and
instead modified only features which
could improve coil performance without
growing the footprint of the coil. When
modeling condenser coils, DOE allowed
for a modest inclusion of an additional
coil row in the direction of airflow. This
was consistent with advanced designs
seen in production units today, and
DOE believes that this added coil size
would not be sufficient to cause major
impacts on unit form factor.
i. Higher-Efficiency Fan Blades
Traulsen commented that DOE
modeling of higher efficiency fan blades
did include specific details pertaining to
the implementation of this design
option, including energy savings,
method of cost modeling, and other
attributes. (Traulsen, No. 65 at p. 5)
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ebm-papst commented that fan selection
should be based on airflow at the
operating point and should not be
limited to axial and tangential fans.
(ebm-papst, No. 70 at p. 3)
In response to Traulsen’s comment,
DOE wishes to clarify that DOE did not
consider higher-efficiency fan blades as
a design option within its NOPR or final
rule engineering analyses. Most
commercial refrigeration equipment
currently uses stamped sheet metal or
plastic axial fan blades. DOE was not
able to identify any axial fan blade
technology that is significantly more
efficient than what is currently used,
but did identify tangential fan blades as
an alternative fan blade technology that
might improve efficiency. However,
tangential fan blades in small sizes are
themselves less efficient at moving air,
and thus require greater motor shaft
power. Because of these competing
effects, DOE did not consider tangential
fan blades as a design option in its
analyses. Additionally, with regard to
ebm-papst’s comment, DOE did not
encounter any other fan blade
technologies aside from axial and
tangential fans which were available for
application in commercial refrigeration
equipment. Consistent with the
comment from ebm-papst, DOE
modeled fan motor and blade
combinations so as to provide needed
airflow across the heat exchangers
consistent with what is used in designs
currently available on the market.
j. ECM Fan Motors
ebm-papst, in its written comment,
noted that a variety of fans with
electronically commutated (EC) motors
(ECMs) were available on the market
which provided wire-to-air efficiency of
65–70%. ebm-papst further commented
that EC motors are compact and easily
integrated into all levels of refrigeration
systems. Also, ebm-papst commented
that EC fans compatible with alternative
refrigerants are now available on the
market. (ebm-papst, No. 70 at p. 4)
DOE agrees with ebm-papst regarding
the performance and availability of ECM
fan motors for commercial refrigeration
applications. In its preliminary and
NOPR analyses, DOE considered EC
motors as a design option for evaporator
and condenser fan applications in all
equipment classes where such fans were
present. Additionally, DOE modeled an
overall efficiency of 66% for EC motors,
which is consistent with the figure
provided by ebm-papst. DOE retained
this modeling of EC motors in the final
rule analyses.
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k. Lighting Occupancy Sensors and
Controls
In its analysis, DOE considered
lighting occupancy sensors as a design
option with the potential to reduce unit
energy consumption. However, Traulsen
commented that the study of occupancy
sensors which DOE cited did not
account for different traffic patterns, and
only covered 30 days of data collection
with LEDs at full power and 60 days
with LEDs dimmed. Traulsen expressed
concern that this analysis used
insufficient data to support the savings
assumed by TSL4. (Traulsen, No. 65 at
p. 12) Hillphoenix commented that the
occupancy sensor credit for VOP.RC.L
was higher than for all other classes.
(Hillphoenix, No. 71 at p. 7)
Some manufacturers questioned the
need for occupancy sensors. AHRI
commented that since manual night
curtains are modeled, it could be
assumed that when the curtains are
deployed, the CRE lighting systems can
also be manually turned off during
periods of inactivity. (AHRI, No. 75 at
p. 4) Structural Concepts commented
that requiring occupancy sensors on
cases that will be going to twenty-four
hour stores would be a cost-burden with
no associated energy savings. (Structural
Concepts, No. 85 at p. 2) However, the
Joint Comment suggested that the use of
lighting sensors could further reduce the
energy consumption of max-tech
options for self-contained vertical
closed transparent door units. (Joint
Comment, No. 91 at p. 4)
DOE based its modeling of lighting
occupancy sensors and scheduled
controls on the provisions of the DOE
test procedure as amended by the 2012
final rule. 77 FR at 10292 (February 21,
2012). These provisions allow for cases
featuring these technologies to be tested
with the lights turned off for a fixed
period of time. DOE applied these
provisions specifically across all classes
in which occupancy sensors and
scheduled controls were considered as a
design option. Therefore, DOE believes
Traulsen’s assertions regarding DOE’s
modeled savings levels to be incorrect,
as DOE did not model savings potential
based on field studies, but rather on the
specific provisions of the DOE test
procedure. In response to the comment
from Hillphoenix, DOE wishes to clarify
that occupancy sensors were not given
an absolute credit in the form of a kWh/
day reduction, but instead were
modeled as they are treated under the
DOE test procedure, where they are
given an allowance for lighting off time.
This modified lighting run time was
incorporated into DOE’s engineering
analysis model for cases including
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lighting occupancy sensors, and the
model was run for the particular case
configuration being examined.
Therefore, due to differences in case
geometries, features, and design options,
DOE cautions against direct
comparisons of the absolute merits of
specific technologies across different
equipment classes, as such comparisons
may be misleading.
With respect to the comment from
AHRI, DOE does not consider a manual
light switch to be a lighting controller
under the provisions of its test
procedure, since this device does not
have the inherent ability to reduce
energy consumption and since the
method of test included in the
procedure requires that all lighting be
activated during the test. In its 2012 test
procedure final rule, DOE added a
provision specifically to allow for the
testing of units including occupancy
sensors and scheduled controls, but this
does not include manual light switches.
77 FR at 10292 (February 21, 2012).
Therefore, DOE maintains that a manual
light switch is not a lighting control and
shall not be treated as such during the
conduct of the DOE test procedure.
In response to the concerns of
Structural Concepts, occupancy sensors
have the potential to operate at all
times, turning off lighting to save energy
during periods of inactivity, then
reactivating the lights when shoppers
are present. DOE understands that, even
in 24-hour stores, there are periods
when a high density of shoppers may
not be present, and thus when lighting
occupancy sensors would present the
potential to save energy. DOE agrees
with the Joint Comment that lighting
occupancy sensors offer the potential to
reduce the energy consumption of
equipment in classes to which they are
applicable, including the particular
class noted in the comment. Therefore,
DOE retained its modeling of this design
option in its final rule engineering
analysis.
l. Night Curtains
DOE analyzed night curtains as a
design option with the potential to
reduce equipment energy consumption.
However, Southern Store Fixtures
commented that, while DOE modeled a
reduction in heat load when night
curtains were employed, there was no
cost analysis presented to justify this
option. Furthermore, Southern Store
Fixtures referred to a Pacific Gas and
Electric Company (PG&E) report which
asserted that night curtains were not
cost effective due to poor economics,
and a study funded by the California
Energy Commission which reported a
minimum 6.63 year and maximum
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21.56 year payback period on night
curtains. (Southern Store Fixtures, No.
67 at p. 6) Structural Concepts
commented that night curtains should
be excluded from the analysis since they
were deemed by DOE as not ‘‘required.’’
Structural Concepts further commented
that twenty-four-hour stores would not
be able to use night curtains. (Structural
Concepts, No. 85 at p. 2)
Regarding the types of night curtains
that were modeled by DOE, AHRI
commented that DOE did not explore
automatic night curtains and Southern
Store Fixtures commented that there
were no night curtains currently
available that are suited for curved
display cases. (Southern Store Fixtures,
No. 67 at p. 5) (AHRI, No. 75 at p. 3)
In response to the comment from
Southern Store Fixtures on cost
analysis, DOE wishes to clarify that it
did include a cost analysis of night
curtains in its engineering analysis.
Costs per foot of night curtain were
included in DOE’s engineering
spreadsheet model as released to the
public, and served as the basis of DOE’s
placement of night curtains in the
engineering cost-efficiency curves, as
design options were ordered from
lowest to highest calculated payback
period. Regarding the mention of the
PG&E report as presented to CEC, DOE
understands that that report focused
largely on time-variant economic factors
such as the savings at peak-load
conditions, rather than the overall life
cycle cost savings and payback periods
calculated by DOE. Therefore, due to a
different focus and methodology, that
organization may have reached a
different conclusion than that attained
by DOE. DOE plans to retain its
analytical methodology as used across a
variety of rulemaking efforts and
believes that that methodology is
appropriate and soundly evaluates the
economic and energy savings benefits of
design options including night curtains.
With respect to the comments from
Structural Concepts, DOE agrees that
use of night curtains is not required
since DOE is setting a performance
standard based on daily energy
consumption under the DOE test
procedure, rather than a prescriptive
standard mandating the use of specific
features. However, DOE is charged with
exploring all avenues of reducing
measured energy consumption, and the
ability of the DOE test procedure to
quantify savings attributed to night
curtains justifies DOE’s inclusion of this
technology in its analysis. In addition,
DOE notes that night curtains may be
used in 24-hour stores during periods of
low customer traffic, and that
consideration of this feature in
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equipment offered for sale would
provide store operators with the
availability of an additional mechanism
for attaining energy savings.
DOE agrees with AHRI that it did not
explore automatic night curtains, as it
did not find a readily available
automatic night curtain technology that
was applicable to the relevant case
designs, including vertical and
semivertical open cases. With respect to
the comment from Southern Store
Fixtures on case geometries, DOE
believes that night curtains are available
that apply to the vast majority of open
case designs. Further, DOE is not setting
a prescriptive standard; night curtains
are one design option, but not required
under the amended standard.
3. Refrigerants
For the preliminary and NOPR
analyses, 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 NOPR, DOE
received a number of comments on
potential future issues relating to
refrigerants for this equipment.
ACEEE commented that the DOE had
not taken into consideration the use of
propane and other hydrocarbon
refrigerants, which are in use
internationally and are now allowed in
limited quantities by the U.S.
Environmental Protection Agency
(EPA). ACEEE further commented that it
has manufacturer statements to show
that these refrigerants considerably
improve equipment efficiency. (ACEEE,
Public Meeting Transcript, No. 62 at p.
40) Danfoss commented that Montreal
Protocol 32 amendments requiring the
phasing out of HFCs would likely come
into effect before this standard’s
compliance date. Additionally, Danfoss
commented that this action would make
DOE’s ‘‘refrigerant neutral’’ stance
flawed, and that DOE must consider the
increased uncertainty and regulatory
burden from the use of low-global
warming potential (GWP) refrigerants in
its analysis. (Danfoss, No. 61 at p. 2)
Coca-Cola, too, opined that by not
directly analyzing alternative
refrigerants, DOE was showing a bias
32 The Montreal Protocol is an international
agreement, first signed in 1987, in which signatories
pledged to phase out the production and use of
ozone depleting substances.
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towards HFCs. (Coca-Cola, Public
Meeting Transcript, No. 62 at p. 121)
The CA IOUs commented that
alternative refrigerants are being used
both internationally and in the United
States. The CA IOUs further commented
that, given the potential for EPA
regulations on HFC usage, DOE should
be prepared to adopt the levels of
performance included in its proposed
standards to reflect the performance
abilities of other refrigerants. (CA IOUs,
No. 63 at p. 8)
AHRI commented that the potential
for changes in Federal refrigerant policy
over the next few years will require the
industry to use refrigerants with low
GWP, putting into question the
applicability of the proposed standard
over extended time periods. AHRI
further stated that there was a
possibility of refrigerant switching
having adverse impacts on equipment
performance. (AHRI, No. 75 at p. 10)
True commented that the refrigerants
modeled in the analysis, R404 and
R134a, are both currently being
reviewed by the EPA Significant New
Alternatives Policy (SNAP) program 33
for possible removal from commercial
refrigeration applications. (True, Public
Meeting Transcript, No. 62 at p. 123)
Lennox, too, noted that non-HFC
refrigerants might become a growing
part of the CRE market in the
foreseeable future. (Lennox, No. 73 at p.
5) Additionally, Hillphoenix
commented that manufacturers are
being pushed towards low GWP
refrigerants which will have an impact
on coil and evaporator designs, as well
as efficiency curves for compressors.
(Hillphoenix, No. 71 at p. 2)
ACEEE asserted that the market
already has begun to move away from
HFC refrigerants. (ACEEE, Public
Meeting Transcript, No. 62 at p. 185)
Coca-Cola commented that it was
seeking to stop using HFCs and switch
over to R744, R290 and R600A, not only
to improve energy efficiency, but also to
make the units environmentally benign.
(Coca-Cola, Public Meeting Transcript,
No. 62 at p. 88) Further, Coca-Cola
commented that it is already purchasing
a large number (28% in the United
States) of R744 cabinets, and aim to be
using only R744 within three years.
(Coca-Cola, Public Meeting Transcript,
No. 62 at p. 128) Continental
commented that refrigerants such as
propane and CO2 have been approved
by EPA and are actively being evaluated
and tested in products. Continental
33 EPA SNAP is the U.S. government regulatory
program responsible for maintaining the list of
alternatives to ozone depleting substances allowed
for use within specific applications, including
refrigeration, in the United States.
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further commented that alternative
refrigerants have the potential to affect
the performance of equipment.
(Continental, No. 87 at p. 1) AHRI also
commented that a change in refrigerant
policy would impact refrigerants which
are used as blowing agents for foams,
possibly resulting in lower insulation
performance values. (AHRI, No. 75 at p.
10) Providing an additional view, the
Joint Comment noted that the use of
propane as a refrigerant could improve
efficiency of units by 7–11%.
Additionally, the Joint Comment
pointed out that while DOE did not
model non-HFC refrigerants,
manufacturers have the option of using
more efficient refrigerants. (Joint
Comment, No. 91 at p. 4)
Specifically, many stakeholders
wished for DOE to consider propane
(R290) as a viable alternative refrigerant.
Danfoss commented that the inclusion
of natural refrigerants in the analysis
was a critical issue, since, unlike higherefficiency compressors, the technology
is already available. Danfoss urged DOE
to consider propane, isobutane and
carbon dioxide as viable refrigerants.
(Danfoss, Public Meeting Transcript, No.
62 at p. 126) ACEEE commented that
DOE’s decision to screen out propane
refrigerant as a design option had
seriously impacted the downstream
analyses. (ACEEE, Public Meeting
Transcript, No. 62 at p. 127) However,
both Structural Concepts and True
noted that they could consider propane
as a refrigerant for some, but not all, of
their products, since the 150 gram
SNAP limit restricted total compressor
capacity. (Structural Concepts, Public
Meeting Transcript, No. 62 at p. 127)
(True, Public Meeting Transcript, No. 62
at p. 127)
In its written comment, however,
Traulsen commented that, while
alternative refrigerants were discussed
in the public meeting, DOE should
remain technology neutral with regard
to those refrigerants at this time, since
there was a risk of conflict with other
programs such as EPA SNAP and UL,
and since the costs to switch over to
alternative refrigerants is high.
(Traulsen, No. 65 at p. 18)
While DOE appreciates the input from
stakeholders at the public meeting and
in subsequent written comment, DOE
does not believe that there is sufficient
specific, actionable data presented at
this juncture to warrant a change in its
analysis and assumptions regarding the
refrigerants used in commercial
refrigeration applications. As of now,
there is inadequate publicly-available
data on the design, construction, and
operation of equipment featuring
alternative refrigerants to facilitate the
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level of analysis of equipment
performance which would be needed for
standard-setting purposes. DOE is aware
that many low-GWP refrigerants are
being introduced to the market, and
wishes to ensure that this rule is
consistent with the phase-down of HFCs
proposed by the United States under the
Montreal Protocol. DOE continues to
welcome comments on experience
within the industry with the use of lowGWP alternative refrigerants. Moreover,
there are currently no mandatory
initiatives such as refrigerant phase-outs
driving a change to alternative
refrigerants. Absent such action, DOE
will continue to analyze the most
commonly-used, industry-standard
refrigerants in its analysis.
DOE wishes to clarify that it will
continue to consider CRE models
meeting the definition of commercial
refrigeration equipment to be part of
their applicable covered equipment
class, regardless of the refrigerant that
the equipment uses. If a manufacturer
believes that its design is subjected to
undue hardship by regulations, the
manufacturer may petition DOE’s Office
of Hearing and Appeals (OHA) for
exception relief or exemption from the
standard pursuant to OHA’s authority
under section 504 of the DOE
Organization Act (42 U.S.C. 7194), as
implemented at subpart B of 10 CFR
part 1003. OHA has the authority to
grant such relief on a case-by-case basis
if it determines that a manufacturer has
demonstrated that meeting the standard
would cause hardship, inequity, or
unfair distribution of burdens.
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
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information with data from physical
teardowns of commercial refrigeration
equipment currently on the market.
During the development of the
engineering analysis for the 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. These
results were used as the basis for the
downstream calculations at the NOPR
stage of the rulemaking.
At the NOPR public meeting and in
subsequent written comments, DOE
received further input from stakeholders
regarding the methodologies and inputs
used in DOE’s cost assessment. DOE
incorporated this input in updating its
modeling at the final rule stage. 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 final rule 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 equipment
families, with the exception of the HZO
family.34 The units were then
34 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.
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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.
At the final rule stage of the
rulemaking, in response to comments
regarding the technologies incorporated
into commercial refrigeration equipment
at various levels of performance, DOE
procured additional models of
equipment on the market and performed
further teardown assessment of the
construction and componentry featured
in these models. The data from these
supplemental teardowns, coupled with
known performance of the purchased
units from independent testing or
ENERGY STAR certification, allowed
DOE to compare the performance of
models currently on the market to the
results of modeling of the same
equipment configurations using its
engineering simulation. This
comparison provided a validation check
on the results of the simulations. See
chapter 5 of the final rule TSD for more
details on the teardown analysis.
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.
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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 25 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, which would in turn
cause the model to scale other geometric
and cost parameters defining the overall
size of the case. This parameterized
model, coupled with the design
specifications chosen for each
representative unit modeled in the
engineering analysis, was used to
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develop core case MPC cost estimates
for each of the 25 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 (those
components treated as 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 final
rule TSD describes DOE’s cost model
and definitions, assumptions, data
sources, and estimates.
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
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.J). At the
NOPR stage of the rulemaking, 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 once
again updated the analysis at the final
rule stage based on input from the
NOPR public meeting and subsequent
written comments. DOE calculated the
average equipment cost percentages by
equipment class. Chapter 5 of the 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.
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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 rule. DOE also
created 25 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 final rule TSD. Chapter 5 of the final
rule TSD also presents these costefficiency curves in the form of energy
efficiency versus MPC. After the
publication of the NOPR analysis,
several stakeholders provided input and
feedback regarding DOE’s cost modeling
methodology and costs used for specific
components and design options.
Specifically, DOE received comments
regarding core case costs, LED cost
specifications, component sourcing and
cost information, and coil costs. The
following sections address these
stakeholder comments and concerns.
Core Case Costs
Traulsen commented that DOE’s
assumption of core costs not changing
for more efficient design option levels is
flawed. Traulsen further pointed out
that costs for shelving, wiring, air
curtain grills, trim, etc. do change in all
cases when internal or external product
footprint is altered. (Traulsen, No. 65 at
p. 15)
DOE understands that changes to
design requiring adjustment to a unit’s
form factor would have an impact on
the cost of production of the unit, and
would result in the manufacturer
incurring redesign costs. Of the design
options considered, most would not
have a significant impact in these areas,
as they consist largely of component
swaps or bolt-on component additions.
However, for the design options which
would affect unit format, DOE
considered incremental materials costs
and redesign costs, as well as capital
expenditures, in its engineering and
MIA analyses. Therefore, DOE believes
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that it has sufficiently addressed the
concerns raised by Traulsen.
Light-Emitting Diode Cost
Specifications
Several stakeholders expressed
reservations over DOE’s use of LED
price projections, opining that DOE had
likely underestimated the price of LEDs.
Traulsen commented that according to
DOE’s Solid State Lighting Multi-Year
Program Plan (MYPP), there is a
breakthrough in LED performance
required in 2015 that would decrease
the life-cycle energy of LED lamps.
Traulsen asserted that these projections
were based on the assumption of
continued governmental R&D support,
and that there is evidence of declining
R&D support for LEDs. Traulsen further
commented that this lack of certainty
made some assumptions in DOE
analysis questionable. (Traulsen, No. 65
at p. 3) Hussmann noted that, typically,
LED fixtures cost twice as much as T8
fluorescent ballasts. (Hussmann, No. 77
at p. 2) Structural Concepts commented
that the prices of LED fixtures would
likely be 37–40% higher than DOE
predictions for 2017. (Structural
Concepts, No. 85 at p. 2) Similarly,
Hillphoenix commented that DOE had
modeled a zero cost for drivers and that
current LED prices are on the order of
three times that estimated in the model.
(Hillphoenix, No. 71 at p. 1) Traulsen
noted that for VCT.SC systems, the
added cost of using LED systems was
greater than $120 per unit. (Traulsen,
No. 65 at p. 3) True commented that it
was unlikely for LED prices to continue
to drop. (True, No. 76 at p. 1)
Hillphoenix commented that LED
lighting for the VCT.RC.M and
VCT.RC.L classes had experienced an
83% reduction in cost from the previous
rulemaking to the current rulemaking
analysis. (Hillphoenix, No. 71 at p. 7)
Conversely, the Joint Comment
concurred with DOE’s analysis, noting
that the incorporation of LED price
projections significantly improved the
analysis by reflecting a realistic estimate
of LED costs. (Joint Comment, No. 91 at
p. 5)
In its NOPR analysis, DOE
incorporated price projections from its
Solid-State Lighting Program 35 into its
MPC values for the primary equipment
classes. The price projections for LED
case lighting were developed from
projections developed for the DOE
Solid-State Lighting Program 2012
report, Energy Savings Potential of
35 The DOE Solid-State Lighting Program is a
program within DOE’s Office of Energy Efficiency
& Renewable Energy. More information on the
program is available at https://
www1.eere.energy.gov/buildings/ssl/.
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Solid-State Lighting in General
Illumination Applications (‘‘the energy
savings report’’).36 In the appendix to
this report, price projections from 2010
to 2030 were provided in ($/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 SolidState Lighting Program’s energy savings
report are based on the DOE’s 2011
Multi-Year Program Plan (MYPP). The
MYPP is developed based on input from
manufacturers, researchers, and other
industry experts. Table IV.1 shows the
normalized LED price deflators used in
the final rule analysis.
TABLE IV.1—LED PRICE DEFLATORS USED IN THE FINAL RULE ANALYSIS
Normalized to
2013
Year
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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
During the NOPR stage, 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 equipmentspecific 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
required 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.
The LCC analysis (section IV.F) 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.H). 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 37 due to reduction in LED prices
for equipment installed in 2018 to 2030
were also calculated and appropriately
deducted from the lighting maintenance
costs.
While DOE understands the concerns
of manufacturers over projections of
LED prices in the future, DOE made the
decision to incorporate these projections
based on stakeholder input, past market
trends, and DOE research within the
lighting field, which includes regular
interaction with manufacturers and
suppliers of LED lighting technologies.
With respect to the comments from
Traulsen, DOE does not see any specific
hurdles in the market that indicate that
levels predicted in the MYPP will fail to
be realized. DOE appreciates the
comments from Hussmann, Structural
Concepts, Hillphoenix, Traulsen, and
True regarding present and future LED
prices. However, based on past market
trends and the current research
supporting the MYPP, DOE continued to
utilize these LED price projections in
the modeling underlying today’s final
rule. As a point of clarification to the
comment presented by Hillphoenix,
DOE wishes to mention that the
modeled costs include all components
of the LED fixture, including drivers,
emitters, housing, and wiring. DOE
agrees with the assertion of the Joint
Comment that incorporation of LED
price projections allow the analysis to
better depict market conditions which
will be encountered by manufacturers at
the time of their compliance with the
amended standard set forth in today’s
rule.
Component Sourcing and Cost
Information
36 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.
37 Discussion related to lighting maintenance
costs for commercial refrigeration equipment can be
found in section 0, and a more detailed explanation
can be found in chapter 8 of the final rule TSD.
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In its written comment following
publication of the NOPR, Hoshizaki
commented that the engineering cost
analysis was unrealistic and incomplete
since specific parts suppliers, part
numbers, and parts costs were not
listed. (Hoshizaki, No. 84 at p. 1)
In developing its engineering cost
model, DOE gathered a wide variety of
input information, including component
and material costs, to serve as the basis
for this model. Much of this information
was collected under nondisclosure
agreement by DOE’s contractors, or from
sources which are not publicly
available. Therefore, in order to protect
the sensitive nature of this information,
DOE is unable to disclose the
information in its notice or technical
support document. However, in
developing its engineering performance
and cost models, DOE ensured that the
components and features being modeled
did not present any intellectual property
issues with respect to sourcing or
implementation. That is, DOE ensured
that the features modeled were
consistent with designs and components
available on the open market to the
entire range of CRE manufacturers.
Coil Costs
Some manufacturers opined that DOE
had underestimated the cost of
manufacturing improved evaporator and
condenser coils. Southern Store Fixtures
commented that using smaller tubes in
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a fixed size evaporator was found
through their internal studies to allow
for only 8% performance improvement,
while incurring a 290% cost increase.
Southern Store Fixtures noted that
making changes to a condensing unit
would make the cost 80% higher than
the standard catalog price. (Southern
Store Fixtures, No. 67 at p. 3) AHRI
commented that DOE had
underestimated the added costs
associated with the implementation of
higher efficiency evaporator coils.
(AHRI, No. 75 at p. 5) Traulsen, too,
commented that DOE estimated values
of the cost to manufacture improved
coils was much lower than a cost figure
provided to it by the largest provider of
CRE coils in the U.S. (Traulsen, No. 65
at p. 6) Hillphoenix concurred with
DOE on the modeled price of condenser
coils, but noted that evaporator coils
cost nearly three to four times as much
as condenser coils. Hillphoenix
qualified this assertion by pointing out
that the necessary customization, as
well as the increased assembly cost
(labor) of a lower fin density and longer
width coil, contributed to the increased
price of the evaporator coil.
(Hillphoenix, No. 71 at p. 1)
In response to the comment from
Southern Store Fixtures, DOE did not
consider smaller-diameter tubes in its
evaporator coil designs as modeled in
the final rule engineering analysis.
Additionally, DOE modeled the
components of the condensing unit—
coil, fans, compressor, and cost to
assemble—independently, rather than
modeling the cost of a single
prepackaged assembly. DOE believes
that this modeling accurately reflects
the costs incurred by manufacturers
when producing the condensing units of
self-contained equipment.
Regarding the concerns of AHRI,
Traulsen and Hillphoenix on the
modeled costs of condenser and
evaporator coils, DOE revisited this
modeling for the final rule. DOE based
its modeling of coil costs on information
gathered from teardowns of coils
present in units currently available on
the market, and then used these inputs
in conjunction with an internal cost
model to develop costs to manufacture
for these components. These costs factor
in the prices of raw materials, the costs
of processing, forming, and assembly
operations, and other key costs integral
to the development of the components.
DOE updated its coil costs for the final
rule taking into account the design
changes to the form factors of its
modeled coils and the information
provided in stakeholder comments
regarding the relative costs of different
coil types. DOE is confident in its use
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of this methodology, which has been
implemented and vetted through use in
a number of other past and ongoing
rulemaking analyses. For further
information regarding coil modeling,
please see chapter 5 of the final rule
TSD.
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
manufacturer markup are net sales,
costs of sales, and gross profit. DOE
averaged the financial figures spanning
the years from 2004 to 2010 38 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
38 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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calculated markups to manufacturers
during the manufacturer interviews for
the NOPR (see section IV.D.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 final rule 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
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.J). During
the interviews, DOE sought feedback on
all aspects of its analyses for
commercial refrigeration equipment. For
the engineering analysis, DOE discussed
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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. The results of
the manufacturer interview process
conducted before the release of the
NOPR were augmented with additional
information provided in written
comments after the NOPR and at the
NOPR public meeting. More details
about the manufacturer interviews are
contained in chapter 12 of the final rule
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.39
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.D.4.b. For
each level above the baseline, the
changes in system cost due to the
implementation 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
39 Available at https://www1.eere.energy.gov/
buildings/appliance_standards/rulemaking.aspx/
ruleid/27.
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specific equipment configurations. After
the publication of the NOPR analysis,
DOE received numerous stakeholder
comments regarding the methodology
and results of the energy consumption
model.
a. Release of Engineering Model for
Review
At the NOPR public meeting, Zero
Zone and ACEEE urged DOE to make its
engineering spreadsheet model publicly
available. (Zero Zone, Public Meeting
Transcript, No. 62 at p. 70) (ACEEE,
Public Meeting Transcript, No. 62 at p.
125) DOE agreed with Zero Zone and
ACEEE and released the engineering
spreadsheet model for public review
shortly after the NOPR public meeting.
Stakeholder review of the model served
as the basis for many of the specific
comments and suggestions discussed in
today’s document and incorporated into
DOE’s final rule analysis.
b. Anti-Sweat Heater Power
Some stakeholders opined that the
DOE model did not fully consider some
equipment classes and components
which used anti-sweat heat. Traulsen
noted that, due to gasket and breaker
strip inefficiencies, VCS.SC.L and
VCS.SC.M equipment will require some
auxiliary heat around door perimeters to
prevent condensation, even at ambient
conditions of 75 °F and 55% RH.
(Traulsen, No. 65 at p. 11) Hussmann
noted that no-heat doors for VCT.RC.M
were not suitable in high-humidity
conditions, since they could lead to
condensation on the doors and the risk
of water dripping onto the floor.
(Hussmann, No. 77 at p. 9) AHRI
commented that there was no clear
justification provided for why certain
doors were modeled with anti-sweat
heat power and others were modeled
without it, further pointing out, that
anti-sweat heat is not limited only to
doors, but often also applies to frames
and mullions too. (AHRI, No. 75 at p. 8)
DOE appreciates the input from
commenters regarding the use of antisweat heat and has updated its
engineering model for the final rule
stage to better reflect the needs of
different equipment classes in this
respect. In response to the comment
from Traulsen and based on additional
investigational teardowns performed at
the final rule stage, DOE added antisweat heater power to some solid-door
classes in order to account for
inefficiencies in gasketing which could
otherwise result in condensation or frost
issues. The magnitude of the power of
these heaters was developed based on
figures included in stakeholder
comments applicable to classes
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17759
VCS.SC.M and VCS.SC.L, as well as
from measurements taken during
teardown analysis performed at the final
rule stage.
During manufacturer interviews and
in investigations of the current offerings
of commercial refrigeration equipment
manufacturers and door suppliers, DOE
encountered a number of ‘‘energy-free’’
transparent door designs for mediumtemperature applications. This served as
the basis for the modeling of some doors
without anti-sweat heat in the NOPR
analysis, as referenced by AHRI and
Hussmann. However, in response to the
concerns of stakeholders over an
assumption of zero energy doors being
too strict for field applications, DOE
added a modest amount of anti-sweat
heat to its modeling of transparent doors
for medium-temperature applications in
the final rule engineering analysis. DOE
believes that this modeled design
provides energy savings benefits over
standard designs while maintaining the
ability to utilize some anti-sweat heat to
prevent condensation issues during use.
In response to the concerns of AHRI,
DOE wishes to clarify that for
transparent door classes, the modeled
‘‘door’’ anti-sweat heat includes all antisweat heat on the face of the unit,
including frame, mullion, and glass
heat. This anti-sweat heat is included
with the modeling of the door because
generally, the display case manufacturer
purchases the doors and frames as a
single item, inclusive of the anti-sweat
heaters, which is then installed in an
opening in the case body. For cases with
solid doors, as well as open cases, the
perimeter, gasket, mullion, and/or face
heater power is included under the
category of ‘‘non-door anti-sweat
power’’ in the design specifications tab
of the engineering analysis spreadsheet
model. Therefore, while the needed
power may be accounted for differently
among the different classes, the
appropriate heater types are modeled for
each class. DOE believes that its efforts
in updating anti-sweat heater powers
modeled in the engineering analysis for
the final rule sufficiently and directly
address the concerns voiced by
stakeholders at the NOPR stage.
c. Coil Performance Modeling
Stakeholders offered feedback to DOE
on how the simulation of coil
performance could be improved to
better reflect the performance of
evaporator and condenser coils in the
field. Traulsen commented that while
DOE states that evaporators can be
designed to have a discharge air
temperature that is a minimum of 10
degrees F colder than the product
temperature, the baseline model in the
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analysis shows a product-to-refrigerant
temperature difference of 11 degrees F.
Traulsen further sought clarification on
where the improvement in evaporator
performance could be attained since the
temperature differential at the baseline
was already low. (Traulsen, No. 65 at p.
5) Hussmann commented that the gap
between discharge air temperature and
saturated evaporator temperature was
unrealistically low for certain
equipment classes. (Hussmann, No. 77
at p. 10)
Hillphoenix and AHRI noted that,
conventionally, coil UA 40 is calculated
using log-mean temperature difference
(LMTD) and inlet temperature. Further,
Hillphoenix commented that the use of
what it perceived to be incorrect
formulae had led to over-estimation of
UA for condensers and evaporators, and
that different methods were used to
calculate UA for condensers than were
used for evaporators. (AHRI, No. 75 at
p. 5) (Hillphoenix, No. 71 at p. 5).
AHRI commented that since both the
previous and current rulemakings
included rifled tubing and increased fin
pitch, the total prototype energy
consumption should have been the
same across rulemakings. Further, AHRI
commented that the prototype
condenser coil scenario is not fully
representative of all condensers for SC
equipment. (AHRI, No. 75 at p. 8)
In response to the concerns of
Traulsen and Hussmann, DOE reevaluated its parameters for modeling of
coil temperature performance.
Specifically, it adjusted the temperature
differential between product
temperature and saturated evaporator
temperature to be 15 °F for certain
classes under the baseline configuration.
DOE believes that this is a more
accurate representation of evaporator
performance based on the feedback that
it has received from comments and data
from testing and equipment literature.
The result is that the temperature
differential at the baseline and highperformance level is higher, reflecting
the adjustments to this parameter
suggested by stakeholders.
In the engineering model, evaporator
coil UA is calculated as a function of
case heat load and a log mean
temperature difference based on the
saturated evaporator temperature,
discharge air temperature, and return air
temperature. This is the same
methodology that was used in the 2009
final rule engineering analysis, which
underwent rigorous examination by
40 Coil
UA is a lumped parameter describing the
heat transfer capability of a heat exchanger,
accounting for the thermal transmittance (U) and
surface area (A) of the specific heat exchanger
design.
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stakeholders. Therefore, DOE believes
that Hillphoenix and AHRI are
misinterpreting DOE’s methodology
when discussing evaporator
performance. Additionally, with respect
to the comment that different formulae
were applied to the modeling of
evaporators and condensers, DOE agrees
with this fact, but does not believe that
this is an incorrect methodology. The
modeling of the evaporator reflects the
fact that chilled case air is being
recirculated, whereas modeling of the
condenser reflects the fact that the
condenser is rejecting heat to an
ambient environment which functions
as an effectively infinite thermal sink.
Therefore, DOE believes that these
different performance environments
warrant different modeling, and
maintains its methodology for
conducting this modeling in the final
rule.
With regard to the concern of AHRI
over disparities between the coil
performance levels modeled in the 2009
final rule and the current rulemaking,
DOE performed new analysis for the
current rulemaking based on teardowns
and simulation conducted at the NOPR
stage. At the final rule stage, based on
further input from stakeholder
comments, DOE again updated this
performance and cost modeling.
Therefore, due to the fact that the
analysis was conducted anew at each of
these stages and is not directly related
to the analysis conducted for the 2009
final rule, DOE believes that the
differences in modeled performance are
reasonable and reflect improvements to
DOE’s understanding of baseline and
high-performance coil designs.
In reference to AHRI’s mention of the
applicability of DOE’s condenser coil
design to a variety of commercial
refrigeration equipment, DOE modeled a
baseline coil based upon geometries and
features measured from teardowns of
representative models for sale on the
market today, and then implemented
further design improvements based on
the inputs of outside subject matter
experts and within the guidance
provided by stakeholder comments and
feedback. The engineering model then
expands the cost and capacity of the
modeled coil to adjust to the needs of
different equipment sizes being
simulated. Thus, DOE believes that the
modeled coil design accurately reflects
the real-world needs of condenser heat
exchangers for this equipment.
d. Compressor Performance Modeling
Manufacturers and consumers
expressed concern over DOE’s
assumptions regarding the advances in
compressor technology anticipated
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before the compliance date. Danfoss,
Traulsen, AHRI, True, Structural
Concepts, Continental, NAFEM and
Hoshizaki commented that if a 10%
compressor efficiency improvement
were possible for a 5% cost increase,
then it is most likely that manufacturers
would have already adopted this
technology. (Traulsen, No. 65 at p. 12)
(AHRI, No. 75 at p. 9) (True, No. 76 at
p. 2) (Structural Concepts, No. 85 at p.
2) (Continental, No. 87 at p. 2) (NAFEM,
No. 93 at p. 3) (Hoshizaki, No. 84 at p.
2) Further, Danfoss stated that, at most,
a 1–2% increase in efficiency could be
gained for a 5% cost increase. (Danfoss,
No. 61 at p. 2)
DOE appreciates the specific and
detailed input which it received from
manufacturers and suppliers regarding
its previous assumptions of potential
improvements in compressor efficiency
and the corresponding costs to attain
these performance increases. In light of
these comments, DOE updated its
performance and cost modeling of
compressors for the final rule analysis.
Specifically, DOE implemented the
suggestion of Danfoss, a major supplier,
which stated that a 2% increase in
performance over today’s standard
offerings, with a corresponding cost
increase of 5%, is attainable. DOE
believes that these parameters better
reflect the options available to
manufacturers of commercial
refrigeration equipment.
e. Insulation Modeling
Some stakeholders felt that DOE’s
analytical model of case insulation had
failed to sufficiently capture its effect on
manufacturing processes and field
performance. Continental and Structural
Concepts commented that the actual Rvalue of urethane foam insulation is
significantly lower than the value
modeled. (Structural Concepts, No. 85 at
p. 2) (Continental, No. 87 at p. 3) AHRI
and True suggested that an R-Value of
6 per inch was more realistic for
insulation than the currently modeled 8
per inch. (AHRI, No. 75 at p. 5) (True,
No. 76 at p. 3) Concurrently, NAFEM
commented that 1.25 inches of added
insulation would actually be required to
meet the level of insulating performance
included in the proposed standard.
(NAFEM, No. 93 at p. 5) True
commented that there was a loss of
insulation value over time using
urethane insulation and plastic liners.
(True, No. 76 at p. 3)
Traulsen commented that the DOE
assumption that increased insulation
would not affect cabinet structure was
incorrect. Traulsen further noted that
some aspects of cabinet geometry and
features where the highest level of heat
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leakage occur appear to be beyond the
scope of DOE’s model. (Traulsen, No. 65
at p. 7) Continental, too, commented
that cabinet geometry would lead to low
in-place insulation values, requiring
much thicker insulation in some areas
than others, to achieve the proposed
standards. (Continental, No. 87 at p. 3)
Traulsen commented that since the
2009 rule noted that a 1⁄2″ insulation
increase was not viable for some classes,
and since no significant changes in
technology have occurred, DOE should
exclude this design option from a
proposed standard level. (Traulsen, No.
65 at p. 8)
In response to the comments from
Structural Concepts, Continental, AHRI,
True, and NAFEM, DOE believes that an
R-value of 8 per inch is accurate for
foamed-in-place polyurethane
insulation as used in commercial
refrigeration equipment. DOE has
corroborated this value in past and
ongoing rulemakings against product
literature, supplier and academic
studies, and discussions in
manufacturer interviews. Therefore DOE
believes that this is an accurate value
and has maintained it for the modeling
of foam performance in its final rule
engineering analysis. With regard to the
comment from True on changes in
insulative value of foam over time, DOE
notes that certification of equipment is
conducted at or shortly after the time of
manufacture, and thus equipment in
that state is modeled in DOE’s
engineering analysis. DOE did not
model the performance of equipment at
points long after the time of
manufacture.
DOE based its modeling of case heat
loads on measured geometries as seen in
units purchased and torn down over the
course of the rulemaking, as well as on
product literature for designs currently
on the market. DOE notes that these
geometries in some cases included the
level of increased foam thicknesses
modeled as a design option, meaning
that manufacturers were already
including these increases and
accounting for their effects. Thus, since
proof of concept is already being
presented in today’s equipment market,
DOE does not believe that there are
inaccuracies in its levels of modeled
foam thickness. In response to the
comment from Traulsen, DOE believes
that its model sufficiently accounts for
the thermal effects of conduction,
infiltration, and other heat loads
incident upon the refrigerated case.
With respect to Continental’s concerns,
DOE has examined a wide variety of
case designs on the market, but
generally has not encountered instances
in which low in-place insulation
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thicknesses have been observed. In most
instances that DOE has examined,
manufacturers have maintained a
standard thickness throughout the body
of the case. Therefore, DOE believes that
its insulation modeling is accurate and
consistent with designs currently
produced by the industry.
DOE conducted its current analysis
based on the latest available information
regarding equipment designs, cost and
performance of design options and
components, and downstream factors
such as electricity price forecasts. This
information was updated entirely from
the 2009 rule. Therefore, in response to
Traulsen’s comment that DOE should
not consider a design option in this
analysis just because it was not
included in the analytical levels
corresponding to standards set for some
classes in 2009, DOE cautions that a
direct comparison between the two
rulemakings may not be accurate.
Changes in prices, market factors, and
other inputs since 2009 mean that
outcomes between the two analyses
could be different. Therefore, DOE has
conducted the current analysis in
isolation based on the best currently
available data, and has set the standard
levels included in today’s rule using the
results of that analysis.
f. Lighting Performance
Several manufacturers opined that
DOE had modeled LED performance too
aggressively. Southern Store Fixtures
commented that even with more
directional light from LED systems,
higher wattage LEDs with higher
number of diodes than those modeled
by DOE would be required to provide
illumination comparable to a
fluorescent system. (Southern Store
Fixtures, No. 67 at p. 2) Traulsen, in
agreement with other commenters,
noted that LEDs require more watts per
lumen than high efficiency T8 lighting
which uses reflectors. (Traulsen, No. 65
at p. 3) Continental commented that,
while LEDs are significantly more
directional than fluorescent lights, the
efficacy modeled by DOE was
overestimated. (Continental, No. 87 at p.
2) More specifically, AHRI commented
that although LEDs are directional, the
DOE assumption that the output of 4-ft
& 5-ft LEDs is only 29% of that
associated with T8 lighting is flawed,
since the directional nature of LEDs
cannot fully compensate for such a large
differential. (AHRI, No. 75 at p. 3)
Additionally, True commented that due
to the varied nature of illumination
needs across products, many models
require higher wattages if LEDs are
used. (True, No. 76 at p. 1) AHRI added
that reducing the light output into cases
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through use of LEDs would affect
consumer utility. (AHRI, No. 75 at p. 4)
Traulsen commented that CRE
applications, especially those requiring
low temperature settings, could
experience degradation in LED color
quality and shorter lifespans. Traulsen
further commented that the variety of
displayed packaging or product types
may need special light colors, and that
one size fits all approach to LED lighting
could lead to loss of utility. (Traulsen,
No. 65 at p. 4)
Providing an additional viewpoint,
the CA IOUs commented that the
assumed level of efficacy for LED
technology (54 lumens per watt) was
very conservative. The CA IOUs further
noted that using the DesignLights
Consortium online database, the current
simple average for all vertical
refrigerated case lighting was 59 lumens
per watt, with the average for products
added in 2013 being 66 lumens per
watt. (CA IOUs, No. 63 at p. 7)
AHRI commented that comparisons
between T8, super T8, and LED lighting
systems as modeled in the previous and
current rulemakings suggest that no
significant improvements have been
made in lighting since the last
rulemaking cycle. (AHRI, No. 75 at p. 2)
With regard to specific equipment
classes, Hillphoenix commented that
the savings from SVO.RC.M due to LED
lighting was the same as for VOP.RC.M
even though the semi-vertical cases
would have fewer shelf lights than the
vertical open cases. (Hillphoenix, No. 71
at p. 6) Further, AHRI commented that
in the case of VCT.RC.M and VCT.RC.L
equipment, the LED lighting design
option provides about an 80–83%
increased energy consumption
reduction for the current rulemaking as
compared to the previous rulemaking.
(AHRI, No. 75 at p. 9)
DOE agrees with the comments from
Southern Store Fixtures, Continental,
and Traulsen that, in absolute terms,
LED lighting produces fewer output
lumens per watt than T8 fluorescent
lighting. However, DOE understands
that due to the directionality of LED
lighting, a much greater percentage of
the lighting is incident upon the
product, rather than being diffused into
the cabinet. With respect to the
concerns of AHRI and Continental that
this directionality is still not sufficient
to compensate for the levels of lighting
modeled in the engineering analysis,
DOE asserts that it based its modeling
directly on the specific configurations of
equipment being shipped on the market
at the time of the analysis. When
selecting LED lighting specifications to
model, DOE performed research through
manufacturer literature and catalogs,
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studies of lighting manufacturer product
literature, and physical teardowns of
existing units on the market. Developed
based on this data, DOE believes that its
lighting specifications reflect the current
needs of customers and designs
produced by manufacturers to satisfy
those needs.
In addition, based on new information
provided by stakeholder comments at
the final rule stage, DOE has increased
the modeled lumen output of its LED
fixtures by roughly 20% across all
classes. DOE believes that this added
modeled light output serves to address
the concerns presented by stakeholders
in their comments. Additionally, DOE
understands that manufacturers have
concerns over the applicability of LED
lighting to the wide variety of models
merchandised within commercial
refrigeration equipment. During its
manufacturer interviews, DOE
specifically addressed this subject,
speaking to manufacturers of a broad
range of equipment about their use of
LEDs. Generally, manufacturers stated
that LED technology has advanced
sufficiently that issues with color
matching and product color
illumination are no longer as significant
as in the past. DOE’s research into
current manufacturer designs aligns
with this finding, as manufacturers are
using LED lighting in all applicable
equipment families. With respect to
concerns over LED lifetimes, based on
its discussions with manufacturers, DOE
does understand that there still remain
variations in quality and durability of
LED products based on the chosen
supplier, but that LED reliability has
improved significantly to its current
state. Additionally, DOE has accounted
for the need for replacement of LED
lighting fixtures as part of the
maintenance costs analyzed in its lifecycle cost and payback period analysis.
After receiving the comment from the
CA IOUs regarding standard efficacies of
LED fixtures produced today, DOE
researched the referenced DesignLights
Consortium online database and found
that the listed data agreed with the
performance levels stated in the
comment from the CA IOUs. In response
to this new data, DOE updated its
efficacy figures for the modeled LED
fixtures in line with those levels
depicted for models currently on the
market per the database. This resulted
in an approximate 20% increase in
modeled lumen output for all LED
fixtures modeled. DOE believes that this
adjustment allows its LED modeling to
better reflect the level of technology
currently available on the market, while
simultaneously addressing concerns
from manufacturers and other
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stakeholder about low levels of product
illumination using LED lighting.
DOE agrees with AHRI that no major
new lighting technologies have come
onto the market since the conduct of the
2009 rulemaking; that is, that the
options currently available to
manufacturers consist largely of T8
fluorescent and LED lighting. Therefore,
in building up engineering costefficiency curves depicting the price
and performance of equipment from
baseline to max-tech levels, DOE
included these technologies in the
baseline and higher-efficiency scenarios
and implemented energy-saving lighting
features alongside other design options
in order of ascending payback period.
With respect to AHRI’s assertion of
significant new improvements to
lighting technologies since the modeling
for the 2009 final rule was performed,
DOE points out that it updated the
prices and performance levels of the
various lighting technologies to reflect
new information since the 2009
rulemaking, and reordered its design
options and cost-efficiency curves
correspondingly.
In response to the comments from
AHRI and Hillphoenix comparing the
perceived relative efficacies of specific
design options in the engineering
analysis to the incremental performance
changes associated with them in the
2009 rule, DOE cautions against making
such comparisons since many other
factors were not held constant. Updates
to the baseline configuration, improved
pricing and performance modeling,
inclusion of new design options, and
updated design option ordering all
mean that the modeled order of
implementation of design options, and
the effects of those design options being
implemented, has in many instances
changed since the 2009 final rule
analysis. Therefore, a direct comparison
would be inaccurate and unfair.
Similarly, DOE cautions against direct
comparisons of specific incremental
results across different equipment
classes. Engineering results for each
equipment class were calculated
independently based upon the best
available data on equipment
configuration, design option
performance, and costs. Therefore, the
results of each class should be examined
independently, and there was no
interrelation to other classes built into
the model.
g. Transparent Door Performance
Stakeholders expressed concern over
the modeled improvements in
transparent door performance between
the current and previous rulemaking
analyses. AHRI commented that there
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was a decrease of over 60% in the Ufactors for transparent doors between
the previous final rule and the current
NOPR, even though both results were
arrived at using the Lawrence Berkeley
National Laboratory (LBNL)
WINDOW 41 software. Further, AHRI
noted that the U-factor associated with
high-performance doors for VCT.M
equipment in 2009 did not even meet
the level of performance suggested by
the U-factor that is listed in the current
TSD for standard doors. (AHRI, No. 75
at p. 9) Similarly, Hussmann
commented that the U-factors and antisweat heat values for transparent doors
in various classes were significantly
lower than in the 2009 final rule, and
that base cases in the current NOPR
analysis did not meet the definition of
high-performance from the previous
analysis. (Hussmann, No. 77 at p. 2)
Hillphoenix commented that the Ufactor and heater power varied for
identical classes from the previous
rulemaking to the current. (Hillphoenix,
No. 71 at p. 7) AHRI commented that for
HCT.M equipment, while the overall UFactor specified for standard doors
seems appropriate, the U-factor for highperformance doors seems very low.
(AHRI, No. 75 at p. 10)
In response to the stakeholder
concerns regarding the modeled
performance of transparent doors, DOE
revisited its modeling of this feature as
part of its final rule engineering
analysis. In doing so, it incorporated
comments and suggestions from
stakeholders received during the NOPR
public meeting and in written
comments after the publication of the
NOPR regarding design attributes such
as the number of panes of glass
modeled, the use of low-e coatings, and
appropriate levels of anti-sweat heat.
DOE also gathered additional
information through physical inspection
and teardown of several additional
glass-door models procured during the
final rule stage. Based on these inputs,
DOE modeled the various types of glass
doors using the latest version of the LBL
WINDOW software to develop new,
more accurate whole-door U-factors. In
response to the comments on alignment
of the previous and current baseline
door designs, DOE did in some cases,
where appropriate, retain the U-factors
and anti-sweat powers used at the
baseline in the 2009 final rule. However,
in other instances where DOE found
evidence that the market baseline and
41 This software is an industry-accepted, publiclyavailable software tool used to model the
performance of various fenestration components
such as windows. More information is available at
https://windows.lbl.gov/software/window/
window.html.
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features included in standard door
offerings had evolved since that time,
DOE sought to include in its baseline
designs features which reflect the
current offerings of major door
manufacturers. For full details on the
modeled performance attributes of
transparent doors, please see chapter 5
of the final rule TSD.
h. Validation of Engineering Results
DOE’s engineering results as
presented in the NOPR were based on
the results of analytical modeling.
Several stakeholders, however, felt that
the analysis was purely theoretical and
did not account for factors affecting
field performance. Hoshizaki
commented that DOE’s engineering
analysis considers a theoretical base
case with no experimental or physical
data to support the model. (Hoshizaki,
No. 84 at p. 1) Traulsen commented that
the MDEC targets were evaluated by
using a theoretical prototype based on
market trends and assumptions, and
contrasted that with DOE’s statement in
the NOPR TSD that design options
comprising the maximum
technologically feasible level must have
been physically demonstrated. Further,
Traulsen noted that the engineering
analysis was only an academic exercise
based on computer simulations rather
than physical results. (Traulsen, No. 65
at p. 2)
Hoshizaki, ACEEE and Lennox urged
DOE to perform validation testing and
physically demonstrate the achievement
of the proposed efficiency improvement
levels. (Hoshizaki, No. 84 at p. 2)
(ACEEE, Public Meeting Transcript, No.
62 at p. 351) (Lennox, No. 73 at p. 2)
Similarly, NAFEM noted that the
modeled maximum-technology designs
were not backed by tests or prototypes.
(NAFEM, No. 93 at p. 3) The CA IOUs
strongly urged DOE to calibrate and
validate its model with test and
prototype data, asserting that while
many of the assumptions made by DOE
might hold true in theory, they may not
be physically possible to realize. (CA
IOUs, No. 63 at p. 6)
Traulsen commented that the success
of the 2009 final rule standard could
have been reviewed using voluntary
databases containing empirical data of
commonly-produced units. Traulsen
further commented that DOE should
base its future MDEC targets on data
regarding best practices and
technologies available in the market, as
indicated by these databases. (Traulsen,
No. 65 at p. 2)
The Joint Comment noted that DOE
utilized a theoretical engineering model
approach for the 2011 residential
refrigerators final rule. 76 FR 57516
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(Sept. 15, 2011) Further, the Joint
Comment noted that the 2011
residential refrigeration model’s maxtech levels were 59% more efficient
than the existing standard, even though
the most efficient model available at the
time was only 27% more efficient. (Joint
Comment, No. 91 at p. 2)
DOE agrees that its results are based
on analytical modeling, but disagrees
with the assertions from Hoshizaki and
Traulsen that the simulation and
modeling were purely theoretical in
nature. DOE based its analysis on a
model which was developed for the
2009 final rule and updated to
accommodate the needs of this current
rulemaking. Inputs to the model
included data from tangible sources
such as manufacturer literature,
manufacturer interviews, production
facility tours, reverse engineering and
teardown of existing products on the
market, and tests of commercial
refrigeration equipment and
components. DOE maintains its
assertion, contrary to Traulsen’s
comment, that all design options
modeled have been physically
demonstrated in the commercial
refrigeration market or in comparable
products.
In agreement with the Joint Comment,
DOE points to the 2011 residential
refrigerators final rule, the 2009
commercial refrigeration equipment
final rule, and the 2009 refrigerated
beverage vending machine final rule as
examples of cases where analytical tools
and simulation have been used to
develop effective energy efficiency
standards. 76 FR 57516 (Sept. 15, 2011);
74 FR 1092 (Jan. 9, 2009); 74 FR 44914
(Aug. 31, 2009) Additionally, DOE notes
that it recently issued a rule, strongly
supported by industry, which will allow
manufacturers to use alternative energy
determination methods (AEDMs), which
are non-testing methodologies and
analytical tools, to certify the
performance of their equipment. 78 FR
79579 (December 31, 2013)
In response to the comments from
Traulsen, Hoshizaki, ACEEE, the CA
IOUs, Lennox, and NAFEM that DOE
perform validation testing to confirm
the veracity of its model, at the final
rule stage DOE procured a number of
commercial refrigeration units currently
on the market, including highperformance units featuring advanced
designs. It gathered physical test data on
each unit from certification directories
and, in some cases, from independent
laboratory tests conducted by DOE on
the units. DOE then performed physical
teardowns and inspection of the units to
quantify the features and design
attributes included in each model.
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Then, DOE used this empiricallydetermined data as inputs into its
engineering model, allowing the model
to simulate these specific manufacturer
models as closely as possible. The
results showed good alignment between
the model outputs and the physical test
results across a range of equipment
classes and efficiencies, validating the
abilities of the model. For further
information on this validation exercise,
please see chapter 5 of the final rule
TSD.
With regard to the suggestion from
Traulsen that DOE reference existing
equipment performance databases, at
the final rule stage of this rulemaking,
DOE utilized information from the
ENERGY STAR 42 and California Energy
Commission 43 appliance databases as a
point of comparison to its engineering
analysis results. This allowed DOE to
compare its analytical results to existing
directories of certified data and ensure
that the results fell within a reasonable
range of performance values. However,
DOE notes that neither of these
databases is necessarily comprehensive
and exhaustive of all models offered for
sale in the United States, and that
market data only capture those designs
which are currently being built, not all
of those which may be feasible. For
these reasons, while DOE compared its
results against those databases as a
check, it continued to use a design
option approach and simulation as the
basis for developing its engineering
analysis results, rather than developing
standard levels solely from existing
market data.
E. 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.D.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.
In estimating markups for CRE and
other products, DOE develops separate
markups for the cost of baseline
42 https://www.energystar.gov/certified-products/
certified-products.
43 https://www.appliances.energy.ca.gov/
Default.aspx.
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equipment and the incremental cost of
higher-efficiency equipment.
Incremental markups are applied as
multipliers only to the MSP increments
of higher-efficiency equipment
compared to baseline, and not to the
entire MSP.
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. 65 at p.
18) DOE agrees that manufacturer
markups are often larger on higherefficiency equipment due to product
differentiation strategies. However,
DOE’s approach considers a situation in
which products at any given efficiency
level may be the baseline products
under new or amended standards (i.e.,
they just meet the standard). In that
situation, a typical markup would
apply. DOE uses average values for
manufacturer markups.
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. 65 at p. 18)
DOE’s approach for wholesaler
markups does not imply that
wholesalers differentiate markups based
on the technologies inherently present
in the equipment. It assumes that the
average markup declines as the
wholesalers’ cost of goods sold increases
due to the higher cost of more-efficient
equipment. If the markup remains
constant while the cost of goods sold
increases, as Traulsen’s comment
suggests, the wholesalers’ profits would
also increase. While this might happen
in the short run, DOE believes that the
wholesale market is sufficiently
competitive such that there would be
pressure on margins. DOE recognizes
that attempting to capture the market
response to changing cost conditions is
difficult. However, DOE’s approach is
consistent with the mainstream
understanding of firm behavior in
competitive markets.
See chapter 6 of the final rule TSD for
more details on DOE’s markups
analysis.
F. Life-Cycle Cost and Payback Period
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
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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
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 0) in
each equipment class is the least
efficient and the least expensive
equipment configuration in that class.
The higher efficiency levels (Level 1 and
higher) exhibit progressive increases in
efficiency and cost from Level 0. The
highest efficiency level in each
equipment class corresponds to the
max-tech level. 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 final rule TSD). DOE
then applies additional markups to the
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equipment to account for the markups
associated with the distribution
channels for the particular type of
equipment (chapter 6 of the final rule
TSD). Installation costs were 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. 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,44 in which certain inputs
44 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 amended 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 0 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 (see section IV.F.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
face different energy prices and also
exhibit differing discount rates that they
apply to purchase decisions.
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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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.45
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 final rule
TSD.
1. 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.D.5. DOE
applied baseline markups to baseline
MSPs, and incremental markups to the
MSP increments associated with higher
efficiency levels.
DOE developed an equipment price
trend for CRE based on the inflationadjusted index of the producer price
index (PPI) for air conditioning,
refrigeration, and forced air heating
from 1978 to 2012.46 A linear regression
of the inflation-adjusted PPI shows a
slight downward trend (see appendix
10D of the final rule TSD). To project a
future trend, DOE extrapolated the
historic trend using the regression
results. For the LCC and PBP analysis,
this default trend was applied between
the present and the first year of
compliance with amended standards,
2017.
2. Installation 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. DOE retained the nationally
representative installation cost values
from the January 2009 final rule and
45 A Weibull survival function is a continuous
probability distribution function that is used to
approximate the distribution of equipment lifetimes
of commercial refrigeration equipment.
46 Bureau of Labor Statistics, Producer Price Index
Industry Data, Series: PCU3334153334153.
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simply escalated the values from 2007$
to 2012$, resulting in installation costs
of $2,299 for all remote condensing
equipment and $862 for all selfcontained equipment.
Hussmann opined that as equipment
becomes more expensive, it will also
become more difficult to install, which
will result in higher installation labor
costs. (Hussmann, No. 77 at p. 5) DOE
has found no evidence to support the
notion that higher-efficiency (and more
expensive) commercial refrigeration
equipment lead to an increase in
installations costs. The installation costs
derived for the NOPR and final rule are
based on a detailed list of installation
and commissioning procedures, which
DOE believes to be representative of
current industry practice. These
installation and commissioning details
can be found in chapter 8 of the final
rule TSD.
NAFEM asserted that DOE failed to
take into account the ramifications of
the proposed standard on a variety of
end-uses, such as restaurants, grocery
stores, and convenience stores. For
these end-users floor space is limited,
and increasing efficiency may increase
the equipment size to store the same
amount of goods. NAFEM suggests that
increasing the thickness of foam
insulation would decrease storage and
display capacity of equipment and will
likely result in a limitation of the
products offered for sale by these users.
(NAFEM, No. 93 at pp. 3–4)
As described in detail in section
IV.D.2.d of today’s rule, DOE, in its
teardown analyses, encountered a
number of models currently on the
market utilizing the increased foam wall
thicknesses which it modeled. Since
manufacturers are already employing
these wall thicknesses in currentlyavailable models, DOE believes that this
serves as a proof of concept and that the
resulting changes to form factor would
be of minimal impact to end users. DOE
also would like to remind stakeholders
that it is not setting prescriptive
standards, and should manufacturers
value some features over others, they are
free to use different design paths in
order to attain the performance levels
required by today’s rule.
3. Maintenance and Repair Costs
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
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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 chapter 5 of the TSD, for
efficiency levels that incorporate LED
lights as a design option, the expected
reduction in LED costs beyond 2017 was
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.
Several stakeholders stated that DOE’s
estimated repair and maintenance costs
were too low. The National Restaurant
Association commented that, in general,
maintenance costs would be much
higher. (NRA, No. 90 at p. 3) Hussmann
asserted that the condensate evaporator
pan, which is often present in selfcontained equipment, must be
periodically cleaned and serviced,
which increases the maintenance costs
for such equipment, and that selfcontained equipment that utilizes
enhanced condenser coils needs to be
cleaned more frequently due to the
greater density of fins on the condenser.
(Hussmann, No. 77 at p. 4) Hussmann
further commented that equipment
using ECM has higher repair costs.
(Hussmann, No. 77 at p. 5) True
commented that fluorescent lamps in
low temperature applications fail more
commonly, so there is a substantial
increase in the cost of lighting for
freezers compared to refrigerators. LEDs
do not have this problem. (True, Public
Meeting Transcript, No. 62 at p. 186)
Continental commented that smaller
refrigeration systems have higher
maintenance costs due to tighter
tolerances. (Continental, Public Meeting
Transcript, No. 62 at p. 186)
DOE requested information from
stakeholders regarding maintenance and
repair costs specifically related to any of
the design options used for this
rulemaking. DOE believes its
maintenance costs per linear foot are
consistent with current industry
practices and are sufficient to account
for the additional time required to clean
closely placed condenser coils and other
considerations related to tight space.
DOE does not believe that any design
option used in the higher efficiency
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equipment considered in this
rulemaking would lead to higher costs
for regular maintenance activities.
Therefore, DOE retained its approach of
using the same costs for regular
maintenance for all efficiency levels.
However, repair costs have been
modeled to be proportional to the OEM
cost of the components and,
consequently, are higher for higher
efficiency equipment.
4. Annual Energy Consumption
Typical annual energy consumption
of commercial refrigeration equipment
at each considered efficiency level is
obtained from the engineering analysis
results (see chapter 5 of the final rule
TSD).
5. Energy Prices
DOE calculated state average
commercial electricity prices using the
U.S. Energy Information
Administration’s (EIA’s) ‘‘Database of
Monthly Electric Utility Sales and
Revenue Data.’’ 47 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 by state.
6. Energy Price Projections
To estimate energy prices in future
years, DOE extrapolated the average
state electricity prices described above
using the forecast of annual average
commercial electricity prices developed
in the Reference Case from
AEO2013.48 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.
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,
47 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.
48 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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on the other hand, tend to use CRE
longer. In the NOPR, DOE used 15 years
as the average equipment lifetime for
remote condensing equipment in small
food 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 final
rule TSD.
Several commenters responded on the
subject of equipment lifetimes. NAFEM
asserted that DOE had overestimated the
lifetime of commercial refrigeration
equipment, and suggested that DOE
reach out to end-users and
manufacturers for a more accurate
estimate. (NAFEM, No. 93 at p. 7)
Traulsen commented that commercial
refrigeration equipment is too diverse to
be lumped into categories of different
lifetimes, as the lifetime of a unit
depends on how it is used by a
customer in each environment. Traulsen
added that without including the time
spent in the used equipment market, the
estimate of equipment life is too low.
(Traulsen, No. 65 at p. 21) The National
Restaurant Association also commented
that DOE’s assumption of a 10 to 15 year
lifetime is too low. (NRA, No. 90 at p.
3) Hussmann and Hoshizaki both
commented that DOE’s equipment
lifetime estimates are reasonable at 10
and 15 years. (Hussmann, No. 77 at p.
7) (Hoshizaki, No. 84 at p. 1)
DOE recognizes that the lifetime of
commercial refrigeration equipment is
dependent on customer type and usage
environment. In the NOPR, DOE used
an average lifetime of 15 years for
remote condensing equipment for small
retail stores, and 10 years for all other
business types. These lifetimes are the
averages of distributions with a
maximum lifetime of 20 and 15 years,
respectively, for remote condensing
equipment for small retail stores, and all
other business types. DOE received
comments indicating that the lifetimes
for small businesses aside from small
retail were too low in the NOPR, and
that equipment used in small businesses
of other types were likely to have
increased lifetimes as well. DOE agrees
with these statements, and adopted
figures for the average and maximum
lifetime of 15 and 20 years, respectively,
for equipment operated by small
businesses of all types. The equipment
lifetimes for all other business types
remains unchanged from the NOPR with
an average and maximum lifetime of 10
and 15 years, respectively. Equipment
lifetimes are described in detail in
chapter 8 of the TSD.
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8. Discount Rates
In calculating the LCC, DOE applies
discount rates to estimate the present
value of future operating costs to the
customers of commercial refrigeration
equipment.49 DOE derived the discount
rates for the commercial refrigeration
equipment analysis by estimating the
average cost of capital for a large
number of companies similar to those
that could purchase commercial
refrigeration equipment. This resulted
in a distribution of potential customer
discount rates from which DOE sampled
in the LCC analysis. 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).50 The CAPM
assumes that the cost of equity is
proportional to the amount of
systematic risk associated with a
company.
Mercatus Center, George Mason
University (Mercatus) commented that
the CAPM includes the risk associated
with a firm’s failure, but it does not
estimate the risk associated with any
individual item used in by the firm, nor
does it estimate the failure risk
associated with a particular site of
operation. (Mercatus, No. 72 at p. 3)
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, and the
CAPM is among the most widely used
models to estimate the cost of equity
financing. The types of risk mentioned
by Mercatus may exist, but 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. DOE’s approach
estimates this risk for the set of
companies that could purchase
commercial refrigeration equipment.
See chapter 8 of the final rule TSD for
further discussion.
tkelley on DSK3SPTVN1PROD with RULES2
9. Compliance Date of Standards
EPCA requires that any amended
standards established in this rulemaking
must apply to equipment that is
49 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.
50 Harris, R.S. Applying the Capital Asset Pricing
Model. UVA–F–1456. Available at SSRN: https://
ssrn.com/abstract=909893.
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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 assumed 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.
Continental and Lennox commented
that an extension of compliance dates of
the amended standards may not be
required so long as the standards are
based on whatever technology was
currently available. (Continental, Public
Meeting Transcript, No. 62 at p. 334;
Lennox, No. 73 at p. 2) Traulsen noted
that, should the compliance date be
extended by a further three years, then
it was possible, albeit unlikely, that the
proposed standards could be realized.
(Traulsen, No. 65 at p. 24) Providing a
contrary view, the Joint Comment
asserted that a three year compliance
time period appeared feasible for the
proposed standard. In addition, the Joint
Comment pointed out that the initial
statutory deadline for the final rule was
January 2013. (Joint Comment, No. 91 at
p. 13) Earthjustice noted that if the
compliance date were extended, this
may have an impact on how alternative
refrigerants feature in the next round of
analysis. (Earthjustice, Public Meeting
Transcript, No. 62 at p. 334)
In response to the inputs of
stakeholders during the NOPR public
meeting and in written comment, DOE
believes that a compliance date three
years after issuance of the final rule is
reasonable and appropriate. A threeyear period is the standard length of
time given between final rule issuance
and required compliance, with
exceptions generally being made only in
circumstances specifically warranting
them. Additionally, the commercial
refrigeration industry and related
industries have proven in the past that
a three-year period is adequate to
produce equipment meeting updated
standards. Therefore, DOE is not
including an extension of the period to
comply with standards in today’s final
rule document.
In their written and verbal comments
after publication of the NOPR,
stakeholders noted that in ascertaining
the compliance date for the CRE
standards rule, DOE should take into
account other, currently open
rulemakings, which could affect or be
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17767
affected by the proposed rule. True
commented that the new timeline for
this rulemaking, alongside the recent
negotiated settlements regarding the
certification of commercial equipment,
could lead to a situation where the new
standards could be enforced, but not the
certification requirement. (True, Public
Meeting Transcript, No. 62 at p. 28)
Traulsen requested that DOE refrain
from issuing new CRE standards until
the CRE test procedure is finalized.
(Traulsen, No. 65 at p. 16) The final rule
for the CRE test procedure was issued
prior to today’s rule for CRE standards.
Therefore, DOE sees no conflict between
the issuance of the two rules.
Additionally, Structural Concepts
commented that in order to have a
product line ready by 2017, the design
phase would need to start at least three
years prior, and therefore new standards
should only be based on existing
technologies. (Structural Concepts,
Public Meeting Transcript, No. 62 at p.
72)
DOE agrees with Structural Concepts
that existing technologies should be the
basis of its engineering analysis, and has
considered only currently-available
technologies in that analysis.
Additionally, the three-year compliance
period required by EPCA in most
circumstances is consistent with the
required length of design time suggested
by Structural Concepts.
10. Base-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.
In the NOPR, DOE’s methodology to
estimate market shares of each
efficiency level within each equipment
class is a cost-based method consistent
with the approaches that were used in
the EIA’s National Energy Modeling
System (NEMS) 51 and in the Canadian
Integrated Modeling System (CIMS)52 53
51 U.S. Energy Information Administration.
National Energy Modeling System Commercial
Model (2004 Version). 2004. Washington, DC.
52 The CIMS Model was originally known as the
Canadian Integrated Modeling System, but as the
model is now being applied to other countries, the
acronym is now used as its proper name.
53 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
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for estimating efficiency choices within
each equipment class.
At the NOPR public meeting, True
stated that 62 percent of the commercial
refrigeration equipment sold in the
United States is certified under
ENERGY STAR. (True, Public Meeting
Transcript, No. 62 at p. 302)
For today’s final rule, DOE revised its
approach for determining the base case
efficiency distribution to better account
for market data from the ENERGY STAR
program. DOE’s understanding of the
CRE market is that consumers of
commercial refrigeration equipment fall
into two categories: Those that purchase
equipment at the lowest available first
cost (also lowest efficiency) and those
that purchase equipment at a somewhat
higher first cost with higher efficiency.
Thus, for the final rule DOE developed
a base case efficiency distribution
consisting of two categories: Purchases
at the baseline and purchases at higher
efficiency.
For equipment classes that are
covered by ENERGY STAR,54 DOE
assumed that baseline equipment
accounts for all products that are not
ENERGY STAR certified. The ENERGY
STAR share is divided between the
ENERGY STAR 2.1 level and the more
recent ENERGY STAR 3.0 level, which
will become effective in October 2014.
For CRE classes that are not covered by
ENERGY STAR, DOE estimated the
share of equipment at the baseline based
on the output from the customer choice
model for commercial refrigeration used
for EIA’s Annual Energy Outlook 2013
(AEO 2013).55 For the higher efficiency
equipment, DOE included all efficiency
levels for which the retail price is not
more than 10 percent above the baseline
price, and divided the equipment
between the baseline and the higherefficiency market. Table IV.2 shows the
shipment-weighted market shares by
efficiency level in the base-case
scenario. The method for developing the
base-case efficiency distribution is
explained in detail in chapter 8 of the
final rule TSD.
TABLE IV.2—MARKET SHARES BY EFFICIENCY LEVEL, BASE CASE IN 2017
Base-case efficiency distribution (%)
Equipment class
Base
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 .......................................................
SOC.SC.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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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
value of money; that is, the calculation
is done at an effective discount rate of
zero percent. PBPs are expressed in
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60
60
60
60
60
90
90
60
60
60
60
60
60
60
60
60
60
60
60
60
60
60
90
90
60
EL 2
40
20
40
14
20
0
0
8
0
30
8
40
40
40
40
40
20
20
20
0
0
40
0
0
40
EL 3
0
20
0
13
20
10
10
8
30
0
8
0
0
0
0
0
20
20
20
0
0
0
0
0
0
EL 4
0
0
0
13
0
0
0
8
0
0
8
0
0
0
0
0
0
0
0
40
30
0
0
0
0
EL 5
0
0
0
0
0
0
0
8
0
10
8
0
0
0
0
0
0
0
0
0
0
0
0
0
0
EL 6
0
0
0
0
0
0
0
8
0
0
8
0
0
0
0
0
0
0
0
0
0
0
0
0
0
EL 7
0
0
0
0
0
0
0
0
10
0
0
0
0
0
0
0
0
0
0
0
0
0
10
10
0
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.
55 U.S. Energy Information Administration.
Annual Energy Outlook 2013. 2013. Washington,
DC. DOE/EIA–0383(2013).
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
10
0
0
0
0
12. Rebuttable-Presumption Payback
Period
54 These classes consist of VCT.SC.M, VCT.SC.L,
VCS.SC.M, VCS.SC.L, HCT.SC.M, HCT.SC.L,
HCS.SC.M., and HCS.SC.L
11. Inputs to Payback Period Analysis
for%20Natural%20Resources%20Canada/
Rollup.pdf.
EL 1
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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
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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 PBP, or the ratio
of the value of the increased installed
price above the baseline efficiency level
to the first year’s energy cost savings.
When the rebuttable presumption PBP
is less than 3 years, the rebuttable
presumption is satisfied; when the
rebuttable presumption PBP 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 rebuttable
presumption, it also considered whether
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).
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G. Shipments
Complete historical shipments data
for commercial refrigeration equipment
could not be obtained from any one
single source. Therefore, for the NOPR
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.56; 2008, and 2012 Size and Shape
56 Freedonia Group, Inc. Commercial
Refrigeration Equipment to 2014. 2010. Cleveland,
OH. Study 2261. www.freedoniagroup.com/
Commercial-Refrigeration-Equipment.html.
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of Industry by the North American
Association of Food Equipment
Manufacturers; 57 58 and Energy Savings
Potential and R&D Opportunities for
Commercial Refrigeration prepared by
Navigant Consulting, Inc. for DOE.59
Historical linear feet of shipped units
is the figure used to depict 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 values.
Chapter 9 of the final rule TSD presents
the representative equipment class
lengths used for the conversion of perunit shipments to linear footage within
each equipment class.
DOE divided historical annual
shipments into new and replacement
categories by building type. First,
equipment types were identified by the
type of business they generally serve.
For example, vertical open cases with
remote condensing units are associated
with large grocers and multi-line retail
stores. When there was no strong
association between the building type
and equipment class, equipment was
distributed across broader building
types. Second, a ratio of new versus
replacement equipment was developed
based on commercial floor space
estimates. 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. 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.
DOE then estimated the annual linear
footage shipped for each of the 25
primary equipment classes used to
represent the commercial refrigeration
equipment market. The fractions shown
in Table IV.3 were held constant over
the analysis period.
57 North American Association of Food
Equipment Manufacturers. 2008 Size and Shape of
Industry. 2008. Chicago, IL.
58 North American Association of Food
Equipment Manufacturers. 20012 Size and Shape of
Industry. 2012. Chicago, IL.
59 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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TABLE IV.3—PERCENT OF SHIPPED
LINEAR FEET OF COMMERCIAL REFRIGERATION EQUIPMENT
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 ............................
SOC.SC.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 ...............................
Percentage of
linear feet
shipped *
10.3
0.5
1.3
0.8
10.7
4.8
0.2
0.3
25.4
15.0
0.1
8.2
1.1
2.1
0.2
1.3
4.0
0.1
0.2
0.1
0.4
0.4
4.4
0.6
7.6
* The percentages in this column do not
sum to 100 percent because shipments of
secondary equipment classes and certain
other equipment classes that were not analyzed in this rulemaking were not included.
The amount of new and existing
commercial floor space is the main
driver for future commercial
refrigeration equipment shipments. The
model divides commercial floor space
into new construction floor space and
existing floor space.
DOE projected square footage of new
construction as a driver of CRE demand
to scale annual new commercial
refrigeration equipment shipments. DOE
took the projected floor space
construction after the year 2009 from
the NEMS projection underlying AEO
2013. The new construction growth
rates over the last 10 years of the AEO
2013 forecast (2031 through 2040) were
used to extend the AEO forecast out
until 2046 to develop the full 30-year
forecast needed for the NIA.
True stated during the NOPR public
meeting that DOE’s shipments estimates
for the VCT.SC.M equipment class were
20 to 30 percent of actual shipments.
(True, Public Meeting Transcript, No. 62
at pp. 240–242) This statement was
supported by Coca-Cola, which asserted
that it alone purchased 180,000 linear
feet of VCT.SC.M equipment
domestically compared to the 155,000
linear feet of VCT.SC.M equipment
presented in the NOPR. (Coca-Cola,
Public Meeting Transcript, No. 62 at p.
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242) True followed up its public
meeting statements with written
comment stating that its estimate of the
self-contained market was four to six
times larger than what was stated in the
proposed rule. (True, No. 76 at p. 1)
Traulsen suggested that DOE use newer
data, such as those in the NAFEM 2012
‘‘Size and Shape of the Industry’’ study
to improve the accuracy of its shipments
analysis. (Traulsen, No. 65 at p. 15)
Although neither True nor Coca-Cola
provided DOE with shipments data to
support their assertions, the magnitude
of the discrepancy in shipments
identified by these comments led DOE
to revise its shipments estimates for the
final rule. DOE reviewed three sources
of data in developing the revision. First,
DOE reviewed the most recent data
published by the EPA’s ENERGY STAR
Program.60 These EPA data include both
an estimate of total units shipped, and
an estimate of the fraction that are
ENERGY STAR compliant, from 2003 to
2012. The ENERGY STAR estimates of
total unit shipments show somewhat
slow growth from 2003 to 2010, and a
significant increase between 2010 and
2011, with shipments increasing by a
factor of two. Second, DOE reviewed the
most recent North American
Association of Food Equipment
Manufacturers Size and Shape of the
Industry 61 report published in 2012.
This report provides industry total
estimates of sales in dollar values. These
data show an increase of approximately
60 percent in sales of the relevant
covered equipment between 2008 and
2011. Third, DOE reviewed equipment
saturation estimates calculated from
data in the Energy Information Agency’s
(EIA) Commercial Buildings Energy
Consumption Survey (CBECS) for 1999
and 2003. The CBECS surveys include
a count of the number of refrigerated
cases in a building, which was be
converted to a saturation value that
represents the average number of cases
per building. These data indicate a
growth in saturation between 1999 and
2003, particularly for closed
refrigeration cases. The existence of a
trend in equipment saturations was not
accounted for in the NOPR analyses.
Taken together, all three data sources
support the claims made by
stakeholders that DOE’s shipments
published in the NOPR were
substantially underestimated.
60 Energy Star. Unit Shipment and Sales Data
Archives. Available at: https://www.energystar.gov/
index.cfm?c=partners.unit_shipment_data_archives
(Last accessed 12/5/2013).
61 North American Association of Food
Equipment Manufacturers. 2012 Size and Shape of
Industry. 2012. Chicago, IL.
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For the final rule, DOE modified the
shipments analysis to include a trend in
equipment saturations between 2003
and 2012. The trend was calculated by
(1) smoothing the growth in shipments
in the ENERGY STAR data to a constant
annual growth rate, (2) correcting to
account for the growth in total new and
existing commercial floor space, and (3)
applying the resulting trend in
saturations for the years 2004 to 2012.
Before 2003 and after 2012 equipment
saturations are held constant. The net
result is a doubling of equipment
saturations between 2003 and 2012,
with corresponding increases in the
shipments estimates, which are
generally consistent in magnitude with
stakeholder comments. These
corrections were applied uniformly to
all equipment types and applications,
and thus do not affect the distribution
of equipment by building type or by
equipment class.
Detailed description of the procedure
to calculate future shipments is
presented in chapter 9 of the final rule
TSD.
1. Impact of Standards on Shipments
Several stakeholders stated that
customer purchase behavior would
change in response to an increase in
equipment prices due to more stringent
standards. At the NOPR public meeting,
Hussmann commented that it had
noticed a shift from the open VOP.RC.M
to the closed VCT.RC.M equipment
class, possibly due to energy savings
being valued by customers (primarily
supermarkets). (Hussmann, Public
Meeting Transcript, No. 62 at pp. 236–
37) However, Hussmann noted that the
shift could be reversed if closed
equipment diminished in its utility as a
merchandising platform. (Hussmann,
Public Meeting Transcript, No. 62 at p.
237) Hillphoenix and Danfoss stated
that if standards require the use of
triple-pane coated glass, reduction in
visibility will result in users shifting
back to less-efficient open cases.
(Danfoss, No. 61 at p. 4; Hillphoenix,
No. 71 at p. 2) Hussmann noted that it
had not observed a reversal of the trend
toward closed units in response to
previous efficiency standards.
(Hussmann, Public Meeting Transcript,
No. 62 at p. 235)
DOE recognizes that increased cost for
closed equipment meeting the amended
standards in today’s final rule has the
potential to influence a shift from more
efficient closed equipment to open
equipment. However, DOE did not have
sufficient information on customer
behavior to model the degree of such
equipment switching as part of the NIA.
Further, DOE has concluded that the
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amended standards in today’s final rule
will not diminish the utility of
commercial refrigeration equipment,
and they do not require triple-pane
coated glass.
Several stakeholders commented that,
in response to a possible price increase
due to standards, CRE customers may
prolong the life of existing equipment
through refurbishment. Danfoss asserted
that a 15 to 20 percent increase in prices
will reduce demand for new units and
increase sales of used of refurbished
units. (Danfoss, No. 61 at p. 3) NAFEM
commented that any standard where the
payback on new equipment is longer
than 2 years will likely steer users into
the refurbished market. (NAFEM, No. 93
at pp. 7–8) Traulsen commented that the
impact of refurbishing equipment was
not fully represented by DOE, especially
in the small business environment
where customers are likely to hold onto
equipment longer. (Traulsen, No. 65 at
p. 19) Hussmann stated that due to price
increases resulting from higher
efficiency, the refurbishment of old
equipment will reduce the market for
new equipment. (Hussmann, No. 77 at
p. 5)
DOE acknowledges that increases in
price due to amended standards could
lead to more refurbishing of equipment
(or purchase of used equipment), which
would have the effect of deferring the
shipment of new equipment for a period
of time. DOE did not have enough
information on CRE customer behavior
to explicitly model the extent of
refurbishing at each TSL. However, DOE
believes that the extent of refurbishing
would not be so significant as to change
the ranking of the TSLs considered for
today’s rule.
H. 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 final rule analysis,
DOE forecasted the energy savings,
operating cost savings, equipment costs,
and NPV of customer benefits over the
lifetime of equipment sold from 2017
through 2046.
DOE evaluated the impacts of the
amended standards by comparing basecase projections with standards-case
projections. The base-case projections
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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.
DOE uses a Microsoft Excel
spreadsheet model to calculate the
energy savings and the national
customer costs and savings from each
TSL. The final rule 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
model uses average values as inputs (as
opposed to probability distributions of
key input parameters from a set of
possible values).
For the final rule 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 appendix 10D of the
final rule TSD.
A detailed description of the
procedure to calculate NES and NPV,
and inputs for this analysis are provided
in chapter 10 of the final rule TSD.
1. 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.F.10, and a
detailed description can be found in
chapter 8 of the final rule TSD.
As discussed in section IV.F.10 of
today’s rule, DOE revised the
distribution of equipment efficiencies in
the base case to better account for data
from ENERGY STAR. For equipment
covered by ENERGY STAR, for the NIA
DOE estimated that the market will
move over time to adopt higher
efficiency ENERGY STAR rated
equipment. DOE estimated that for
equipment not covered by ENERGY
STAR, there is limited market demand
for higher efficiency equipment, and the
base case efficiency distribution would
not change over time.
To estimate market behavior in the
standards cases, DOE uses a ‘‘roll-up’’
scenario. Under the roll-up scenario,
DOE assumes that equipment
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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.
To project trends in standards-case
efficiency after the initial shift in the
compliance year, DOE used the same
assumptions as in the base case for
equipment covered or not covered by
ENERGY STAR.
The estimated efficiency trends in the
base case and standards cases are
further described in chapter 8 of the
final rule TSD.
2. 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 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. DOE did not incorporate
a rebound factor for commercial
refrigeration equipment because it is
operated 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-toprimary energy 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
forecasted shipment-weighted average
equipment efficiencies that, in turn,
enabled determination of shipmentweighted annual energy consumption
values.
The NES spreadsheet model keeps
track of the total linear footage of
commercial refrigeration units shipped
each year. The commercial refrigeration
equipment stock in a given year is the
total linear footage of commercial
refrigeration equipment shipped from
earlier years that is still in use in that
year, based on the equipment lifetime.
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To estimate the national energy
savings expected from energy
conservation standards, DOE uses a
multiplicative factor to convert site
energy consumption (energy use at the
location where the appliance is
operated) into primary or source energy
consumption (the energy required to
deliver the site energy). For today’s final
rule, DOE used conversion factors based
on AEO 2013. For electricity, the
conversion factors vary over time
because of projected changes in
generation sources (i.e., the types of
power plants projected to provide
electricity to the country). Because the
AEO does not provide energy forecasts
beyond 2040, DOE used conversion
factors that remain constant at the 2040
values throughout the rest of the
forecast.
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
energy conservation standards
rulemakings. 76 FR 51281 (August 18,
2011) While DOE stated in that
document 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 document, 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).
The approach used for today’s final
rule, and the FFC multipliers that were
applied, are described in appendix 10D
of the final rule TSD. NES results are
presented in both primary energy and
FFC savings in section V.B.3.a.
3. 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
annual savings in operating costs; and
(3) a discount factor. DOE calculated net
national customer savings for each year
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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.
As discussed in section IV.F.1, DOE
developed an equipment price trend for
commercial refrigeration equipment
based on the inflation-adjusted index of
the PPI for air conditioning,
refrigeration, and forced air heating
from 1978 to 2012. A linear regression
of the inflation-adjusted PPI shows a
slight downward trend (see appendix
10D of the final rule TSD). To project a
future trend over the analysis period,
DOE extrapolated the historic trend
using the regression results.
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.
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
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. DOE defined the present year as
2014 for the analysis.
I. Customer Subgroup Analysis
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. Small
businesses typically face higher cost of
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capital. In general, the higher the cost of
capital, the more likely it is that an
entity would be disadvantaged by a
requirement to purchase higher
efficiency equipment. 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 small
grocery and convenience stores and
restaurants fall under the definition of
small businesses.
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, which would tend to render
higher-efficiency equipment not costeffective. To examine a ‘‘worst case’’
situation, convenience stores with gas
stations were chosen for the subgroup
analysis. Limited-service restaurants
and full-service restaurants have similar
electricity price and discount rates. DOE
chose to study full-service restaurants
for the subgroup analysis because a
higher percentage of full-service
restaurants tend to be operated by
independent small businesses, as
compared to limited-service (fast-food)
restaurants. DOE believes that these two
subgroups are broadly representative of
small businesses that use CRE.
DOE estimated the impact on the
identified customer subgroups using the
LCC spreadsheet model. The input for
business type was fixed to the identified
subgroup, which ensured that the
discount rates and electricity prices
associated with only that subgroup were
selected in the Monte Carlo simulations.
The discount rate was further increased
by applying the small firm premium to
the WACC. In addition, DOE assumed
that the subgroups do not have access to
national purchasing accounts and,
consequently, face a higher distribution
channel markup. Apart from these
changes, all other inputs for the
subgroup analysis are the same as those
in the LCC analysis. Details of the data
used for the subgroup analysis and
results are presented in chapter 11 of
the final rule TSD.
The Society of American Florists
stated that the percent of refrigerated
product sold at retail by florists is
higher than in other retail industries
and that they would be particularly
sensitive to an increase in equipment
price. (SAF, No. 74 at p. 3) SAF
suggested that DOE should conduct
analyses for floriculture growers,
wholesalers, and retail florists to
determine the impact of amended
standards on these end-users. (SAF, No.
74 at p. 7)
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While the subgroups considered by
DOE do not exactly correspond to
florist-related businesses, DOE believes
that the impacts experienced by the
selected subgroups are indicative of the
impacts that would be experienced by
florist-related businesses. Thus, the
analyses suggested by SAF are not
warranted.
The National Restaurant Association
suggested that DOE re-analyze the small
business subgroups based on more
accurate costs and equipment lifetime
assumptions. (NRA, No. 90 at p. 2) DOE
has used the best available data to
estimate equipment costs and lifetime
for the considered subgroups, so there
would be no basis for re-analysis.
Mercatus stated that 26 percent of
restaurants fail in their first year and by
year three the rate of failure is just over
60 percent; therefore, it is not rational
for these types of customers to purchase
more efficient equipment before
realizing a net benefit. (Mercatus, No. 72
at p. 3) DOE acknowledges that some
CRE units may outlive the particular
business that purchased them new, but
the customer that purchases the used
equipment would see the energy cost
benefits of higher-efficiency equipment.
Several parties stated that higher
equipment costs will induce small
businesses to purchase used or
refurbished equipment. The National
Restaurant Association commented that
an equipment cost increase of 15 to 20
percent will force small restaurants to
purchase used or refurbished
equipment. (NRA, No. 90 at p. 3) The
Air Conditioning Contractors of
America (ACCA) commented that small
consumers would elect to extend the life
of existing equipment rather than
purchase new more expensive
equipment. (ACCA, Public Meeting
Transcript, No. 62 at pp. 343–44) True
commented that individually owned
restaurants would elect to purchase
used equipment due to lower first cost
instead of purchasing new, more
efficient equipment. (True, Public
Meeting Transcript, No. 62 at p. 208)
Traulsen opined that smaller entities are
more likely to keep existing equipment
longer, and will be negatively affected
by the proposed standard. (Traulsen,
No. 65 at p. 19) Hoshizaki commented
that the proposed standards will
increase costs and deter small business
owners from buying new equipment.
(Hoshizaki, No. 84 at p. 1)
DOE acknowledges that some small
businesses may respond to amended
CRE standards by purchasing used or
refurbished equipment. However, as
discussed in section V.B.1.b, DOE did
not have sufficient information to
evaluate the likely extent of this
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response. The consumer subgroup
results (shown in section V.B.1.b of this
document) indicate that in nearly all
cases the considered small business
subgroups see higher average LCC
savings and lower median payback
periods when compared to all CRE
customers. These results suggest that
most small businesses would find it
beneficial to purchase new commercial
refrigeration equipment that meets
today’s standards.
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J. Manufacturer Impact Analysis
1. Overview
DOE performed a MIA to estimate the
financial impact of amended energy
conservation standards on
manufacturers of commercial
refrigeration equipment and to
understand 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 final rule TSD.
DOE conducted the MIA for this
rulemaking in three phases. In Phase 1
of the MIA, DOE prepared a profile of
the 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;
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
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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.
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
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
(September 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 final rule TSD and in
section I.A.1 of this document.
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
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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 final rule TSD.
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.B and further
detailed in chapter 5 of the NOPR TSD.
In addition, DOE used information from
its teardown analysis, described in
section IV.D.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.
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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 final rule
TSD for additional details.
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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.D.4.
Further adjustments were made to
capital conversion costs based on
feedback in the NOPR written
comments. The key driver of capital
conversion costs was new production
equipment associated with improving
cabinet insulation.
DOE assessed the product 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
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. For the final
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rule, adjustments were made to product
conversion costs based on feedback in
the NOPR written comments submitted
following the NOPR. Key drivers of
product conversion costs included the
re-design effort associated with
modifying cabinets to incorporate
improved cabinet insulation, along with
the product and food safety certification
costs associated with redesigning key
equipment components.
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 document. For
additional information on the estimated
product conversion and capital
conversion costs, see chapter 12 of the
final rule 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
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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
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.
3. Discussion of Comments
During the NOPR public meeting,
interested parties commented on the
assumptions and results of the analyses
as described in the TSD. Oral and
written comments addressed several
topics, including volume purchasing of
components, refrigerants, redesign
issues, LED material costs, the GRIM,
foaming fixtures, cumulative regulatory
burden, certification costs, and issues
specific to small manufacturers.
a. Volume Purchasing of Components
Traulsen commented that the prices
of high-efficiency condenser fan motors
were higher than DOE stated, and that
this would place a cost burden on small
manufacturers who could not receive a
purchase volume discount. (Traulsen,
No. 65 at p. 4) DOE recognizes that
small manufacturers face pricing
disadvantages for key components in
both the base case and the standards
case. This issue is incorporated into the
discussion of Regulatory Flexibility in
section VI.B.2 of this final rule.
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b. Refrigerants
True commented that there was the
potential for a substantial cost increase
to manufacturers in the very near future
due to the phasing out of HFCs. True
further commented that new refrigerants
may have an incremental cost of 5–10
times over what is currently being paid
for refrigerants. (True, Public Meeting
Transcript, No. 62 at p. 279) The use of
alternative refrigerants by manufacturers
of commercial refrigeration equipment
would not arise as a direct result of this
rule, and thus was not considered in
this analysis. Furthermore, there is no
requirement mandating the use of
alternative refrigerants at this time. DOE
does not include the impacts of pending
legislation or unfinalized regulations in
its analyses, as any impact would be
speculative.
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c. Redesign Issues
Several manufacturers pointed out
that high capital costs were required by
the proposed standards. Traulsen
asserted that up to 95% of all equipment
would need to be redesigned as a result
of the proposed standard. (Traulsen, No.
62 at p. 315) True added that the cost
of redesigning and retooling entire
product lines, and including the costs of
new refrigerants, would be cost
prohibitive. (True, No. 62 at p. 341)
With regard to the specific cost of
replacing foaming fixtures, True
commented that new fixtures could cost
several hundred thousand dollars, and
modifying fixtures in order to
manufacture thicker foam panels could
cost $40,000–$50,000 per fixture, while
Southern Store Fixtures noted that it
would have to change over 3,000 molds
and 1,000 foaming fixtures for its entire
product line, and that it would cost
much more than the assumed
$2,500,000. (True, No. 62 at p. 340)
(SSF, No. 67 at p. 3)
With regard to capital costs, True
commented that switching from doublepane to triple pane glass would require
new tooling and molds for
manufacturing, costing up to $300,000
per door model produced, and that if
the interior volume of a unit were to
change due to thicker foam, all shelving
systems and weld fixtures would need
to be redesigned. (True, No. 76 at p. 3)
Furthermore, Traulsen commented that
changing fixture depth would cause a
change in production time per unit, and
that this cost had not been reflected in
the DOE analysis. (Traulsen, No. 65 at
p. 9) Similarly, Hussmann commented
that there was a substantial engineering
cost associated with re-engineering case
components in order to incorporate
increased foam thickness. Specifically,
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Hussmann noted that in order to
maintain outside dimensions of a case
and increase insulation thickness,
manufacturers would be required to
redesign and retool every component
based on the case’s internal dimensions.
(Hussmann, No. 77 at p. 2) Hoshizaki,
also expressed the same concern, adding
that that DOE underestimated the cost
associated with increasing foam
thickness by 1⁄2″, since this increase
would require engineering, testing,
tooling, production line changeover,
down-time, packaging changes, and
certification. (Hoshizaki, No. 84 at p. 2)
DOE estimated the conversion costs
associated with increases in foam
thickness based on direct input from the
industry in interviews, as well as
through analysis of production
equipment that is part of the
engineering cost model. DOE’s analysis
included capital conversion costs,
including as tooling costs and
production line upgrades, and product
conversion costs, including redesign
efforts, testing costs, industry
certifications, and marketing changes.
Differences in packing and shipping
costs were also accounted for in the
shipping cost component of the
engineering analysis.
In its NOPR analysis, DOE recognized
the need for new foaming fixtures to
accommodate thicker panels. However,
for the final rule analysis, DOE revised
its estimate of fixture investment for the
entire CRE industry upward to $210
million.
At the NOPR stage, the MIA analysis
did not associate a conversion cost with
changes in display door designs based
on DOE’s understanding that the vast
majority of CRE manufacturers consider
display doors to be purchased parts.
Furthermore, in the final rule
engineering analysis, DOE does not
consider triple-pane display doors as a
design option in its analysis. However,
for the final rule, DOE updated its
manufacturer impact analysis to account
for the conversion costs associated with
changes in door design and
specification, such as moving from
single-pane to double-pane for
horizontal cases with transparent doors.
d. LED Material Costs
Structural Concepts commented that
the implementation of LEDs would cost
over $500,000 annually in material costs
alone. (Structural Concepts, No. 85 at p.
3) DOE agrees with Structural Concepts
that some design options, such as LED
lighting, require larger upfront
investments in component inventory by
manufacturers. DOE accounts for
investment in more expensive
components and greater amounts of raw
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materials as increases in working
capital. Increases in working capital
decrease free cash flow and are reflected
in industry net present value (INPV),
which DOE considers as a key input
when selecting a standard level.
e. GRIM
AHRI asserted that the GRIM model
should account for periodic revisions to
energy standards and potential changes
in refrigerant policy when estimating
the INPV. (AHRI, No. 75 at p. 11)
Additionally, AHRI commented that,
since the GRIM predicts INPV across an
extended period, the model should have
accounted for impacts on manufacturers
due to periodic revisions of energy
conservation standards and potential
changes to refrigerant policy, and that
the INPV range at TSL4 was grossly
underestimated since there will likely
be up to five revisions to CRE standards
by 2046. (AHRI, No. 75 at p. 13)
However, DOE does not take unfinalized
regulation into account in its analysis.
Any forecast of amendments to the
standard level in the future and the
potential costs of those changes would
be purely speculative and, therefore,
outside the scope of analysis.
f. Cumulative Regulatory Burden
Traulsen commented that the cost
burden to manufacturers of complying
with both the 2009 and 2017 rules,
which overlap, is unmanageable.
(Traulsen, No. 65 at p. 22) Lennox also
stated that the proposed standards
would place significant cumulative
regulatory burden on manufacturers.
(Traulsen, No. 65 at p. 9)
DOE defines cumulative regulatory
burden (CRB) as regulations that go into
effect within 3 years of the effective date
of the standard under consideration. As
a result, the 2009 amended standard is
not one of the regulations listed in the
CRB analysis in section V.B.2.e of this
document. However, the market changes
and equipment price impacts that
resulted from the 2009 standard are
incorporated into DOE’s analyses.
g. Certification Costs
AHRI commented that the
implementation of higher efficiency
compressors should include costs
associated with safety certification (UL,
etc.), compliance with NSF Standards,
and recertification due to the induced
change in the equipment performance.
(AHRI, No. 75 at p. 13) In its NOPR and
final rule analyses, DOE accounted for
the UL and NSF certification costs
associated with compressor changes.
While UL and NSF certification costs
can vary by manufacturers, DOE used an
industry average combined cost of
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$8,000 per model for those certifications
in its final rule analysis.
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h. Small Manufacturers
In its written comment, Traulsen
expressed the opinion that the proposed
rule would have a significant economic
impact on a substantial number of small
businesses and was therefore in
violation of the Regulatory Flexibility
Act. In particular, Traulsen drew
attention to page 55983, column 2 of the
Federal Register NOPR document,
which stated that DOE could not certify
that the proposed standards would not
have a significant impact on a
significant number of small businesses.
(Traulsen, No. 65 at p.16) The George
Washington University (GWU) also
asserted in its comment that the
proposed rule affected small
businesses—both manufacturers and
consumers—since it did not maintain
flexibility and freedom of choice. (GWU,
No. 66 at p. 11) To better understand the
potential impact of the final rule on
small businesses, DOE provides an
assessment of the impacts on small
manufacturers in section VI.B.
K. 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
(August 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 primarily conducted the
emissions analysis using emissions
factors for CO2 and most of the other
gases derived from data in 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 final rule TSD.
For CH4 and N2O, DOE calculated
emissions reduction in tons and also in
terms of units of carbon dioxide
equivalent (CO2eq). Gases are converted
to CO2eq by multiplying the physical
units by the gas’ global warming
potential (GWP) over a 100 year time
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horizon. Based on the Fourth
Assessment Report of the
Intergovernmental Panel on Climate
Change,62 DOE used GWP values of 25
for CH4 and 298 for N2O.
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
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 (D.C.).
SO2 emissions from 28 eastern States
and D.C. 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.63 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). In 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 D.C. Circuit issued a decision
to vacate CSAPR.64 The court ordered
EPA to continue administering CAIR.
The AEO 2013 emissions factors used
for today’s final rule assume that CAIR
remains a binding regulation through
2040.
The attainment of emissions caps is
typically flexible among EGUs and is
enforced through the use of tradable
emissions allowances. Under existing
62 Forster, P., V. Ramaswamy, P. Artaxo, T.
Berntsen, R. Betts, D.W. Fahey, J. Haywood, J. Lean,
D.C. Lowe, G. Myhre, J. Nganga, R. Prinn, G. Raga,
M. Schulz and R. Van Dorland. 2007: Changes in
Atmospheric Constituents and in Radiative Forcing.
In Climate Change 2007: The Physical Science
Basis. Contribution of Working Group I to the
Fourth Assessment Report of the Intergovernmental
Panel on Climate Change. S. Solomon, D. Qin, M.
Manning, Z. Chen, M. Marquis, K.B. Averyt,
M.Tignor and H.L. Miller, Editors. 2007. Cambridge
University Press, Cambridge, United Kingdom and
New York, NY, USA. p. 212.
63 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).
64 See EME Homer City Generation, LP v. EPA,
696 F.3d 7, 38 (D.C. Cir. 2012), cert. granted, 81
U.S.L.W. 3567, 81 U.S.L.W. 3696, 81 U.S.L.W. 3702
(U.S. June 24, 2013) (No. 12–1182).
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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
allow 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 cap-and-trade
system, but it concluded that negligible
reductions in power sector SO2
emissions would occur as a result of
standards.
Beginning around 2015, however, SO2
emissions will fall as a result of the
Mercury and Air Toxics Standards
(MATS) for power plants. 77 FR 9304
(February 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 allow offsetting
increases in SO2 emissions by any
regulated EGU. Therefore, DOE believes
that energy 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 allow
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
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from the standards considered in
today’s final rule 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.
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L. Monetizing Carbon Dioxide and Other
Emissions Impacts
As part of the development of the
standards in this final rule, 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 final rule.
For today’s final rule, 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 final rule TSD.
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
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CO2 emissions into cost-benefit analyses
of regulatory actions. 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 challenges. A report from the
National Research Council 65 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 questions of science,
economics, and ethics and should be
viewed as provisional.
Despite the limits of both
quantification and monetization, SCC
estimates can be useful in estimating the
social benefits of reducing CO2
emissions. 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 values
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.
It is important to emphasize that the
interagency process is committed to
65 National Research Council. Hidden Costs of
Energy: Unpriced Consequences of Energy
Production and Use. 2009. National Academies
Press: Washington, DC.
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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. Development of Social Cost of Carbon
Values
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
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
After 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 peer-reviewed literature and
were used in the last assessment of the
Intergovernmental Panel on Climate
Change (IPCC). 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
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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
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,66 although preference is given to
consideration of the global benefits of
reducing CO2 emissions. Table IV.4
presents the values in the 2010
interagency group report,67 which is
reproduced in appendix 14A of the DOE
final rule TSD.
TABLE IV.4—ANNUAL SCC VALUES FROM 2010 INTERAGENCY REPORT, 2010–2050
[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
.................................................................................................................
.................................................................................................................
.................................................................................................................
.................................................................................................................
.................................................................................................................
.................................................................................................................
.................................................................................................................
.................................................................................................................
.................................................................................................................
The SCC values used for today’s
document were generated using the
most recent versions of the three
integrated assessment models that have
been published in the peer-reviewed
literature.68 Table IV.5 shows the
updated sets of SCC estimates in 5-year
4.7
5.7
6.8
8.2
9.7
11.2
12.7
14.2
15.7
increments from 2010 to 2050. The full
set of annual SCC estimates between
2010 and 2050 is reported in appendix
14B of the DOE final rule TSD. The
central value that emerges is the average
SCC across models at the 3 percent
discount rate. However, for purposes of
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
capturing the uncertainties involved in
regulatory impact analysis, the
interagency group emphasizes the
importance of including all four sets of
SCC values.
TABLE IV.5—ANNUAL SCC VALUES FROM 2013 INTERAGENCY REPORT, 2010–2050
[2007 dollars per metric ton]
Discount rate
Year
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3%
2.5%
3%
Average
2010
2015
2020
2025
2030
2035
2040
2045
2050
5%
Average
Average
95th percentile
.................................................................................................................
.................................................................................................................
.................................................................................................................
.................................................................................................................
.................................................................................................................
.................................................................................................................
.................................................................................................................
.................................................................................................................
.................................................................................................................
11
11
12
14
16
19
21
24
26
32
37
43
47
52
56
61
66
71
51
57
64
69
75
80
86
92
97
89
109
128
143
159
175
191
206
220
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.
66 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.
67 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.
68 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; revised November 2013. https://
www.whitehouse.gov/sites/default/files/omb/assets/
inforeg/technical-update-social-cost-of-carbon-forregulator-impact-analysis.pdf.
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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 analytic challenges that are
being 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.
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 $11.8, $39.7, $61.2, and $117 per
metric ton avoided (values expressed in
2012$). 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.
In responding to the NOPR, many
commenters questioned the scientific
and economic basis of the SCC values.
These commenters made extensive
comments about: The alleged lack of
economic theory underlying the models;
the sufficiency of the models for policymaking; potential flaws in the models’
inputs and assumptions (including the
discount rates and climate sensitivity
chosen); whether there had been
adequate peer review of the three
models; whether there had been
adequate peer review of the interagency
TSD supporting the 2013 SCC values; 69
whether the SCC estimates comply with
OMB’s ‘‘Final Information Quality
Bulletin for Peer Review’’ 70 and DOE’s
own guidelines for ensuring and
69 Available at: https://www.whitehouse.gov/sites/
default/files/omb/inforeg/social_cost_of_carbon_
for_ria_2013_update.pdf.
70 Available at: https://www.cio.noaa.gov/services_
programs/pdfs/OMB_Peer_Review_Bulletin_m0503.pdf.
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maximizing the quality, objectivity,
utility and integrity of information
disseminated by DOE; and why DOE is
considering global benefits of carbon
dioxide emission reductions rather than
solely domestic benefits. (See AHRI, No.
75; Joint Comment from America’s
Natural Gas Alliance, the American
Chemistry Council, the American
Petroleum Institute, the National
Association of Home Builders, the
National Association of Manufacturers,
the Portland Cement Association, and
the U.S. Chamber of Commerce (ANGA
et al/Chamber of Commerce), No. 79;
Cato Institute (Cato), No. 69; EEI, No. 89;
GWU, No. 66; Mercatus, No. 72;
NRECA, No. 88; Traulsen, No. 65.
Several other parties expressed support
for the derivation and application of the
SCC values. (Joint Comment from the
Environmental Defense Fund, Institute
for Policy Integrity, Natural Resources
Defense Council, and the Union of
Concerned Scientists, No. 83; ASAP,
No. 91; Kopp, No. 60)
In response to the comments on the
SCC values, DOE acknowledges the
limitations in the SCC estimates, which
are discussed in detail in the 2010
interagency group report. Specifically,
uncertainties in the assumptions
regarding climate sensitivity, as well as
other model inputs such as economic
growth and emissions trajectories, are
discussed and the reasons for the
specific input assumptions chosen are
explained. Regarding discount rates,
there is not consensus in the scientific
or economics literature regarding the
appropriate discount rate to use for
intergenerational time horizons. The
SCC estimates thus use a reasonable
range of discount rates, from 2.5% to
5%, in order to show the effects that
different discount rate assumptions
have on the estimated values. More
information about the choice of
discount rates can be found in the 2010
interagency group report starting on
page 17.
Regarding peer review of the models,
the three integrated assessment models
used to estimate the SCC are frequently
cited in the peer-reviewed literature and
were used in the last assessment of the
IPCC. In addition, new versions of the
models that were used in 2013 to
estimate revised SCC values were
published in the peer-reviewed
literature (see appendix 14B of the DOE
final rule TSD for discussion).
DOE believes that the SCC estimates
comply with OMB’s Final Information
Quality Bulletin for Peer Review and
DOE’s own guidelines for ensuring and
maximizing the quality, objectivity,
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17779
utility and integrity of information
disseminated by DOE.71
As to why DOE is considering global
benefits of carbon dioxide emission
reductions rather than solely domestic
benefits, a global measure of SCC
because of the distinctive nature of the
climate change problem, which is
highly unusual in at least two respects.
First, it involves a global externality:
Emissions of most greenhouse gases
contribute to damages around the world
even when they are emitted in the
United States. Second, climate change
presents a problem that the United
States alone cannot solve. The issue of
global versus domestic measures of the
SCC is further discussed in appendix
14A of the DOE final rule TSD.
AHRI stated that DOE calculates the
present value of the costs of standards
to consumers and manufacturers over a
30-year period, but the SCC values
reflect the present value of future
climate related impacts well beyond
2100. AHRI stated that DOE’s
comparison of 30 years of cost to
hundreds of years of presumed future
benefits is inconsistent and improper.
(AHRI, No. 84 at p. 12)
For the analysis of national impacts of
the proposed standards, DOE
considered the lifetime impacts of
equipment shipped in a 30-year period.
With respect to energy and energy cost
savings, impacts continue past 30 years
until all of the equipment shipped in
the 30-year period is retired. With
respect to the valuation of CO2
emissions reductions, the SCC estimates
developed by the interagency working
group are meant to represent the full
discounted value (using an appropriate
range of discount rates) of emissions
reductions occurring in a given year.
DOE is thus comparing the costs of
achieving the emissions reductions in
each year of the analysis, with the
carbon reduction value of the emissions
reductions in those same years. Neither
the costs nor the benefits of emissions
reductions outside the analytic time
frame are included in the analysis.
In November 2013, OMB announced a
new opportunity for public comment on
the interagency technical support
document underlying the revised SCC
estimates. See 78 FR 70586. The
comment period for the OMB
announcement closed on February 26,
2014. OMB is currently reviewing
comments and considering whether
further revisions to the 2013 SCC
estimates are warranted. DOE stands
ready to work with OMB and the other
71 https://www.directives.doe.gov/references/
secretarial_policy_statement_on_scientific_
integrity/view.
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members of the interagency working
group on further review and revision of
the SCC estimates as appropriate.
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 final rule based on estimates
found in the relevant scientific
literature. Estimates of monetary value
for reducing NOX from stationary
sources range from $468 to $4,809 per
ton (2012$).72 DOE calculated monetary
benefits using a medium value for NOX
emissions of $2,639 per short ton (in
2012$), 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.
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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 National Energy Modeling
System—Building Technologies
(NEMS–BT) 73 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
72 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.
73 The EIA allows the use of the name ‘‘NEMS’’
to describe only an AEO version of the model
without any modification to code or data. Because
the present analysis entails some minor code
modifications and runs the model under various
policy scenarios that deviate from AEO
assumptions, the name ‘‘NEMS–BT’’ refers to the
model as used here. For more information on
NEMS, refer to The National Energy Modeling
System: An Overview, DOE/EIA–0581 (98)
(Feb.1998), available at: https://tonto.eia.doe.gov/
FTPROOT/forecasting/058198.pdf.
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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 final rule
TSD.
N. Employment Impact Analysis
Employment impacts are one of the
factors that DOE considers in selecting
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 which 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 for today’s
standard, 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
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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.
For more details on the employment
impact analysis and its results, see
chapter 16 of the TSD.
V. Analytical Results
A. Trial Standard Levels
1. Trial Standard Level Formulation
Process and Criteria
Based on the results of the LCC
analysis and NIA, DOE selected five
TSLs above the baseline level for each
equipment class for the final rule. 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 7percent discount rate. TSL 3 was chosen
to represent the group of efficiency
levels with the highest customer NPV at
a 7-percent discount rate. TSL 2 and
TSL 1 were chosen to provide
intermediate efficiency levels that fill
the gap between the baseline efficiency
levels and TSL 3.
For the HCT.SC.I, HZO.RC.M, and
HZO.RC.L equipment classes, there is
only one efficiency level above baseline.
For the HZO.SC.L equipment class,
there are no efficiency levels above
baseline, because there was only one
analytical design analyzed engineering
analysis compliant with the 2009 final
rule. While TSL 5 was associated with
the max-tech level for HCT.SC.I,
HZO.RC.M, and HZO.RC.L equipment
classes, TSLs 1 through 4 did not have
corresponding efficiency levels that
satisfied the TSL formulation criteria.
Therefore, the baseline efficiency level
was assigned to TSL 1 through TSL 4 for
each of these equipment classes. Table
V.1 shows the mapping between TSLs
and efficiency levels.
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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TABLE V.1—MAPPING BETWEEN TSLS AND EFFICIENCY LEVELS
Intermediate level
Intermediate level
Max NPV *
Max NES NPV * >0-†
Max-tech
TSL 1
TSL 2
TSL 3
TSL 4
TSL 5
Baseline ....................
Baseline ....................
Baseline ....................
Baseline ....................
EL 1 ..........................
EL 1 ..........................
EL 1 ..........................
EL 1 ..........................
EL 1 ..........................
EL 1 ..........................
EL 1 ..........................
EL 1 ..........................
Baseline ....................
Baseline ....................
Baseline ....................
Baseline ....................
Baseline ....................
Baseline ....................
Baseline ....................
EL 2 ..........................
EL 2 ..........................
Baseline ....................
EL 1 ..........................
EL 1 ..........................
EL 1 ..........................
Baseline ....................
Baseline ....................
Baseline ....................
Baseline ....................
EL 1 ..........................
EL 2 ..........................
EL 3 ..........................
EL 1 ..........................
EL 2 ..........................
EL 3 ..........................
EL 2 ..........................
EL 1 ..........................
Baseline ....................
Baseline ....................
Baseline ....................
Baseline ....................
Baseline ....................
EL 1 ..........................
Baseline ....................
EL 3 ..........................
EL 3 ..........................
Baseline ....................
EL 2 ..........................
EL 2 ..........................
EL 2 ..........................
EL 1 ..........................
EL 1 ..........................
Baseline ....................
EL 1 ..........................
EL 2 ..........................
EL 3 ..........................
EL 5 ..........................
EL 1 ..........................
EL 4 ..........................
EL 5 ..........................
EL 4 ..........................
EL 1 ..........................
Baseline ....................
Baseline ....................
Baseline ....................
Baseline ....................
Baseline ....................
EL 1 ..........................
Baseline ....................
EL 4 ..........................
EL 4 ..........................
Baseline ....................
EL 3 ..........................
EL 3 ..........................
EL 3 ..........................
EL 3 ..........................
EL 2 ..........................
EL 1 ..........................
EL 3 ..........................
EL 3 ..........................
EL 5 ..........................
EL 7 ..........................
EL 3 ..........................
EL 6 ..........................
EL 6 ..........................
EL 4 ..........................
EL 3 ..........................
EL 1 ..........................
EL 1 ..........................
EL 2 ..........................
Baseline ....................
Baseline ....................
EL 2 ..........................
Baseline ....................
EL 6 ..........................
EL 6 ..........................
Baseline ....................
EL 4 ..........................
EL 5 ..........................
EL 4 ..........................
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 .................
SOC.SC.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 ....................
EL 4.
EL 3.
EL 2.
EL 4.
EL 4.
EL 7.
EL 7.
EL 4.
EL 7.
EL 7.
EL 5.
EL 4.
EL 3.
EL 4.
EL 4.
EL 1.
EL 1.
EL 3.
Baseline.
EL 7.
EL 7.
EL 1.
EL 6.
EL 6.
EL 7.
* NPV is estimated at a 7 percent discount rate.
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 each used
for certain equipment classes: (1)
Volume (V), and (2) total display area
(TDA). The use of these two
normalization metrics allows for the
development of a 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,
AEMTCA, or January 2009 final rule
standard for each covered equipment
class. (42 U.S.C. 6313(c)(2)–(3)); 74 FR
at 1093 (January 9, 2009). Additionally,
for 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 yintercept on a plot of each standard
level equation (representing a limit 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 at 1118–19
(January 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 final rule,
DOE retained the January 2009 final rule
offset factors at all TSLs, and updated
those included in the EPACT 2005
standards to reflect size-based trends in
energy consumption for each equipment
class. See chapter 5 of the TSD for
further details and discussion of offset
factors.
For the equipment classes covered
under this rulemaking, the standards
equation at each TSL is presented 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)
The standards equations may be used
to prescribe the MDEC for equipment of
different sizes within the same
equipment class. Chapter 9 of the final
rule TSD explains the methodology
used for selecting TSLs and developing
the coefficients shown in Table V.3.
tkelley on DSK3SPTVN1PROD with RULES2
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
TSL 1
VOP.RC.M .................................................................
VOP.RC.L ..................................................................
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46.84
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TSL 4
38.02
104.94
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36.1
101.70
TSL 5
35.65
100.01
17782
Federal Register / Vol. 79, No. 60 / Friday, March 28, 2014 / Rules and Regulations
TABLE V.2—CDEC VALUES BY TSL FOR REPRESENTATIVE UNITS ANALYZED IN THE ENGINEERING ANALYSIS FOR EACH
PRIMARY EQUIPMENT CLASS—Continued
CDEC Values by TSL
kWh/day
Equipment class
TSL 1
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 .................................................................
SOC.SC.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 ....................................................................
TSL 2
30.01
13.65
35.34
6.83
27.46
19.52
5.29
13.94
18.70
29.45
26.32
22.74
27.72
14.47
32.36
14.66
29.92
1.62
2.15
3.13
1.42
1.78
4.73
TSL 3
30.01
13.65
35.34
5.99
18.23
19.52
4.03
12.94
18.01
29.45
26.32
22.74
27.72
14.47
32.36
14.16
29.92
0.99
2.03
3.13
1.36
1.67
3.90
TSL 4
30.01
11.8
34.78
5.64
17.16
19.52
3.69
12.19
17.43
29.45
26.32
22.74
27.72
14.47
32.36
14.16
29.92
0.90
1.92
3.13
1.28
1.53
3.78
TSL 5
29.91
11.49
34.50
5.45
16.05
18.95
3.45
12.08
17.43
28.01
25.65
22.31
26.61
14.47
32.36
14.02
29.92
0.79
1.73
3.13
1.26
1.29
3.75
29.71
10.99
33.04
5.15
16.05
18.11
3.03
11.13
16.04
27.70
25.4
21.56
26.12
14.15
31.08
13.75
29.92
0.61
1.32
2.33
0.98
0.71
3.41
TABLE V.3—EQUATIONS REPRESENTING THE STANDARDS AT EACH TSL FOR ALL PRIMARY EQUIPMENT CLASSES
Trial standard levels for primary equipment classes analyzed
Baseline
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.
SOC.SC.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 .....
tkelley on DSK3SPTVN1PROD with RULES2
Equipment
class
0.82 × TDA + 4.07
2.27 × TDA + 6.85
1.74 × TDA + 4.71
0.22 × TDA + 1.95
0.56 × TDA + 2.61
0.12 × V + 3.34 .....
0.75 × V + 4.1 .......
0.67 × TDA + 3.29
0.1 × V + 2.04 .......
0.4 × V + 1.38 .......
0.38 × V + 0.88 .....
0.83 × TDA + 3.18
1.73 × TDA + 4.59
0.51 × TDA + 0.11
0.6 × TDA + 1 .......
0.35 × TDA + 2.88
0.57 × TDA + 6.88
0.77 × TDA + 5.55
1.92 × TDA + 7.08
0.12 × V + 3.34 .....
0.75 × V + 4.1 .......
0.56 × TDA + 0.43
0.1 × V + 2.04 .......
0.4 × V + 1.38 .......
0.126 × V + 3.51 ...
0.8 × TDA + 4.07 ..
2.21 × TDA + 6.85
1.69 × TDA + 4.71
0.18 × TDA + 1.95
0.5 × TDA + 2.61 ..
0.1 × V + 2.05 .......
0.48 × V + 4.1 .......
0.62 × TDA + 3.29
0.07 × V + 2.04 .....
0.26 × V + 1.38 .....
0.37 × V + 0.88 .....
0.66 × TDA + 3.18
1.7 × TDA + 4.59 ..
0.44 × TDA + 0.11
0.52 × TDA + 1 .....
0.35 × TDA + 2.88
0.55 × TDA + 6.88
0.76 × TDA + 5.55
1.9 × TDA + 7.08 ..
0.06 × V + 1.09 .....
0.08 × V + 1.47 .....
0.56 × TDA + 0.43
0.05 × V + 1.05 .....
0.06 × V + 1.38 .....
0.11 × V + 1.76 .....
0.8 × TDA + 4.07 ..
2.21 × TDA + 6.85
1.69 × TDA + 4.71
0.18 × TDA + 1.95
0.5 × TDA + 2.61 ..
0.1 × V + 1.21 .......
0.29 × V + 4.1 .......
0.62 × TDA + 3.29
0.05 × V + 1.69 .....
0.24 × V + 1.38 .....
0.36 × V + 0.88 .....
0.66 × TDA + 3.18
1.7 × TDA + 4.59 ..
0.44 × TDA + 0.11
0.52 × TDA + 1 .....
0.35 × TDA + 2.88
0.55 × TDA + 6.88
0.72 × TDA + 5.55
1.9 × TDA + 7.08 ..
0.06 × V + 0.46 .....
0.08 × V + 1.35 .....
0.56 × TDA + 0.43
0.05 × V + 0.98 .....
0.06 × V + 1.26 .....
0.11 × V + 0.93 .....
0.64 × TDA + 4.07
2.2 × TDA + 6.85 ..
1.69 × TDA + 4.71
0.15 × TDA + 1.95
0.49 × TDA + 2.61
0.1 × V + 0.86 .......
0.29 × V + 2.95 .....
0.62 × TDA + 3.29
0.05 × V + 1.36 .....
0.22 × V + 1.38 .....
0.34 × V + 0.88 .....
0.66 × TDA + 3.18
1.7 × TDA + 4.59 ..
0.44 × TDA + 0.11
0.52 × TDA + 1 .....
0.35 × TDA + 2.88
0.55 × TDA + 6.88
0.72 × TDA + 5.55
1.9 × TDA + 7.08 ..
0.06 × V + 0.37 .....
0.08 × V + 1.23 .....
0.56 × TDA + 0.43
0.05 × V + 0.91 .....
0.06 × V + 1.12 .....
0.11 × V + 0.81 .....
0.6 × TDA + 4.07 ..
2.12 × TDA + 6.85
1.69 × TDA + 4.71
0.15 × TDA + 1.95
0.49 × TDA + 2.61
0.1 × V + 0.68 .......
0.29 × V + 1.84 .....
0.6 × TDA + 3.29 ..
0.05 × V + 1.11 .....
0.22 × V + 1.38 .....
0.34 × V + 0.88 .....
0.62 × TDA + 3.18
1.65 × TDA + 4.59
0.44 × TDA + 0.11
0.5 × TDA + 1 .......
0.35 × TDA + 2.88
0.55 × TDA + 6.88
0.71 × TDA + 5.55
1.9 × TDA + 7.08 ..
0.06 × V + 0.27 .....
0.08 × V + 1.05 .....
0.56 × TDA + 0.43
0.05 × V + 0.89 .....
0.06 × V + 0.89 .....
0.11 × V + 0.78 .....
0.59 × TDA + 4.07.
2.09 × TDA + 6.85.
1.67 × TDA + 4.71.
0.14 × TDA + 1.95.
0.47 × TDA + 2.61.
0.1 × V + 0.38.
0.29 × V + 1.84.
0.57 × TDA + 3.29.
0.05 × V + 0.7.
0.2 × V + 1.38.
0.32 × V + 0.88.
0.61 × TDA + 3.18.
1.63 × TDA + 4.59
0.42 × TDA + 0.11.
0.49 × TDA + 1.
0.34 × TDA + 2.88.
0.53 × TDA + 6.88.
0.68 × TDA + 5.55.
1.9 × TDA + 7.08.
0.06 × V + 0.09.
0.08 × V + 0.63.
0.4 × TDA + 0.43.
0.02 × V + 0.81.
0.06 × V + 0.31.
0.11 × V + 0.44.
In addition to the 25 primary
equipment classes analyzed, DOE
evaluated existing and potential
amended standards for 24 secondary
equipment classes of commercial
refrigeration equipment covered in this
rulemaking that were not directly
analyzed in the engineering analysis.
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DOE’s approach to evaluating standards
for these secondary equipment classes
involves extension multipliers
developed using the engineering results
for the primary equipment classes
analyzed and a set of matched-pair
analyses performed during the January
PO 00000
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Fmt 4701
Sfmt 4700
2009 final rule analysis.75 In addition,
75 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,
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
E:\FR\FM\28MRR2.SGM
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Federal Register / Vol. 79, No. 60 / Friday, March 28, 2014 / Rules and Regulations
DOE believes that standards for certain
primary equipment classes can be
directly applied to similar secondary
equipment classes. Chapter 5 of the final
rule TSD discusses the development of
the extension multipliers.
Using the extension multiplier
approach, DOE developed an additional
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
17783
is presenting the standards equations
developed for each TSL for all 47
equipment classes to allow interested
parties to better observe 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
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 ....
SOC.SC.L* ..
Trial standard levels for secondary equipment classes analyzed
Baseline
TSL 1
TSL 2
TSL 3
TSL 4
TSL 5
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 .....
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 .....
0.75 × V + 4.10 .....
2.81 × TDA + 8.7 ..
2.21 × TDA + 6.85
2.81 × TDA + 8.7 ..
0.7 × TDA + 8.74 ..
4.25 × TDA +
11.82.
5.4 × TDA + 15.02
2.81 × TDA + 8.7 ..
2.21 × TDA + 6.85
2.81 × TDA + 8.7 ..
0.7 × TDA + 8.74 ..
4.25 × TDA +
11.82.
5.4 × TDA + 15.02
2.79 × TDA + 8.7 ..
2.2 × TDA + 6.85 ..
2.79 × TDA + 8.7 ..
0.7 × TDA + 8.74 ..
4.25 × TDA +
11.82.
5.4 × TDA + 15.02
2.65 × TDA + 8.7.
2.09 × TDA + 6.85.
2.65 × TDA + 8.7.
0.67 × TDA + 8.74.
4.2 × TDA + 11.82.
4.26 × TDA +
11.51.
5.41 × TDA +
14.63.
2.42 × TDA + 9 .....
0.93 × TDA + 0.22
1.09 × TDA + 0.26
1.53 × TDA + 0.36
0.59 × 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 .....
0.37 × V + 0.88 .....
0.11 × V + 0.26 .....
0.23 × V + 0.54 .....
0.27 × V + 0.63 .....
1.1 × TDA + 2.1 ....
4.26 × TDA +
11.51.
5.41 × TDA +
14.63.
2.42 × TDA + 9 .....
0.93 × TDA + 0.22
1.09 × TDA + 0.26
1.53 × TDA + 0.36
0.59 × TDA + 3.05
0.16 × TDA + 0.13
0.34 × TDA + 0.26
0.4 × TDA + 0.31 ..
0.1 × V + 0.26 .......
0.22 × V + 0.54 .....
0.25 × V + 0.63 .....
0.36 × V + 0.88 .....
0.1 × V + 0.26 .......
0.22 × V + 0.54 .....
0.25 × V + 0.63 .....
1.1 × TDA + 2.1 ....
4.26 × TDA +
11.51.
5.41 × TDA +
14.63.
2.42 × TDA + 9 .....
0.93 × TDA + 0.22
1.09 × TDA + 0.26
1.53 × TDA + 0.36
0.58 × TDA + 3.05
0.16 × TDA + 0.13
0.34 × TDA + 0.26
0.4 × TDA + 0.31 ..
0.1 × V + 0.26 .......
0.21 × V + 0.54 .....
0.25 × V + 0.63 .....
0.34 × V + 0.88 .....
0.1 × V + 0.26 .......
0.21 × V + 0.54 .....
0.25 × V + 0.63 .....
1.1 × TDA + 2.1 ....
2.7 × TDA + 8.7 ....
2.12 × TDA + 6.85
2.7 × TDA + 8.7 ....
0.7 × TDA + 8.74 ..
4.24 × TDA +
11.82.
5.38 × TDA +
15.02.
4.13 × TDA +
11.51.
5.24 × TDA +
14.63.
2.42 × TDA + 9 .....
0.91 × TDA + 0.22
1.07 × TDA + 0.26
1.5 × TDA + 0.36 ..
0.57 × TDA + 3.05
0.16 × TDA + 0.13
0.34 × TDA + 0.26
0.4 × TDA + 0.31 ..
0.1 × V + 0.26 .......
0.21 × V + 0.54 .....
0.25 × V + 0.63 .....
0.34 × V + 0.88 .....
0.1 × V + 0.26 .......
0.21 × V + 0.54 .....
0.25 × V + 0.63 .....
1.05 × TDA + 2.1 ..
5.34 × TDA +
15.02.
4.08 × TDA +
11.51.
5.18 × TDA +
14.63.
2.42 × TDA + 9.
0.88 × TDA + 0.22.
1.03 × TDA + 0.26.
1.45 × TDA + 0.36.
0.55 × TDA + 3.05.
0.12 × TDA + 0.13.
0.24 × TDA + 0.26.
0.28 × TDA + 0.31.
0.09 × V + 0.26.
0.19 × V + 0.54.
0.23 × V + 0.63.
0.32 × V + 0.88.
0.09 × V + 0.26.
0.19 × V + 0.54.
0.23 × V + 0.63.
1.03 × TDA + 2.1.
* 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. (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 promulgating amended standards for
SOC.SC.M equipment with TDA as the normalization metric (see Table V.3), DOE derives the standard for secondary equipment classes based
on the standard of a primary equipment that has similar characteristics as the secondary equipment class under consideration (see chapter 5 of
the final rule TSD for details). For the equipment class SOC.SC.L, the standard was derived from the standard level selected for equipment class
SOC.SC.M. Since the standard for SOC.SC.M is in terms of TDA, the standard for SOC.SC.L equipment has 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
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 (February 21, 2012)
The DOE test procedure adopted an
industry-accepted test method and has
been widely accepted as a reasonably
applicable equipment. For more information, please
see chapter 5 of the 2009 final rule TSD, which can
be found at https://www.regulations.gov/
#!documentDetail;D=EERE-2006-STD-0126-0058.
1. Economic Impacts on Commercial
Customers
a. Life-Cycle Cost and Payback Period
tkelley on DSK3SPTVN1PROD with RULES2
accurate representation of the
conditions to which a vast majority of
the equipment covered in this
rulemaking is subjected during actual
use. As described in section IV.F, the
LCC analysis was carried out in the form
of Monte Carlo simulations.
Consequently, the results 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.
VerDate Mar<15>2010
19:39 Mar 27, 2014
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28MRR2
17784
Federal Register / Vol. 79, No. 60 / Friday, March 28, 2014 / Rules and Regulations
Table V.5 through Table V.29 show
key results of the LCC and PBP analysis
for each equipment class. Each table
presents the mean LCC, mean LCC
savings, median PBP, and distribution
of customer impacts in the form of
percentages of customers who
experience net cost, no impact, or net
benefit.
All of the equipment classes, except
for VCT.SC.L, have negative LCC
savings values at TSL 5. Negative
average LCC savings imply that, on
average, customers experience an
increase in LCC as a consequence of
buying equipment associated with that
particular TSL.
The mean LCC savings associated
with TSL 4 vary by equipment class,
and are negative for some equipment
classes with significant market shares.
The mean LCC savings at today’s
standard, TSL 3, are all positive. (LCC
savings are equal in cases in which both
TSLs are associated with the same
efficiency level.)
Generally, customers who currently
buy equipment in the base case scenario
at or above the level of performance
specified by the TSL under
consideration would be unaffected if the
amended standard were to be set at that
TSL. Customers who buy equipment
below the level of 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 (lower LCC) and some
may incur net cost (higher LCC). DOE’s
results 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 0 to 92
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 all of the equipment classes,
except VCT.SC.L, 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 during the life of the
equipment. The median PBP values for
TSL 4 range from 1.4 years to 63.1 years.
The median PBP values at TSL 3 are all
below the average lifetime of a majority
of the commercial refrigeration
equipment under consideration is 10 to
15 years. Therefore, PBP results for TSL
3 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 3 through operating cost savings
within the lifetime of the equipment.
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
17,095
17,095
13,877
13,177
13,013
Life-cycle cost, all customers
2012$
Installed
cost
10,527
10,527
11,988
12,786
15,901
Discounted
operating
cost
2,376
2,376
2,099
2,071
2,202
Life-cycle cost savings
LCC
30,748
30,748
29,826
30,374
34,572
Affected
customers’
average
savings
2012$
....................
....................
922
¥5
¥4,203
% of Customers that experience**
Net cost
(percent)
No impact
(percent)
0
0
4
64
100
Net benefit
(percent)
100
100
41
0
0
0
0
55
36
0
Median
payback
period
years
....................
....................
5.7
9.9
34.1
* 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
...............
...............
...............
...............
...............
Annual energy consumption
kWh/yr
38,544
38,544
38,301
37,117
36,502
Life-cycle cost, all customers
2012$
Installed
cost
11,699
11,699
11,799
12,631
17,725
Discounted
operating
cost
4,445
4,445
4,427
4,353
4,534
Life-cycle cost savings
LCC
49,574
49,574
49,521
49,707
56,289
Affected
customers’
average
savings
2012$
....................
....................
53
¥148
¥6,701
% of Customers that experience**
Net cost
(percent)
No impact
(percent)
0
0
7
59
100
Net benefit
(percent)
100
100
40
20
0
0
0
53
21
0
Median
payback
period
years
....................
....................
5.7
7.2
9.9
* 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*
tkelley on DSK3SPTVN1PROD with RULES2
TSL
1
2
3
4
...............
...............
...............
...............
VerDate Mar<15>2010
Annual energy consumption
kWh/yr
10,953
10,953
10,953
10,917
21:09 Mar 27, 2014
Life-cycle cost, all customers
2012$
Installed
cost
6,365
6,365
6,365
6,432
Jkt 232001
Discounted
operating
cost
1,340
1,340
1,340
1,339
PO 00000
Frm 00060
Life-cycle cost savings
LCC
Affected
customers’
average
savings
2012$
20,337
20,337
20,337
20,391
....................
....................
....................
¥54
Fmt 4701
Sfmt 4700
% of Customers that experience**
Net cost
(percent)
No impact
(percent)
0
0
0
60
E:\FR\FM\28MRR2.SGM
100
100
100
40
28MRR2
Net benefit
(percent)
0
0
0
0
Median
payback
period
years
....................
....................
....................
5.7
17785
Federal Register / Vol. 79, No. 60 / Friday, March 28, 2014 / Rules and Regulations
TABLE V.7—SUMMARY LCC AND PBP RESULTS FOR VOP.SC.M EQUIPMENT CLASS*—Continued
TSL
5 ...............
Annual energy consumption
kWh/yr
10,846
Life-cycle cost, all customers
2012$
Installed
cost
7,483
Discounted
operating
cost
1,368
Life-cycle cost savings
LCC
21,742
Affected
customers’
average
savings
2012$
¥1,384
% of Customers that experience**
Net cost
(percent)
No impact
(percent)
100
Net benefit
(percent)
0
0
Median
payback
period
years
7.2
* 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
...............
...............
...............
...............
...............
Annual energy consumption
kWh/yr
4,981
4,981
4,307
4,192
4,011
Life-cycle cost, all customers
2012$
Installed
cost
12,951
12,951
13,102
13,384
17,093
Discounted
operating
cost
1,263
1,263
1,185
1,193
1,341
Life-cycle cost savings
LCC
23,996
23,996
23,454
23,803
28,775
Affected
customers’
average
savings
2012$
....................
....................
542
41
¥4,937
% of Customers that experience**
Net cost
(percent)
No impact
(percent)
0
0
0
36
100
Net benefit
(percent)
100
100
40
13
0
0
0
60
51
0
Median
payback
period
years
....................
....................
2.1
6.6
364.7
* Percentages may not add up to 100 percent due to rounding.
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
12,898
12,898
12,694
12,593
12,061
Life-cycle cost, all customers
2012$
Installed
cost
14,411
14,411
14,508
14,809
19,567
Discounted
operating
cost
2,081
2,081
2,066
2,070
2,232
Life-cycle cost savings
LCC
32,705
32,705
32,665
32,996
39,125
Affected
customers’
average
savings
2012$
647
647
526
93
¥6,036
% of Customers that experience**
Net cost
(percent)
No impact
(percent)
0
0
4
43
100
Net benefit
(percent)
40
40
20
0
0
60
60
76
57
0
Median
payback
period
years
1.8
1.8
2.7
6.3
194.7
* Percentages may not add up to 100 percent due to rounding.
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
2,491
2,184
2,057
1,991
1,879
Life-cycle cost, all customers
2012$
Installed
cost
Discounted
operating
cost
5,184
5,336
5,401
5,487
6,831
490
452
442
440
478
Life-cycle cost savings
LCC
10,025
9,800
9,767
9,830
11,534
Affected
customers’
average
savings
2012$
¥10
214
226
163
¥1,541
% of Customers that experience**
Net cost
(percent)
No impact
(percent)
71
1
3
17
100
Net benefit
(percent)
10
10
0
0
0
18
89
97
83
0
Median
payback
period
years
23.4
4.8
5.3
7.0
96.2
* Percentages may not add up to 100 percent due to rounding.
tkelley on DSK3SPTVN1PROD with RULES2
TABLE V.11—SUMMARY LCC AND PBP RESULTS FOR VCT.SC.L EQUIPMENT CLASS
TSL
1 ...............
VerDate Mar<15>2010
Annual energy consumption
kWh/yr
10,022
21:09 Mar 27, 2014
Life-cycle cost, all customers
2012$
Installed
cost
6,498
Jkt 232001
Discounted
operating
cost
1,270
PO 00000
Frm 00061
Life-cycle cost savings
LCC
19,135
Fmt 4701
Affected
customers’
average
savings
2012$
2,503
Sfmt 4700
90 of Customers that experience **
Net cost
(percent)
No impact
(percent)
0
E:\FR\FM\28MRR2.SGM
10
28MRR2
Net benefit
(percent)
90
Median
payback
period
years
0.5
17786
Federal Register / Vol. 79, No. 60 / Friday, March 28, 2014 / Rules and Regulations
TABLE V.11—SUMMARY LCC AND PBP RESULTS FOR VCT.SC.L EQUIPMENT CLASS—Continued
TSL
2
3
4
5
...............
...............
...............
...............
Annual energy consumption
kWh/yr
6,654
6,262
5,857
5,857
Life-cycle cost, all customers
2012$
Installed
cost
Discounted
operating
cost
6,822
7,003
8,909
8,909
964
917
948
948
Life-cycle cost savings
LCC
16,397
16,105
18,294
18,294
Affected
customers’
average
savings
2012$
4,709
5,001
2,812
2,812
90 of Customers that experience **
Net cost
(percent)
No impact
(percent)
0
0
11
11
Net benefit
(percent)
0
0
0
0
100
100
89
89
Median
payback
period
years
0.8
1.1
4.7
4.7
* 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
7,124
7,124
7,124
6,916
6,609
Life-cycle cost, all customers
2012$
Installed
cost
7,305
7,305
7,305
7,509
9,780
Discounted
operating
cost
1,015
1,015
1,015
1,003
1,057
Life-cycle cost savings
LCC
17,384
17,384
17,384
17,468
20,242
Affected
customers’
average
savings
2012$
18
18
18
¥68
¥2,834
90 of Customers that experience **
Net cost
(percent)
No impact
(percent)
10
10
10
65
84
Net benefit
(percent)
40
40
40
24
16
50
50
50
11
0
Median
payback
period
years
7.2
7.2
7.2
16.2
663.6
* 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
...............
...............
...............
...............
...............
Annual energy consumption
kWh/yr
1,929
1,469
1,346
1,258
1,105
Life-cycle cost, all customers
2012$
Installed
cost
Discounted
operating
cost
3,572
3,601
3,651
3,734
5,062
Life-cycle cost savings
LCC
368
326
318
314
365
6,378
6,083
6,067
6,125
7,828
Affected
customers’
average
savings
2012$
223
518
363
305
¥1,428
% of Customers that experience **
Net cost
(percent)
No impact
(percent)
0
0
7
25
100
Net benefit
(percent)
40
40
10
10
0
60
60
83
65
0
Median
payback
period
years
0.5
0.6
1.4
2.6
48.0
* Percentages may not add up to 100 percent due to rounding.
TABLE V.14—SUMMARY LCC AND PBP RESULTS FOR VCS.SC.L EQUIPMENT CLASS *
TSL
tkelley on DSK3SPTVN1PROD with RULES2
1
2
3
4
5
...............
...............
...............
...............
...............
Annual energy consumption
kWh/yr
5,088
4,722
4,448
4,410
4,062
Life-cycle cost, all customers
2012$
Installed
cost
Discounted
operating
cost
4,007
4,083
4,216
4,238
5,988
702
672
653
651
703
Life-cycle cost savings
LCC
9,374
9,215
9,201
9,213
11,349
Affected
customers’
average
savings
2012$
588
550
507
495
¥1,640
% of Customers that experience **
Net cost
(percent)
No impact
(percent)
0
0
7
9
100
40
10
0
0
0
* Percentages may not add up to 100 percent due to rounding.
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28MRR2
Net benefit
(percent)
60
90
93
91
0
Median
payback
period
years
0.6
1.3
2.5
2.7
31.8
17787
Federal Register / Vol. 79, No. 60 / Friday, March 28, 2014 / Rules and Regulations
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
6,824
6,574
6,361
6,361
5,855
Life-cycle cost, all customers
2012$
Installed
cost
Discounted
operating
cost
4,349
4,420
4,515
4,515
6,839
895
876
861
861
927
Life-cycle cost savings
LCC
11,195
11,117
11,096
11,096
13,909
Affected
customers’
average
savings
2012$
41
114
113
113
¥2,710
% of Customers that experience **
Net cost
(percent)
No impact
(percent)
0
0
9
9
92
Net benefit
(percent)
40
32
17
17
8
60
68
75
75
0
Median
payback
period
years
2.6
3.6
5.0
5.0
183.7
* 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
...............
...............
...............
...............
...............
Annual energy consumption
kWh/yr
10,748
10,748
10,748
10,226
10,111
Life-cycle cost, all customers
2012$
Installed
cost
10,304
10,304
10,304
10,875
12,867
Discounted
operating
cost
1,694
1,694
1,694
1,670
1,752
Life-cycle cost savings
LCC
24,841
24,841
24,841
25,201
27,873
Affected
customers’
average
savings
2012$
564
564
564
¥19
¥2,691
% of Customers that experience **
Net cost
(percent)
No impact
(percent)
7
7
7
67
100
Net benefit
(percent)
40
40
40
0
0
54
54
54
33
0
Median
payback
period
years
6.2
6.2
6.2
10.4
29.9
* 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
1
2
3
4
5
...............
...............
...............
...............
...............
Annual energy consumption
kWh/yr
9,608
9,608
9,608
9,361
9,271
Life-cycle cost, all customers
2012$
Installed
cost
4,980
4,980
4,980
5,157
5,897
Discounted
operating
cost
1,150
1,150
1,150
1,132
1,151
Life-cycle cost savings
LCC
16,733
16,733
16,733
16,728
17,648
Affected
customers’
average
savings
2012$
....................
....................
....................
6
¥917
% of Customers that experience§**
Net cost
(percent)
No impact
(percent)
0
0
0
32
100
Net benefit
(percent)
100
100
100
40
0
0
0
0
27
0
Median
payback
period
years
....................
....................
....................
10.9
151.6
* 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 *
tkelley on DSK3SPTVN1PROD with RULES2
TSL
1
2
3
4
5
...............
...............
...............
...............
...............
Annual energy consumption
kWh/yr
8,300
8,300
8,300
8,144
7,869
Life-cycle cost, all customers
2012$
Installed
cost
13,971
13,971
13,971
14,144
15,879
Discounted
operating
cost
1,679
1,679
1,679
1,674
1,729
Life-cycle cost savings
LCC
28,172
28,172
28,172
28,301
30,492
Affected
customers’
average
savings
2012$
....................
....................
....................
¥128
¥2,268
% of Customers that experience **
Net cost
(percent)
No impact
(percent)
0
0
0
60
100
100
100
100
40
0
* Percentages may not add up to 100 percent due to rounding.
VerDate Mar<15>2010
21:09 Mar 27, 2014
Jkt 232001
PO 00000
Frm 00063
Fmt 4701
Sfmt 4700
E:\FR\FM\28MRR2.SGM
28MRR2
Net benefit
(percent)
0
0
0
0
0
Median
payback
period
years
....................
....................
....................
38.0
114.1
17788
Federal Register / Vol. 79, No. 60 / Friday, March 28, 2014 / Rules and Regulations
TABLE V.19—SUMMARY LCC AND PBP RESULTS FOR SOC.SC.M EQUIPMENT CLASS *
TSL
1
2
3
4
5
...............
...............
...............
...............
...............
Annual energy consumption
kWh/yr
10,119
10,119
10,119
9,711
9,533
Life-cycle cost, all customers
2012$
Installed
cost
13,965
13,965
13,965
14,332
15,880
Discounted
operating
cost
1,821
1,821
1,821
1,808
1,868
Life-cycle cost savings
LCC
27,861
27,861
27,861
28,128
30,123
Affected
customers’
average
savings
2012$
....................
....................
....................
¥209
¥2,204
% of Customers that experience **
Net cost
(percent)
No impact
(percent)
0
0
0
100
100
Net benefit
(percent)
100
100
100
0
0
0
0
0
1
0
Median
payback
period
years
....................
....................
....................
28.7
25.3
* Percentages may not add up to 100 percent due to rounding.
TABLE V.20—SUMMARY LCC AND PBP RESULTS FOR HZO.RC.M EQUIPMENT CLASS *
TSL
1
2
3
4
5
...............
...............
...............
...............
...............
Annual energy consumption
kWh/yr
5,282
5,282
5,282
5,282
5,165
Life-cycle cost, all customers
2012$
Installed
cost
8,290
8,290
8,290
8,290
9,921
Discounted
operating
cost
1,036
1,036
1,036
1,036
1,103
Life-cycle cost savings
LCC
16,958
16,958
16,958
16,958
19,137
Affected
customers’
average
savings
2012$
....................
....................
....................
....................
¥2,180
% of Customers that experience **
Net cost
(percent)
No impact
(percent)
0
0
0
0
60
Net benefit
(percent)
100
100
100
100
40
0
0
0
0
0
Median
payback
period
years
....................
....................
....................
....................
....................
* Percentages may not add up to 100 percent due to rounding.
TABLE V.21—SUMMARY LCC AND PBP RESULTS FOR HZO.RC.L EQUIPMENT CLASS *
TSL
1
2
3
4
5
...............
...............
...............
...............
...............
Annual energy consumption
kWh/yr
11,812
11,812
11,812
11,812
11,344
Life-cycle cost, all customers
2012$
Installed
cost
8,504
8,504
8,504
8,504
11,822
Discounted
operating
cost
1,673
1,673
1,673
1,673
1,787
Life-cycle cost savings
LCC
22,548
22,548
22,548
22,548
26,795
Affected
customers’
average
savings
2012$
....................
....................
....................
....................
¥4,249
% of Customers that experience **
Net cost
(percent)
No impact
(percent)
0
0
0
0
60
Net benefit
(percent)
100
100
100
100
40
0
0
0
0
0
Median
payback
period
years
....................
....................
....................
....................
288.9
* Percentages may not add up to 100 percent due to rounding.
TABLE V.22—SUMMARY LCC AND PBP RESULTS FOR HZO.SC.M EQUIPMENT CLASS *
tkelley on DSK3SPTVN1PROD with RULES2
TSL
1
2
3
4
5
...............
...............
...............
...............
...............
Annual energy consumption
kWh/yr
5,351
5,168
5,168
5,118
5,018
Life-cycle cost, all customers
2012$
Installed
cost
Discounted
operating
cost
2,605
2,698
2,698
2,763
3,689
629
615
615
613
636
Life-cycle cost savings
LCC
9,022
8,967
8,967
9,013
10,163
Affected
customers’
average
savings
2012$
....................
55
55
¥4
¥1,154
% of Customers that experience **
Net cost
(percent)
No impact
(percent)
0
5
5
50
100
100
40
40
21
0
* Percentages may not add up to 100 percent due to rounding.
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E:\FR\FM\28MRR2.SGM
28MRR2
Net benefit
(percent)
0
54
54
29
0
Median
payback
period
years
....................
6.9
6.9
11.8
194.7
17789
Federal Register / Vol. 79, No. 60 / Friday, March 28, 2014 / Rules and Regulations
TABLE V.23—SUMMARY LCC AND PBP RESULTS FOR HZO.SC.M EQUIPMENT CLASS *
TSL
1
2
3
4
5
...............
...............
...............
...............
...............
Annual energy consumption
kWh/yr
10,922
10,922
10,922
10,922
10,922
Life-cycle cost, all customers
2012$
Installed
cost
5,008
5,008
5,008
5,008
5,008
Discounted
operating
cost
1,265
1,265
1,265
1,265
1,265
Life-cycle cost savings
LCC
17,894
17,894
17,894
17,894
17,894
Affected
customers’
average
savings
2012$
% of Customers that experience **
Net cost
(percent)
....................
....................
....................
....................
....................
No impact
(percent)
0
0
0
0
0
Net benefit
(percent)
100
100
100
100
100
0
0
0
0
0
Median
payback
period
years
....................
....................
....................
....................
....................
* Percentages may not add up to 100 percent due to rounding.
TABLE V.24—SUMMARY LCC AND PBP RESULTS FOR HCT.SC.M EQUIPMENT CLASS
TSL
1
2
3
4
5
...............
...............
...............
...............
...............
Annual
energy
consumption
kWh/yr
590
360
327
289
224
Life-cycle cost, all customers
2012$
Installed
cost
Discounted
operating
cost
2,101
2,198
2,213
2,279
2,807
Life-cycle cost savings
LCC
140
122
120
120
131
3,577
3,478
3,476
3,534
4,175
Affected
customers’
average
savings
2012$
66
165
101
43
¥599
Median
payback
period
years
% of Customers that experience **
Net
cost
(percent)
No impact
(percent)
0
0
20
45
100
Net
benefit
(percent)
40
40
0
0
0
60
60
80
55
0
2.5
4.7
5.8
9.2
46.6
* Percentages may not add up to 100 percent due to rounding.
TABLE V.25—SUMMARY LCC AND PBP RESULTS FOR HCT.SC.L EQUIPMENT CLASS *
TSL
1
2
3
4
5
...............
...............
...............
...............
...............
Annual
energy
consumption
kWh/yr
785
742
701
632
480
Life-cycle cost, all customers
2012$
Installed
cost
Discounted
operating
cost
2,297
2,312
2,330
2,399
3,120
Life-cycle cost savings
LCC
190
187
185
182
200
3,882
3,876
3,870
3,915
4,775
Affected
customers’
average
savings
2012$
428
435
293
248
¥613
Median
payback
period
years
% of Customers that experience **
Net
cost
(percent)
No impact
(percent)
0
0
10
29
87
Net
benefit
(percent)
41
41
10
10
10
59
59
80
61
3
1.8
2.0
2.5
3.6
19.5
** Percentages may not add up to 100 percent due to rounding.
TABLE V.26—SUMMARY LCC AND PBP RESULTS FOR HCT.SC.I EQUIPMENT CLASS *
tkelley on DSK3SPTVN1PROD with RULES2
TSL
1
2
3
4
5
...............
...............
...............
...............
...............
Annual
energy
consumption
kWh/yr
1,141
1,141
1,141
1,141
849
Life-cycle cost, all customers
2012$
Installed
cost
Discounted
operating
cost
2,490
2,490
2,490
2,490
3,553
Life-cycle cost savings
LCC
240
240
240
240
264
4,348
4,348
4,348
4,348
5,587
Affected
customers’
average
savings
2012$
....................
....................
....................
....................
¥1,240
Net
cost
(percent)
No impact
(percent)
0
0
0
0
61
100
100
100
100
39
* 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\28MRR2.SGM
28MRR2
Net
benefit
(percent)
0
0
0
0
0
....................
....................
....................
....................
23.8
17790
Federal Register / Vol. 79, No. 60 / Friday, March 28, 2014 / Rules and Regulations
TABLE V.27—SUMMARY LCC AND PBP RESULTS FOR HCS.SC.M EQUIPMENT CLASS *
Annual
energy
consumption
kWh/yr
TSL
1
2
3
4
5
...............
...............
...............
...............
...............
518
495
466
461
358
Life-cycle cost, all customers
2012$
Installed
cost
Discounted
operating
cost
1,986
1,993
2,008
2,014
2,488
Life-cycle cost savings
LCC
146
145
143
144
157
3,100
3,095
3,097
3,107
3,679
Affected
customers’
average
savings
2012$
% of Customers that experience **
Net
cost
(percent)
12
17
15
5
¥568
No impact
(percent)
0
1
10
42
91
Net
benefit
(percent)
9
9
9
9
9
91
90
80
48
0
Median
payback
period
years
2.9
3.7
5.5
7.5
680.6
* Percentages may not add up to 100 percent due to rounding.
TABLE V.28—SUMMARY LCC AND PBP RESULTS FOR HCS.SC.L EQUIPMENT CLASS *
Annual
energy
consumption
kWh/yr
TSL
1
2
3
4
5
...............
...............
...............
...............
...............
650
609
558
472
260
Life-cycle cost, all customers
2012$
Installed
cost
Discounted
operating
cost
2,006
2,013
2,028
2,093
2,663
Life-cycle cost savings
LCC
160
156
153
148
156
3,224
3,205
3,191
3,222
3,845
Affected
customers’
average
savings
2012$
% of Customers that experience **
Net
cost
(percent)
31
50
64
33
¥590
No impact
(percent)
0
0
0
20
90
Net
benefit
(percent)
10
10
10
10
10
Median
payback
period
years
90
90
90
70
0
1.4
1.7
2.5
6.2
68.9
* Percentages may not add up to 100 percent due to rounding.
TABLE V.29—SUMMARY LCC AND PBP RESULTS FOR PD.SC.M EQUIPMENT CLASS *
Annual
energy
consumption
kWh/yr
TSL
1
2
3
4
5
...............
...............
...............
...............
...............
1,726
1,422
1,381
1,369
1,243
Life-cycle cost, all customers
2012$
Installed
cost
Discounted
operating
cost
3,502
3,654
3,677
3,691
4,808
Life-cycle cost savings
LCC
342
310
308
308
340
6,732
6,574
6,572
6,587
7,989
Affected
customers’
average
savings
2012$
% of Customers that experience **
Net
cost
(percent)
8
163
165
150
¥1,252
No impact
(percent)
28
3
5
8
100
Net
benefit
(percent)
39
0
0
0
0
33
97
95
92
0
Median
payback
period
years
9.3
5.3
5.6
6.0
102.2
* Percentages may not add up to 100 percent due to rounding.
b. Customer Subgroup Analysis
As described in section IV.I, DOE
estimated the impact of potential
amended efficiency standards for
commercial refrigeration equipment on
two representative customer subgroups:
full-service restaurants and convenience
stores with gas stations.
The results for full-service restaurants
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
subgroup with the values for all CRE
customers. For all TSLs in all
equipment classes save one, the LCC
savings for this subgroup are higher (or
less negative) than the national average
values. This can be attributed to the
longer average lifetimes of CRE used by
small business customers, and higher
electricity prices in the case of full
service restaurants.
Table V.31 compares median PBPs for
full-service restaurants with the values
for all CRE customers. The PBP values
are lower for the small business
subgroup in all cases save one, which is
consistent with the decrease in LCC
savings.
tkelley on DSK3SPTVN1PROD with RULES2
TABLE V.30—COMPARISON OF MEAN LCC SAVINGS FOR THE FULL-SERVICE RESTAURANTS SUBGROUP WITH THE
SAVINGS FOR ALL CRE CUSTOMERS
Equipment class
Mean LCC savings
2012$ *
Category
TSL 1
VOP.SC.M ..............................................
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TSL 2
TSL 3
................
................
................
E:\FR\FM\28MRR2.SGM
28MRR2
TSL 4
$(57)
TSL 5
$(1,508)
Federal Register / Vol. 79, No. 60 / Friday, March 28, 2014 / Rules and Regulations
17791
TABLE V.30—COMPARISON OF MEAN LCC SAVINGS FOR THE FULL-SERVICE RESTAURANTS SUBGROUP WITH THE
SAVINGS FOR ALL CRE CUSTOMERS—Continued
Equipment class
Mean LCC savings
2012$ *
Category
TSL 1
VCT.SC.M ...............................................
VCT.SC.L ................................................
VCT.SC.I .................................................
VCS.SC.M ...............................................
VCS.SC.L ................................................
VCS.SC.I .................................................
SOC.SC.M ..............................................
SVO.SC.M ..............................................
HZO.SC.M ..............................................
HZO.SC.L ...............................................
HCT.SC.M ...............................................
HCT.SC.L ................................................
HCT.SC.I .................................................
HCS.SC.M ..............................................
HCS.SC.L ...............................................
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
TSL 3
TSL 4
TSL 5
................
$0
$(10)
$3,073
$2,503
$34
$18
$375
$223
$979
$588
$81
$41
................
................
................
................
................
................
................
................
$81
$66
$687
$428
................
................
$23
$12
$55
$31
................
$299
$214
$5,868
$4,709
$34
$18
$870
$518
$971
$550
$257
$114
................
................
................
................
$92
$55
................
................
$216
$165
$707
$435
................
................
$38
$17
$91
$50
................
$330
$226
$6,254
$5,001
$34
$18
$652
$363
$999
$507
$321
$113
................
................
................
................
$92
$55
................
................
$137
$101
$487
$293
................
................
$48
$15
$127
$64
$(54)
$280
$163
$4,163
$2,812
$(12)
$(68)
$632
$305
$1,000
$495
$321
$113
$(74)
$(209)
$53
$6
$33
$(4)
................
................
$85
$43
$468
$248
................
................
$38
$5
$133
$33
$(1,384)
$(1,391)
$(1,541)
$4,163
$2,812
$(2,706)
$(2,834)
$(1,031)
$(1,428)
$(936)
$(1,640)
$(2,241)
$(2,710)
$(1,952)
$(2,204)
$(871)
$(917)
$(1,097)
$(1,154)
................
................
$(546)
$(599)
$(319)
$(613)
$(1,081)
$(1,240)
$(477)
$(568)
$(381)
$(590)
TABLE V.31—COMPARISON OF MEDIAN PAYBACK PERIODS FOR THE FULL-SERVICE RESTAURANTS SUBGROUP WITH THE
VALUES FOR ALL CRE CUSTOMERS
Equipment class
Mean LCC savings
2012$ *
Category
TSL 1
VOP.SC.M ..............................................
VCT.SC.M ...............................................
VCT.SC.L ................................................
VCT.SC.I .................................................
VCS.SC.M ...............................................
VCS.SC.L ................................................
VCS.SC.I .................................................
SOC.SC.M ..............................................
SVO.SC.M ..............................................
tkelley on DSK3SPTVN1PROD with RULES2
HZO.SC.M ..............................................
HZO.SC.L ...............................................
HCT.SC.M ...............................................
HCT.SC.L ................................................
HCT.SC.I .................................................
VerDate Mar<15>2010
19:39 Mar 27, 2014
Jkt 232001
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 .......................................
PO 00000
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Sfmt 4700
TSL 2
TSL 3
TSL 4
TSL 5
................
................
12.9
23.4
0.4
0.5
5.8
7.2
0.4
0.5
0.5
0.6
2.1
2.6
................
................
................
................
................
................
................
................
2.1
2.5
1.5
1.8
................
................
................
4.1
4.8
0.7
0.8
5.8
7.2
0.5
0.6
1.1
1.3
2.9
3.6
................
................
................
................
5.7
6.9
................
................
4.0
4.7
1.6
2.0
................
................
................
4.5
5.3
0.9
1.1
5.8
7.2
1.2
1.4
2.0
2.5
3.9
5.0
................
................
................
................
5.7
6.9
................
................
4.7
5.8
2.0
2.5
................
54.1
63.1
5.9
7.0
4.0
4.7
12.4
16.2
2.1
2.6
2.2
2.7
3.9
5.0
15.5
28.7
8.9
10.9
9.5
11.8
................
................
7.5
9.2
2.9
3.6
................
541.3
593.2
64.8
96.2
4.0
4.7
310.0
663.6
22.4
48.0
19.2
31.8
91.7
183.7
221.7
25.3
124.3
151.6
166.7
194.7
................
................
33.9
46.6
14.0
19.5
176.3
E:\FR\FM\28MRR2.SGM
28MRR2
17792
Federal Register / Vol. 79, No. 60 / Friday, March 28, 2014 / Rules and Regulations
TABLE V.31—COMPARISON OF MEDIAN PAYBACK PERIODS FOR THE FULL-SERVICE RESTAURANTS SUBGROUP WITH THE
VALUES FOR ALL CRE CUSTOMERS—Continued
Equipment class
Mean LCC savings
2012$ *
Category
TSL 1
HCS.SC.M ..............................................
HCS.SC.L ...............................................
PD.SC.M .................................................
All Business Types .................................
Small Business .......................................
All Business Types .................................
Small Business .......................................
All Business Types .................................
Small Business .......................................
All Business Types .................................
Table V.32 presents the comparison of
mean LCC savings for convenience
stores with gasoline stations with the
national average values at each TSL.
TSL 2
TSL 3
TSL 4
................
2.3
2.9
1.1
1.4
6.9
9.3
................
2.9
3.7
1.4
1.7
4.5
5.3
................
4.2
5.5
2.1
2.5
4.7
5.6
................
5.4
7.5
4.7
6.2
5.0
6.0
This comparison shows higher (or less
negative) LCC savings for the subgroups
in nearly all instances.
Table V.33 presents the comparison of
median PBPs for convenience stores
TSL 5
23.8
136.0
680.6
27.9
68.9
63.3
102.2
with gasoline stations with national
median values at each TSL. This
comparison shows lower PBP for the
subgroup in nearly all cases.
TABLE V.32—COMPARISON OF MEAN LCC SAVINGS FOR CONVENIENCE STORES WITH GASOLINE STATIONS WITH
SAVINGS FOR ALL CRE CUSTOMERS
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 ..............................................
tkelley on DSK3SPTVN1PROD with RULES2
HZO.SC.L ** ............................................
HCT.SC.M ...............................................
HCT.SC.L ................................................
HCT.SC.I .................................................
HCS.SC.M ..............................................
VerDate Mar<15>2010
19:39 Mar 27, 2014
Jkt 232001
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 .................................
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TSL 2
TSL 3
TSL 4
TSL 5
................
................
................
................
................
................
................
................
$751
$647
$(8)
$(10)
$2,489
$2,503
$19
$18
$299
$223
$785
$588
$62
$41
$966
$564
................
................
................
................
................
................
................
................
................
................
................
................
$62
$66
$535
$428
................
................
$18
$12
................
................
................
................
................
................
................
................
$751
$647
$214
$214
$4,699
$4,709
$19
$18
$696
$518
$765
$550
$189
$114
$966
$564
................
................
................
................
................
................
................
................
$55
$55
................
................
$151
$165
$548
$435
................
................
$28
$17
$1,334
$922
$82
$53
................
................
$636
$542
$634
$526
$229
$226
$4,988
$5,001
$19
$18
$511
$363
$763
$507
$224
$113
$966
$564
................
................
................
................
................
................
................
................
$55
$55
................
................
$92
$101
$374
$293
................
................
$32
$15
$299
$(5)
$2
$(148)
$(62)
$(54)
$135
$41
$213
$93
$169
$163
$2,878
$2,812
$(59)
$(68)
$476
$305
$758
$495
$224
$113
$340
$(19)
$5
$6
$(93)
$(128)
................
................
................
................
$(3)
$(4)
................
................
$35
$43
$343
$248
................
................
$23
$5
$(4,003)
$(4,203)
$(6,703)
$(6,701)
$(1,485)
$(1,384)
$(4,544)
$(4,937)
$(5,486)
$(6,036)
$(1,479)
$(1,541)
$2,878
$2,812
$(2,732)
$(2,834)
$(1,157)
$(1,428)
$(1,190)
$(1,640)
$(2,354)
$(2,710)
$(2,148)
$(2,691)
$(891)
$(917)
$(2,058)
$(2,268)
$(2,015)
$(2,180)
$(3,880)
$(4,249)
$(1,114)
$(1,154)
................
................
$(591)
$(599)
$(451)
$(613)
$(1,106)
$(1,240)
$(498)
$(568)
E:\FR\FM\28MRR2.SGM
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Federal Register / Vol. 79, No. 60 / Friday, March 28, 2014 / Rules and Regulations
TABLE V.32—COMPARISON OF MEAN LCC SAVINGS FOR CONVENIENCE STORES WITH GASOLINE STATIONS WITH
SAVINGS FOR ALL CRE CUSTOMERS—Continued
Equipment class
Mean LCC savings *
2012$
Category
TSL 1
HCS.SC.L ...............................................
PD.SC.M .................................................
Small Business .......................................
All Business Types .................................
Small Business .......................................
All Business Types .................................
$44
$31
$14
$8
TSL 2
TSL 3
$71
$50
$186
$163
TSL 4
$97
$64
$190
$165
$87
$33
$177
$150
TSL 5
$(453)
$(590)
$(1,159)
$(1,252)
TABLE V.33—COMPARISON OF MEDIAN PAYBACK PERIODS FOR CONVENIENCE STORES WITH GASOLINE STATIONS WITH
VALUES FOR ALL CRE CUSTOMERS
Equipment class
Median payback period
years
Category
TSL1
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 ..............................................
SOC.SC.M ..............................................
HZO.RC.M ..............................................
HZO.RC.L ...............................................
HZO.SC.M ..............................................
HZO.SC.L ...............................................
HCT.SC.M ...............................................
HCT.SC.L ................................................
HCT.SC.I .................................................
tkelley on DSK3SPTVN1PROD with RULES2
HCS.SC.M ..............................................
HCS.SC.L ...............................................
PD.SC.M .................................................
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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 .................................
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TSL2
TSL3
TSL4
TSL5
................
................
................
................
................
................
................
................
1.7
1.8
18.2
23.4
0.4
0.5
6.6
7.2
0.5
0.5
0.5
0.6
2.3
2.6
5.4
6.2
................
................
................
................
................
................
................
................
................
................
................
................
................
................
2.3
2.5
1.7
1.8
................
................
2.6
2.9
1.3
1.4
8.0
9.3
................
................
................
................
................
................
................
................
1.7
1.8
4.5
4.8
0.8
0.8
6.6
7.2
0.6
0.6
1.2
1.3
3.2
3.6
5.4
6.2
................
................
................
................
................
................
................
................
................
................
6.4
6.9
................
................
4.4
4.7
1.8
2.0
................
................
3.3
3.7
1.6
1.7
4.9
5.3
5.5
5.7
5.8
6.1
................
................
1.9
2.1
2.5
2.7
5.0
5.3
1.0
1.1
6.6
7.2
1.3
1.4
2.2
2.5
4.3
5.0
5.4
6.2
................
................
................
................
................
................
................
................
................
................
6.4
6.9
................
................
5.4
5.8
2.3
2.5
................
................
4.7
5.5
2.3
2.5
5.2
5.6
9.0
9.9
10.2
11.3
69.5
63.1
5.8
6.6
5.7
6.3
6.5
7.0
4.4
4.7
14.3
16.2
2.3
2.6
2.4
2.7
4.3
5.0
8.4
10.4
10.0
10.9
23.2
38.0
18.2
28.7
................
................
................
................
10.8
11.8
................
................
8.5
9.2
3.3
3.6
................
................
6.2
7.5
5.3
6.2
5.6
6.0
25.1
34.1
195.3
310.0
513.9
593.2
308.8
364.7
171.0
194.7
82.7
96.2
4.4
4.7
531.1
663.6
26.4
48.0
22.2
31.8
118.4
183.7
20.7
29.9
150.5
151.6
656.6
114.1
265.4
25.3
................
................
59.8
288.9
174.0
194.7
................
................
40.5
46.6
15.6
19.5
208.9
23.8
151.6
680.6
33.7
68.9
78.9
102.2
E:\FR\FM\28MRR2.SGM
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Federal Register / Vol. 79, No. 60 / Friday, March 28, 2014 / Rules and Regulations
c. Rebuttable Presumption Payback
As discussed in section IV.F.12, EPCA
provides a rebuttable presumption that
a given standard is economically
justified if the increased purchase cost
for a product that meets the standard is
less than three times the value of the
first-year energy savings resulting from
the standard. However, DOE routinely
conducts a full economic analysis that
considers the full range of impacts,
including those to the customer,
manufacturer, Nation, and environment,
as required under 42 U.S.C.
6295(o)(2)(B)(i) and 42 U.S.C.
6316(e)(1). The results of this analysis
serve as the basis for DOE to evaluate
definitively the economic justification
for a potential standard level (thereby
supporting or rebutting the results of
any preliminary determination of
economic justification). Therefore, if the
rebuttable presumption is not met, DOE
may justify its standard on another
basis.
Table V.34 shows the rebuttable
payback periods analysis for each
equipment class.
TABLE V.34—SUMMARY OF RESULTS FOR COMMERCIAL REFRIGERATION EQUIPMENT TSLS: REBUTTABLE MEDIAN
PAYBACK PERIOD
Median Payback Period
years
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 ...........................................................................
SOC.SC.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 ..............................................................................
........................
........................
........................
........................
2.2
4.4
0.5
5.0
0.4
0.5
2.3
5.4
........................
........................
........................
........................
........................
........................
........................
2.2
1.7
........................
2.5
1.3
4.9
........................
........................
........................
........................
2.2
5.4
0.8
5.0
0.6
1.2
3.0
5.4
........................
........................
........................
........................
........................
5.6
........................
4.0
1.8
........................
2.9
1.6
5.4
5.1
4.6
........................
2.5
3.0
5.5
1.1
5.0
1.2
2.1
3.8
5.4
........................
........................
........................
........................
........................
5.6
........................
4.4
2.2
........................
4.0
2.2
5.5
7.6
7.3
21.2
6.8
6.6
6.5
4.2
9.5
2.1
2.3
3.8
7.8
8.1
12.4
10.2
........................
........................
8.1
........................
6.6
3.0
........................
4.5
4.5
5.7
17.3
36.2
127.9
56.3
43.0
28.1
4.2
48.7
16.5
13.6
28.7
16.5
35.9
54.3
39.8
156.3
79.5
42.9
........................
20.9
11.4
40.8
30.5
16.7
26.7
2. Economic Impacts on Manufacturers
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 final rule TSD explains the
analysis in further detail.
tkelley on DSK3SPTVN1PROD with RULES2
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
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Jkt 232001
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
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Fmt 4701
Sfmt 4700
earn the same operating margin in
absolute dollars in the amended
standards case as in the base case. Table
V.35 and Table V.36 show the potential
INPV impacts for commercial
refrigeration equipment manufacturers
at each TSL: Table V.35 reflects the
lower bound of impacts and Table V.36
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
E:\FR\FM\28MRR2.SGM
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17795
case at each TSL in the year before
amended standards take effect.
TABLE V.35—MANUFACTURER IMPACT ANALYSIS FOR COMMERCIAL REFRIGERATION EQUIPMENT—PRESERVATION OF
GROSS MARGIN PERCENTAGE MARKUP SCENARIO *
Base
case
Units
INPV ....................................
Change in INPV ..................
Product Conversion Costs ..
Capital Conversion Costs ...
Total Conversion Costs ......
2012$ Millions ....................
2012$ Millions ....................
(%) ......................................
2012$ Millions ....................
2012$ Millions ....................
2012$ Millions ....................
2,660.0
................
................
................
................
................
Trial standard level
1
2
2,650.1
(9.9)
(0.37)
20.6
3.5
24.1
3
2,651.3
(8.7)
(0.33)
32.1
3.6
35.6
2,566.1
(93.9)
(3.53)
125.9
58.1
184.0
4
2,470.6
(189.4)
(7.12)
194.2
160.7
354.9
5
2,475.6
(184.4)
(6.93)
282.1
499.7
781.8
* Values in parentheses are negative values.
TABLE V.36—MANUFACTURER IMPACT ANALYSIS FOR COMMERCIAL REFRIGERATION EQUIPMENT—PRESERVATION OF
OPERATING PROFIT MARKUP SCENARIO *
Base
case
Units
INPV ....................................
Change in INPV ..................
Product Conversion Costs ..
Capital Conversion Costs ...
Total Conversion Costs ......
2012$ Millions ....................
2012$ Millions ....................
(%) ......................................
2012$ Millions ....................
2012$ Millions ....................
2012$ Millions ....................
2,660.0
................
................
................
................
................
Trial standard level
1
2
2,636.1
(23.9)
(0.90)
20.6
3.5
24.1
3
2,617.1
(42.9)
(1.61)
32.1
3.6
35.6
2,495.0
(165.0)
(6.20)
125.9
58.1
184.0
4
2,339.1
(320.9)
(12.07)
194.2
160.7
354.9
5
1,515.2
(1,144.8)
(43.04)
282.1
499.7
781.8
tkelley on DSK3SPTVN1PROD with RULES2
* Values in parentheses are negative values.
At TSL 1, DOE estimates impacts on
INPV for commercial refrigeration
equipment manufacturers to range from
¥$23.9 million to ¥$9.9 million, or a
change in INPV of ¥0 percent to ¥0.37
percent. At this potential standard level,
industry free cash flow is estimated to
decrease by approximately 4.16 percent
to $192.1 million, compared to the basecase value of $200.4 million in the year
before the compliance date (2016).
The INPV impacts at TSL 1 are
relatively minor because DOE
manufacturer production costs do not
increase significant. The average unit
price for the industry (calculated by
dividing industry revenue by industry
unit shipments) increases 0.8% from
$2,892.72 to $2,916.55 in the standards
year. Few capital conversion costs are
expected because DOE anticipates that
manufacturers would be able to make
simple component swaps to meet the
efficiency levels for each equipment
class at this TSL. However, product
conversion costs are required for
industry certifications to incorporate the
new components into existing designs.
Industry conversion costs total $24.1
million.
Under the preservation of gross
margin percentage markup scenario,
impacts on manufacturers are
marginally negative because while
manufacturers can maintain their gross
margin percentages, they also incur
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19:39 Mar 27, 2014
Jkt 232001
conversion costs that offset the higher
profits that they gain from increasing
their selling prices to accommodate
higher production costs. However, the
effects of these conversion costs are
more apparent in the preservation of
operating profit markup scenario
because manufacturers earn the same
operating profit at TSL 1 as they do in
the base case. In general, manufacturers
stated that the preservation of operating
profit scenario is a more likely
representation of the industry than the
preservation of operating profit
scenario, especially as MPCs increase.
At TSL 2, DOE estimates impacts on
INPV for commercial refrigeration
equipment manufacturers to range from
¥$42.9 million to ¥$8.7 million, or a
change in INPV of ¥1.61 percent to
¥0.33 percent. At this potential
standard level, industry free cash flow
is estimated to decrease by
approximately 6.04 percent to $188.3
million, compared to the base-case
value of $200.4 million in the year
before the compliance date (2016).
Although DOE continues to expect
mild INPV impacts on the industry at
TSL 2, product conversion costs do
increase. Nearly 20% of product in the
industry would require some level of
component redesign, such as changes in
evaporator coil, condenser coil, or
compressor selection, that would
necessitate UL or NSF certification
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changes. These industry certification
investments push total industry
conversion costs to $35.4 million.
At TSL 3, DOE estimates impacts on
INPV for commercial refrigeration
equipment manufacturers to range from
¥$165.0 million to ¥$93.9 million, or
a change in INPV of ¥6.20 percent to
¥3.53 percent. At this potential
standard level, industry free cash flow
is estimated to decrease by
approximately 33.64 percent to $133.0
million, compared to the base-case
value of $200.4 million in the year
before the compliance date (2016).
At TSL 3, the expected design options
do not dramatically alter manufacturer
per unit production costs. Average unit
costs increase by 4.1% to $3,011.93
while industry shipments remain
steady. However, DOE expects higher
conversion costs at TSL 3 due to the
possible need for improved insulation
for high-volume products, such as
VCS.SC.L, which accounts for
approximately 18.3 percent of total
shipments, and VCT.RC.L, which
accounts for approximately 4.1 percent.
In total, DOE expects 5 of the 24
equipment classes to require improved
insulation due to higher standards. The
need for improved insulation
necessitates redesign efforts for the
cabinet as well as interior components.
Furthermore, thicker insulation requires
investment in new production tooling.
E:\FR\FM\28MRR2.SGM
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is estimated to decrease by
approximately 158.32 percent to
¥$116.9 million, compared to the basecase value of $200.4 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 VIP technology. VIPs
are not currently used by any
commercial refrigeration equipment
manufacturers and the production of
VIPs would require processes different
from those used to produce standard
foam panels. High R&D investments
would be necessary to integrate the
technology into CRE cases. Based on
industry feedback, DOE estimated the
R&D investment to be 1–2 times the
industry’s typical annual R&D
expenditure and the capital conversion
cost to be more than double the cost of
all current fixtures in use. Total
industry conversion costs total $781.8
million.
Total industry conversion costs reach
$184.0 million.
At TSL 4, DOE estimates impacts on
INPV for commercial refrigeration
equipment manufacturers range from
¥$320.9 million to ¥$189.4 million, or
a change in INPV of ¥12.7 percent to
¥7.12 percent. At this potential
standard level, industry free cash flow
is estimated to decrease by
approximately 67.84 percent to $64.4
million, compared to the base-case
value of $200.4 million in the year
before the compliance date (2016).
The drop in INPV at TSL 4 is driven
by conversion costs. Industry average
unit price increases 7.6% and industry
shipments are modeled to remain
steady. However, the need for new
tooling to accommodate additional foam
insulation in 16 of the 25 analyzed
equipment classes pushes up industry
conversion costs. The redesign effort,
coupled with industry certification
costs, push product conversion costs up
to $194.2 million. Total industry
conversion costs are expected to reach
$354.9 million.
At TSL 5, DOE estimates impacts on
INPV for commercial refrigeration
equipment manufacturers to range from
¥$1,144.85 million to ¥$184.4 million,
or a change in INPV of ¥43.04 percent
to ¥6.93 percent. At this potential
standard level, industry free cash flow
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
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.37—POTENTIAL CHANGES IN THE NUMBER OF COMMERCIAL REFRIGERATION EQUIPMENT PRODUCTION WORKERS
IN 2017
Trial Standard Level *
Base Case
Total Number of Domestic Production Workers in 2017 (assuming no changes in production locations).
Range of Potential Changes in
Domestic Production Workers
in 2017 **.
1
2
3
4
5
7,779
7,779 ................
7,779 ................
7,779 ................
7,780 ................
8,220
—
(7,7790) to 0 ....
(7,740) to 0 ......
(7,779) to 0 ......
(7,779) to 1 ......
(7,779) to 441.
tkelley on DSK3SPTVN1PROD with RULES2
* 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.37 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.
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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 are
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
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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 foamed-in-place cases would
essentially remain the same, and
therefore require no additional labor
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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 vacuum
insulation panels may lead to greater
labor requirements. In general, the
production and handling of VIPs will
require more labor than the production
of standard refrigerated cases. This is
due to the delicate nature of VIPs and
the additional labor necessary to embed
them into a display case. The additional
labor and handling associated with
these 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.
tkelley on DSK3SPTVN1PROD with RULES2
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. An amended
energy conservation standard for
commercial refrigeration equipment
would not change the fundamental
assembly of the equipment, but
manufacturers do anticipate potential
for changes to tooling and fixtures. The
most significant of these would come as
a result of any redesigns performed to
accommodate additional foam
insulation thickness. However, most of
the design options being evaluated are
already available on the market as
product options. Thus, DOE believes
manufacturers would be 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.J, 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
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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 document and chapter 12 of
the final rule 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
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.
For the cumulative regulatory burden
analysis, DOE looks at other regulations
that could affect CRE manufacturers that
will take effect approximately three
years before or after the 2017
compliance date of amended energy
conservation standards for these
products. In interviews, manufacturers
cited Federal regulations on
certification, on walk-in cooler and
freezer equipment, and from ENERGY
STAR as contributing to their
cumulative regulatory burden. The
compliance years and expected industry
conversion costs are listed below:
Walk-In Cooler and Freezer Energy
Conservation Standard Rulemaking
Nine commercial refrigeration
equipment manufacturers also produce
walk-ins, and therefore they must
comply with two rulemakings that
follow similar timelines. These
manufacturers will incur conversion
costs for both types of products at
around the same time, which could be
a significant strain on resources. In the
2013 NOPR for walk-ins, the proposed
standard was estimated to require
conversion costs of $71 million (in
2012$) to be incurred by the industry
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17797
ahead of the 2017 compliance date. 78
FR 55781. However, the analysis is not
final and these figures are subject to
change in the forthcoming final rule for
walk-in coolers and freezers. DOE
discusses these and other requirements,
and includes the full details of the
cumulative regulatory burden, in
chapter 12 of the final rule TSD.
Certification, Compliance, and
Enforcement Rule
Many manufacturers have expressed
concerns about the Certification,
Compliance, and Enforcement (CC&E)
March 2011 final rule, which allows
DOE to enforce the energy and water
conservation standards for covered
products and equipment, and provides
for more accurate, comprehensive
information about the energy and water
use characteristics of products sold in
the United States. The rule revises
former certification regulations so that
the Department has the information it
needs to ensure that regulated products
sold in the United States comply with
the law. According to the rule,
manufacturers of covered consumer
products and commercial and industrial
equipment must certify on an annual
basis, by means of a compliance
statement and a certification report, that
each of their basic models meets its
applicable energy conservation, water
conservation, and/or design standard
before it is distributed within the United
States. For purposes of certification
testing, the determination that a basic
model complies with the applicable
conservation standard must be based on
sampling procedures, which currently
require that a minimum of two units of
a basic model must be tested in order to
certify that the model is compliant
(unless the product-specific regulations
specify otherwise). 76 FR 12422 (March
7, 2011).
However, DOE recognizes that
sampling requirements can create
burden for certain commercial
refrigeration equipment manufacturers
who build one-of-a kind customized
units and have a large number of basic
models. Therefore, DOE conducted a
rulemaking to expand AEDM coverage
and issued a final rule on December 31,
2013. (78 FR 79579) An AEDM is a
computer modeling or mathematical
tool that predicts the performance of
non-tested basic models. In the final
rule, DOE is allowing CRE
manufacturers to rate their basic models
using AEDMs, reducing the need for
sample units and reducing burden on
manufacturers. More information can be
found at https://www1.eere.energy.gov/
buildings/appliance_standards/
implement_cert_and_enforce.html. DOE
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discusses these and other requirements,
and includes the full details of the
cumulative regulatory burden, in
chapter 12 of the final rule TSD.
EPA’s ENERGY STAR
Some stakeholders have also
expressed concern regarding potential
conflicts with other certification
programs, in particular EPA’s ENERGY
STAR requirements. However, DOE
notes that certain standards, such as
ENERGY STAR, are voluntary for
manufacturers. As such, they are not
part of DOE’s consideration of
cumulative regulatory burden.
DOE discusses these and other nonFederal regulations in chapter 12 of the
NOPR TSD.
3. National Impact Analysis
a. 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 over the
lifetime of all equipment purchased in
2017–2046.
Table V.38 presents the primary NES
(taking into account losses in the
generation and transmission of
electricity) for all equipment classes and
the sum total of NES for each TSL, and
Table V.39 presents estimated FFC
energy savings for each considered TSL.
The total FFC NES progressively
increases from 1.195 quads at TSL 1 to
4.207 quads at TSL 5.
TABLE V.38—CUMULATIVE NATIONAL PRIMARY 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 ...........................................................................
SOC.SC.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 ..............................................................................
0.000
0.000
0.000
0.000
0.096
0.010
0.018
0.001
0.309
0.450
0.000
0.229
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.011
0.000
0.004
0.001
0.046
0.000
0.000
0.000
0.000
0.096
0.060
0.041
0.001
0.687
0.631
0.001
0.229
0.000
0.000
0.000
0.000
0.000
0.001
0.000
0.001
0.012
0.000
0.008
0.002
0.271
0.403
0.001
0.000
0.006
0.130
0.093
0.045
0.001
0.794
0.808
0.002
0.229
0.000
0.000
0.000
0.000
0.000
0.001
0.000
0.001
0.012
0.000
0.013
0.003
0.301
0.550
0.011
0.002
0.008
0.150
0.110
0.050
0.003
0.870
0.839
0.002
0.316
0.010
0.004
0.001
0.000
0.000
0.001
0.000
0.002
0.013
0.000
0.013
0.005
0.310
0.584
0.017
0.007
0.010
0.259
0.139
0.050
0.008
1.080
1.121
0.005
0.335
0.016
0.016
0.002
0.002
0.023
0.002
0.000
0.002
0.016
0.005
0.030
0.010
0.403
Total ..............................................................................
1.176
2.041
2.844
3.270
4.140
TABLE V.39—CUMULATIVE NATIONAL FULL-FUEL-CYCLE ENERGY SAVINGS FOR EQUIPMENT PURCHASED IN 2017–2046
Quads
Equipment class
tkelley on DSK3SPTVN1PROD with RULES2
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 ...........................................................................
SOC.SC.M ...........................................................................
HZO.RC.M ...........................................................................
HZO.RC.L ............................................................................
HZO.SC.M ............................................................................
HZO.SC.L .............................................................................
HCT.SC.M ............................................................................
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TSL 2
0.000
0.000
0.000
0.000
0.098
0.010
0.018
0.001
0.314
0.458
0.000
0.233
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
Fmt 4701
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TSL 3
0.000
0.000
0.000
0.000
0.098
0.061
0.042
0.001
0.699
0.641
0.001
0.233
0.000
0.000
0.000
0.000
0.000
0.001
0.000
0.001
E:\FR\FM\28MRR2.SGM
TSL 4
0.410
0.001
0.000
0.006
0.132
0.094
0.046
0.001
0.807
0.821
0.002
0.233
0.000
0.000
0.000
0.000
0.000
0.001
0.000
0.001
28MRR2
0.559
0.011
0.002
0.008
0.153
0.112
0.050
0.003
0.884
0.852
0.002
0.321
0.010
0.004
0.001
0.000
0.000
0.001
0.000
0.002
TSL 5
0.593
0.018
0.007
0.010
0.263
0.141
0.050
0.008
1.097
1.139
0.005
0.340
0.016
0.016
0.002
0.002
0.023
0.002
0.000
0.002
Federal Register / Vol. 79, No. 60 / Friday, March 28, 2014 / Rules and Regulations
17799
TABLE V.39—CUMULATIVE NATIONAL FULL-FUEL-CYCLE ENERGY SAVINGS FOR EQUIPMENT PURCHASED IN 2017–2046—
Continued
Quads
Equipment class
TSL 1
TSL 2
TSL 3
TSL 4
TSL 5
HCT.SC.L .............................................................................
HCT.SC.I ..............................................................................
HCS.SC.M ............................................................................
HCS.SC.L .............................................................................
PD.SC.M ..............................................................................
0.011
0.000
0.004
0.001
0.047
0.012
0.000
0.008
0.002
0.275
0.012
0.000
0.013
0.003
0.306
0.013
0.000
0.014
0.005
0.315
0.016
0.005
0.030
0.010
0.410
Total ..............................................................................
1.195
2.074
2.889
3.323
4.207
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.76 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.40 and Table V.41, respectively.
The impacts are counted over the
lifetime of products purchased in 2017–
2025.
TABLE V.40—CUMULATIVE NATIONAL PRIMARY 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
0.000
0.000
0.000
0.000
0.024
0.003
0.005
0.000
0.075
0.110
0.000
0.056
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.003
0.000
0.001
0.000
0.011
0.000
0.000
0.000
0.000
0.024
0.017
0.011
0.000
0.168
0.156
0.000
0.056
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.003
0.000
0.002
0.001
0.066
0.099
0.000
0.000
0.002
0.032
0.025
0.012
0.000
0.198
0.202
0.001
0.056
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.003
0.000
0.003
0.001
0.074
0.134
0.003
0.000
0.002
0.037
0.029
0.013
0.001
0.219
0.209
0.001
0.077
0.002
0.001
0.000
0.000
0.000
0.000
0.000
0.000
0.003
0.000
0.004
0.001
0.076
0.143
0.004
0.002
0.003
0.063
0.036
0.013
0.002
0.270
0.278
0.001
0.082
0.004
0.004
0.001
0.000
0.006
0.000
0.000
0.001
0.004
0.001
0.008
0.003
0.099
Total ..............................................................................
tkelley on DSK3SPTVN1PROD with RULES2
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 ...........................................................................
SOC.SC.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 ..............................................................................
0.289
0.504
0.707
0.814
1.027
76 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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19:39 Mar 27, 2014
Jkt 232001
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 4700
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.
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TABLE V.41—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 ...........................................................................
SOC.SC.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 ..............................................................................
0.000
0.000
0.000
0.000
0.024
0.003
0.005
0.000
0.077
0.112
0.000
0.057
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.003
0.000
0.001
0.000
0.011
0.000
0.000
0.000
0.000
0.024
0.017
0.012
0.000
0.171
0.158
0.000
0.057
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.003
0.000
0.002
0.001
0.067
0.100
0.000
0.000
0.002
0.032
0.025
0.013
0.000
0.201
0.205
0.001
0.057
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.003
0.000
0.004
0.001
0.075
0.137
0.003
0.000
0.002
0.037
0.029
0.014
0.001
0.222
0.213
0.001
0.079
0.002
0.001
0.000
0.000
0.000
0.000
0.000
0.000
0.003
0.000
0.004
0.001
0.077
0.145
0.004
0.002
0.003
0.064
0.037
0.014
0.002
0.275
0.283
0.001
0.083
0.004
0.004
0.001
0.000
0.006
0.000
0.000
0.001
0.004
0.001
0.008
0.003
0.100
Total ..............................................................................
0.294
0.513
0.719
0.828
1.045
b. Net Present Value of Customer Costs
and Benefits
DOE estimated the cumulative NPV to
the Nation of the net savings for CRE
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.
Table V.42 and Table V.43 show the
customer NPV results for each of the
TSLs DOE considered for commercial
refrigeration equipment at 7-percent and
3-percent discount rates, respectively.
The impacts cover the expected lifetime
of equipment purchased in 2017–2046.
The NPV results at a 7-percent
discount rate are negative for all
equipment classes at TSL 5 except for
the VCT.SC.L equipment class.
Efficiency levels for TSL 4 were chosen
to correspond to the highest efficiency
level with a near positive NPV at a 7percent discount rate for each
equipment class. The criterion for TSL
3 was to select efficiency levels with the
highest NPV at a 7-percent discount
rate. Consequently, the total NPV is
highest for TSL 3. TSL 2 shows the
second highest total NPV at a 7-percent
discount rate. TSL 1 has a total NPV
lower than TSL 2.
TABLE V.42— NET PRESENT VALUE OF CUSTOMER COSTS AND BENEFITS AT A 7-PERCENT DISCOUNT RATE
billion 2012$ *
Equipment class
tkelley on DSK3SPTVN1PROD with RULES2
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 ...........................................................................
SOC.SC.M ...........................................................................
HZO.RC.M ...........................................................................
HZO.RC.L ............................................................................
HZO.SC.M ............................................................................
HZO.SC.L .............................................................................
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TSL 2
0.000
0.000
0.000
0.000
0.212
¥0.006
0.059
0.000
0.756
1.164
0.001
0.291
0.000
0.000
0.000
0.000
0.000
0.000
0.000
Fmt 4701
Sfmt 4700
TSL 3
0.000
0.000
0.000
0.000
0.212
0.039
0.118
0.000
1.748
1.502
0.002
0.291
0.000
0.000
0.000
0.000
0.000
0.000
0.000
E:\FR\FM\28MRR2.SGM
TSL 4
0.570
0.001
0.000
0.013
0.234
0.058
0.123
0.000
1.829
1.579
0.003
0.291
0.000
0.000
0.000
0.000
0.000
0.000
0.000
28MRR2
0.171
¥0.004
¥0.009
¥0.003
¥0.005
¥0.003
0.040
¥0.004
1.659
1.550
0.003
0.081
¥0.003
¥0.011
¥0.003
0.000
0.000
0.000
0.000
TSL 5
¥2.941
¥0.240
¥0.374
¥0.271
¥4.423
¥1.531
0.040
¥0.141
¥6.820
¥4.692
¥0.050
¥1.493
¥0.215
¥0.342
¥0.032
¥0.123
¥0.734
¥0.025
0.000
Federal Register / Vol. 79, No. 60 / Friday, March 28, 2014 / Rules and Regulations
17801
TABLE V.42— NET PRESENT VALUE OF CUSTOMER COSTS AND BENEFITS AT A 7-PERCENT DISCOUNT RATE—Continued
billion 2012$ *
Equipment class
TSL 1
TSL 2
TSL 3
TSL 4
TSL 5
HCT.SC.M ............................................................................
HCT.SC.L .............................................................................
HCT.SC.I ..............................................................................
HCS.SC.M ............................................................................
HCS.SC.L .............................................................................
PD.SC.M ..............................................................................
0.001
0.024
0.000
0.008
0.003
0.007
0.002
0.024
0.000
0.012
0.005
0.183
0.002
0.025
0.000
0.012
0.006
0.183
0.000
0.022
0.000
0.007
0.004
0.146
¥0.014
¥0.030
¥0.076
¥0.342
¥0.047
¥3.475
Total ..............................................................................
2.519
4.139
4.928
3.637
¥28.390
* A value of $0.000 means NES values are less than 0.001 billion 2012$.
TABLE V.43— NET PRESENT VALUE OF CUSTOMER COSTS AND BENEFITS AT A 3-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 ...........................................................................
SOC.SC.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 ..............................................................................
0.000
0.000
0.000
0.000
0.481
¥0.006
0.124
0.001
1.656
2.551
0.001
0.790
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.002
0.054
0.000
0.019
0.006
0.046
0.000
0.000
0.000
0.000
0.481
0.119
0.252
0.001
3.838
3.333
0.005
0.790
0.000
0.000
0.000
0.000
0.000
0.001
0.000
0.004
0.056
0.000
0.029
0.010
0.577
1.500
0.004
0.000
0.029
0.551
0.185
0.265
0.001
4.074
3.626
0.007
0.790
0.000
0.000
0.000
0.000
0.000
0.001
0.000
0.004
0.057
0.000
0.033
0.014
0.602
0.882
0.003
¥0.016
0.001
0.125
0.086
0.116
¥0.005
3.825
3.592
0.007
0.476
0.003
¥0.018
¥0.004
0.000
0.000
0.000
0.000
0.002
0.053
0.000
0.022
0.012
0.537
¥4.894
¥0.433
¥0.683
¥0.496
¥8.007
¥2.712
0.116
¥0.254
¥11.832
¥7.824
¥0.090
¥2.443
¥0.383
¥0.625
¥0.058
¥0.227
¥1.350
¥0.044
0.000
¥0.024
¥0.039
¥0.137
¥0.594
¥0.076
¥6.090
Total ..............................................................................
5.727
9.497
11.742
9.698
¥49.199
* 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.44 and Table
V.45. The impacts are counted over the
lifetime of equipment 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.44—NET PRESENT VALUE OF CUSTOMER COSTS AND BENEFITS AT A 7-PERCENT DISCOUNT RATE FOR 9-YEAR
ANALYSIS PERIOD
[Equipment purchased in 2017–2025]
billion 2012$*
Equipment class
tkelley on DSK3SPTVN1PROD with RULES2
TSL 1
VOP.RC.M ...........................................................................
VOP.RC.L ............................................................................
VOP.SC.M ............................................................................
VCT.RC.M ............................................................................
VCT.RC.L .............................................................................
VCT.SC.M ............................................................................
VCT.SC.L .............................................................................
VCT.SC.I ..............................................................................
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TSL 2
0.000
0.000
0.000
0.000
0.099
¥0.004
0.029
0.000
Fmt 4701
Sfmt 4700
TSL 3
0.000
0.000
0.000
0.000
0.099
0.020
0.059
0.000
E:\FR\FM\28MRR2.SGM
TSL 4
0.237
0.000
0.000
0.006
0.107
0.027
0.061
0.000
28MRR2
0.036
¥0.002
¥0.005
¥0.002
¥0.009
¥0.003
0.021
¥0.002
TSL 5
¥1.454
¥0.116
¥0.179
¥0.130
¥2.130
¥0.736
0.021
¥0.068
17802
Federal Register / Vol. 79, No. 60 / Friday, March 28, 2014 / Rules and Regulations
TABLE V.44—NET PRESENT VALUE OF CUSTOMER COSTS AND BENEFITS AT A 7-PERCENT DISCOUNT RATE FOR 9-YEAR
ANALYSIS PERIOD—Continued
[Equipment purchased in 2017–2025]
billion 2012$*
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 ...........................................................................
SOC.SC.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 ..............................................................................
0.342
0.528
0.000
0.118
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.011
0.000
0.004
0.001
0.000
0.792
0.681
0.001
0.118
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.001
0.011
0.000
0.006
0.002
0.079
0.827
0.709
0.001
0.118
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.001
0.011
0.000
0.006
0.003
0.077
0.732
0.693
0.001
0.012
¥0.002
¥0.006
¥0.001
0.000
0.000
0.000
0.000
0.000
0.010
0.000
0.003
0.002
0.059
¥3.338
¥2.311
¥0.024
¥0.742
¥0.104
¥0.165
¥0.015
¥0.059
¥0.353
¥0.012
0.000
¥0.007
¥0.018
¥0.037
¥0.182
¥0.025
¥1.680
Total ..............................................................................
1.129
1.869
2.191
1.536
¥13.863
* 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 OF CUSTOMER COSTS AND BENEFITS AT A 3-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 ...........................................................................
SOC.SC.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 ..............................................................................
0.000
0.000
0.000
0.000
0.160
¥0.004
0.045
0.000
0.533
0.824
0.000
0.231
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.001
0.017
0.000
0.007
0.002
0.009
0.000
0.000
0.000
0.000
0.160
0.044
0.092
0.000
1.239
1.078
0.001
0.231
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.001
0.018
0.000
0.010
0.004
0.178
0.446
0.001
0.000
0.010
0.179
0.062
0.096
0.000
1.314
1.160
0.002
0.231
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.001
0.018
0.000
0.011
0.005
0.182
0.208
¥0.001
¥0.006
0.000
0.027
0.025
0.043
¥0.002
1.204
1.143
0.002
0.108
0.000
¥0.007
¥0.002
0.000
0.000
0.000
0.000
0.000
0.016
0.000
0.007
0.004
0.158
¥1.814
¥0.154
¥0.240
¥0.174
¥2.829
¥0.957
0.043
¥0.090
¥4.295
¥2.885
¥0.032
¥0.914
¥0.136
¥0.221
¥0.021
¥0.080
¥0.475
¥0.016
0.000
¥0.009
¥0.020
¥0.049
¥0.237
¥0.031
¥2.171
Total ..............................................................................
1.826
3.056
3.719
2.929
¥17.805
tkelley on DSK3SPTVN1PROD with RULES2
* A value of $0.000 means NES values are less than 0.001 billion 2012$. Values in parentheses are negative values.
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
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impacts of amended standards on the
economy. As discussed above, DOE
expects energy amended conservation
standards for commercial refrigeration
equipment to reduce energy bills for
PO 00000
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Sfmt 4700
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
E:\FR\FM\28MRR2.SGM
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Federal Register / Vol. 79, No. 60 / Friday, March 28, 2014 / Rules and Regulations
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.J of this
document; see chapter 16 of the final
rule TSD for more details).
Customers who purchase moreefficient equipment pay lower amounts
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 amended
energy conservation standards for
commercial refrigeration equipment are
likely to slightly increase the net
demand for labor in the economy. As
shown in chapter 16 of the final rule
TSD, DOE estimates that net indirect
employment impacts from commercial
refrigeration equipment amended
standards are very small relative to the
national 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.
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 final rule TSD), DOE
eliminates from consideration any
design options that reduce the utility of
the equipment. For today’s final rule,
DOE concluded that none of the
efficiency levels considered 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 that is likely to
result from standards. It also directs the
Attorney General of the United States
(Attorney General) to determine the
impact, if any, of any lessening of
competition likely to result from a
proposed standard and to transmit such
determination to the Secretary within 60
days of the publication of a proposed
rule and simultaneously published
17803
proposed rule, together with an analysis
of the nature and extent of the impact.
(42 U.S.C. 6295(o)(2)(B)(i)(V) and (B)(ii))
To assist the Attorney General in
making a determination for CRE
standards, DOE provided the
Department of Justice (DOJ) with copies
of the NOPR and the TSD for review.
DOE received no adverse comments
from DOJ regarding the proposal.
6. Need of the Nation To Conserve
Energy
An improvement in the energy
efficiency of the equipment subject to
today’s final rule 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 final rule
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
production. Table V.46 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. DOE reports
annual emissions reductions for each
TSL in chapter 13 of the final rule TSD.
TABLE V.46—CUMULATIVE EMISSIONS REDUCTION ESTIMATED FOR COMMERCIAL REFRIGERATION EQUIPMENT TSLS FOR
EQUIPMENT PURCHASED IN 2017–2046
TSL
1
2
3
4
5
Power Sector Emissions
CO2 (million metric tons) ...........................................
SO2 (thousand tons) ..................................................
NOX (thousand tons) .................................................
Hg (tons) ....................................................................
N2O (thousand tons) ..................................................
CH4 (thousand tons) ..................................................
54.9
84.9
¥11.4
0.10
1.3
7.7
95.4
147.4
¥19.9
0.17
2.3
13.3
133.0
205.5
¥28.1
0.24
3.2
18.6
152.9
236.3
¥32.3
0.28
3.7
21.4
193.6
299.1
¥40.7
0.35
4.7
27.1
6.4
1.4
87.8
0.00
0.1
533.3
8.9
1.9
122.4
0.00
0.1
743.1
10.2
2.2
140.7
0.01
0.1
854.6
13.0
2.8
178.2
0.01
0.1
1081.9
101.7
148.8
67.9
0.18
2.4
141.9
207.4
94.3
0.25
3.3
163.2
238.5
108.4
0.28
3.8
206.5
301.9
137.4
0.36
4.8
Upstream Emissions
tkelley on DSK3SPTVN1PROD with RULES2
CO2 (million metric tons) ...........................................
SO2 (thousand tons) ..................................................
NOX (thousand tons) .................................................
Hg (tons) ....................................................................
N2O (thousand tons) ..................................................
CH4 (thousand tons) ..................................................
3.7
0.8
50.6
0.00
0.0
307.2
Total Emissions
CO2 (million metric tons) ...........................................
SO2 (thousand tons) ..................................................
NOX (thousand tons) .................................................
Hg (tons) ....................................................................
N2O (thousand tons) ..................................................
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39.2
0.10
1.4
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17804
Federal Register / Vol. 79, No. 60 / Friday, March 28, 2014 / Rules and Regulations
TABLE V.46—CUMULATIVE EMISSIONS REDUCTION ESTIMATED FOR COMMERCIAL REFRIGERATION EQUIPMENT TSLS FOR
EQUIPMENT PURCHASED IN 2017–2046—Continued
TSL
1
CH4 (thousand tons) ..................................................
As part of the analysis for this final
rule, DOE estimated monetary benefits
likely to result from the reduced
emissions of CO2 and NOX that were
estimated for each of the TSLs
considered. As discussed in section
IV.L, 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
2
314.9
3
546.6
integrated assessment models, at
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 $11.8/ton, $39.7/ton, $61.2/ton, and
4
761.7
5
875.9
1109.0
$117/ton. The values for later years are
higher due to increasing emissionsrelated costs as the magnitude of
projected climate change increases.
Table V.47 presents the global value
of CO2 emissions reductions at each
TSL. DOE calculated domestic values as
a range from 7 percent to 23 percent of
the global values, and these results are
presented in chapter 14 of the final rule
TSD.
TABLE V.47—GLOBAL PRESENT VALUE OF CO2 EMISSIONS REDUCTION FOR POTENTIAL STANDARDS FOR COMMERCIAL
REFRIGERATION EQUIPMENT
SCC Scenario
TSL
5% discount rate,
average
3% discount rate,
average
2.5% discount
rate, average
3% discount rate,
95th percentile
million 2012$
Power Sector Emissions
1
2
3
4
5
...................................................................................................
...................................................................................................
...................................................................................................
...................................................................................................
...................................................................................................
392
682
952
1095
1385
1762
3063
4274
4916
6220
2787
4844
6758
7773
9836
5438
9452
13187
15167
19192
115
200
278
320
405
183
317
442
508
643
356
617
861
990
1253
1877
3263
4552
5236
6625
2970
5161
7200
8281
10479
5794
10070
14047
16157
20444
Upstream Emissions
1
2
3
4
5
...................................................................................................
...................................................................................................
...................................................................................................
...................................................................................................
...................................................................................................
25
43
61
70
88
Total Emissions
tkelley on DSK3SPTVN1PROD with RULES2
1
2
3
4
5
...................................................................................................
...................................................................................................
...................................................................................................
...................................................................................................
...................................................................................................
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 final rule 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
VerDate Mar<15>2010
19:39 Mar 27, 2014
Jkt 232001
417
725
1012
1164
1473
emissions. This ongoing review will
consider the comments on this subject
that are part of the public record for this
final rule 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 final rule 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
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economic benefits associated with NOX
emission reductions anticipated to
result from amended commercial
refrigeration equipment standards.
Table V.48 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.
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TABLE V.48—PRESENT VALUE OF
NOX EMISSIONS REDUCTION FOR
POTENTIAL STANDARDS FOR COMMERCIAL
REFRIGERATION EQUIP-
TABLE V.48—PRESENT VALUE OF
NOX EMISSIONS REDUCTION FOR
POTENTIAL STANDARDS FOR COMMERCIAL
REFRIGERATION EQUIPMENT—Continued
MENT
million 2012$
TSL
3% Discount
rate
million 2012$
7% Discount
rate
Power Sector Emissions
1
2
3
4
5
¥25.3
¥44.4
¥62.4
¥71.9
¥90.6
................
................
................
................
................
¥18.9
¥33.2
¥46.6
¥53.7
¥67.7
Upstream Emissions
1 ................
2 ................
TSL
68.7
119.4
32.6
56.7
3% Discount
rate
3 ................
4 ................
5 ................
7% Discount
rate
166.5
191.5
242.4
79.3
91.2
115.3
Total Emissions
1
2
3
4
5
................
................
................
................
................
43.4
75.0
104.1
119.6
151.8
13.7
23.6
32.6
37.4
47.6
17805
7. Summary of National Economic
Impact
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 final rule.
Table V.49 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 customer savings calculated
for each TSL, at both a 7-percent and a
3-percent 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.49—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 37% Discount Rate added with Value of Emissions Based
on:
TSL
SCC Value of
$11.8/metric ton
CO2* and Medium Value for
NOX
SCC Value of
$39.7/metric ton
CO2* and Medium Value for
NOX
SCC Value of
$61.2/metric ton
CO2* and Medium Value for
NOX
SCC Value of
$117/metric ton
CO2* and Medium Value for
NOX
billion 2012$
1
2
3
4
5
.......................................................................................................
.......................................................................................................
.......................................................................................................
.......................................................................................................
.......................................................................................................
6.2
10.3
12.9
11.0
¥47.6
7.6
12.8
16.4
15.1
¥42.4
8.7
14.7
19.0
18.1
¥38.6
11.6
19.6
25.9
26.0
¥28.6
Consumer NPV at 7% Discount Rate added with Value of Emissions Based
on:
TSL
SCC Value of
$11.8/metric ton
CO2* and Medium Value for
NOX
SCC Value of
$39.7/metric ton
CO2* and Medium Value for
NOX
SCC Value of
$61.2/metric ton
CO2* and Medium Value for
NOX
SCC Value of
$117/metric ton
CO2* and Medium Value for
NOX
billion 2012$
1
2
3
4
5
.......................................................................................................
.......................................................................................................
.......................................................................................................
.......................................................................................................
.......................................................................................................
3.0
4.9
6.0
4.8
¥26.9
4.4
7.4
9.5
8.9
¥21.7
5.5
9.3
12.2
12.0
¥17.9
8.3
14.2
19.0
19.8
¥7.9
tkelley on DSK3SPTVN1PROD with RULES2
* These label values represent the global SCC in 2015, in 2012$. The present values have been calculated with scenario-consistent discount
rates.
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
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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
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
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each year. These impacts continue well
beyond 2100.
8. Other Factors
EPCA allows the Secretary, in
determining whether a 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)) DOE
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has not considered other factors in
development of the standards in this
final rule.
C. Conclusions
Any new or amended energy
conservation standard for any type (or
class) of covered product shall 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 standard is
economically justified, the Secretary
must determine whether the benefits of
the standard exceed its burdens to the
greatest extent practicable, considering
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))
For today’s rulemaking, 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 maxtech level was not justified, DOE then
considered the next most efficient level
and undertook the same evaluation until
it reached the highest efficiency level
that is both technologically feasible and
economically justified and saves a
significant amount of energy.
To aid the reader in understanding
the benefits and/or burdens of each TSL,
tables in this section summarize the
quantitative analytical results for each
TSL, based on the assumptions and
methodology discussed herein. The
efficiency levels contained in each TSL
are described in section IV.A.1. In
addition to the quantitative results
presented in the tables below, DOE also
considers other burdens and benefits
that affect economic justification. These
include the impacts on identifiable
subgroups of consumers who may be
disproportionately affected by a national
standard, and impacts on employment.
Section IV.I presents the estimated
impacts of each TSL for the considered
subgroups. DOE discusses the impacts
on employment in CRE manufacturing
in section IV.J and discusses the indirect
employment impacts in section IV.N.
1. Benefits and Burdens of Trial
Standard Levels Considered for
Commercial Refrigeration Equipment
Table V.50 through Table V.53
summarizes the quantitative impacts
estimated for each TSL for CRE.
TABLE V.50—SUMMARY OF RESULTS FOR COMMERCIAL REFRIGERATION EQUIPMENT TSLS: NATIONAL IMPACTS*
Category
TSL 1
TSL 2
TSL 3
TSL 4
TSL 5
Cumulative National Energy Savings 2017 through 2060
quads
With full-fuel cycle ..........................
1.176 .....................
1.195 .....................
2.041 .....................
2.074 .....................
2.844 .....................
2.889 .....................
3.270 .....................
3.323 .....................
4.140.
4.207.
11.74 .....................
4.93 .......................
9.70 .......................
3.64 .......................
(49.20).
(28.39).
Cumulative NPV of Customer Benefits
2012$ billion
3% discount rate .............................
7% discount rate .............................
5.73 .......................
2.52 .......................
9.50 .......................
4.14 .......................
Industry Impacts
Change in Industry NPV (2012$
million).
Change in Industry NPV (%) ..........
(23.9) to (9.9) ........
(42.9) to (8.7) ........
(165.0) to (93.9) ....
(320.9) to (189.4) ..
(0.90) to (0.37) ......
(1.61) to (0.33) ......
(6.20) to (3.53) ......
(12.07) to (7.12) ....
(1,144.8) to
(184.4).
(43.04) to (6.93).
163.2 .....................
238.5 .....................
108.4 .....................
0.28 .......................
3.8 .........................
1136.2 ...................
875.9 .....................
21898.5 .................
206.5.
301.9.
137.4.
0.36.
4.8.
1438.8.
1109.0.
27724.7.
1164 to 16157 .......
119.6 .....................
37.4 .......................
1473 to 20444.
151.8.
47.6.
Cumulative Emissions Reductions**
CO2 (Mt) .........................................
SO2 (kt) ...........................................
NOX (kt) ..........................................
Hg (t) ...............................................
N2O (kt) ...........................................
N2O (kt CO2eq) ...............................
CH4 (kt) ...........................................
CH4 (kt CO2eq) ...............................
58.6 .......................
85.7 .......................
39.2 .......................
0.10 .......................
1.4 .........................
408.8 .....................
314.9 .....................
7872.6 ...................
101.7 .....................
148.8 .....................
67.9 .......................
0.18 .......................
2.4 .........................
709.4 .....................
546.6 .....................
13665.9 .................
141.9 .....................
207.4 .....................
94.3 .......................
0.25 .......................
3.3 .........................
988.1 .....................
761.7 .....................
19043.5 .................
Monetary Value of Cumulative Emissions Reductions
2012$ million†
tkelley on DSK3SPTVN1PROD with RULES2
CO2 .................................................
NOX—3% discount rate ..................
NOX—7% discount rate ..................
417 to 5794 ...........
43.4 .......................
13.7 .......................
725 to 10070 .........
75.0 .......................
23.6 .......................
1012 to 14047 .......
104.1 .....................
32.6 .......................
** ‘‘Mt’’ 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 CO2 reductions is based on estimates of the global benefit of reduced CO2 emissions.
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17807
TABLE V.51—SUMMARY OF RESULTS FOR COMMERCIAL REFRIGERATION EQUIPMENT TSLS: MEAN LCC SAVINGS
Mean LCC Savings*
2012$
Equipment Class
TSL 1
TSL 2
TSL 3
TSL 4
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 ...........................................................................
SOC.SC.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 ..............................................................................
........................
........................
........................
........................
647
¥10
2,503
18
223
588
41
564
........................
........................
........................
........................
........................
........................
........................
66
428
........................
12
31
8
........................
........................
........................
........................
647
214
4,709
18
518
550
114
564
........................
........................
........................
........................
........................
55
........................
165
435
........................
17
50
163
922
53
........................
542
526
226
5,001
18
363
507
113
564
........................
........................
........................
........................
........................
55
........................
101
293
........................
15
64
165
¥5
¥148
¥54
41
93
163
2,812
¥68
305
495
113
¥19
6
¥128
¥209
........................
........................
¥4
........................
43
248
........................
5
33
150
TSL 5
¥4,203
¥6,701
¥1,384
¥4,937
¥6,036
¥1,541
2,812
¥2,834
¥1,428
¥1,640
¥2,710
¥2,691
¥917
¥2,268
¥2,204
¥2,180
¥4,249
¥1,154
¥599
¥613
¥1,240
¥568
¥590
¥1,252
* ‘‘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.52—SUMMARY OF RESULTS FOR COMMERCIAL REFRIGERATION EQUIPMENT TSLS: MEDIAN PAYBACK PERIOD
Median Payback Period
years
tkelley on DSK3SPTVN1PROD with RULES2
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 ...........................................................................
SOC.SC.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 ..............................................................................
........................
........................
........................
........................
1.8
23.4
0.5
7.2
0.5
0.6
2.6
6.2
........................
........................
........................
........................
........................
........................
........................
2.5
1.8
........................
2.9
1.4
9.3
........................
........................
........................
........................
1.8
4.8
0.8
7.2
0.6
1.3
3.6
6.2
........................
........................
........................
........................
........................
6.9
........................
4.7
2.0
........................
3.7
1.7
5.3
5.7
6.1
........................
2.1
2.7
5.3
1.1
7.2
1.4
2.5
5.0
6.2
........................
........................
........................
........................
........................
6.9
........................
5.8
2.5
........................
5.5
2.5
5.6
9.9
11.3
63.1
6.6
6.3
7.0
4.7
16.2
2.6
2.7
5.0
10.4
10.9
38.0
28.7
........................
........................
11.8
........................
9.2
3.6
........................
7.5
6.2
6.0
34.1
310.0
593.2
364.7
194.7
96.2
4.7
663.6
48.0
31.8
183.7
29.9
151.6
114.1
25.3
........................
288.9
194.7
........................
46.6
19.5
23.8
680.6
68.9
102.2
* ‘‘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.
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TABLE V.53—SUMMARY OF RESULTS FOR COMMERCIAL REFRIGERATION EQUIPMENT TSLS: DISTRIBUTION OF CUSTOMER
LCC IMPACTS
tkelley on DSK3SPTVN1PROD with RULES2
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 (%) .................................................................
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 (%) .............................................................
SOC.SC.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 (%) ...............................................................
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TSL 2 *
TSL 3 *
TSL 4 *
TSL 5 *
0
100
0
4
41
55
64
0
36
100
0
0
0
100
0
0
100
0
7
40
53
59
20
21
100
0
0
0
100
0
0
100
0
0
100
0
60
40
0
100
0
0
0
100
0
0
100
0
0
40
60
36
13
51
100
0
0
0
40
60
0
40
60
4
20
76
43
0
57
100
0
0
71
10
18
1
10
89
3
0
97
17
0
83
100
0
0
0
10
90
0
0
100
0
0
100
11
0
89
11
0
89
10
40
50
10
40
50
10
40
50
65
24
11
84
16
0
0
40
60
0
40
60
7
10
83
25
10
65
100
0
0
0
40
60
0
10
90
7
0
93
9
0
91
100
0
0
0
40
60
0
32
68
9
17
75
9
17
75
92
8
0
7
40
54
7
40
54
7
40
54
67
0
33
100
0
0
0
100
0
0
100
0
0
100
0
32
40
27
100
0
0
0
100
0
0
100
0
0
100
0
60
40
0
100
0
0
0
100
0
0
100
0
0
100
0
100
0
1
100
0
0
0
100
0
0
100
0
0
100
0
0
100
0
60
40
0
0
100
0
0
100
0
0
100
0
0
100
0
60
40
0
0
100
Fmt 4701
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100
0
5
40
5
40
50
21
100
0
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17809
TABLE V.53—SUMMARY OF RESULTS FOR COMMERCIAL REFRIGERATION EQUIPMENT TSLS: DISTRIBUTION OF CUSTOMER
LCC IMPACTS—Continued
Category
TSL 1 *
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:
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 (%) .............................................................
TSL 2 *
TSL 3 *
TSL 4 *
TSL 5 *
0
54
54
29
0
0
100
0
0
100
0
0
100
0
0
100
0
0
100
0
0
40
60
0
40
60
20
0
80
45
0
55
100
0
0
0
41
59
0
41
59
10
10
80
29
10
61
87
10
3
0
100
0
0
100
0
0
100
0
0
100
0
61
39
0
0
9
91
1
9
90
10
9
80
42
9
48
91
9
0
0
10
90
0
10
90
0
10
90
20
10
70
90
10
0
28
39
33
3
0
97
5
0
95
8
0
92
100
0
0
tkelley on DSK3SPTVN1PROD with RULES2
* Values have been rounded to the nearest integer. Therefore, some of the percentages may not add up to 100.
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
4.21 quads, an amount DOE deems
significant. TSL 5 shows a net negative
NPV for customers with estimated
increased costs valued at $28.39 billion
at a 7-percent discount rate. Estimated
emissions reductions are 206.5 Mt of
CO2, 137.4 kt of NOX, 301.9 kt of SO2,
and 0.36 tons of Hg. The CO2 emissions
have a value of $1.5 billion to $20.4
billion and the NOX emissions have a
value of $47.6 million at a 7-percent
discount rate.
For TSL 5 the mean LCC savings for
all equipment classes, except for
VCT.SC.L are negative, implying an
increase in LCC. The median PBP is
longer than the lifetime of the
equipment for nearly all/most
equipment classes. The share of
customers that would experience a net
benefit (positive LCC savings) is very
low in nearly all equipment classes.
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 $1,144.8
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million to a decrease of $184.4 million
based on DOE’s manufacturer markup
scenarios. The upper bound of ¥$184.4
million is considered an optimistic
scenario for manufacturers because it
assumes manufacturers can fully pass
on substantial increases in equipment
costs to their customers. 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 43.04 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, are
outweighed by the burdens, in the form
of a large decrease in customer NPV,
negative LCC savings and very long
PBPs for nearly all equipment classes,
and a decrease in manufacturer INPV.
DOE concludes that the burdens of TSL
5 outweigh the benefits and, therefore,
does not find TSL 5 to be economically
justifiable.
TSL 4 corresponds to the highest
efficiency level, in each equipment
class, with a near positive NPV at a 7percent discount rate. The estimated
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energy savings from TSL 4 is 3.32
quads, an amount DOE deems
significant. TSL 4 shows a net positive
NPV for customers with estimated
benefit of at $3.64 billion at a 7-percent
discount rate. Estimated emissions
reductions are 163.2 Mt of CO2, 108.4 kt
of NOX, 238.5 kt of SO2, and 0.28 tons
of Hg. The CO2 emissions have a value
of $1.2 billion to $16.1 billion and the
NOX emissions have a value of $37.4
million at a 7-percent discount rate.
At TSL 4, the mean LCC savings
among equipment classes affected by
standards range from ¥$209 for
HCS.SC.M to $2,812 for VOP.RC.M.77
The median PBP ranges from 2.6 years
to 63.1 years. The share of customers
that would experience a net benefit
(positive LCC savings) ranges from 0
percent to 91 percent.
At TSL 4, the projected change in
INPV ranges from a decrease of $320.9
million to a decrease of $189.4 million.
At TSL 4, DOE recognizes the risk of
negative impacts if manufacturers’
expectations concerning reduced profit
77 For equipment classes HZO.RC.M, HZO.RC.L,
and HZO.SC.L, and HCT.SC.I 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.
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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 12.07 percent in INPV for
commercial refrigeration equipment
manufacturers.
After carefully considering the
analyses results and weighing the
benefits and burdens of TSL 4, DOE
finds that the benefits to the Nation
from TSL 4, in the form of energy
savings and emissions reductions, an
increase in customer NPV, and positive
mean LCC savings for many equipment
classes, are outweighed by the burdens,
in the form of negative mean LCC
savings for many equipment classes
(including several classes with a
significant share of total shipments),
long PBPs for some equipment classes,
the fact that over half of customers
would experience a net cost (negative
LCC savings) in many equipment
classes, and a decrease in manufacturer
INPV. DOE concludes that the burdens
of TSL 4 outweigh the benefits and,
therefore, does not find TSL 4 to be
economically justifiable.
Next, DOE considered TSL 3. The
estimated energy savings from TSL 3 is
2.89 quads, an amount DOE deems
significant. TSL 3 shows a positive NPV
for customers valued at $4.93 billion at
a 7-percent discount rate. Estimated
emissions reductions are 141.9 Mt of
CO2, 94.3 kt of NOX, 207.4 kt of SO2,
and 0.25 tons of Hg. The CO2 emissions
have a value of $1.0 billion to $14.0
billion and the NOX emissions have a
value of $32.6 million at a 7-percent
discount rate.
At TSL 3, the mean LCC savings for
affected equipment classes range from
$18 to $5,001.78 The median PBP ranges
from 1.1 years to 7.2 years. The share of
customers that would experience a net
benefit (positive LCC savings) is over 50
percent for all affected equipment
classes.
At TSL 3, the projected change in
INPV ranges from a decrease of $165.0
million to a decrease of $93.9 million.
At TSL 3, 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 3 could result in a net
loss of 6.20 percent in INPV for
commercial refrigeration equipment
manufacturers.
After careful consideration of the
analyses results and, weighing the
benefits and burdens of TSL 3, DOE
finds that the benefits to the Nation
from TSL 3, in the form of energy
savings and emissions reductions, an
increase in customer NPV, positive
mean LCC savings for all affected
equipment classes, PBPs that are less
than seven years for most of the affected
equipment classes, and the fact that over
half of customers would experience a
net benefit in nearly all affected
equipment classes, outweigh the
burdens, in the form of a decrease in
manufacturer INPV. The Secretary
concludes that TSL 3 will offer the
maximum improvement in efficiency
that is technologically feasible and
economically justified and will result in
the significant conservation of energy.
Therefore, DOE today is adopting
standards at TSL 3 for commercial
refrigeration equipment. The amended
energy conservation standards for
commercial refrigeration equipment,
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 V.54.
TABLE V.54—ENERGY CONSERVATION STANDARDS FOR COMMERCIAL REFRIGERATION EQUIPMENT
[Compliance required starting March 27, 2017]
Equipment class *
Standard level ** ,†
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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 .....................................
Equipment class *
0.49 × TDA + 2.61.
0.63 × TDA + 4.07.
0.66 × TDA + 3.18.
0.55 × TDA + 6.88.
0.35 × TDA + 2.88.
0.15 × TDA + 1.95.
2.2 × TDA + 6.85.
0.44 × TDA + 0.11.
1.69 × TDA + 4.71.
1.7 × TDA + 4.59.
1.9 × TDA + 7.08.
0.72 × TDA + 5.55.
0.56 × TDA + 0.43.
0.62 × TDA + 3.29.
0.34 × V + 0.88.
0.1 × V + 0.86.
0.29 × V + 2.95.
0.05 × V + 1.36.
0.22 × V + 1.38.
0.06 × V + 0.37.
0.08 × V + 1.23.
0.05 × V + 0.91.
0.06 × V + 1.12.
0.11 × V + 0.81.
0.52 × TDA + 1.
Standard level **,†
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 ......................................
SOC.SC.L .....................................
2.79 × TDA + 8.7.
2.2 × TDA + 6.85.
2.79 × TDA + 8.7.
0.7 × TDA + 8.74.
4.25 × TDA + 11.82.
5.4 × TDA + 15.02.
4.26 × TDA + 11.51.
5.41 × TDA + 14.63.
2.42 × TDA + 9.
0.93 × TDA + 0.22.
1.09 × TDA + 0.26.
1.53 × TDA + 0.36.
0.58 × TDA + 3.05.
0.16 × TDA + 0.13.
0.34 × TDA + 0.26.
0.4 × TDA + 0.31.
0.1 × V + 0.26.
0.21 × V + 0.54.
0.25 × V + 0.63.
0.34 × V + 0.88.
0.1 × V + 0.26.
0.21 × V + 0.54.
0.25 × V + 0.63.
1.1 × TDA + 2.1.
* 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 closed with transparent doors, VCS = vertical closed with solid doors, HCT = horizontal closed with
transparent doors, HCS = horizontal closed with 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 final rule 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.
78 Equipment classes VOP.SC.M, SVO.SC.M,
SOC.RC.M, SOC.SC.M, HZO.RC.M, HZO.RC.L,
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HZO.SC.L, and HCT.SC.I at TSL 3 are associated
with the baseline level.
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Federal Register / Vol. 79, No. 60 / Friday, March 28, 2014 / Rules and Regulations
2. Summary of Benefits and Costs
(Annualized) of the Standards
The benefits and costs of today’s
standards, for 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 operating the product
(consisting primarily of operating cost
savings from using less energy, minus
increases in equipment purchase and
installation costs, which is another way
of representing consumer NPV), plus (2)
the annualized monetary value of the
benefits of emission reductions,
including CO2 emission reductions.79
Estimates of annualized benefits and
costs of today’s standards are shown in
Table V.55. The results under the
primary estimate are as follows. Using a
7-percent discount rate for benefits and
costs other than CO2 reduction, for
which DOE used a 3-percent discount
rate along with the average SCC series
that uses a 3-percent discount rate, the
cost of the standards in today’s rule is
$256 million per year in increased
equipment costs, while the benefits are
$710 million per year in reduced
17811
equipment operating costs, $246 million
in CO2 reductions, and $3.01 million in
reduced NOX emissions. In this case, the
net benefit amounts to $704 million per
year. Using a 3-percent discount rate for
all benefits and costs and the average
SCC series, the cost of the standards in
today’s rule is $264 million per year in
increased equipment costs, while the
benefits are $900 million per year in
reduced operating costs, $246 million in
CO2 reductions, and $5.64 million in
reduced NOX emissions. In this case, the
net benefit amounts to $888 million per
year.
TABLE V.55—ANNUALIZED BENEFITS AND COSTS OF NEW AND AMENDED STANDARDS FOR COMMERCIAL REFRIGERATION
EQUIPMENT
Million 2012$/year
Discount rate
Primary estimate*
Low net benefits estimate*
High net benefits estimate*
Benefits
Operating Cost Savings ....
CO2 Reduction at ($11.8/t
case) **.
CO2 Reduction at ($39.7/t
case) **.
CO2 Reduction at ($61.2/t
case)**.
CO2 Reduction at ($117.0/t
case) **.
NOX Reduction at ($2,591/
ton) **.
Total Benefits † ...........
7% .....................................
3% .....................................
5% .....................................
710 ....................................
900 ....................................
73 ......................................
688 ....................................
865 ....................................
73 ......................................
744.
947.
73.
3% .....................................
246 ....................................
246 ....................................
246.
2.5% ..................................
361 ....................................
361 ....................................
361.
3% .....................................
760 ....................................
760 ....................................
760.
7% .....................................
3.01 ...................................
3.01 ...................................
3.01.
3%
7%
7%
3%
3%
5.64 ...................................
786 to 1,474 ......................
960 ....................................
978 to 1,666 ......................
1,152 .................................
5.64 ...................................
764 to 1,451 ......................
937 ....................................
943 to 1,631 ......................
1,117 .................................
5.64.
820 to 1,508.
994.
1,026 to 1,713.
1,200.
.....................................
plus CO2 range ...........
.....................................
plus CO2 range ...........
.....................................
Costs
Incremental Equipment
Costs.
7% .....................................
256 ....................................
250 ....................................
261.
3% .....................................
264 ....................................
258 ....................................
271.
513
687
685
859
559 to 1,246.
733.
755 to 1,442.
929.
Net Benefits
tkelley on DSK3SPTVN1PROD with RULES2
Total † ..................
7%
7%
3%
3%
plus CO2 range ...........
.....................................
plus CO2 range ...........
.....................................
530
704
714
888
to 1,218 ......................
....................................
to 1,402 ......................
....................................
to 1,201 ......................
....................................
to 1,373 ......................
....................................
* This table presents the annualized costs and benefits associated with commercial refrigeration equipment shipped in 2017–2046. These results include benefits to customers which accrue after 2046 from the products purchased in 2017–2046. The results account for the incremental
variable and fixed costs incurred by manufacturers due to the amended standard, some of which may be incurred in preparation for the final rule.
The primary, low, and high estimates utilize projections of energy prices from the AEO 2013 Reference case, Low Estimate, and High Estimate,
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 product price trends in the Low Benefits Estimate, and a high decline rate for projected product price trends in the
High Benefits Estimate. The methods used to derive projected price trends are explained in section IV.H.
** The CO2 values represent global monetized values of the SCC, in 2012$, in 2015 under several scenarios of the updated SCC values. The
first three cases use the averages of SCC distributions calculated using 5%, 3%, and 2.5% discount rates, respectively. The fourth case represents the 95th percentile of the SCC distribution calculated using a 3% discount rate. The SCC time series used by DOE incorporate an escalation factor. The value for NO X is the average of the low and high values used in DOE’s analysis.
79 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 three and seven 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.3. From the present value, DOE
then calculated the fixed annual payment over a 30year period (2017 through 2046) that yields the
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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.
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† 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.
tkelley on DSK3SPTVN1PROD with RULES2
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 (October 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) For certain segments of the
companies that purchase commercial
refrigeration equipment, such as small
grocers, there may be 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).
(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 that are not
reflected in energy prices, such as
reduced emissions of greenhouse gases.
DOE attempts to quantify some of the
external benefits through use of Social
Cost of Carbon values.
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 a regulatory
impact analysis (RIA) on today’s rule
and that the Office of Information and
Regulatory Affairs (OIRA) in the Office
of Management and Budget (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 technical
support document for this rulemaking.
DOE has also reviewed this regulation
pursuant to Executive Order 13563,
issued on January 18, 2011 (76 FR 3281,
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19:39 Mar 27, 2014
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January 21, 2011). EO 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
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, the Office of
Information and Regulatory Affairs 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 final rule 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 an 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
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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
(August 16, 2002), DOE published
procedures and policies on February 19,
2003, to ensure that the potential
impacts of its rules on small entities are
properly considered during the
rulemaking process. 68 FR 7990. DOE
has made its procedures and policies
available on the Office of the General
Counsel’s Web site (https://energy.gov/
gc/office-general-counsel).
For manufacturers of commercial
refrigeration equipment, the Small
Business Administration (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 (September 5, 2000)
and codified at 13 CFR Part 121.The size
standards are listed by North American
Industry Classification System (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, ‘‘AirConditioning 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. Based on this
threshold, DOE present the following
FRFA analysis:
1. Description and Estimated Number of
Small Entities Regulated
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,80 the SBA Database 81),
individual company Web sites, and
80 ‘‘AHRI Certification Directory.’’ AHRI
Certification Directory. AHRI. (Available at: https://
www.ahridirectory.org/ahridirectory/pages/
home.aspx) (Last accessed October 10, 2011). See
www.ahridirectory.org/ahriDirectory/pages/
home.aspx.
81 ‘‘Dynamic Small Business Search.’’ SBA.
(Available at: See https://dsbs.sba.gov/dsbs/search/
dsp_dsbs.cfm) (Last accessed October 12, 2011).
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market research tools (e.g., Dunn and
Bradstreet reports 82 and Hoovers
reports 83) 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 in
the United States. Nine of the
companies are foreign-owned firms. 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.84 While some
small businesses have significant market
share (e.g., Continental has a 4-percent
market share for foodservice commercial
refrigeration 84), 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 amended level, the average
small manufacturer is expected to face
capital conversion costs that are nearly
five times typical annual capital
expenditures, and product conversion
costs that are roughly double the typical
annual R&D spending, as shown in
Table VI.1. At the amended level, the
conversion costs are driven by the
incorporation of thicker insulation into
case designs. The thicker case designs
necessitate the purchase of new jigs for
production. Manufacturers estimate of
the cost of modifying an existing jig at
approximately $50,000. Manufacturer
estimates of the cost of a new jig ranged
from $100,000 to $300,000, depending
on the jig size and 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. All shelving and
internally fitted components would
need to be redesigned to fit the revised
cabinet’s interior dimensions.
Furthermore, changes in insulation and
in refrigeration components could
necessitate 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 49 percent of annual capital
expenditures for an average large
manufacturer, while capital conversion
17813
costs are 278 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 the
amended standard.
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 amended standard,
small businesses will likely have greater
increases in component costs than large
businesses and will thus be at a pricing
disadvantage.
To estimate how small manufacturers
would be 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).
The conversion costs in these tables are
presented relative to annual financial
metrics for the purposes of comparing
impacts of small versus large
manufacturers. In practice, these
conversion costs will likely be spread
out over a period of multiple years. TSL
3 represents the level adopted in today’s
final rule:
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
tkelley on DSK3SPTVN1PROD with RULES2
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
20
20
330
913
2838
45
71
278
428
622
1
2
11
26
70
13
18
129
296
792
...............................................
...............................................
...............................................
...............................................
...............................................
82 ‘‘D&B √ Business Information √ Get Credit
Reports √ 888 480–6007.’’. Dun & Bradstreet
(Available at: www.dnb.com) (Last accessed October
10, 2011). See www.dnb.com/.
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83 ‘‘Hoovers √ Company Information √ Industry
Information √ Lists.’’ D&B (2013) (Available at: See
https://www.hoovers.com/) (Last accessed December
12, 2012).
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84 32nd Annual Portrait of the U.S. Appliance
Industry. Appliance Magazine. September 2009.
66(7).
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Federal Register / Vol. 79, No. 60 / Friday, March 28, 2014 / Rules and Regulations
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
3
3
46
128
398
49
49
49
49
49
1
1
2
3
9
10
10
20
40
104
...............................................
...............................................
...............................................
...............................................
...............................................
Small firms would likely be at a
disadvantage relative to larger firms in
meeting the amended energy
conservation standard for commercial
refrigeration equipment. The small
businesses face disadvantages in terms
of access to capital, the cost of re-tooling
production lines and investing in
redesigns, and pricing for key
components. As a result, DOE could not
certify that the amended standards
would not have a significant impact on
a significant number of small
businesses.
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 adopted
today.
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4. Significant Alternatives to the Rule
The discussion above analyzes
impacts on small businesses that would
result from DOE’s amended standards.
In addition to the other TSLs being
considered, the rulemaking TSD
includes a regulatory impact analysis
(RIA). For commercial refrigeration
equipment, the RIA discusses the
following policy alternatives: (1) No
change in standard; (2) consumer
rebates; (3) consumer tax credits; and (4)
manufacturer tax credits; (5) voluntary
energy efficiency targets; and (6) bulk
government purchases. While these
alternatives may mitigate to some
varying extent the economic impacts on
small entities compared to the
standards, DOE determined that the
energy savings of these alternatives are
significantly smaller than those that
would be expected to result from
adoption of the amended standard
levels. Accordingly, DOE is declining to
adopt any of these alternatives and is
adopting the standards set forth in this
rulemaking. (See chapter 17 of the final
rule TSD for further detail on the policy
alternatives DOE considered.)
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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
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.
D. Review Under the National
Environmental Policy Act of 1969
Pursuant to the National
Environmental Policy Act (NEPA) of
1969, DOE has determined that the 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, App. B, B5.1(b);
§ 1021.410(b) and Appendix B, B(1)–(5).
The rule fits within the category of
actions because it is a rulemaking that
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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 rule. DOE’s CX determination for
this 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
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 final rule.
States can petition DOE for exemption
from such preemption to the extent, and
based on criteria, set forth in EPCA. (42
U.S.C. 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
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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
(February 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 final
rule meets the relevant standards of
Executive Order 12988.
G. Review Under the Unfunded
Mandates Reform Act of 1995
Title II of the Unfunded Mandates
Reform Act of 1995 (UMRA) requires
each Federal agency to assess the effects
of Federal regulatory actions on State,
local, and Tribal governments and the
private sector. Public Law 104–4, sec.
201 (codified at 2 U.S.C. 1531). For an
amended 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 ‘‘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
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intergovernmental consultation under
UMRA. 62 FR 12820. DOE’s policy
statement is also available at https://
energy.gov/gc/office-general-counsel.
DOE has concluded that this final rule
would likely require expenditures of
$100 million or more on the private
sector. 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 consumers
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 final rule. 2 U.S.C. 1532(c). The
content requirements of section 202(b)
of UMRA relevant to a private sector
mandate substantially overlap the
economic analysis requirements that
apply under section 325(o) of EPCA and
Executive Order 12866. The
SUPPLEMENTARY INFORMATION section of
the notice of final rulemaking and the
‘‘Regulatory Impact Analysis’’ section of
the TSD for this final rule respond to
those requirements.
Under section 205 of UMRA, the
Department is obligated to identify and
consider a reasonable number of
regulatory alternatives before
promulgating a rule for which a written
statement under section 202 is required.
2 U.S.C. 1535(a). DOE is required to
select from those alternatives the most
cost-effective and least burdensome
alternative that achieves the objectives
of the 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 final 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’’ chapter 17 of the TSD for
today’s final rule.
H. Review Under the Treasury and
General Government Appropriations
Act, 1999
Section 654 of the Treasury and
General Government Appropriations
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17815
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
(March 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
the public under guidelines established
by each agency pursuant to general
guidelines issued by OMB. OMB’s
guidelines were published at 67 FR
8452 (February 22, 2002), and DOE’s
guidelines were published at 67 FR
62446 (October 7, 2002). DOE has
reviewed today’s final rule under the
OMB and DOE guidelines and has
concluded that it is consistent with
applicable policies in those guidelines.
K. Review Under Executive Order 13211
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
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 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.
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DOE has concluded that today’s
regulatory action, which sets forth
energy conservation standards for
commercial refrigeration equipment, is
not a significant energy action because
the amended 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 final 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 (January 14, 2005). The Bulletin
establishes that certain scientific
information shall be peer reviewed by
qualified specialists before it is
disseminated by the Federal
Government, including influential
scientific information related to agency
regulatory actions. The purpose of the
bulletin is to enhance the quality and
credibility of the Government’s
scientific information. Under the
Bulletin, the energy conservation
standards rulemaking analyses are
‘‘influential scientific information,’’
which the Bulletin defines as scientific
information the agency reasonably can
determine will have, or does have, a
clear and substantial impact on
important public policies or private
sector decisions. 70 FR 2667.
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.
M. Congressional Notification
As required by 5 U.S.C. 801, DOE will
report to Congress on the promulgation
of this rule prior to its effective date.
The report will state that it has been
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determined that the rule is not a ‘‘major
rule’’ as defined by 5 U.S.C. 804(2).
§ 431.66 Energy conservation standards
and their effective dates.
VII. Approval of the Office of the
Secretary
The Secretary of Energy has approved
publication of today’s final rule.
(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)(1) 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 March 27, 2017 shall
have a daily energy consumption (in
kilowatt-hours 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 March 27, 2017 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 March 27, 2017 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 March 27,
2017, shall have a daily energy
consumption (in kilowatt-hours per day)
that does not exceed the levels
specified:
List of Subjects in 10 CFR Part 431
Administrative practice and
procedure, Confidential business
information, Energy conservation,
Incorporation by reference, Reporting
and recordkeeping requirements.
Issued in Washington, DC, on February 28,
2014.
David T. Danielson,
Assistant Secretary, Energy Efficiency and
Renewable Energy.
For the reasons stated in the
preamble, DOE amends part 431 of
chapter II, subchapter D, of title 10 of
the Code of Federal Regulations, to read
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
for ‘‘Service over counter’’ to read as
follows:
■
§ 431.62 Definitions concerning
commercial refrigerators, freezers and
refrigerator-freezers.
*
*
*
*
*
Service over counter means
equipment that has sliding or hinged
doors in the back intended for use by
sales personnel, with glass or other
transparent material in the front for
displaying merchandise, and that has a
height not greater than 66 inches and is
intended to serve as a counter for
transactions between sales personnel
and customers. ‘‘Service over the
counter, self-contained, medium
temperature commercial refrigerator’’,
also defined in this section, is one
specific equipment class within the
service over counter equipment family.
*
*
*
*
*
■ 3. Section 431.66 is amended by:
■ a. Revising paragraph (a)(3);
■ b. Revising paragraph (b)(1)
introductory text;
■ c. Revising paragraph (c);
■ d. Revising paragraph (d) introductory
text; and
■ c. Adding paragraph (e).
The revisions and addition read as
follows:
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17817
(1) For equipment other than hybrid
equipment, refrigerator/freezers, or
wedge cases:
Condensing
unit
configuration
Equipment
family
Remote (RC) ..............
Vertical Open (VOP) ...
Equipment category
Rating
temp.
°F
Operating
temp.
°F
Equipment
class
designation *
Maximum
daily energy
consumption
kWh/day
Self-Contained (SC) ...
Semivertical Open
(SVO).
Horizontal Open (HZO)
Self-Contained Commercial Refrigerators
and Commercial
Freezers With Doors.
Self-Contained (SC) ...
Vertical Closed Transparent (VCT).
Vertical Closed Solid
(VCS).
Horizontal Closed
Transparent (HCT).
SVO.RC.L ...
HZO.RC.M ..
HZO.RC.L ...
VCT.RC.M ...
2.2 × TDA + 6.85.
0.35 × TDA + 2.88.
0.55 × TDA + 6.88.
0.15 × TDA + 1.95.
<32
≥32
VCT.RC.L ....
HCT.RC.M ...
0.49 × TDA + 2.61.
0.16 × TDA + 0.13.
<32
≥32
HCT.RC.L ....
VCS.RC.M ...
0.34 × TDA + 0.26.
0.1 × V + 0.26.
<32
≥32
VCS.RC.L ....
HCS.RC.M ..
0.21 × V + 0.54.
0.1 × V + 0.26.
<32
≥32
HCS.RC.L ...
SOC.RC.M ..
0.21 × V + 0.54.
0.44 × TDA + 0.11.
0 (L)
38 (M)
<32
≥32
SOC.RC.L ...
VOP.SC.M ...
0.93 × TDA + 0.22.
1.69 × TDA + 4.71.
<32
≥32
VOP.SC.L ...
SVO.SC.M ...
4.25 × TDA + 11.82.
1.7 × TDA + 4.59.
0 (L)
38 (M)
0 (L)
38 (M)
<32
≥32
<32
≥32
SVO.SC.L ...
HZO.SC.M ...
HZO.SC.L ....
VCT.SC.M ...
4.26 × TDA + 11.51.
0.72 × TDA + 5.55.
1.9 × TDA + 7.08.
0.1 × V + 0.86.
<32
≥32
VCT.SC.L ....
VCS.SC.M ...
0.29 × V + 2.95.
0.05 × V + 1.36.
38 (M)
Vertical Open (VOP) ...
<32
≥32
<32
≥32
<32
≥32
VCS.SC.L ....
HCT.SC.M ...
0.22 × V + 1.38.
0.06 × V + 0.37.
<32
≥32
HCT.SC.L ....
HCS.SC.M ...
0.08 × V + 1.23.
0.05 × V + 0.91.
0 (L)
Self-Contained Commercial Refrigerators
and Commercial
Freezers Without
Doors.
0 (L)
38 (M)
0 (L)
38 (M)
0 (L)
38 (M)
Service Over Counter
(SOC).
2.2 × TDA + 6.85.
0.66 × TDA + 3.18.
0 (L)
38 (M)
Horizontal Closed
Solid (HCS).
VOP.RC.L ...
SVO.RC.M ..
0 (L)
38 (M)
Vertical Closed Solid
(VCS).
<32
≥32
0 (L)
38 (M)
Horizontal Closed
Transparent (HCT).
0.64 × TDA + 4.07.
0 (L)
38 (M)
Vertical Closed Transparent (VCT).
VOP.RC.M ..
0 (L)
38 (M)
Horizontal Open (HZO)
≥32
0 (L)
38 (M)
Semivertical Open
(SVO).
38 (M)
0 (L)
Remote Condensing
Commercial Refrigerators and Commercial Freezers.
<32
≥32
HCS.SC.L ....
SOC.SC.M ..
0.06 × V + 1.12.
0.52 × TDA + 1.
Horizontal Closed
Solid (HCS).
tkelley on DSK3SPTVN1PROD with RULES2
Service Over Counter
(SOC).
Self-Contained Commercial Refrigerators
with Transparent
Doors for Pull-Down
Temperature Applications.
Commercial Ice-Cream
Freezers.
Self-Contained (SC) ...
Pull-Down (PD) ...........
0 (L)
38 (M)
<32
≥32
SOC.SC.L ...
PD.SC.M .....
1.1 × TDA + 2.1.
0.11 × V + 0.81.
Remote (RC) ..............
Vertical Open (VOP) ...
¥15 (I)
≤¥5**
VOP.RC.I ....
2.79 × TDA + 8.7.
SVO.RC.I ....
2.79 × TDA + 8.7.
HZO.RC.I ....
VCT.RC.I .....
0.7 × TDA + 8.74.
0.58 × TDA + 3.05.
Semivertical Open
(SVO).
Horizontal Open (HZO)
Vertical Closed Transparent (VCT).
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Federal Register / Vol. 79, No. 60 / Friday, March 28, 2014 / Rules and Regulations
Condensing
unit
configuration
Equipment category
Self-Contained (SC) ...
0.4 × TDA + 0.31.
0.25 × V + 0.63.
HCS.RC.I ....
0.25 × V + 0.63.
SOC.RC.I ....
1.09 × TDA + 0.26.
VOP.SC.I .....
SVO.SC.I .....
5.4 × TDA + 15.02.
5.41 × TDA + 14.63.
HZO.SC.I .....
VCT.SC.I .....
2.42 × TDA + 9.
0.62 × TDA + 3.29.
HCT.SC.I .....
0.56 × TDA + 0.43.
VCS.SC.I .....
0.34 × V + 0.88.
HCS.SC.I .....
0.34 × V + 0.88.
SOC.SC.I ....
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).
Maximum
daily energy
consumption
kWh/day
VCS.RC.I .....
Operating
temp.
°F
Equipment
class
designation *
HCT.RC.I .....
Rating
temp.
°F
Equipment
family
1.53 × TDA + 0.36.
* 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.
tkelley on DSK3SPTVN1PROD with RULES2
(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
its compartments. For each
compartment, measure the TDA or
volume of that compartment, and
determine the appropriate equipment
class based on that compartment’s
equipment family, condensing unit
configuration, and designed operating
temperature. The MDEC limit for each
compartment shall be the calculated
value obtained by entering that
compartment’s TDA or volume into the
VerDate Mar<15>2010
19:39 Mar 27, 2014
Jkt 232001
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
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 § 431.63). For wedge cases in
equipment classes for which a volume
metric is used, the MDEC shall be the
PO 00000
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Fmt 4701
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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 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. 2014–05082 Filed 3–27–14; 8:45 am]
BILLING CODE 6450–01–P
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]]>Agencies
[Federal Register Volume 79, Number 60 (Friday, March 28, 2014)]
[Rules and Regulations]
[Pages 17725-17818]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-05082]
[[Page 17725]]
Vol. 79
Friday,
No. 60
March 28, 2014
Part III
Department of Energy
-----------------------------------------------------------------------
10 CFR Part 431
Energy Conservation Program: Energy Conservation Standards for
Commercial Refrigeration Equipment; Final Rule
Federal Register / Vol. 79 , No. 60 / Friday, March 28, 2014 / Rules
and Regulations
[[Page 17726]]
-----------------------------------------------------------------------
DEPARTMENT OF ENERGY
10 CFR Part 431
[Docket Number 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: Final rule.
-----------------------------------------------------------------------
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
standards would be technologically feasible and economically justified,
and would save a significant amount of energy. In this final rule, DOE
is adopting more-stringent energy conservation standards for some
classes of commercial refrigeration equipment. It has determined that
the amended energy conservation standards for these products would
result in significant conservation of energy, and are technologically
feasible and economically justified.
DATES: The effective date of this rule is May 27, 2014. Compliance with
the amended standards established for commercial refrigeration
equipment in today's final rule is required on March 27, 2017.
The incorporation by reference of certain publications listed in
this final rule were approved by the Director of the Office of the
Federal Register on January 9, 2009 and February 21, 2012.
ADDRESSES: The docket, which includes Federal Register notices, public
meeting attendee lists and transcripts, comments, and other supporting
documents/materials, is available for review at www.regulations.gov.
All documents in the docket are listed in the 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. The
regulations.gov Web page will contain simple instructions on how to
access all documents, including public comments, in the docket.
For further information on how to review the docket, contact Ms.
Brenda Edwards at (202) 586-2945 or by email:
Brenda.Edwards@ee.doe.gov.
FOR FURTHER INFORMATION CONTACT:
John Cymbalsky, 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
287-1692. 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 Final Rule and Its Benefits
A. Benefits and Costs to Customers
B. Impact on Manufacturers
C. National Benefits and Costs
D. Conclusion
II. Introduction
A. Authority
B. Background
1. Current Standards
2. History of Standards Rulemaking for Commercial 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. Savings in Operating Costs Compared To Increase in Price
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. Trial Standard Levels
2. Proposed Standard Levels
3. Rulemaking Timeline
4. Normalization Metrics
5. Conformance With Executive Orders and Departmental Policies
6. Offset Factors
B. Market and Technology Assessment
1. Equipment Classes
a. Equipment Subcategories
b. Floral 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
C. Screening Analysis
D. Engineering Analysis
1. Representative Equipment for Analysis
a. Representative Unit Selection
b. Baseline Models
2. Design Options
a. Fluorescent Lamp Ballasts
b. Condenser Fans
c. Evaporator Fans
d. Design Options Impacting Equipment Form Factor
e. Vacuum Insulated Panels (VIPs)
f. Variable-Speed Fan Motors
g. Improved Transparent Door Designs
h. High-Performance Coil Designs
i. Higher-Efficiency Fan Blades
j. ECM Fan Motors
k. Lighting Occupancy Sensors and Controls
l. Night Curtains
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. Release of Engineering Model for Review
b. Anti-Sweat Heater Power
c. Coil Performance Modeling
d. Compressor Performance Modeling
e. Insulation Modeling
f. Lighting Performance
g. Transparent Door Performance
h. Validation of Engineering Results
E. Markups Analysis
F. Life-Cycle Cost and Payback Period Analysis
1. Equipment Cost
2. Installation Costs
3. Maintenance and 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 Efficiency Distributions
11. Inputs to Payback Period Analysis
12. Rebuttable-Presumption Payback Period
G. Shipments
1. Impact of Standards on Shipments
H. National Impact Analysis--National Energy Savings and Net
Present Value
1. Forecasted Efficiency in the Base Case and Standards Cases
2. National Energy Savings
3. Net Present Value of Customer Benefit
I. Customer Subgroup Analysis
J. Manufacturer Impact Analysis
1. Overview
2. Government Regulatory Impact Model
[[Page 17727]]
a. Government Regulatory Impact Model Key Inputs
b. Government Regulatory Impact Model Scenarios
3. Discussion of Comments
a. Volume Purchasing of Components
b. Refrigerants
c. Redesign Issues
d. LED Material Costs
e. GRIM
f. Cumulative Regulatory Burden
g. Certification Costs
h. Small Manufacturers
K. Emissions Analysis
L. 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
M. Utility Impact Analysis
N. Employment 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. Customer Subgroup Analysis
c. Rebuttable Presumption Payback
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. 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. Summary of National Economic Impact
8. Other Factors
C. Conclusions
1. Benefits and Burdens of Trial Standard Levels Considered for
Commercial Refrigeration Equipment
2. Summary of Benefits and Costs (Annualized) of the Standards
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
M. Congressional Notification
VII. Approval of the Office of the Secretary
I. Summary of the Final Rule and Its Benefits
Title III, Part C \1\ of the Energy Policy and Conservation Act of
1975 (EPCA or the Act), Public Law 94-163 (42 U.S.C. 6291-6309, as
codified), added by Public Law 95-619, Title IV, section 441(a),
established the Energy Conservation Program for Certain Industrial
Equipment.\2\ Pursuant to EPCA, any new or amended energy conservation
standard that DOE prescribes for certain products, such as commercial
refrigeration equipment, shall be designed to achieve the maximum
improvement in energy efficiency that DOE determines is both
technologically feasible and economically justified. (42 U.S.C.
6295(o)(2)(A)) Furthermore, the new or amended standard must result in
significant conservation of energy. (42 U.S.C. 6295(o)(3)(B) and
6316(e)(1)) In accordance with these and other statutory provisions
discussed in this document, DOE is adopting amended energy conservation
standards for commercial refrigeration equipment. The amended
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. These amended standards apply to
all equipment listed in Table I.1 and manufactured in, or imported
into, the United States on or after March 27, 2017.
---------------------------------------------------------------------------
\1\ For editorial reasons, upon codification in the U.S. Code,
Part C was redesignated Part A-1.
\2\ 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).
Table I.1--Energy Conservation Standards for Commercial Refrigeration Equipment
[Compliance required starting March 27, 2017]
----------------------------------------------------------------------------------------------------------------
Standard level** Standard level**
Equipment class* [dagger] Equipment class* [dagger]
----------------------------------------------------------------------------------------------------------------
VOP.RC.M............................ 0.64 x TDA + 4.07 VOP.RC.I............... 2.79 x TDA + 8.7
VOP.RC.L............................ 2.2 x TDA + 6.85 SVO.RC.L............... 2.2 x TDA + 6.85
VOP.SC.M............................ 1.69 x TDA + 4.71 SVO.RC.I............... 2.79 x TDA + 8.7
VCT.RC.M............................ 0.15 x TDA + 1.95 HZO.RC.I............... 0.7 x TDA + 8.74
VCT.RC.L............................ 0.49 x TDA + 2.61 VOP.SC.L............... 4.25 x TDA + 11.82
VCT.SC.M............................ 0.1 x V + 0.86 VOP.SC.I............... 5.4 x TDA + 15.02
VCT.SC.L............................ 0.29 x V + 2.95 SVO.SC.L............... 4.26 x TDA + 11.51
VCT.SC.I............................ 0.62 x TDA + 3.29 SVO.SC.I............... 5.41 x TDA + 14.63
VCS.SC.M............................ 0.05 x V + 1.36 HZO.SC.I............... 2.42 x TDA + 9
VCS.SC.L............................ 0.22 x V + 1.38 SOC.RC.L............... 0.93 x TDA + 0.22
VCS.SC.I............................ 0.34 x V + 0.88 SOC.RC.I............... 1.09 x TDA + 0.26
SVO.RC.M............................ 0.66 x TDA + 3.18 SOC.SC.I............... 1.53 x TDA + 0.36
SVO.SC.M............................ 1.7 x TDA + 4.59 VCT.RC.I............... 0.58 x TDA + 3.05
SOC.RC.M............................ 0.44 x TDA + 0.11 HCT.RC.M............... 0.16 x TDA + 0.13
SOC.SC.M............................ 0.52 x TDA + 1 HCT.RC.L............... 0.34 x TDA + 0.26
HZO.RC.M............................ 0.35 x TDA + 2.88 HCT.RC.I............... 0.4 x TDA + 0.31
HZO.RC.L............................ 0.55 x TDA + 6.88 VCS.RC.M............... 0.1 x V + 0.26
HZO.SC.M............................ 0.72 x TDA + 5.55 VCS.RC.L............... 0.21 x V + 0.54
HZO.SC.L............................ 1.9 x TDA + 7.08 VCS.RC.I............... 0.25 x V + 0.63
HCT.SC.M............................ 0.06 x V + 0.37 HCS.SC.I............... 0.34 x V + 0.88
HCT.SC.L............................ 0.08 x V + 1.23 HCS.RC.M............... 0.1 x V + 0.26
HCT.SC.I............................ 0.56 x TDA + 0.43 HCS.RC.L............... 0.21 x V + 0.54
[[Page 17728]]
HCS.SC.M............................ 0.05 x V + 0.91 HCS.RC.I............... 0.25 x V + 0.63
HCS.SC.L............................ 0.06 x V + 1.12 SOC.SC.L............... 1.1 x TDA + 2.1
PD.SC.M............................. 0.11 x V + 0.81 ....................... .......................
----------------------------------------------------------------------------------------------------------------
* 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
closed with transparent doors, VCS = vertical closed with solid doors, HCT = horizontal closed with
transparent doors, HCS = horizontal closed with 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 [deg]F), L = low temperature (02 [deg]F), or I = ice-
cream temperature (-152 [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 final rule 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
today's 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 for which customers are impacted by the
amended standards.
---------------------------------------------------------------------------
\3\ Life-cycle cost 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.
\4\ Payback period 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 cost. Further discussion can be found in chapter 8 of the
final rule TSD.
Table I.2--Impacts of Today's Standards on Customers of Commercial
Refrigeration Equipment
------------------------------------------------------------------------
Average LCC
Equipment class* savings Median PBP
2012$ years
------------------------------------------------------------------------
VOP.RC.M...................................... 922 5.7
VOP.RC.L...................................... 53 6.1
VOP.SC.M...................................... ........... ...........
VCT.RC.M...................................... 542 2.1
VCT.RC.L...................................... 526 2.7
VCT.SC.M...................................... 226 5.3
VCT.SC.L...................................... 5001 1.1
VCT.SC.I...................................... 18 7.2
VCS.SC.M...................................... 363 1.4
VCS.SC.L...................................... 507 2.5
VCS.SC.I...................................... 113 5.0
SVO.RC.M...................................... 564 6.2
SVO.SC.M...................................... ........... ...........
SOC.RC.M...................................... ........... ...........
SOC.SC.M...................................... ........... ...........
HZO.RC.M...................................... ........... ...........
HZO.RC.L...................................... ........... ...........
HZO.SC.M...................................... 55 6.9
HZO.SC.L...................................... ........... ...........
HCT.SC.M...................................... 101 5.8
HCT.SC.L...................................... 293 2.5
HCT.SC.I...................................... ........... ...........
HCS.SC.M...................................... 15 5.5
HCS.SC.L...................................... 64 2.5
PD.SC.M....................................... 165 5.6
------------------------------------------------------------------------
* 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 final rule
TSD, Engineering Analysis, for a detailed discussion of primary and
secondary equipment classes.
* For equipment classes VOP.SC.M, SVO.SC.M, SOC. RC.M, SOC. SC.M,
HZO.RC.M, HZO.RC.L, HZO.SC.L, and HCT.SC.I, no efficiency levels above
the baseline were found to be economically justifiable. Therefore, the
standard levels contained in today's document for these equipment
classes are the same as those set in the 2009 final rule. As a result,
LCC savings and PBP values for these equipment classes are not
relevant.
Note: Equipment lifetimes are between 10 and 15 years for all equipment
classes.
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 10.0 percent,
DOE estimates that the INPV for manufacturers of commercial
refrigeration equipment is $2,660.0 million in 2012$.\5\ Under today's
standards, DOE expects the industry net present value to decrease by
3.53 percent to 6.60 percent. Total industry conversion costs are
expected to total $184.0 million. Additionally, based on DOE's
interviews with the manufacturers of commercial refrigeration
equipment, DOE does not expect significant loss of domestic employment.
---------------------------------------------------------------------------
\5\ All monetary values in this notice are expressed in 2012
dollars.
---------------------------------------------------------------------------
C. National Benefits and Costs
DOE's analyses indicate that today's 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 compliance with amended standards (2017-2046) amount to
2.89 quadrillion British thermal units (quads). The annualized energy
savings (0.10 quads) are equivalent to 0.5 percent of total U.S.
commercial primary energy consumption in 2014.\6\
---------------------------------------------------------------------------
\6\ Based on U.S. Department of Energy, Energy Information
Administration, Annual Energy Outlook 2013 (AEO 2013) data.
---------------------------------------------------------------------------
The cumulative net present value (NPV) of total consumer costs and
savings of today's standards for commercial refrigeration equipment
ranges from $4.93 billion (at a 7-percent discount rate) to $11.74
billion (at a 3-percent discount rate).\7\ This NPV expresses the
estimated total value of future operating cost savings minus the
estimated increased product costs for products purchased in 2016-2047.
---------------------------------------------------------------------------
\7\ All present value results reflect discounted to beginning of
2014.
---------------------------------------------------------------------------
In addition, today's standards are expected to have significant
environmental benefits. The energy savings would result in cumulative
emission reductions of approximately 142 million metric tons (Mt) \8\
of carbon dioxide (CO2), 762 thousand tons of methane, 207
thousand tons of sulfur dioxide (SO2), 94 tons of nitrogen
oxides
[[Page 17729]]
(NOX) and 0.25 tons of mercury (Hg).\9\ Through 2030, the
estimated energy savings would result in cumulative emissions
reductions of 48 Mt of CO2.
---------------------------------------------------------------------------
\8\ A metric ton is equivalent to 1.1 short tons. Results for
NOX and Hg are presented in short tons.
\9\ DOE calculated emissions reductions relative to the AEO 2013
Reference case, which generally represents current legislation and
environmental regulations for which implementing regulations were
available as of December 31, 2012.
---------------------------------------------------------------------------
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.\10\ The derivation of the SCC values is discussed
in section IV.M. Using discount rates appropriate for each set of SCC
values, DOE estimates that the net present monetary value of the
CO2 emissions reductions is between $1.0 billion and $14.0
billion. DOE also estimates that the net present monetary value of the
NOX emissions reductions is $33 million at a 7-percent
discount rate, and $104 million at a 3-percent discount rate.\11\
---------------------------------------------------------------------------
\10\ Technical Update of the Social Cost of Carbon for
Regulatory Impact Analysis Under Executive Order 12866. Interagency
Working Group on Social Cost of Carbon, United States Government.
May 2013; revised November 2013. https://www.whitehouse.gov/sites/default/files/omb/assets/inforeg/technical-update-social-cost-of-carbon-for-regulator-impact-analysis.pdf.
\11\ DOE is investigating the valuation of avoided Hg and
SO2 emissions.
---------------------------------------------------------------------------
Table I.3 summarizes the national economic costs and benefits
expected to result from today's standards for commercial refrigeration
equipment.
Table I.3--Summary of National Economic Benefits and Costs of Amended
Commercial Refrigeration Equipment Energy Conservation Standards*
------------------------------------------------------------------------
Present value Discount rate
Category Billion 2012$ (percent)
------------------------------------------------------------------------
Benefits
------------------------------------------------------------------------
Operating Cost Savings.............. 7.70 7
16.63 3
CO2 Reduction Monetized Value ($11.8/ 1.01 5
t case)**..........................
CO2 Reduction Monetized Value ($39.7/ 4.55 3
t case)**..........................
CO2 Reduction Monetized Value ($61.2/ 7.20 2.5
t case)**..........................
CO2 Reduction Monetized Value ($117/ 14.05 3
t case)**..........................
NOX Reduction Monetized Value (at 0.03 7
$2,591/ton )**.....................
0.10 3
-----------------------------------
Total Benefits[dagger].......... 12.28 7
21.28 3
------------------------------------------------------------------------
Costs
------------------------------------------------------------------------
Incremental Installed Costs......... 2.77 7
4.89 3
------------------------------------------------------------------------
Net Benefits
------------------------------------------------------------------------
Including CO2 and NOX [dagger] 9.51 7
Reduction Monetized Value.......... 16.40 3
------------------------------------------------------------------------
* This table presents the costs and benefits associated with commercial
refrigeration equipment shipped in 2017-2046. These results include
benefits to customers which accrue after 2046 from the equipment
purchased in 2017-2046. The results account for the incremental
variable and fixed costs incurred by manufacturers due to the amended
standard, some of which may be incurred in preparation for this final
rule.
** The CO2 values represent global monetized values of the SCC, in
2012$, in 2015 under several scenarios of the updated SCC values. The
first three cases use the averages of SCC distributions calculated
using 5%, 3%, and 2.5% discount rates, respectively. The fourth case
represents the 95th percentile of the SCC distribution calculated
using a 3% discount rate. The SCC time series used by DOE incorporates
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% and 7% cases are derived using
the series corresponding to average SCC with 3-percent discount rate.
The benefits and costs of today's standards, for 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 operating the product (consisting
primarily of operating cost savings from using less energy, minus
increases in equipment purchase and installation costs, which is
another way of representing consumer NPV, plus (2) the annualized
monetary value of the benefits of emission reductions, including
CO2 emission reductions.\12\
---------------------------------------------------------------------------
\12\ 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 customer costs and savings, for the time-series of
costs and benefits, using discount rates of three and seven 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.3. 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 adding the value of consumer 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. consumer 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 for the lifetime of commercial refrigeration equipment
shipped in 2017-2046. The SCC values, on the other hand, reflect the
present value of all future climate-related impacts resulting from the
emission of one metric ton of carbon dioxide in each
[[Page 17730]]
year. These impacts continue well beyond 2100.
Estimates of annualized benefits and costs of today's standards are
shown in Table I.4. The results under the primary estimate are as
follows. Using a 7-percent discount rate for benefits and costs other
than CO2 reduction, for which DOE used a 3-percent discount
rate along with the average SCC series that uses a 3-percent discount
rate, the cost of the amended standards in today's rule is $256 million
per year in increased equipment costs, while the benefits are $710
million per year in reduced equipment operating costs, $246 million in
CO2 reductions, and $3.01 million in reduced NOX
emissions. In this case, the net benefit amounts to $704 million per
year. Using a 3-percent discount rate for all benefits and costs and
the average SCC series, the cost of the standards in today's rule is
$264 million per year in increased equipment costs, while the benefits
are $900 million per year in reduced operating costs, $246 million in
CO2 reductions, and $5.64 million in reduced NOX
emissions. In this case, the net benefit amounts to $888 million per
year.
Table I.4--Annualized Benefits and Costs of Amended Standards for Commercial Refrigeration Equipment*
----------------------------------------------------------------------------------------------------------------
million 2012$/year
-----------------------------------------------------------
Discount rate Low net benefits High net benefits
Primary estimate* estimate* estimate*
----------------------------------------------------------------------------------------------------------------
Benefits
----------------------------------------------------------------------------------------------------------------
Operating Cost Savings.......... 7%................ 710............... 688............... 744.
3%................ 900............... 865............... 947.
CO2 Reduction at ($11.8/t 5%................ 73................ 73................ 73.
case)**.
CO2 Reduction at ($39.7/t 3%................ 246............... 246............... 246.
case)**.
CO2 Reduction at ($61.2/t 2.5%.............. 361............... 361............... 361.
case)**.
CO2 Reduction at ($117.0/t 3%................ 760............... 760............... 760.
case)**.
NOX Reduction at ($2,591/ton)**. 7%................ 3.01.............. 3.01.............. 3.01.
3%................ 5.64.............. 5.64.............. 5.64.
Total Benefits[dagger]...... 7% plus CO2 range. 786 to 1,474...... 764 to 1,451...... 820 to 1,508.
7%................ 960............... 937............... 994.
3% plus CO2 range. 978 to 1,666...... 943 to 1,631...... 1,026 to 1,713.
3%................ 1,152............. 1,117............. 1,200.
----------------------------------------------------------------------------------------------------------------
Costs
----------------------------------------------------------------------------------------------------------------
Incremental Equipment Costs..... 7%................ 256............... 250............... 261.
3%................ 264............... 258............... 271.
----------------------------------------------------------------------------------------------------------------
Net Benefits
----------------------------------------------------------------------------------------------------------------
Total[dagger]............... 7% plus CO2 range. 530 to 1,218...... 513 to 1,201...... 559 to 1,246.
7%................ 704............... 687............... 733.
3% plus CO2 range. 714 to 1,402...... 685 to 1,373...... 755 to 1,442.
3%................ 888............... 859............... 929.
----------------------------------------------------------------------------------------------------------------
* This table presents the annualized costs and benefits associated with commercial refrigeration equipment
shipped in 2017-2046. These results include benefits to customers which accrue after 2046 from the products
purchased in 2017-2046. The results account for the incremental variable and fixed costs incurred by
manufacturers due to the amended standard, some of which may be incurred in preparation for the final rule.
The primary, low, and high estimates utilize projections of energy prices from the AEO 2013 Reference case,
Low Estimate, and High Estimate, 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
product price trends in the Low Benefits Estimate, and a high decline rate for projected product price trends
in the High Benefits Estimate. The method used to derive projected price trends are explained in section IV.H.
** The CO2 values represent global monetized values of the SCC, in 2012$, in 2015 under several scenarios of the
updated SCC values. The first three cases use the averages of SCC distributions calculated using 5%, 3%, and
2.5% discount rates, respectively. The fourth case represents the 95th percentile of the SCC distribution
calculated using a 3% discount rate. The SCC time series used by DOE 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.
D. Conclusion
Based on the analyses culminating in this final rule, DOE found the
benefits to the nation of the amended standards (energy savings,
consumer LCC savings, positive NPV of consumer benefit, and emission
reductions) outweigh the burdens (loss of INPV and LCC increases for
some users of this equipment). DOE has concluded that the standards in
today's final rule represent the maximum improvement in energy
efficiency that is both technologically feasible and economically
justified, and would result in significant conservation of energy. (42
U.S.C. 6295(o), 6316(e))
II. Introduction
The following section briefly discusses the statutory authority
underlying today's final rule, as well as some of the relevant
historical background related to the establishment of amended standards
for commercial refrigeration equipment.
[[Page 17731]]
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 document.13 14 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.)
---------------------------------------------------------------------------
\13\ For editorial reasons, upon codification in the U.S. Code,
Part C was re-designated Part A-1.
\14\ 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))
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
[[Page 17732]]
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 at 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 (December 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.
Table II.2--Commercial Refrigeration Equipment Standards Established in
the January 2009 Final Rule--Compliance Required Beginning on January 1,
2012
------------------------------------------------------------------------
Equipment class * Standard level ** 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 closed with transparent doors, VCS = vertical closed with
solid doors, HCT = horizontal closed with transparent doors, HCS =
horizontal closed with 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.
[[Page 17733]]
** TDA is the total display area of the case, 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.
In December 2012, AEMTCA amended EPCA by establishing 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))
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 \15\ (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.\16\ 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 at 60407.
---------------------------------------------------------------------------
\15\ 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))
\16\ 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 document in the Federal Register announcing the
availability of the Framework document, as well as a public meeting to
discuss the document. The document 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,\17\ 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
document.
---------------------------------------------------------------------------
\17\ 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 a 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.)
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
[[Page 17734]]
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.
On September 11, 2013, DOE published a notice of proposed
rulemaking (NOPR) in this proceeding (September 2013 NOPR). 78 FR
55890. In the September 2013 NOPR, DOE addressed, in detail, the
comments received in earlier stages of rulemaking, and proposed amended
energy conservation standards for commercial refrigeration equipment.
In conjunction with the September 2013 NOPR, DOE also published on its
Web site the complete technical support document (TSD) for the proposed
rule, which incorporated the analyses DOE conducted and technical
documentation for each analysis. Also published on DOE's Web site were
the engineering analysis spreadsheets, the LCC spreadsheet, and the
national impact analysis standard spreadsheet. These materials are
available at https://www1.eere.energy.gov/buildings/appliance_standards/rulemaking.aspx/ruleid/27.
The standards which DOE proposed for commercial refrigeration
equipment at the NOPR stage of this rulemaking are shown in Table II.3.
They are provided solely for background informational purposes and
differ from the amended standards set forth in this final rule.
Table II.3--Proposed Energy Conservation Standards for Commercial Refrigeration Equipment
[For compliance in 2017]
----------------------------------------------------------------------------------------------------------------
Proposed level ** Proposed standard level
Equipment class* [dagger] Equipment class * **
----------------------------------------------------------------------------------------------------------------
VCT.RC.L............................ 0.43 x TDA + 2.03 VOP.RC.I............... 2.68 x TDA + 8.08
VOP.RC.M............................ 0.61 x TDA + 3.03 SVO.RC.L............... 2.11 x TDA + 6.36
SVO.RC.M............................ 0.63 x TDA + 2.41 SVO.RC.I............... 2.68 x TDA + 8.08
HZO.RC.L............................ 0.57 x TDA + 6.88 HZO.RC.I............... 0.72 x TDA + 8.74
HZO.RC.M............................ 0.35 x TDA + 2.88 VOP.SC.L............... 3.79 x TDA + 10.26
VCT.RC.M............................ 0.08 x TDA + 0.72 VOP.SC.I............... 4.81 x TDA + 13.03
VOP.RC.L............................ 2.11 x TDA + 6.36 SVO.SC.L............... 3.77 x TDA + 10.01
SOC.RC.M............................ 0.39 x TDA + 0.08 SVO.SC.I............... 4.79 x TDA + 12.72
VOP.SC.M............................ 1.51 x TDA + 4.09 HZO.SC.I............... 2.44 x TDA + 9.0
SVO.SC.M............................ 1.5 x TDA + 3.99 SOC.RC.L............... 0.83 x TDA + 0.18
HZO.SC.L............................ 1.92 x TDA + 7.08 SOC.RC.I............... 0.97 x TDA + 0.21
HZO.SC.M............................ 0.75 x TDA + 5.44 SOC.SC.I............... 1.35 x TDA + 0.29
HCT.SC.I............................ 0.49 x TDA + 0.37 VCT.RC.I............... 0.51 x TDA + 2.37
VCT.SC.I............................ 0.52 x TDA + 2.56 HCT.RC.M............... 0.14 x TDA + 0.11
VCS.SC.I............................ 0.35 x V + 0.81 HCT.RC.L............... 0.3 x TDA + 0.23
VCT.SC.M............................ 0.04 x V + 1.07 HCT.RC.I............... 0.35 x TDA + 0.27
VCT.SC.L............................ 0.22 x V + 1.21 VCS.RC.M............... 0.1 x V + 0.24
VCS.SC.M............................ 0.03 x V + 0.53 VCS.RC.L............... 0.21 x V + 0.5
VCS.SC.L............................ 0.13 x V + 0.43 VCS.RC.I............... 0.25 x V + 0.58
HCT.SC.M............................ 0.02 x V + 0.51 HCS.SC.I............... 0.35 x V + 0.81
HCT.SC.L............................ 0.11 x V + 0.6 HCS.RC.M............... 0.1 x V + 0.24
HCS.SC.M............................ 0.02 x V + 0.37 HCS.RC.L............... 0.21 x V + 0.5
HCS.SC.L............................ 0.12 x V + 0.42 HCS.RC.I............... 0.25 x V + 0.58
PD.SC.M............................. 0.03 x V + 0.83 SOC.SC.L............... 0.67 x TDA + 1.12
SOC.SC.M............................ 0.32 x TDA + 0.53
----------------------------------------------------------------------------------------------------------------
* 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
closed with transparent doors, VCS = vertical closed with solid doors, HCT = horizontal closed with
transparent doors, HCS = horizontal closed with 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 [deg]F), L = low temperature (02 [deg]F), or I = ice-
cream temperature (-152 [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 final rule 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.
In the September 2013 NOPR, DOE identified seven issues on which it
was particularly interested in receiving comments and views of
interested parties: light-emitting diode (LED) price projections, base
case efficiency trends,
[[Page 17735]]
operating temperature ranges, offset factors for smaller equipment,
extension of standards developed for the 25 primary classes to the
remaining 24 secondary classes, standards for hybrid cases and wedges,
and standard levels. 78 FR 55987 (September 11, 2013) After the
publication of the September 2013 NOPR, DOE received written comments
on these and other issues. DOE also held a public meeting in
Washington, DC, on October 3, 2013, to hear oral comments on and
solicit information relevant to the proposed rule. These comments are
addressed in today's document.
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 at
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 at 71357 (December 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 at 71369-70 (December 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 (February 21,
2012). The 2012 test procedure final rule also included an amendment to
incorporate by reference the updated ANSI/AHAM Standard HRF-1-2008,
``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 \18\ and lighting
occupancy sensors and scheduled controls. 77 FR at 10296-98 (February
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.\19\ 77 FR at 10305 (February 21, 2012).
---------------------------------------------------------------------------
\18\ 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.
\19\ 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 the
amended standards promulgated in this energy conservation standards
final rule. 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 the
revised energy conservation standards established by today's document.
77 FR at 10308 (February 21, 2012).
DOE has initiated a test procedure rulemaking for commercial
refrigeration equipment to revise and reorganize its test procedure for
commercial refrigeration equipment in order to clarify certain terms,
procedures, and compliance dates. A NOPR for this rulemaking was
published on October 28, 2013. 78 FR 64206 (October 28. 2013). In the
NOPR, DOE addressed:
Several inquiries received from interested parties
regarding the applicability of DOE's test procedure and current Federal
energy conservation standards;
The definitions of certain terms pertinent to commercial
refrigeration equipment;
The proper configuration and use of certain components and
features of commercial refrigeration equipment when testing according
to the DOE test procedure;
The proper application of certain test procedure
provisions;
The compliance date of certain provisions specified in the
DOE test procedure final rule published on February 21, 2012; and
A number of test procedure clarifications which arose as a
result of the negotiated rulemaking process for certification of
commercial heating, ventilation, air conditioning, refrigeration, and
water heating equipment.
DOE also held a public meeting in Washington, DC, on December 5,
2013, to hear oral comments on and solicit information relevant to the
proposed rule.
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
[[Page 17736]]
utilize volume as the normalization metric for all equipment types,
with the exception of refrigerator-freezers with solid doors, for which
the standard specifies adjusted volume. (42 U.S.C. 6313(c)(2)) The
January 2009 final rule, meanwhile, utilizes 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 at 1093
(January 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 at 1093
(January 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 maintained this stance in the NOPR
document and TSD. DOE did not receive any significant information or
data while conducting the final rule analyses that would alter this
position, and thus DOE includes continued use of the existing
normalization metrics in today's document.
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 part 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 final rule 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.
2. Maximum Technologically Feasible Levels
When DOE adopts (or does 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,
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 final rule. See chapter 5 of the 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
------------------------------------------------------------------------
``Max-Tech''
Equipment class level kWh/day
------------------------------------------------------------------------
VCT.RC.L................................................ 33.044
VOP.RC.M................................................ 35.652
SVO.RC.M................................................ 27.702
HZO.RC.L................................................ 31.078
HZO.RC.M................................................ 14.15
VCT.RC.M................................................ 10.988
VOP.RC.L................................................ 100.006
SOC.RC.M................................................ 21.560
VOP.SC.M................................................ 29.714
SVO.SC.M................................................ 25.400
HZO.SC.L................................................ 29.922
HZO.SC.M................................................ 13.748
HCT.SC.I................................................ 2.327
VCT.SC.I................................................ 18.106
VCS.SC.I................................................ 16.042
VCT.SC.M................................................ 5.148
VCT.SC.L................................................ 16.048
VCS.SC.M................................................ 3.028
VCS.SC.L................................................ 11.130
HCT.SC.M................................................ 0.614
HCT.SC.L................................................ 1.315
HCS.SC.M................................................ 0.981
HCS.SC.L................................................ 0.713
PD.SC.M................................................. 3.405
SOC.SC.M................................................ 26.119
------------------------------------------------------------------------
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 a 30-year period
that begins in the year of compliance with amended standards (2017-
2046).\20\ The savings are measured over the entire lifetime of
products purchased in the 30-year period.\21\ 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
considered TSLs. DOE then compares
[[Page 17737]]
the energy use at each TSL to the base-case energy use to obtain the
NES. The NIA model is described in section IV.H of this document and in
chapter 10 of the final rule TSD.
---------------------------------------------------------------------------
\20\ DOE also presents a sensitivity analysis that considers
impacts for products shipped in a 9-year period.
\21\ 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 NIA spreadsheet model to estimate energy savings from
amended standards for the equipment that is the subject of this
rulemaking. The NIA spreadsheet model (described in section IV.H of
this document) 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 also has begun to estimate full-fuel-cycle energy savings. 76
FR 51282 (August 18, 2011), as amended at 77 FR 49701 (August 17,
2012). The full-fuel-cycle (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 evaluation of FFC savings is driven in part by the
National Academy of Science's (NAS) report on FFC measurement
approaches for DOE's Appliance Standards Program.\22\ The NAS report
discusses that FFC was primarily intended for energy efficiency
standards rulemakings where multiple fuels may be used by a particular
product. In the case of this rulemaking pertaining to commercial
refrigeration equipment, only a single fuel--electricity--is consumed
by the equipment. DOE's approach is based on the calculation of an FFC
multiplier for each of the energy types used by covered equipment.
Although the addition of FFC energy savings in the rulemakings is
consistent with the recommendations, the methodology for estimating FFC
does not project how fuel markets would respond to this particular
standard rulemaking. The FFC methodology simply estimates how much
additional energy, and in turn how many tons of emissions, may be
displaced if the estimated fuel were not consumed by the equipment
covered in this rulemaking. It is also important to note that inclusion
of FFC savings does not affect DOE's choice of proposed standards. 76
FR 51282 (August 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 (i.e., coal, natural gas,
petroleum fuels), and thus presents a more complete picture of the
impacts of energy efficiency standards. For more information on FFC
energy savings, see section IV.H.2.
---------------------------------------------------------------------------
\22\ ``Review of Site (Point-of-Use) and Full-Fuel-Cycle
Measurement Approaches to DOE/EERE Building Appliance Energy-
Efficiency Standards,'' (Academy report) was completed in May 2009
and included five recommendations. A copy of the study can be
downloaded at: https://www.nap.edu/catalog.php?record_id=12670.
---------------------------------------------------------------------------
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.''
D. Economic Justification
1. Specific Criteria
As discussed in section III.D.1, 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 III.C and V of today's document.
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 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.
These measures are discussed further in the following section. For
consumers in the aggregate, DOE also calculates the national net
present value of the economic impacts applicable to a particular
rulemaking. DOE also evaluates the LCC impacts of potential standards
on identifiable subgroups of consumers that may be affected
disproportionately by a national standard.
b. Savings in Operating Costs Compared To Increase in Price
EPCA requires DOE to consider the savings in operating costs
throughout the estimated average life of the covered product compared
to any increase in the price of the covered product that are likely to
result from the imposition of the standard. (42 U.S.C.
6295(o)(2)(B)(i)(II) and 6316(e)(1)) DOE conducts this comparison in
its LCC and PBP analysis.
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. To account for uncertainty and variability in specific
inputs, such as product lifetime and discount rate, DOE uses a
distribution of values, with probabilities attached to each value. For
its analysis, DOE assumes that consumers will purchase the covered
products in the first year of compliance with amended standards.
The LCC savings and the PBP 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 identifies the
percentage of consumers estimated to receive LCC savings or experience
an LCC increase, in addition to the average LCC savings associated with
a particular standard level.
[[Page 17738]]
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 I.A.3 of this document and chapter 10 of
the final rule 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. DOE has determined that none of the
TSLs presented in today's final rule 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.C of this document and chapter 4 of the
final rule TSD.
e. Impact of Any Lessening of Competition
EPCA requires DOE to consider any lessening of competition that is
likely to result from setting new or amended standards for covered
equipment. Consistent with its obligations under EPCA, DOE sought the
views of the United States Department of Justice (DOJ). DOE asked DOJ
to provide a written determination of the impact, if any, of any
lessening of competition likely to result from the amended standards,
together with an analysis of the nature and extent of such impact. 42
U.S.C. 6295(o)(2)(B)(i)(V) and (B)(ii).
To assist DOJ in making such a determination, DOE provided DOJ with
copies of both the NOPR and NOPR TSD for review. DOJ subsequently
determined that the amended standards are unlikely to have a
significant adverse impact on competition.
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.K, IV.L and V.B.6 of
this document. DOE reports the expected environmental effects from the
amended standards, as well as from each TSL it considered for
commercial refrigeration equipment, in the emissions analysis contained
in chapter 13 of the final rule TSD. DOE also reports estimates of the
economic value of emissions reductions resulting from the considered
TSLs in chapter 14 of the final rule 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)) There were no other factors considered for today's
final rule.
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.F.12 of this document and chapter 8 of the
final rule TSD.
IV. Methodology and Discussion of Comments
A. General Rulemaking Issues
During the October 2013 NOPR public meeting, and in subsequent
written comments, stakeholders provided input regarding general issues
pertinent to the rulemaking, including the trial standard levels and
proposed standard levels presented, the rulemaking timeline, the
metrics used to normalize equipment size, and other subjects. These
issues are discussed in this section.
1. Trial Standard Levels
In his comment, Mr. R. Kopp (Kopp) suggested that using continuous
energy-efficiency cost-curves as opposed to discrete TSLs would provide
a more accurate analysis. Further, he suggested that instead of setting
a single TSL standard, DOE should adopt pathways to improve efficiency.
(Kopp, No. 60 at p. 5)
In its engineering analysis, DOE utilized a design-option approach,
in which it began by modeling baseline units and then modeled
increasingly efficient designs up to max-tech by adding design options
one at a time in order of ascending payback period. This methodology
reflects the options available to manufacturers in increasing the
efficiency of their equipment, which consist of piecewise design
improvements corresponding to the design options modeled in the
engineering analysis. Therefore, the efficiency levels generated from
the engineering analysis and carried through the downstream analyses to
the development of TSLs correspond to specific packages of technologies
and design features which could be developed and built by
manufacturers. Since the stepwise increments along the
[[Page 17739]]
cost-efficiency curve represent tangible efficiency improvements
attainable through the implementation of design options, DOE asserts
that a smooth cost-efficiency curve would not be realistic, as the
areas on the curve between the current efficiency levels would not
correspond to any design that exists. Therefore, DOE has retained the
approach used in the NOPR in developing this final rule.
2. Proposed Standard Levels
Traulsen, Structural Concepts Corp. (Structural Concepts), National
Rural Electric Cooperative Association (NRECA), and the Edison Electric
Institute (EEI) asserted that TSL4, the level proposed in the NOPR, was
not economically viable, noting that the marginal efficiency increase
over TSL 3 did not justify the increased costs of compliance.
(Traulsen, No. 65 at p. 16; \23\ Structural Concepts, Public Meeting
Transcript, No. 62 at p. 337; NRECA, No. 88 at p. 2; EEI, No. 89 at p.
4) Traulsen opined that any TSL with a payback period longer than 3
years was not feasible for most manufacturers. (Traulsen, No. 65 at p.
21) Further, NRECA and EEI urged DOE to select TSL 3 instead of TSL 4.
However, the joint comments from the American Council for an Energy-
Efficient Economy (ACEEE), National Resources Defense Council (NRDC),
Appliance Standards Awareness Project (ASAP), Alliance to Save Energy
(ASE), and Northwest Energy Efficiency Alliance (NEEA) (hereafter
referred to as the ``Joint Comment'') supported DOE's proposal to adopt
TSL 4, noting that it represented maximum energy savings with a
positive NPV. (Joint Comment, No. 91 at p. 1)
---------------------------------------------------------------------------
\23\ In the comment citation format used in this document, the
citation first presents the name of the commenter, followed by the
number on the docket corresponding to the document in which the
comment is contained, followed by a reference to the page in that
document on which the comment can be found.
---------------------------------------------------------------------------
Several manufacturers expressed an expected inability to meet the
proposed standard levels, even with the best available technology. At
the October public meeting, Zero Zone Inc. (Zero Zone) noted that there
had been no significant technological advancements since the previous
rulemaking which would make an amended standard feasible. (Zero Zone,
Public Meeting Transcript, No. 62 at p. 62) Structural Concepts raised
a similar concern, noting that despite using the most efficient
technology currently available, its minimum attainable daily energy
consumption was 30-40% above the proposed standard level. (Structural
Concepts, Public Meeting Transcript, No. 62 at p. 133) Royal Vendors
Inc. (Royal Vendors), in its written comment, noted that even with the
most efficient currently-available technology, the maximum possible
efficiency gain was 10% over the levels contained in the ENERGY STAR
\24\ Version 3 specification. However, the Joint Comment opined that
most of these concerns were limited to pull-down equipment, and that if
the standard for that class were revised, there would be no need to
revise standards for other classes. (Joint Comment, No. 91 at p. 2)
Additionally, manufacturers opined that the percentage reduction in
energy consumption between the existing standard and the proposed rule
was not achievable. Hussmann Corp. (Hussmann), True Manufacturing Co.,
Inc. (True), and Hoshizaki America, Inc. (Hoshizaki) all commented that
the efficiency improvements in excess of 60%, as proposed for SC
equipment and the VCT.RC.M class, were neither economically feasible
nor technologically possible. (Hussmann, No. 77 at p. 10) (True, No. 76
at p. 1) (Hoshizaki, No. 84 at p. 1)
---------------------------------------------------------------------------
\24\ ENERGY STAR is a joint program of the U.S. Environmental
Protection Agency (EPA) and DOE that establishes a voluntary rating,
certification, and labeling program for highly energy efficient
consumer products and commercial equipment. Information on the
program is available at: www.energystar.gov.
---------------------------------------------------------------------------
Hoshizaki noted in its written comment that a large majority of
currently ENERGY STAR-certified equipment would fail to meet the
proposed standard. (Hoshizaki, No. 84 at p. 1) During the public
meeting, Structural Concepts pointed out the relationship between the
proposed standard and the ENERGY STAR Version 3.0 requirement, opining
that it was impractical for a standard to be more stringent than the
ENERGY STAR requirement. (Structural Concepts, Public Meeting
Transcript, No. 62 at p. 305) The Joint Comment, however, noted that
according to the ENERGY STAR-qualified products list, there already are
products in five major self-contained equipment classes that meet or
exceed the proposed standard. Further, the Joint Comment drew
comparison to the 2009 final rule for residential refrigerators, noting
that proceeding to be a precedent in which units on the market were not
reaching the maximum technically feasible efficiency level modeled,
since no product was using all the design options considered in DOE's
analysis. (Joint Comment, No. 91 at p. 3) Additionally, joint comments
from the California Investor Owned Utilities (CA IOUs) noted that all
equipment currently listed in the CEC product database for the
VOP.SC.M, SVO.SC.M, HZO.SC.M, and HZO.RC.M classes already met the
proposed standard. (CA IOUs, No. 63 at p. 1)
Stakeholders noted that, in the proposed rule, the expected
efficiency improvement over existing standards was more stringent for
some equipment classes than for others. Lennox International Inc.
(Lennox) urged DOE to set standards for VCT classes which had the same
percentage reduction from existing standard levels as open-case
classes, and suggested that stricter VCT standards would encourage
consumers to switch from closed to open equipment. (Lennox, No. 73 at
p. 4) Structural Concepts opined that the proposed change in MDEC for
SOC equipment was too drastic, further noting that for SOC and VCS
equipment classes, it is counterintuitive for DOE to propose a greater
relationship between size and daily energy consumption for remote
condensing units than for self-contained units, since SC units are
inherently less efficient. (Structural Concepts, No. 85 at p. 3) Coca-
Cola, Inc. (Coca-Cola) commented that the TSL 4 standard was more
stringent for PD.SC.M units than for VCT.SC.M, and that this was
counterintuitive. (Coca-Cola, Public Meeting Transcript, No. 62 at p.
100) The CA IOUs pointed out in its written comment that the current
standards for PD.SC.M were set through a negotiated process, whereas
the standards for other classes were modeled. (CA IOUs, No. 63 at p. 6)
China commented that while DOE proposed stricter standards for the
VCT.RC.M class since the 2009 final rule, DOE was not suggesting
amended standards for the HZO class. (China, No. 92 at p. 3)
Another concern amongst manufacturers and consumers was the belief
that the proposed standard levels were based on technology that was
currently not available, but rather which DOE projected would be
available at the time of required compliance with the proposed rule.
Continental opined that it was impractical to develop standards based
on currently unavailable technologies. (Continental, Public Meeting
Transcript, No. 62 at p. 96) Coca-Cola commented that since the
proposed standards were based on technology which was not yet
available, the proposed standards, specifically TSL4 for VCT.SC.M
units, were not technologically feasible. (Coca-Cola, Public Meeting
Transcript, No. 62 at p. 74) True expressed agreement with Coca-Cola,
stating that the proposed efficiency levels were beyond the level
[[Page 17740]]
of what industry can meet at the current time. (True, Public Meeting
Transcript, No. 62 at p. 307) Lennox commented that the proposed
standards for VCT units were unattainable with currently known
technology and were not economically justified. Lennox further
commented that under the proposed rule, only a very limited number of
compliant VCT products would be produced and sold. (Lennox, No. 73 at
p. 2) The North American Association of Food Equipment Manufacturers
(NAFEM) noted that none of its member manufacturers were able to
identify current technology options or prototype designs which met the
proposed standard levels, and that using assumptions beyond what was
available in the current market landscape would also improperly
quantify the impact of the proposed rule on manufacturer costs. (NAFEM,
No. 93 at p. 3)
Additionally, during the October public meeting Coca-Cola and True
commented that food safety was of prime importance in the design of
their equipment, and should take precedence over energy savings. (Coca-
Cola, Public Meeting Transcript, No. 62 at p. 86) (True, Public Meeting
Transcript, No. 62 at p. 350) National Restaurant Association (NRA)
noted that the proposed standards had the potential to reduce cooling
ability and recovery time for equipment subject to constant opening and
closing, and that this reduced performance could compromise food
safety. (NRA, No. 90 at p. 3) Similarly, NAFEM also noted that the
implementation of the proposed standards would have potential negative
effects on food safety for end-users. (NAFEM, No. 93 at p. 5)
DOE understands the concerns voiced by stakeholders regarding their
future ability to meet standard levels as proposed in the NOPR. Between
the NOPR and final rule stages, DOE revised and updated its analysis
based on stakeholders comments received at the NOPR public meeting and
in written comments. These updates included improvements to the
modeling of equipment geometries, design specifications, and design
option performance and costs so as to provide a more accurate model of
baseline and higher-efficiency designs across the classes analyzed.
After applying these updates, DOE amended its TSLs and standard level
equations accordingly. With respect to the comments from Zero Zone,
Structural Concepts, and Royal Vendors regarding the ability of
technologies needed to meet the proposed standard level, DOE analyzed
the available technologies in its market and technology assessment and
screening analyses, and incorporated appropriate and available
technology options in the modeling performed as part of its engineering
analysis. Therefore, DOE believes that the technologies and designs
included in the analysis accurately reflect what is available to
industry for improving equipment efficiency.
In response to the Joint Comment, DOE notes that it evaluated
equipment performance independently for each equipment class and thus
did not revise standards for any one class solely based upon factors
affecting another class. DOE believes that the updates and improvements
to the modeling applied between the NOPR and final rule stages of this
rulemaking have resulted in standard levels presented in today's final
rule which address the concerns voiced by stakeholders after
publication of the NOPR.
In response to stakeholder comments comparing the proposed standard
levels to ENERGY STAR levels, DOE cautions against direct comparisons
between its standards and those set forth by ENERGY STAR due to the
different natures of the programs and how the two different sets of
standard levels are set. ENERGY STAR is a voluntary program which
derives its standard levels from market data based on the performance
of certain models of equipment currently available for purchase. ENERGY
STAR also does not model performance or include consumer economics in
its standard-setting process. DOE sets its standards as applicable to
all covered equipment and develops them through specific analyses of
equipment performance and modeling of economic impacts and other
downstream effects. Due to the different goals and methodologies of
these two programs, a direct comparison may not be entirely relevant.
However, during the final rule stage, for relevant equipment
classes,\25\ DOE did compare its engineering results to available
ENERGY STAR data as a means of checking the modeled performance levels
against empirical test data. With respect to the comparison by the
California IOUs of performance of open cases to certified values from
the CEC directory, DOE also cautions that this directory is not
exhaustive. For example, a search of the directory shows that, for some
equipment classes, only equipment from a single manufacturer is
included. Therefore, while directory data is helpful in providing a
check on DOE's results, DOE has performed independent modeling and
analysis to derive its standard levels.
---------------------------------------------------------------------------
\25\ ENERGY STAR only maintains standard levels applying to
equipment classes VCS.SC.M, VCS.SC.L, VCT.SC.M, VCT.SC.L, HCS.SC.M,
HCS.SC.L, HCT.SC.M, and HCT.SC.L. Thus, these were the only classes
for which a comparison between the DOE and ENERGY STAR levels could
be made.
---------------------------------------------------------------------------
With respect to the concerns about the relative perceived
stringencies of proposed standards for different classes, in the NOPR
analyses, DOE examined each equipment class independently based on
standard geometries and feature sets for representative units within
the classes. DOE then conducted the engineering simulations and
downstream economic analyses separately for each primary class
examined. The results presented at the NOPR stage represent the
suggested performance and cost values for each class based on the best
available information at the time of that analysis. Therefore, DOE
cautions against comparative examination of the relative stringencies
of the various standard levels, as each was calculated independently
and the performance and economic benefits of individual design options
vary specific to each class. DOE also agrees with the California IOUs
that previous standard levels should not necessarily be used as a check
on current analytical results because the origins of those standards
are not completely transparent, meaning that a direct comparison may be
inappropriate due to differences between the methodologies used to set
those standards and those used by DOE in the current rulemaking. At the
final rule stage, DOE continued to examine each class independently
based on the merits of the available efficiency-improving features, and
has set amended standards for each class based on the results of those
analyses.
In response to the assertions that DOE's standard levels were not
based upon currently available technologies, but rather were dependent
upon future potential technological developments, DOE maintains that
all technology options and equipment configurations included in its
NOPR reflect technologies currently in use in commercial refrigeration
equipment or related equipment types. DOE has observed these design
options and features used in current manufacturer models offered for
sale. The specific inputs which it used to model these design options,
such as compressor efficiency improvements over the market baseline,
glass door U-factor, or heat exchanger UA, were provided to the public
for comment in the NOPR TSD and engineering analysis spreadsheet, and
DOE has updated those inputs according to stakeholder
[[Page 17741]]
feedback and other information available during the final rule stage.
DOE understands the concerns voiced by Coca-Cola, True, NAFEM, and
NRA regarding food safety. DOE realizes that food safety is of the
utmost importance to the industry, and is in fact a definitional aspect
of the design of equipment for food storage temperatures. In its
screening analysis, DOE is compelled by sections 4(b)(4) and 5(b) of
the Process Rule \26\ to eliminate from consideration any technology
that presents unacceptable problems with respect to a specific set of
criteria, including impacts on equipment utility. Therefore, DOE
removed from consideration technologies and design options which could
result in such adverse impacts. Additionally, in its engineering
analysis, DOE modeled medium-temperature equipment as having an average
product temperature of 38[deg]F, consistent with the rating temperature
specified in the DOE test procedure and below the 41[deg]F requirement
of the NSF 7 \27\ food safety rating procedure. Thus, the daily energy
consumption values produced in the engineering analysis reflect a level
of equipment performance which ensures preservation of the ability to
maintain food safety temperatures.
---------------------------------------------------------------------------
\26\ Appendix A to subpart C of 10 CFR part 430, ``Procedures,
Interpretations, and Policies for Consideration of New or Revised
Energy Conservation Standards for Consumer Products'' is known as
``The Process Rule.''
\27\ This refers to the NSF/ANSI 7 procedure used to test
equipment performance for food safety.
---------------------------------------------------------------------------
3. Rulemaking Timeline
Some stakeholders felt that in light of the large number of
analytical changes that could be required between the NOPR and final
rule, DOE should extend the target date for publication of the final
rule. Traulsen requested that DOE slow the rulemaking process down due
to the aggressiveness of the final rule date. (Traulsen, Public Meeting
Transcript, No. 62 at p. 347) Hillphoenix and Lennox also expressed the
same concern, noting that a February 2014 deadline for publication of
the final rule allowed insufficient time for the reevaluation of DOE's
engineering analysis. (Hillphoenix, No. 71 at p. 3) (Lennox, No. 73 at
p. 2) In contrast, the New York State Attorney General (NYSAG)
commented that the delay in amending these efficiency standards not
only violated Congressional mandates, but has also prolonged the time
that inefficient products stay in the market. NYSAG further commented
that these delays have led to avoidable pollution and waste of
resources. (NYSAG, No. 92 at p. 1)
While DOE appreciates the input from commenters requesting that the
timeline for this rulemaking be extended, none of the commenters has
provided any details or specifics with regard to what specifically they
believe would require extra time. In reviewing its analyses to date,
the inputs received at the NOPR public meeting and in subsequent
written comment, DOE believes that the time allotted is sufficient in
order to allow for full and proper analysis required in order to
develop the final rule. In fact, DOE conducted an efficient and
thorough effort to promulgate the final rule within the constraints of
the time allotted. With regard to NYSAG's comment, DOE notes that it
has moved as efficiently as possible while conducting the thorough
analysis required to set appropriate standards.
4. Normalization Metrics
Following publication of the NOPR, DOE received comment on the
normalization metrics used to scale allowable daily energy consumption
under the standard levels as a function of equipment size. Depending on
the design and intended application of each equipment class, DOE
proposed energy standard levels using either total display area or
volume as a metric. Structural Concepts commented that DOE's metrics
for the VCT and HCT families were inconsistent, since some proposed
standards for classes within the families were based on total display
area (TDA) while others were based on volume, NAFEM stated that
industry participants use volume, rather than linear feet, to estimate
total market size. (Structural Concepts, No. 85 at p. 3) (NAFEM, No. 93
at p. 6)
DOE understands that the selection of appropriate measures of case
size is important to the standards-setting process across all covered
equipment classes. For the self-contained equipment with doors for
which standards were set in the EPACT 2005 legislation, volume was
identified in the statute as the normalization metric. (42 U.S.C.
6313(c)(2)) For the equipment covered by the 2009 final rule, DOE
selected the metrics of volume for equipment with solid doors and TDA
for display-type equipment. Because radiation and conduction through
doors are the primary heat transfer pathways for CRE equipment with
transparent doors, DOE concluded that TDA is the metric that best
quantifies this effect. Likewise, for equipment without doors, the
majority of heat load occurs due to warm air infiltration, and DOE
determined that TDA would also be the most appropriate metric for
capturing these effects. DOE also stated its conclusion that for these
equipment types, where the function is to display merchandise for sale,
TDA best quantifies the ability of a piece of equipment to perform that
function. On the other hand, equipment with solid doors is designed for
storage, and volume was determined to be the most appropriate metric
for quantifying the storage capacity of the unit. 72 FR 41177-78 (July
26, 2007).
DOE does not believe, based on its discussions with manufacturers
and comments solicited over the course of this rulemaking that the
fundamental concepts underlying the choices of TDA or volume as the
normalization metric for any given class of equipment have changed. In
line with the reasons stated above, DOE is retaining the current
normalization metrics for the respective equipment classes, consisting
of both the metrics set forth in the 2009 final rule and those
prescribed by the EPACT 2005 standards for self-contained equipment
with doors.
In response to the comment from NAFEM regarding the usage of linear
feet, DOE wishes to clarify that it did not use linear feet of
equipment as a measure of equipment size in its engineering analysis,
nor as a metric when estimating total market size in its shipments
analysis. Rather, DOE utilized linear feet as a normalization metric in
the national impacts and other downstream analyses when accounting for
the aggregate costs and benefits of today's final rule. DOE believes
that the units used in making representations of equipment market size
are accurate, and DOE did not modify them for the final rule analysis.
5. Conformance With Executive Orders and Departmental Policies
At the NOPR public meeting, and in a subsequent written comment,
Traulsen opined that the proposed rule violates Executive Order 12866.
Specifically, Traulsen stated that the rule failed to identify the
failures of private markets or public institutions that warrant new
agency action, since the industry had actively embraced voluntary
efficiency goals and standards. (Traulsen, No. 65 at p.16) Section
1(b)(1) of Executive Order 12866 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.
In section VI.A of today's document (and also in the NOPR), DOE has
identified the problems that it has
[[Page 17742]]
addressed by amending energy conservation standards for commercial
refrigeration equipment. For certain segments of the companies that
purchase commercial refrigeration equipment, such as small grocers,
these problems may include a lack of consumer information and/or
information processing capability about energy efficiency opportunities
in the commercial refrigeration equipment market. In addition, the
market for commercial refrigeration equipment is affected by
electricity prices that do not reflect all of the social and
environmental costs associated with electricity use. When such
externalities are not included in the decisions made by market actors,
this is considered a market failure by economists.
Traulsen asserted that the proposed rule was in violation of
Executive Order 13563 and the Information Quality Act since the
assumptions in DOE's analysis did not use the best available techniques
to quantify the benefits of the rule. (Traulsen, No. 65 at pp.16-17)
DOE believes that the analysis described in today's document is based
on the best available techniques that were suited to the data available
to analyze commercial refrigeration equipment. Further, Traulsen did
not point to any specific techniques in its comment that would have
been superior to those employed by DOE.
NAFEM expressed concern that the proposed rule was in violation of
Executive Orders because it had a disproportionate negative impact on
small businesses, failed to consider non-regulatory alternatives, and
since DOE had made no contact with end-users in order to understand
impact on users. (NAFEM, No. 93 at p. 14) Traulsen stated that DOE
should consider supplementing regulatory action with other forms of
non-regulatory alternatives, such as expanded collaboration with ENERGY
STAR, rebates, and incentive programs. (Traulsen, No. 65 at p. 15)
As discussed in section V.B.1.b of this document, DOE believes that
today's rule would not have a disproportionate negative impact on small
businesses. DOE did consider non-regulatory alternatives to amended
standards, as described in detail in chapter 17 of the final rule TSD.
Finally, DOE requested comment from the public and held public meetings
that were attended by representatives of end-users of commercial
refrigeration equipment (e.g., ACCA, Coca-Cola, and NAFEM).
NAFEM also opined that the proposed rule violated the Secretarial
Policy Statement of Scientific Integrity, since the analysis was not
independently peer-reviewed by qualified experts, underlying
assumptions were not clearly explained, and since DOE failed to
accurately contextualize uncertainties pertaining to non-regulatory
alternatives. (NAFEM, No. 93 at p. 14)
The Secretary's March 23, 2012 ``Secretarial Policy Statement of
Scientific Integrity'' \28\ sets forth a policy for DOE employees and
states, in relevant part, that ``DOE will ensure that data and research
used to support policy decisions are of high scientific and technical
objectivity. Scientific and technical objectivity will be supported
through independent peer review by qualified experts, where feasible
and appropriate, and consistent with law.'' With respect to DOE's
analysis underlying this final rule, DOE has solicited and thoroughly
considered comment and data from expert CRE manufacturers throughout
the rulemaking process. DOE does not believe that any additional expert
review of its analysis is either necessary or appropriate.
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\28\ https://www.directives.doe.gov/references/secretarial_policy_statement_on_scientific_integrity/view.
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Further, the assumptions used in DOE's analysis are described in
detail in the NOPR TSD and in the final rule TSD. DOE is not aware of
the uncertainties pertaining to non-regulatory alternatives mentioned
only in a general sense by NAFEM.
6. Offset Factors
In presenting the NOPR standard levels, DOE adopted and modified
the offset factors from the 2009 final rule and EPACT 2005 standard
levels to define the energy consumption of a unit at zero volume or
TDA, thus setting the y-intercepts of the linear standard level
equations proposed at levels intended to represent ``end effects''
inherent in all equipment. Some stakeholders expressed disagreement
with DOE's modeling of offset factors. Hillphoenix commented that
offset factors were designed to account for factors which remained
constant over a range of equipment sizes. Hillphoenix further commented
that such factors as conduction end effects typically do not vary with
size. (Hillphoenix, No. 71 at p. 2) Traulsen commented that DOE's
modeled offset factors were not empirically determined. (Traulsen, No.
65 at p. 19) The Air-Conditioning, Heating, and Refrigeration Institute
(AHRI) commented that it was impossible for stakeholders to compare the
offset factors within the current rulemaking with the previous
rulemaking's values. (AHRI, No. 75 at p. 14)
In developing offset factors for the NOPR, DOE scaled existing
offset factors from the EPACT 2005 and 2009 final rule standard levels
based on the percentage reduction in energy use modeled at the
representative unit size. This allowed the NOPR standard level
equations to reflect energy allowances which proposed a standard
percentage reduction in allowable consumption across all equipment
sizes. While DOE agrees with Traulsen that the offset factors were not
empirically determined, the factors were based upon scaling
proportional to modeled equipment performance and applied to the
existing offset factors which have been well-established and vetted
through development of and compliance with the existing standards
containing them.
In response to the comment from Hillphoenix, DOE agrees that there
are certain fixed effects which will be encountered by any piece of
equipment, such as a minimum amount of conduction, or energy
consumption attributable to the presence of a minimum of a single fan
motor, for example. For the final rule, and in response to the concern
of stakeholders, DOE adjusted its offset factors to account for these
constant effects. In equipment for which DOE developed offset factors
for use in standard level equations in its 2009 final rule, DOE
retained the same offset factors in the development of the trial
standard levels presented in today's document. DOE believes that the
retention of these factors accurately reflects the presence of fixed
end-effect behavior in this equipment, which remains independent of the
design options elsewise implemented in the equipment. For the equipment
for which standard levels were set by EPACT 2005, DOE had no background
information as to how those offset factors were developed. Therefore,
in developing trial standard levels for today's final rule, DOE
adjusted those offset factors based on available data from directories
of certified product performance. For more information on the
development of offset factors, please see chapter 5 of the final rule
TSD.
B. 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
[[Page 17743]]
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 final rule 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. 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 \29\
(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 at 1099-1100
(January 9, 2009)), and used during this rulemaking:
---------------------------------------------------------------------------
\29\ 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)
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 has
created 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). A total of 49 equipment classes
were created, and these are listed in chapter 3 of the TSD using the
nomenclature developed in the January 2009 final rule. 74 FR at 1100
(January 9, 2009).
During the October 2013 NOPR 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 Subcategories
In their written comments, Continental, NAFEM, True and Traulsen
all expressed concern that the equipment classes defined by DOE in the
proposed rule did not sufficiently encompass various sub-
classifications, especially with regard to pass-through and reach-in
cases. (Continental, No. 87 at p. 1) (NAFEM, No. 93 at p. 7) (True, No.
76 at p. 3) (Traulsen, No. 65 at p. 16) Further, Traulsen and True
pointed out that a multitude of custom-built and niche equipment
exists, which would require further analysis in order to determine a
viable standard. (Traulsen, No. 65 at p. 20) (True, No. 76 at p. 1)
In response to the concerns of interested parties, DOE believes
that its existing equipment class structure is sufficient to account
for the majority of variation in type and combination of equipment
geometry, condensing unit configuration, and operating temperature. DOE
provides allowances in its standards to account for the energy needs of
different equipment sizes through its use of standard level equations
constructed in the form of linear equations varying with equipment size
(as measured by volume or TDA) and through its use of offset factors to
represent energy end-effects. DOE also accommodates variation in
operating temperature outside of its three rating temperatures through
the use of a lowest application product temperature provision in its
test procedure. 77 FR at 10305 (February 21, 2012)
b. Floral Equipment
In the context of niche equipment classes, the Society of American
Florists (SAF) noted that the floral industry uses purpose-designed
refrigeration equipment, including sliding door floral display coolers
(self-contained), open air access floral display coolers (reach-in),
countertop floral display coolers and long door floral display coolers
(swinging or sliding doors, top-mounted or remote condensing unit). SAF
further added that most of these units are custom-built, since floral
cooling systems are balanced to keep humidity high, and that special
low-velocity coils are utilized to blow air through the unit while
maintaining temperature and high humidity levels--features not
available in stock equipment. (SAF, No. 74 at p. 3)
DOE believes that its division of covered equipment into numerous
classes is sufficiently broad to capture the level of differentiation
present within the commercial refrigeration equipment market. The
equipment types described in the comment from SAF would fall into a
number of existing equipment classes for which DOE has conducted
analyses in this rulemaking. Additionally, DOE has recognized the
temperature issues which may be present in floral cases, and has
accommodated those different operating temperatures by developing and
implementing a provision in its test procedure allowing equipment which
cannot reach the specified DOE rating temperature to be tested at its
lowest application product temperature. 77 FR at 10305 (February 21,
2012)
2. Technology Assessment
As part of the market and technology assessment performed for the
final rule analysis, DOE developed a comprehensive list of technologies
that would be expected to improve the
[[Page 17744]]
energy efficiency of commercial refrigeration equipment. Chapter 3 of
the 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.C.
a. Technologies Applicable to All Equipment
In the NOPR 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. These technologies are discussed in depth in chapter
3 of the NOPR TSD. Not all of these technologies were considered in the
engineering analysis; some were screened out or removed from
consideration on technical grounds. After the publication of the NOPR
analysis, DOE received numerous stakeholder comments regarding these
technologies, discussed below.
Low Pressure Differential Evaporators
Traulsen commented that low pressure differential evaporators would
require larger spaces between fins and tubes, which could in turn
reduce overall efficiency by allowing frost build-up. (Traulsen, No. 65
at p. 7) Low-pressure differential evaporators reduce energy
consumption by reducing the power of evaporator fan motors, often by
increasing the air gap between fins. However, as noted in chapter 5 of
the NOPR TSD, in space-constrained equipment such as commercial
refrigeration equipment, this reduction usually comes from a decrease
in evaporator coil surface area, which generally requires a lower
saturated evaporator temperature (SET) to achieve the same discharge
air temperature and cooling potential. This, in turn, results in a
reduction in compressor efficiency. Therefore, DOE agrees with Traulsen
that low pressure differential evaporators are not a viable option for
consideration in this rulemaking and did not consider them as a design
option.
Defrost Mechanisms
Traulsen commented that in order for DOE to advocate for improved
defrost sensors, new designs would need to be implemented, and that the
compliance date suggested in the NOPR would not allow for the levels of
research and development (R&D) necessary to achieve this improvement.
(Traulsen, No. 65 at p. 8) DOE wishes to clarify that it did not
consider advanced defrost sensors as a design option within the
analyses conducted at the NOPR or final rule stages of this rulemaking.
Much equipment currently manufactured already uses partial defrost
cycle control in the form of cycle temperature-termination control.
However, defrost cycle initiation is still scheduled at regular
intervals. Full defrost cycle control would involve a method of
detecting frost buildup and initiating defrost. This could be
accomplished using an optical sensor or through use of a sensor to
detect the temperature differential across the evaporator coil.
However, DOE understands that both of these methods are currently
unreliable due to fouling of the coil with dust and other surface
contaminants, which becomes more of an issue as cases age. Because of
these issues, DOE agrees with Traulsen's concerns and did not consider
defrost cycle control as a design option at the NOPR or final rule
stages. Instead, the defrost lengths modeled in the engineering
analysis were based on defrost times gathered through review of
manufacturer literature, manufacturer interviews, and data collected
through laboratory testing of equipment currently available on the
market.
Light Emitting Diode Lighting
After publication of the NOPR, Traulsen commented that DOE's
assertion of consumer enthusiasm towards LEDs lacked basis in reality.
Further, Traulsen commented that any weight given to this assertion in
the calculations was null. (Traulsen, No. 65 at p. 4) During its
analysis, DOE considered design options based on their availability on
the market and on the screening criteria set forth by the Process Rule.
In considering LED lighting as a design option, DOE did so after
researching existing product offerings on the market and conferring
with manufacturers in confidential interviews. DOE did not factor
``consumer enthusiasm'' into its decision to include LED lighting as
asserted by Traulsen, but instead considered this design option based
on the information available from the current equipment market and the
technology's ability to reduce the measured energy consumption of
covered equipment.
b. Technologies Relevant Only to Equipment With Doors
In chapter 3 of the NOPR 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 NOPR 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
Traulsen commented that while DOE called for the use of advanced
hydrophobic materials in the form of anti-fog films to prevent
condensation build-up, there were concerns with regard to the NSF
certification of this feature. (Traulsen, No. 65 at p. 11) DOE wishes
to clarify that, while it included anti-fog films for consideration in
the NOPR market and technology assessment, it did not include them as a
design option in the engineering analysis. For a full discussion of why
DOE did not consider anti-fog films, please see chapter 5 of the NOPR
TSD. DOE agrees with Traulsen's concerns, amongst others, and continued
to exclude this technology from its analysis at the final rule stage.
Anti-Sweat Heater Controllers
In its statements at the NOPR public meeting, the California IOUs
urged DOE to consider anti-sweat heater controllers as a design option
due to their large savings potential. (CA IOUs, Public Meeting
Transcript, No. 62 at p. 19) However, in its written comment, Traulsen
pointed out that these may be impractical, since sensor technologies
had high failure rates in kitchen environments. (Traulsen, No. 65 at p.
11)
DOE addressed consideration of this technology in chapter 4 of the
NOPR TSD. Anti-sweat heater controllers modulate the operation of anti-
sweat heaters by reducing heater power when
[[Page 17745]]
humidity is low, and operate most effectively when a constant ambient
dew point cannot be maintained. However, in the context of the DOE test
procedure, anti-sweat heater controllers solely serve to keep the power
to the anti-sweat heaters at the levels necessary for the test
conditions. These fixed conditions of 75 [deg]F and 55 percent relative
humidity are the conditions that ASHRAE has determined to be generally
representative of commercial refrigeration equipment operating
environments and which DOE has adopted in its test procedure. While
anti-sweat heater controllers could modulate the anti-sweat power to a
further extent in the field so as 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 a unit with anti-sweat heaters tuned
for constant 75/55 conditions. Because they would have no impact on
measured energy consumption under the DOE test procedure, DOE did not
consider anti-sweat heater controllers in the engineering analysis.
c. Technologies Applicable Only to Equipment Without Doors
In chapter 3 of the NOPR TSD, DOE mentioned two technologies, air-
curtain design and night curtains, that potentially could be used to
improve the efficiency of commercial refrigeration equipment without
doors. Air curtain design was not considered in the NOPR 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.
Air-Curtain Design
In its written comment, Traulsen expressed concern over the use of
advanced air curtain designs. (Traulsen, No. 65 at p. 11) DOE agrees
with Traulsen that advanced air curtain designs are not currently a
feasible option for use in commercial refrigeration equipment. Sections
4(a) and 5(b) of the Process Rule specifically set ``practicability to
manufacture, install, and service'' as a criterion that should be
satisfied for technology to be considered as a design option. In
chapter 4 of the NOPR TSD, DOE explained that advanced air curtain
designs are only in the research stage and, therefore, that it would be
impracticable to manufacture, install, and service this technology on
the scale necessary to serve the relevant market at the time an amended
standard would become effective. For that reason, DOE screened out
improved air curtains as a design option for improving the energy
efficiency of commercial refrigeration equipment.
C. 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 safety. 10 CFR part
430, subpart C, appendix A, sections (4)(a)(4) and (5)(b).
In comments received after the NOPR publication, Traulsen commented
that, while DOE screened out certain technology options due to impacts
on end-users, it was unclear why the same technology option was
screened out for some equipment classes but not others. (Traulsen, No.
65 at p. 2)
During the screening analysis, DOE considered sections 4(b)(4) and
5(b) of the Process Rule, which provide guidance in determining whether
to eliminate from consideration any technology that presents
unacceptable problems with respect to certain criteria. These criteria
include technological feasibility, practicability to manufacture,
install, and service, impacts on equipment utility or equipment
availability, and adverse impacts on health or safety. If DOE
determines that a technology, or a combination of technologies, meet
any of the criteria set forth in section 5(b) of the Process Rule, it
will be eliminated from consideration. This screening process is
applied to each candidate technology being considered, and is
applicable across all equipment classes. Therefore, in response to the
comment from Traulsen, DOE does not believe that it screened out any
particular technology options for some classes but not others.
Based on all available information, DOE has concluded that: (1) All
of the efficiency levels discussed in today's document 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 document are all achievable
through technology options that were ``screened in'' during the
screening analysis.
D. 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, preliminary analysis, and
NOPR 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, used a combination of
industry research and teardown-based cost modeling to determine
manufacturing costs, and employed numerical modeling to determine the
energy consumption for each combination of design options used to
increase equipment efficiency. DOE selected a set of 25 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 final rule TSD.
[[Page 17746]]
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).
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. Chapter 5 of the
final rule TSD sets forth the specifications that DOE chose for each
equipment class and discusses baseline models in greater detail.
One complexity involved in developing an engineering baseline was
due to the variety of designs and technology options that manufacturers
could utilize in order to meet the recently-implemented standards
arising from EPACT 2005 and the 2009 final rule. Through its analyses,
DOE determined that manufacturers were utilizing a wide variety of
design paths in order to meet the necessary performance level.
Therefore, in order to develop its engineering results for the current
rule, 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, and ordered the technology options from lowest to highest
payback period. The result was a set of cost-efficiency curves
reflecting what DOE believes to be the most cost-effective means of
meeting the existing standards, as well as that of attaining the higher
levels of performance reflected in today's rule.
As a result, some of the engineering results represent levels of
unit performance that are below the standard levels for equipment
currently on the market and subject to 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
model of equipment would have to comply. The exact procedure is
described in section IV.F and additional details are provided in
chapter 8 of the final rule TSD.
After publication of the NOPR and the NOPR public meeting, DOE
received a number of comments from interested parties regarding its
establishment of baseline models, and the features and design
specifications included in those baseline models. The subsequent
sections contain those comments and DOE's responses.
Composition of Baseline
Southern Store Fixtures Inc. (Southern Store Fixtures), AHRI,
Hussmann and Structural Concepts expressed concern that, by keeping the
baseline consistent between the previous rule and the proposed rule,
DOE had failed to account for the efficiency improvement brought about
by the previous standard, thereby overestimating the potential for
energy savings. (Southern Store Fixtures, No. 67 at p. 2) (AHRI, No. 75
at p. 2) (Hussmann, No. 77 at p. 9) (Structural Concepts, No. 85 at p.
1) Additionally, AHRI noted that although the current rulemaking
retains the baseline specifications and some related technologies from
the previous rulemaking, there are differences in the baseline energy
consumption across the two rulemakings. (AHRI, No. 75 at p. 4)
The Joint Comment pointed out that, for some equipment classes,
many ENERGY STAR-qualified products were rated as being less efficient
than the modeled baseline. Further, the Joint Comment urged DOE to re-
evaluate the baseline levels for equipment classes for which the
current standards were established by EPACT 2005. (Joint Comment, No.
91 at p. 5)
In response to the comments raised by interested parties regarding
the modeled equipment baseline, DOE points out that there is currently
no prescriptive requirement that commercial refrigeration equipment use
any specific combination of features to meet the existing EPACT 2005 or
2009 final rule standard levels. For this reason, and in order to
ensure a proper ordering of the implementation of efficiency-improving
technologies in its engineering analysis, DOE started with an
engineering baseline which was, in many cases, below the performance
level mandated by the current standards. DOE then modeled equipment
with increasingly higher levels of performance by implementing the
applicable design options in order of ascending payback period. The
result of this was a modeled configuration reflecting, based on the
information available to DOE, the most cost-effective way to build a
model which complies with the existing standards. Then, DOE continued
to add the remaining design options until it reached the max-tech
level. It was these additional efficiency levels above the performance
level required by the existing standard that were considered as
offering incremental efficiency improvements beyond the level required
at the time of the analysis.
Energy savings and downstream impacts (such as life-cycle cost and
national net present value results) were calculated based on a base
case efficiency distribution in which minimum-efficiency products
available today are assumed to comply with existing standards.
Therefore the modeled design options up to the level of performance
required by existing standards did not have any impact on the energy or
cost savings attributed to the amended standards prescribed today, but
rather, served only to align the engineering cost-efficiency curve with
the technologies which present the shortest-payback options for
reducing energy consumption. As a result, DOE believes that the
assertion of some stakeholders that its methodology overstates the
energy savings attributable to today's rule is inaccurate.
With regard to the specific technology modeling that was discussed
by AHRI, DOE updated modeling of some baseline design options and
components from the 2009 final rule to the current
[[Page 17747]]
rulemaking to ensure the most accurate possible depiction of components
currently available on the market. In the final rule stage, DOE
revisited these design option parameters based on stakeholder comments
and further revised them where appropriate so as to ensure a greater
degree of accuracy in the engineering model inputs. Therefore, DOE
understands that there may be adjustments to the numerical outputs of
the modeling of baseline units between rulemakings and rulemaking
stages.
In response to the issue raised in the Joint Comment, DOE wishes to
point out that the ENERGY STAR-qualified directory \30\ is, by design,
not necessarily an exhaustive source of information for all models
available on the market. However, DOE has adjusted its modeling of
baseline units in the final rule stage of the analysis and, in
conducting comparisons between its engineering results and market data
such as the ENERGY STAR directory, has found agreement between the
performance results obtained from its engineering analysis and the data
points contained in the ENERGY STAR directory.
---------------------------------------------------------------------------
\30\ Available https://www.energystar.gov/certified-products/certified-products.
---------------------------------------------------------------------------
Condensate Pan Heaters
In their written comments, manufacturers provided input on the
modeling of condensate pan heaters in baseline and higher-performance
units. Traulsen noted that closed door refrigerators were modeled in
the NOPR engineering analysis as not requiring electric condensate pan
heaters, while freezers were modeled as using this component, even
though refrigerators face the same physical limitations as freezers.
Further, Traulsen commented that DOE should consider the power required
to bring condensate pan heaters to operating temperature and the idle
power consumption of empty condensate pans when reviewing energy
conservation strategies. Further, Traulsen expressed the belief that
electric condensate pan heaters are an important feature which cannot
be ignored. (Traulsen, No. 65 at p. 1) Similarly, Hussmann also
commented that in self-contained medium-temperature units,
manufacturers are required to use condensate evaporator pans, the lack
of which would reduce utility to end-users. (Hussmann, No. 77 at p. 7)
In response to the comments provided by Traulsen and Hussmann, DOE
revisited its engineering analysis and added condensate pan heaters for
medium-temperature vertical closed-door cases to its analytical model.
Additionally, in response to Traulsen's suggestion, DOE added a factor
of an additional 10% pan energy consumption to its modeling of
condensate pan energy use in order to account for the energy needed to
bring the pan up to temperature. However, DOE did not add further
energy in its engineering simulation to account for idle consumption of
empty condensate pans, as DOE understands that most condensate pan
heaters use float switches or other sensor devices to activate the pan
heater only when the water level is sufficiently high to require it,
minimizing operation of heaters with empty pans.
Defrost
In its written comment, Traulsen provided additional information to
assist in DOE's modeling of defrost systems. Traulsen commented that
while the DOE model assumed that all VCT.SC.M and VCS.SC.M units employ
off-cycle defrost systems, this is not true in real-life applications.
Traulsen further commented that, for most refrigerator models, it uses
an electric defrost element. Traulsen further noted that if electric
defrost were included, all theoretical models would fail to meet the
proposed standard. Additionally, Traulsen commented that DOE's model
seems to ignore desired features such as hot-gas defrost and electric
defrost systems, even though they are widely available in the market.
Traulsen commented that defrost cycles tend to terminate when the
evaporator coil reaches a predetermined temperature, but the time
period required for melting all accumulated frost varies with the mass
of the evaporator coil and surrounding components. Further, Traulsen
noted that the DOE spreadsheet appears not to account for these
accommodations, and fails to account for increased defrost length when
using enhanced evaporator coils, which have a 50% higher mass than the
baseline coil designs. Traulsen commented that, in the DOE NOPR
engineering model, defrost heater wattage only varied in proportion to
the length of the cabinet, and not with the cabinet height or volume.
Furthermore, Traulsen noted that the heater wattage calculated for
full-height closed door cabinets appear to be too high. (Traulsen, No.
65 at p. 11) Structural Concepts commented that the multipliers used to
model defrost cycles should differ between open and closed type cases.
(Structural Concepts, No. 85 at p. 3)
After the NOPR public meeting and upon receipt of comments, DOE
researched defrost mechanisms applied in medium-temperature
applications. Specifically, DOE investigated this subject through
review of manufacturer literature such as manuals and replacement parts
catalogs, as well as through testing and teardown of selected units.
The results of this investigation contradicted Traulsen's assertion
that electric defrost is commonly used in medium-temperature units, as
DOE did not find evidence of this. Additionally, examination of public
certification databases such as the ENERGY STAR directory showed
equipment performance levels inconsistent with the use of substantial
amounts of electric defrost. Therefore, DOE did not find sufficient
evidence to warrant adding the modeling of electric defrost to its
engineering analysis. With respect to the discussion of hot gas
defrost, DOE understands that this feature is currently used by some
manufacturers in the market, but did not explicitly model it due to
concerns raised through comments and in manufacturer interviews
regarding reliability issues with this feature.
In response to the comments from Traulsen and Structural Concepts
regarding defrost cycle lengths, DOE based its modeling of defrost
cycles for various equipment classes based on a number of sources,
including manufacturer literature, manufacturer interviews, and testing
of equipment currently on the market. Thus DOE agrees that the defrost
length values should vary by equipment class, and has modeled them as
such in its engineering analysis. With respect to Traulsen's comment on
additional defrost power being needed for larger evaporator coils, DOE
constrained the size of the evaporator coils modeled in the final rule
analysis, thus mitigating concern over this issue. Additionally, in the
final rule engineering analysis, for vertical freezers, DOE adjusted
the modeled defrost heater wattages based on inputs from Traulsen's
comment and other sources. DOE believes that these changes better
reflects the actuality of defrost mechanisms utilized in these
equipment classes.
Lighting Configurations
Hillphoenix commented that the number of shelves, and therefore
shelf lights, varies greatly for SVO cases depending on the height of
the case. Hillphoenix further commented that there exist ``extreme
configuration differences'' among cases within the same class.
(Hillphoenix, No. 71 at p. 4)
[[Page 17748]]
In developing its engineering analysis for this rulemaking, DOE
collected data on common designs within the industry. This information
included specifications on lighting configurations and formed the basis
for the representative units modeled within the engineering analysis.
Based on input collected over the course of the current rulemaking and
in the development of the 2009 final rule, DOE believes that its design
specifications, including lighting configurations, are accurate and
representative of the various covered classes, including SVO cases.
Additionally, DOE notes that for SVO cases, the allowable energy
consumption under the existing and amended standards is a function of
TDA. Cases with greater height, such as those suggested by Hillphoenix,
would have a greater measured total display area and thus would be
allowed a proportionally larger amount of energy. Therefore, DOE
believes that its existing analytical methodology accounts for the
concerns raised by Hillphoenix.
Infiltration Loads
Manufacturers opined that DOE's modeling of air infiltration caused
by door openings could be improved. Continental Refrigerator
(Continental), Hussmann, and Traulsen all commented that air exchange
during door openings significantly affects system energy consumption.
(Hussmann, No. 77 at p. 3) (Traulsen, No. 65 at p. 10) (Continental,
No. 87 at p. 2) Specifically, True commented that door openings and the
resultant air exchange could account for between 15% and 25% of a
unit's energy consumption. (True, Public Meeting Transcript, No. 62 at
p. 151)
Traulsen commented that the energy consumption formulas for closed
door models fail to account for gasket losses (heat gain or added
load), and that it was concerned with the use of the air infiltration
load models applied, especially with respect to closed door units,
since real world conditions can vary from those experienced during the
ASHRAE test procedure. (Traulsen, No. 65 at p. 10) Moreover,
Continental noted that the percentage of air that is exchanged varies
greatly with the configuration and type of cabinet. Continental further
commented that the DOE model did not provide sufficient explanation of
how air infiltration loads were calculated for different cabinet types.
(Continental, Public Meeting Transcript, No. 62 at p. 123) Structural
Concepts commented that the multipliers used to model infiltration
should differ between open and closed type cases. (Structural Concepts,
No. 85 at p. 3) ACEEE commented that tracer gas analysis, a well-
established technology, could be used to analyze the actual air
exchange that occurs during door openings. (ACEEE, Public Meeting
Transcript, No. 62 at p. 154)
DOE understands the significance of air infiltration and is aware
of its impact on the modeled energy consumption of commercial
refrigeration equipment. In response to these comments, DOE reviewed
its modeled infiltrated air mass values between the NOPR and final rule
stages of the rulemaking. Specifically, DOE adjusted the values for a
variety of classes to better align with new information presented in
stakeholder comments and other sources. This included adjustments to
account for the impacts of the respective air densities at the three
DOE rating temperatures, and scaling to better simulate the impacts of
case geometry. For full details on the infiltration levels modeled,
please refer to chapter 5 and appendix 5A of the final rule TSD.
With respect to the comment from True regarding the percentage of
case heat load attributable to infiltration, DOE's engineering model
provides a specific breakdown of the constituent components of the case
heat loads modeled in its simulation. A review of the DOE engineering
model shows the contribution of infiltration to case heat load for
closed-door units to be in line with the figures provided by True. In
response to the comment from Traulsen, DOE believes that gasket losses
are accounted for in its infiltrated air mass values. These values were
derived from manufacturer literature based upon test performance under
ASHRAE conditions, and thus would encapsulate all phenomena, including
gasket losses, encountered by the unit which contribute to the
infiltration load during operation. The engineering model simulates
performance under the DOE test procedure, and thus changes which may be
encountered in the field such as those noted by Traulsen are not
specifically relevant to the calculated daily energy consumption values
used for standards setting purposes. Therefore, DOE does not see a need
to change its methodology to account for this attribute.
DOE agrees with Continental and Structural Concepts that wide
variation in infiltration is observed among different equipment
classes, particularly between open and closed cases. DOE believes that
its updated air infiltration values better account for differences that
exist in infiltration loads among cases of different configurations,
geometries, sizes, and operating temperatures.
With respect to the comment from ACEEE, DOE understands that tracer
gas analysis could be used in a controlled laboratory environment to
possibly determine infiltration rates into commercial refrigeration
equipment. However, within the scope, time frame, and resources of this
rulemaking process, DOE did not pursue that method to further
investigate infiltration effects. Instead, DOE continued to base its
approach on infiltration load values calculated from manufacturer
literature, and adjusted those values based upon comments received
after publication of the NOPR. DOE believes that this is an accurate
approach, consistent with methodologies employed in other past and
current rulemakings, which is substantiated by the best available data
as of the time of this analysis.
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 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).
After publication of the NOPR, DOE received a number of comments on
its choice and implementation of certain design options within the
engineering analysis. The following sections address these stakeholder
comments.
[[Page 17749]]
a. Fluorescent Lamp Ballasts
Traulsen commented that markets have already trended towards
electronic (solid-state) ballasts to modulate power provided by T8
lights. Traulsen raised concern that DOE analysis might therefore be
unfairly overstating savings from the adoption of TSL4 by including
electronic ballasts as a design option in its analysis. (Traulsen, No.
65 at p. 4)
DOE understands that electronic ballasts are ubiquitous in the
commercial refrigeration equipment market within cases that use
fluorescent lighting and agrees with the comment presented by Traulsen.
In its NOPR engineering analysis, DOE modeled the baseline design
option in cases with lighting as comprised of T8 fluorescent fixtures
with electronic ballasts. At improved levels of efficiency, DOE
implemented super-T8 fluorescent lighting, LED lighting, and LED
lighting with occupancy sensors. DOE did not model magnetic ballasts
within its NOPR engineering analysis. Given the comments received at
the NOPR stage, DOE retained this stance in its final rule engineering
analysis.
With regard to Traulsen's assertion that DOE might be overstating
savings, DOE wishes to clarify that energy savings and downstream
impacts (such as life-cycle cost and national net present value
results) were calculated using a base case efficiency distribution in
which minimum-efficiency products available today are assumed to comply
with existing standards. Therefore, the modeled design options up to
the level of performance required by existing standards did not have
any impact on the energy or cost savings attributed to the amended
standards set forth today, but rather, served only to align the
engineering cost-efficiency curve with the technologies which present
the shortest-payback options for reducing energy consumption.
b. Condenser Fans
Southern Store Fixtures and AHRI commented that the modeling of
electronically commutated motors (ECMs) in condenser fan applications
was redundant, since they believe that all equipment in compliance with
the 2009 final rule are already using ECMs. (Southern Store Fixtures,
No. 67 at p. 4) (AHRI, No. 75 at p. 7)
DOE understands that manufacturers may currently be choosing to
utilize ECM fan motors as part of their designs on the market. However,
the 2009 final rule and EPACT 2005 standards do not include
prescriptive requirements, so DOE is unable to assume that
manufacturers have all used any one single design path in order to
achieve the necessary performance levels. Instead, DOE started its
analysis with an engineering baseline representing designs less
sophisticated than needed to meet the current standard levels, and
added all available design options, including some previously
considered in the 2009 final rule, until reaching the max tech
efficiency level. This method allowed DOE to order all design options
in the most cost-effective manner. However, only those modeled
efficiency levels having performance above the level required by
existing standards were considered as contributing to the energy and
cost savings attributable to this rule. For a further explanation of
this methodology, please see section IV.D.1.b, ``Baseline Models.''
c. Evaporator Fans
Southern Store Fixtures and AHRI commented that the modeling of ECM
fan motors in evaporators was redundant, since they believe that all
equipment in compliance with the 2009 final rule is already using ECMs.
(Southern Store Fixtures, No. 67 at p. 4) (AHRI, No. 75 at p. 7)
Continental commented that shutting off the fans during door-opening
could cause the evaporator coil to freeze up, and thus that this should
not be considered as an option. (Continental, Public Meeting
Transcript, No. 62 at p. 153)
DOE understands that many manufacturers may currently be choosing
to utilize ECM fan motors as part of their designs on the market at
this time. However, the 2009 final rule and EPACT 2005 standards do not
include prescriptive requirements, so DOE was unable to assume that
manufacturers all chose any one single design path in order to achieve
the necessary performance levels. Instead, DOE started with a simpler
engineering baseline representing equipment performance at a lower
level than that permitted by current standards, and added all design
options, including some previously considered in the 2009 final rule,
until reaching the max tech level. This method allowed DOE to order all
design options in the most cost-effective manner. However, only those
modeled efficiency levels performance above the level required by
existing standards were considered as contributing to the energy and
cost savings attributable to this rule. For a further explanation of
this methodology, please see section IV.D.1.b, ``Baseline Models.''
DOE agrees with the concerns of Continental regarding turning off
evaporator fans, and did not model evaporator fan controls as a design
option in this rulemaking due to a number of issues including the
integrity of the air curtain on open cases and food safety issues due
to lack of air circulation arising from stopping the evaporator fans.
For a full discussion of this issue, please see chapter 5 of the final
rule TSD.
d. Design Options Impacting Equipment Form Factor
Some manufacturers and consumer groups urged DOE to screen out any
design options which would even marginally affect the geometry of a
model, either by increasing its total footprint or reducing the cooled
internal space. Specifically, these comments referred to DOE's
consideration of added insulation thickness as a design option. True
commented that it was impractical to increase the total footprint of
equipment since almost all commercial kitchen equipment has a fixed
footprint and replacement units must fit into the same space as old
units. (True, No. 76 at p. 1) Continental commented that a \1/2\''
increase in insulation of walls could have a significant impact on end-
users and manufacturers, since equipment is often designed for very
specific footprints and layouts. Continental further commented that
while an inch less inside space or an inch larger cabinet may seem
insignificant, it may be important to end-users. (Continental, Public
Meeting Transcript, No. 62 at p. 103) Traulsen, too, noted that both
internal capacity and footprint of a unit were its key selling points.
(Traulsen, No. 65 at p. 7) Hoshizaki, True, AHRI, NAFEM, SAF,
Continental, Structural Concepts and Hillphoenix all opined that
increasing the case insulation requirement by even \1/2\'', would lead
to a significant increase in footprint, or decrease in internal
volume--both of which would detrimentally affect consumer utility,
since many commercial environments have very limited floor space.
(Hoshizaki, No. 84 at p. 2) (True, No. 76 at p. 3) (AHRI, No. 75 at p.
6) (NAFEM, No. 93 at p. 5) (SAF, No. 74 at p. 6) (Continental, No. 87
at p. 3) (Structural Concepts, No. 85 at p. 2) (Hillphoenix, No. 71 at
p. 3)
DOE understands stakeholder concerns over unit form factor, and
discussed these concerns thoroughly in its manufacturer interviews
conducted at the NOPR stage of the rulemaking. At that time,
manufacturers agreed that the addition of \1/2\'' of insulation above
the baseline thicknesses modeled (1.5'', 2'', and 2.5'' for
refrigerators, freezers, and ice cream freezers, respectively) was
feasible, albeit at the expense of equipment redesign and replacement
of
[[Page 17750]]
foaming fixtures. DOE incorporated cost figures for these factors into
the engineering and manufacturer impact analyses so as to account for
the costs of additional foam as a design option. With respect to the
concerns over additional foam thickness having an impact on the
usefulness of the product to consumers, DOE notes that in its teardown
analyses it encountered a number of models currently on the market
utilizing the increased foam wall thicknesses which it modeled. Since
manufacturers are already employing these wall thicknesses in
currently-available models, DOE believes that this serves as a proof of
concept and that the resulting changes to form factor would be of
minimal impact to end users. DOE also would like to remind stakeholders
that it is not setting prescriptive standards, and should manufacturers
value some features over others, they are free to use different design
paths in order to attain the performance levels required by today's
rule.
e. Vacuum Insulated Panels (VIPs)
True, Structural Concepts, and Traulsen commented that the use of
VIPs is very cost-prohibitive and can reduce the structural strength of
the unit. Additionally, Traulsen recommended further discussion on the
use of vacuum insulated panels, specifically on the structural
integrity and associated trade-offs of this technology. (Traulsen, No.
65 at p. 10) (True, No. 76 at p. 3) (Structural Concepts, No. 85 at p.
2)
DOE considered vacuum insulated panels as a design option in its
engineering analysis because they have the potential to improve
equipment efficiency, are available on the market today, are currently
used in refrigeration equipment, and pass the screening criteria set
forth in sections 4(b)(4) and 5(b) of the Process Rule. However, DOE
understands that there is a high level of cost required to implement
this design option, including redesign costs, and sought to reflect
that fact through appropriate cost values obtained from manufacturer
interviews and other sources and included in its analyses. As a result,
vacuum insulated panels appear only in max-tech designs for each
equipment class, and are not included in any of the modeled
configurations selected in setting the standard levels put forth in
today's document.
f. Variable-Speed Fan Motors
Traulsen commented that while DOE suggested varying condenser and
evaporator fan speeds to improve performance, Traulsen equipment is
used in applications in which food safety concerns make this option
infeasible. Traulsen further commented that NSF issues related to food
safety and sanitation must be a primary consideration over energy
savings. (Traulsen, No. 65 at p. 5) However, ebm-papst, Inc. (ebm-
papst) noted that variable speed condenser fans have successfully been
deployed in the European market. (ebm-papst, No. 70 at p. 3)
DOE agrees with Traulsen's concerns over food safety issues arising
from possible implementation of evaporator fan control schemes. DOE
noted in chapter 5 of its NOPR TSD that the effectiveness of the air
curtain in equipment without doors is very sensitive to changes in
airflow, and fan motor controllers could disrupt the air curtain. The
potential of disturbance to the air curtain, which could lead to higher
infiltration loads, does not warrant the use of evaporator fan motor
controllers in equipment without doors, even if there were some
reduction in fan energy use. With respect to equipment with doors, DOE,
in its discussions with manufacturers, found that there are concerns in
industry about the implementation of variable-speed fan technology due
to the need to meet food safety and maximum temperature requirements.
Varying the fan speed would reduce the movement of air within the case,
potentially leading to the development of ``hot spots'' in some areas
of the case, where temperatures could exceed the desired value. This
finding aligns with the concerns raised by Traulsen. Some industry
representatives also stated during interviews that the use of such
controllers could have unintended consequences, in which fans would be
inadvertently run at full power to attempt to overcome a frosted or
dirty coil, resulting in wasted energy. Due to the uncertainties that
exist with respect to these technologies, DOE did not consider
variable-speed evaporator fan motors or evaporator fan motor
controllers as a design option in its NOPR or final rule analyses.
In response to the comment from ebm-papst, DOE points out that it
discussed condenser fan controls in chapter 4 of its NOPR TSD. Because
testing under the ANSI/ASHRAE Standard 72 test procedure is conducted
at a constant ambient temperature, there is little opportunity to
account for the adaptive technology of varying condenser fan motor
speed to reduce daily energy consumption of a given model. Moreover,
DOE understands that condenser fan motor controllers function best when
paired with a variable-speed modulating compressor, a technology that
DOE understands to be only in the early stages of implementation in
this industry. Therefore, DOE did not consider variable-speed condenser
fan motors or condenser fan motor controllers as design options in its
engineering analysis.
g. Improved Transparent Door Designs
In the NOPR, DOE modeled triple pane, low-e coated glass in the
configuration of an advanced design option for vertical medium-
temperature cases with transparent doors. Hussmann commented that low-e
coatings have an inherent tint to them, which reduces the visibility of
merchandise through a triple-paned, low-e coated glass door. (Hussmann,
Public Meeting Transcript, No. 62 at p. 99) SAF, AHRI and NRA also
expressed concern over product visibility associated with this
technology. (SAF, No. 74 at p. 6) (AHRI, No. 75 at p. 6) (NRA, No. 90
at p. 5) Traulsen, NAFEM, Continental, Royal Vendors, and True noted
that triple-pane glass doors are much heavier than double-paned doors,
and increase the risk of the unit tipping over, especially when it is
near empty. Additionally, True pointed out that triple-paned glass led
to reduced thermo-break in hinge areas, reduction in internal volume of
sliding doors, failure to clear the Underwriters Laboratories (UL) 471
tip-test,\31\ door opening difficulties due to added mass and easier
breakage. Traulsen also noted that an enhanced door would require
design changes including heavier hinges, and a complete redesign of
sliding doors with applications in narrow aisles. (Continental, No. 87
at p. 3) (NAFEM, No. 93 at p. 7) (True, No. 76 at p. 2) (Traulsen, No.
65 at p. 10)
---------------------------------------------------------------------------
\31\ UL standard 471, ``Commercial Refrigerators and Freezers,''
is a safety standard applicable to this equipment. Part of this
procedure includes a test of the ability of the unit to avoid
tipping over under certain conditions. This is the ``tip test''
referenced by the commenter.
---------------------------------------------------------------------------
Additionally, AHRI commented that, for HCT equipment, the NOPR TSD
considered two extra panes of glass for high-performance doors that
were used in low and ice-cream temperatures, whereas only a single
extra pane of glass was used for medium temperature high- performance
doors. (AHRI, No. 75 at p. 7)
The CA IOUs disagreed with the comments from many manufacturers and
trade associations, and in a written comment opined that triple-pane,
low-e transparent doors were feasible in medium temperature
applications and were already found in existing
[[Page 17751]]
equipment. (CA IOUs, No. 63 at p. 6) The Joint Comment suggested that
if the use of triple-pane, low-e doors were to reduce product
visibility, then increased lighting levels may be more energy-efficient
than reverting to double-pane glass. (Joint Comment, No. 91 at p. 4)
DOE understands the concern of manufacturers and other interested
parties regarding the applicability and appropriateness of triple-pane,
low-e doors in medium temperature equipment. The range of concerns
suggests that manufacturers may encounter significant issues of
redesign, recertification, consumer choice, and possible loss of some
functionality were this feature to be implemented across all medium-
temperature glass-door units. Therefore, in its final rule modeling of
glass doors, DOE restricted its high-performance design to consider
only two panes of glass for medium-temperature cases.
In response to AHRI's comments regarding HCT doors, DOE asserts
that HCT doors as modeled in its engineering analysis for the NOPR
featured the same number of panes of glass in both low/ice cream and
medium temperature designs. For these equipment types, the baseline
door featured a single pane of glass, while the high-performance door
featured a second pane of glass. These designs are consistent with what
DOE has observed on the market and in the design of similar equipment.
Therefore, DOE retained these designs, with respect to the number of
panes of glass modeled, in its final rule engineering analysis.
DOE agrees with the CA IOUs that some equipment currently on the
market for medium-temperature applications does feature triple-pane,
low-e glass doors. However, this is not a standard design and DOE
understands the concerns of manufacturers in applying this feature to
the entirety of their product lines. Due to concerns over applicability
and implementation of triple-pane, low-e doors in all medium-
temperature products, DOE retained a double-pane design in its final
rule engineering analysis simulation of improved glass door
performance. However, DOE wishes to point out again that it is not
setting prescriptive design requirements, and thus manufacturers are
free to use only those designs and technologies they see fit in order
to attain the level of performance specified in today's final rule.
h. High-Performance Coil Designs
In order to model improved performance, DOE considered the use of
improved evaporator and condenser coils as design options. However,
many manufacturers felt that while these design options provided
theoretical efficiency gain, there are several practical issues which
mitigated these gains in the field. Heatcraft commented that the phrase
``improved evaporator coil design'' was a very generic term, and that
coils that can be designed for high efficiency in a laboratory
environment may not serve the purpose of the equipment functionally in
the field. (Heatcraft, Public Meeting Transcript, No. 62 at p. 77)
Danfoss, Traulsen, Southern Store Fixtures, Royal Vendors and True
commented that higher fin density for evaporators and condensers would
lead to frequent clogging and freezing, which could not only cause an
increase in energy use, but also cause the unit to not maintain
temperature levels required for safe storage of food. (Danfoss, No. 61
at p. 4) (Traulsen, No. 65 at p. 6) (Southern Store Fixtures, No. 67 at
p. 3) (Royal, No. 68 at p. 1) (True, Public Meeting Transcript, No. 62
at p. 67)
At the NOPR stage, DOE modeled an improved evaporator coil with a
larger number of tube passes than the baseline design; however,
Traulsen commented that if an evaporator with a larger number of tube
passes is selected, there is an increased risk of refrigerant pressure
drop through the coils. Traulsen further commented that, with multiple
tubing circuits, this drop could be so substantial that the refrigerant
could fail to make its way back to the compressor. (Traulsen, No. 65 at
p. 6)
DOE also modeled rifled evaporator tubes to improve coil
performance in its NOPR analyses. Southern Store Fixtures commented
that the use of rifled tubing for evaporator coils may have no
significant improvement in coil performance for commercial
refrigeration systems. (Southern Store Fixtures, No. 67 at p. 3) AHRI
commented that rifling of evaporator coil tubes is common in the
industry, but that in practical applications, lower evaporation
temperatures and lower flow rates result in no significant efficiency
improvement attributable to internally enhanced tubing. (AHRI, No. 75
at p. 3) Continental commented that rifled tubing for evaporator coils
causes turbulence in refrigerant flow, leading to slugging and stress
concentrations, which lead to increased maintenance costs and failure
possibilities. (Continental, No. 87 at p. 2)
Another concern amongst manufacturers was the effect of
incorporating larger evaporator and condenser coils into a unit. AHRI
noted that there had been drastic reductions in the overall width and
depth of the modeled evaporator coils since the last rulemaking.
Further, AHRI noted that while DOE relied on its contractors for
details on coil construction, it did not provide any references to
studies that justify changes in coil dimensions. (AHRI, No. 75 at p. 5)
Traulsen commented that larger coils would require equipment redesign,
resulting in possible obsolescence of smaller lines and custom
applications. (Traulsen, No. 65 at p. 6) Hillphoenix commented that the
use of taller coils would decrease the amount of product that could be
put in the case, or would move the product further away from consumers,
and that this would be unacceptable to retailers. (Hillphoenix, No. 71
at p. 4) Hussmann commented that increasing evaporator and condenser
coil dimensions would involve engineering costs associated with
redesigning parts of the case that interface with the coil. (Hussmann,
No. 77 at p. 2) Structural Concepts commented that changing the overall
height of heat exchangers would require that either the display
capacity to be reduced, or the overall height of a unit be increased,
which would impact utility negatively. (Structural Concepts, No. 85 at
p. 2) Continental commented that in under-counter and worktop units,
limited space is available for a condensing unit, and increasing the
size of the condenser coil is not practical. (Continental, No. 87 at p
2)
In response to the comment from Heatcraft regarding DOE's reference
to ``improved evaporator coil design,'' DOE points to chapter 5 of its
TSD, where it specifically outlines the geometries and features
included in this coil design. With respect to the concerns of
Heatcraft, Danfoss, Traulsen, Southern Store Fixtures, Royal Vendors,
and True that coil designs must remain functional in the field, DOE
only considered features which were proven through field use in current
coil designs. In a review of the coil designs at the final rule stage,
DOE removed from consideration designs featuring increased fin pitch,
and instead retained the modeled fin pitches at levels seen in teardown
units. DOE believes that this action addresses the concerns of these
stakeholders over the issues of clogging and freezing that could be
encountered with higher-fin-pitch coils.
When modeling coil configurations at baseline and improved levels
of efficiency, DOE evaluated the overall performance of the coils
within the context of specific refrigeration systems in which they
would be used. This included numerical simulation of coil performance
accounting for pressure drops. DOE excluded from consideration coil
designs which proved
[[Page 17752]]
impractical, or which had negative energy impacts. Therefore, DOE
believes Traulsen's concern regarding pressure drops over larger
numbers of tube passes to be unsubstantiated. Additionally, DOE re-
evaluated its coil designs at the final rule stage based on stakeholder
comments and additional data from teardowns, incorporating many of the
concerns expressed in these comments during coil modeling at the final
rule stage.
Based on stakeholder comments including those of Southern Store
Fixtures, AHRI, and Continental, DOE removed consideration of coil tube
rifling from its analysis of improved heat exchanger performance at the
final rule stage of this rulemaking. DOE believes that this action
addresses the concerns voiced by stakeholders over the inapplicability
of rifled tubing to some commercial refrigeration designs and issues
with reduced refrigerant flow, slugging, and other negative effects.
During the final rule stage, DOE revised its modeling of evaporator
and condenser coils based on new information gained through stakeholder
comments and additional teardowns. In this analysis, it addressed the
concerns expressed by manufacturers and other parties regarding the
size constraints imposed upon heat exchangers in commercial
refrigeration applications. With respect to the comments from AHRI, DOE
notes that it did re-evaluate its coil designs from the 2009 rulemaking
to produce designs that better approximate the configurations and
performance attributes of coils found in the market. In response to the
concerns of Hillphoenix, Hussmann, Structural Concepts, and
Continental, during its final rule engineering modeling, DOE kept the
size of modeled evaporator coils constant based on geometries seen in
teardown units, and instead modified only features which could improve
coil performance without growing the footprint of the coil. When
modeling condenser coils, DOE allowed for a modest inclusion of an
additional coil row in the direction of airflow. This was consistent
with advanced designs seen in production units today, and DOE believes
that this added coil size would not be sufficient to cause major
impacts on unit form factor.
i. Higher-Efficiency Fan Blades
Traulsen commented that DOE modeling of higher efficiency fan
blades did include specific details pertaining to the implementation of
this design option, including energy savings, method of cost modeling,
and other attributes. (Traulsen, No. 65 at p. 5) ebm-papst commented
that fan selection should be based on airflow at the operating point
and should not be limited to axial and tangential fans. (ebm-papst, No.
70 at p. 3)
In response to Traulsen's comment, DOE wishes to clarify that DOE
did not consider higher-efficiency fan blades as a design option within
its NOPR or final rule engineering analyses. Most commercial
refrigeration equipment currently uses stamped sheet metal or plastic
axial fan blades. DOE was not able to identify any axial fan blade
technology that is significantly more efficient than what is currently
used, but did identify tangential fan blades as an alternative fan
blade technology that might improve efficiency. However, tangential fan
blades in small sizes are themselves less efficient at moving air, and
thus require greater motor shaft power. Because of these competing
effects, DOE did not consider tangential fan blades as a design option
in its analyses. Additionally, with regard to ebm-papst's comment, DOE
did not encounter any other fan blade technologies aside from axial and
tangential fans which were available for application in commercial
refrigeration equipment. Consistent with the comment from ebm-papst,
DOE modeled fan motor and blade combinations so as to provide needed
airflow across the heat exchangers consistent with what is used in
designs currently available on the market.
j. ECM Fan Motors
ebm-papst, in its written comment, noted that a variety of fans
with electronically commutated (EC) motors (ECMs) were available on the
market which provided wire-to-air efficiency of 65-70%. ebm-papst
further commented that EC motors are compact and easily integrated into
all levels of refrigeration systems. Also, ebm-papst commented that EC
fans compatible with alternative refrigerants are now available on the
market. (ebm-papst, No. 70 at p. 4)
DOE agrees with ebm-papst regarding the performance and
availability of ECM fan motors for commercial refrigeration
applications. In its preliminary and NOPR analyses, DOE considered EC
motors as a design option for evaporator and condenser fan applications
in all equipment classes where such fans were present. Additionally,
DOE modeled an overall efficiency of 66% for EC motors, which is
consistent with the figure provided by ebm-papst. DOE retained this
modeling of EC motors in the final rule analyses.
k. Lighting Occupancy Sensors and Controls
In its analysis, DOE considered lighting occupancy sensors as a
design option with the potential to reduce unit energy consumption.
However, Traulsen commented that the study of occupancy sensors which
DOE cited did not account for different traffic patterns, and only
covered 30 days of data collection with LEDs at full power and 60 days
with LEDs dimmed. Traulsen expressed concern that this analysis used
insufficient data to support the savings assumed by TSL4. (Traulsen,
No. 65 at p. 12) Hillphoenix commented that the occupancy sensor credit
for VOP.RC.L was higher than for all other classes. (Hillphoenix, No.
71 at p. 7)
Some manufacturers questioned the need for occupancy sensors. AHRI
commented that since manual night curtains are modeled, it could be
assumed that when the curtains are deployed, the CRE lighting systems
can also be manually turned off during periods of inactivity. (AHRI,
No. 75 at p. 4) Structural Concepts commented that requiring occupancy
sensors on cases that will be going to twenty-four hour stores would be
a cost-burden with no associated energy savings. (Structural Concepts,
No. 85 at p. 2) However, the Joint Comment suggested that the use of
lighting sensors could further reduce the energy consumption of max-
tech options for self-contained vertical closed transparent door units.
(Joint Comment, No. 91 at p. 4)
DOE based its modeling of lighting occupancy sensors and scheduled
controls on the provisions of the DOE test procedure as amended by the
2012 final rule. 77 FR at 10292 (February 21, 2012). These provisions
allow for cases featuring these technologies to be tested with the
lights turned off for a fixed period of time. DOE applied these
provisions specifically across all classes in which occupancy sensors
and scheduled controls were considered as a design option. Therefore,
DOE believes Traulsen's assertions regarding DOE's modeled savings
levels to be incorrect, as DOE did not model savings potential based on
field studies, but rather on the specific provisions of the DOE test
procedure. In response to the comment from Hillphoenix, DOE wishes to
clarify that occupancy sensors were not given an absolute credit in the
form of a kWh/day reduction, but instead were modeled as they are
treated under the DOE test procedure, where they are given an allowance
for lighting off time. This modified lighting run time was incorporated
into DOE's engineering analysis model for cases including
[[Page 17753]]
lighting occupancy sensors, and the model was run for the particular
case configuration being examined. Therefore, due to differences in
case geometries, features, and design options, DOE cautions against
direct comparisons of the absolute merits of specific technologies
across different equipment classes, as such comparisons may be
misleading.
With respect to the comment from AHRI, DOE does not consider a
manual light switch to be a lighting controller under the provisions of
its test procedure, since this device does not have the inherent
ability to reduce energy consumption and since the method of test
included in the procedure requires that all lighting be activated
during the test. In its 2012 test procedure final rule, DOE added a
provision specifically to allow for the testing of units including
occupancy sensors and scheduled controls, but this does not include
manual light switches. 77 FR at 10292 (February 21, 2012). Therefore,
DOE maintains that a manual light switch is not a lighting control and
shall not be treated as such during the conduct of the DOE test
procedure.
In response to the concerns of Structural Concepts, occupancy
sensors have the potential to operate at all times, turning off
lighting to save energy during periods of inactivity, then reactivating
the lights when shoppers are present. DOE understands that, even in 24-
hour stores, there are periods when a high density of shoppers may not
be present, and thus when lighting occupancy sensors would present the
potential to save energy. DOE agrees with the Joint Comment that
lighting occupancy sensors offer the potential to reduce the energy
consumption of equipment in classes to which they are applicable,
including the particular class noted in the comment. Therefore, DOE
retained its modeling of this design option in its final rule
engineering analysis.
l. Night Curtains
DOE analyzed night curtains as a design option with the potential
to reduce equipment energy consumption. However, Southern Store
Fixtures commented that, while DOE modeled a reduction in heat load
when night curtains were employed, there was no cost analysis presented
to justify this option. Furthermore, Southern Store Fixtures referred
to a Pacific Gas and Electric Company (PG&E) report which asserted that
night curtains were not cost effective due to poor economics, and a
study funded by the California Energy Commission which reported a
minimum 6.63 year and maximum 21.56 year payback period on night
curtains. (Southern Store Fixtures, No. 67 at p. 6) Structural Concepts
commented that night curtains should be excluded from the analysis
since they were deemed by DOE as not ``required.'' Structural Concepts
further commented that twenty-four-hour stores would not be able to use
night curtains. (Structural Concepts, No. 85 at p. 2)
Regarding the types of night curtains that were modeled by DOE,
AHRI commented that DOE did not explore automatic night curtains and
Southern Store Fixtures commented that there were no night curtains
currently available that are suited for curved display cases. (Southern
Store Fixtures, No. 67 at p. 5) (AHRI, No. 75 at p. 3)
In response to the comment from Southern Store Fixtures on cost
analysis, DOE wishes to clarify that it did include a cost analysis of
night curtains in its engineering analysis. Costs per foot of night
curtain were included in DOE's engineering spreadsheet model as
released to the public, and served as the basis of DOE's placement of
night curtains in the engineering cost-efficiency curves, as design
options were ordered from lowest to highest calculated payback period.
Regarding the mention of the PG&E report as presented to CEC, DOE
understands that that report focused largely on time-variant economic
factors such as the savings at peak-load conditions, rather than the
overall life cycle cost savings and payback periods calculated by DOE.
Therefore, due to a different focus and methodology, that organization
may have reached a different conclusion than that attained by DOE. DOE
plans to retain its analytical methodology as used across a variety of
rulemaking efforts and believes that that methodology is appropriate
and soundly evaluates the economic and energy savings benefits of
design options including night curtains.
With respect to the comments from Structural Concepts, DOE agrees
that use of night curtains is not required since DOE is setting a
performance standard based on daily energy consumption under the DOE
test procedure, rather than a prescriptive standard mandating the use
of specific features. However, DOE is charged with exploring all
avenues of reducing measured energy consumption, and the ability of the
DOE test procedure to quantify savings attributed to night curtains
justifies DOE's inclusion of this technology in its analysis. In
addition, DOE notes that night curtains may be used in 24-hour stores
during periods of low customer traffic, and that consideration of this
feature in equipment offered for sale would provide store operators
with the availability of an additional mechanism for attaining energy
savings.
DOE agrees with AHRI that it did not explore automatic night
curtains, as it did not find a readily available automatic night
curtain technology that was applicable to the relevant case designs,
including vertical and semivertical open cases. With respect to the
comment from Southern Store Fixtures on case geometries, DOE believes
that night curtains are available that apply to the vast majority of
open case designs. Further, DOE is not setting a prescriptive standard;
night curtains are one design option, but not required under the
amended standard.
3. Refrigerants
For the preliminary and NOPR analyses, 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 NOPR, DOE received
a number of comments on potential future issues relating to
refrigerants for this equipment.
ACEEE commented that the DOE had not taken into consideration the
use of propane and other hydrocarbon refrigerants, which are in use
internationally and are now allowed in limited quantities by the U.S.
Environmental Protection Agency (EPA). ACEEE further commented that it
has manufacturer statements to show that these refrigerants
considerably improve equipment efficiency. (ACEEE, Public Meeting
Transcript, No. 62 at p. 40) Danfoss commented that Montreal Protocol
\32\ amendments requiring the phasing out of HFCs would likely come
into effect before this standard's compliance date. Additionally,
Danfoss commented that this action would make DOE's ``refrigerant
neutral'' stance flawed, and that DOE must consider the increased
uncertainty and regulatory burden from the use of low-global warming
potential (GWP) refrigerants in its analysis. (Danfoss, No. 61 at p. 2)
Coca-Cola, too, opined that by not directly analyzing alternative
refrigerants, DOE was showing a bias
[[Page 17754]]
towards HFCs. (Coca-Cola, Public Meeting Transcript, No. 62 at p. 121)
The CA IOUs commented that alternative refrigerants are being used both
internationally and in the United States. The CA IOUs further commented
that, given the potential for EPA regulations on HFC usage, DOE should
be prepared to adopt the levels of performance included in its proposed
standards to reflect the performance abilities of other refrigerants.
(CA IOUs, No. 63 at p. 8)
---------------------------------------------------------------------------
\32\ The Montreal Protocol is an international agreement, first
signed in 1987, in which signatories pledged to phase out the
production and use of ozone depleting substances.
---------------------------------------------------------------------------
AHRI commented that the potential for changes in Federal
refrigerant policy over the next few years will require the industry to
use refrigerants with low GWP, putting into question the applicability
of the proposed standard over extended time periods. AHRI further
stated that there was a possibility of refrigerant switching having
adverse impacts on equipment performance. (AHRI, No. 75 at p. 10) True
commented that the refrigerants modeled in the analysis, R404 and
R134a, are both currently being reviewed by the EPA Significant New
Alternatives Policy (SNAP) program \33\ for possible removal from
commercial refrigeration applications. (True, Public Meeting
Transcript, No. 62 at p. 123) Lennox, too, noted that non-HFC
refrigerants might become a growing part of the CRE market in the
foreseeable future. (Lennox, No. 73 at p. 5) Additionally, Hillphoenix
commented that manufacturers are being pushed towards low GWP
refrigerants which will have an impact on coil and evaporator designs,
as well as efficiency curves for compressors. (Hillphoenix, No. 71 at
p. 2)
---------------------------------------------------------------------------
\33\ EPA SNAP is the U.S. government regulatory program
responsible for maintaining the list of alternatives to ozone
depleting substances allowed for use within specific applications,
including refrigeration, in the United States.
---------------------------------------------------------------------------
ACEEE asserted that the market already has begun to move away from
HFC refrigerants. (ACEEE, Public Meeting Transcript, No. 62 at p. 185)
Coca-Cola commented that it was seeking to stop using HFCs and switch
over to R744, R290 and R600A, not only to improve energy efficiency,
but also to make the units environmentally benign. (Coca-Cola, Public
Meeting Transcript, No. 62 at p. 88) Further, Coca-Cola commented that
it is already purchasing a large number (28% in the United States) of
R744 cabinets, and aim to be using only R744 within three years. (Coca-
Cola, Public Meeting Transcript, No. 62 at p. 128) Continental
commented that refrigerants such as propane and CO2 have been approved
by EPA and are actively being evaluated and tested in products.
Continental further commented that alternative refrigerants have the
potential to affect the performance of equipment. (Continental, No. 87
at p. 1) AHRI also commented that a change in refrigerant policy would
impact refrigerants which are used as blowing agents for foams,
possibly resulting in lower insulation performance values. (AHRI, No.
75 at p. 10) Providing an additional view, the Joint Comment noted that
the use of propane as a refrigerant could improve efficiency of units
by 7-11%. Additionally, the Joint Comment pointed out that while DOE
did not model non-HFC refrigerants, manufacturers have the option of
using more efficient refrigerants. (Joint Comment, No. 91 at p. 4)
Specifically, many stakeholders wished for DOE to consider propane
(R290) as a viable alternative refrigerant. Danfoss commented that the
inclusion of natural refrigerants in the analysis was a critical issue,
since, unlike higher-efficiency compressors, the technology is already
available. Danfoss urged DOE to consider propane, isobutane and carbon
dioxide as viable refrigerants. (Danfoss, Public Meeting Transcript,
No. 62 at p. 126) ACEEE commented that DOE's decision to screen out
propane refrigerant as a design option had seriously impacted the
downstream analyses. (ACEEE, Public Meeting Transcript, No. 62 at p.
127) However, both Structural Concepts and True noted that they could
consider propane as a refrigerant for some, but not all, of their
products, since the 150 gram SNAP limit restricted total compressor
capacity. (Structural Concepts, Public Meeting Transcript, No. 62 at p.
127) (True, Public Meeting Transcript, No. 62 at p. 127)
In its written comment, however, Traulsen commented that, while
alternative refrigerants were discussed in the public meeting, DOE
should remain technology neutral with regard to those refrigerants at
this time, since there was a risk of conflict with other programs such
as EPA SNAP and UL, and since the costs to switch over to alternative
refrigerants is high. (Traulsen, No. 65 at p. 18)
While DOE appreciates the input from stakeholders at the public
meeting and in subsequent written comment, DOE does not believe that
there is sufficient specific, actionable data presented at this
juncture to warrant a change in its analysis and assumptions regarding
the refrigerants used in commercial refrigeration applications. As of
now, there is inadequate publicly-available data on the design,
construction, and operation of equipment featuring alternative
refrigerants to facilitate the level of analysis of equipment
performance which would be needed for standard-setting purposes. DOE is
aware that many low-GWP refrigerants are being introduced to the
market, and wishes to ensure that this rule is consistent with the
phase-down of HFCs proposed by the United States under the Montreal
Protocol. DOE continues to welcome comments on experience within the
industry with the use of low-GWP alternative refrigerants. Moreover,
there are currently no mandatory initiatives such as refrigerant phase-
outs driving a change to alternative refrigerants. Absent such action,
DOE will continue to analyze the most commonly-used, industry-standard
refrigerants in its analysis.
DOE wishes to clarify that it will continue to consider CRE models
meeting the definition of commercial refrigeration equipment to be part
of their applicable covered equipment class, regardless of the
refrigerant that the equipment uses. If a manufacturer believes that
its design is subjected to undue hardship by regulations, the
manufacturer may petition DOE's Office of Hearing and Appeals (OHA) for
exception relief or exemption from the standard pursuant to OHA's
authority under section 504 of the DOE Organization Act (42 U.S.C.
7194), as implemented at subpart B of 10 CFR part 1003. OHA has the
authority to grant such relief on a case-by-case basis if it determines
that a manufacturer has demonstrated that meeting the standard would
cause hardship, inequity, or unfair distribution of burdens.
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
[[Page 17755]]
information with data from physical teardowns of commercial
refrigeration equipment currently on the market.
During the development of the engineering analysis for the 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. These results were used as the basis for
the downstream calculations at the NOPR stage of the rulemaking.
At the NOPR public meeting and in subsequent written comments, DOE
received further input from stakeholders regarding the methodologies
and inputs used in DOE's cost assessment. DOE incorporated this input
in updating its modeling at the final rule stage. 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 final rule 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 equipment families, with the exception of the HZO family.\34\ The
units were 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.
---------------------------------------------------------------------------
\34\ 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.
At the final rule stage of the rulemaking, in response to comments
regarding the technologies incorporated into commercial refrigeration
equipment at various levels of performance, DOE procured additional
models of equipment on the market and performed further teardown
assessment of the construction and componentry featured in these
models. The data from these supplemental teardowns, coupled with known
performance of the purchased units from independent testing or ENERGY
STAR certification, allowed DOE to compare the performance of models
currently on the market to the results of modeling of the same
equipment configurations using its engineering simulation. This
comparison provided a validation check on the results of the
simulations. See chapter 5 of the final rule 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 25
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, which would in turn cause the model to scale other
geometric and cost parameters defining the overall size of the case.
This parameterized model, coupled with the design specifications chosen
for each representative unit modeled in the engineering analysis, was
used to
[[Page 17756]]
develop core case MPC cost estimates for each of the 25 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 (those components treated as
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 final rule TSD describes DOE's cost model and
definitions, assumptions, data sources, and estimates.
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
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.J). At the NOPR stage of the
rulemaking, 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 once again updated the analysis at the
final rule stage based on input from the NOPR public meeting and
subsequent written comments. DOE calculated the average equipment cost
percentages by equipment class. Chapter 5 of the 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 rule. DOE also created 25 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
final rule TSD. Chapter 5 of the final rule TSD also presents these
cost-efficiency curves in the form of energy efficiency versus MPC.
After the publication of the NOPR analysis, several stakeholders
provided input and feedback regarding DOE's cost modeling methodology
and costs used for specific components and design options.
Specifically, DOE received comments regarding core case costs, LED cost
specifications, component sourcing and cost information, and coil
costs. The following sections address these stakeholder comments and
concerns.
Core Case Costs
Traulsen commented that DOE's assumption of core costs not changing
for more efficient design option levels is flawed. Traulsen further
pointed out that costs for shelving, wiring, air curtain grills, trim,
etc. do change in all cases when internal or external product footprint
is altered. (Traulsen, No. 65 at p. 15)
DOE understands that changes to design requiring adjustment to a
unit's form factor would have an impact on the cost of production of
the unit, and would result in the manufacturer incurring redesign
costs. Of the design options considered, most would not have a
significant impact in these areas, as they consist largely of component
swaps or bolt-on component additions. However, for the design options
which would affect unit format, DOE considered incremental materials
costs and redesign costs, as well as capital expenditures, in its
engineering and MIA analyses. Therefore, DOE believes that it has
sufficiently addressed the concerns raised by Traulsen.
Light-Emitting Diode Cost Specifications
Several stakeholders expressed reservations over DOE's use of LED
price projections, opining that DOE had likely underestimated the price
of LEDs. Traulsen commented that according to DOE's Solid State
Lighting Multi-Year Program Plan (MYPP), there is a breakthrough in LED
performance required in 2015 that would decrease the life-cycle energy
of LED lamps. Traulsen asserted that these projections were based on
the assumption of continued governmental R&D support, and that there is
evidence of declining R&D support for LEDs. Traulsen further commented
that this lack of certainty made some assumptions in DOE analysis
questionable. (Traulsen, No. 65 at p. 3) Hussmann noted that,
typically, LED fixtures cost twice as much as T8 fluorescent ballasts.
(Hussmann, No. 77 at p. 2) Structural Concepts commented that the
prices of LED fixtures would likely be 37-40% higher than DOE
predictions for 2017. (Structural Concepts, No. 85 at p. 2) Similarly,
Hillphoenix commented that DOE had modeled a zero cost for drivers and
that current LED prices are on the order of three times that estimated
in the model. (Hillphoenix, No. 71 at p. 1) Traulsen noted that for
VCT.SC systems, the added cost of using LED systems was greater than
$120 per unit. (Traulsen, No. 65 at p. 3) True commented that it was
unlikely for LED prices to continue to drop. (True, No. 76 at p. 1)
Hillphoenix commented that LED lighting for the VCT.RC.M and VCT.RC.L
classes had experienced an 83% reduction in cost from the previous
rulemaking to the current rulemaking analysis. (Hillphoenix, No. 71 at
p. 7) Conversely, the Joint Comment concurred with DOE's analysis,
noting that the incorporation of LED price projections significantly
improved the analysis by reflecting a realistic estimate of LED costs.
(Joint Comment, No. 91 at p. 5)
In its NOPR analysis, DOE incorporated price projections from its
Solid-State Lighting Program \35\ into its MPC values for the primary
equipment classes. The price projections for LED case lighting were
developed from projections developed for the DOE Solid-State Lighting
Program 2012 report, Energy Savings Potential of
[[Page 17757]]
Solid-State Lighting in General Illumination Applications (``the energy
savings report'').\36\ In the appendix to this report, price
projections from 2010 to 2030 were provided in ($/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 Multi-Year Program Plan (MYPP). The MYPP is developed based on
input from manufacturers, researchers, and other industry experts.
Table IV.1 shows the normalized LED price deflators used in the final
rule analysis.
---------------------------------------------------------------------------
\35\ The DOE Solid-State Lighting Program is a program within
DOE's Office of Energy Efficiency & Renewable Energy. More
information on the program is available at https://www1.eere.energy.gov/buildings/ssl/.
\36\ 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.
Table IV.1--LED Price Deflators Used in the Final Rule 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
----------------------------------------------------------------------------------------------------------------
During the NOPR stage, 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 required 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.
The LCC analysis (section IV.F) 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.H). 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
\37\ due to reduction in LED prices for equipment installed in 2018 to
2030 were also calculated and appropriately deducted from the lighting
maintenance costs.
---------------------------------------------------------------------------
\37\ Discussion related to lighting maintenance costs for
commercial refrigeration equipment can be found in section 0, and a
more detailed explanation can be found in chapter 8 of the final
rule TSD.
---------------------------------------------------------------------------
While DOE understands the concerns of manufacturers over
projections of LED prices in the future, DOE made the decision to
incorporate these projections based on stakeholder input, past market
trends, and DOE research within the lighting field, which includes
regular interaction with manufacturers and suppliers of LED lighting
technologies. With respect to the comments from Traulsen, DOE does not
see any specific hurdles in the market that indicate that levels
predicted in the MYPP will fail to be realized. DOE appreciates the
comments from Hussmann, Structural Concepts, Hillphoenix, Traulsen, and
True regarding present and future LED prices. However, based on past
market trends and the current research supporting the MYPP, DOE
continued to utilize these LED price projections in the modeling
underlying today's final rule. As a point of clarification to the
comment presented by Hillphoenix, DOE wishes to mention that the
modeled costs include all components of the LED fixture, including
drivers, emitters, housing, and wiring. DOE agrees with the assertion
of the Joint Comment that incorporation of LED price projections allow
the analysis to better depict market conditions which will be
encountered by manufacturers at the time of their compliance with the
amended standard set forth in today's rule.
Component Sourcing and Cost Information
In its written comment following publication of the NOPR, Hoshizaki
commented that the engineering cost analysis was unrealistic and
incomplete since specific parts suppliers, part numbers, and parts
costs were not listed. (Hoshizaki, No. 84 at p. 1)
In developing its engineering cost model, DOE gathered a wide
variety of input information, including component and material costs,
to serve as the basis for this model. Much of this information was
collected under nondisclosure agreement by DOE's contractors, or from
sources which are not publicly available. Therefore, in order to
protect the sensitive nature of this information, DOE is unable to
disclose the information in its notice or technical support document.
However, in developing its engineering performance and cost models, DOE
ensured that the components and features being modeled did not present
any intellectual property issues with respect to sourcing or
implementation. That is, DOE ensured that the features modeled were
consistent with designs and components available on the open market to
the entire range of CRE manufacturers.
Coil Costs
Some manufacturers opined that DOE had underestimated the cost of
manufacturing improved evaporator and condenser coils. Southern Store
Fixtures commented that using smaller tubes in
[[Page 17758]]
a fixed size evaporator was found through their internal studies to
allow for only 8% performance improvement, while incurring a 290% cost
increase. Southern Store Fixtures noted that making changes to a
condensing unit would make the cost 80% higher than the standard
catalog price. (Southern Store Fixtures, No. 67 at p. 3) AHRI commented
that DOE had underestimated the added costs associated with the
implementation of higher efficiency evaporator coils. (AHRI, No. 75 at
p. 5) Traulsen, too, commented that DOE estimated values of the cost to
manufacture improved coils was much lower than a cost figure provided
to it by the largest provider of CRE coils in the U.S. (Traulsen, No.
65 at p. 6) Hillphoenix concurred with DOE on the modeled price of
condenser coils, but noted that evaporator coils cost nearly three to
four times as much as condenser coils. Hillphoenix qualified this
assertion by pointing out that the necessary customization, as well as
the increased assembly cost (labor) of a lower fin density and longer
width coil, contributed to the increased price of the evaporator coil.
(Hillphoenix, No. 71 at p. 1)
In response to the comment from Southern Store Fixtures, DOE did
not consider smaller-diameter tubes in its evaporator coil designs as
modeled in the final rule engineering analysis. Additionally, DOE
modeled the components of the condensing unit--coil, fans, compressor,
and cost to assemble--independently, rather than modeling the cost of a
single prepackaged assembly. DOE believes that this modeling accurately
reflects the costs incurred by manufacturers when producing the
condensing units of self-contained equipment.
Regarding the concerns of AHRI, Traulsen and Hillphoenix on the
modeled costs of condenser and evaporator coils, DOE revisited this
modeling for the final rule. DOE based its modeling of coil costs on
information gathered from teardowns of coils present in units currently
available on the market, and then used these inputs in conjunction with
an internal cost model to develop costs to manufacture for these
components. These costs factor in the prices of raw materials, the
costs of processing, forming, and assembly operations, and other key
costs integral to the development of the components. DOE updated its
coil costs for the final rule taking into account the design changes to
the form factors of its modeled coils and the information provided in
stakeholder comments regarding the relative costs of different coil
types. DOE is confident in its use of this methodology, which has been
implemented and vetted through use in a number of other past and
ongoing rulemaking analyses. For further information regarding coil
modeling, please see chapter 5 of the final rule TSD.
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 \38\ 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.D.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
final rule TSD for more details about the manufacturer markup
calculation.
---------------------------------------------------------------------------
\38\ 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.J). During the interviews, DOE
sought feedback on all aspects of its analyses for commercial
refrigeration equipment. For the engineering analysis, DOE discussed
[[Page 17759]]
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. The results of the manufacturer interview
process conducted before the release of the NOPR were augmented with
additional information provided in written comments after the NOPR and
at the NOPR public meeting. More details about the manufacturer
interviews are contained in chapter 12 of the final rule 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.\39\
---------------------------------------------------------------------------
\39\ Available at https://www1.eere.energy.gov/buildings/appliance_standards/rulemaking.aspx/ruleid/27.
---------------------------------------------------------------------------
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.D.4.b. For each level above the baseline, the
changes in system cost due to the implementation 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 NOPR analysis,
DOE received numerous stakeholder comments regarding the methodology
and results of the energy consumption model.
a. Release of Engineering Model for Review
At the NOPR public meeting, Zero Zone and ACEEE urged DOE to make
its engineering spreadsheet model publicly available. (Zero Zone,
Public Meeting Transcript, No. 62 at p. 70) (ACEEE, Public Meeting
Transcript, No. 62 at p. 125) DOE agreed with Zero Zone and ACEEE and
released the engineering spreadsheet model for public review shortly
after the NOPR public meeting. Stakeholder review of the model served
as the basis for many of the specific comments and suggestions
discussed in today's document and incorporated into DOE's final rule
analysis.
b. Anti-Sweat Heater Power
Some stakeholders opined that the DOE model did not fully consider
some equipment classes and components which used anti-sweat heat.
Traulsen noted that, due to gasket and breaker strip inefficiencies,
VCS.SC.L and VCS.SC.M equipment will require some auxiliary heat around
door perimeters to prevent condensation, even at ambient conditions of
75 [deg]F and 55% RH. (Traulsen, No. 65 at p. 11) Hussmann noted that
no-heat doors for VCT.RC.M were not suitable in high-humidity
conditions, since they could lead to condensation on the doors and the
risk of water dripping onto the floor. (Hussmann, No. 77 at p. 9) AHRI
commented that there was no clear justification provided for why
certain doors were modeled with anti-sweat heat power and others were
modeled without it, further pointing out, that anti-sweat heat is not
limited only to doors, but often also applies to frames and mullions
too. (AHRI, No. 75 at p. 8)
DOE appreciates the input from commenters regarding the use of
anti-sweat heat and has updated its engineering model for the final
rule stage to better reflect the needs of different equipment classes
in this respect. In response to the comment from Traulsen and based on
additional investigational teardowns performed at the final rule stage,
DOE added anti-sweat heater power to some solid-door classes in order
to account for inefficiencies in gasketing which could otherwise result
in condensation or frost issues. The magnitude of the power of these
heaters was developed based on figures included in stakeholder comments
applicable to classes VCS.SC.M and VCS.SC.L, as well as from
measurements taken during teardown analysis performed at the final rule
stage.
During manufacturer interviews and in investigations of the current
offerings of commercial refrigeration equipment manufacturers and door
suppliers, DOE encountered a number of ``energy-free'' transparent door
designs for medium-temperature applications. This served as the basis
for the modeling of some doors without anti-sweat heat in the NOPR
analysis, as referenced by AHRI and Hussmann. However, in response to
the concerns of stakeholders over an assumption of zero energy doors
being too strict for field applications, DOE added a modest amount of
anti-sweat heat to its modeling of transparent doors for medium-
temperature applications in the final rule engineering analysis. DOE
believes that this modeled design provides energy savings benefits over
standard designs while maintaining the ability to utilize some anti-
sweat heat to prevent condensation issues during use.
In response to the concerns of AHRI, DOE wishes to clarify that for
transparent door classes, the modeled ``door'' anti-sweat heat includes
all anti-sweat heat on the face of the unit, including frame, mullion,
and glass heat. This anti-sweat heat is included with the modeling of
the door because generally, the display case manufacturer purchases the
doors and frames as a single item, inclusive of the anti-sweat heaters,
which is then installed in an opening in the case body. For cases with
solid doors, as well as open cases, the perimeter, gasket, mullion,
and/or face heater power is included under the category of ``non-door
anti-sweat power'' in the design specifications tab of the engineering
analysis spreadsheet model. Therefore, while the needed power may be
accounted for differently among the different classes, the appropriate
heater types are modeled for each class. DOE believes that its efforts
in updating anti-sweat heater powers modeled in the engineering
analysis for the final rule sufficiently and directly address the
concerns voiced by stakeholders at the NOPR stage.
c. Coil Performance Modeling
Stakeholders offered feedback to DOE on how the simulation of coil
performance could be improved to better reflect the performance of
evaporator and condenser coils in the field. Traulsen commented that
while DOE states that evaporators can be designed to have a discharge
air temperature that is a minimum of 10 degrees F colder than the
product temperature, the baseline model in the
[[Page 17760]]
analysis shows a product-to-refrigerant temperature difference of 11
degrees F. Traulsen further sought clarification on where the
improvement in evaporator performance could be attained since the
temperature differential at the baseline was already low. (Traulsen,
No. 65 at p. 5) Hussmann commented that the gap between discharge air
temperature and saturated evaporator temperature was unrealistically
low for certain equipment classes. (Hussmann, No. 77 at p. 10)
Hillphoenix and AHRI noted that, conventionally, coil UA \40\ is
calculated using log-mean temperature difference (LMTD) and inlet
temperature. Further, Hillphoenix commented that the use of what it
perceived to be incorrect formulae had led to over-estimation of UA for
condensers and evaporators, and that different methods were used to
calculate UA for condensers than were used for evaporators. (AHRI, No.
75 at p. 5) (Hillphoenix, No. 71 at p. 5).
---------------------------------------------------------------------------
\40\ Coil UA is a lumped parameter describing the heat transfer
capability of a heat exchanger, accounting for the thermal
transmittance (U) and surface area (A) of the specific heat
exchanger design.
---------------------------------------------------------------------------
AHRI commented that since both the previous and current rulemakings
included rifled tubing and increased fin pitch, the total prototype
energy consumption should have been the same across rulemakings.
Further, AHRI commented that the prototype condenser coil scenario is
not fully representative of all condensers for SC equipment. (AHRI, No.
75 at p. 8)
In response to the concerns of Traulsen and Hussmann, DOE re-
evaluated its parameters for modeling of coil temperature performance.
Specifically, it adjusted the temperature differential between product
temperature and saturated evaporator temperature to be 15 [deg]F for
certain classes under the baseline configuration. DOE believes that
this is a more accurate representation of evaporator performance based
on the feedback that it has received from comments and data from
testing and equipment literature. The result is that the temperature
differential at the baseline and high-performance level is higher,
reflecting the adjustments to this parameter suggested by stakeholders.
In the engineering model, evaporator coil UA is calculated as a
function of case heat load and a log mean temperature difference based
on the saturated evaporator temperature, discharge air temperature, and
return air temperature. This is the same methodology that was used in
the 2009 final rule engineering analysis, which underwent rigorous
examination by stakeholders. Therefore, DOE believes that Hillphoenix
and AHRI are misinterpreting DOE's methodology when discussing
evaporator performance. Additionally, with respect to the comment that
different formulae were applied to the modeling of evaporators and
condensers, DOE agrees with this fact, but does not believe that this
is an incorrect methodology. The modeling of the evaporator reflects
the fact that chilled case air is being recirculated, whereas modeling
of the condenser reflects the fact that the condenser is rejecting heat
to an ambient environment which functions as an effectively infinite
thermal sink. Therefore, DOE believes that these different performance
environments warrant different modeling, and maintains its methodology
for conducting this modeling in the final rule.
With regard to the concern of AHRI over disparities between the
coil performance levels modeled in the 2009 final rule and the current
rulemaking, DOE performed new analysis for the current rulemaking based
on teardowns and simulation conducted at the NOPR stage. At the final
rule stage, based on further input from stakeholder comments, DOE again
updated this performance and cost modeling. Therefore, due to the fact
that the analysis was conducted anew at each of these stages and is not
directly related to the analysis conducted for the 2009 final rule, DOE
believes that the differences in modeled performance are reasonable and
reflect improvements to DOE's understanding of baseline and high-
performance coil designs.
In reference to AHRI's mention of the applicability of DOE's
condenser coil design to a variety of commercial refrigeration
equipment, DOE modeled a baseline coil based upon geometries and
features measured from teardowns of representative models for sale on
the market today, and then implemented further design improvements
based on the inputs of outside subject matter experts and within the
guidance provided by stakeholder comments and feedback. The engineering
model then expands the cost and capacity of the modeled coil to adjust
to the needs of different equipment sizes being simulated. Thus, DOE
believes that the modeled coil design accurately reflects the real-
world needs of condenser heat exchangers for this equipment.
d. Compressor Performance Modeling
Manufacturers and consumers expressed concern over DOE's
assumptions regarding the advances in compressor technology anticipated
before the compliance date. Danfoss, Traulsen, AHRI, True, Structural
Concepts, Continental, NAFEM and Hoshizaki commented that if a 10%
compressor efficiency improvement were possible for a 5% cost increase,
then it is most likely that manufacturers would have already adopted
this technology. (Traulsen, No. 65 at p. 12) (AHRI, No. 75 at p. 9)
(True, No. 76 at p. 2) (Structural Concepts, No. 85 at p. 2)
(Continental, No. 87 at p. 2) (NAFEM, No. 93 at p. 3) (Hoshizaki, No.
84 at p. 2) Further, Danfoss stated that, at most, a 1-2% increase in
efficiency could be gained for a 5% cost increase. (Danfoss, No. 61 at
p. 2)
DOE appreciates the specific and detailed input which it received
from manufacturers and suppliers regarding its previous assumptions of
potential improvements in compressor efficiency and the corresponding
costs to attain these performance increases. In light of these
comments, DOE updated its performance and cost modeling of compressors
for the final rule analysis. Specifically, DOE implemented the
suggestion of Danfoss, a major supplier, which stated that a 2%
increase in performance over today's standard offerings, with a
corresponding cost increase of 5%, is attainable. DOE believes that
these parameters better reflect the options available to manufacturers
of commercial refrigeration equipment.
e. Insulation Modeling
Some stakeholders felt that DOE's analytical model of case
insulation had failed to sufficiently capture its effect on
manufacturing processes and field performance. Continental and
Structural Concepts commented that the actual R-value of urethane foam
insulation is significantly lower than the value modeled. (Structural
Concepts, No. 85 at p. 2) (Continental, No. 87 at p. 3) AHRI and True
suggested that an R-Value of 6 per inch was more realistic for
insulation than the currently modeled 8 per inch. (AHRI, No. 75 at p.
5) (True, No. 76 at p. 3) Concurrently, NAFEM commented that 1.25
inches of added insulation would actually be required to meet the level
of insulating performance included in the proposed standard. (NAFEM,
No. 93 at p. 5) True commented that there was a loss of insulation
value over time using urethane insulation and plastic liners. (True,
No. 76 at p. 3)
Traulsen commented that the DOE assumption that increased
insulation would not affect cabinet structure was incorrect. Traulsen
further noted that some aspects of cabinet geometry and features where
the highest level of heat
[[Page 17761]]
leakage occur appear to be beyond the scope of DOE's model. (Traulsen,
No. 65 at p. 7) Continental, too, commented that cabinet geometry would
lead to low in-place insulation values, requiring much thicker
insulation in some areas than others, to achieve the proposed
standards. (Continental, No. 87 at p. 3)
Traulsen commented that since the 2009 rule noted that a \1/2\''
insulation increase was not viable for some classes, and since no
significant changes in technology have occurred, DOE should exclude
this design option from a proposed standard level. (Traulsen, No. 65 at
p. 8)
In response to the comments from Structural Concepts, Continental,
AHRI, True, and NAFEM, DOE believes that an R-value of 8 per inch is
accurate for foamed-in-place polyurethane insulation as used in
commercial refrigeration equipment. DOE has corroborated this value in
past and ongoing rulemakings against product literature, supplier and
academic studies, and discussions in manufacturer interviews. Therefore
DOE believes that this is an accurate value and has maintained it for
the modeling of foam performance in its final rule engineering
analysis. With regard to the comment from True on changes in insulative
value of foam over time, DOE notes that certification of equipment is
conducted at or shortly after the time of manufacture, and thus
equipment in that state is modeled in DOE's engineering analysis. DOE
did not model the performance of equipment at points long after the
time of manufacture.
DOE based its modeling of case heat loads on measured geometries as
seen in units purchased and torn down over the course of the
rulemaking, as well as on product literature for designs currently on
the market. DOE notes that these geometries in some cases included the
level of increased foam thicknesses modeled as a design option, meaning
that manufacturers were already including these increases and
accounting for their effects. Thus, since proof of concept is already
being presented in today's equipment market, DOE does not believe that
there are inaccuracies in its levels of modeled foam thickness. In
response to the comment from Traulsen, DOE believes that its model
sufficiently accounts for the thermal effects of conduction,
infiltration, and other heat loads incident upon the refrigerated case.
With respect to Continental's concerns, DOE has examined a wide variety
of case designs on the market, but generally has not encountered
instances in which low in-place insulation thicknesses have been
observed. In most instances that DOE has examined, manufacturers have
maintained a standard thickness throughout the body of the case.
Therefore, DOE believes that its insulation modeling is accurate and
consistent with designs currently produced by the industry.
DOE conducted its current analysis based on the latest available
information regarding equipment designs, cost and performance of design
options and components, and downstream factors such as electricity
price forecasts. This information was updated entirely from the 2009
rule. Therefore, in response to Traulsen's comment that DOE should not
consider a design option in this analysis just because it was not
included in the analytical levels corresponding to standards set for
some classes in 2009, DOE cautions that a direct comparison between the
two rulemakings may not be accurate. Changes in prices, market factors,
and other inputs since 2009 mean that outcomes between the two analyses
could be different. Therefore, DOE has conducted the current analysis
in isolation based on the best currently available data, and has set
the standard levels included in today's rule using the results of that
analysis.
f. Lighting Performance
Several manufacturers opined that DOE had modeled LED performance
too aggressively. Southern Store Fixtures commented that even with more
directional light from LED systems, higher wattage LEDs with higher
number of diodes than those modeled by DOE would be required to provide
illumination comparable to a fluorescent system. (Southern Store
Fixtures, No. 67 at p. 2) Traulsen, in agreement with other commenters,
noted that LEDs require more watts per lumen than high efficiency T8
lighting which uses reflectors. (Traulsen, No. 65 at p. 3) Continental
commented that, while LEDs are significantly more directional than
fluorescent lights, the efficacy modeled by DOE was overestimated.
(Continental, No. 87 at p. 2) More specifically, AHRI commented that
although LEDs are directional, the DOE assumption that the output of 4-
ft & 5-ft LEDs is only 29% of that associated with T8 lighting is
flawed, since the directional nature of LEDs cannot fully compensate
for such a large differential. (AHRI, No. 75 at p. 3) Additionally,
True commented that due to the varied nature of illumination needs
across products, many models require higher wattages if LEDs are used.
(True, No. 76 at p. 1) AHRI added that reducing the light output into
cases through use of LEDs would affect consumer utility. (AHRI, No. 75
at p. 4) Traulsen commented that CRE applications, especially those
requiring low temperature settings, could experience degradation in LED
color quality and shorter lifespans. Traulsen further commented that
the variety of displayed packaging or product types may need special
light colors, and that one size fits all approach to LED lighting could
lead to loss of utility. (Traulsen, No. 65 at p. 4)
Providing an additional viewpoint, the CA IOUs commented that the
assumed level of efficacy for LED technology (54 lumens per watt) was
very conservative. The CA IOUs further noted that using the
DesignLights Consortium online database, the current simple average for
all vertical refrigerated case lighting was 59 lumens per watt, with
the average for products added in 2013 being 66 lumens per watt. (CA
IOUs, No. 63 at p. 7)
AHRI commented that comparisons between T8, super T8, and LED
lighting systems as modeled in the previous and current rulemakings
suggest that no significant improvements have been made in lighting
since the last rulemaking cycle. (AHRI, No. 75 at p. 2)
With regard to specific equipment classes, Hillphoenix commented
that the savings from SVO.RC.M due to LED lighting was the same as for
VOP.RC.M even though the semi-vertical cases would have fewer shelf
lights than the vertical open cases. (Hillphoenix, No. 71 at p. 6)
Further, AHRI commented that in the case of VCT.RC.M and VCT.RC.L
equipment, the LED lighting design option provides about an 80-83%
increased energy consumption reduction for the current rulemaking as
compared to the previous rulemaking. (AHRI, No. 75 at p. 9)
DOE agrees with the comments from Southern Store Fixtures,
Continental, and Traulsen that, in absolute terms, LED lighting
produces fewer output lumens per watt than T8 fluorescent lighting.
However, DOE understands that due to the directionality of LED
lighting, a much greater percentage of the lighting is incident upon
the product, rather than being diffused into the cabinet. With respect
to the concerns of AHRI and Continental that this directionality is
still not sufficient to compensate for the levels of lighting modeled
in the engineering analysis, DOE asserts that it based its modeling
directly on the specific configurations of equipment being shipped on
the market at the time of the analysis. When selecting LED lighting
specifications to model, DOE performed research through manufacturer
literature and catalogs,
[[Page 17762]]
studies of lighting manufacturer product literature, and physical
teardowns of existing units on the market. Developed based on this
data, DOE believes that its lighting specifications reflect the current
needs of customers and designs produced by manufacturers to satisfy
those needs.
In addition, based on new information provided by stakeholder
comments at the final rule stage, DOE has increased the modeled lumen
output of its LED fixtures by roughly 20% across all classes. DOE
believes that this added modeled light output serves to address the
concerns presented by stakeholders in their comments. Additionally, DOE
understands that manufacturers have concerns over the applicability of
LED lighting to the wide variety of models merchandised within
commercial refrigeration equipment. During its manufacturer interviews,
DOE specifically addressed this subject, speaking to manufacturers of a
broad range of equipment about their use of LEDs. Generally,
manufacturers stated that LED technology has advanced sufficiently that
issues with color matching and product color illumination are no longer
as significant as in the past. DOE's research into current manufacturer
designs aligns with this finding, as manufacturers are using LED
lighting in all applicable equipment families. With respect to concerns
over LED lifetimes, based on its discussions with manufacturers, DOE
does understand that there still remain variations in quality and
durability of LED products based on the chosen supplier, but that LED
reliability has improved significantly to its current state.
Additionally, DOE has accounted for the need for replacement of LED
lighting fixtures as part of the maintenance costs analyzed in its
life-cycle cost and payback period analysis.
After receiving the comment from the CA IOUs regarding standard
efficacies of LED fixtures produced today, DOE researched the
referenced DesignLights Consortium online database and found that the
listed data agreed with the performance levels stated in the comment
from the CA IOUs. In response to this new data, DOE updated its
efficacy figures for the modeled LED fixtures in line with those levels
depicted for models currently on the market per the database. This
resulted in an approximate 20% increase in modeled lumen output for all
LED fixtures modeled. DOE believes that this adjustment allows its LED
modeling to better reflect the level of technology currently available
on the market, while simultaneously addressing concerns from
manufacturers and other stakeholder about low levels of product
illumination using LED lighting.
DOE agrees with AHRI that no major new lighting technologies have
come onto the market since the conduct of the 2009 rulemaking; that is,
that the options currently available to manufacturers consist largely
of T8 fluorescent and LED lighting. Therefore, in building up
engineering cost-efficiency curves depicting the price and performance
of equipment from baseline to max-tech levels, DOE included these
technologies in the baseline and higher-efficiency scenarios and
implemented energy-saving lighting features alongside other design
options in order of ascending payback period. With respect to AHRI's
assertion of significant new improvements to lighting technologies
since the modeling for the 2009 final rule was performed, DOE points
out that it updated the prices and performance levels of the various
lighting technologies to reflect new information since the 2009
rulemaking, and reordered its design options and cost-efficiency curves
correspondingly.
In response to the comments from AHRI and Hillphoenix comparing the
perceived relative efficacies of specific design options in the
engineering analysis to the incremental performance changes associated
with them in the 2009 rule, DOE cautions against making such
comparisons since many other factors were not held constant. Updates to
the baseline configuration, improved pricing and performance modeling,
inclusion of new design options, and updated design option ordering all
mean that the modeled order of implementation of design options, and
the effects of those design options being implemented, has in many
instances changed since the 2009 final rule analysis. Therefore, a
direct comparison would be inaccurate and unfair. Similarly, DOE
cautions against direct comparisons of specific incremental results
across different equipment classes. Engineering results for each
equipment class were calculated independently based upon the best
available data on equipment configuration, design option performance,
and costs. Therefore, the results of each class should be examined
independently, and there was no interrelation to other classes built
into the model.
g. Transparent Door Performance
Stakeholders expressed concern over the modeled improvements in
transparent door performance between the current and previous
rulemaking analyses. AHRI commented that there was a decrease of over
60% in the U-factors for transparent doors between the previous final
rule and the current NOPR, even though both results were arrived at
using the Lawrence Berkeley National Laboratory (LBNL) WINDOW \41\
software. Further, AHRI noted that the U-factor associated with high-
performance doors for VCT.M equipment in 2009 did not even meet the
level of performance suggested by the U-factor that is listed in the
current TSD for standard doors. (AHRI, No. 75 at p. 9) Similarly,
Hussmann commented that the U-factors and anti-sweat heat values for
transparent doors in various classes were significantly lower than in
the 2009 final rule, and that base cases in the current NOPR analysis
did not meet the definition of high-performance from the previous
analysis. (Hussmann, No. 77 at p. 2) Hillphoenix commented that the U-
factor and heater power varied for identical classes from the previous
rulemaking to the current. (Hillphoenix, No. 71 at p. 7) AHRI commented
that for HCT.M equipment, while the overall U-Factor specified for
standard doors seems appropriate, the U-factor for high-performance
doors seems very low. (AHRI, No. 75 at p. 10)
---------------------------------------------------------------------------
\41\ This software is an industry-accepted, publicly-available
software tool used to model the performance of various fenestration
components such as windows. More information is available at https://windows.lbl.gov/software/window/window.html.
---------------------------------------------------------------------------
In response to the stakeholder concerns regarding the modeled
performance of transparent doors, DOE revisited its modeling of this
feature as part of its final rule engineering analysis. In doing so, it
incorporated comments and suggestions from stakeholders received during
the NOPR public meeting and in written comments after the publication
of the NOPR regarding design attributes such as the number of panes of
glass modeled, the use of low-e coatings, and appropriate levels of
anti-sweat heat. DOE also gathered additional information through
physical inspection and teardown of several additional glass-door
models procured during the final rule stage. Based on these inputs, DOE
modeled the various types of glass doors using the latest version of
the LBL WINDOW software to develop new, more accurate whole-door U-
factors. In response to the comments on alignment of the previous and
current baseline door designs, DOE did in some cases, where
appropriate, retain the U-factors and anti-sweat powers used at the
baseline in the 2009 final rule. However, in other instances where DOE
found evidence that the market baseline and
[[Page 17763]]
features included in standard door offerings had evolved since that
time, DOE sought to include in its baseline designs features which
reflect the current offerings of major door manufacturers. For full
details on the modeled performance attributes of transparent doors,
please see chapter 5 of the final rule TSD.
h. Validation of Engineering Results
DOE's engineering results as presented in the NOPR were based on
the results of analytical modeling. Several stakeholders, however, felt
that the analysis was purely theoretical and did not account for
factors affecting field performance. Hoshizaki commented that DOE's
engineering analysis considers a theoretical base case with no
experimental or physical data to support the model. (Hoshizaki, No. 84
at p. 1) Traulsen commented that the MDEC targets were evaluated by
using a theoretical prototype based on market trends and assumptions,
and contrasted that with DOE's statement in the NOPR TSD that design
options comprising the maximum technologically feasible level must have
been physically demonstrated. Further, Traulsen noted that the
engineering analysis was only an academic exercise based on computer
simulations rather than physical results. (Traulsen, No. 65 at p. 2)
Hoshizaki, ACEEE and Lennox urged DOE to perform validation testing
and physically demonstrate the achievement of the proposed efficiency
improvement levels. (Hoshizaki, No. 84 at p. 2) (ACEEE, Public Meeting
Transcript, No. 62 at p. 351) (Lennox, No. 73 at p. 2) Similarly, NAFEM
noted that the modeled maximum-technology designs were not backed by
tests or prototypes. (NAFEM, No. 93 at p. 3) The CA IOUs strongly urged
DOE to calibrate and validate its model with test and prototype data,
asserting that while many of the assumptions made by DOE might hold
true in theory, they may not be physically possible to realize. (CA
IOUs, No. 63 at p. 6)
Traulsen commented that the success of the 2009 final rule standard
could have been reviewed using voluntary databases containing empirical
data of commonly-produced units. Traulsen further commented that DOE
should base its future MDEC targets on data regarding best practices
and technologies available in the market, as indicated by these
databases. (Traulsen, No. 65 at p. 2)
The Joint Comment noted that DOE utilized a theoretical engineering
model approach for the 2011 residential refrigerators final rule. 76 FR
57516 (Sept. 15, 2011) Further, the Joint Comment noted that the 2011
residential refrigeration model's max-tech levels were 59% more
efficient than the existing standard, even though the most efficient
model available at the time was only 27% more efficient. (Joint
Comment, No. 91 at p. 2)
DOE agrees that its results are based on analytical modeling, but
disagrees with the assertions from Hoshizaki and Traulsen that the
simulation and modeling were purely theoretical in nature. DOE based
its analysis on a model which was developed for the 2009 final rule and
updated to accommodate the needs of this current rulemaking. Inputs to
the model included data from tangible sources such as manufacturer
literature, manufacturer interviews, production facility tours, reverse
engineering and teardown of existing products on the market, and tests
of commercial refrigeration equipment and components. DOE maintains its
assertion, contrary to Traulsen's comment, that all design options
modeled have been physically demonstrated in the commercial
refrigeration market or in comparable products.
In agreement with the Joint Comment, DOE points to the 2011
residential refrigerators final rule, the 2009 commercial refrigeration
equipment final rule, and the 2009 refrigerated beverage vending
machine final rule as examples of cases where analytical tools and
simulation have been used to develop effective energy efficiency
standards. 76 FR 57516 (Sept. 15, 2011); 74 FR 1092 (Jan. 9, 2009); 74
FR 44914 (Aug. 31, 2009) Additionally, DOE notes that it recently
issued a rule, strongly supported by industry, which will allow
manufacturers to use alternative energy determination methods (AEDMs),
which are non-testing methodologies and analytical tools, to certify
the performance of their equipment. 78 FR 79579 (December 31, 2013)
In response to the comments from Traulsen, Hoshizaki, ACEEE, the CA
IOUs, Lennox, and NAFEM that DOE perform validation testing to confirm
the veracity of its model, at the final rule stage DOE procured a
number of commercial refrigeration units currently on the market,
including high-performance units featuring advanced designs. It
gathered physical test data on each unit from certification directories
and, in some cases, from independent laboratory tests conducted by DOE
on the units. DOE then performed physical teardowns and inspection of
the units to quantify the features and design attributes included in
each model. Then, DOE used this empirically-determined data as inputs
into its engineering model, allowing the model to simulate these
specific manufacturer models as closely as possible. The results showed
good alignment between the model outputs and the physical test results
across a range of equipment classes and efficiencies, validating the
abilities of the model. For further information on this validation
exercise, please see chapter 5 of the final rule TSD.
With regard to the suggestion from Traulsen that DOE reference
existing equipment performance databases, at the final rule stage of
this rulemaking, DOE utilized information from the ENERGY STAR \42\ and
California Energy Commission \43\ appliance databases as a point of
comparison to its engineering analysis results. This allowed DOE to
compare its analytical results to existing directories of certified
data and ensure that the results fell within a reasonable range of
performance values. However, DOE notes that neither of these databases
is necessarily comprehensive and exhaustive of all models offered for
sale in the United States, and that market data only capture those
designs which are currently being built, not all of those which may be
feasible. For these reasons, while DOE compared its results against
those databases as a check, it continued to use a design option
approach and simulation as the basis for developing its engineering
analysis results, rather than developing standard levels solely from
existing market data.
---------------------------------------------------------------------------
\42\ https://www.energystar.gov/certified-products/certified-products.
\43\ https://www.appliances.energy.ca.gov/Default.aspx.
---------------------------------------------------------------------------
E. 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.D.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.
In estimating markups for CRE and other products, DOE develops
separate markups for the cost of baseline
[[Page 17764]]
equipment and the incremental cost of higher-efficiency equipment.
Incremental markups are applied as multipliers only to the MSP
increments of higher-efficiency equipment compared to baseline, and not
to the entire MSP.
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. 65 at p. 18)
DOE agrees that manufacturer markups are often larger on higher-
efficiency equipment due to product differentiation strategies.
However, DOE's approach considers a situation in which products at any
given efficiency level may be the baseline products under new or
amended standards (i.e., they just meet the standard). In that
situation, a typical markup would apply. DOE uses average values for
manufacturer markups.
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. 65 at p. 18)
DOE's approach for wholesaler markups does not imply that
wholesalers differentiate markups based on the technologies inherently
present in the equipment. It assumes that the average markup declines
as the wholesalers' cost of goods sold increases due to the higher cost
of more-efficient equipment. If the markup remains constant while the
cost of goods sold increases, as Traulsen's comment suggests, the
wholesalers' profits would also increase. While this might happen in
the short run, DOE believes that the wholesale market is sufficiently
competitive such that there would be pressure on margins. DOE
recognizes that attempting to capture the market response to changing
cost conditions is difficult. However, DOE's approach is consistent
with the mainstream understanding of firm behavior in competitive
markets.
See chapter 6 of the final rule TSD for more details on DOE's
markups analysis.
F. Life-Cycle Cost and Payback Period 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 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 0) in each equipment class is the
least efficient and the least expensive equipment configuration in that
class. The higher efficiency levels (Level 1 and higher) exhibit
progressive increases in efficiency and cost from Level 0. The highest
efficiency level in each equipment class corresponds to the max-tech
level. 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 final rule 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 final rule TSD). Installation costs were
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. 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,\44\ in which certain inputs
[[Page 17765]]
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.
---------------------------------------------------------------------------
\44\ 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 amended
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 0 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 (see section IV.F.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 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.\45\
---------------------------------------------------------------------------
\45\ A Weibull survival function is a continuous probability
distribution function that is used to approximate the distribution
of equipment lifetimes of commercial refrigeration equipment.
---------------------------------------------------------------------------
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 final rule TSD.
1. 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.D.5. DOE applied baseline markups to
baseline MSPs, and incremental markups to the MSP increments associated
with higher efficiency levels.
DOE developed an equipment price trend for CRE based on the
inflation-adjusted index of the producer price index (PPI) for air
conditioning, refrigeration, and forced air heating from 1978 to
2012.\46\ A linear regression of the inflation-adjusted PPI shows a
slight downward trend (see appendix 10D of the final rule TSD). To
project a future trend, DOE extrapolated the historic trend using the
regression results. For the LCC and PBP analysis, this default trend
was applied between the present and the first year of compliance with
amended standards, 2017.
---------------------------------------------------------------------------
\46\ Bureau of Labor Statistics, Producer Price Index Industry
Data, Series: PCU3334153334153.
---------------------------------------------------------------------------
2. Installation 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. DOE retained the
nationally representative installation cost values from the January
2009 final rule and simply escalated the values from 2007$ to 2012$,
resulting in installation costs of $2,299 for all remote condensing
equipment and $862 for all self-contained equipment.
Hussmann opined that as equipment becomes more expensive, it will
also become more difficult to install, which will result in higher
installation labor costs. (Hussmann, No. 77 at p. 5) DOE has found no
evidence to support the notion that higher-efficiency (and more
expensive) commercial refrigeration equipment lead to an increase in
installations costs. The installation costs derived for the NOPR and
final rule are based on a detailed list of installation and
commissioning procedures, which DOE believes to be representative of
current industry practice. These installation and commissioning details
can be found in chapter 8 of the final rule TSD.
NAFEM asserted that DOE failed to take into account the
ramifications of the proposed standard on a variety of end-uses, such
as restaurants, grocery stores, and convenience stores. For these end-
users floor space is limited, and increasing efficiency may increase
the equipment size to store the same amount of goods. NAFEM suggests
that increasing the thickness of foam insulation would decrease storage
and display capacity of equipment and will likely result in a
limitation of the products offered for sale by these users. (NAFEM, No.
93 at pp. 3-4)
As described in detail in section IV.D.2.d of today's rule, DOE, in
its teardown analyses, encountered a number of models currently on the
market utilizing the increased foam wall thicknesses which it modeled.
Since manufacturers are already employing these wall thicknesses in
currently-available models, DOE believes that this serves as a proof of
concept and that the resulting changes to form factor would be of
minimal impact to end users. DOE also would like to remind stakeholders
that it is not setting prescriptive standards, and should manufacturers
value some features over others, they are free to use different design
paths in order to attain the performance levels required by today's
rule.
3. Maintenance and Repair Costs
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
[[Page 17766]]
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 chapter 5
of the TSD, for efficiency levels that incorporate LED lights as a
design option, the expected reduction in LED costs beyond 2017 was
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.
Several stakeholders stated that DOE's estimated repair and
maintenance costs were too low. The National Restaurant Association
commented that, in general, maintenance costs would be much higher.
(NRA, No. 90 at p. 3) Hussmann asserted that the condensate evaporator
pan, which is often present in self-contained equipment, must be
periodically cleaned and serviced, which increases the maintenance
costs for such equipment, and that self-contained equipment that
utilizes enhanced condenser coils needs to be cleaned more frequently
due to the greater density of fins on the condenser. (Hussmann, No. 77
at p. 4) Hussmann further commented that equipment using ECM has higher
repair costs. (Hussmann, No. 77 at p. 5) True commented that
fluorescent lamps in low temperature applications fail more commonly,
so there is a substantial increase in the cost of lighting for freezers
compared to refrigerators. LEDs do not have this problem. (True, Public
Meeting Transcript, No. 62 at p. 186) Continental commented that
smaller refrigeration systems have higher maintenance costs due to
tighter tolerances. (Continental, Public Meeting Transcript, No. 62 at
p. 186)
DOE requested information from stakeholders regarding maintenance
and repair costs specifically related to any of the design options used
for this rulemaking. DOE believes its maintenance costs per linear foot
are consistent with current industry practices and are sufficient to
account for the additional time required to clean closely placed
condenser coils and other considerations related to tight space. 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. Therefore, DOE retained its approach of
using the same costs for regular maintenance for all efficiency levels.
However, repair costs have been modeled to be proportional to the OEM
cost of the components and, consequently, are higher for higher
efficiency equipment.
4. Annual Energy Consumption
Typical annual energy consumption of commercial refrigeration
equipment at each considered efficiency level is obtained from the
engineering analysis results (see chapter 5 of the final rule TSD).
5. Energy Prices
DOE calculated state average commercial electricity prices using
the U.S. Energy Information Administration's (EIA's) ``Database of
Monthly Electric Utility Sales and Revenue Data.'' \47\ 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 by state.
---------------------------------------------------------------------------
\47\ 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.
---------------------------------------------------------------------------
6. Energy Price Projections
To estimate energy prices in future years, DOE extrapolated the
average state electricity prices described above using the forecast of
annual average commercial electricity prices developed in the Reference
Case from AEO2013.\48\ 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.
---------------------------------------------------------------------------
\48\ 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.
---------------------------------------------------------------------------
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 CRE longer. In the NOPR,
DOE used 15 years as the average equipment lifetime for remote
condensing equipment in small food 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 final rule TSD.
Several commenters responded on the subject of equipment lifetimes.
NAFEM asserted that DOE had overestimated the lifetime of commercial
refrigeration equipment, and suggested that DOE reach out to end-users
and manufacturers for a more accurate estimate. (NAFEM, No. 93 at p. 7)
Traulsen commented that commercial refrigeration equipment is too
diverse to be lumped into categories of different lifetimes, as the
lifetime of a unit depends on how it is used by a customer in each
environment. Traulsen added that without including the time spent in
the used equipment market, the estimate of equipment life is too low.
(Traulsen, No. 65 at p. 21) The National Restaurant Association also
commented that DOE's assumption of a 10 to 15 year lifetime is too low.
(NRA, No. 90 at p. 3) Hussmann and Hoshizaki both commented that DOE's
equipment lifetime estimates are reasonable at 10 and 15 years.
(Hussmann, No. 77 at p. 7) (Hoshizaki, No. 84 at p. 1)
DOE recognizes that the lifetime of commercial refrigeration
equipment is dependent on customer type and usage environment. In the
NOPR, DOE used an average lifetime of 15 years for remote condensing
equipment for small retail stores, and 10 years for all other business
types. These lifetimes are the averages of distributions with a maximum
lifetime of 20 and 15 years, respectively, for remote condensing
equipment for small retail stores, and all other business types. DOE
received comments indicating that the lifetimes for small businesses
aside from small retail were too low in the NOPR, and that equipment
used in small businesses of other types were likely to have increased
lifetimes as well. DOE agrees with these statements, and adopted
figures for the average and maximum lifetime of 15 and 20 years,
respectively, for equipment operated by small businesses of all types.
The equipment lifetimes for all other business types remains unchanged
from the NOPR with an average and maximum lifetime of 10 and 15 years,
respectively. Equipment lifetimes are described in detail in chapter 8
of the TSD.
[[Page 17767]]
8. Discount Rates
In calculating the LCC, DOE applies discount rates to estimate the
present value of future operating costs to the customers of commercial
refrigeration equipment.\49\ DOE derived the discount rates for the
commercial refrigeration equipment analysis by estimating the average
cost of capital for a large number of companies similar to those that
could purchase commercial refrigeration equipment. This resulted in a
distribution of potential customer discount rates from which DOE
sampled in the LCC analysis. 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.
---------------------------------------------------------------------------
\49\ 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.
---------------------------------------------------------------------------
DOE estimated the cost of equity financing by using the Capital
Asset Pricing Model (CAPM).\50\ The CAPM assumes that the cost of
equity is proportional to the amount of systematic risk associated with
a company.
---------------------------------------------------------------------------
\50\ Harris, R.S. Applying the Capital Asset Pricing Model. UVA-
F-1456. Available at SSRN: https://ssrn.com/abstract=909893.
---------------------------------------------------------------------------
Mercatus Center, George Mason University (Mercatus) commented that
the CAPM includes the risk associated with a firm's failure, but it
does not estimate the risk associated with any individual item used in
by the firm, nor does it estimate the failure risk associated with a
particular site of operation. (Mercatus, No. 72 at p. 3)
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, and the CAPM is among the most widely used models to
estimate the cost of equity financing. The types of risk mentioned by
Mercatus may exist, but 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. DOE's
approach estimates this risk for the set of companies that could
purchase commercial refrigeration equipment. See chapter 8 of the final
rule TSD for further discussion.
9. Compliance Date of Standards
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 assumed 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.
Continental and Lennox commented that an extension of compliance
dates of the amended standards may not be required so long as the
standards are based on whatever technology was currently available.
(Continental, Public Meeting Transcript, No. 62 at p. 334; Lennox, No.
73 at p. 2) Traulsen noted that, should the compliance date be extended
by a further three years, then it was possible, albeit unlikely, that
the proposed standards could be realized. (Traulsen, No. 65 at p. 24)
Providing a contrary view, the Joint Comment asserted that a three year
compliance time period appeared feasible for the proposed standard. In
addition, the Joint Comment pointed out that the initial statutory
deadline for the final rule was January 2013. (Joint Comment, No. 91 at
p. 13) Earthjustice noted that if the compliance date were extended,
this may have an impact on how alternative refrigerants feature in the
next round of analysis. (Earthjustice, Public Meeting Transcript, No.
62 at p. 334)
In response to the inputs of stakeholders during the NOPR public
meeting and in written comment, DOE believes that a compliance date
three years after issuance of the final rule is reasonable and
appropriate. A three-year period is the standard length of time given
between final rule issuance and required compliance, with exceptions
generally being made only in circumstances specifically warranting
them. Additionally, the commercial refrigeration industry and related
industries have proven in the past that a three-year period is adequate
to produce equipment meeting updated standards. Therefore, DOE is not
including an extension of the period to comply with standards in
today's final rule document.
In their written and verbal comments after publication of the NOPR,
stakeholders noted that in ascertaining the compliance date for the CRE
standards rule, DOE should take into account other, currently open
rulemakings, which could affect or be affected by the proposed rule.
True commented that the new timeline for this rulemaking, alongside the
recent negotiated settlements regarding the certification of commercial
equipment, could lead to a situation where the new standards could be
enforced, but not the certification requirement. (True, Public Meeting
Transcript, No. 62 at p. 28) Traulsen requested that DOE refrain from
issuing new CRE standards until the CRE test procedure is finalized.
(Traulsen, No. 65 at p. 16) The final rule for the CRE test procedure
was issued prior to today's rule for CRE standards. Therefore, DOE sees
no conflict between the issuance of the two rules.
Additionally, Structural Concepts commented that in order to have a
product line ready by 2017, the design phase would need to start at
least three years prior, and therefore new standards should only be
based on existing technologies. (Structural Concepts, Public Meeting
Transcript, No. 62 at p. 72)
DOE agrees with Structural Concepts that existing technologies
should be the basis of its engineering analysis, and has considered
only currently-available technologies in that analysis. Additionally,
the three-year compliance period required by EPCA in most circumstances
is consistent with the required length of design time suggested by
Structural Concepts.
10. Base-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.
In the NOPR, DOE's methodology to estimate market shares of each
efficiency level within each equipment class is a cost-based method
consistent with the approaches that were used in the EIA's National
Energy Modeling System (NEMS) \51\ and in the Canadian Integrated
Modeling System (CIMS)52 53
[[Page 17768]]
for estimating efficiency choices within each equipment class.
---------------------------------------------------------------------------
\51\ U.S. Energy Information Administration. National Energy
Modeling System Commercial Model (2004 Version). 2004. Washington,
DC.
\52\ The CIMS Model was originally known as the Canadian
Integrated Modeling System, but as the model is now being applied to
other countries, the acronym is now used as its proper name.
\53\ 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%20for%20Natural%20Resources%20Canada/Rollup.pdf.
---------------------------------------------------------------------------
At the NOPR public meeting, True stated that 62 percent of the
commercial refrigeration equipment sold in the United States is
certified under ENERGY STAR. (True, Public Meeting Transcript, No. 62
at p. 302)
For today's final rule, DOE revised its approach for determining
the base case efficiency distribution to better account for market data
from the ENERGY STAR program. DOE's understanding of the CRE market is
that consumers of commercial refrigeration equipment fall into two
categories: Those that purchase equipment at the lowest available first
cost (also lowest efficiency) and those that purchase equipment at a
somewhat higher first cost with higher efficiency. Thus, for the final
rule DOE developed a base case efficiency distribution consisting of
two categories: Purchases at the baseline and purchases at higher
efficiency.
For equipment classes that are covered by ENERGY STAR,\54\ DOE
assumed that baseline equipment accounts for all products that are not
ENERGY STAR certified. The ENERGY STAR share is divided between the
ENERGY STAR 2.1 level and the more recent ENERGY STAR 3.0 level, which
will become effective in October 2014. For CRE classes that are not
covered by ENERGY STAR, DOE estimated the share of equipment at the
baseline based on the output from the customer choice model for
commercial refrigeration used for EIA's Annual Energy Outlook 2013 (AEO
2013).\55\ For the higher efficiency equipment, DOE included all
efficiency levels for which the retail price is not more than 10
percent above the baseline price, and divided the equipment between the
baseline and the higher-efficiency market. Table IV.2 shows the
shipment-weighted market shares by efficiency level in the base-case
scenario. The method for developing the base-case efficiency
distribution is explained in detail in chapter 8 of the final rule TSD.
---------------------------------------------------------------------------
\54\ These classes consist of VCT.SC.M, VCT.SC.L, VCS.SC.M,
VCS.SC.L, HCT.SC.M, HCT.SC.L, HCS.SC.M., and HCS.SC.L
\55\ U.S. Energy Information Administration. Annual Energy
Outlook 2013. 2013. Washington, DC. DOE/EIA-0383(2013).
Table IV.2--Market Shares by Efficiency Level, Base Case in 2017
--------------------------------------------------------------------------------------------------------------------------------------------------------
Base-case efficiency distribution (%)
Equipment class ---------------------------------------------------------------------------------------
Base EL 1 EL 2 EL 3 EL 4 EL 5 EL 6 EL 7
--------------------------------------------------------------------------------------------------------------------------------------------------------
VOP.RC.M........................................................ 60 40 0 0 0 0 0 0
VOP.RC.L........................................................ 60 20 20 0 0 0 0 0
VOP.SC.M........................................................ 60 40 0 0 0 0 0 0
VCT.RC.M........................................................ 60 14 13 13 0 0 0 0
VCT.RC.L........................................................ 60 20 20 0 0 0 0 0
VCT.SC.M........................................................ 90 0 10 0 0 0 0 0
VCT.SC.L........................................................ 90 0 10 0 0 0 0 0
VCT.SC.I........................................................ 60 8 8 8 8 8 0 0
VCS.SC.M........................................................ 60 0 30 0 0 0 10 0
VCS.SC.L........................................................ 60 30 0 0 10 0 0 0
VCS.SC.I........................................................ 60 8 8 8 8 8 0 0
SVO.RC.M........................................................ 60 40 0 0 0 0 0 0
SVO.SC.M........................................................ 60 40 0 0 0 0 0 0
SOC.RC.M........................................................ 60 40 0 0 0 0 0 0
SOC.SC.M........................................................ 60 40 0 0 0 0 0 0
HZO.RC.M........................................................ 60 40 0 0 0 0 0 0
HZO.RC.L........................................................ 60 20 20 0 0 0 0 0
HZO.SC.M........................................................ 60 20 20 0 0 0 0 0
HZO.SC.L........................................................ 60 20 20 0 0 0 0 0
HCT.SC.M........................................................ 60 0 0 40 0 0 0 0
HCT.SC.L........................................................ 60 0 0 30 0 0 0 10
HCT.SC.I........................................................ 60 40 0 0 0 0 0 0
HCS.SC.M........................................................ 90 0 0 0 0 0 10 0
HCS.SC.L........................................................ 90 0 0 0 0 0 10 0
PD.SC.M......................................................... 60 40 0 0 0 0 0 0
--------------------------------------------------------------------------------------------------------------------------------------------------------
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 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
[[Page 17769]]
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 more-efficient, 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 PBP, or the ratio of the
value of the increased installed price above the baseline efficiency
level to the first year's energy cost savings. When the rebuttable
presumption PBP is less than 3 years, the rebuttable presumption is
satisfied; when the rebuttable presumption PBP 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 rebuttable presumption, it also considered
whether 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).
G. Shipments
Complete historical shipments data for commercial refrigeration
equipment could not be obtained from any one single source. Therefore,
for the NOPR 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.\56\; 2008, and 2012 Size and
Shape of Industry by the North American Association of Food Equipment
Manufacturers; 57 58 and Energy Savings Potential and R&D
Opportunities for Commercial Refrigeration prepared by Navigant
Consulting, Inc. for DOE.\59\
---------------------------------------------------------------------------
\56\ Freedonia Group, Inc. Commercial Refrigeration Equipment to
2014. 2010. Cleveland, OH. Study 2261. www.freedoniagroup.com/Commercial-Refrigeration-Equipment.html.
\57\ North American Association of Food Equipment Manufacturers.
2008 Size and Shape of Industry. 2008. Chicago, IL.
\58\ North American Association of Food Equipment Manufacturers.
20012 Size and Shape of Industry. 2012. Chicago, IL.
\59\ 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.
---------------------------------------------------------------------------
Historical linear feet of shipped units is the figure used to
depict 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 values. Chapter 9 of the final rule TSD presents
the representative equipment class lengths used for the conversion of
per-unit shipments to linear footage within each equipment class.
DOE divided historical annual shipments into new and replacement
categories by building type. First, equipment types were identified by
the type of business they generally serve. For example, vertical open
cases with remote condensing units are associated with large grocers
and multi-line retail stores. When there was no strong association
between the building type and equipment class, equipment was
distributed across broader building types. Second, a ratio of new
versus replacement equipment was developed based on commercial floor
space estimates. 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.
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.
DOE then estimated the annual linear footage shipped for each of
the 25 primary equipment classes used to represent the commercial
refrigeration equipment market. The fractions shown in Table IV.3 were
held constant over the analysis period.
Table IV.3--Percent of Shipped Linear Feet of Commercial Refrigeration
Equipment
------------------------------------------------------------------------
Percentage of
Equipment class linear feet
shipped *
------------------------------------------------------------------------
VOP.RC.M................................................ 10.3
VOP.RC.L................................................ 0.5
VOP.SC.M................................................ 1.3
VCT.RC.M................................................ 0.8
VCT.RC.L................................................ 10.7
VCT.SC.M................................................ 4.8
VCT.SC.L................................................ 0.2
VCT.SC.I................................................ 0.3
VCS.SC.M................................................ 25.4
VCS.SC.L................................................ 15.0
VCS.SC.I................................................ 0.1
SVO.RC.M................................................ 8.2
SVO.SC.M................................................ 1.1
SOC.RC.M................................................ 2.1
SOC.SC.M................................................ 0.2
HZO.RC.M................................................ 1.3
HZO.RC.L................................................ 4.0
HZO.SC.M................................................ 0.1
HZO.SC.L................................................ 0.2
HCT.SC.M................................................ 0.1
HCT.SC.L................................................ 0.4
HCT.SC.I................................................ 0.4
HCS.SC.M................................................ 4.4
HCS.SC.L................................................ 0.6
PD.SC.M................................................. 7.6
------------------------------------------------------------------------
* The percentages in this column do not sum to 100 percent because
shipments of secondary equipment classes and certain other equipment
classes that were not analyzed in this rulemaking were not included.
The amount of new and existing commercial floor space is the main
driver for future commercial refrigeration equipment shipments. The
model divides commercial floor space into new construction floor space
and existing floor space.
DOE projected square footage of new construction as a driver of CRE
demand to scale annual new commercial refrigeration equipment
shipments. DOE took the projected floor space construction after the
year 2009 from the NEMS projection underlying AEO 2013. The new
construction growth rates over the last 10 years of the AEO 2013
forecast (2031 through 2040) were used to extend the AEO forecast out
until 2046 to develop the full 30-year forecast needed for the NIA.
True stated during the NOPR public meeting that DOE's shipments
estimates for the VCT.SC.M equipment class were 20 to 30 percent of
actual shipments. (True, Public Meeting Transcript, No. 62 at pp. 240-
242) This statement was supported by Coca-Cola, which asserted that it
alone purchased 180,000 linear feet of VCT.SC.M equipment domestically
compared to the 155,000 linear feet of VCT.SC.M equipment presented in
the NOPR. (Coca-Cola, Public Meeting Transcript, No. 62 at p.
[[Page 17770]]
242) True followed up its public meeting statements with written
comment stating that its estimate of the self-contained market was four
to six times larger than what was stated in the proposed rule. (True,
No. 76 at p. 1) Traulsen suggested that DOE use newer data, such as
those in the NAFEM 2012 ``Size and Shape of the Industry'' study to
improve the accuracy of its shipments analysis. (Traulsen, No. 65 at p.
15)
Although neither True nor Coca-Cola provided DOE with shipments
data to support their assertions, the magnitude of the discrepancy in
shipments identified by these comments led DOE to revise its shipments
estimates for the final rule. DOE reviewed three sources of data in
developing the revision. First, DOE reviewed the most recent data
published by the EPA's ENERGY STAR Program.\60\ These EPA data include
both an estimate of total units shipped, and an estimate of the
fraction that are ENERGY STAR compliant, from 2003 to 2012. The ENERGY
STAR estimates of total unit shipments show somewhat slow growth from
2003 to 2010, and a significant increase between 2010 and 2011, with
shipments increasing by a factor of two. Second, DOE reviewed the most
recent North American Association of Food Equipment Manufacturers Size
and Shape of the Industry \61\ report published in 2012. This report
provides industry total estimates of sales in dollar values. These data
show an increase of approximately 60 percent in sales of the relevant
covered equipment between 2008 and 2011. Third, DOE reviewed equipment
saturation estimates calculated from data in the Energy Information
Agency's (EIA) Commercial Buildings Energy Consumption Survey (CBECS)
for 1999 and 2003. The CBECS surveys include a count of the number of
refrigerated cases in a building, which was be converted to a
saturation value that represents the average number of cases per
building. These data indicate a growth in saturation between 1999 and
2003, particularly for closed refrigeration cases. The existence of a
trend in equipment saturations was not accounted for in the NOPR
analyses. Taken together, all three data sources support the claims
made by stakeholders that DOE's shipments published in the NOPR were
substantially underestimated.
---------------------------------------------------------------------------
\60\ Energy Star. Unit Shipment and Sales Data Archives.
Available at: https://www.energystar.gov/index.cfm?c=partners.unit_shipment_data_archives (Last accessed 12/5/2013).
\61\ North American Association of Food Equipment Manufacturers.
2012 Size and Shape of Industry. 2012. Chicago, IL.
---------------------------------------------------------------------------
For the final rule, DOE modified the shipments analysis to include
a trend in equipment saturations between 2003 and 2012. The trend was
calculated by (1) smoothing the growth in shipments in the ENERGY STAR
data to a constant annual growth rate, (2) correcting to account for
the growth in total new and existing commercial floor space, and (3)
applying the resulting trend in saturations for the years 2004 to 2012.
Before 2003 and after 2012 equipment saturations are held constant. The
net result is a doubling of equipment saturations between 2003 and
2012, with corresponding increases in the shipments estimates, which
are generally consistent in magnitude with stakeholder comments. These
corrections were applied uniformly to all equipment types and
applications, and thus do not affect the distribution of equipment by
building type or by equipment class.
Detailed description of the procedure to calculate future shipments
is presented in chapter 9 of the final rule TSD.
1. Impact of Standards on Shipments
Several stakeholders stated that customer purchase behavior would
change in response to an increase in equipment prices due to more
stringent standards. At the NOPR public meeting, Hussmann commented
that it had noticed a shift from the open VOP.RC.M to the closed
VCT.RC.M equipment class, possibly due to energy savings being valued
by customers (primarily supermarkets). (Hussmann, Public Meeting
Transcript, No. 62 at pp. 236-37) However, Hussmann noted that the
shift could be reversed if closed equipment diminished in its utility
as a merchandising platform. (Hussmann, Public Meeting Transcript, No.
62 at p. 237) Hillphoenix and Danfoss stated that if standards require
the use of triple-pane coated glass, reduction in visibility will
result in users shifting back to less-efficient open cases. (Danfoss,
No. 61 at p. 4; Hillphoenix, No. 71 at p. 2) Hussmann noted that it had
not observed a reversal of the trend toward closed units in response to
previous efficiency standards. (Hussmann, Public Meeting Transcript,
No. 62 at p. 235)
DOE recognizes that increased cost for closed equipment meeting the
amended standards in today's final rule has the potential to influence
a shift from more efficient closed equipment to open equipment.
However, DOE did not have sufficient information on customer behavior
to model the degree of such equipment switching as part of the NIA.
Further, DOE has concluded that the amended standards in today's final
rule will not diminish the utility of commercial refrigeration
equipment, and they do not require triple-pane coated glass.
Several stakeholders commented that, in response to a possible
price increase due to standards, CRE customers may prolong the life of
existing equipment through refurbishment. Danfoss asserted that a 15 to
20 percent increase in prices will reduce demand for new units and
increase sales of used of refurbished units. (Danfoss, No. 61 at p. 3)
NAFEM commented that any standard where the payback on new equipment is
longer than 2 years will likely steer users into the refurbished
market. (NAFEM, No. 93 at pp. 7-8) Traulsen commented that the impact
of refurbishing equipment was not fully represented by DOE, especially
in the small business environment where customers are likely to hold
onto equipment longer. (Traulsen, No. 65 at p. 19) Hussmann stated that
due to price increases resulting from higher efficiency, the
refurbishment of old equipment will reduce the market for new
equipment. (Hussmann, No. 77 at p. 5)
DOE acknowledges that increases in price due to amended standards
could lead to more refurbishing of equipment (or purchase of used
equipment), which would have the effect of deferring the shipment of
new equipment for a period of time. DOE did not have enough information
on CRE customer behavior to explicitly model the extent of refurbishing
at each TSL. However, DOE believes that the extent of refurbishing
would not be so significant as to change the ranking of the TSLs
considered for today's rule.
H. 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 final rule
analysis, DOE forecasted the energy savings, operating cost savings,
equipment costs, and NPV of customer benefits over the lifetime of
equipment sold from 2017 through 2046.
DOE evaluated the impacts of the amended standards by comparing
base-case projections with standards-case projections. The base-case
projections
[[Page 17771]]
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.
DOE uses a Microsoft Excel spreadsheet model to calculate the
energy savings and the national customer costs and savings from each
TSL. The final rule 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 model uses average values as inputs
(as opposed to probability distributions of key input parameters from a
set of possible values).
For the final rule 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
appendix 10D of the final rule TSD.
A detailed description of the procedure to calculate NES and NPV,
and inputs for this analysis are provided in chapter 10 of the final
rule TSD.
1. 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.F.10, and a detailed
description can be found in chapter 8 of the final rule TSD.
As discussed in section IV.F.10 of today's rule, DOE revised the
distribution of equipment efficiencies in the base case to better
account for data from ENERGY STAR. For equipment covered by ENERGY
STAR, for the NIA DOE estimated that the market will move over time to
adopt higher efficiency ENERGY STAR rated equipment. DOE estimated that
for equipment not covered by ENERGY STAR, there is limited market
demand for higher efficiency equipment, and the base case efficiency
distribution would not change over time.
To estimate market behavior in the standards cases, DOE uses a
``roll-up'' scenario. 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.
To project trends in standards-case efficiency after the initial
shift in the compliance year, DOE used the same assumptions as in the
base case for equipment covered or not covered by ENERGY STAR.
The estimated efficiency trends in the base case and standards
cases are further described in chapter 8 of the final rule TSD.
2. 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 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.
DOE did not incorporate a rebound factor for commercial refrigeration
equipment because it is operated 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-to-primary energy
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 forecasted shipment-weighted average equipment efficiencies
that, in turn, enabled determination of shipment-weighted annual energy
consumption values.
The NES spreadsheet model keeps track of the total linear footage
of commercial refrigeration units shipped each year. The commercial
refrigeration equipment stock in a given year is the total linear
footage of commercial refrigeration equipment shipped from earlier
years that is still in use in that year, based on the equipment
lifetime.
To estimate the national energy savings expected from energy
conservation standards, DOE uses a multiplicative factor to convert
site energy consumption (energy use at the location where the appliance
is operated) into primary or source energy consumption (the energy
required to deliver the site energy). For today's final rule, DOE used
conversion factors based on AEO 2013. For electricity, the conversion
factors vary over time because of projected changes in generation
sources (i.e., the types of power plants projected to provide
electricity to the country). Because the AEO does not provide energy
forecasts beyond 2040, DOE used conversion factors that remain constant
at the 2040 values throughout the rest of the forecast.
DOE has historically presented NES in terms of primary energy
savings. In response to the recommendations of a committee on ``Point-
of-Use and Full-Fuel-Cycle Measurement Approaches to Energy Efficiency
Standards'' appointed by the National Academy of Science, DOE announced
its intention to use full-fuel-cycle (FFC) measures of energy use and
greenhouse gas and other emissions in the national impact analyses and
emissions analyses included in future energy conservation standards
rulemakings. 76 FR 51281 (August 18, 2011) While DOE stated in that
document 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 document, 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).
The approach used for today's final rule, and the FFC multipliers
that were applied, are described in appendix 10D of the final rule TSD.
NES results are presented in both primary energy and FFC savings in
section V.B.3.a.
3. 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 annual savings in operating
costs; and (3) a discount factor. DOE calculated net national customer
savings for each year
[[Page 17772]]
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.
As discussed in section IV.F.1, DOE developed an equipment price
trend for commercial refrigeration equipment based on the inflation-
adjusted index of the PPI for air conditioning, refrigeration, and
forced air heating from 1978 to 2012. A linear regression of the
inflation-adjusted PPI shows a slight downward trend (see appendix 10D
of the final rule TSD). To project a future trend over the analysis
period, DOE extrapolated the historic trend using the regression
results.
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 7-percent 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. 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 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. DOE
defined the present year as 2014 for the analysis.
I. Customer Subgroup Analysis
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. Small businesses typically
face higher cost of capital. In general, the higher the cost of
capital, the more likely it is that an entity would be disadvantaged by
a requirement to purchase higher efficiency equipment. 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
small grocery and convenience stores and restaurants fall under the
definition of small businesses.
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, which would tend to render higher-efficiency
equipment not cost-effective. To examine a ``worst case'' situation,
convenience stores with gas stations were chosen for the subgroup
analysis. Limited-service restaurants and full-service restaurants have
similar electricity price and discount rates. DOE chose to study full-
service restaurants for the subgroup analysis because a higher
percentage of full-service restaurants tend to be operated by
independent small businesses, as compared to limited-service (fast-
food) restaurants. DOE believes that these two subgroups are broadly
representative of small businesses that use CRE.
DOE estimated the impact on the identified customer subgroups using
the LCC spreadsheet model. The input for business type was fixed to the
identified subgroup, which ensured that the discount rates and
electricity prices associated with only that subgroup were selected in
the Monte Carlo simulations. The discount rate was further increased by
applying the small firm premium to the WACC. In addition, DOE assumed
that the subgroups do not have access to national purchasing accounts
and, consequently, face a higher distribution channel markup. Apart
from these changes, all other inputs for the subgroup analysis are the
same as those in the LCC analysis. Details of the data used for the
subgroup analysis and results are presented in chapter 11 of the final
rule TSD.
The Society of American Florists stated that the percent of
refrigerated product sold at retail by florists is higher than in other
retail industries and that they would be particularly sensitive to an
increase in equipment price. (SAF, No. 74 at p. 3) SAF suggested that
DOE should conduct analyses for floriculture growers, wholesalers, and
retail florists to determine the impact of amended standards on these
end-users. (SAF, No. 74 at p. 7)
While the subgroups considered by DOE do not exactly correspond to
florist-related businesses, DOE believes that the impacts experienced
by the selected subgroups are indicative of the impacts that would be
experienced by florist-related businesses. Thus, the analyses suggested
by SAF are not warranted.
The National Restaurant Association suggested that DOE re-analyze
the small business subgroups based on more accurate costs and equipment
lifetime assumptions. (NRA, No. 90 at p. 2) DOE has used the best
available data to estimate equipment costs and lifetime for the
considered subgroups, so there would be no basis for re-analysis.
Mercatus stated that 26 percent of restaurants fail in their first
year and by year three the rate of failure is just over 60 percent;
therefore, it is not rational for these types of customers to purchase
more efficient equipment before realizing a net benefit. (Mercatus, No.
72 at p. 3) DOE acknowledges that some CRE units may outlive the
particular business that purchased them new, but the customer that
purchases the used equipment would see the energy cost benefits of
higher-efficiency equipment.
Several parties stated that higher equipment costs will induce
small businesses to purchase used or refurbished equipment. The
National Restaurant Association commented that an equipment cost
increase of 15 to 20 percent will force small restaurants to purchase
used or refurbished equipment. (NRA, No. 90 at p. 3) The Air
Conditioning Contractors of America (ACCA) commented that small
consumers would elect to extend the life of existing equipment rather
than purchase new more expensive equipment. (ACCA, Public Meeting
Transcript, No. 62 at pp. 343-44) True commented that individually
owned restaurants would elect to purchase used equipment due to lower
first cost instead of purchasing new, more efficient equipment. (True,
Public Meeting Transcript, No. 62 at p. 208) Traulsen opined that
smaller entities are more likely to keep existing equipment longer, and
will be negatively affected by the proposed standard. (Traulsen, No. 65
at p. 19) Hoshizaki commented that the proposed standards will increase
costs and deter small business owners from buying new equipment.
(Hoshizaki, No. 84 at p. 1)
DOE acknowledges that some small businesses may respond to amended
CRE standards by purchasing used or refurbished equipment. However, as
discussed in section V.B.1.b, DOE did not have sufficient information
to evaluate the likely extent of this
[[Page 17773]]
response. The consumer subgroup results (shown in section V.B.1.b of
this document) indicate that in nearly all cases the considered small
business subgroups see higher average LCC savings and lower median
payback periods when compared to all CRE customers. These results
suggest that most small businesses would find it beneficial to purchase
new commercial refrigeration equipment that meets today's standards.
J. Manufacturer Impact Analysis
1. Overview
DOE performed a MIA to estimate the financial impact of amended
energy conservation standards on manufacturers of commercial
refrigeration equipment and to understand 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 final rule TSD.
DOE conducted the MIA for this rulemaking in three phases. In Phase
1 of the MIA, DOE prepared a profile of the 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; 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 cross-section 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.
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 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 (September 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 final rule TSD
and in section I.A.1 of this document.
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 final rule TSD.
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.B
and further detailed in chapter 5 of the NOPR TSD. In addition, DOE
used information from its teardown analysis, described in section
IV.D.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.
[[Page 17774]]
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 final rule 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.D.4. Further adjustments were
made to capital conversion costs based on feedback in the NOPR written
comments. The key driver of capital conversion costs was new production
equipment associated with improving cabinet insulation.
DOE assessed the product 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 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. For the final rule, adjustments were made to
product conversion costs based on feedback in the NOPR written comments
submitted following the NOPR. Key drivers of product conversion costs
included the re-design effort associated with modifying cabinets to
incorporate improved cabinet insulation, along with the product and
food safety certification costs associated with redesigning key
equipment components.
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 document. For additional information on the estimated product
conversion and capital conversion costs, see chapter 12 of the final
rule 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 non-production 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 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.
3. Discussion of Comments
During the NOPR public meeting, interested parties commented on the
assumptions and results of the analyses as described in the TSD. Oral
and written comments addressed several topics, including volume
purchasing of components, refrigerants, redesign issues, LED material
costs, the GRIM, foaming fixtures, cumulative regulatory burden,
certification costs, and issues specific to small manufacturers.
a. Volume Purchasing of Components
Traulsen commented that the prices of high-efficiency condenser fan
motors were higher than DOE stated, and that this would place a cost
burden on small manufacturers who could not receive a purchase volume
discount. (Traulsen, No. 65 at p. 4) DOE recognizes that small
manufacturers face pricing disadvantages for key components in both the
base case and the standards case. This issue is incorporated into the
discussion of Regulatory Flexibility in section VI.B.2 of this final
rule.
[[Page 17775]]
b. Refrigerants
True commented that there was the potential for a substantial cost
increase to manufacturers in the very near future due to the phasing
out of HFCs. True further commented that new refrigerants may have an
incremental cost of 5-10 times over what is currently being paid for
refrigerants. (True, Public Meeting Transcript, No. 62 at p. 279) The
use of alternative refrigerants by manufacturers of commercial
refrigeration equipment would not arise as a direct result of this
rule, and thus was not considered in this analysis. Furthermore, there
is no requirement mandating the use of alternative refrigerants at this
time. DOE does not include the impacts of pending legislation or
unfinalized regulations in its analyses, as any impact would be
speculative.
c. Redesign Issues
Several manufacturers pointed out that high capital costs were
required by the proposed standards. Traulsen asserted that up to 95% of
all equipment would need to be redesigned as a result of the proposed
standard. (Traulsen, No. 62 at p. 315) True added that the cost of
redesigning and retooling entire product lines, and including the costs
of new refrigerants, would be cost prohibitive. (True, No. 62 at p.
341) With regard to the specific cost of replacing foaming fixtures,
True commented that new fixtures could cost several hundred thousand
dollars, and modifying fixtures in order to manufacture thicker foam
panels could cost $40,000-$50,000 per fixture, while Southern Store
Fixtures noted that it would have to change over 3,000 molds and 1,000
foaming fixtures for its entire product line, and that it would cost
much more than the assumed $2,500,000. (True, No. 62 at p. 340) (SSF,
No. 67 at p. 3)
With regard to capital costs, True commented that switching from
double-pane to triple pane glass would require new tooling and molds
for manufacturing, costing up to $300,000 per door model produced, and
that if the interior volume of a unit were to change due to thicker
foam, all shelving systems and weld fixtures would need to be
redesigned. (True, No. 76 at p. 3) Furthermore, Traulsen commented that
changing fixture depth would cause a change in production time per
unit, and that this cost had not been reflected in the DOE analysis.
(Traulsen, No. 65 at p. 9) Similarly, Hussmann commented that there was
a substantial engineering cost associated with re-engineering case
components in order to incorporate increased foam thickness.
Specifically, Hussmann noted that in order to maintain outside
dimensions of a case and increase insulation thickness, manufacturers
would be required to redesign and retool every component based on the
case's internal dimensions. (Hussmann, No. 77 at p. 2) Hoshizaki, also
expressed the same concern, adding that that DOE underestimated the
cost associated with increasing foam thickness by \1/2\'', since this
increase would require engineering, testing, tooling, production line
changeover, down-time, packaging changes, and certification.
(Hoshizaki, No. 84 at p. 2)
DOE estimated the conversion costs associated with increases in
foam thickness based on direct input from the industry in interviews,
as well as through analysis of production equipment that is part of the
engineering cost model. DOE's analysis included capital conversion
costs, including as tooling costs and production line upgrades, and
product conversion costs, including redesign efforts, testing costs,
industry certifications, and marketing changes. Differences in packing
and shipping costs were also accounted for in the shipping cost
component of the engineering analysis.
In its NOPR analysis, DOE recognized the need for new foaming
fixtures to accommodate thicker panels. However, for the final rule
analysis, DOE revised its estimate of fixture investment for the entire
CRE industry upward to $210 million.
At the NOPR stage, the MIA analysis did not associate a conversion
cost with changes in display door designs based on DOE's understanding
that the vast majority of CRE manufacturers consider display doors to
be purchased parts. Furthermore, in the final rule engineering
analysis, DOE does not consider triple-pane display doors as a design
option in its analysis. However, for the final rule, DOE updated its
manufacturer impact analysis to account for the conversion costs
associated with changes in door design and specification, such as
moving from single-pane to double-pane for horizontal cases with
transparent doors.
d. LED Material Costs
Structural Concepts commented that the implementation of LEDs would
cost over $500,000 annually in material costs alone. (Structural
Concepts, No. 85 at p. 3) DOE agrees with Structural Concepts that some
design options, such as LED lighting, require larger upfront
investments in component inventory by manufacturers. DOE accounts for
investment in more expensive components and greater amounts of raw
materials as increases in working capital. Increases in working capital
decrease free cash flow and are reflected in industry net present value
(INPV), which DOE considers as a key input when selecting a standard
level.
e. GRIM
AHRI asserted that the GRIM model should account for periodic
revisions to energy standards and potential changes in refrigerant
policy when estimating the INPV. (AHRI, No. 75 at p. 11) Additionally,
AHRI commented that, since the GRIM predicts INPV across an extended
period, the model should have accounted for impacts on manufacturers
due to periodic revisions of energy conservation standards and
potential changes to refrigerant policy, and that the INPV range at
TSL4 was grossly underestimated since there will likely be up to five
revisions to CRE standards by 2046. (AHRI, No. 75 at p. 13) However,
DOE does not take unfinalized regulation into account in its analysis.
Any forecast of amendments to the standard level in the future and the
potential costs of those changes would be purely speculative and,
therefore, outside the scope of analysis.
f. Cumulative Regulatory Burden
Traulsen commented that the cost burden to manufacturers of
complying with both the 2009 and 2017 rules, which overlap, is
unmanageable. (Traulsen, No. 65 at p. 22) Lennox also stated that the
proposed standards would place significant cumulative regulatory burden
on manufacturers. (Traulsen, No. 65 at p. 9)
DOE defines cumulative regulatory burden (CRB) as regulations that
go into effect within 3 years of the effective date of the standard
under consideration. As a result, the 2009 amended standard is not one
of the regulations listed in the CRB analysis in section V.B.2.e of
this document. However, the market changes and equipment price impacts
that resulted from the 2009 standard are incorporated into DOE's
analyses.
g. Certification Costs
AHRI commented that the implementation of higher efficiency
compressors should include costs associated with safety certification
(UL, etc.), compliance with NSF Standards, and recertification due to
the induced change in the equipment performance. (AHRI, No. 75 at p.
13) In its NOPR and final rule analyses, DOE accounted for the UL and
NSF certification costs associated with compressor changes. While UL
and NSF certification costs can vary by manufacturers, DOE used an
industry average combined cost of
[[Page 17776]]
$8,000 per model for those certifications in its final rule analysis.
h. Small Manufacturers
In its written comment, Traulsen expressed the opinion that the
proposed rule would have a significant economic impact on a substantial
number of small businesses and was therefore in violation of the
Regulatory Flexibility Act. In particular, Traulsen drew attention to
page 55983, column 2 of the Federal Register NOPR document, which
stated that DOE could not certify that the proposed standards would not
have a significant impact on a significant number of small businesses.
(Traulsen, No. 65 at p.16) The George Washington University (GWU) also
asserted in its comment that the proposed rule affected small
businesses--both manufacturers and consumers--since it did not maintain
flexibility and freedom of choice. (GWU, No. 66 at p. 11) To better
understand the potential impact of the final rule on small businesses,
DOE provides an assessment of the impacts on small manufacturers in
section VI.B.
K. 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 (August 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 primarily conducted the emissions analysis using emissions
factors for CO2 and most of the other gases derived from
data in 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 final rule TSD.
For CH4 and N2O, DOE calculated emissions
reduction in tons and also in terms of units of carbon dioxide
equivalent (CO2eq). Gases are converted to CO2eq
by multiplying the physical units by the gas' global warming potential
(GWP) over a 100 year time horizon. Based on the Fourth Assessment
Report of the Intergovernmental Panel on Climate Change,\62\ DOE used
GWP values of 25 for CH4 and 298 for N2O.
---------------------------------------------------------------------------
\62\ Forster, P., V. Ramaswamy, P. Artaxo, T. Berntsen, R.
Betts, D.W. Fahey, J. Haywood, J. Lean, D.C. Lowe, G. Myhre, J.
Nganga, R. Prinn, G. Raga, M. Schulz and R. Van Dorland. 2007:
Changes in Atmospheric Constituents and in Radiative Forcing. In
Climate Change 2007: The Physical Science Basis. Contribution of
Working Group I to the Fourth Assessment Report of the
Intergovernmental Panel on Climate Change. S. Solomon, D. Qin, M.
Manning, Z. Chen, M. Marquis, K.B. Averyt, M.Tignor and H.L. Miller,
Editors. 2007. Cambridge University Press, Cambridge, United Kingdom
and New York, NY, USA. p. 212.
---------------------------------------------------------------------------
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 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 cap-and-trade
programs. Title IV of the Clean Air Act sets an annual emissions cap on
SO2 for affected EGUs in the 48 contiguous States (42 U.S.C.
7651 et seq.) and the District of Columbia (D.C.). SO2
emissions from 28 eastern States and D.C. 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.\63\ 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). In 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 D.C. Circuit issued a decision to vacate
CSAPR.\64\ The court ordered EPA to continue administering CAIR. The
AEO 2013 emissions factors used for today's final rule assume that CAIR
remains a binding regulation through 2040.
---------------------------------------------------------------------------
\63\ 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).
\64\ See EME Homer City Generation, LP v. EPA, 696 F.3d 7, 38
(D.C. Cir. 2012), cert. granted, 81 U.S.L.W. 3567, 81 U.S.L.W. 3696,
81 U.S.L.W. 3702 (U.S. June 24, 2013) (No. 12-1182).
---------------------------------------------------------------------------
The attainment of emissions caps is typically flexible among EGUs
and is enforced through the use of tradable emissions allowances. Under
existing EPA regulations, any excess SO2 emissions
allowances resulting from the lower electricity demand caused by the
adoption of a new or amended efficiency standard could be used to allow
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 cap-and-trade system, but it concluded that negligible
reductions in power sector SO2 emissions would occur as a
result of standards.
Beginning around 2015, however, SO2 emissions will fall
as a result of the Mercury and Air Toxics Standards (MATS) for power
plants. 77 FR 9304 (February 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 allow
offsetting increases in SO2 emissions by any regulated EGU.
Therefore, DOE believes that energy 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
allow 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
[[Page 17777]]
from the standards considered in today's final rule 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.
L. Monetizing Carbon Dioxide and Other Emissions Impacts
As part of the development of the standards in this final rule, 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 final rule.
For today's final rule, 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
final rule TSD.
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. 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 challenges. A
report from the National Research Council \65\ 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 questions of science, economics, and ethics
and should be viewed as provisional.
---------------------------------------------------------------------------
\65\ National Research Council. Hidden Costs of Energy: Unpriced
Consequences of Energy Production and Use. 2009. National Academies
Press: Washington, DC.
---------------------------------------------------------------------------
Despite the limits of both quantification and monetization, SCC
estimates can be useful in estimating the social benefits of reducing
CO2 emissions. 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 values
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.
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. Development of Social Cost of Carbon Values
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 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
After 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 peer-reviewed literature and were used in the last
assessment of the Intergovernmental Panel on Climate Change (IPCC).
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
[[Page 17778]]
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 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,\66\ although preference is
given to consideration of the global benefits of reducing
CO2 emissions. Table IV.4 presents the values in the 2010
interagency group report,\67\ which is reproduced in appendix 14A of
the DOE final rule TSD.
---------------------------------------------------------------------------
\66\ 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.
\67\ 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-for-RIA.pdf.
Table IV.4--Annual SCC Values From 2010 Interagency Report, 2010-2050
[2007 dollars per metric ton]
----------------------------------------------------------------------------------------------------------------
Discount Rate
---------------------------------------------------------------
5% 3% 2.5% 3%
Year ---------------------------------------------------------------
95th
Average Average Average percentile
----------------------------------------------------------------------------------------------------------------
2010............................................ 4.7 21.4 35.1 64.9
2015............................................ 5.7 23.8 38.4 72.8
2020............................................ 6.8 26.3 41.7 80.7
2025............................................ 8.2 29.6 45.9 90.4
2030............................................ 9.7 32.8 50.0 100.0
2035............................................ 11.2 36.0 54.2 109.7
2040............................................ 12.7 39.2 58.4 119.3
2045............................................ 14.2 42.1 61.7 127.8
2050............................................ 15.7 44.9 65.0 136.2
----------------------------------------------------------------------------------------------------------------
The SCC values used for today's document were generated using the
most recent versions of the three integrated assessment models that
have been published in the peer-reviewed literature.\68\ Table IV.5
shows the 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 14B of the DOE final rule TSD. The central value
that emerges is the average SCC across 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.
---------------------------------------------------------------------------
\68\ 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; revised November 2013. https://www.whitehouse.gov/sites/default/files/omb/assets/inforeg/technical-update-social-cost-of-carbon-for-regulator-impact-analysis.pdf.
Table IV.5--Annual SCC Values from 2013 Interagency Report, 2010-2050
[2007 dollars per metric ton]
----------------------------------------------------------------------------------------------------------------
Discount rate
---------------------------------------------------------------
5% 3% 2.5% 3%
Year ---------------------------------------------------------------
95th
Average Average Average percentile
----------------------------------------------------------------------------------------------------------------
2010............................................ 11 32 51 89
2015............................................ 11 37 57 109
2020............................................ 12 43 64 128
2025............................................ 14 47 69 143
2030............................................ 16 52 75 159
2035............................................ 19 56 80 175
2040............................................ 21 61 86 191
2045............................................ 24 66 92 206
2050............................................ 26 71 97 220
----------------------------------------------------------------------------------------------------------------
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.
[[Page 17779]]
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 analytic challenges that are being
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.
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 $11.8, $39.7, $61.2, and $117 per metric ton avoided (values
expressed in 2012$). 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.
In responding to the NOPR, many commenters questioned the
scientific and economic basis of the SCC values. These commenters made
extensive comments about: The alleged lack of economic theory
underlying the models; the sufficiency of the models for policy-making;
potential flaws in the models' inputs and assumptions (including the
discount rates and climate sensitivity chosen); whether there had been
adequate peer review of the three models; whether there had been
adequate peer review of the interagency TSD supporting the 2013 SCC
values; \69\ whether the SCC estimates comply with OMB's ``Final
Information Quality Bulletin for Peer Review'' \70\ and DOE's own
guidelines for ensuring and maximizing the quality, objectivity,
utility and integrity of information disseminated by DOE; and why DOE
is considering global benefits of carbon dioxide emission reductions
rather than solely domestic benefits. (See AHRI, No. 75; Joint Comment
from America's Natural Gas Alliance, the American Chemistry Council,
the American Petroleum Institute, the National Association of Home
Builders, the National Association of Manufacturers, the Portland
Cement Association, and the U.S. Chamber of Commerce (ANGA et al/
Chamber of Commerce), No. 79; Cato Institute (Cato), No. 69; EEI, No.
89; GWU, No. 66; Mercatus, No. 72; NRECA, No. 88; Traulsen, No. 65.
Several other parties expressed support for the derivation and
application of the SCC values. (Joint Comment from the Environmental
Defense Fund, Institute for Policy Integrity, Natural Resources Defense
Council, and the Union of Concerned Scientists, No. 83; ASAP, No. 91;
Kopp, No. 60)
---------------------------------------------------------------------------
\69\ Available at: https://www.whitehouse.gov/sites/default/files/omb/inforeg/social_cost_of_carbon_for_ria_2013_update.pdf.
\70\ Available at: https://www.cio.noaa.gov/services_programs/pdfs/OMB_Peer_Review_Bulletin_m05-03.pdf.
---------------------------------------------------------------------------
In response to the comments on the SCC values, DOE acknowledges the
limitations in the SCC estimates, which are discussed in detail in the
2010 interagency group report. Specifically, uncertainties in the
assumptions regarding climate sensitivity, as well as other model
inputs such as economic growth and emissions trajectories, are
discussed and the reasons for the specific input assumptions chosen are
explained. Regarding discount rates, there is not consensus in the
scientific or economics literature regarding the appropriate discount
rate to use for intergenerational time horizons. The SCC estimates thus
use a reasonable range of discount rates, from 2.5% to 5%, in order to
show the effects that different discount rate assumptions have on the
estimated values. More information about the choice of discount rates
can be found in the 2010 interagency group report starting on page 17.
Regarding peer review of the models, the three integrated
assessment models used to estimate the SCC are frequently cited in the
peer-reviewed literature and were used in the last assessment of the
IPCC. In addition, new versions of the models that were used in 2013 to
estimate revised SCC values were published in the peer-reviewed
literature (see appendix 14B of the DOE final rule TSD for discussion).
DOE believes that the SCC estimates comply with OMB's Final
Information Quality Bulletin for Peer Review and DOE's own guidelines
for ensuring and maximizing the quality, objectivity, utility and
integrity of information disseminated by DOE.\71\
---------------------------------------------------------------------------
\71\ https://www.directives.doe.gov/references/secretarial_policy_statement_on_scientific_integrity/view.
---------------------------------------------------------------------------
As to why DOE is considering global benefits of carbon dioxide
emission reductions rather than solely domestic benefits, a global
measure of SCC because of the distinctive nature of the climate change
problem, which is highly unusual in at least two respects. First, it
involves a global externality: Emissions of most greenhouse gases
contribute to damages around the world even when they are emitted in
the United States. Second, climate change presents a problem that the
United States alone cannot solve. The issue of global versus domestic
measures of the SCC is further discussed in appendix 14A of the DOE
final rule TSD.
AHRI stated that DOE calculates the present value of the costs of
standards to consumers and manufacturers over a 30-year period, but the
SCC values reflect the present value of future climate related impacts
well beyond 2100. AHRI stated that DOE's comparison of 30 years of cost
to hundreds of years of presumed future benefits is inconsistent and
improper. (AHRI, No. 84 at p. 12)
For the analysis of national impacts of the proposed standards, DOE
considered the lifetime impacts of equipment shipped in a 30-year
period. With respect to energy and energy cost savings, impacts
continue past 30 years until all of the equipment shipped in the 30-
year period is retired. With respect to the valuation of CO2
emissions reductions, the SCC estimates developed by the interagency
working group are meant to represent the full discounted value (using
an appropriate range of discount rates) of emissions reductions
occurring in a given year. DOE is thus comparing the costs of achieving
the emissions reductions in each year of the analysis, with the carbon
reduction value of the emissions reductions in those same years.
Neither the costs nor the benefits of emissions reductions outside the
analytic time frame are included in the analysis.
In November 2013, OMB announced a new opportunity for public
comment on the interagency technical support document underlying the
revised SCC estimates. See 78 FR 70586. The comment period for the OMB
announcement closed on February 26, 2014. OMB is currently reviewing
comments and considering whether further revisions to the 2013 SCC
estimates are warranted. DOE stands ready to work with OMB and the
other
[[Page 17780]]
members of the interagency working group on further review and revision
of the SCC estimates as appropriate.
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 final rule based on estimates found in the
relevant scientific literature. Estimates of monetary value for
reducing NOX from stationary sources range from $468 to
$4,809 per ton (2012$).\72\ DOE calculated monetary benefits using a
medium value for NOX emissions of $2,639 per short ton (in
2012$), and real discount rates of 3 percent and 7 percent.
---------------------------------------------------------------------------
\72\ 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.
---------------------------------------------------------------------------
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.
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 National Energy Modeling System--Building
Technologies (NEMS-BT) \73\ 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
final rule TSD.
---------------------------------------------------------------------------
\73\ The EIA allows the use of the name ``NEMS'' to describe
only an AEO version of the model without any modification to code or
data. Because the present analysis entails some minor code
modifications and runs the model under various policy scenarios that
deviate from AEO assumptions, the name ``NEMS-BT'' refers to the
model as used here. For more information on NEMS, refer to The
National Energy Modeling System: An Overview, DOE/EIA-0581 (98)
(Feb.1998), available at: https://tonto.eia.doe.gov/FTPROOT/forecasting/058198.pdf.
---------------------------------------------------------------------------
N. Employment Impact Analysis
Employment impacts are one of the factors that DOE considers in
selecting 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 which 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 for today's standard, 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.
---------------------------------------------------------------------------
For more details on the employment impact analysis and its results,
see chapter 16 of the TSD.
V. Analytical Results
A. Trial Standard Levels
1. Trial Standard Level Formulation Process and Criteria
Based on the results of the LCC analysis and NIA, DOE selected five
TSLs above the baseline level for each equipment class for the final
rule. 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. TSL 3 was chosen to represent the group of
efficiency levels with the highest customer NPV at a 7-percent discount
rate. TSL 2 and TSL 1 were chosen to provide intermediate efficiency
levels that fill the gap between the baseline efficiency levels and TSL
3.
For the HCT.SC.I, HZO.RC.M, and HZO.RC.L equipment classes, there
is only one efficiency level above baseline. For the HZO.SC.L equipment
class, there are no efficiency levels above baseline, because there was
only one analytical design analyzed engineering analysis compliant with
the 2009 final rule. While TSL 5 was associated with the max-tech level
for HCT.SC.I, HZO.RC.M, and HZO.RC.L equipment classes, TSLs 1 through
4 did not have corresponding efficiency levels that satisfied the TSL
formulation criteria. Therefore, the baseline efficiency level was
assigned to TSL 1 through TSL 4 for each of these equipment classes.
Table V.1 shows the mapping between TSLs and efficiency levels.
[[Page 17781]]
Table V.1--Mapping Between TSLs and Efficiency Levels
--------------------------------------------------------------------------------------------------------------------------------------------------------
Intermediate level Intermediate level Max NPV * Max NES NPV * >0- Max-tech
----------------------------------------------------------------------- [dagger] ----------------------
Equipment class -----------------------
TSL 1 TSL 2 TSL 3 TSL 4 TSL 5
--------------------------------------------------------------------------------------------------------------------------------------------------------
VOP.RC.M........................... Baseline.............. Baseline.............. EL 1................. EL 3................. EL 4.
VOP.RC.L........................... Baseline.............. Baseline.............. EL 1................. EL 2................. EL 3.
VOP.SC.M........................... Baseline.............. Baseline.............. Baseline............. EL 1................. EL 2.
VCT.RC.M........................... Baseline.............. Baseline.............. EL 1................. EL 3................. EL 4.
VCT.RC.L........................... EL 1.................. EL 1.................. EL 2................. EL 3................. EL 4.
VCT.SC.M........................... EL 1.................. EL 2.................. EL 3................. EL 5................. EL 7.
VCT.SC.L........................... EL 1.................. EL 3.................. EL 5................. EL 7................. EL 7.
VCT.SC.I........................... EL 1.................. EL 1.................. EL 1................. EL 3................. EL 4.
VCS.SC.M........................... EL 1.................. EL 2.................. EL 4................. EL 6................. EL 7.
VCS.SC.L........................... EL 1.................. EL 3.................. EL 5................. EL 6................. EL 7.
VCS.SC.I........................... EL 1.................. EL 2.................. EL 4................. EL 4................. EL 5.
SVO.RC.M........................... EL 1.................. EL 1.................. EL 1................. EL 3................. EL 4.
SVO.SC.M........................... Baseline.............. Baseline.............. Baseline............. EL 1................. EL 3.
SOC.RC.M........................... Baseline.............. Baseline.............. Baseline............. EL 1................. EL 4.
SOC.SC.M........................... Baseline.............. Baseline.............. Baseline............. EL 2................. EL 4.
HZO.RC.M........................... Baseline.............. Baseline.............. Baseline............. Baseline............. EL 1.
HZO.RC.L........................... Baseline.............. Baseline.............. Baseline............. Baseline............. EL 1.
HZO.SC.M........................... Baseline.............. EL 1.................. EL 1................. EL 2................. EL 3.
HZO.SC.L........................... Baseline.............. Baseline.............. Baseline............. Baseline............. Baseline.
HCT.SC.M........................... EL 2.................. EL 3.................. EL 4................. EL 6................. EL 7.
HCT.SC.L........................... EL 2.................. EL 3.................. EL 4................. EL 6................. EL 7.
HCT.SC.I........................... Baseline.............. Baseline.............. Baseline............. Baseline............. EL 1.
HCS.SC.M........................... EL 1.................. EL 2.................. EL 3................. EL 4................. EL 6.
HCS.SC.L........................... EL 1.................. EL 2.................. EL 3................. EL 5................. EL 6.
PD.SC.M............................ EL 1.................. EL 2.................. EL 3................. EL 4................. EL 7.
--------------------------------------------------------------------------------------------------------------------------------------------------------
* NPV is estimated at a 7 percent discount rate.
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 each
used for certain equipment classes: (1) Volume (V), and (2) total
display area (TDA). The use of these two normalization metrics allows
for the development of a 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, AEMTCA, or January 2009 final rule
standard for each covered equipment class. (42 U.S.C. 6313(c)(2)-(3));
74 FR at 1093 (January 9, 2009). Additionally, for 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 limit 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 at 1118-19 (January 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 final rule, DOE retained the January 2009 final rule offset
factors at all TSLs, and updated those included in the EPACT 2005
standards to reflect size-based trends in energy consumption for each
equipment class. See chapter 5 of the TSD for further details and
discussion of offset factors.
For the equipment classes covered under this rulemaking, the
standards equation at each TSL is presented 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 x TDA + B (for equipment using TDA as a normalizing metric)
or
MDEC = A x V + B (for equipment using volume as a normalizing metric)
The standards equations may be used to prescribe the MDEC for
equipment of different sizes within the same equipment class. Chapter 9
of the final rule 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 -------------------------------------------------------------------------------
TSL 1 TSL 2 TSL 3 TSL 4 TSL 5
----------------------------------------------------------------------------------------------------------------
VOP.RC.M........................ 46.84 46.84 38.02 36.1 35.65
VOP.RC.L........................ 105.6 105.6 104.94 101.70 100.01
[[Page 17782]]
VOP.SC.M........................ 30.01 30.01 30.01 29.91 29.71
VCT.RC.M........................ 13.65 13.65 11.8 11.49 10.99
VCT.RC.L........................ 35.34 35.34 34.78 34.50 33.04
VCT.SC.M........................ 6.83 5.99 5.64 5.45 5.15
VCT.SC.L........................ 27.46 18.23 17.16 16.05 16.05
VCT.SC.I........................ 19.52 19.52 19.52 18.95 18.11
VCS.SC.M........................ 5.29 4.03 3.69 3.45 3.03
VCS.SC.L........................ 13.94 12.94 12.19 12.08 11.13
VCS.SC.I........................ 18.70 18.01 17.43 17.43 16.04
SVO.RC.M........................ 29.45 29.45 29.45 28.01 27.70
SVO.SC.M........................ 26.32 26.32 26.32 25.65 25.4
SOC.RC.M........................ 22.74 22.74 22.74 22.31 21.56
SOC.SC.M........................ 27.72 27.72 27.72 26.61 26.12
HZO.RC.M........................ 14.47 14.47 14.47 14.47 14.15
HZO.RC.L........................ 32.36 32.36 32.36 32.36 31.08
HZO.SC.M........................ 14.66 14.16 14.16 14.02 13.75
HZO.SC.L........................ 29.92 29.92 29.92 29.92 29.92
HCT.SC.M........................ 1.62 0.99 0.90 0.79 0.61
HCT.SC.L........................ 2.15 2.03 1.92 1.73 1.32
HCT.SC.I........................ 3.13 3.13 3.13 3.13 2.33
HCS.SC.M........................ 1.42 1.36 1.28 1.26 0.98
HCS.SC.L........................ 1.78 1.67 1.53 1.29 0.71
PD.SC.M......................... 4.73 3.90 3.78 3.75 3.41
----------------------------------------------------------------------------------------------------------------
Table V.3--Equations Representing the Standards at Each TSL for All Primary Equipment Classes
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Trial standard levels for primary equipment classes analyzed
Equipment class -----------------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline TSL 1 TSL 2 TSL 3 TSL 4 TSL 5
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
VOP.RC.M...................... 0.82 x TDA + 4.07........ 0.8 x TDA + 4.07......... 0.8 x TDA + 4.07......... 0.64 x TDA + 4.07........ 0.6 x TDA + 4.07......... 0.59 x TDA + 4.07.
VOP.RC.L...................... 2.27 x TDA + 6.85........ 2.21 x TDA + 6.85........ 2.21 x TDA + 6.85........ 2.2 x TDA + 6.85......... 2.12 x TDA + 6.85........ 2.09 x TDA + 6.85.
VOP.SC.M...................... 1.74 x TDA + 4.71........ 1.69 x TDA + 4.71........ 1.69 x TDA + 4.71........ 1.69 x TDA + 4.71........ 1.69 x TDA + 4.71........ 1.67 x TDA + 4.71.
VCT.RC.M...................... 0.22 x TDA + 1.95........ 0.18 x TDA + 1.95........ 0.18 x TDA + 1.95........ 0.15 x TDA + 1.95........ 0.15 x TDA + 1.95........ 0.14 x TDA + 1.95.
VCT.RC.L...................... 0.56 x TDA + 2.61........ 0.5 x TDA + 2.61......... 0.5 x TDA + 2.61......... 0.49 x TDA + 2.61........ 0.49 x TDA + 2.61........ 0.47 x TDA + 2.61.
VCT.SC.M...................... 0.12 x V + 3.34.......... 0.1 x V + 2.05........... 0.1 x V + 1.21........... 0.1 x V + 0.86........... 0.1 x V + 0.68........... 0.1 x V + 0.38.
VCT.SC.L...................... 0.75 x V + 4.1........... 0.48 x V + 4.1........... 0.29 x V + 4.1........... 0.29 x V + 2.95.......... 0.29 x V + 1.84.......... 0.29 x V + 1.84.
VCT.SC.I...................... 0.67 x TDA + 3.29........ 0.62 x TDA + 3.29........ 0.62 x TDA + 3.29........ 0.62 x TDA + 3.29........ 0.6 x TDA + 3.29......... 0.57 x TDA + 3.29.
VCS.SC.M...................... 0.1 x V + 2.04........... 0.07 x V + 2.04.......... 0.05 x V + 1.69.......... 0.05 x V + 1.36.......... 0.05 x V + 1.11.......... 0.05 x V + 0.7.
VCS.SC.L...................... 0.4 x V + 1.38........... 0.26 x V + 1.38.......... 0.24 x V + 1.38.......... 0.22 x V + 1.38.......... 0.22 x V + 1.38.......... 0.2 x V + 1.38.
VCS.SC.I...................... 0.38 x V + 0.88.......... 0.37 x V + 0.88.......... 0.36 x V + 0.88.......... 0.34 x V + 0.88.......... 0.34 x V + 0.88.......... 0.32 x V + 0.88.
SVO.RC.M...................... 0.83 x TDA + 3.18........ 0.66 x TDA + 3.18........ 0.66 x TDA + 3.18........ 0.66 x TDA + 3.18........ 0.62 x TDA + 3.18........ 0.61 x TDA + 3.18.
SVO.SC.M...................... 1.73 x TDA + 4.59........ 1.7 x TDA + 4.59......... 1.7 x TDA + 4.59......... 1.7 x TDA + 4.59......... 1.65 x TDA + 4.59........ 1.63 x TDA + 4.59
SOC.RC.M...................... 0.51 x TDA + 0.11........ 0.44 x TDA + 0.11........ 0.44 x TDA + 0.11........ 0.44 x TDA + 0.11........ 0.44 x TDA + 0.11........ 0.42 x TDA + 0.11.
SOC.SC.M...................... 0.6 x TDA + 1............ 0.52 x TDA + 1........... 0.52 x TDA + 1........... 0.52 x TDA + 1........... 0.5 x TDA + 1............ 0.49 x TDA + 1.
HZO.RC.M...................... 0.35 x TDA + 2.88........ 0.35 x TDA + 2.88........ 0.35 x TDA + 2.88........ 0.35 x TDA + 2.88........ 0.35 x TDA + 2.88........ 0.34 x TDA + 2.88.
HZO.RC.L...................... 0.57 x TDA + 6.88........ 0.55 x TDA + 6.88........ 0.55 x TDA + 6.88........ 0.55 x TDA + 6.88........ 0.55 x TDA + 6.88........ 0.53 x TDA + 6.88.
HZO.SC.M...................... 0.77 x TDA + 5.55........ 0.76 x TDA + 5.55........ 0.72 x TDA + 5.55........ 0.72 x TDA + 5.55........ 0.71 x TDA + 5.55........ 0.68 x TDA + 5.55.
HZO.SC.L...................... 1.92 x TDA + 7.08........ 1.9 x TDA + 7.08......... 1.9 x TDA + 7.08......... 1.9 x TDA + 7.08......... 1.9 x TDA + 7.08......... 1.9 x TDA + 7.08.
HCT.SC.M...................... 0.12 x V + 3.34.......... 0.06 x V + 1.09.......... 0.06 x V + 0.46.......... 0.06 x V + 0.37.......... 0.06 x V + 0.27.......... 0.06 x V + 0.09.
HCT.SC.L...................... 0.75 x V + 4.1........... 0.08 x V + 1.47.......... 0.08 x V + 1.35.......... 0.08 x V + 1.23.......... 0.08 x V + 1.05.......... 0.08 x V + 0.63.
HCT.SC.I...................... 0.56 x TDA + 0.43........ 0.56 x TDA + 0.43........ 0.56 x TDA + 0.43........ 0.56 x TDA + 0.43........ 0.56 x TDA + 0.43........ 0.4 x TDA + 0.43.
HCS.SC.M...................... 0.1 x V + 2.04........... 0.05 x V + 1.05.......... 0.05 x V + 0.98.......... 0.05 x V + 0.91.......... 0.05 x V + 0.89.......... 0.02 x V + 0.81.
HCS.SC.L...................... 0.4 x V + 1.38........... 0.06 x V + 1.38.......... 0.06 x V + 1.26.......... 0.06 x V + 1.12.......... 0.06 x V + 0.89.......... 0.06 x V + 0.31.
PD.SC.M....................... 0.126 x V + 3.51......... 0.11 x V + 1.76.......... 0.11 x V + 0.93.......... 0.11 x V + 0.81.......... 0.11 x V + 0.78.......... 0.11 x V + 0.44.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
In addition to the 25 primary equipment classes analyzed, DOE
evaluated existing and potential amended standards for 24 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 for the primary equipment classes analyzed and a set of
matched-pair analyses performed during the January 2009 final rule
analysis.\75\ In addition,
[[Page 17783]]
DOE believes that standards for certain primary equipment classes can
be directly applied to similar secondary equipment classes. Chapter 5
of the final rule TSD discusses the development of the extension
multipliers.
---------------------------------------------------------------------------
\75\ 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,
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 applicable equipment. For more information, please see chapter 5
of the 2009 final rule TSD, which can be found at https://www.regulations.gov/#!documentDetail;D=EERE-2006-STD-0126-0058.
---------------------------------------------------------------------------
Using the extension multiplier approach, DOE developed an
additional 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 observe 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
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Trial standard levels for secondary equipment classes analyzed
Equipment class -----------------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline TSL 1 TSL 2 TSL 3 TSL 4 TSL 5
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
VOP.RC.I...................... 2.89 x TDA + 8.7......... 2.81 x TDA + 8.7......... 2.81 x TDA + 8.7......... 2.79 x TDA + 8.7......... 2.7 x TDA + 8.7.......... 2.65 x TDA + 8.7.
SVO.RC.L...................... 2.27 x TDA + 6.85........ 2.21 x TDA + 6.85........ 2.21 x TDA + 6.85........ 2.2 x TDA + 6.85......... 2.12 x TDA + 6.85........ 2.09 x TDA + 6.85.
SVO.RC.I...................... 2.89 x TDA + 8.7......... 2.81 x TDA + 8.7......... 2.81 x TDA + 8.7......... 2.79 x TDA + 8.7......... 2.7 x TDA + 8.7.......... 2.65 x TDA + 8.7.
HZO.RC.I...................... 0.72 x TDA + 8.74........ 0.7 x TDA + 8.74......... 0.7 x TDA + 8.74......... 0.7 x TDA + 8.74......... 0.7 x TDA + 8.74......... 0.67 x TDA + 8.74.
VOP.SC.L...................... 4.37 x TDA + 11.82....... 4.25 x TDA + 11.82....... 4.25 x TDA + 11.82....... 4.25 x TDA + 11.82....... 4.24 x TDA + 11.82....... 4.2 x TDA + 11.82.
VOP.SC.I...................... 5.55 x TDA + 15.02....... 5.4 x TDA + 15.02........ 5.4 x TDA + 15.02........ 5.4 x TDA + 15.02........ 5.38 x TDA + 15.02....... 5.34 x TDA + 15.02.
SVO.SC.L...................... 4.34 x TDA + 11.51....... 4.26 x TDA + 11.51....... 4.26 x TDA + 11.51....... 4.26 x TDA + 11.51....... 4.13 x TDA + 11.51....... 4.08 x TDA + 11.51.
SVO.SC.I...................... 5.52 x TDA + 14.63....... 5.41 x TDA + 14.63....... 5.41 x TDA + 14.63....... 5.41 x TDA + 14.63....... 5.24 x TDA + 14.63....... 5.18 x TDA + 14.63.
HZO.SC.I...................... 2.44 x TDA + 9........... 2.42 x TDA + 9........... 2.42 x TDA + 9........... 2.42 x TDA + 9........... 2.42 x TDA + 9........... 2.42 x TDA + 9.
SOC.RC.L...................... 1.08 x TDA + 0.22........ 0.93 x TDA + 0.22........ 0.93 x TDA + 0.22........ 0.93 x TDA + 0.22........ 0.91 x TDA + 0.22........ 0.88 x TDA + 0.22.
SOC.RC.I...................... 1.26 x TDA + 0.26........ 1.09 x TDA + 0.26........ 1.09 x TDA + 0.26........ 1.09 x TDA + 0.26........ 1.07 x TDA + 0.26........ 1.03 x TDA + 0.26.
SOC.SC.I...................... 1.76 x TDA + 0.36........ 1.53 x TDA + 0.36........ 1.53 x TDA + 0.36........ 1.53 x TDA + 0.36........ 1.5 x TDA + 0.36......... 1.45 x TDA + 0.36.
VCT.RC.I...................... 0.66 x TDA + 3.05........ 0.59 x TDA + 3.05........ 0.59 x TDA + 3.05........ 0.58 x TDA + 3.05........ 0.57 x TDA + 3.05........ 0.55 x TDA + 3.05.
HCT.RC.M...................... 0.16 x TDA + 0.13........ 0.16 x TDA + 0.13........ 0.16 x TDA + 0.13........ 0.16 x TDA + 0.13........ 0.16 x TDA + 0.13........ 0.12 x TDA + 0.13.
HCT.RC.L...................... 0.34 x TDA + 0.26........ 0.34 x TDA + 0.26........ 0.34 x TDA + 0.26........ 0.34 x TDA + 0.26........ 0.34 x TDA + 0.26........ 0.24 x TDA + 0.26.
HCT.RC.I...................... 0.4 x TDA + 0.31......... 0.4 x TDA + 0.31......... 0.4 x TDA + 0.31......... 0.4 x TDA + 0.31......... 0.4 x TDA + 0.31......... 0.28 x TDA + 0.31.
VCS.RC.M...................... 0.11 x V + 0.26.......... 0.11 x V + 0.26.......... 0.1 x V + 0.26........... 0.1 x V + 0.26........... 0.1 x V + 0.26........... 0.09 x V + 0.26.
VCS.RC.L...................... 0.23 x V + 0.54.......... 0.23 x V + 0.54.......... 0.22 x V + 0.54.......... 0.21 x V + 0.54.......... 0.21 x V + 0.54.......... 0.19 x V + 0.54.
VCS.RC.I...................... 0.27 x V + 0.63.......... 0.27 x V + 0.63.......... 0.25 x V + 0.63.......... 0.25 x V + 0.63.......... 0.25 x V + 0.63.......... 0.23 x V + 0.63.
HCS.SC.I...................... 0.38 x V + 0.88.......... 0.37 x V + 0.88.......... 0.36 x V + 0.88.......... 0.34 x V + 0.88.......... 0.34 x V + 0.88.......... 0.32 x V + 0.88.
HCS.RC.M...................... 0.11 x V + 0.26.......... 0.11 x V + 0.26.......... 0.1 x V + 0.26........... 0.1 x V + 0.26........... 0.1 x V + 0.26........... 0.09 x V + 0.26.
HCS.RC.L...................... 0.23 x V + 0.54.......... 0.23 x V + 0.54.......... 0.22 x V + 0.54.......... 0.21 x V + 0.54.......... 0.21 x V + 0.54.......... 0.19 x V + 0.54.
HCS.RC.I...................... 0.27 x V + 0.63.......... 0.27 x V + 0.63.......... 0.25 x V + 0.63.......... 0.25 x V + 0.63.......... 0.25 x V + 0.63.......... 0.23 x V + 0.63.
SOC.SC.L*..................... 0.75 x V + 4.10.......... 1.1 x TDA + 2.1.......... 1.1 x TDA + 2.1.......... 1.1 x TDA + 2.1.......... 1.05 x TDA + 2.1......... 1.03 x TDA + 2.1.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
* 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 x 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. (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 promulgating amended standards for SOC.SC.M equipment with TDA as the normalization metric (see Table V.3), DOE derives the standard for secondary equipment
classes based on the standard of a primary equipment that has similar characteristics as the secondary equipment class under consideration (see chapter 5 of the final rule TSD for details).
For the equipment class SOC.SC.L, the standard was derived from the standard level selected for equipment class SOC.SC.M. Since the standard for SOC.SC.M is in terms of TDA, the standard for
SOC.SC.L equipment has 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
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 (February 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. As described in section IV.F, the LCC analysis was
carried out in the form of Monte Carlo simulations. Consequently, the
results 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.
[[Page 17784]]
Table V.5 through Table V.29 show key results of the LCC and PBP
analysis for each equipment class. Each table presents the mean LCC,
mean LCC savings, median PBP, and distribution of customer impacts in
the form of percentages of customers who experience net cost, no
impact, or net benefit.
All of the equipment classes, except for VCT.SC.L, have negative
LCC savings values at TSL 5. Negative average LCC savings imply that,
on average, customers experience an increase in LCC as a consequence of
buying equipment associated with that particular TSL.
The mean LCC savings associated with TSL 4 vary by equipment class,
and are negative for some equipment classes with significant market
shares. The mean LCC savings at today's standard, TSL 3, are all
positive. (LCC savings are equal in cases in which both TSLs are
associated with the same efficiency level.)
Generally, customers who currently buy equipment in the base case
scenario at or above the level of performance specified by the TSL
under consideration would be unaffected if the amended standard were to
be set at that TSL. Customers who buy equipment below the level of 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
(lower LCC) and some may incur net cost (higher LCC). DOE's results
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 0 to 92
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 all of the equipment classes, except VCT.SC.L, 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
during the life of the equipment. The median PBP values for TSL 4 range
from 1.4 years to 63.1 years. The median PBP values at TSL 3 are all
below the average lifetime of a majority of the commercial
refrigeration equipment under consideration is 10 to 15 years.
Therefore, PBP results for TSL 3 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 3 through
operating cost savings within the lifetime of the equipment.
Table V.5--Summary LCC and PBP Results for VOP.RC.M Equipment Class*
--------------------------------------------------------------------------------------------------------------------------------------------------------
Life-cycle cost, all customers 2012$ Life-cycle cost savings
-------------------------------------------------------------------------------------------
Annual Affected % of Customers that experience** Median
TSL energy Discounted customers' --------------------------------------- payback
consumption Installed operating LCC average period
kWh/yr cost cost savings Net cost No impact Net benefit years
2012$ (percent) (percent) (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
1.................................. 17,095 10,527 2,376 30,748 ........... 0 100 0 ...........
2.................................. 17,095 10,527 2,376 30,748 ........... 0 100 0 ...........
3.................................. 13,877 11,988 2,099 29,826 922 4 41 55 5.7
4.................................. 13,177 12,786 2,071 30,374 -5 64 0 36 9.9
5.................................. 13,013 15,901 2,202 34,572 -4,203 100 0 0 34.1
--------------------------------------------------------------------------------------------------------------------------------------------------------
* 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*
--------------------------------------------------------------------------------------------------------------------------------------------------------
Life-cycle cost, all customers 2012$ Life-cycle cost savings
-------------------------------------------------------------------------------------------
Annual Affected % of Customers that experience** Median
TSL energy Discounted customers' --------------------------------------- payback
consumption Installed operating LCC average period
kWh/yr cost cost savings Net cost No impact Net benefit years
2012$ (percent) (percent) (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
1.................................. 38,544 11,699 4,445 49,574 ........... 0 100 0 ...........
2.................................. 38,544 11,699 4,445 49,574 ........... 0 100 0 ...........
3.................................. 38,301 11,799 4,427 49,521 53 7 40 53 5.7
4.................................. 37,117 12,631 4,353 49,707 -148 59 20 21 7.2
5.................................. 36,502 17,725 4,534 56,289 -6,701 100 0 0 9.9
--------------------------------------------------------------------------------------------------------------------------------------------------------
* 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*
--------------------------------------------------------------------------------------------------------------------------------------------------------
Life-cycle cost, all customers 2012$ Life-cycle cost savings
-------------------------------------------------------------------------------------------
Annual Affected % of Customers that experience** Median
TSL energy Discounted customers' --------------------------------------- payback
consumption Installed operating LCC average period
kWh/yr cost cost savings Net cost No impact Net benefit years
2012$ (percent) (percent) (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
1.................................. 10,953 6,365 1,340 20,337 ........... 0 100 0 ...........
2.................................. 10,953 6,365 1,340 20,337 ........... 0 100 0 ...........
3.................................. 10,953 6,365 1,340 20,337 ........... 0 100 0 ...........
4.................................. 10,917 6,432 1,339 20,391 -54 60 40 0 5.7
[[Page 17785]]
5.................................. 10,846 7,483 1,368 21,742 -1,384 100 0 0 7.2
--------------------------------------------------------------------------------------------------------------------------------------------------------
* 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*
--------------------------------------------------------------------------------------------------------------------------------------------------------
Life-cycle cost, all customers 2012$ Life-cycle cost savings
-------------------------------------------------------------------------------------------
Annual Affected % of Customers that experience** Median
TSL energy Discounted customers' --------------------------------------- payback
consumption Installed operating LCC average period
kWh/yr cost cost savings Net cost No impact Net benefit years
2012$ (percent) (percent) (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
1.................................. 4,981 12,951 1,263 23,996 ........... 0 100 0 ...........
2.................................. 4,981 12,951 1,263 23,996 ........... 0 100 0 ...........
3.................................. 4,307 13,102 1,185 23,454 542 0 40 60 2.1
4.................................. 4,192 13,384 1,193 23,803 41 36 13 51 6.6
5.................................. 4,011 17,093 1,341 28,775 -4,937 100 0 0 364.7
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Percentages may not add up to 100 percent due to rounding.
Table V.9--Summary LCC and PBP Results for VCT.RC.L Equipment Class*
--------------------------------------------------------------------------------------------------------------------------------------------------------
Life-cycle cost, all customers 2012$ Life-cycle cost savings
-------------------------------------------------------------------------------------------
Annual Affected % of Customers that experience** Median
TSL energy Discounted customers' --------------------------------------- payback
consumption Installed operating LCC average period
kWh/yr cost cost savings Net cost No impact Net benefit years
2012$ (percent) (percent) (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
1.................................. 12,898 14,411 2,081 32,705 647 0 40 60 1.8
2.................................. 12,898 14,411 2,081 32,705 647 0 40 60 1.8
3.................................. 12,694 14,508 2,066 32,665 526 4 20 76 2.7
4.................................. 12,593 14,809 2,070 32,996 93 43 0 57 6.3
5.................................. 12,061 19,567 2,232 39,125 -6,036 100 0 0 194.7
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Percentages may not add up to 100 percent due to rounding.
Table V.10--Summary LCC and PBP Results for VCT.SC.M Equipment Class*
--------------------------------------------------------------------------------------------------------------------------------------------------------
Life-cycle cost, all customers 2012$ Life-cycle cost savings
-------------------------------------------------------------------------------------------
Annual Affected % of Customers that experience** Median
TSL energy Discounted customers' --------------------------------------- payback
consumption Installed operating LCC average period
kWh/yr cost cost savings Net cost No impact Net benefit years
2012$ (percent) (percent) (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
1.................................. 2,491 5,184 490 10,025 -10 71 10 18 23.4
2.................................. 2,184 5,336 452 9,800 214 1 10 89 4.8
3.................................. 2,057 5,401 442 9,767 226 3 0 97 5.3
4.................................. 1,991 5,487 440 9,830 163 17 0 83 7.0
5.................................. 1,879 6,831 478 11,534 -1,541 100 0 0 96.2
--------------------------------------------------------------------------------------------------------------------------------------------------------
* 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
--------------------------------------------------------------------------------------------------------------------------------------------------------
Life-cycle cost, all customers 2012$ Life-cycle cost savings
-------------------------------------------------------------------------------------------
Annual Affected 90 of Customers that experience ** Median
TSL energy Discounted customers' --------------------------------------- payback
consumption Installed operating LCC average period
kWh/yr cost cost savings Net cost No impact Net benefit years
2012$ (percent) (percent) (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
1.................................. 10,022 6,498 1,270 19,135 2,503 0 10 90 0.5
[[Page 17786]]
2.................................. 6,654 6,822 964 16,397 4,709 0 0 100 0.8
3.................................. 6,262 7,003 917 16,105 5,001 0 0 100 1.1
4.................................. 5,857 8,909 948 18,294 2,812 11 0 89 4.7
5.................................. 5,857 8,909 948 18,294 2,812 11 0 89 4.7
--------------------------------------------------------------------------------------------------------------------------------------------------------
* 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 *
--------------------------------------------------------------------------------------------------------------------------------------------------------
Life-cycle cost, all customers 2012$ Life-cycle cost savings
-------------------------------------------------------------------------------------------
Annual Affected 90 of Customers that experience ** Median
TSL energy Discounted customers' --------------------------------------- payback
consumption Installed operating LCC average period
kWh/yr cost cost savings Net cost No impact Net benefit years
2012$ (percent) (percent) (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
1.................................. 7,124 7,305 1,015 17,384 18 10 40 50 7.2
2.................................. 7,124 7,305 1,015 17,384 18 10 40 50 7.2
3.................................. 7,124 7,305 1,015 17,384 18 10 40 50 7.2
4.................................. 6,916 7,509 1,003 17,468 -68 65 24 11 16.2
5.................................. 6,609 9,780 1,057 20,242 -2,834 84 16 0 663.6
--------------------------------------------------------------------------------------------------------------------------------------------------------
* 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 *
--------------------------------------------------------------------------------------------------------------------------------------------------------
Life-cycle cost, all customers 2012$ Life-cycle cost savings
-------------------------------------------------------------------------------------------
Annual Affected % of Customers that experience ** Median
TSL energy Discounted customers' --------------------------------------- payback
consumption Installed operating LCC average period
kWh/yr cost cost savings Net cost No impact Net benefit years
2012$ (percent) (percent) (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
1.................................. 1,929 3,572 368 6,378 223 0 40 60 0.5
2.................................. 1,469 3,601 326 6,083 518 0 40 60 0.6
3.................................. 1,346 3,651 318 6,067 363 7 10 83 1.4
4.................................. 1,258 3,734 314 6,125 305 25 10 65 2.6
5.................................. 1,105 5,062 365 7,828 -1,428 100 0 0 48.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Percentages may not add up to 100 percent due to rounding.
Table V.14--Summary LCC and PBP Results for VCS.SC.L Equipment Class *
--------------------------------------------------------------------------------------------------------------------------------------------------------
Life-cycle cost, all customers 2012$ Life-cycle cost savings
-------------------------------------------------------------------------------------------
Annual Affected % of Customers that experience ** Median
TSL energy Discounted customers' --------------------------------------- payback
consumption Installed operating LCC average period
kWh/yr cost cost savings Net cost No impact Net benefit years
2012$ (percent) (percent) (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
1.................................. 5,088 4,007 702 9,374 588 0 40 60 0.6
2.................................. 4,722 4,083 672 9,215 550 0 10 90 1.3
3.................................. 4,448 4,216 653 9,201 507 7 0 93 2.5
4.................................. 4,410 4,238 651 9,213 495 9 0 91 2.7
5.................................. 4,062 5,988 703 11,349 -1,640 100 0 0 31.8
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Percentages may not add up to 100 percent due to rounding.
[[Page 17787]]
Table V.15--Summary LCC and PBP Results for VCS.SC.I Equipment Class *
--------------------------------------------------------------------------------------------------------------------------------------------------------
Life-cycle cost, all customers 2012$ Life-cycle cost savings
-------------------------------------------------------------------------------------------
Annual Affected % of Customers that experience ** Median
TSL energy Discounted customers' --------------------------------------- payback
consumption Installed operating LCC average period
kWh/yr cost cost savings Net cost No impact Net benefit years
2012$ (percent) (percent) (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
1.................................. 6,824 4,349 895 11,195 41 0 40 60 2.6
2.................................. 6,574 4,420 876 11,117 114 0 32 68 3.6
3.................................. 6,361 4,515 861 11,096 113 9 17 75 5.0
4.................................. 6,361 4,515 861 11,096 113 9 17 75 5.0
5.................................. 5,855 6,839 927 13,909 -2,710 92 8 0 183.7
--------------------------------------------------------------------------------------------------------------------------------------------------------
* 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 *
--------------------------------------------------------------------------------------------------------------------------------------------------------
Life-cycle cost, all customers 2012$ Life-cycle cost savings
-------------------------------------------------------------------------------------------
Annual Affected % of Customers that experience ** Median
TSL energy Discounted customers' --------------------------------------- payback
consumption Installed operating LCC average period
kWh/yr cost cost savings Net cost No impact Net benefit years
2012$ (percent) (percent) (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
1.................................. 10,748 10,304 1,694 24,841 564 7 40 54 6.2
2.................................. 10,748 10,304 1,694 24,841 564 7 40 54 6.2
3.................................. 10,748 10,304 1,694 24,841 564 7 40 54 6.2
4.................................. 10,226 10,875 1,670 25,201 -19 67 0 33 10.4
5.................................. 10,111 12,867 1,752 27,873 -2,691 100 0 0 29.9
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Percentages may not add up to 100 percent due to rounding.
Table V.17--Summary LCC and PBP Results for SVO.SC.M Equipment ClassSec. *
--------------------------------------------------------------------------------------------------------------------------------------------------------
Life-cycle cost, all customers 2012$ Life-cycle cost savings
-------------------------------------------------------------------------------------------
Annual Affected % of Customers that experienceSec. Median
TSL energy Discounted customers' -------------------**------------------ payback
consumption Installed operating LCC average period
kWh/yr cost cost savings Net cost No impact Net benefit years
2012$ (percent) (percent) (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
1.................................. 9,608 4,980 1,150 16,733 ........... 0 100 0 ...........
2.................................. 9,608 4,980 1,150 16,733 ........... 0 100 0 ...........
3.................................. 9,608 4,980 1,150 16,733 ........... 0 100 0 ...........
4.................................. 9,361 5,157 1,132 16,728 6 32 40 27 10.9
5.................................. 9,271 5,897 1,151 17,648 -917 100 0 0 151.6
--------------------------------------------------------------------------------------------------------------------------------------------------------
* 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 *
--------------------------------------------------------------------------------------------------------------------------------------------------------
Life-cycle cost, all customers 2012$ Life-cycle cost savings
-------------------------------------------------------------------------------------------
Annual Affected % of Customers that experience ** Median
TSL energy Discounted customers' --------------------------------------- payback
consumption Installed operating LCC average period
kWh/yr cost cost savings Net cost No impact Net benefit years
2012$ (percent) (percent) (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
1.................................. 8,300 13,971 1,679 28,172 ........... 0 100 0 ...........
2.................................. 8,300 13,971 1,679 28,172 ........... 0 100 0 ...........
3.................................. 8,300 13,971 1,679 28,172 ........... 0 100 0 ...........
4.................................. 8,144 14,144 1,674 28,301 -128 60 40 0 38.0
5.................................. 7,869 15,879 1,729 30,492 -2,268 100 0 0 114.1
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Percentages may not add up to 100 percent due to rounding.
[[Page 17788]]
Table V.19--Summary LCC and PBP Results for SOC.SC.M Equipment Class *
--------------------------------------------------------------------------------------------------------------------------------------------------------
Life-cycle cost, all customers 2012$ Life-cycle cost savings
-------------------------------------------------------------------------------------------
Annual Affected % of Customers that experience ** Median
TSL energy Discounted customers' --------------------------------------- payback
consumption Installed operating LCC average period
kWh/yr cost cost savings Net cost No impact Net benefit years
2012$ (percent) (percent) (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
1.................................. 10,119 13,965 1,821 27,861 ........... 0 100 0 ...........
2.................................. 10,119 13,965 1,821 27,861 ........... 0 100 0 ...........
3.................................. 10,119 13,965 1,821 27,861 ........... 0 100 0 ...........
4.................................. 9,711 14,332 1,808 28,128 -209 100 0 1 28.7
5.................................. 9,533 15,880 1,868 30,123 -2,204 100 0 0 25.3
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Percentages may not add up to 100 percent due to rounding.
Table V.20--Summary LCC and PBP Results for HZO.RC.M Equipment Class *
--------------------------------------------------------------------------------------------------------------------------------------------------------
Life-cycle cost, all customers 2012$ Life-cycle cost savings
-------------------------------------------------------------------------------------------
Annual Affected % of Customers that experience ** Median
TSL energy Discounted customers' --------------------------------------- payback
consumption Installed operating LCC average period
kWh/yr cost cost savings Net cost No impact Net benefit years
2012$ (percent) (percent) (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
1.................................. 5,282 8,290 1,036 16,958 ........... 0 100 0 ...........
2.................................. 5,282 8,290 1,036 16,958 ........... 0 100 0 ...........
3.................................. 5,282 8,290 1,036 16,958 ........... 0 100 0 ...........
4.................................. 5,282 8,290 1,036 16,958 ........... 0 100 0 ...........
5.................................. 5,165 9,921 1,103 19,137 -2,180 60 40 0 ...........
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Percentages may not add up to 100 percent due to rounding.
Table V.21--Summary LCC and PBP Results for HZO.RC.L Equipment Class *
--------------------------------------------------------------------------------------------------------------------------------------------------------
Life-cycle cost, all customers 2012$ Life-cycle cost savings
-------------------------------------------------------------------------------------------
Annual Affected % of Customers that experience ** Median
TSL energy Discounted customers' --------------------------------------- payback
consumption Installed operating LCC average period
kWh/yr cost cost savings Net cost No impact Net benefit years
2012$ (percent) (percent) (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
1.................................. 11,812 8,504 1,673 22,548 ........... 0 100 0 ...........
2.................................. 11,812 8,504 1,673 22,548 ........... 0 100 0 ...........
3.................................. 11,812 8,504 1,673 22,548 ........... 0 100 0 ...........
4.................................. 11,812 8,504 1,673 22,548 ........... 0 100 0 ...........
5.................................. 11,344 11,822 1,787 26,795 -4,249 60 40 0 288.9
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Percentages may not add up to 100 percent due to rounding.
Table V.22--Summary LCC and PBP Results for HZO.SC.M Equipment Class *
--------------------------------------------------------------------------------------------------------------------------------------------------------
Life-cycle cost, all customers 2012$ Life-cycle cost savings
-------------------------------------------------------------------------------------------
Annual Affected % of Customers that experience ** Median
TSL energy Discounted customers' --------------------------------------- payback
consumption Installed operating LCC average period
kWh/yr cost cost savings Net cost No impact Net benefit years
2012$ (percent) (percent) (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
1.................................. 5,351 2,605 629 9,022 ........... 0 100 0 ...........
2.................................. 5,168 2,698 615 8,967 55 5 40 54 6.9
3.................................. 5,168 2,698 615 8,967 55 5 40 54 6.9
4.................................. 5,118 2,763 613 9,013 -4 50 21 29 11.8
5.................................. 5,018 3,689 636 10,163 -1,154 100 0 0 194.7
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Percentages may not add up to 100 percent due to rounding.
[[Page 17789]]
Table V.23--Summary LCC and PBP Results for HZO.SC.M Equipment Class *
--------------------------------------------------------------------------------------------------------------------------------------------------------
Life-cycle cost, all customers 2012$ Life-cycle cost savings
-------------------------------------------------------------------------------------------
Annual Affected % of Customers that experience ** Median
TSL energy Discounted customers' --------------------------------------- payback
consumption Installed operating LCC average period
kWh/yr cost cost savings Net cost No impact Net benefit years
2012$ (percent) (percent) (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
1.................................. 10,922 5,008 1,265 17,894 ........... 0 100 0 ...........
2.................................. 10,922 5,008 1,265 17,894 ........... 0 100 0 ...........
3.................................. 10,922 5,008 1,265 17,894 ........... 0 100 0 ...........
4.................................. 10,922 5,008 1,265 17,894 ........... 0 100 0 ...........
5.................................. 10,922 5,008 1,265 17,894 ........... 0 100 0 ...........
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Percentages may not add up to 100 percent due to rounding.
Table V.24--Summary LCC and PBP Results for HCT.SC.M Equipment Class
--------------------------------------------------------------------------------------------------------------------------------------------------------
Life-cycle cost, all customers 2012$ Life-cycle cost savings
-------------------------------------------------------------------------------------------
Annual Affected % of Customers that experience ** Median
TSL energy Discounted customers' --------------------------------------- payback
consumption Installed operating LCC average period
kWh/yr cost cost savings Net cost No impact Net benefit years
2012$ (percent) (percent) (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
1.................................. 590 2,101 140 3,577 66 0 40 60 2.5
2.................................. 360 2,198 122 3,478 165 0 40 60 4.7
3.................................. 327 2,213 120 3,476 101 20 0 80 5.8
4.................................. 289 2,279 120 3,534 43 45 0 55 9.2
5.................................. 224 2,807 131 4,175 -599 100 0 0 46.6
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Percentages may not add up to 100 percent due to rounding.
Table V.25--Summary LCC and PBP Results for HCT.SC.L Equipment Class *
--------------------------------------------------------------------------------------------------------------------------------------------------------
Life-cycle cost, all customers 2012$ Life-cycle cost savings
-------------------------------------------------------------------------------------------
Annual Affected % of Customers that experience ** Median
TSL energy Discounted customers' --------------------------------------- payback
consumption Installed operating LCC average period
kWh/yr cost cost savings Net cost No impact Net benefit years
2012$ (percent) (percent) (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
1.................................. 785 2,297 190 3,882 428 0 41 59 1.8
2.................................. 742 2,312 187 3,876 435 0 41 59 2.0
3.................................. 701 2,330 185 3,870 293 10 10 80 2.5
4.................................. 632 2,399 182 3,915 248 29 10 61 3.6
5.................................. 480 3,120 200 4,775 -613 87 10 3 19.5
--------------------------------------------------------------------------------------------------------------------------------------------------------
** Percentages may not add up to 100 percent due to rounding.
Table V.26--Summary LCC and PBP Results for HCT.SC.I Equipment Class *
--------------------------------------------------------------------------------------------------------------------------------------------------------
Life-cycle cost, all customers 2012$ Life-cycle cost savings
-------------------------------------------------------------------------------------------
Annual Affected % of Customers that experience** Median
TSL energy Discounted customers' --------------------------------------- payback
consumption Installed operating LCC average period
kWh/yr cost cost savings Net cost No impact Net benefit years
2012$ (percent) (percent) (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
1.................................. 1,141 2,490 240 4,348 ........... 0 100 0 ...........
2.................................. 1,141 2,490 240 4,348 ........... 0 100 0 ...........
3.................................. 1,141 2,490 240 4,348 ........... 0 100 0 ...........
4.................................. 1,141 2,490 240 4,348 ........... 0 100 0 ...........
5.................................. 849 3,553 264 5,587 -1,240 61 39 0 23.8
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Percentages may not add up to 100 percent due to rounding.
[[Page 17790]]
Table V.27--Summary LCC and PBP Results for HCS.SC.M Equipment Class *
--------------------------------------------------------------------------------------------------------------------------------------------------------
Life-cycle cost, all customers 2012$ Life-cycle cost savings
-------------------------------------------------------------------------------------------
Annual Affected % of Customers that experience ** Median
TSL energy Discounted customers' --------------------------------------- payback
consumption Installed operating LCC average period
kWh/yr cost cost savings Net cost No impact Net benefit years
2012$ (percent) (percent) (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
1.................................. 518 1,986 146 3,100 12 0 9 91 2.9
2.................................. 495 1,993 145 3,095 17 1 9 90 3.7
3.................................. 466 2,008 143 3,097 15 10 9 80 5.5
4.................................. 461 2,014 144 3,107 5 42 9 48 7.5
5.................................. 358 2,488 157 3,679 -568 91 9 0 680.6
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Percentages may not add up to 100 percent due to rounding.
Table V.28--Summary LCC and PBP Results for HCS.SC.L Equipment Class *
--------------------------------------------------------------------------------------------------------------------------------------------------------
Life-cycle cost, all customers 2012$ Life-cycle cost savings
-------------------------------------------------------------------------------------------
Annual Affected % of Customers that experience ** Median
TSL energy Discounted customers' --------------------------------------- payback
consumption Installed operating LCC average period
kWh/yr cost cost savings Net cost No impact Net benefit years
2012$ (percent) (percent) (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
1.................................. 650 2,006 160 3,224 31 0 10 90 1.4
2.................................. 609 2,013 156 3,205 50 0 10 90 1.7
3.................................. 558 2,028 153 3,191 64 0 10 90 2.5
4.................................. 472 2,093 148 3,222 33 20 10 70 6.2
5.................................. 260 2,663 156 3,845 -590 90 10 0 68.9
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Percentages may not add up to 100 percent due to rounding.
Table V.29--Summary LCC and PBP Results for PD.SC.M Equipment Class *
--------------------------------------------------------------------------------------------------------------------------------------------------------
Life-cycle cost, all customers 2012$ Life-cycle cost savings
-------------------------------------------------------------------------------------------
Annual Affected % of Customers that experience ** Median
TSL energy Discounted customers' --------------------------------------- payback
consumption Installed operating LCC average period
kWh/yr cost cost savings Net cost No impact Net benefit years
2012$ (percent) (percent) (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
1.................................. 1,726 3,502 342 6,732 8 28 39 33 9.3
2.................................. 1,422 3,654 310 6,574 163 3 0 97 5.3
3.................................. 1,381 3,677 308 6,572 165 5 0 95 5.6
4.................................. 1,369 3,691 308 6,587 150 8 0 92 6.0
5.................................. 1,243 4,808 340 7,989 -1,252 100 0 0 102.2
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Percentages may not add up to 100 percent due to rounding.
b. Customer Subgroup Analysis
As described in section IV.I, DOE estimated the impact of potential
amended efficiency standards for commercial refrigeration equipment on
two representative customer subgroups: full-service restaurants and
convenience stores with gas stations.
The results for full-service restaurants 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 subgroup
with the values for all CRE customers. For all TSLs in all equipment
classes save one, the LCC savings for this subgroup are higher (or less
negative) than the national average values. This can be attributed to
the longer average lifetimes of CRE used by small business customers,
and higher electricity prices in the case of full service restaurants.
Table V.31 compares median PBPs for full-service restaurants with
the values for all CRE customers. The PBP values are lower for the
small business subgroup in all cases save one, which is consistent with
the decrease in LCC savings.
Table V.30--Comparison of Mean LCC Savings for the Full-Service Restaurants Subgroup With the Savings for All
CRE Customers
----------------------------------------------------------------------------------------------------------------
Mean LCC savings 2012$ *
Equipment class Category ------------------------------------------------------
TSL 1 TSL 2 TSL 3 TSL 4 TSL 5
----------------------------------------------------------------------------------------------------------------
VOP.SC.M.......................... Small Business....... ......... ......... ......... $(57) $(1,508)
[[Page 17791]]
All Business Types... ......... ......... ......... $(54) $(1,384)
VCT.SC.M.......................... Small Business....... $0 $299 $330 $280 $(1,391)
All Business Types... $(10) $214 $226 $163 $(1,541)
VCT.SC.L.......................... Small Business....... $3,073 $5,868 $6,254 $4,163 $4,163
All Business Types... $2,503 $4,709 $5,001 $2,812 $2,812
VCT.SC.I.......................... Small Business....... $34 $34 $34 $(12) $(2,706)
All Business Types... $18 $18 $18 $(68) $(2,834)
VCS.SC.M.......................... Small Business....... $375 $870 $652 $632 $(1,031)
All Business Types... $223 $518 $363 $305 $(1,428)
VCS.SC.L.......................... Small Business....... $979 $971 $999 $1,000 $(936)
All Business Types... $588 $550 $507 $495 $(1,640)
VCS.SC.I.......................... Small Business....... $81 $257 $321 $321 $(2,241)
All Business Types... $41 $114 $113 $113 $(2,710)
SOC.SC.M.......................... Small Business....... ......... ......... ......... $(74) $(1,952)
All Business Types... ......... ......... ......... $(209) $(2,204)
SVO.SC.M.......................... Small Business....... ......... ......... ......... $53 $(871)
All Business Types... ......... ......... ......... $6 $(917)
HZO.SC.M.......................... Small Business....... ......... $92 $92 $33 $(1,097)
All Business Types... ......... $55 $55 $(4) $(1,154)
HZO.SC.L.......................... Small Business....... ......... ......... ......... ......... .........
All Business Types... ......... ......... ......... ......... .........
HCT.SC.M.......................... Small Business....... $81 $216 $137 $85 $(546)
All Business Types... $66 $165 $101 $43 $(599)
HCT.SC.L.......................... Small Business....... $687 $707 $487 $468 $(319)
All Business Types... $428 $435 $293 $248 $(613)
HCT.SC.I.......................... Small Business....... ......... ......... ......... ......... $(1,081)
All Business Types... ......... ......... ......... ......... $(1,240)
HCS.SC.M.......................... Small Business....... $23 $38 $48 $38 $(477)
All Business Types... $12 $17 $15 $5 $(568)
HCS.SC.L.......................... Small Business....... $55 $91 $127 $133 $(381)
All Business Types... $31 $50 $64 $33 $(590)
----------------------------------------------------------------------------------------------------------------
Table V.31--Comparison of Median Payback Periods for the Full-Service Restaurants Subgroup With the Values for
All CRE Customers
----------------------------------------------------------------------------------------------------------------
Mean LCC savings 2012$ *
Equipment class Category ------------------------------------------------------
TSL 1 TSL 2 TSL 3 TSL 4 TSL 5
----------------------------------------------------------------------------------------------------------------
VOP.SC.M.......................... Small Business....... ......... ......... ......... 54.1 541.3
All Business Types... ......... ......... ......... 63.1 593.2
VCT.SC.M.......................... Small Business....... 12.9 4.1 4.5 5.9 64.8
All Business Types... 23.4 4.8 5.3 7.0 96.2
VCT.SC.L.......................... Small Business....... 0.4 0.7 0.9 4.0 4.0
All Business Types... 0.5 0.8 1.1 4.7 4.7
VCT.SC.I.......................... Small Business....... 5.8 5.8 5.8 12.4 310.0
All Business Types... 7.2 7.2 7.2 16.2 663.6
VCS.SC.M.......................... Small Business....... 0.4 0.5 1.2 2.1 22.4
All Business Types... 0.5 0.6 1.4 2.6 48.0
VCS.SC.L.......................... Small Business....... 0.5 1.1 2.0 2.2 19.2
All Business Types... 0.6 1.3 2.5 2.7 31.8
VCS.SC.I.......................... Small Business....... 2.1 2.9 3.9 3.9 91.7
All Business Types... 2.6 3.6 5.0 5.0 183.7
SOC.SC.M.......................... Small Business....... ......... ......... ......... 15.5 221.7
All Business Types... ......... ......... ......... 28.7 25.3
SVO.SC.M.......................... Small Business....... ......... ......... ......... 8.9 124.3
All Business Types... ......... ......... ......... 10.9 151.6
HZO.SC.M.......................... Small Business....... ......... 5.7 5.7 9.5 166.7
All Business Types... ......... 6.9 6.9 11.8 194.7
HZO.SC.L.......................... Small Business....... ......... ......... ......... ......... .........
All Business Types... ......... ......... ......... ......... .........
HCT.SC.M.......................... Small Business....... 2.1 4.0 4.7 7.5 33.9
All Business Types... 2.5 4.7 5.8 9.2 46.6
HCT.SC.L.......................... Small Business....... 1.5 1.6 2.0 2.9 14.0
All Business Types... 1.8 2.0 2.5 3.6 19.5
HCT.SC.I.......................... Small Business....... ......... ......... ......... ......... 176.3
[[Page 17792]]
All Business Types... ......... ......... ......... ......... 23.8
HCS.SC.M.......................... Small Business....... 2.3 2.9 4.2 5.4 136.0
All Business Types... 2.9 3.7 5.5 7.5 680.6
HCS.SC.L.......................... Small Business....... 1.1 1.4 2.1 4.7 27.9
All Business Types... 1.4 1.7 2.5 6.2 68.9
PD.SC.M........................... Small Business....... 6.9 4.5 4.7 5.0 63.3
All Business Types... 9.3 5.3 5.6 6.0 102.2
----------------------------------------------------------------------------------------------------------------
Table V.32 presents the comparison of mean LCC savings for
convenience stores with gasoline stations with the national average
values at each TSL. This comparison shows higher (or less negative) LCC
savings for the subgroups in nearly all instances.
Table V.33 presents the comparison of median PBPs for convenience
stores with gasoline stations with national median values at each TSL.
This comparison shows lower PBP for the subgroup in nearly all cases.
Table V.32--Comparison of Mean LCC Savings for Convenience Stores With Gasoline Stations With Savings for All
CRE Customers
----------------------------------------------------------------------------------------------------------------
Mean LCC savings * 2012$
Equipment class Category ------------------------------------------------------
TSL 1 TSL 2 TSL 3 TSL 4 TSL 5
----------------------------------------------------------------------------------------------------------------
VOP.RC.M.......................... Small Business....... ......... ......... $1,334 $299 $(4,003)
All Business Types... ......... ......... $922 $(5) $(4,203)
VOP.RC.L.......................... Small Business....... ......... ......... $82 $2 $(6,703)
All Business Types... ......... ......... $53 $(148) $(6,701)
VOP.SC.M.......................... Small Business....... ......... ......... ......... $(62) $(1,485)
All Business Types... ......... ......... ......... $(54) $(1,384)
VCT.RC.M.......................... Small Business....... ......... ......... $636 $135 $(4,544)
All Business Types... ......... ......... $542 $41 $(4,937)
VCT.RC.L.......................... Small Business....... $751 $751 $634 $213 $(5,486)
All Business Types... $647 $647 $526 $93 $(6,036)
VCT.SC.M.......................... Small Business....... $(8) $214 $229 $169 $(1,479)
All Business Types... $(10) $214 $226 $163 $(1,541)
VCT.SC.L.......................... Small Business....... $2,489 $4,699 $4,988 $2,878 $2,878
All Business Types... $2,503 $4,709 $5,001 $2,812 $2,812
VCT.SC.I.......................... Small Business....... $19 $19 $19 $(59) $(2,732)
All Business Types... $18 $18 $18 $(68) $(2,834)
VCS.SC.M.......................... Small Business....... $299 $696 $511 $476 $(1,157)
All Business Types... $223 $518 $363 $305 $(1,428)
VCS.SC.L.......................... Small Business....... $785 $765 $763 $758 $(1,190)
All Business Types... $588 $550 $507 $495 $(1,640)
VCS.SC.I.......................... Small Business....... $62 $189 $224 $224 $(2,354)
All Business Types... $41 $114 $113 $113 $(2,710)
SVO.RC.M.......................... Small Business....... $966 $966 $966 $340 $(2,148)
All Business Types... $564 $564 $564 $(19) $(2,691)
SVO.SC.M.......................... Small Business....... ......... ......... ......... $5 $(891)
All Business Types... ......... ......... ......... $6 $(917)
SOC.RC.M.......................... Small Business....... ......... ......... ......... $(93) $(2,058)
All Business Types... ......... ......... ......... $(128) $(2,268)
HZO.RC.M **....................... Small Business....... ......... ......... ......... ......... $(2,015)
All Business Types... ......... ......... ......... ......... $(2,180)
HZO.RC.L **....................... Small Business....... ......... ......... ......... ......... $(3,880)
All Business Types... ......... ......... ......... ......... $(4,249)
HZO.SC.M.......................... Small Business....... ......... $55 $55 $(3) $(1,114)
All Business Types... ......... $55 $55 $(4) $(1,154)
HZO.SC.L **....................... Small Business....... ......... ......... ......... ......... .........
All Business Types... ......... ......... ......... ......... .........
HCT.SC.M.......................... Small Business....... $62 $151 $92 $35 $(591)
All Business Types... $66 $165 $101 $43 $(599)
HCT.SC.L.......................... Small Business....... $535 $548 $374 $343 $(451)
All Business Types... $428 $435 $293 $248 $(613)
HCT.SC.I.......................... Small Business....... ......... ......... ......... ......... $(1,106)
All Business Types... ......... ......... ......... ......... $(1,240)
HCS.SC.M.......................... Small Business....... $18 $28 $32 $23 $(498)
All Business Types... $12 $17 $15 $5 $(568)
[[Page 17793]]
HCS.SC.L.......................... Small Business....... $44 $71 $97 $87 $(453)
All Business Types... $31 $50 $64 $33 $(590)
PD.SC.M........................... Small Business....... $14 $186 $190 $177 $(1,159)
All Business Types... $8 $163 $165 $150 $(1,252)
----------------------------------------------------------------------------------------------------------------
Table V.33--Comparison of Median Payback Periods for Convenience Stores With Gasoline Stations With Values for
All CRE Customers
----------------------------------------------------------------------------------------------------------------
Median payback period years
Equipment class Category ------------------------------------------------------
TSL1 TSL2 TSL3 TSL4 TSL5
----------------------------------------------------------------------------------------------------------------
VOP.RC.M.......................... Small Business....... ......... ......... 5.5 9.0 25.1
All Business Types... ......... ......... 5.7 9.9 34.1
VOP.RC.L.......................... Small Business....... ......... ......... 5.8 10.2 195.3
All Business Types... ......... ......... 6.1 11.3 310.0
VOP.SC.M.......................... Small Business....... ......... ......... ......... 69.5 513.9
All Business Types... ......... ......... ......... 63.1 593.2
VCT.RC.M.......................... Small Business....... ......... ......... 1.9 5.8 308.8
All Business Types... ......... ......... 2.1 6.6 364.7
VCT.RC.L.......................... Small Business....... 1.7 1.7 2.5 5.7 171.0
All Business Types... 1.8 1.8 2.7 6.3 194.7
VCT.SC.M.......................... Small Business....... 18.2 4.5 5.0 6.5 82.7
All Business Types... 23.4 4.8 5.3 7.0 96.2
VCT.SC.L.......................... Small Business....... 0.4 0.8 1.0 4.4 4.4
All Business Types... 0.5 0.8 1.1 4.7 4.7
VCT.SC.I.......................... Small Business....... 6.6 6.6 6.6 14.3 531.1
All Business Types... 7.2 7.2 7.2 16.2 663.6
VCS.SC.M.......................... Small Business....... 0.5 0.6 1.3 2.3 26.4
All Business Types... 0.5 0.6 1.4 2.6 48.0
VCS.SC.L.......................... Small Business....... 0.5 1.2 2.2 2.4 22.2
All Business Types... 0.6 1.3 2.5 2.7 31.8
VCS.SC.I.......................... Small Business....... 2.3 3.2 4.3 4.3 118.4
All Business Types... 2.6 3.6 5.0 5.0 183.7
SVO.RC.M.......................... Small Business....... 5.4 5.4 5.4 8.4 20.7
All Business Types... 6.2 6.2 6.2 10.4 29.9
SVO.SC.M.......................... Small Business....... ......... ......... ......... 10.0 150.5
All Business Types... ......... ......... ......... 10.9 151.6
SOC.RC.M.......................... Small Business....... ......... ......... ......... 23.2 656.6
All Business Types... ......... ......... ......... 38.0 114.1
SOC.SC.M.......................... Small Business....... ......... ......... ......... 18.2 265.4
All Business Types... ......... ......... ......... 28.7 25.3
HZO.RC.M.......................... Small Business....... ......... ......... ......... ......... .........
All Business Types... ......... ......... ......... ......... .........
HZO.RC.L.......................... Small Business....... ......... ......... ......... ......... 59.8
All Business Types... ......... ......... ......... ......... 288.9
HZO.SC.M.......................... Small Business....... ......... 6.4 6.4 10.8 174.0
All Business Types... ......... 6.9 6.9 11.8 194.7
HZO.SC.L.......................... Small Business....... ......... ......... ......... ......... .........
All Business Types... ......... ......... ......... ......... .........
HCT.SC.M.......................... Small Business....... 2.3 4.4 5.4 8.5 40.5
All Business Types... 2.5 4.7 5.8 9.2 46.6
HCT.SC.L.......................... Small Business....... 1.7 1.8 2.3 3.3 15.6
All Business Types... 1.8 2.0 2.5 3.6 19.5
HCT.SC.I.......................... Small Business....... ......... ......... ......... ......... 208.9
All Business Types... ......... ......... ......... ......... 23.8
HCS.SC.M.......................... Small Business....... 2.6 3.3 4.7 6.2 151.6
All Business Types... 2.9 3.7 5.5 7.5 680.6
HCS.SC.L.......................... Small Business....... 1.3 1.6 2.3 5.3 33.7
All Business Types... 1.4 1.7 2.5 6.2 68.9
PD.SC.M........................... Small Business....... 8.0 4.9 5.2 5.6 78.9
All Business Types... 9.3 5.3 5.6 6.0 102.2
----------------------------------------------------------------------------------------------------------------
[[Page 17794]]
c. Rebuttable Presumption Payback
As discussed in section IV.F.12, EPCA provides a rebuttable
presumption that a given standard is economically justified if the
increased purchase cost for a product that meets the standard is less
than three times the value of the first-year energy savings resulting
from the standard. However, DOE routinely conducts a full economic
analysis that considers the full range of impacts, including those to
the customer, manufacturer, Nation, and environment, as required under
42 U.S.C. 6295(o)(2)(B)(i) and 42 U.S.C. 6316(e)(1). The results of
this analysis serve as the basis for DOE to evaluate definitively the
economic justification for a potential standard level (thereby
supporting or rebutting the results of any preliminary determination of
economic justification). Therefore, if the rebuttable presumption is
not met, DOE may justify its standard on another basis.
Table V.34 shows the rebuttable payback periods analysis for each
equipment class.
Table V.34--Summary of Results for Commercial Refrigeration Equipment TSLs: Rebuttable Median Payback Period
----------------------------------------------------------------------------------------------------------------
Median Payback Period years
-----------------------------------------------------------------------------------------------------------------
Equipment class TSL 1 TSL 2 TSL 3 TSL 4 TSL 5
----------------------------------------------------------------------------------------------------------------
VOP.RC.M........................ .............. .............. 5.1 7.6 17.3
VOP.RC.L........................ .............. .............. 4.6 7.3 36.2
VOP.SC.M........................ .............. .............. .............. 21.2 127.9
VCT.RC.M........................ .............. .............. 2.5 6.8 56.3
VCT.RC.L........................ 2.2 2.2 3.0 6.6 43.0
VCT.SC.M........................ 4.4 5.4 5.5 6.5 28.1
VCT.SC.L........................ 0.5 0.8 1.1 4.2 4.2
VCT.SC.I........................ 5.0 5.0 5.0 9.5 48.7
VCS.SC.M........................ 0.4 0.6 1.2 2.1 16.5
VCS.SC.L........................ 0.5 1.2 2.1 2.3 13.6
VCS.SC.I........................ 2.3 3.0 3.8 3.8 28.7
SVO.RC.M........................ 5.4 5.4 5.4 7.8 16.5
SVO.SC.M........................ .............. .............. .............. 8.1 35.9
SOC.RC.M........................ .............. .............. .............. 12.4 54.3
SOC.SC.M........................ .............. .............. .............. 10.2 39.8
HZO.RC.M........................ .............. .............. .............. .............. 156.3
HZO.RC.L........................ .............. .............. .............. .............. 79.5
HZO.SC.M........................ .............. 5.6 5.6 8.1 42.9
HZO.SC.L........................ .............. .............. .............. .............. ..............
HCT.SC.M........................ 2.2 4.0 4.4 6.6 20.9
HCT.SC.L........................ 1.7 1.8 2.2 3.0 11.4
HCT.SC.I........................ .............. .............. .............. .............. 40.8
HCS.SC.M........................ 2.5 2.9 4.0 4.5 30.5
HCS.SC.L........................ 1.3 1.6 2.2 4.5 16.7
PD.SC.M......................... 4.9 5.4 5.5 5.7 26.7
----------------------------------------------------------------------------------------------------------------
2. Economic Impacts on Manufacturers
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 final rule 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 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 absolute dollars in
the amended standards case as in the base case. Table V.35 and Table
V.36 show the potential INPV impacts for commercial refrigeration
equipment manufacturers at each TSL: Table V.35 reflects the lower
bound of impacts and Table V.36 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
[[Page 17795]]
case at each TSL in the year before amended standards take effect.
Table V.35--Manufacturer Impact Analysis for Commercial Refrigeration Equipment--Preservation of Gross Margin Percentage Markup Scenario *
--------------------------------------------------------------------------------------------------------------------------------------------------------
Trial standard level
Units Base case ----------------------------------------------------------------
1 2 3 4 5
--------------------------------------------------------------------------------------------------------------------------------------------------------
INPV........................................ 2012$ Millions................ 2,660.0 2,650.1 2,651.3 2,566.1 2,470.6 2,475.6
Change in INPV.............................. 2012$ Millions................ ......... (9.9) (8.7) (93.9) (189.4) (184.4)
(%)........................... ......... (0.37) (0.33) (3.53) (7.12) (6.93)
Product Conversion Costs.................... 2012$ Millions................ ......... 20.6 32.1 125.9 194.2 282.1
Capital Conversion Costs.................... 2012$ Millions................ ......... 3.5 3.6 58.1 160.7 499.7
Total Conversion Costs...................... 2012$ Millions................ ......... 24.1 35.6 184.0 354.9 781.8
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Values in parentheses are negative values.
Table V.36--Manufacturer Impact Analysis for Commercial Refrigeration Equipment--Preservation of Operating Profit Markup Scenario *
--------------------------------------------------------------------------------------------------------------------------------------------------------
Trial standard level
Units Base case ----------------------------------------------------------------
1 2 3 4 5
--------------------------------------------------------------------------------------------------------------------------------------------------------
INPV........................................ 2012$ Millions................ 2,660.0 2,636.1 2,617.1 2,495.0 2,339.1 1,515.2
Change in INPV.............................. 2012$ Millions................ ......... (23.9) (42.9) (165.0) (320.9) (1,144.8)
(%)........................... ......... (0.90) (1.61) (6.20) (12.07) (43.04)
Product Conversion Costs.................... 2012$ Millions................ ......... 20.6 32.1 125.9 194.2 282.1
Capital Conversion Costs.................... 2012$ Millions................ ......... 3.5 3.6 58.1 160.7 499.7
Total Conversion Costs...................... 2012$ Millions................ ......... 24.1 35.6 184.0 354.9 781.8
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Values in parentheses are negative values.
At TSL 1, DOE estimates impacts on INPV for commercial
refrigeration equipment manufacturers to range from -$23.9 million to -
$9.9 million, or a change in INPV of -0 percent to -0.37 percent. At
this potential standard level, industry free cash flow is estimated to
decrease by approximately 4.16 percent to $192.1 million, compared to
the base-case value of $200.4 million in the year before the compliance
date (2016).
The INPV impacts at TSL 1 are relatively minor because DOE
manufacturer production costs do not increase significant. The average
unit price for the industry (calculated by dividing industry revenue by
industry unit shipments) increases 0.8% from $2,892.72 to $2,916.55 in
the standards year. Few capital conversion costs are expected because
DOE anticipates that manufacturers would be able to make simple
component swaps to meet the efficiency levels for each equipment class
at this TSL. However, product conversion costs are required for
industry certifications to incorporate the new components into existing
designs. Industry conversion costs total $24.1 million.
Under the preservation of gross margin percentage markup scenario,
impacts on manufacturers are marginally negative because while
manufacturers can maintain their gross margin percentages, they also
incur conversion costs that offset the higher profits that they gain
from increasing their selling prices to accommodate higher production
costs. However, the effects of these conversion costs are more apparent
in the preservation of operating profit markup scenario because
manufacturers earn the same operating profit at TSL 1 as they do in the
base case. In general, manufacturers stated that the preservation of
operating profit scenario is a more likely representation of the
industry than the preservation of operating profit scenario, especially
as MPCs increase.
At TSL 2, DOE estimates impacts on INPV for commercial
refrigeration equipment manufacturers to range from -$42.9 million to -
$8.7 million, or a change in INPV of -1.61 percent to -0.33 percent. At
this potential standard level, industry free cash flow is estimated to
decrease by approximately 6.04 percent to $188.3 million, compared to
the base-case value of $200.4 million in the year before the compliance
date (2016).
Although DOE continues to expect mild INPV impacts on the industry
at TSL 2, product conversion costs do increase. Nearly 20% of product
in the industry would require some level of component redesign, such as
changes in evaporator coil, condenser coil, or compressor selection,
that would necessitate UL or NSF certification changes. These industry
certification investments push total industry conversion costs to $35.4
million.
At TSL 3, DOE estimates impacts on INPV for commercial
refrigeration equipment manufacturers to range from -$165.0 million to
-$93.9 million, or a change in INPV of -6.20 percent to -3.53 percent.
At this potential standard level, industry free cash flow is estimated
to decrease by approximately 33.64 percent to $133.0 million, compared
to the base-case value of $200.4 million in the year before the
compliance date (2016).
At TSL 3, the expected design options do not dramatically alter
manufacturer per unit production costs. Average unit costs increase by
4.1% to $3,011.93 while industry shipments remain steady. However, DOE
expects higher conversion costs at TSL 3 due to the possible need for
improved insulation for high-volume products, such as VCS.SC.L, which
accounts for approximately 18.3 percent of total shipments, and
VCT.RC.L, which accounts for approximately 4.1 percent. In total, DOE
expects 5 of the 24 equipment classes to require improved insulation
due to higher standards. The need for improved insulation necessitates
redesign efforts for the cabinet as well as interior components.
Furthermore, thicker insulation requires investment in new production
tooling.
[[Page 17796]]
Total industry conversion costs reach $184.0 million.
At TSL 4, DOE estimates impacts on INPV for commercial
refrigeration equipment manufacturers range from -$320.9 million to -
$189.4 million, or a change in INPV of -12.7 percent to -7.12 percent.
At this potential standard level, industry free cash flow is estimated
to decrease by approximately 67.84 percent to $64.4 million, compared
to the base-case value of $200.4 million in the year before the
compliance date (2016).
The drop in INPV at TSL 4 is driven by conversion costs. Industry
average unit price increases 7.6% and industry shipments are modeled to
remain steady. However, the need for new tooling to accommodate
additional foam insulation in 16 of the 25 analyzed equipment classes
pushes up industry conversion costs. The redesign effort, coupled with
industry certification costs, push product conversion costs up to
$194.2 million. Total industry conversion costs are expected to reach
$354.9 million.
At TSL 5, DOE estimates impacts on INPV for commercial
refrigeration equipment manufacturers to range from -$1,144.85 million
to -$184.4 million, or a change in INPV of -43.04 percent to -6.93
percent. At this potential standard level, industry free cash flow is
estimated to decrease by approximately 158.32 percent to -$116.9
million, compared to the base-case value of $200.4 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 VIP technology. VIPs are not currently
used by any commercial refrigeration equipment manufacturers and the
production of VIPs would require processes different from those used to
produce standard foam panels. High R&D investments would be necessary
to integrate the technology into CRE cases. Based on industry feedback,
DOE estimated the R&D investment to be 1-2 times the industry's typical
annual R&D expenditure and the capital conversion cost to be more than
double the cost of all current fixtures in use. Total industry
conversion costs total $781.8 million.
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 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.37--Potential Changes in the Number of Commercial Refrigeration Equipment Production Workers in 2017
--------------------------------------------------------------------------------------------------------------------------------------------------------
Trial Standard Level *
-----------------------------------------------------------------------------------------------------------------------
Base Case 1 2 3 4 5
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total Number of Domestic 7,779 7,779.............. 7,779.............. 7,779.............. 7,780.............. 8,220
Production Workers in 2017
(assuming no changes in
production locations).
Range of Potential Changes in -- (7,7790) to 0...... (7,740) to 0....... (7,779) to 0....... (7,779) to 1....... (7,779) to 441.
Domestic Production Workers in
2017 **.
--------------------------------------------------------------------------------------------------------------------------------------------------------
* 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.37 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 are 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 foamed-in-place cases would
essentially remain the same, and therefore require no additional labor
[[Page 17797]]
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 vacuum insulation panels may lead to
greater labor requirements. In general, the production and handling of
VIPs will require more labor than the production of standard
refrigerated cases. This is due to the delicate nature of VIPs and the
additional labor necessary to embed them into a display case. The
additional labor and handling associated with these 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. An
amended energy conservation standard for commercial refrigeration
equipment would not change the fundamental assembly of the equipment,
but manufacturers do anticipate potential for changes to tooling and
fixtures. The most significant of these would come as a result of any
redesigns performed to accommodate additional foam insulation
thickness. However, most of the design options being evaluated are
already available on the market as product options. Thus, DOE believes
manufacturers would be 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.J, 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
document and chapter 12 of the final rule 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 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.
For the cumulative regulatory burden analysis, DOE looks at other
regulations that could affect CRE manufacturers that will take effect
approximately three years before or after the 2017 compliance date of
amended energy conservation standards for these products. In
interviews, manufacturers cited Federal regulations on certification,
on walk-in cooler and freezer equipment, and from ENERGY STAR as
contributing to their cumulative regulatory burden. The compliance
years and expected industry conversion costs are listed below:
Walk-In Cooler and Freezer Energy Conservation Standard Rulemaking
Nine commercial refrigeration equipment manufacturers also produce
walk-ins, and therefore they must comply with two rulemakings that
follow similar timelines. These manufacturers will incur conversion
costs for both types of products at around the same time, which could
be a significant strain on resources. In the 2013 NOPR for walk-ins,
the proposed standard was estimated to require conversion costs of $71
million (in 2012$) to be incurred by the industry ahead of the 2017
compliance date. 78 FR 55781. However, the analysis is not final and
these figures are subject to change in the forthcoming final rule for
walk-in coolers and freezers. DOE discusses these and other
requirements, and includes the full details of the cumulative
regulatory burden, in chapter 12 of the final rule TSD.
Certification, Compliance, and Enforcement Rule
Many manufacturers have expressed concerns about the Certification,
Compliance, and Enforcement (CC&E) March 2011 final rule, which allows
DOE to enforce the energy and water conservation standards for covered
products and equipment, and provides for more accurate, comprehensive
information about the energy and water use characteristics of products
sold in the United States. The rule revises former certification
regulations so that the Department has the information it needs to
ensure that regulated products sold in the United States comply with
the law. According to the rule, manufacturers of covered consumer
products and commercial and industrial equipment must certify on an
annual basis, by means of a compliance statement and a certification
report, that each of their basic models meets its applicable energy
conservation, water conservation, and/or design standard before it is
distributed within the United States. For purposes of certification
testing, the determination that a basic model complies with the
applicable conservation standard must be based on sampling procedures,
which currently require that a minimum of two units of a basic model
must be tested in order to certify that the model is compliant (unless
the product-specific regulations specify otherwise). 76 FR 12422 (March
7, 2011).
However, DOE recognizes that sampling requirements can create
burden for certain commercial refrigeration equipment manufacturers who
build one-of-a kind customized units and have a large number of basic
models. Therefore, DOE conducted a rulemaking to expand AEDM coverage
and issued a final rule on December 31, 2013. (78 FR 79579) An AEDM is
a computer modeling or mathematical tool that predicts the performance
of non-tested basic models. In the final rule, DOE is allowing CRE
manufacturers to rate their basic models using AEDMs, reducing the need
for sample units and reducing burden on manufacturers. More information
can be found at https://www1.eere.energy.gov/buildings/appliance_standards/implement_cert_and_enforce.html. DOE
[[Page 17798]]
discusses these and other requirements, and includes the full details
of the cumulative regulatory burden, in chapter 12 of the final rule
TSD.
EPA's ENERGY STAR
Some stakeholders have also expressed concern regarding potential
conflicts with other certification programs, in particular EPA's ENERGY
STAR requirements. However, DOE notes that certain standards, such as
ENERGY STAR, are voluntary for manufacturers. As such, they are not
part of DOE's consideration of cumulative regulatory burden.
DOE discusses these and other non-Federal regulations in chapter 12
of the NOPR TSD.
3. National Impact Analysis
a. 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 over the lifetime of all equipment purchased in 2017-
2046.
Table V.38 presents the primary NES (taking into account losses in
the generation and transmission of electricity) for all equipment
classes and the sum total of NES for each TSL, and
Table V.39 presents estimated FFC energy savings for each
considered TSL. The total FFC NES progressively increases from 1.195
quads at TSL 1 to 4.207 quads at TSL 5.
Table V.38--Cumulative National Primary Energy Savings for Equipment Purchased in 2017-2046
----------------------------------------------------------------------------------------------------------------
Quads
Equipment class -------------------------------------------------------------------------------
TSL 1 TSL 2 TSL 3 TSL 4 TSL 5
----------------------------------------------------------------------------------------------------------------
VOP.RC.M........................ 0.000 0.000 0.403 0.550 0.584
VOP.RC.L........................ 0.000 0.000 0.001 0.011 0.017
VOP.SC.M........................ 0.000 0.000 0.000 0.002 0.007
VCT.RC.M........................ 0.000 0.000 0.006 0.008 0.010
VCT.RC.L........................ 0.096 0.096 0.130 0.150 0.259
VCT.SC.M........................ 0.010 0.060 0.093 0.110 0.139
VCT.SC.L........................ 0.018 0.041 0.045 0.050 0.050
VCT.SC.I........................ 0.001 0.001 0.001 0.003 0.008
VCS.SC.M........................ 0.309 0.687 0.794 0.870 1.080
VCS.SC.L........................ 0.450 0.631 0.808 0.839 1.121
VCS.SC.I........................ 0.000 0.001 0.002 0.002 0.005
SVO.RC.M........................ 0.229 0.229 0.229 0.316 0.335
SVO.SC.M........................ 0.000 0.000 0.000 0.010 0.016
SOC.RC.M........................ 0.000 0.000 0.000 0.004 0.016
SOC.SC.M........................ 0.000 0.000 0.000 0.001 0.002
HZO.RC.M........................ 0.000 0.000 0.000 0.000 0.002
HZO.RC.L........................ 0.000 0.000 0.000 0.000 0.023
HZO.SC.M........................ 0.000 0.001 0.001 0.001 0.002
HZO.SC.L........................ 0.000 0.000 0.000 0.000 0.000
HCT.SC.M........................ 0.000 0.001 0.001 0.002 0.002
HCT.SC.L........................ 0.011 0.012 0.012 0.013 0.016
HCT.SC.I........................ 0.000 0.000 0.000 0.000 0.005
HCS.SC.M........................ 0.004 0.008 0.013 0.013 0.030
HCS.SC.L........................ 0.001 0.002 0.003 0.005 0.010
PD.SC.M......................... 0.046 0.271 0.301 0.310 0.403
-------------------------------------------------------------------------------
Total....................... 1.176 2.041 2.844 3.270 4.140
----------------------------------------------------------------------------------------------------------------
Table V.39--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........................ 0.000 0.000 0.410 0.559 0.593
VOP.RC.L........................ 0.000 0.000 0.001 0.011 0.018
VOP.SC.M........................ 0.000 0.000 0.000 0.002 0.007
VCT.RC.M........................ 0.000 0.000 0.006 0.008 0.010
VCT.RC.L........................ 0.098 0.098 0.132 0.153 0.263
VCT.SC.M........................ 0.010 0.061 0.094 0.112 0.141
VCT.SC.L........................ 0.018 0.042 0.046 0.050 0.050
VCT.SC.I........................ 0.001 0.001 0.001 0.003 0.008
VCS.SC.M........................ 0.314 0.699 0.807 0.884 1.097
VCS.SC.L........................ 0.458 0.641 0.821 0.852 1.139
VCS.SC.I........................ 0.000 0.001 0.002 0.002 0.005
SVO.RC.M........................ 0.233 0.233 0.233 0.321 0.340
SVO.SC.M........................ 0.000 0.000 0.000 0.010 0.016
SOC.RC.M........................ 0.000 0.000 0.000 0.004 0.016
SOC.SC.M........................ 0.000 0.000 0.000 0.001 0.002
HZO.RC.M........................ 0.000 0.000 0.000 0.000 0.002
HZO.RC.L........................ 0.000 0.000 0.000 0.000 0.023
HZO.SC.M........................ 0.000 0.001 0.001 0.001 0.002
HZO.SC.L........................ 0.000 0.000 0.000 0.000 0.000
HCT.SC.M........................ 0.000 0.001 0.001 0.002 0.002
[[Page 17799]]
HCT.SC.L........................ 0.011 0.012 0.012 0.013 0.016
HCT.SC.I........................ 0.000 0.000 0.000 0.000 0.005
HCS.SC.M........................ 0.004 0.008 0.013 0.014 0.030
HCS.SC.L........................ 0.001 0.002 0.003 0.005 0.010
PD.SC.M......................... 0.047 0.275 0.306 0.315 0.410
-------------------------------------------------------------------------------
Total....................... 1.195 2.074 2.889 3.323 4.207
----------------------------------------------------------------------------------------------------------------
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.\76\
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.40 and Table V.41, respectively. The impacts are
counted over the lifetime of products purchased in 2017-2025.
---------------------------------------------------------------------------
\76\ 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 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 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.
Table V.40--Cumulative National Primary 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........................ 0.000 0.000 0.099 0.134 0.143
VOP.RC.L........................ 0.000 0.000 0.000 0.003 0.004
VOP.SC.M........................ 0.000 0.000 0.000 0.000 0.002
VCT.RC.M........................ 0.000 0.000 0.002 0.002 0.003
VCT.RC.L........................ 0.024 0.024 0.032 0.037 0.063
VCT.SC.M........................ 0.003 0.017 0.025 0.029 0.036
VCT.SC.L........................ 0.005 0.011 0.012 0.013 0.013
VCT.SC.I........................ 0.000 0.000 0.000 0.001 0.002
VCS.SC.M........................ 0.075 0.168 0.198 0.219 0.270
VCS.SC.L........................ 0.110 0.156 0.202 0.209 0.278
VCS.SC.I........................ 0.000 0.000 0.001 0.001 0.001
SVO.RC.M........................ 0.056 0.056 0.056 0.077 0.082
SVO.SC.M........................ 0.000 0.000 0.000 0.002 0.004
SOC.RC.M........................ 0.000 0.000 0.000 0.001 0.004
SOC.SC.M........................ 0.000 0.000 0.000 0.000 0.001
HZO.RC.M........................ 0.000 0.000 0.000 0.000 0.000
HZO.RC.L........................ 0.000 0.000 0.000 0.000 0.006
HZO.SC.M........................ 0.000 0.000 0.000 0.000 0.000
HZO.SC.L........................ 0.000 0.000 0.000 0.000 0.000
HCT.SC.M........................ 0.000 0.000 0.000 0.000 0.001
HCT.SC.L........................ 0.003 0.003 0.003 0.003 0.004
HCT.SC.I........................ 0.000 0.000 0.000 0.000 0.001
HCS.SC.M........................ 0.001 0.002 0.003 0.004 0.008
HCS.SC.L........................ 0.000 0.001 0.001 0.001 0.003
PD.SC.M......................... 0.011 0.066 0.074 0.076 0.099
-------------------------------------------------------------------------------
Total....................... 0.289 0.504 0.707 0.814 1.027
----------------------------------------------------------------------------------------------------------------
[[Page 17800]]
Table V.41--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........................ 0.000 0.000 0.100 0.137 0.145
VOP.RC.L........................ 0.000 0.000 0.000 0.003 0.004
VOP.SC.M........................ 0.000 0.000 0.000 0.000 0.002
VCT.RC.M........................ 0.000 0.000 0.002 0.002 0.003
VCT.RC.L........................ 0.024 0.024 0.032 0.037 0.064
VCT.SC.M........................ 0.003 0.017 0.025 0.029 0.037
VCT.SC.L........................ 0.005 0.012 0.013 0.014 0.014
VCT.SC.I........................ 0.000 0.000 0.000 0.001 0.002
VCS.SC.M........................ 0.077 0.171 0.201 0.222 0.275
VCS.SC.L........................ 0.112 0.158 0.205 0.213 0.283
VCS.SC.I........................ 0.000 0.000 0.001 0.001 0.001
SVO.RC.M........................ 0.057 0.057 0.057 0.079 0.083
SVO.SC.M........................ 0.000 0.000 0.000 0.002 0.004
SOC.RC.M........................ 0.000 0.000 0.000 0.001 0.004
SOC.SC.M........................ 0.000 0.000 0.000 0.000 0.001
HZO.RC.M........................ 0.000 0.000 0.000 0.000 0.000
HZO.RC.L........................ 0.000 0.000 0.000 0.000 0.006
HZO.SC.M........................ 0.000 0.000 0.000 0.000 0.000
HZO.SC.L........................ 0.000 0.000 0.000 0.000 0.000
HCT.SC.M........................ 0.000 0.000 0.000 0.000 0.001
HCT.SC.L........................ 0.003 0.003 0.003 0.003 0.004
HCT.SC.I........................ 0.000 0.000 0.000 0.000 0.001
HCS.SC.M........................ 0.001 0.002 0.004 0.004 0.008
HCS.SC.L........................ 0.000 0.001 0.001 0.001 0.003
PD.SC.M......................... 0.011 0.067 0.075 0.077 0.100
-------------------------------------------------------------------------------
Total....................... 0.294 0.513 0.719 0.828 1.045
----------------------------------------------------------------------------------------------------------------
b. Net Present Value of Customer Costs and Benefits
DOE estimated the cumulative NPV to the Nation of the net savings
for CRE 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.
Table V.42 and Table V.43 show the customer NPV results for each of
the TSLs DOE considered for commercial refrigeration equipment at 7-
percent and 3-percent discount rates, respectively. The impacts cover
the expected lifetime of equipment purchased in 2017-2046.
The NPV results at a 7-percent discount rate are negative for all
equipment classes at TSL 5 except for the VCT.SC.L equipment class.
Efficiency levels for TSL 4 were chosen to correspond to the highest
efficiency level with a near positive NPV at a 7-percent discount rate
for each equipment class. The criterion for TSL 3 was to select
efficiency levels with the highest NPV at a 7-percent discount rate.
Consequently, the total NPV is highest for TSL 3. TSL 2 shows the
second highest total NPV at a 7-percent discount rate. TSL 1 has a
total NPV lower than TSL 2.
Table V.42-- Net Present Value of Customer Costs and Benefits at a 7-Percent Discount Rate
----------------------------------------------------------------------------------------------------------------
billion 2012$ *
Equipment class -------------------------------------------------------------------------------
TSL 1 TSL 2 TSL 3 TSL 4 TSL 5
----------------------------------------------------------------------------------------------------------------
VOP.RC.M........................ 0.000 0.000 0.570 0.171 -2.941
VOP.RC.L........................ 0.000 0.000 0.001 -0.004 -0.240
VOP.SC.M........................ 0.000 0.000 0.000 -0.009 -0.374
VCT.RC.M........................ 0.000 0.000 0.013 -0.003 -0.271
VCT.RC.L........................ 0.212 0.212 0.234 -0.005 -4.423
VCT.SC.M........................ -0.006 0.039 0.058 -0.003 -1.531
VCT.SC.L........................ 0.059 0.118 0.123 0.040 0.040
VCT.SC.I........................ 0.000 0.000 0.000 -0.004 -0.141
VCS.SC.M........................ 0.756 1.748 1.829 1.659 -6.820
VCS.SC.L........................ 1.164 1.502 1.579 1.550 -4.692
VCS.SC.I........................ 0.001 0.002 0.003 0.003 -0.050
SVO.RC.M........................ 0.291 0.291 0.291 0.081 -1.493
SVO.SC.M........................ 0.000 0.000 0.000 -0.003 -0.215
SOC.RC.M........................ 0.000 0.000 0.000 -0.011 -0.342
SOC.SC.M........................ 0.000 0.000 0.000 -0.003 -0.032
HZO.RC.M........................ 0.000 0.000 0.000 0.000 -0.123
HZO.RC.L........................ 0.000 0.000 0.000 0.000 -0.734
HZO.SC.M........................ 0.000 0.000 0.000 0.000 -0.025
HZO.SC.L........................ 0.000 0.000 0.000 0.000 0.000
[[Page 17801]]
HCT.SC.M........................ 0.001 0.002 0.002 0.000 -0.014
HCT.SC.L........................ 0.024 0.024 0.025 0.022 -0.030
HCT.SC.I........................ 0.000 0.000 0.000 0.000 -0.076
HCS.SC.M........................ 0.008 0.012 0.012 0.007 -0.342
HCS.SC.L........................ 0.003 0.005 0.006 0.004 -0.047
PD.SC.M......................... 0.007 0.183 0.183 0.146 -3.475
-------------------------------------------------------------------------------
Total....................... 2.519 4.139 4.928 3.637 -28.390
----------------------------------------------------------------------------------------------------------------
* A value of $0.000 means NES values are less than 0.001 billion 2012$.
Table V.43-- Net Present Value of Customer Costs and Benefits at a 3-Percent Discount Rate
----------------------------------------------------------------------------------------------------------------
billion 2012$ *
Equipment class -------------------------------------------------------------------------------
TSL 1 TSL 2 TSL 3 TSL 4 TSL 5
----------------------------------------------------------------------------------------------------------------
VOP.RC.M........................ 0.000 0.000 1.500 0.882 -4.894
VOP.RC.L........................ 0.000 0.000 0.004 0.003 -0.433
VOP.SC.M........................ 0.000 0.000 0.000 -0.016 -0.683
VCT.RC.M........................ 0.000 0.000 0.029 0.001 -0.496
VCT.RC.L........................ 0.481 0.481 0.551 0.125 -8.007
VCT.SC.M........................ -0.006 0.119 0.185 0.086 -2.712
VCT.SC.L........................ 0.124 0.252 0.265 0.116 0.116
VCT.SC.I........................ 0.001 0.001 0.001 -0.005 -0.254
VCS.SC.M........................ 1.656 3.838 4.074 3.825 -11.832
VCS.SC.L........................ 2.551 3.333 3.626 3.592 -7.824
VCS.SC.I........................ 0.001 0.005 0.007 0.007 -0.090
SVO.RC.M........................ 0.790 0.790 0.790 0.476 -2.443
SVO.SC.M........................ 0.000 0.000 0.000 0.003 -0.383
SOC.RC.M........................ 0.000 0.000 0.000 -0.018 -0.625
SOC.SC.M........................ 0.000 0.000 0.000 -0.004 -0.058
HZO.RC.M........................ 0.000 0.000 0.000 0.000 -0.227
HZO.RC.L........................ 0.000 0.000 0.000 0.000 -1.350
HZO.SC.M........................ 0.000 0.001 0.001 0.000 -0.044
HZO.SC.L........................ 0.000 0.000 0.000 0.000 0.000
HCT.SC.M........................ 0.002 0.004 0.004 0.002 -0.024
HCT.SC.L........................ 0.054 0.056 0.057 0.053 -0.039
HCT.SC.I........................ 0.000 0.000 0.000 0.000 -0.137
HCS.SC.M........................ 0.019 0.029 0.033 0.022 -0.594
HCS.SC.L........................ 0.006 0.010 0.014 0.012 -0.076
PD.SC.M......................... 0.046 0.577 0.602 0.537 -6.090
-------------------------------------------------------------------------------
Total....................... 5.727 9.497 11.742 9.698 -49.199
----------------------------------------------------------------------------------------------------------------
* 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.44 and Table V.45. The impacts are counted
over the lifetime of equipment 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.44--Net Present Value of Customer Costs and Benefits 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........................ 0.000 0.000 0.237 0.036 -1.454
VOP.RC.L........................ 0.000 0.000 0.000 -0.002 -0.116
VOP.SC.M........................ 0.000 0.000 0.000 -0.005 -0.179
VCT.RC.M........................ 0.000 0.000 0.006 -0.002 -0.130
VCT.RC.L........................ 0.099 0.099 0.107 -0.009 -2.130
VCT.SC.M........................ -0.004 0.020 0.027 -0.003 -0.736
VCT.SC.L........................ 0.029 0.059 0.061 0.021 0.021
VCT.SC.I........................ 0.000 0.000 0.000 -0.002 -0.068
[[Page 17802]]
VCS.SC.M........................ 0.342 0.792 0.827 0.732 -3.338
VCS.SC.L........................ 0.528 0.681 0.709 0.693 -2.311
VCS.SC.I........................ 0.000 0.001 0.001 0.001 -0.024
SVO.RC.M........................ 0.118 0.118 0.118 0.012 -0.742
SVO.SC.M........................ 0.000 0.000 0.000 -0.002 -0.104
SOC.RC.M........................ 0.000 0.000 0.000 -0.006 -0.165
SOC.SC.M........................ 0.000 0.000 0.000 -0.001 -0.015
HZO.RC.M........................ 0.000 0.000 0.000 0.000 -0.059
HZO.RC.L........................ 0.000 0.000 0.000 0.000 -0.353
HZO.SC.M........................ 0.000 0.000 0.000 0.000 -0.012
HZO.SC.L........................ 0.000 0.000 0.000 0.000 0.000
HCT.SC.M........................ 0.000 0.001 0.001 0.000 -0.007
HCT.SC.L........................ 0.011 0.011 0.011 0.010 -0.018
HCT.SC.I........................ 0.000 0.000 0.000 0.000 -0.037
HCS.SC.M........................ 0.004 0.006 0.006 0.003 -0.182
HCS.SC.L........................ 0.001 0.002 0.003 0.002 -0.025
PD.SC.M......................... 0.000 0.079 0.077 0.059 -1.680
-------------------------------------------------------------------------------
Total....................... 1.129 1.869 2.191 1.536 -13.863
----------------------------------------------------------------------------------------------------------------
* 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 of Customer Costs and Benefits at a 3-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........................ 0.000 0.000 0.446 0.208 -1.814
VOP.RC.L........................ 0.000 0.000 0.001 -0.001 -0.154
VOP.SC.M........................ 0.000 0.000 0.000 -0.006 -0.240
VCT.RC.M........................ 0.000 0.000 0.010 0.000 -0.174
VCT.RC.L........................ 0.160 0.160 0.179 0.027 -2.829
VCT.SC.M........................ -0.004 0.044 0.062 0.025 -0.957
VCT.SC.L........................ 0.045 0.092 0.096 0.043 0.043
VCT.SC.I........................ 0.000 0.000 0.000 -0.002 -0.090
VCS.SC.M........................ 0.533 1.239 1.314 1.204 -4.295
VCS.SC.L........................ 0.824 1.078 1.160 1.143 -2.885
VCS.SC.I........................ 0.000 0.001 0.002 0.002 -0.032
SVO.RC.M........................ 0.231 0.231 0.231 0.108 -0.914
SVO.SC.M........................ 0.000 0.000 0.000 0.000 -0.136
SOC.RC.M........................ 0.000 0.000 0.000 -0.007 -0.221
SOC.SC.M........................ 0.000 0.000 0.000 -0.002 -0.021
HZO.RC.M........................ 0.000 0.000 0.000 0.000 -0.080
HZO.RC.L........................ 0.000 0.000 0.000 0.000 -0.475
HZO.SC.M........................ 0.000 0.000 0.000 0.000 -0.016
HZO.SC.L........................ 0.000 0.000 0.000 0.000 0.000
HCT.SC.M........................ 0.001 0.001 0.001 0.000 -0.009
HCT.SC.L........................ 0.017 0.018 0.018 0.016 -0.020
HCT.SC.I........................ 0.000 0.000 0.000 0.000 -0.049
HCS.SC.M........................ 0.007 0.010 0.011 0.007 -0.237
HCS.SC.L........................ 0.002 0.004 0.005 0.004 -0.031
PD.SC.M......................... 0.009 0.178 0.182 0.158 -2.171
-------------------------------------------------------------------------------
Total....................... 1.826 3.056 3.719 2.929 -17.805
----------------------------------------------------------------------------------------------------------------
* A value of $0.000 means NES values are less than 0.001 billion 2012$. Values in parentheses are negative
values.
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 amended 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
[[Page 17803]]
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.J of
this document; see chapter 16 of the final rule TSD for more details).
Customers who purchase more-efficient equipment pay lower amounts
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 re-invested in economic sectors that create more
jobs than are lost in the electric utilities sector. Thus, the amended
energy conservation standards for commercial refrigeration equipment
are likely to slightly increase the net demand for labor in the
economy. As shown in chapter 16 of the final rule TSD, DOE estimates
that net indirect employment impacts from commercial refrigeration
equipment amended standards are very small relative to the national
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.
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
final rule TSD), DOE eliminates from consideration any design options
that reduce the utility of the equipment. For today's final rule, DOE
concluded that none of the efficiency levels considered 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 that is
likely to result from standards. It also directs the Attorney General
of the United States (Attorney General) to determine the impact, if
any, of any lessening of competition likely to result from a proposed
standard and to transmit such determination to the Secretary within 60
days of the publication of a proposed rule and simultaneously published
proposed rule, together with an analysis of the nature and extent of
the impact. (42 U.S.C. 6295(o)(2)(B)(i)(V) and (B)(ii)) To assist the
Attorney General in making a determination for CRE standards, DOE
provided the Department of Justice (DOJ) with copies of the NOPR and
the TSD for review. DOE received no adverse comments from DOJ regarding
the proposal.
6. Need of the Nation To Conserve Energy
An improvement in the energy efficiency of the equipment subject to
today's final rule 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 final rule
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 production. Table V.46 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. DOE reports annual emissions reductions for
each TSL in chapter 13 of the final rule TSD.
Table V.46--Cumulative Emissions Reduction Estimated for Commercial Refrigeration Equipment TSLs for Equipment
Purchased in 2017-2046
----------------------------------------------------------------------------------------------------------------
TSL
-------------------------------------------------------------------------------
1 2 3 4 5
----------------------------------------------------------------------------------------------------------------
Power Sector Emissions
----------------------------------------------------------------------------------------------------------------
CO[ihel2] (million metric tons). 54.9 95.4 133.0 152.9 193.6
SO[ihel2] (thousand tons)....... 84.9 147.4 205.5 236.3 299.1
NOX (thousand tons)............. -11.4 -19.9 -28.1 -32.3 -40.7
Hg (tons)....................... 0.10 0.17 0.24 0.28 0.35
N[ihel2]O (thousand tons)....... 1.3 2.3 3.2 3.7 4.7
CH4 (thousand tons)............. 7.7 13.3 18.6 21.4 27.1
----------------------------------------------------------------------------------------------------------------
Upstream Emissions
----------------------------------------------------------------------------------------------------------------
CO[ihel2] (million metric tons). 3.7 6.4 8.9 10.2 13.0
SO[ihel2] (thousand tons)....... 0.8 1.4 1.9 2.2 2.8
NOX (thousand tons)............. 50.6 87.8 122.4 140.7 178.2
Hg (tons)....................... 0.00 0.00 0.00 0.01 0.01
N[ihel2]O (thousand tons)....... 0.0 0.1 0.1 0.1 0.1
CH4 (thousand tons)............. 307.2 533.3 743.1 854.6 1081.9
----------------------------------------------------------------------------------------------------------------
Total Emissions
----------------------------------------------------------------------------------------------------------------
CO[ihel2] (million metric tons). 58.6 101.7 141.9 163.2 206.5
SO[ihel2] (thousand tons)....... 85.7 148.8 207.4 238.5 301.9
NOX (thousand tons)............. 39.2 67.9 94.3 108.4 137.4
Hg (tons)....................... 0.10 0.18 0.25 0.28 0.36
N[ihel2]O (thousand tons)....... 1.4 2.4 3.3 3.8 4.8
[[Page 17804]]
CH4 (thousand tons)............. 314.9 546.6 761.7 875.9 1109.0
----------------------------------------------------------------------------------------------------------------
As part of the analysis for this final rule, DOE estimated monetary
benefits likely to result from the reduced emissions of CO2
and NOX that were estimated for each of the TSLs considered.
As discussed in section IV.L, 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 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 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 four SCC values for CO2
emissions reductions in 2015, expressed in 2012$, are $11.8/ton, $39.7/
ton, $61.2/ton, and $117/ton. The values for later years are higher due
to increasing emissions-related costs as the magnitude of projected
climate change increases.
Table V.47 presents the global value of CO2 emissions
reductions at each TSL. DOE calculated domestic values as a range from
7 percent to 23 percent of the global values, and these results are
presented in chapter 14 of the final rule TSD.
Table V.47--Global Present Value of CO[ihel2] Emissions Reduction for Potential Standards for Commercial
Refrigeration Equipment
----------------------------------------------------------------------------------------------------------------
SCC Scenario
------------------------------------------------------------------------
TSL 3% discount
5% discount 3% discount 2.5% discount rate, 95th
rate, average rate, average rate, average percentile
------------------------------million 2012$------------------------------
----------------------------------------------------------------------------------------------------------------
Power Sector Emissions
----------------------------------------------------------------------------------------------------------------
1..................................... 392 1762 2787 5438
2..................................... 682 3063 4844 9452
3..................................... 952 4274 6758 13187
4..................................... 1095 4916 7773 15167
5..................................... 1385 6220 9836 19192
----------------------------------------------------------------------------------------------------------------
Upstream Emissions
----------------------------------------------------------------------------------------------------------------
1..................................... 25 115 183 356
2..................................... 43 200 317 617
3..................................... 61 278 442 861
4..................................... 70 320 508 990
5..................................... 88 405 643 1253
----------------------------------------------------------------------------------------------------------------
Total Emissions
----------------------------------------------------------------------------------------------------------------
1..................................... 417 1877 2970 5794
2..................................... 725 3263 5161 10070
3..................................... 1012 4552 7200 14047
4..................................... 1164 5236 8281 16157
5..................................... 1473 6625 10479 20444
----------------------------------------------------------------------------------------------------------------
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 final rule 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 final rule 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 final
rule 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. Table V.48 presents the present value of cumulative
NOX emissions reductions for each TSL calculated using the
average dollar-per-ton values and 7-percent and 3-percent discount
rates.
[[Page 17805]]
Table V.48--Present Value of NOX Emissions Reduction for Potential
Standards for Commercial Refrigeration Equipment
------------------------------------------------------------------------
million 2012$
-------------------------------
TSL 3% Discount 7% Discount
rate rate
------------------------------------------------------------------------
Power Sector Emissions
------------------------------------------------------------------------
1....................................... -25.3 -18.9
2....................................... -44.4 -33.2
3....................................... -62.4 -46.6
4....................................... -71.9 -53.7
5....................................... -90.6 -67.7
------------------------------------------------------------------------
Upstream Emissions
------------------------------------------------------------------------
1....................................... 68.7 32.6
2....................................... 119.4 56.7
3....................................... 166.5 79.3
4....................................... 191.5 91.2
5....................................... 242.4 115.3
------------------------------------------------------------------------
Total Emissions
------------------------------------------------------------------------
1....................................... 43.4 13.7
2....................................... 75.0 23.6
3....................................... 104.1 32.6
4....................................... 119.6 37.4
5....................................... 151.8 47.6
------------------------------------------------------------------------
7. Summary of National Economic Impact
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 final rule. Table
V.49 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 customer savings calculated for each TSL, at both a 7-percent
and a 3-percent 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.49--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 37% Discount Rate added with Value of Emissions Based
on:
-----------------------------------------------------------------------
TSL SCC Value of SCC Value of SCC Value of SCC Value of
$11.8/metric ton $39.7/metric ton $61.2/metric ton $117/metric ton
CO2\*\ and CO2\*\ and CO2\*\ and CO2\*\ and
Medium Value for Medium Value for Medium Value for Medium Value for
NOX NOX NOX NOX
-----------------------------------------------------------------------
billion 2012$
----------------------------------------------------------------------------------------------------------------
1....................................... 6.2 7.6 8.7 11.6
2....................................... 10.3 12.8 14.7 19.6
3....................................... 12.9 16.4 19.0 25.9
4....................................... 11.0 15.1 18.1 26.0
5....................................... -47.6 -42.4 -38.6 -28.6
----------------------------------------------------------------------------------------------------------------
Consumer NPV at 7% Discount Rate added with Value of Emissions Based
on:
-----------------------------------------------------------------------
TSL SCC Value of SCC Value of SCC Value of SCC Value of
$11.8/metric ton $39.7/metric ton $61.2/metric ton $117/metric ton
CO2\*\ and CO2\*\ and CO2\*\ and CO2\*\ and
Medium Value for Medium Value for Medium Value for Medium Value for
NOX NOX NOX NOX
-----------------------------------------------------------------------
billion 2012$
----------------------------------------------------------------------------------------------------------------
1....................................... 3.0 4.4 5.5 8.3
2....................................... 4.9 7.4 9.3 14.2
3....................................... 6.0 9.5 12.2 19.0
4....................................... 4.8 8.9 12.0 19.8
5....................................... -26.9 -21.7 -17.9 -7.9
----------------------------------------------------------------------------------------------------------------
* These label values represent the global SCC in 2015, in 2012$. The present values have been calculated with
scenario-consistent discount rates.
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 products shipped in 2017-2046. The SCC
values, on the other hand, reflect the present value of future climate-
related impacts resulting from the emission of one metric ton of
CO2 in each year. These impacts continue well beyond 2100.
8. Other Factors
EPCA allows the Secretary, in determining whether a 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)) DOE
[[Page 17806]]
has not considered other factors in development of the standards in
this final rule.
C. Conclusions
Any new or amended energy conservation standard for any type (or
class) of covered product shall 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 standard is
economically justified, the Secretary must determine whether the
benefits of the standard exceed its burdens to the greatest extent
practicable, considering 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))
For today's rulemaking, 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 economically justified and saves a significant amount of
energy.
To aid the reader in understanding the benefits and/or burdens of
each TSL, tables in this section summarize the quantitative analytical
results for each TSL, based on the assumptions and methodology
discussed herein. The efficiency levels contained in each TSL are
described in section IV.A.1. In addition to the quantitative results
presented in the tables below, DOE also considers other burdens and
benefits that affect economic justification. These include the impacts
on identifiable subgroups of consumers who may be disproportionately
affected by a national standard, and impacts on employment. Section
IV.I presents the estimated impacts of each TSL for the considered
subgroups. DOE discusses the impacts on employment in CRE manufacturing
in section IV.J and discusses the indirect employment impacts in
section IV.N.
1. Benefits and Burdens of Trial Standard Levels Considered for
Commercial Refrigeration Equipment
Table V.50 through Table V.53 summarizes the quantitative impacts
estimated for each TSL for CRE.
Table V.50--Summary of Results for Commercial Refrigeration Equipment TSLs: National Impacts*
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Category TSL 1 TSL 2 TSL 3 TSL 4 TSL 5
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Cumulative National Energy Savings 2017 through 2060
quads
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
1.176......................... 2.041......................... 2.844........................ 3.270........................ 4.140.
With full-fuel cycle............... 1.195......................... 2.074......................... 2.889........................ 3.323........................ 4.207.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Cumulative NPV of Customer Benefits
2012$ billion
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
3% discount rate................... 5.73.......................... 9.50.......................... 11.74........................ 9.70......................... (49.20).
7% discount rate................... 2.52.......................... 4.14.......................... 4.93......................... 3.64......................... (28.39).
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Industry Impacts
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Change in Industry NPV (2012$ (23.9) to (9.9)............... (42.9) to (8.7)............... (165.0) to (93.9)............ (320.9) to (189.4)........... (1,144.8) to (184.4).
million).
Change in Industry NPV (%)......... (0.90) to (0.37).............. (1.61) to (0.33).............. (6.20) to (3.53)............. (12.07) to (7.12)............ (43.04) to (6.93).
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Cumulative Emissions Reductions**
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
CO2 (Mt)........................... 58.6.......................... 101.7......................... 141.9........................ 163.2........................ 206.5.
SO2 (kt)........................... 85.7.......................... 148.8......................... 207.4........................ 238.5........................ 301.9.
NOX (kt)........................... 39.2.......................... 67.9.......................... 94.3......................... 108.4........................ 137.4.
Hg (t)............................. 0.10.......................... 0.18.......................... 0.25......................... 0.28......................... 0.36.
N2O (kt)........................... 1.4........................... 2.4........................... 3.3.......................... 3.8.......................... 4.8.
N2O (kt CO2eq)..................... 408.8......................... 709.4......................... 988.1........................ 1136.2....................... 1438.8.
CH4 (kt)........................... 314.9......................... 546.6......................... 761.7........................ 875.9........................ 1109.0.
CH4 (kt CO2eq)..................... 7872.6........................ 13665.9....................... 19043.5...................... 21898.5...................... 27724.7.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Monetary Value of Cumulative Emissions Reductions
2012$ million[dagger]
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
CO2................................ 417 to 5794................... 725 to 10070.................. 1012 to 14047................ 1164 to 16157................ 1473 to 20444.
NOX--3% discount rate.............. 43.4.......................... 75.0.......................... 104.1........................ 119.6........................ 151.8.
NOX--7% discount rate.............. 13.7.......................... 23.6.......................... 32.6......................... 37.4......................... 47.6.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
** ``Mt'' 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).
[dagger] Range of the economic value of CO2 reductions is based on estimates of the global benefit of reduced CO2 emissions.
[[Page 17807]]
Table V.51--Summary of Results for Commercial Refrigeration Equipment TSLs: Mean LCC Savings
----------------------------------------------------------------------------------------------------------------
Mean LCC Savings* 2012$
-----------------------------------------------------------------------------------------------------------------
Equipment Class TSL 1 TSL 2 TSL 3 TSL 4 TSL 5
----------------------------------------------------------------------------------------------------------------
VOP.RC.M........................ .............. .............. 922 -5 -4,203
VOP.RC.L........................ .............. .............. 53 -148 -6,701
VOP.SC.M........................ .............. .............. .............. -54 -1,384
VCT.RC.M........................ .............. .............. 542 41 -4,937
VCT.RC.L........................ 647 647 526 93 -6,036
VCT.SC.M........................ -10 214 226 163 -1,541
VCT.SC.L........................ 2,503 4,709 5,001 2,812 2,812
VCT.SC.I........................ 18 18 18 -68 -2,834
VCS.SC.M........................ 223 518 363 305 -1,428
VCS.SC.L........................ 588 550 507 495 -1,640
VCS.SC.I........................ 41 114 113 113 -2,710
SVO.RC.M........................ 564 564 564 -19 -2,691
SVO.SC.M........................ .............. .............. .............. 6 -917
SOC.RC.M........................ .............. .............. .............. -128 -2,268
SOC.SC.M........................ .............. .............. .............. -209 -2,204
HZO.RC.M........................ .............. .............. .............. .............. -2,180
HZO.RC.L........................ .............. .............. .............. .............. -4,249
HZO.SC.M........................ .............. 55 55 -4 -1,154
HZO.SC.L........................ .............. .............. .............. .............. -
HCT.SC.M........................ 66 165 101 43 -599
HCT.SC.L........................ 428 435 293 248 -613
HCT.SC.I........................ .............. .............. .............. .............. -1,240
HCS.SC.M........................ 12 17 15 5 -568
HCS.SC.L........................ 31 50 64 33 -590
PD.SC.M......................... 8 163 165 150 -1,252
----------------------------------------------------------------------------------------------------------------
* ``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.52--Summary of Results for Commercial Refrigeration Equipment TSLs: Median Payback Period
----------------------------------------------------------------------------------------------------------------
Median Payback Period years
-----------------------------------------------------------------------------------------------------------------
Equipment Class TSL 1 TSL 2 TSL 3 TSL 4 TSL 5
----------------------------------------------------------------------------------------------------------------
VOP.RC.M........................ .............. .............. 5.7 9.9 34.1
VOP.RC.L........................ .............. .............. 6.1 11.3 310.0
VOP.SC.M........................ .............. .............. .............. 63.1 593.2
VCT.RC.M........................ .............. .............. 2.1 6.6 364.7
VCT.RC.L........................ 1.8 1.8 2.7 6.3 194.7
VCT.SC.M........................ 23.4 4.8 5.3 7.0 96.2
VCT.SC.L........................ 0.5 0.8 1.1 4.7 4.7
VCT.SC.I........................ 7.2 7.2 7.2 16.2 663.6
VCS.SC.M........................ 0.5 0.6 1.4 2.6 48.0
VCS.SC.L........................ 0.6 1.3 2.5 2.7 31.8
VCS.SC.I........................ 2.6 3.6 5.0 5.0 183.7
SVO.RC.M........................ 6.2 6.2 6.2 10.4 29.9
SVO.SC.M........................ .............. .............. .............. 10.9 151.6
SOC.RC.M........................ .............. .............. .............. 38.0 114.1
SOC.SC.M........................ .............. .............. .............. 28.7 25.3
HZO.RC.M........................ .............. .............. .............. .............. ..............
HZO.RC.L........................ .............. .............. .............. .............. 288.9
HZO.SC.M........................ .............. 6.9 6.9 11.8 194.7
HZO.SC.L........................ .............. .............. .............. .............. ..............
HCT.SC.M........................ 2.5 4.7 5.8 9.2 46.6
HCT.SC.L........................ 1.8 2.0 2.5 3.6 19.5
HCT.SC.I........................ .............. .............. .............. .............. 23.8
HCS.SC.M........................ 2.9 3.7 5.5 7.5 680.6
HCS.SC.L........................ 1.4 1.7 2.5 6.2 68.9
PD.SC.M......................... 9.3 5.3 5.6 6.0 102.2
----------------------------------------------------------------------------------------------------------------
* ``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.
[[Page 17808]]
Table V.53--Summary of Results for Commercial Refrigeration Equipment TSLs: Distribution of Customer LCC Impacts
----------------------------------------------------------------------------------------------------------------
Category TSL 1 * TSL 2 * TSL 3 * TSL 4 * TSL 5 *
----------------------------------------------------------------------------------------------------------------
VOP.RC.M:
Net Cost (%)................ 0 0 4 64 100
No Impact (%)............... 100 100 41 0 0
Net Benefit (%)............. 0 0 55 36 0
VOP.RC.L:
Net Cost (%)................ 0 0 7 59 100
No Impact (%)............... 100 100 40 20 0
Net Benefit (%)............. 0 0 53 21 0
VOP.SC.M:
Net Cost (%)................ 0 0 0 60 100
No Impact (%)............... 100 100 100 40 0
Net Benefit (%)............. 0 0 0 0 0
VCT.RC.M:
Net Cost (%)................ 0 0 0 36 100
No Impact (%)............... 100 100 40 13 0
Net Benefit (%)............. 0 0 60 51 0
VCT.RC.L:
Net Cost (%)................ 0 0 4 43 100
No Impact (%)............... 40 40 20 0 0
Net Benefit (%)............. 60 60 76 57 0
VCT.SC.M:
Net Cost (%)................ 71 1 3 17 100
No Impact (%)............... 10 10 0 0 0
Net Benefit (%)............. 18 89 97 83 0
VCT.SC.L:
Net Cost (%)................ 0 0 0 11 11
No Impact (%)............... 10 0 0 0 0
Net Benefit (%)............. 90 100 100 89 89
VCT.SC.I:
Net Cost (%)................ 10 10 10 65 84
No Impact (%)............... 40 40 40 24 16
Net Benefit (%)............. 50 50 50 11 0
VCS.SC.M:
Net Cost (%)................ 0 0 7 25 100
No Impact (%)............... 40 40 10 10 0
Net Benefit (%)............. 60 60 83 65 0
VCS.SC.L:
Net Cost (%)................ 0 0 7 9 100
No Impact (%)............... 40 10 0 0 0
Net Benefit (%)............. 60 90 93 91 0
VCS.SC.I:
Net Cost (%)................ 0 0 9 9 92
No Impact (%)............... 40 32 17 17 8
Net Benefit (%)............. 60 68 75 75 0
SVO.RC.M:
Net Cost (%)................ 7 7 7 67 100
No Impact (%)............... 40 40 40 0 0
Net Benefit (%)............. 54 54 54 33 0
SVO.SC.M:
Net Cost (%)................ 0 0 0 32 100
No Impact (%)............... 100 100 100 40 0
Net Benefit (%)............. 0 0 0 27 0
SOC.RC.M:
Net Cost (%)................ 0 0 0 60 100
No Impact (%)............... 100 100 100 40 0
Net Benefit (%)............. 0 0 0 0 0
SOC.SC.M:
Net Cost (%)................ 0 0 0 100 100
No Impact (%)............... 100 100 100 0 0
Net Benefit (%)............. 0 0 0 1 0
HZO.RC.M: **
Net Cost (%)................ 0 0 0 0 60
No Impact (%)............... 100 100 100 100 40
Net Benefit (%)............. 0 0 0 0 0
HZO.RC.L: **
Net Cost (%)................ 0 0 0 0 60
No Impact (%)............... 100 100 100 100 40
Net Benefit (%)............. 0 0 0 0 0
HZO.SC.M:
Net Cost (%)................ 0 5 5 50 100
No Impact (%)............... 100 40 40 21 0
[[Page 17809]]
Net Benefit (%)............. 0 54 54 29 0
HZO.SC.L:
Net Cost (%)................ 0 0 0 0 0
No Impact (%)............... 100 100 100 100 100
Net Benefit (%)............. 0 0 0 0 0
HCT.SC.M:
Net Cost (%)................ 0 0 20 45 100
No Impact (%)............... 40 40 0 0 0
Net Benefit (%)............. 60 60 80 55 0
HCT.SC.L:
Net Cost (%)................ 0 0 10 29 87
No Impact (%)............... 41 41 10 10 10
Net Benefit (%)............. 59 59 80 61 3
HCT.SC.I:
Net Cost (%)................ 0 0 0 0 61
No Impact (%)............... 100 100 100 100 39
Net Benefit (%)............. 0 0 0 0 0
HCS.SC.M:
Net Cost (%)................ 0 1 10 42 91
No Impact (%)............... 9 9 9 9 9
Net Benefit (%)............. 91 90 80 48 0
HCS.SC.L:
Net Cost (%)................ 0 0 0 20 90
No Impact (%)............... 10 10 10 10 10
Net Benefit (%)............. 90 90 90 70 0
PD.SC.M:
Net Cost (%)................ 28 3 5 8 100
No Impact (%)............... 39 0 0 0 0
Net Benefit (%)............. 33 97 95 92 0
----------------------------------------------------------------------------------------------------------------
* Values have been rounded to the nearest integer. Therefore, some of the percentages may not add up to 100.
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 4.21 quads, an
amount DOE deems significant. TSL 5 shows a net negative NPV for
customers with estimated increased costs valued at $28.39 billion at a
7-percent discount rate. Estimated emissions reductions are 206.5 Mt of
CO2, 137.4 kt of NOX, 301.9 kt of SO2,
and 0.36 tons of Hg. The CO2 emissions have a value of $1.5
billion to $20.4 billion and the NOX emissions have a value
of $47.6 million at a 7-percent discount rate.
For TSL 5 the mean LCC savings for all equipment classes, except
for VCT.SC.L are negative, implying an increase in LCC. The median PBP
is longer than the lifetime of the equipment for nearly all/most
equipment classes. The share of customers that would experience a net
benefit (positive LCC savings) is very low in nearly all equipment
classes.
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 $1,144.8 million to
a decrease of $184.4 million based on DOE's manufacturer markup
scenarios. The upper bound of -$184.4 million is considered an
optimistic scenario for manufacturers because it assumes manufacturers
can fully pass on substantial increases in equipment costs to their
customers. 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 43.04 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, are outweighed by the burdens, in the form of a large
decrease in customer NPV, negative LCC savings and very long PBPs for
nearly all equipment classes, and a decrease in manufacturer INPV. DOE
concludes that the burdens of TSL 5 outweigh the benefits and,
therefore, does not find TSL 5 to be economically justifiable.
TSL 4 corresponds to the highest efficiency level, in each
equipment class, with a near positive NPV at a 7-percent discount rate.
The estimated energy savings from TSL 4 is 3.32 quads, an amount DOE
deems significant. TSL 4 shows a net positive NPV for customers with
estimated benefit of at $3.64 billion at a 7-percent discount rate.
Estimated emissions reductions are 163.2 Mt of CO2, 108.4 kt
of NOX, 238.5 kt of SO2, and 0.28 tons of Hg. The
CO2 emissions have a value of $1.2 billion to $16.1 billion
and the NOX emissions have a value of $37.4 million at a 7-
percent discount rate.
At TSL 4, the mean LCC savings among equipment classes affected by
standards range from -$209 for HCS.SC.M to $2,812 for VOP.RC.M.\77\ The
median PBP ranges from 2.6 years to 63.1 years. The share of customers
that would experience a net benefit (positive LCC savings) ranges from
0 percent to 91 percent.
---------------------------------------------------------------------------
\77\ For equipment classes HZO.RC.M, HZO.RC.L, and HZO.SC.L, and
HCT.SC.I 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.
---------------------------------------------------------------------------
At TSL 4, the projected change in INPV ranges from a decrease of
$320.9 million to a decrease of $189.4 million. At TSL 4, DOE
recognizes the risk of negative impacts if manufacturers' expectations
concerning reduced profit
[[Page 17810]]
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 12.07
percent in INPV for commercial refrigeration equipment manufacturers.
After carefully considering the analyses results and weighing the
benefits and burdens of TSL 4, DOE finds that the benefits to the
Nation from TSL 4, in the form of energy savings and emissions
reductions, an increase in customer NPV, and positive mean LCC savings
for many equipment classes, are outweighed by the burdens, in the form
of negative mean LCC savings for many equipment classes (including
several classes with a significant share of total shipments), long PBPs
for some equipment classes, the fact that over half of customers would
experience a net cost (negative LCC savings) in many equipment classes,
and a decrease in manufacturer INPV. DOE concludes that the burdens of
TSL 4 outweigh the benefits and, therefore, does not find TSL 4 to be
economically justifiable.
Next, DOE considered TSL 3. The estimated energy savings from TSL 3
is 2.89 quads, an amount DOE deems significant. TSL 3 shows a positive
NPV for customers valued at $4.93 billion at a 7-percent discount rate.
Estimated emissions reductions are 141.9 Mt of CO2, 94.3 kt
of NOX, 207.4 kt of SO2, and 0.25 tons of Hg. The
CO2 emissions have a value of $1.0 billion to $14.0 billion
and the NOX emissions have a value of $32.6 million at a 7-
percent discount rate.
At TSL 3, the mean LCC savings for affected equipment classes range
from $18 to $5,001.\78\ The median PBP ranges from 1.1 years to 7.2
years. The share of customers that would experience a net benefit
(positive LCC savings) is over 50 percent for all affected equipment
classes.
---------------------------------------------------------------------------
\78\ Equipment classes VOP.SC.M, SVO.SC.M, SOC.RC.M, SOC.SC.M,
HZO.RC.M, HZO.RC.L, HZO.SC.L, and HCT.SC.I at TSL 3 are associated
with the baseline level.
---------------------------------------------------------------------------
At TSL 3, the projected change in INPV ranges from a decrease of
$165.0 million to a decrease of $93.9 million. At TSL 3, 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 3 could result in a net loss of
6.20 percent in INPV for commercial refrigeration equipment
manufacturers.
After careful consideration of the analyses results and, weighing
the benefits and burdens of TSL 3, DOE finds that the benefits to the
Nation from TSL 3, in the form of energy savings and emissions
reductions, an increase in customer NPV, positive mean LCC savings for
all affected equipment classes, PBPs that are less than seven years for
most of the affected equipment classes, and the fact that over half of
customers would experience a net benefit in nearly all affected
equipment classes, outweigh the burdens, in the form of a decrease in
manufacturer INPV. The Secretary concludes that TSL 3 will offer the
maximum improvement in efficiency that is technologically feasible and
economically justified and will result in the significant conservation
of energy. Therefore, DOE today is adopting standards at TSL 3 for
commercial refrigeration equipment. The amended energy conservation
standards for commercial refrigeration equipment, 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
V.54.
Table V.54--Energy Conservation Standards for Commercial Refrigeration Equipment
[Compliance required starting March 27, 2017]
----------------------------------------------------------------------------------------------------------------
Standard level ** Standard level
Equipment class * ,[dagger] Equipment class * **,[dagger]
----------------------------------------------------------------------------------------------------------------
VCT.RC.L............................ 0.49 x TDA + 2.61. VOP.RC.I............... 2.79 x TDA + 8.7.
VOP.RC.M............................ 0.63 x TDA + 4.07. SVO.RC.L............... 2.2 x TDA + 6.85.
SVO.RC.M............................ 0.66 x TDA + 3.18. SVO.RC.I............... 2.79 x TDA + 8.7.
HZO.RC.L............................ 0.55 x TDA + 6.88. HZO.RC.I............... 0.7 x TDA + 8.74.
HZO.RC.M............................ 0.35 x TDA + 2.88. VOP.SC.L............... 4.25 x TDA + 11.82.
VCT.RC.M............................ 0.15 x TDA + 1.95. VOP.SC.I............... 5.4 x TDA + 15.02.
VOP.RC.L............................ 2.2 x TDA + 6.85. SVO.SC.L............... 4.26 x TDA + 11.51.
SOC.RC.M............................ 0.44 x TDA + 0.11. SVO.SC.I............... 5.41 x TDA + 14.63.
VOP.SC.M............................ 1.69 x TDA + 4.71. HZO.SC.I............... 2.42 x TDA + 9.
SVO.SC.M............................ 1.7 x TDA + 4.59. SOC.RC.L............... 0.93 x TDA + 0.22.
HZO.SC.L............................ 1.9 x TDA + 7.08. SOC.RC.I............... 1.09 x TDA + 0.26.
HZO.SC.M............................ 0.72 x TDA + 5.55. SOC.SC.I............... 1.53 x TDA + 0.36.
HCT.SC.I............................ 0.56 x TDA + 0.43. VCT.RC.I............... 0.58 x TDA + 3.05.
VCT.SC.I............................ 0.62 x TDA + 3.29. HCT.RC.M............... 0.16 x TDA + 0.13.
VCS.SC.I............................ 0.34 x V + 0.88. HCT.RC.L............... 0.34 x TDA + 0.26.
VCT.SC.M............................ 0.1 x V + 0.86. HCT.RC.I............... 0.4 x TDA + 0.31.
VCT.SC.L............................ 0.29 x V + 2.95. VCS.RC.M............... 0.1 x V + 0.26.
VCS.SC.M............................ 0.05 x V + 1.36. VCS.RC.L............... 0.21 x V + 0.54.
VCS.SC.L............................ 0.22 x V + 1.38. VCS.RC.I............... 0.25 x V + 0.63.
HCT.SC.M............................ 0.06 x V + 0.37. HCS.SC.I............... 0.34 x V + 0.88.
HCT.SC.L............................ 0.08 x V + 1.23. HCS.RC.M............... 0.1 x V + 0.26.
HCS.SC.M............................ 0.05 x V + 0.91. HCS.RC.L............... 0.21 x V + 0.54.
HCS.SC.L............................ 0.06 x V + 1.12. HCS.RC.I............... 0.25 x V + 0.63.
PD.SC.M............................. 0.11 x V + 0.81. SOC.SC.L............... 1.1 x TDA + 2.1.
SOC.SC.M............................ 0.52 x TDA + 1.
----------------------------------------------------------------------------------------------------------------
* 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
closed with transparent doors, VCS = vertical closed with solid doors, HCT = horizontal closed with
transparent doors, HCS = horizontal closed with 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 [deg]F), L = low temperature (0 2 [deg]F), or I = ice-
cream temperature (-15 2 [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 final rule
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.
[[Page 17811]]
2. Summary of Benefits and Costs (Annualized) of the Standards
The benefits and costs of today's standards, for 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 operating the product (consisting
primarily of operating cost savings from using less energy, minus
increases in equipment purchase and installation costs, which is
another way of representing consumer NPV), plus (2) the annualized
monetary value of the benefits of emission reductions, including
CO2 emission reductions.\79\
---------------------------------------------------------------------------
\79\ 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 three and seven 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.3. 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.
---------------------------------------------------------------------------
Estimates of annualized benefits and costs of today's standards are
shown in Table V.55. The results under the primary estimate are as
follows. Using a 7-percent discount rate for benefits and costs other
than CO2 reduction, for which DOE used a 3-percent discount
rate along with the average SCC series that uses a 3-percent discount
rate, the cost of the standards in today's rule is $256 million per
year in increased equipment costs, while the benefits are $710 million
per year in reduced equipment operating costs, $246 million in
CO2 reductions, and $3.01 million in reduced NOX
emissions. In this case, the net benefit amounts to $704 million per
year. Using a 3-percent discount rate for all benefits and costs and
the average SCC series, the cost of the standards in today's rule is
$264 million per year in increased equipment costs, while the benefits
are $900 million per year in reduced operating costs, $246 million in
CO2 reductions, and $5.64 million in reduced NOX
emissions. In this case, the net benefit amounts to $888 million per
year.
Table V.55--Annualized Benefits and Costs of New and Amended Standards for Commercial Refrigeration Equipment
----------------------------------------------------------------------------------------------------------------
Million 2012$/year
-----------------------------------------------------------
Discount rate Low net benefits High net benefits
Primary estimate* estimate* estimate*
----------------------------------------------------------------------------------------------------------------
Benefits
----------------------------------------------------------------------------------------------------------------
Operating Cost Savings.......... 7%................ 710............... 688............... 744.
3%................ 900............... 865............... 947.
CO2 Reduction at ($11.8/t case) 5%................ 73................ 73................ 73.
**.
CO2 Reduction at ($39.7/t case) 3%................ 246............... 246............... 246.
**.
CO2 Reduction at ($61.2/t 2.5%.............. 361............... 361............... 361.
case)**.
CO2 Reduction at ($117.0/t case) 3%................ 760............... 760............... 760.
**.
NOX Reduction at ($2,591/ton) ** 7%................ 3.01.............. 3.01.............. 3.01.
3%................ 5.64.............. 5.64.............. 5.64.
Total Benefits [dagger]..... 7% plus CO2 range. 786 to 1,474...... 764 to 1,451...... 820 to 1,508.
7%................ 960............... 937............... 994.
3% plus CO2 range. 978 to 1,666...... 943 to 1,631...... 1,026 to 1,713.
3%................ 1,152............. 1,117............. 1,200.
----------------------------------------------------------------------------------------------------------------
Costs
----------------------------------------------------------------------------------------------------------------
Incremental Equipment Costs..... 7%................ 256............... 250............... 261.
3%................ 264............... 258............... 271.
----------------------------------------------------------------------------------------------------------------
Net Benefits
----------------------------------------------------------------------------------------------------------------
Total [dagger].......... 7% plus CO2 range. 530 to 1,218...... 513 to 1,201...... 559 to 1,246.
7%................ 704............... 687............... 733.
3% plus CO2 range. 714 to 1,402...... 685 to 1,373...... 755 to 1,442.
3%................ 888............... 859............... 929.
----------------------------------------------------------------------------------------------------------------
* This table presents the annualized costs and benefits associated with commercial refrigeration equipment
shipped in 2017-2046. These results include benefits to customers which accrue after 2046 from the products
purchased in 2017-2046. The results account for the incremental variable and fixed costs incurred by
manufacturers due to the amended standard, some of which may be incurred in preparation for the final rule.
The primary, low, and high estimates utilize projections of energy prices from the AEO 2013 Reference case,
Low Estimate, and High Estimate, 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
product price trends in the Low Benefits Estimate, and a high decline rate for projected product price trends
in the High Benefits Estimate. The methods used to derive projected price trends are explained in section
IV.H.
** The CO2 values represent global monetized values of the SCC, in 2012$, in 2015 under several scenarios of the
updated SCC values. The first three cases use the averages of SCC distributions calculated using 5%, 3%, and
2.5% discount rates, respectively. The fourth case represents the 95th percentile of the SCC distribution
calculated using a 3% discount rate. The SCC time series used by DOE incorporate an escalation factor. The
value for NOX is the average of the low and high values used in DOE's analysis.
[[Page 17812]]
[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.
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 (October 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) For certain segments of the companies that purchase commercial
refrigeration equipment, such as small grocers, there may be 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).
(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 that are not reflected in energy
prices, such as reduced emissions of greenhouse gases. DOE attempts to
quantify some of the external benefits through use of Social Cost of
Carbon values.
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 a regulatory impact analysis (RIA) on
today's rule and that the Office of Information and Regulatory Affairs
(OIRA) in the Office of Management and Budget (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 technical support document
for this rulemaking.
DOE has also reviewed this regulation pursuant to Executive Order
13563, issued on January 18, 2011 (76 FR 3281, January 21, 2011). EO
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 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, the Office of Information and Regulatory Affairs 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 final rule 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 an 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 (August 16, 2002), DOE published
procedures and policies on February 19, 2003, to ensure that the
potential impacts of its rules on small entities are properly
considered during the rulemaking process. 68 FR 7990. DOE has made its
procedures and policies available on the Office of the General
Counsel's Web site (https://energy.gov/gc/office-general-counsel).
For manufacturers of commercial refrigeration equipment, the Small
Business Administration (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 (September 5, 2000) and codified at 13 CFR Part
121.The size standards are listed by North American Industry
Classification System (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. Based
on this threshold, DOE present the following FRFA analysis:
1. Description and Estimated Number of Small Entities Regulated
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,\80\ the SBA Database \81\),
individual company Web sites, and
[[Page 17813]]
market research tools (e.g., Dunn and Bradstreet reports \82\ and
Hoovers reports \83\) 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.
---------------------------------------------------------------------------
\80\ ``AHRI Certification Directory.'' AHRI Certification
Directory. AHRI. (Available at: https://www.ahridirectory.org/ahridirectory/pages/home.aspx) (Last accessed October 10, 2011). See
www.ahridirectory.org/ahriDirectory/pages/home.aspx.
\81\ ``Dynamic Small Business Search.'' SBA. (Available at: See
https://dsbs.sba.gov/dsbs/search/dsp_dsbs.cfm) (Last accessed
October 12, 2011).
\82\ ``D&B Business Information Get Credit
Reports 888 480-6007.''. Dun & Bradstreet (Available at:
www.dnb.com) (Last accessed October 10, 2011). See www.dnb.com/.
\83\ ``Hoovers Company Information Industry
Information Lists.'' D&B (2013) (Available at: See https://www.hoovers.com/) (Last accessed December 12, 2012).
---------------------------------------------------------------------------
DOE identified 54 companies selling commercial refrigeration
equipment in the United States. Nine of the companies are foreign-owned
firms. 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.\84\ While some small businesses have
significant market share (e.g., Continental has a 4-percent market
share for foodservice commercial refrigeration \84\), 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.
---------------------------------------------------------------------------
\84\ 32nd Annual Portrait of the U.S. Appliance Industry.
Appliance Magazine. September 2009. 66(7).
---------------------------------------------------------------------------
At the amended level, the average small manufacturer is expected to
face capital conversion costs that are nearly five times typical annual
capital expenditures, and product conversion costs that are roughly
double the typical annual R&D spending, as shown in Table VI.1. At the
amended level, the conversion costs are driven by the incorporation of
thicker insulation into case designs. The thicker case designs
necessitate the purchase of new jigs for production. Manufacturers
estimate of the cost of modifying an existing jig at approximately
$50,000. Manufacturer estimates of the cost of a new jig ranged from
$100,000 to $300,000, depending on the jig size and 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. All
shelving and internally fitted components would need to be redesigned
to fit the revised cabinet's interior dimensions. Furthermore, changes
in insulation and in refrigeration components could necessitate 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 49 percent of annual capital expenditures for an
average large manufacturer, while capital conversion costs are 278
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 the amended standard.
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 amended standard, small businesses will likely
have greater increases in component costs than large businesses and
will thus be at a pricing disadvantage.
To estimate how small manufacturers would be 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). The conversion costs in these tables
are presented relative to annual financial metrics for the purposes of
comparing impacts of small versus large manufacturers. In practice,
these conversion costs will likely be spread out over a period of
multiple years. TSL 3 represents the level adopted in today's final
rule:
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 Product conversion cost Total conversion cost Total conversion cost
TSL annual capital as a percentage of as a percentage of as a percentage of
expenditures annual R&D expense annual revenue annual EBIT
--------------------------------------------------------------------------------------------------------------------------------------------------------
TSL 1............................................... 20 45 1 13
TSL 2............................................... 20 71 2 18
TSL 3............................................... 330 278 11 129
TSL 4............................................... 913 428 26 296
TSL 5............................................... 2838 622 70 792
--------------------------------------------------------------------------------------------------------------------------------------------------------
[[Page 17814]]
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 Product conversion cost Total conversion cost Total conversion cost
TSL annual capital as a percentage of as a percentage of as a percentage of
expenditures annual R&D expense annual revenue annual EBIT
--------------------------------------------------------------------------------------------------------------------------------------------------------
TSL 1............................................... 3 49 1 10
TSL 2............................................... 3 49 1 10
TSL 3............................................... 46 49 2 20
TSL 4............................................... 128 49 3 40
TSL 5............................................... 398 49 9 104
--------------------------------------------------------------------------------------------------------------------------------------------------------
Small firms would likely be at a disadvantage relative to larger
firms in meeting the amended energy conservation standard for
commercial refrigeration equipment. The small businesses face
disadvantages in terms of access to capital, the cost of re-tooling
production lines and investing in redesigns, and pricing for key
components. As a result, DOE could not certify that the amended
standards would not have a significant impact on a significant number
of small businesses.
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 adopted today.
4. Significant Alternatives to the Rule
The discussion above analyzes impacts on small businesses that
would result from DOE's amended standards. In addition to the other
TSLs being considered, the rulemaking TSD includes a regulatory impact
analysis (RIA). For commercial refrigeration equipment, the RIA
discusses the following policy alternatives: (1) No change in standard;
(2) consumer rebates; (3) consumer tax credits; and (4) manufacturer
tax credits; (5) voluntary energy efficiency targets; and (6) bulk
government purchases. While these alternatives may mitigate to some
varying extent the economic impacts on small entities compared to the
standards, DOE determined that the energy savings of these alternatives
are significantly smaller than those that would be expected to result
from adoption of the amended standard levels. Accordingly, DOE is
declining to adopt any of these alternatives and is adopting the
standards set forth in this rulemaking. (See chapter 17 of the final
rule TSD for further detail on the policy alternatives DOE considered.)
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 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.
D. Review Under the National Environmental Policy Act of 1969
Pursuant to the National Environmental Policy Act (NEPA) of 1969,
DOE has determined that the 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, App. B,
B5.1(b); Sec. 1021.410(b) and Appendix B, B(1)-(5). The 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 rule. DOE's CX
determination for this 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 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 final
rule. States can petition DOE for exemption from such preemption to the
extent, and based on criteria, set forth in EPCA. (42 U.S.C. 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
[[Page 17815]]
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 (February 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 final rule meets the
relevant standards of Executive Order 12988.
G. Review Under the Unfunded Mandates Reform Act of 1995
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA)
requires each Federal agency to assess the effects of Federal
regulatory actions on State, local, and Tribal governments and the
private sector. Public Law 104-4, sec. 201 (codified at 2 U.S.C. 1531).
For an amended 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 ``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.
DOE has concluded that this final rule would likely require
expenditures of $100 million or more on the private sector. 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 consumers 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 final rule. 2 U.S.C. 1532(c). The content requirements
of section 202(b) of UMRA relevant to a private sector mandate
substantially overlap the economic analysis requirements that apply
under section 325(o) of EPCA and Executive Order 12866. The
SUPPLEMENTARY INFORMATION section of the notice of final rulemaking and
the ``Regulatory Impact Analysis'' section of the TSD for this final
rule respond to those requirements.
Under section 205 of UMRA, the Department is obligated to identify
and consider a reasonable number of regulatory alternatives before
promulgating a rule for which a written statement under section 202 is
required. 2 U.S.C. 1535(a). DOE is required to select from those
alternatives the most cost-effective and least burdensome alternative
that achieves the objectives of the 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 final 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''
chapter 17 of the TSD for today's final rule.
H. Review Under the Treasury and General Government Appropriations Act,
1999
Section 654 of the Treasury and General Government Appropriations
Act, 1999 (Pub. L. 105-277) requires Federal agencies to issue a Family
Policymaking Assessment for any 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 (March 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 the public under
guidelines established by each agency pursuant to general guidelines
issued by OMB. OMB's guidelines were published at 67 FR 8452 (February
22, 2002), and DOE's guidelines were published at 67 FR 62446 (October
7, 2002). DOE has reviewed today's final rule under the OMB and DOE
guidelines and has concluded that it is consistent with applicable
policies in those guidelines.
K. Review Under Executive Order 13211
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 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 significant energy action, the
agency must give a detailed statement of any adverse effects on energy
supply, distribution, or use should the proposal be implemented, and of
reasonable alternatives to the action and their expected benefits on
energy supply, distribution, and use.
[[Page 17816]]
DOE has concluded that today's regulatory action, which sets forth
energy conservation standards for commercial refrigeration equipment,
is not a significant energy action because the amended 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 final 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 (January
14, 2005). The Bulletin establishes that certain scientific information
shall be peer reviewed by qualified specialists before it is
disseminated by the Federal Government, including influential
scientific information related to agency regulatory actions. The
purpose of the bulletin is to enhance the quality and credibility of
the Government's scientific information. Under the Bulletin, the energy
conservation standards rulemaking analyses are ``influential scientific
information,'' which the Bulletin defines as scientific information the
agency reasonably can determine will have, or does have, a clear and
substantial impact on important public policies or private sector
decisions. 70 FR 2667.
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.
M. Congressional Notification
As required by 5 U.S.C. 801, DOE will report to Congress on the
promulgation of this rule prior to its effective date. The report will
state that it has been determined that the rule is not a ``major rule''
as defined by 5 U.S.C. 804(2).
VII. Approval of the Office of the Secretary
The Secretary of Energy has approved publication of today's final
rule.
List of Subjects in 10 CFR Part 431
Administrative practice and procedure, Confidential business
information, Energy conservation, Incorporation by reference, Reporting
and recordkeeping requirements.
Issued in Washington, DC, on February 28, 2014.
David T. Danielson,
Assistant Secretary, Energy Efficiency and Renewable Energy.
For the reasons stated in the preamble, DOE amends part 431 of
chapter II, subchapter D, of title 10 of the Code of Federal
Regulations, to read as set forth below:
PART 431--ENERGY EFFICIENCY PROGRAM FOR CERTAIN COMMERCIAL AND
INDUSTRIAL EQUIPMENT
0
1. The authority citation for part 431 continues to read as follows:
Authority: 42 U.S.C. 6291-6317.
0
2. Section 431.62 is amended by adding in alphabetical order a
definition for ``Service over counter'' to read as follows:
Sec. 431.62 Definitions concerning commercial refrigerators, freezers
and refrigerator-freezers.
* * * * *
Service over counter means equipment that has sliding or hinged
doors in the back intended for use by sales personnel, with glass or
other transparent material in the front for displaying merchandise, and
that has a height not greater than 66 inches and is intended to serve
as a counter for transactions between sales personnel and customers.
``Service over the counter, self-contained, medium temperature
commercial refrigerator'', also defined in this section, is one
specific equipment class within the service over counter equipment
family.
* * * * *
0
3. Section 431.66 is amended by:
0
a. Revising paragraph (a)(3);
0
b. Revising paragraph (b)(1) introductory text;
0
c. Revising paragraph (c);
0
d. Revising paragraph (d) introductory text; and
0
c. Adding paragraph (e).
The revisions and addition read as follows:
Sec. 431.66 Energy conservation standards and their effective dates.
(a) * * *
(3) For the purpose of paragraph (d) of this section, the term
``TDA'' means the total display area (ft\2\) of the case, as defined in
ARI Standard 1200-2006, appendix D (incorporated by reference, see
Sec. 431.63). For the purpose of paragraph (e) of this section, the
term ``TDA'' means the total display area (ft\2\) of the case, as
defined in AHRI Standard 1200 (I-P)-2010, appendix D (incorporated by
reference, see Sec. 431.63).
(b)(1) 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 March 27, 2017 shall have a daily energy consumption (in
kilowatt-hours 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 March 27,
2017 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 March 27, 2017 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 self-contained condensing unit designed for pull-
down temperature applications and with transparent doors; commercial
refrigerator, freezer, and refrigerator-freezer with a self-contained
condensing unit and without doors; commercial refrigerator, freezer,
and refrigerator-freezer with a remote condensing unit; and commercial
ice-cream freezer manufactured on or after March 27, 2017, shall have a
daily energy consumption (in kilowatt-hours per day) that does not
exceed the levels specified:
[[Page 17817]]
(1) For equipment other than hybrid equipment, refrigerator/
freezers, or wedge cases:
--------------------------------------------------------------------------------------------------------------------------------------------------------
Rating Operating
Equipment category Condensing unit Equipment family temp. temp. Equipment class Maximum daily energy
configuration [deg]F [deg]F designation * consumption kWh/day
--------------------------------------------------------------------------------------------------------------------------------------------------------
Remote Condensing Commercial Remote (RC)........ Vertical Open (VOP) 38 (M) >=32 VOP.RC.M........... 0.64 x TDA + 4.07.
Refrigerators and Commercial
Freezers.
0 (L) <32 VOP.RC.L........... 2.2 x TDA + 6.85.
Semivertical Open 38 (M) >=32 SVO.RC.M........... 0.66 x TDA + 3.18.
(SVO).
0 (L) <32 SVO.RC.L........... 2.2 x TDA + 6.85.
Horizontal Open 38 (M) >=32 HZO.RC.M........... 0.35 x TDA + 2.88.
(HZO).
0 (L) <32 HZO.RC.L........... 0.55 x TDA + 6.88.
Vertical Closed 38 (M) >=32 VCT.RC.M........... 0.15 x TDA + 1.95.
Transparent (VCT).
0 (L) <32 VCT.RC.L........... 0.49 x TDA + 2.61.
Horizontal Closed 38 (M) >=32 HCT.RC.M........... 0.16 x TDA + 0.13.
Transparent (HCT).
0 (L) <32 HCT.RC.L........... 0.34 x TDA + 0.26.
Vertical Closed 38 (M) >=32 VCS.RC.M........... 0.1 x V + 0.26.
Solid (VCS).
0 (L) <32 VCS.RC.L........... 0.21 x V + 0.54.
Horizontal Closed 38 (M) >=32 HCS.RC.M........... 0.1 x V + 0.26.
Solid (HCS).
0 (L) <32 HCS.RC.L........... 0.21 x V + 0.54.
Service Over 38 (M) >=32 SOC.RC.M........... 0.44 x TDA + 0.11.
Counter (SOC).
0 (L) <32 SOC.RC.L........... 0.93 x TDA + 0.22.
Self-Contained Commercial Self-Contained (SC) Vertical Open (VOP) 38 (M) >=32 VOP.SC.M........... 1.69 x TDA + 4.71.
Refrigerators and Commercial
Freezers Without Doors.
0 (L) <32 VOP.SC.L........... 4.25 x TDA + 11.82.
Semivertical Open 38 (M) >=32 SVO.SC.M........... 1.7 x TDA + 4.59.
(SVO).
0 (L) <32 SVO.SC.L........... 4.26 x TDA + 11.51.
Horizontal Open 38 (M) >=32 HZO.SC.M........... 0.72 x TDA + 5.55.
(HZO).
0 (L) <32 HZO.SC.L........... 1.9 x TDA + 7.08.
Self-Contained Commercial Self-Contained (SC) Vertical Closed 38 (M) >=32 VCT.SC.M........... 0.1 x V + 0.86.
Refrigerators and Commercial Transparent (VCT).
Freezers With Doors.
0 (L) <32 VCT.SC.L........... 0.29 x V + 2.95.
Vertical Closed 38 (M) >=32 VCS.SC.M........... 0.05 x V + 1.36.
Solid (VCS).
........... <32 VCS.SC.L........... 0.22 x V + 1.38.
Horizontal Closed 38 (M) >=32 HCT.SC.M........... 0.06 x V + 0.37.
Transparent (HCT).
0 (L) <32 HCT.SC.L........... 0.08 x V + 1.23.
Horizontal Closed ........... >=32 HCS.SC.M........... 0.05 x V + 0.91.
Solid (HCS).
0 (L) <32 HCS.SC.L........... 0.06 x V + 1.12.
Service Over ........... >=32 SOC.SC.M........... 0.52 x TDA + 1.
Counter (SOC).
0 (L) <32 SOC.SC.L........... 1.1 x TDA + 2.1.
Self-Contained Commercial Self-Contained (SC) Pull-Down (PD)..... 38 (M) >=32 PD.SC.M............ 0.11 x V + 0.81.
Refrigerators with Transparent
Doors for Pull-Down Temperature
Applications.
Commercial Ice-Cream Freezers... Remote (RC)........ Vertical Open (VOP) -15 (I) <=-5** VOP.RC.I........... 2.79 x TDA + 8.7.
Semivertical Open ........... ........... SVO.RC.I........... 2.79 x TDA + 8.7.
(SVO).
Horizontal Open ........... ........... HZO.RC.I........... 0.7 x TDA + 8.74.
(HZO).
Vertical Closed ........... ........... VCT.RC.I........... 0.58 x TDA + 3.05.
Transparent (VCT).
[[Page 17818]]
Horizontal Closed ........... ........... HCT.RC.I........... 0.4 x TDA + 0.31.
Transparent (HCT).
Vertical Closed ........... ........... VCS.RC.I........... 0.25 x V + 0.63.
Solid (VCS).
Horizontal Closed ........... ........... HCS.RC.I........... 0.25 x V + 0.63.
Solid (HCS).
Service Over ........... ........... SOC.RC.I........... 1.09 x TDA + 0.26.
Counter (SOC).
Self-Contained (SC) Vertical Open (VOP) ........... ........... VOP.SC.I........... 5.4 x TDA + 15.02.
Semivertical Open ........... ........... SVO.SC.I........... 5.41 x TDA + 14.63.
(SVO).
Horizontal Open ........... ........... HZO.SC.I........... 2.42 x TDA + 9.
(HZO).
Vertical Closed ........... ........... VCT.SC.I........... 0.62 x TDA + 3.29.
Transparent (VCT).
Horizontal Closed ........... ........... HCT.SC.I........... 0.56 x TDA + 0.43.
Transparent (HCT).
Vertical Closed ........... ........... VCS.SC.I........... 0.34 x V + 0.88.
Solid (VCS).
Horizontal Closed ........... ........... HCS.SC.I........... 0.34 x V + 0.88.
Solid (HCS).
Service Over ........... ........... SOC.SC.I........... 1.53 x TDA + 0.36.
Counter (SOC).
--------------------------------------------------------------------------------------------------------------------------------------------------------
* 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 [deg]F *(-21 [deg]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
refrigerator-freezers, and non-hybrid refrigerator-freezers), the
maximum daily energy consumption for each model shall be the sum of the
MDEC values for all of its compartments. For each compartment, measure
the TDA or volume of that compartment, and determine the appropriate
equipment class based on that compartment's equipment family,
condensing unit configuration, and designed operating temperature. The
MDEC limit for each compartment shall be the calculated value obtained
by entering that compartment's TDA or volume into the standard equation
in paragraph (e)(1) of this section for that compartment's equipment
class. Measure the CDEC or TDEC for the entire case as described in
Sec. 431.66(d)(2)(i) through (iii), except that where measurements and
calculations reference ARI Standard 1200-2006 (incorporated by
reference, see Sec. 431.63), AHRI Standard 1200 (I-P)-2010
(incorporated by reference, see Sec. 431.63) shall be used.
(3) For remote condensing and self-contained wedge cases, measure
the CDEC or TDEC according to the AHRI Standard 1200 (I-P)-2010 test
procedure (incorporated by reference, see Sec. 431.63). For wedge
cases in equipment classes for which a volume metric is used, the MDEC
shall be the amount derived from the appropriate standards equation in
paragraph (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 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. 2014-05082 Filed 3-27-14; 8:45 am]
BILLING CODE 6450-01-P
